Real Estate Real Fast EP2 (with Dustin Ellis, CEO of Tallbridge Investments)

Episode overview

Building a real estate investor business is tough. You need to have the right people, the right processes, and the right tech to scale.

Even if you build everything right, things will still go wrong. The market isn’t always constant and you need to be prepared for shifts.

What should you do if the market goes down? How can you stay ahead as a real estate investor?

We’ll dive into how to source below market real estate deals, how you can grow and scale your real estate investing business, and how you can adjust to the shifting market with Dustin Ellis, CEO of Tallbridge Investments.

Episode highlights

• How Tallbridge works for real estate buyers and sellers
• What you should be doing if you’re a real estate investor looking to grow and scale your business
• How you should be thinking about investing in talent as a real estate investor
• Why mindset plays an important role in scaling a real estate business
• Why the technology you choose can have a big impact on your real estate business as an investor
• Here’s how you should approach the real estate market when the supply outpacing demand
• What the best real estate investors look to buy in down trending market
• What the average real estate investor should be looking to buy during a market correctio
• What to focus on if you want to better a better real estate investor

Episode links:

• Follow ListingSpark on LinkedIn, Twitter, Instagram, Facebook, and YouTube
• Connect with Aaron Jistel on LinkedIn
• Connect with Dustin Ellis on LinkedIn

Key takeaways

2:33 – How Tallbridge works for real estate buyers and sellers

Tallbridge works as an intermediary between buyers and sellers. If you’re a seller looking to quickly sell a property, Tallbridge can work with you to cash out that property. If you’re a buyer looking to get a property at a reduced price, Tallbridge can help you connect with the right properties.

“We provide a personalized service to help owners sell their property to a vetted network of cash buyers. So from a seller’s perspective, if you prefer not to use a traditional method through a real estate agent, perhaps because the property’s in a rough shape and you don’t have the cash or time to fix it up before you list it or perhaps there’s some sort of financial distress or perhaps you’re seeing an increase in foreclosures and are in need of quick cash.

If you’re a buyer or investor and you’re looking for an investment property at a reduced price and you want to get on our buyer’s list, let us know what your buy box is and we’ll definitely be willing to have that conversation and help sell you something as well.”

5:51 – What you should be doing if you’re a real estate investor looking to grow and scale your business

If you want to scale your business as a real estate investor, you need to be aware of your spending. Make sure you’re not spending on things you don’t need right now. You also need to get serious about forecasting and budget if you want to scale well.

“To scale a business, you need cash. I think two ways to do that and that is to increase your revenue and to, and to stop spending as much of what you’re making. Right. 

I would say for us, part of our success was a strong focus on marketing because that fuels your sales and then getting our heads wrapped around the finances.

Have a little bit more serious conversations around your budget and your forecast and control what needs to be spent and what can wait. I would say our success probably fueled from our people, our process and, leveraging technology.”

6:53 – How you should be thinking about investing in talent as a real estate investor

To build a successful real estate business, you need to work with the right people. Most large successful real estate businesses aren’t one-person operations. Make sure you’re building a strong culture so you can hire and retain top talent. Investing in great vs good talent might be more expensive but it will put you ahead in the long run.

“When I think of people, our culture, and the communication within our culture is important.

As you scale things get lost in translation, assumptions happen, so it’s important that you maintain clear lines of communication and that you create a culture where people wanna work because it’s critically important to retain your quality people that you work so hard to find.

When I think of people, you know, coaches, mentors, I know my partners Steve and Josh, when they started out, I hear they wish they would’ve got mentors sooner.”

8:15 – Why mindset plays an important role in scaling a real estate business

Things are going to go wrong eventually if you’re a real estate investor. That’s why having the right mindset is important. When things go wrong, you need to have that belief that you can push past it. It’s key to growing your business.

“It never goes perfect. So having that belief and that faith to push through those barriers and those challenges that are gonna surface especially when you’re in the valley. You gotta believe in yourself, you gotta believe in what you’re doing.”

9:36 – Why the technology you choose can have a big impact on your real estate business as an investor

Dustin says the tech you pick for your business can have a huge impact on revenue. If you have a frankenstein approach to tech, you probably won’t get as much productivity out of your business. Focus on building the right tech stack, automating repeatable processes, and identify the tools that can generate the most revenue per dollar spent.

“Have the right internal tech stack. Something that fuels staff productivity throughout the entire deal progression and something where you can leverage automation. 

There’s a lot of Frankenstein tech stacks out there. So if you can get one that’s integrated and seamless for your staff, their productivity is gonna go through the roof. I think the other piece with that is leveraging all that tech to pull accurate data. If you don’t have accurate data it’s really hard to make strategic decisions.

And then the last piece of tech are those external tech platforms that you can leverage. Whether it’s comping tools, private investor platforms, JV platforms. We use several and it has really helped us.

You’re trying to do as much as you can with as little expense as possible. We ask ourselves, is this gonna help drive revenue? And do we really need to spend this right now?”

16:12 – Here’s how you should approach the real estate market when the supply outpacing demand

When there are more people selling than buying, the market can tighten up fast. If you’re a real estate investor, you may have the opportunity soon to lock up a property at a reduced price. If you’re selling, make sure you have the right exit strategy to avoid losing money on a deal.

“I think we’re calling it the market correction. A lot of sellers still haven’t accepted that there’s a shift happening so they still are expecting those prices where they were getting over ask. 

The flip side is the investors are going to pump the brakes here. We’re gonna wait till this market drops because we think we’re gonna be able to pick up this property 20% cheaper. 

Buyers now are a little hesitant. You got some hedge funds, the bigger investors, institutional investors some of them are still waiting. And then we’ve got other ones that are aggressive, the retail buyer. There’s not as many retail buyers out there.

So they’re capitalizing and obviously when they are looking to acquire the property, they’re looking to get it at a more reduced rate.”

22:35 – What the best real estate investors look to buy in down trending market

Smart investors are looking less at fix and flips and more at properties where they can put in less but still maximize profits. That means investors are looking more into properties they can rent. 3x2s have also become a lot more popular.

“Before they were just buying up everything. Now, you see less fix and flippers and you see more buy and holds.

When you think of the buy and holds, the investors want the wholesale deal or they want a hotel deal, they wanna be able to put in as little money as possible to get maximum.

They’re looking for strong rental opportunities. They’re looking for three twos. They’re looking for stuff that needs very little work.”

29:28 – What the average real estate investor should be looking to buy during a market correction

Dustin says newer real estate investors should look in the 100-200k range instead of high-value properties that you try to sell for a big margin. You might have more available buyers if you go the first route. You should also talk to buyers and see what they are looking for.

“I wouldn’t be playing in the 700k to 1M space. If I was new, I’d try to get down into the 100k to 200k. Just simply on the cost of money and the risk.

I would be going out and I would be speaking to buyers first and ask, what are you looking for? Because that’s gonna improve my conversion.

If I can bring them something that they’re looking for versus locking something up and then having to scramble, that’s going to be better.”

31:01 – What to focus on if you want to better a better real estate investor

To become a better real estate investor, you need to invest in yourself. Focus on building a strong network that you can lean on for advice. Having a mentor is helpful when situations go bad and you need to figure out what to do next.

“I would invest in yourself. I would be getting close with an industry expert, a mentor, or getting a part of a networking group. 

We’re a part of a group called Collective Genius.

With so much uncertainty it would be great to have somebody that’s been through this before and can just reassure you. And that ties back into the mindset that talks into process.”