Agents Building Cashflow

EP 157: How to Streamline Your Real Estate Investing with Sharad Mehta

• Sharad Mehta

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Seasoned real estate investor and the Founder and CEO of REsimpli, Sharad Mehta, shares his journey of scaling his real estate business to manage 25 to 50 property rehabs per year with minimal daily involvement, thanks to a well-structured system and a dedicated team. He discusses his investment strategies, remote project management, and the importance of aligning team incentives. 

Sharad also delves into his innovative software, REsimpli, which streamlines real estate operations. Tune in to discover the secrets behind Sharad's success and learn how you can apply his methods to achieve efficiency and profitability in your real estate ventures.

Key takeaways to listen to:

  • Implementing a streamlined system to manage property rehabs remotely.
  • Aligning team incentives to ensure project success and efficiency.
  • Utilizing REsimpli to handle all aspects of real estate operations.
  • Achieving a hands-off approach by delegating responsibilities to a trusted team.
  • Maintaining profitability with a minimum profit threshold for each deal.

About Sharad Mehta

Sharad is a real estate investor and the Founder and CEO of REsimpli, the no. 1 software CRM for real estate investors and wholesalers. His journey in real estate investing is both inspiring and informative. Over the past 10 years, he's completed over 750+ deals, all while running a virtual model from Carlsbad, California, with over 50 deals yearly. 

His unique perspective on leveraging technology and data to streamline real estate processes would make for an engaging discussion. Fun fact about Sharad: He only spends 1 hour per day running his entire real estate flipping and property management business!. Sharad Mehta is a real estate investor who has a great story to share and words of wisdom to impart for both beginning and veteran investors alike, so grab your pen and paper, buckle up and enjoy the ride.

Connect with Sharad Mehta:

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[00:00:00] Sharad Mehta: Sometimes things are going to go wrong. Not every project we make as much as we thought, but some we make more than we thought. I'm totally cool with some projects having an issue. I don't need to be involved in every single decision. I have never talked to the contractors that we're working with. I've never.

[00:00:16] Sharad Mehta: I've seen them, talked to them on the phone. I don't even know their names. So that's how removed I am from that part of the business. 

[00:00:23] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.

[00:00:43] Intro: Here's your host, Randall. Let's dive in. 

[00:00:46] Randal McLeaird: All right, here we go. Welcome back. It is good to have you here today. My guest is Sharad Mehta. We have a conversation about rehabbing properties. How he has basically turned that system where he does 25 to 50 [00:01:00] properties per year into a five to 10 minute. Her day job, right?

[00:01:05] Randal McLeaird: Or not job, but thing that he checks into, it's not his main business. It is a cash generating business that he is obviously managing and has set up. So it's really interesting how he has structured it, his management style. So we talk employees, hiring employees at length. And then he's got a software company.

[00:01:21] Randal McLeaird: So we talked on the business there and just all the things that he's working on in real estate. So fascinating guy, very intelligent. And the conversation was inspiring for me because we're getting into this ramping up of rehab business again. And so great to see how someone is structuring their business so that we can replicate a lot of the things that he's doing.

[00:01:40] Randal McLeaird: So. I hope you enjoy the conversation. If you're getting some of that show, please go on written review, give us a written review because that helps us more so than just the stars. And we do love the stars though. So let's jump into the conversation with Sherrod. Here we go. Hey, Sherrod, welcome to the show.

[00:01:54] Randal McLeaird: It's great to have you on today. I am looking forward to having this conversation and talking about you and your business and what [00:02:00] you're working on right now. Why don't we start off, give us the 50, 000 foot view, what you've been working on, what markets you're in and what you do in the real estate space.

[00:02:07] Sharad Mehta: Yeah, so I do fix and flip. I started out buying whole properties. I own about 50 units, mainly free and clear. Like I think I've blown on a couple of units and uh, I own a property management company, but actively right now I'm doing Fix and flip do about 25, 30 deals a year, live in California doing my flips in India.

[00:02:26] Sharad Mehta: And I said, it's very virtual for me. All right. I'm going to scratch my 

[00:02:30] Randal McLeaird: own itch and talk about this because I flipped a bunch of houses, got out of it. And now I'm like, kind of turn the wheel back on it and getting that going for some owner finance deals. We're going to buy them, fix them, flip them.

[00:02:41] Randal McLeaird: Right. So you're flipping out of state. Just kind of tell me how that evolved over time, or did you live in Indiana and you knew the market or you traveled there? 

[00:02:49] Sharad Mehta: I lived in Chicago. 

[00:02:50] Randal McLeaird: Okay. I 

[00:02:51] Sharad Mehta: lived in Chicago right outside of, which is, I mean, the part of Indiana that I invest in practically suburb of Chicago.

[00:02:57] Sharad Mehta: I was living downtown Chicago. So [00:03:00] just for context, this is Lake County, Indiana, about 30 to 45 minutes outside of downtown Chicago, depending on what part my office is in Indiana. Yeah. So that's how I picked the market. I moved. Out of Chicago, 2015. So since 2015, it's been totally remote, totally virtual. I haven't been to Chicago.

[00:03:20] Sharad Mehta: I don't know. Let's just say like since COVID I've only been there once. Yeah. So, and my property manager, I mean, my project manager lives an hour North of me and I have a virtual assistant in Philippines, so we don't have anyone local in our business, but. 

[00:03:34] Randal McLeaird: Wow. Yeah, that's incredible. All right. So let's pick it apart then you are sourcing deals.

[00:03:39] Randal McLeaird: So how much of that was established prior to leaving the deal flow, the contractors and all of that. 

[00:03:45] Sharad Mehta: When I left like deal flow, we were getting bunch of deals from MLS back in still 2015, you could buy a lot of stuff on MLS. We were doing some direct mail back then buying some off market properties, but primarily MLS and [00:04:00] wholesalers.

[00:04:00] Sharad Mehta: I had good contractors. I was doing about 40, 50 flips in 2015 when I left. And that's when I kind of started looking at some systems and processes that I needed. And right now in 2024, we're buying some from MLS, some from our direct mail marketing, some other tech to sell the market, like PPC, paper lead, those sort of things.

[00:04:22] Sharad Mehta: Yeah. But, I would say about 70%, 80 percent of deals that we buy. We sell retail flip your typical hgtv flips. I would say about 20 25 percent are Sold to other investors as cashflow properties. 

[00:04:38] Randal McLeaird: Okay. So is it like a turnkey rental style? 

[00:04:41] Sharad Mehta: Exactly. Just given the interest rate is high. 

[00:04:43] Randal McLeaird: Do you put the tenant in?

[00:04:44] Sharad Mehta: Yeah, we put the tenant in and then we manage in house with our property management company. Just given where the interest rate is right now. It's easier to do retail flips than turnkey, you know, the cashflow doesn't make a lot of sense right now, depending on the property, but like seven over 7 percent interest rate.

[00:04:59] Sharad Mehta: [00:05:00] So it's been easier to do retail flip is still very strong demand on the retail side, not as strong on the investor turnkey side. 

[00:05:08] Randal McLeaird: Yeah. So when you're doing these in that market, like what's a retail sale price that you focus in the ARV, if you will. 

[00:05:15] Sharad Mehta: Our sweet spot is 150 to 250, but I would say lately, most of the properties have been around 200 to 250 price point.

[00:05:23] Randal McLeaird: Okay. So that's similar in San Antonio. We can find deals similar to that. And so you're in California, correct? 

[00:05:30] Sharad Mehta: I live in San Diego area, but I invest in Indiana. 

[00:05:33] Randal McLeaird: Yeah, yeah. Got it. Okay. All right. So I know, again, RE Simply, right? We'll touch on it and kind of talk about, but is everything you do it through that platform?

[00:05:45] Randal McLeaird: Like you manage the rehab, you manage everything through that single platform. 

[00:05:49] Sharad Mehta: Correct. Except property management, property management. We have a property managed company. It's a totally separate part. So they manage, they use their own software to manage the properties. I mean, [00:06:00] we have other investors that we manage properties for, so they use a separate property management software, but for my own fix and flip.

[00:06:06] Sharad Mehta: So everything from direct to seller marketing, all the way up to like buying properties, managing leads. Fine projects, even bookkeeping, accounting, everything is done in recently. I used to be an accountant, so it's kind of, we baked in the accounting system. I haven't used QuickBooks in last three years.

[00:06:24] Sharad Mehta: Yeah. 

[00:06:25] Randal McLeaird: Awesome. Okay. So how then, again, you've got a deal, you buy one tomorrow, you have a crew, do you have an inspector? Like walk us through the process of a virtual purchase rehab and sale. 

[00:06:37] Sharad Mehta: Yeah. So our processes. The person in Philippines has been the J. He will negotiate on the deal, make an offer on the property all because we're closing on everything.

[00:06:47] Sharad Mehta: We're not wholesaling. So every property that we make an offer, we're buying it. We're closing on it. So every offer we make is contingent on an inspection. So we actually made a, just made an offer today on a property, which we're going to [00:07:00] sign contract on. The way it would work is we signed the contract and there's 48 hours of inspection period.

[00:07:06] Sharad Mehta: Okay. Once that is done, then the contract goes over to Claudia. She's my project slash office manager. She sends the contractors out there to give us a bid on the property. When you initially make an offer, we'll have some idea that it's going to cost 40, 50, 000 based on the pictures and the way the seller explains.

[00:07:25] Sharad Mehta: So we'll make an offer based on that, but it'll always be contingent on the contractor walking through. So contractor walks through, give us an estimate. If the numbers make sense, then we'll move forward on that property and we'll get pictures and videos of their property at that point. And then if everything looks good, we kick it over to the title company.

[00:07:42] Sharad Mehta: And then just close from there. Once the property is closed, then Claudia takes over the project and manages everything from start to end of managing the contractors. She's the one who was involved in the day to day business. She lives in California, also an hour North of me. She goes to [00:08:00] Indiana about, let's say once a quarter, once every four months, just to manage the contractors, the way it's set up.

[00:08:06] Sharad Mehta: On our end is we have a main bank account, like the company's operational account for buying and selling properties. Then I've set up a separate bank account for Claudia for, and then every week I'll put money in that account for her to pay contractors. So she has her own separate bank account that she uses to pay the contractors.

[00:08:25] Sharad Mehta: For me, as the owner of the company, everything is managed. Um, the numbers, how much are we buying the property for? How much are we going to put in it? And then what is our minimum expected profit from the deal? Does that make sense? You know, do we want to put our money into this deal, given how much the profit is and Claudia gets a base plus a percentage of the profit we make, right?

[00:08:45] Sharad Mehta: So she'll make a base salary plus she'll get, depending on how much profit to make anywhere from like 10 to 15 percent of the net profit of the deal. And the net profit, the way we calculate is. We also include the holding period. In that deal. [00:09:00] So let's say if you buy a property for a hundred thousand, we put 50 into it.

[00:09:03] Sharad Mehta: So our total cost is 150 from the time I just say for this example, we bought the property in June 1st and it sold on June 30th. So it took us six months and it costs us 150, 000. So we'll take 150 and we'll take 1 percent for every month as our holding costs. Right. So our cost, the hoarding costs would be 1, 500 a month.

[00:09:23] Sharad Mehta: It took us six months. So 9, 000 comes out of the net profit. If you make 50, then after all the costs, we'll subtract 9, 000 from it and distribute profit on the 41, 000. The 9, 000 goes towards like the marketing costs, hoarding costs, interest costs. Yeah. So there's then incentive for her to get the project done.

[00:09:42] Sharad Mehta: You know, if it takes three months, then she makes more money or so that, but it takes six months for a year. So yeah, that's how we set it up. 

[00:09:49] Randal McLeaird: How'd you come up with the 1%? I mean, it's novel because it's easier to calculate for sure. Okay. Yeah. I like that. Simplify 

[00:09:55] Sharad Mehta: it. It's less than a lot of the projects I'm using my money.

[00:09:59] Sharad Mehta: Then I have a line [00:10:00] of credit that I pay about seven, 8 percent on. So 12 percent covers the interest cost on that opportunity cost. Plus if marketing a little bit of marketing costs. 

[00:10:11] Randal McLeaird: Yeah. So how with your 48 hour inspection period and the way you guys structure contracts, how is it different if you're dealing with a.

[00:10:19] Randal McLeaird: Direct to seller compared to a broker to the brokers in the market. No, you, since you've been buying so many houses and they're like, okay, this is fraud's deal where, uh, 

[00:10:27] Sharad Mehta: I mean, we haven't been buying a lot from MLS last three, four years this year, we picked up a little bit more from MLS. We've noticed like few more deals coming on the market, the foreclosure, uh, foreclosure, we just bought a short sale this week or last week.

[00:10:40] Sharad Mehta: Okay. And then. We bought a foreclosure deal from MLS pre foreclosure from what's for MLS. We have another one that we're making an offer on today. That's an MLS. So we last few years, we had not been buying a lot for MLS, maybe a deal here or there, but now we're more actively looking at MLS. We feel like there's some good opportunities there.

[00:10:58] Sharad Mehta: And, but I'm not involved [00:11:00] in talking to the brokers. It's Jay who's based in Philippines. He's the one who's involved in it. He's the one who's scanning through MLS to see what's on the market, if we can make an offer on it. And because we bought a couple of properties, now we have some brokers sending us deals.

[00:11:14] Sharad Mehta: Hey, this is another one that's coming on the market. So we're getting a little bit of preferential, you know, I mean, some heads of period before a property goes on the market. So for those, we don't have contingency because they are listed on the MLS that we can go view the property before we make an offer.

[00:11:29] Sharad Mehta: So those are a little bit easier. They're listed on the market. We have the code or we have our agent code, check the property out, but it's the direct to seller one that we make an offer on. Those are the ones we have a contingency period on. 

[00:11:42] Randal McLeaird: Yeah. Got it. And so contract close typically takes you guys how long?

[00:11:45] Sharad Mehta: Yeah, I would say depending if there's no title issues about like two weeks, sometimes there'll be some title issues where one that's been. Under contract for like two, three months, it's going through a probate, but typically less than a month. 

[00:11:58] Randal McLeaird: So, and what are you seeing [00:12:00] right now in that market? Is it back to, because in San Antonio from wholesalers and that sort of thing, we were getting up to the 80, 85 percent ARV price points from wholesalers.

[00:12:10] Randal McLeaird: I've been, like you, mostly buying my own stuff. I'm direct to seller, always buying, you know. So, we were getting it 60%, you know, or as low as you can. That makes sense. So, like, what are you seeing right now? And what kind of margin are you looking for typically? 

[00:12:26] Sharad Mehta: So we don't buy anything over 70 percent minus repairs.

[00:12:29] Sharad Mehta: So every time 70 percent minus repairs, we don't buy any. I mean, I shouldn't say we don't, we'll push it to like 72, 75. If it's like a really good deal in a great neighborhood, because we know our hoarding period is going to be, you know, shorter on that versus a neighborhood where we know it may take a little bit of time, but we will not go over 75 percent and we're conservative with our ARV also, so I'm okay with that.

[00:12:52] Sharad Mehta: I'm totally fine doing like a couple of dozen deals a year and making, you know, net profit, uh, net to me [00:13:00] of like 25, 30, 000 after everything is said and done. I'm totally more than okay with that because it doesn't take a lot of my time in the business. I'm like spending maybe, you know, Five, 10 minutes a day.

[00:13:10] Sharad Mehta: Most of the business do a five minute huddle. Then I'll check, you know, the messages my team sends me on the app and just respond to that. So I'm more than happy with that. No intention to scale the business, but I do have incentives as long as it doesn't take a lot of my time. I've incentives baked in for my acquisition.

[00:13:27] Sharad Mehta: Lead manager. He gets a bonus on every single deal that we do. But if we do more than a certain number of deals, then he gets extra bonus on that. Or if he helps us get a deal on a property, less than 70%, he helps us get it at 60%. And then when we do sell and our profit is more than what we anticipated, then he'll make a little bit more money.

[00:13:47] Randal McLeaird: Yeah. Yeah, that's interesting on the sliding scale. So you have an acquisitions guy, you have project manager, you have a realtor local to the market, and then let's talk about contractors. So do you warehouse [00:14:00] materials? Do you have, you know, so how do you manage the rehabs and the crews and the people?

[00:14:04] Randal McLeaird: Because 24, I mean, that's still two a month that you have that you're closing, setting up, and you have however many, six in the pipeline still that you're, you know, going to market with. 

[00:14:14] Sharad Mehta: Yeah. At any given time, we'll have like five to six, seven in pipeline. Yeah. I have never talked to the contractors that we're working with.

[00:14:22] Sharad Mehta: I've never seen them, talked to them on the phone. I don't even know their names. So that's how removed I am from that part of the business. Explain how that came about. I mean, when I moved, I should say when I moved from Chicago to San Diego, that's when I had those relationships with the contractors and Claudia has been with me since 2015 or 16.

[00:14:42] Sharad Mehta: Yeah. My project manager. So she's been with me for about like six, seven years now. So she's absolutely amazing. My business would not be where it is now if it were not for Claudia, or I would not be so hands off in my business if it were not for Claudia, so over a period of [00:15:00] time, we went through a transition period where the contractors we were working with, they were not fitting kind of what we were wanting to do.

[00:15:06] Sharad Mehta: So Claudia is the one who helped us. The set of contractors that we're working with. And she's the one who's constantly looking for other contractors. Like just a couple of months ago, I bought an 11 unit for myself. So she found another set of contractors based on the referral. I honestly don't even know their name.

[00:15:24] Sharad Mehta: I've not talked to them. I don't qualify them. Claudia is the one who manages all of that. For me, the only thing I look for is. Because we're listing these properties on the market. So when they go on the market, we have our own inspector. A home inspector goes and checks these properties just to make sure that there's no major issue on the property before we list it on the market.

[00:15:43] Sharad Mehta: And then because they're going on the market. So our agent also, that's another set of eyes. She'll give us feedback on, Hey, this property looks like shit. Or, you know, this property looks amazing. We'll be able to move it really quick. So we have those two checks built in. And then. We're looking to [00:16:00] scale our business without me being too involved.

[00:16:02] Sharad Mehta: So Claudia is going to start traveling every other month or once every six weeks just to keep an eye on the contractors and, you know, maybe build a team of contractors. But yeah, I am not involved at all. And we don't work with the GCB sub everything out. So I don't, Claudia is more involved in managing plumbers, electrician, HVAC and like carpenters, but that's something like, I'm super grateful for.

[00:16:25] Sharad Mehta: To Claudia for that, she's the one who's managing the day to day my role is, Hey, we thought when we bought the property, we were going to make 50, 000. Did we make 50? Yes or no. You know, just basically that if we did. Yeah. It's great. Let's just do more of these. 

[00:16:39] Randal McLeaird: Yeah. That's incredible. Okay. I've had many iterations.

[00:16:42] Randal McLeaird: I don't know if that was your, you guys just built over time. And so you guys have worked that out and there's another guy. I don't know if you know him. He's out in California as well. He used to run seven figure flipping. I don't know if you know, Justin Williams. 

[00:16:52] Sharad Mehta: Yes, I've heard his name. 

[00:16:55] Randal McLeaird: He had a similar setup where he had an assistant who kind of ran all the rehabs, [00:17:00] set everything up and he hit eTrader.

[00:17:01] Randal McLeaird: So how did you build that relationship and how did you guys know each other? In order to get, yeah, 

[00:17:07] Sharad Mehta: I honestly posted an ad on Craigslist. Said looking for an assistant who can, so at that point, Claudia was living like 10 minutes from where I lived. So I posted an ad, I need someone to come and work from the office for a time.

[00:17:20] Sharad Mehta: So she came in for a week, you know, at a home office, put another desk and chair. She came in, she was doing great. I'm like, Claudia, you know what? You're doing great. You don't need to come in every day. Just come in like three days a week. After a week, I'm like, Claudia, you're doing great. Just come in like once a week.

[00:17:35] Sharad Mehta: And then after like another week, cause I'm like, you don't need to even come in, just work from home. You know what you need to do. So you don't have to come into the office. So one thing I love about Claudia is this is off my agent that she's very mindful of not bringing any problems to me. But solving them and then just telling me about it, which sometimes pisses off my agent.

[00:17:55] Sharad Mehta: He's like, Hey, she doesn't even tell you about this problem. And I'm like, yeah, that's how I like [00:18:00] it. I don't want to know. I mean, unless it's something really big that I need to make decision. I trust Claudia. She's been with me for six, seven years now and she's looking out for my best interest. I'm totally cool with if something goes wrong.

[00:18:13] Sharad Mehta: I mean, it's a business, the nature of the business, there are things, sometimes things are going to go wrong. Not every project we make as much as we thought, but some we make more than we thought. I'm totally cool with some projects having an issue. I don't need to be involved in every single decision. If it's like a big decision about, Hey, should we look into this area?

[00:18:30] Sharad Mehta: This is like an area on the fence. We haven't bought anything. Should we do that? Just like literally we bought a property in a neighborhood. Or in a city where we had not bought anything, we bought it for 60 or 55 or 60 and the numbers looked absolutely amazing. But once we started working on that project, it turns out the city is absolutely difficult to work with for non homeowners.

[00:18:54] Sharad Mehta: So we just decided, Hey, we're just going to put it on the market and we're still going to make like 65, 000 on it, just [00:19:00] cleaning it up and putting it on the market, but that wasn't our intention. But Claudia is the one who came to me and say, Hey, sure. I think this is going to be a difficult one. I've tried everything, but the city is very hard to work with.

[00:19:11] Sharad Mehta: You know, I'm just going to list it on the market. She found the agent, she listed it. She signed on my behalf and we're closing on Monday and we're going to make about 65 or 70 on it, 

[00:19:22] Randal McLeaird: which 

[00:19:22] Sharad Mehta: is absolutely amazing. I didn't even know when it went on the market, she took care of all of it. And so the way we have it set up, we buy and sell everything with the same title company.

[00:19:31] Sharad Mehta: Right, which we've done all our deals, pretty much all our deals, I should say, with the same title company. So we've done, if you include buy and sell transaction, we've done over like 12, 1300 transactions, you know, uh, buy and sell with the same title. So telecom, he knows that, Hey, if this is a deal for us, where the money needs to go.

[00:19:48] Sharad Mehta: So they don't even have to ask me with the writing section. Like, I don't even sign the selling documents because they need to be notarized. So I have my property manager in the area that I've given power of attorney. So she goes and signs on my behalf. Yeah. [00:20:00] But the money comes into the bank account of the company.

[00:20:04] Sharad Mehta: Uh, so we've set up like the systems and processes in place just to take care of it. My role in the business, the way I look at my role in the business is to make sure we always have enough money available to buy. The deals that we want to buy as long as we have that and then there are people on the back end managing everything And I don't have to get too involved.

[00:20:24] Sharad Mehta: I'm very happy with that If my team wants to do 50 deals this year without me getting very involved I'm, totally cool with that, you know, but it should not take a lot of my time To get to that number of 50, like I'm okay doing 25, 30, but of course, the more deals we do, the more money Claudia and Jay are going to make.

[00:20:42] Sharad Mehta: So I said, Hey, we can do this. We have money available for it. Don't get me involved in the business. Yeah. And, uh, so that's how we've set it up. 

[00:20:50] Randal McLeaird: That's awesome. I mean, it really is incredible. Have you ever read the founder of force multiplier? No. It's a book. That means one of many it's Adam Herringrother.

[00:20:58] Randal McLeaird: I think his last name. [00:21:00] But he was a real estate agent and he hired an assistant and how she transformed his entire business. And, and so I think of this a lot in how you have that second in command that can really like totally transform everything you're working on. So to that point, do you think Claudia was built that way or did you train her that way to take problems and solve them?

[00:21:19] Sharad Mehta: I think she was buried that way. She's super organized. And one thing I've realized, you know, between my property management business, my house flipping, but recently, you know, I've realized. For the most part, if we hire the people with the right work ethics and they don't have the right skill, that's totally fine with that.

[00:21:35] Sharad Mehta: We've had people in the past that had absolutely amazing skills, but they didn't have the right work ethics, right? So let's say if I hire someone, they have all the skills in the world they need, but they don't have the right work ethic. They don't show up on time. They steal from the company. There's no training that I can send them to and say, Hey, can you go take this training?

[00:21:53] Sharad Mehta: It's going to teach you how to be honest, right? How to show up on time. Yeah. But. If they're honest, they're willing to [00:22:00] learn, show up on time and brave to work hard against, Hey, can you go take this training on how to do property management, how to do project management, you know, my property manager, she didn't come from any real estate business.

[00:22:11] Sharad Mehta: She's absolutely amazing. And then I've given her like equity in the business or like. Pretty good chunk of profit share in the business, but she didn't come from real estate, but she was just a hardworking person. I said, Hey, you're doing absolutely amazing. How about I pay for your license? You go get license and I'll build a property management company around you and you'll get profit percentage of the profit.

[00:22:31] Sharad Mehta: She's super happy. I'm super happy that I don't have to get involved. Like, she's the only person I talked to, like, once a week for like 2 weeks. 10, 15 minutes just to check in. Hey, how are you doing? Everything good. And we have three other people in the property management. I don't even know their name. I don't need to know their names.

[00:22:47] Sharad Mehta: So that's how we kind of bid. If there's someone that's willing to work hard, willing to take ownership, then I want to get out of their way. And I just want to trust them. But initially we'll set up processes on, you know, hey, make sure that this is [00:23:00] going according to plan, right? I'll check in a little bit more, but as they're proving themselves, then I just don't have to check in.

[00:23:06] Sharad Mehta: As often, then I can just manage everything by the numbers, right? If, when we buy the property, if we anticipate, we expect we're going to make 50, 000 and we make 50 or more. There is no need for me to question that, right? We're making what we thought we were going to make, or in some cases, more than like this property that.

[00:23:23] Sharad Mehta: We thought it was going to be a problem property, but we're actually going to make pretty good money on it. I don't have any reason to question, right? Claudia is happy that we don't have to manage the project and, you know, we're going to make good profit and she's going to get, you know, percentage of the profit on that deal.

[00:23:38] Sharad Mehta: So it works out for everyone. 

[00:23:39] Randal McLeaird: Okay. A couple of questions then one again, I just love the way you structured it and the way you've set it up and let people go and you're like, I just get out of the way. So to that point, how do you, how do you screen for work ethic? If that's one of the biggest things that you're looking forward, 

[00:23:53] Sharad Mehta: I mean, that's one thing that's tough to screen for, like we're realizing, you know, as we're hiring more people, [00:24:00] it's important to take time to hire, like just the cliche of higher, slow fire, fast.

[00:24:06] Sharad Mehta: Honestly, I've been very fortunate. Honestly, it's based on gut feeling, right? Like how someone presents themselves to show up on time How they present themselves like what is their motivation? For that job, right? Are they asking questions about just money? I mean, of course everybody wants to make money, but it's hard to Judge someone or qualify someone on work ethics, right?

[00:24:26] Sharad Mehta: There's no tests you can have them take I mean, there's some personality tests that people can take. I don't have anybody take that You Like, if I'm hiding someone, it just based on like, kind of the conversation we're having, right? I'll just talk to them. Hey, this is how our business is. This is how it's growing.

[00:24:42] Sharad Mehta: And just see, do they get excited about the same things in the business that I'm excited about? Or are they focused on some other part of the business? That's not. Really relevant to me or do their goals in the longterm align with what my goals are like, those are the things that you look for. I mean, it's not a perfect [00:25:00] system.

[00:25:00] Sharad Mehta: Sometimes you'll hire someone, which you think is going to be a great fit, but then you end up finding out after a month or two. This person not working on, then you just got to move on, you know, people are going to present themselves the best they can on the interview. And you can only go based on the interview past references, but after that you hire them and put them in a position.

[00:25:20] Sharad Mehta: If they're willing to succeed, then I'll make sure I give them all the opportunities possible for them to make as much money as they possibly can. While keeping the incentive of the goals of the business and their personal goals aligned But if they're not willing to do that if they're not willing to work hard show up and you know Do the right things then we just got to move on.

[00:25:39] Randal McLeaird: Yeah, so that's kind of why I ask is like Are you hiring fast and firing fast? Like sometimes you just got to get through it and figure out how they are on the job is partly what I found 

[00:25:48] Sharad Mehta: I mean, there might be some times where we need to hire fast, right? I mean like last year we had some turnover in our in our We simply in customer support and we were like, Really, really short on ourselves.

[00:25:59] Sharad Mehta: So we [00:26:00] had to hire fast, right? Sometimes you may get lucky. Sometimes you may not. So we hired some people and then a couple of them worked out. Some of them did not work out. Then you just move on from that and just learn from your mistakes. But now that we're full capacity and we're hiring more people, it's like, Hey, just make sure we're hiring absolutely top off the top people.

[00:26:21] Sharad Mehta: No need to rush into anything. So, yeah, but if in a situation where like really, really short staff, and then you just gotta, you know, make quick decisions and hire fast. 

[00:26:30] Randal McLeaird: Yeah, I can see it going both ways and, and maybe again, like you said, if you're in a rush, you can actually end up with more people and just, you'll, you'll see the ones that rise to the top quickly.

[00:26:39] Sharad Mehta: Exactly. 

[00:26:40] Randal McLeaird: All right. So then the other question I've got is properly incentivizing. I didn't know we were going to talk employees or anything, but it's. No, I love, 

[00:26:47] Sharad Mehta: I love it. I love how 

[00:26:49] Randal McLeaird: you've structured it. And so I just want to know. So when you're figuring out compensation with your, your staff, so you got Claudia, she comes on, you said you're paying her base plus a bonus, right?

[00:26:57] Randal McLeaird: So how did you work out her base? Was [00:27:00] it just having a conversation and you figured out how much you needed and yeah. Okay. 

[00:27:04] Sharad Mehta: Yeah. And then I said, Hey, look, your base is going to be lower, but my hope would be, you make a lot more money from the incentive that you do from the base where the base is just kind of for the sake of it.

[00:27:14] Sharad Mehta: So she's making a lot more money on the bonus. Then she's making on the base and then the more money we make as a company, the more money she makes it in the company. 

[00:27:23] Randal McLeaird: Yeah. I mean, 

[00:27:23] Sharad Mehta: sometime we'll have a conversation where I'd say she helps me source a deal from her contacts. She manages the project and she also helped me on the disposition where she might say, sure, I've done this instead of like, I'd say 3000.

[00:27:38] Sharad Mehta: I feel like it is a 4, 000 because I saved you money in this. I'm like, okay, I think that's fair. That's cool. So I'll just tell my bookkeeper agent, like for this property, the bonus would be 4, 

[00:27:50] Randal McLeaird: Yeah. Got it. Got it. Okay. And so, yeah, that's awesome. Again, it's, it's one of those things like just keeping the incentives aligned.

[00:27:58] Randal McLeaird: When we were wholesaling a bunch of properties, [00:28:00] it was difficult to keep the sales staff, you Happy with the incentive structure that we had. And so I ask people now the same thing, like, how do you, how do you figure out the incentives that keep them aligned and keep the company running? Because at some point you can't pay more because 

[00:28:15] Sharad Mehta: yeah, 

[00:28:15] Randal McLeaird: the company will go broke and there are expenses.

[00:28:17] Sharad Mehta: One of the things we've started doing. Like we have our, on recently, we have our customer support based in Philippines, right? So the head of our CS team, I asked him, Anthony, you know, what's a good competitive Base pay in Philippines. So let's start there. Right? I just start there. We may be able to hire someone for like, 4 dollars an hour.

[00:28:38] Sharad Mehta: Right? But if they would be happy with 6, right? I just thought them at 6 and then I have a lot of incentives baked in there. And then the question we have to ask is. Okay, we could hire someone for four bucks an hour, right? And they end up leaving for another job for five bucks an hour six bucks an hour What is our reaction going to be?

[00:28:59] Sharad Mehta: Is it going to be? [00:29:00] Oh, yeah, you know, we'll hire another one I'm like, oh man, I can't believe we lost that person for like one or two dollars an hour for example Yeah, if that's what our reaction is going to be let's just pay them so they never have to leave Yeah, and then have enough incentive where they feel like every day show up, the more they help us produce or the more they're producing, the more, you know, like we have lead indicators, lag indicators, depending on the role, if they're helping us meeting these targets and the more money they make.

[00:29:29] Sharad Mehta: Again, the goal would be where we're giving them really competitive based, but they can make a lot of money from the incentives also. But the question we have to ask is, how would I feel if this person that I'm paying? Whatever pay something if they decide to leave this shop for 20 30 percent more would I be like man?

[00:29:48] Sharad Mehta: I would have totally paid them that person, right? Let's just pay them that right now what we think they're worth to us what we value them at and if they leave at that point let's say we're paying [00:30:00] someone 60, 000 per year right how would we feel if that person got an offer of 100, 000 and it ends up leaving like we don't want that person to be in that situation so we have this open conversation where we ask hey do you feel like you're fairly compensated right and then we say if you ever feel like it's not then you Just let us know, have the conversation and please like, don't surprise us by saying you love the company.

[00:30:25] Sharad Mehta: You love the job, but you're leaving for a little bit more money, right? So 1 question we ask everyone on our team, a CS team on a weekly basis is on a scale of 1 to 10. How happy are you right now this week? You know, 10 being absolutely amazing job. I love everything about it. 1 being, Hey, I've already interviewed.

[00:30:41] Sharad Mehta: You'll see my 2 week notice tomorrow. And then if it's anything less than 10, we want to ask why you feel like you're working too much. You feel like you're not fairly compensated. You feel like the company culture is not good. So we want to know those things, right? So we ask every single team member on a weekly basis.

[00:30:57] Sharad Mehta: And then the people that are directly reporting to me, I'll just [00:31:00] call them and say, Hey, okay. How's everything going? Like I had a call with Gabby, who's my property manager. I just said, Hey, Gabby, how are you doing? Are you happy with everything? Like we just talked a month or 6 weeks ago about her pay increase.

[00:31:11] Sharad Mehta: And we also increased her profit share percentage. So I just said, I'm like, Hey, did you get last quarter profit share? Are you happy with everything? You know, how much you're making, you know, and I'm going to be in Chicago in July. So I said, yeah, I'm going to, you know, Be in Chicago in July, so I'll come see you, but everything going good, just checking in on those things before it becomes a surprise.

[00:31:31] Sharad Mehta: It's good to have that conversation ahead of time. So you're not taken by some, because it's happened in the past where we had a person in Philippines. We're paying her like six bucks an hour. She was happy, but she ended up leaving for a job, making 10 bucks an hour. I'm like, Oh man, we were totally paid at that, you know, because she was so good, but you know, so that's a lesson we learned.

[00:31:49] Sharad Mehta: So we have those conversations, we are proactive about having those conversations, right? And we pay them a little bit more and put an incentive. So they feel like they're fairly [00:32:00] compensated. And I also went and visited every single team member in Philippines a couple of months ago. You know, we actually had everyone flying from different parts of the country.

[00:32:07] Sharad Mehta: We rented this Airbnb like on the beach and just had a good time for like a weekend. Everybody loves that, right? So we want to make sure that they feel like they're part of something bigger. It's not just a job for them. You know, we're just creating something bigger than anyone individually in the company.

[00:32:22] Randal McLeaird: Yeah. That's fantastic. Like the culture going over, there are a lot of people that I know that hire in the Philippines or hire abroad or hire somewhere. And then it's never a real employee of the company. Right. Or treated like, you know, it's just an appendage almost, you know, So yeah, that's nice to hear, I guess, through all the companies, what does the staff look like for Resimply?

[00:32:42] Randal McLeaird: And I mean, it sounds like everything's pretty remote, right? So 

[00:32:46] Sharad Mehta: we have two people in us, my assistant and affiliate manager. Everyone else is remote. Claudia is in us and my property managers, of course, the property management companies are local in Indiana and the, [00:33:00] yeah, so that's how kind of we're set up the development team is in India.

[00:33:03] Sharad Mehta: The support team is in Philippines for recently and the marketing team is in Bangladesh. 

[00:33:08] Randal McLeaird: Yeah, what are you looking forward to this year? I mean, what are you guys working on? Are you working mostly on resimply? Is that what's occupying most of your time? 

[00:33:16] Sharad Mehta: Yeah, that's what occupies most of my time because there's a lot of moving pieces there, like with the property management company, the house flipping and my rental properties that we have a pretty good system around it.

[00:33:28] Sharad Mehta: I mean, we have a good system around recently also, but we're working on some pretty incredible product updates this year that I'm very, very excited about. So this year it's lots and lots of product updates. I'm super excited about, I've shown preview to some of our Big customers getting their feedback and like, they're all super excited, looking forward to that.

[00:33:50] Sharad Mehta: That that's the stuff that brings me the most joy. And that's the stuff that I like to spend most of my time on. 

[00:33:56] Randal McLeaird: Yeah. So tell us what ReSimply is. We've beat around the bush a [00:34:00] little bit. I know we're not doing a pitch fest or anything, but just what are you working on and what is it? 

[00:34:04] Sharad Mehta: Yeah. It's an all in one software for real estate investors, mainly people that are doing direct to seller marketing.

[00:34:10] Sharad Mehta: So it's an end to end business management software, everything from managing their data. To doing marketing, like websites, dialer, direct mail. Lead management software, and then like you manage your operations, like your buyers, your vendors, your bookkeeping accounting. So the goal was when we started the company was, there was like 3 things it had to do.

[00:34:32] Sharad Mehta: It had to be all in 1 software where we didn't have to jump in multiple software. It had to be super simple to use, hence the name recently, and it had to give us really good data KPIs so we can make decisions based on that. So that's how it started. And like, at this point, I'm running everything in my business from recently and we have.

[00:34:49] Sharad Mehta: Thousands of other companies using our platform all the way from people that are just starting out looking for their first deal, all the way up to people that are doing 25, 30 deals a month using our system. [00:35:00] 

[00:35:01] Randal McLeaird: Awesome. Well, I've torn through so many CRMs and so many different things. There's a guy local to San Antonio that had one he was coming out with.

[00:35:10] Randal McLeaird: And I mean, we went through Zoho, we went through HubSpot and we had 17 different thing, Mojo. We had like all the different dialers, all the different things. And so if you're compressing all of that into one software, then it's beneficial. You can definitely see that. Yeah, 

[00:35:23] Sharad Mehta: absolutely. Yeah. That was the goal from day one.

[00:35:26] Sharad Mehta: It had to be an all in one software. So 

[00:35:27] Randal McLeaird: when did you actually launch that? How long has it been around? 

[00:35:30] Sharad Mehta: For four years now. Yeah. Four or five years since we opened it up for other people. Yeah. Yeah. 

[00:35:35] Randal McLeaird: Awesome. Well, it is, I mean, I was playing around with it, so I'm going to play around with it some more, but, um, I don't have much else, man.

[00:35:43] Randal McLeaird: It seems like you're just kicking it and doing really well. The very interesting thing to me still is being able to flip remotely and the fact that you are, you're a very laid back guy. Like, you seem very laid back and you're like, if somebody's going to do it, I'm going to get out of their way. [00:36:00] And so the structure that you've set up around that, if anybody can replicate that, I think it leads to a relaxed lifestyle on the real estate investing front alone.

[00:36:11] Randal McLeaird: Like if you could just do 20 flips a year without spending more than 10 minutes a day on it, like that's right. 

[00:36:18] Sharad Mehta: It's not a complicated system. Like it's not like anything, like I have intellectual property on or like, it's a pretty systems, simple system align my incentives with that of every single team member.

[00:36:30] Sharad Mehta: And that's it. Like, as long as that's the case, then if they're motivated, if they're self motivated, then they're going to do it. Do what they need to do and I get out of their way, then I'm very clear about making sure we always have enough money to buy the properties as long as we do. And like, you know, they're not going to buy something just for the sake of buying.

[00:36:49] Sharad Mehta: If it's not going to make any money. Right? I mean, we also have another thing. We have an incentive it that every deal that we do, it has to make minimum like 15, 000 in net profit. So there's no. [00:37:00] Bonus given to Claudia if you make less than 15 on any deal. So that's another thing like that's the floor that we have on every single deal.

[00:37:07] Sharad Mehta: And then it can go higher than 15, but if it's less than 15, then she doesn't get any incentive on the deal. 

[00:37:12] Randal McLeaird: None of the bonuses on it. What about the acquisitions guy? They getting bonus if it makes less than 15 or this is our bonus paid up front just for finding and sourcing the deal. 

[00:37:19] Sharad Mehta: He will get bonus paid up front, but he won't get anything on the back end.

[00:37:23] Sharad Mehta: Yeah. I mean, it's not happened where we've made less than 15, but we have that in place. I think that's one of the reasons why it's not happened. We won't look at any marginal deals. It has to minimum 15. So then Claudia will add her own buffer on top of it. Right. If it's going to, let's say make 18, it's like not worth it.

[00:37:39] Sharad Mehta: Right. So for it to make sense for her, it needs to be 30. So even if something goes wrong, she's still making a little bit of money on the deal. 

[00:37:47] Randal McLeaird: Yeah, and then you can just turn and burn as many deals as they want to do. Exactly. 

[00:37:51] Sharad Mehta: As another, it doesn't take a lot of my time. 

[00:37:52] Randal McLeaird: Yeah, for sure. I love it. So we we've kind of transitioned into this phase.

[00:37:57] Randal McLeaird: I was doing similar to you. I was always [00:38:00] subcontracting everything out, having all my own crews and guys, and I was warehousing materials, doing all that stuff. And I've always wanted to have a system. Similar to what you've got going on. You know, it's just like, I've got capital, let's put it to work and you guys run it on due.

[00:38:15] Randal McLeaird: So again, kudos to you. 

[00:38:16] Sharad Mehta: I mean, we could, we could warehouse some stuff. You know, I have a garage storage at our property management company. We own our own building. We could do that, but I'm like, is it really the best use of our time and effort? Yeah. I'll gain some, it'll save us some money, but would that take time away from doing other things?

[00:38:36] Sharad Mehta: Maybe like of all the projects we're doing, let's say it saves us like 30 40, 000. Yeah. I would rather do an extra deal And not have to focus on that and let the contractors make a little bit of money, extra money on that. But then it opens up our time to do another deal or two, because we're not worried about like inventory.

[00:38:55] Sharad Mehta: So, I mean, that's how I look at it 

[00:38:57] Randal McLeaird: for sure. And the only thing that I would [00:39:00] say, I interviewed a guy the other day, there's a deal that, um, that Lowe's has, where they will, they'll set up your whole warehouse. So, Have you seen it? 

[00:39:09] Sharad Mehta: Yeah. That's something with home depot, but it's like, I really look at, is there another thing that we have to manage, you know, like then we're getting bits from our contractors for labor only.

[00:39:22] Sharad Mehta: We're paying for the material. You know, there's like, we have to approve the material stuff. We used to have that deal with home depot. I mean, I would get some pretty good sized checks from them, like 2 percent cashback or something. Yeah. That's pretty good. Decent sized checks, but I'm like, you know, it's great.

[00:39:36] Sharad Mehta: But now like someone has to approve those transactions, right? It's like, yeah. Is it really worth it? No. Yeah. I mean, if that was my full time gig, maybe yes, but like the way I look at it is that my time is super, super valuable. Right. So I'm totally cool with letting go of that, but having less, one less thing to manage.

[00:39:58] Sharad Mehta: And maybe that one less thing will help me [00:40:00] buy a couple of extra deals and more than offset the savings on that. That's how I look at it. For sure. For sure. Yeah. And it works for me at some, some people might hear him like, Oh, you're leaving so much money on the table. I'm totally cool with that. I don't really understand.

[00:40:13] Sharad Mehta: Like I have all my properties free and clear at 50 unit or 90, 95 percent of them are paid for free. I 100 percent understand if I leverage, I can add another two X, three X, the units that I have, but I don't want that more than happy free and clear cashflow. The lifestyle that I have, it's more than happy with that makes sense to me.

[00:40:34] Sharad Mehta: It may not make sense to everyone. So I value my time. Very, very highly. So again, it's the system that works for me. It's very, very simple. I don't need any like tools, anything to manage. It's like, this is what we're going to do day in, day out, follow that, man. That's it. It's like going to a gym. If I go to gym every day, eat healthy, I'm going to lose weight.

[00:40:54] Sharad Mehta: There's like no two ways about it. 

[00:40:57] Randal McLeaird: Love 

[00:40:57] Sharad Mehta: it. Yeah. That's simple. Just do that. [00:41:00] It's just do that. I mean, just do the boring stuff every day. Yeah. I, there's, there's nothing like, we don't have to have any fancy, Spreadsheets like we don't use any Google sheets spreadsheet. Like we literally have a calculator built in and recently just plug in the numbers.

[00:41:15] Sharad Mehta: And that's it, like we just put how much we're going to sell this property for how much we're going to spend on rehab. And it just spits out maximum offer on that. That's just a very, very simple system. Like, I love the simplicity of what we have. I may be leaving some money on the table, but it works for me.

[00:41:33] Sharad Mehta: Super happy with it. My team is happy with it and that's what it's all comes down to. 

[00:41:37] Randal McLeaird: Yeah. Well, sure. It's been awesome catching up, man. It's inspiring. Again, I hear it. I hear the story and it's like that thing that being able to manage deals and 50 projects without much time. I mean, that really is why.

[00:41:52] Randal McLeaird: So many people get into real estate investing and I think too often get sidetracked trying to perfect something. I definitely am guilty of [00:42:00] this. Like I'll, I'm going to make this perfect system and everything's going to be great. And then I'm spending all my time, like managing a system instead of just keeping it simple and just letting people do their work and be okay, leaving some money or sharing some of the profit with partners and people who will make my life easier.

[00:42:14] Randal McLeaird: So. Yeah. Again, inspiring. So I appreciate you jumping on. I'm going to put all your contact info in the show notes. If you are looking to invest or you're looking to get a software, I know Sherrod has a software, we'll put a link to resimply in the show notes as well, so you can click through to that. Yeah.

[00:42:30] Randal McLeaird: So again, appreciate you jumping on. 

[00:42:31] Sharad Mehta: Thank you, man. Appreciate it. Did you 

[00:42:33] Randal McLeaird: know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional. If you want to stay up to date, the best way is to make sure you're subscribed.

[00:42:45] Randal McLeaird: So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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