Financial Freedom Fast
Finding the RIGHT Partner and Doing Thousands of Deals w/ Kevin Shippee
How would you navigate the turbulent waters of the real estate industry and come out not just surviving, but thriving? Today, we share the microphone with Kevin Shippy, co-founder of the behemoth that is Two Guys Take On Real Estate. With a portfolio boasting over 700 rental properties and 600 flips, Kevin invites us into the engine room of their operation, revealing how they've scaled their business, found the right partners, and achieved financial freedom.
This episode isn't just about wins, though. Kevin gets real about the chaos of their first decade in the industry and the challenges they've had to overcome. From dealing with non-paying tenants to making snap decisions to fill vacancies, it's a raw look into the journey these guys have taken. We also get a taste of their unique property acquisition process - complete with squatters and surprise occupants! It's a wild ride and a masterclass in resilience.
As we round things off, we dive into the nitty-gritty of real estate auctions, partnerships, and the balancing act required to keep things running smoothly. Kevin shares invaluable tips on how to navigate differing perspectives for a successful partnership. Plus, we explore the importance of understanding the responsibilities of a property owner, the potential of acquiring properties at auction, and why different mindsets are the secret sauce to success. Whether you're a seasoned investor or just starting out, prepare to walk away with a wealth of insights into the real estate investing world.
Download my FREE E-Book on Scaling Through Partnerships NOW
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Apply for mentorship with Matt and the FAST FI Coaching Community:
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How would you navigate the turbulent waters of the real estate industry and come out not just surviving, but thriving? Today, we share the microphone with Kevin Shippy, co-founder of the behemoth that is Two Guys Take On Real Estate. With a portfolio boasting over 700 rental properties and 600 flips, Kevin invites us into the engine room of their operation, revealing how they've scaled their business, found the right partners, and achieved financial freedom.
This episode isn't just about wins, though. Kevin gets real about the chaos of their first decade in the industry and the challenges they've had to overcome. From dealing with non-paying tenants to making snap decisions to fill vacancies, it's a raw look into the journey these guys have taken. We also get a taste of their unique property acquisition process - complete with squatters and surprise occupants! It's a wild ride and a masterclass in resilience.
As we round things off, we dive into the nitty-gritty of real estate auctions, partnerships, and the balancing act required to keep things running smoothly. Kevin shares invaluable tips on how to navigate differing perspectives for a successful partnership. Plus, we explore the importance of understanding the responsibilities of a property owner, the potential of acquiring properties at auction, and why different mindsets are the secret sauce to success. Whether you're a seasoned investor or just starting out, prepare to walk away with a wealth of insights into the real estate investing world.
Download my FREE E-Book on Scaling Through Partnerships NOW
CLICK HERE
Apply for mentorship with Matt and the FAST FI Coaching Community:
APPLY NOW
Follow Matt online:
Instagram
Facebook
Youtube
somebody might want to get as much out of the partnership as they can, so they're going to advocate for themselves all the time without really thinking of things from your perspective, and that might mean percentages splits. Some people aren't used to standing up for themselves like that and saying wait a second, I could replace you and your 90%, just because they're bringing all the money, and this wouldn't be possible without them. That's true, so flip that around. And it wouldn't be possible without you and your abilities too.
Speaker 3:What is up? Financial freedom fast fam. Today we've got on Kevin Shippy of Two Guys. Take On Real Estate. They own over 700 rental properties. They flipped over 600 properties. Today we dive in on the main areas and ways that they have been able to scale their business.
Speaker 3:But I'm not going to try and make it like you guys want to build up this giant business, because maybe we all don't, maybe we just want 10 to 20 to 30, maybe even five, maybe two great rental properties and we dive in how to do that, going to foreclosure auctions and also, something that I'm passionate about is partnering and finding good partners to get deals done and the ways and things that we have to work with our partners. So excited for you guys to dive into this. If you are not subscribed to this podcast, that's what I need you to do. I need you to click that, follow that, subscribe that plus, wherever you're at Apple podcast, spotify, click that subscribe button and make sure you get notified when I drop the podcast. My peeps, so we are going to dive into this podcast. So, without further ado, let's jump into the pod. Kevin Shippy. Welcome to the financial freedom fast podcast. My man, my brother, what is?
Speaker 1:going on. Dude, that's one hell of an introduction. Thanks very much for having me on here, I appreciate it, Dude, really, really excited to dive in today.
Speaker 3:Guys don't know Kevin. You probably should, and you might even know him without even knowing that you know him. He is a pretty big social media influencer, If you call it that.
Speaker 1:I don't know if you call it that right, hi, I happen to hear that or say that you have to say influencer.
Speaker 3:It reminds me of the 16 year old like the dead TikTok dancers doing all that stuff. No, really cool social media page. Two guys take on real estate you and your partner, Matt, that you guys run there. Guys, we are going to dive in so much today, so much experience that Kevin has to be able to share. They've done over 600 flips, 700 rental properties now like tons. You've got a book written for closures unlock that. If you guys haven't checked that out, you should definitely check that out. And if you are thinking about checking out this podcast, we'll probably make you want to go and do that. Done a lot of foreclosure auctions, things like that. So excited to dive in today. So, kevin, I think I gave a little brief intro of what you guys do, but hey, if you could, why don't we just give a 30,000 foot overview of who you are and what you do right now, as well as basically putting this from a two guys take on real estate perspective. 30,000 foot overview.
Speaker 1:Yeah, it's really hard to do that because I'm just still seeing us as just a couple of dudes who bought a random rundown house one day, if you don't think of us as anything much more than that. But when I start hearing those kind of numbers that you're throwing out there and talking about that and our social media file and all that, it's weird to really think that we are one of those bigger dudes that people talk about when it comes to this stuff. So yeah, I don't know, it's just a really odd situation for me to hear those things back. But yeah, matt and I got in business about 15 years ago feels like 30. And we bought a rundown, vacant two family house, we fixed it up, we rented it out, we started with basically what's called the Burr method today and we just kept rocking ever since. We're getting into commercial stuff now. But yeah, we do a little bit a lot of it of everything in the world of real estate commercial, commercial. We even got it as self storage, you name it, we're doing it.
Speaker 3:Oh man, I love that is going to lead us into so many different paths that we can just touch on today, which is amazing. So one of the main things that I've heard in the market today is like you need to niche down, you need to know exactly what you're buying, you need to dig in and find the right type of property for you to go in and get and I've always been on the outside of that. Hey, yeah, but I kind of want to do a little bit of everything and if I can just find deals to buy, I'll go and buy those deals, whether it's small, multifamily, larger multifamily, single family commercial properties. If it's a deal, I'm going to try and get that deal done. So how have you looked at that in your investing career and how did you transition? Are you in the state right now that you're like we should niche down and focus only on this, or you're okay with doing a little bit of everything?
Speaker 1:We started off not knowing anything about real estate or what we were doing and really without a plan. So our the first over 10 years of us doing business was chaos and it was a scrambling and scrambling to fix mistakes, spin those plates like you see at the circus or whatever, and keep things going. So yeah, the idea of having some kind of like structured, thought out, niche down type of thing is not that important to me because it's just not what I'm used to right now and I've always been just simply used to the chaos, pivoting, adjusting and being flexible and fluid with the way in which you're running your business. So I would say, and I would reach from that perspective, that if you're going to be doing, you can find something, a property that's you could acquire. You can make it a good deal by being very flexible in the way in which you're going to utilize that property. Not every property is a great buy as a buy and hold and a rent if you're at residence. Not every property is a great purchase if it's a buy to flip. The ability to be flexible and your use of the property can turn Most opportunities into something you can make money on. So I like that but I completely get the Flip side of that.
Speaker 1:Where are the other side of that, I should say, where people want to buy in a certain neighborhood or in a certain town. They don't want to see anything else outside of that. They want growth, but they want controlled growth. They want it on their own terms, with the same type of properties or the same type of situation. They will only rent a section 8 or they will never rent this section. They'll only rent our own B class and a class type residential properties. They're never gonna be getting to those tough neighborhoods that you read about. Right, they find an issue, they stick with it and that's awesome. But the problem with something like that is, like you said, niching down, your Minimizing other, all sorts of other opportunities. You're turning away all sorts of other opportunities. If you're okay with that, great, it's your business, you're the one running it. Do what makes still sense for you. But if you were going to make that decision, know it for what it is and know the Opposing viewpoints of it, you're gonna miss out on a lot of other opportunities that could be amazing.
Speaker 3:Yeah, and the people that say that that you should niche down, they're right, because you can. If you niche down into one area, you become that guy that does that or that guy or girl that does that specific thing, and those Opportunities can find their way to you and you can go do them. But I think that when you have your opportunities spread out and you have the opportunity to go buy this Self-storage facility, which I'm looking at now, or go buy the commercial building, the small residential, a single family, whatever it is you can look at everything. It also keeps things exciting and keeps you involved. So I love that you guys did that and this is a lesson for our listeners that you don't have to niche into One specific area, that I am only going to do this. You can keep yourself open to all the opportunities and when a good opportunity comes, you can go after. But if you want to niche down, then niche down, do your thing. I'm not telling you what to do. I'm telling you what the options are and what you can do.
Speaker 3:So you mentioned, kevin, that you had around like 10 years of Pay-up it and blades at this circus man. I love chaos because we learn so much from it and the lessons that we take from it. Tell me about these first 10 years of chaos that you had. What was that like? What was building up like from your first property, this run down? I think it was a duplex that you bought there. Let's dig into I took with Elisra.
Speaker 1:That's those memories. Why that in turn it goes back up when you work a little charter and the cuff them under the water. Over here I'm gonna.
Speaker 3:I'm gonna need to hire a psychologist for you after we go through this, or a therapist.
Speaker 1:I should get into podcast in the couch. Serious, so no, I'm sorry. So what was the question? You want me to relive all the trauma of my first be it.
Speaker 1:Yeah, let's hear about it, yeah, so I'll say first of all, it started by partnering up. Okay, and in the channel is called two guys take for honor real estate or a reason. There are two of us, matt and Kev, and today I guess, you get the discount for half price. You know one one way, one of us thick and, if I had a habit, a business partner or, in those days as he started, we had multiple business, and that itself is an incredible challenge. Marriages fail right in a partnership and partnerships are not that far off and they're somewhat akin to marriages, they're very child, and I'm, and I think I have a pretty good situation going that I think we didn't have those kind of challenges Early on that. This with each other, of course, but with other partners that we have lost along the way, suntaking as long as right up, so just a couple of years ago, where we lost our last or why say lost, I don't mean we're like actively out there looking for and they're ready to sacks, that it's Harder shit anymore. It's that we, we went different ways, so that itself could be very tough and that was crazy for us.
Speaker 1:But not knowing and making every mistake you could make in the book, sometimes using what you think else is logic. Maybe in the world of real estate, renting out an apartment, giving somebody a chance. I just need a second chance on to get back on my feet. Maybe working with a program that'll help a new tenant move in with some assistants like first-last security assistants because they're in a bad situation. They need help, and giving them a chance, but not having safeguards in place to protect you. They live there and all of a sudden it's finally time for the first months worth of red that they're responsible for. After that program. I'll them and all of a sudden it's I don't have any money, I've got three kids, I don't have a job, a lot and you're like wait a second. I guess they should probably put some kind of screening process or requirements in place and they're learning that, unfortunately, as we go. And Then, how do you deal with somebody who's breaking rules, creating a you know, a hazard at the property or a nuisance or a dispute? How do you deal with somebody who doesn't pay you for your service? I think conventional logic would say somebody doesn't pay you to Provide services for them needing you would stop providing services. And that's just not the case, especially in certain types of states like Massachusetts, for instance, where we have most of our activity, and so we dealt with a whole lot of crazy growing pains early on, from not the most successful or best Partnerships available to not knowing how to manage growth.
Speaker 1:There was one year we went to, as you've been doing for a while, went to a ton for closure off. You and we were acting emotionally at these foreclosure auctions. We were buying something and somebody's. We'd buy two to three houses in a day at an auction, throughout the day and in the morning we would go to one. We'd win one and we would say, wow, we won such a great deal. This property we're making. It's got $80,000 in equity on this one. So the one in the afternoon when we had a bidding number that we were going to bid up to, we would bid a little bit higher than that because we said we made $80,000 this morning, we can afford to bid an extra 10, 20 or $30,000 more this afternoon and, of course, doesn't hold up. I was acting a whole lot. You're going to find that you didn't really make that $80,000 that morning. That place didn't turn out, it didn't have any money, all sorts of stuff like that moving very fast.
Speaker 1:And I think one of the biggest things we learned, too, is when we finally did, as we grew through this, come up with a plan. What we weren't doing, we didn't implement a plan. We said, listen, what we're going to do is we're going to not, we're going to focus on filling all of our vacancies, getting a good tenant base, and we're not going to keep buying new rental properties until we've stable it. And then what we would do is three weeks later or a month later, we wouldn't give the time that plant enough time to actually work itself out.
Speaker 1:Some of these things take time and we would say, oh gosh, we need you to x-y. I guess we got to make some changes. So let's buy some more property, we'll refinance it, we'll do some flips over here to offer that money we're having in vacancy loss over there. And it was just, it was always scrambling and chaotic. So that's not the way to be limited, that's not the way to be running your business by trying to not rob Peter to pay Paul, but make a deal over here to deal over there to backfill mistakes you're making over here. And so nowadays it's so much better where we're a lot more stable. And when I say my days are crazy days, it's because of a crazy story that happened, a crazy whatever situation or event, not just simply a crazy, unstable lifestyle.
Speaker 3:Yeah, it's an entire 10 years of putting all the pieces together and making sure that the business is running. And now, what do like the first five years like? So, year one, you bought property number one. What did scaling look like after that? I don't need to know exactly. Oh, we, year one, we got 12 units and then year two we got. But what did it look like? Like when you what? I say these numbers 600 plus flips, 700 rental properties. Hell, these numbers sound ridiculous to me because you do one flip at a time, or you could be doing like 50 flips with one big facility, but I think of it as one property, one flip. So you did that 600 time. How did you build like? What did that look like from year one through five? As I'm in year four of my investing career right now, Was it a hockey stick towards the end, or what did those numbers look like when you were like, did it just blow up? Tell me a bit about that.
Speaker 1:We started off like I'd bet you. You started off with a two family is rundown, haunted house, place didn't need rehab, but I always say you need to be in the next assistant. That's how bad it was. And again, so what we did is you just work really hard. That sounds super easy to say but people don't always have an appreciation of what that means. And my favorite expression is when somebody sees something you have, I don't, it must be nice. You know what I mean. They hit you with it must be nice, no, like, no, it's not nice. It was not nice. Earning that student's really hard. Yeah, buying the first two family house, what I mean. How did that work? That was tough.
Speaker 1:So I had a regular job at that time. I had done a career basically of several years of being in one form of sales career or another. At this point I had just a regular sales job and I would wear, get up in the morning early as I could stumble out of bed, wear crappy clothes, wear them to the house, and I'd work there with Matt. I'd do whatever we needed to do and we're watching YouTube videos trying to learn how to fix this, redo that, and I would bring nice clothes with me, keep them to trunk of my car. I would then change into my nice clothes and go to my sales job, work however many hours a day, $80, whatever it is, and then I would come back to the property and work there with Matt till midnight and my crappy clothes once again. And that went on. We didn't know what we were doing. We we specularly have to be take X amount of time. It took way more money and time. So we just work more hours and put in more time.
Speaker 1:And you know that's really hard. When people like say I really want to get started up, I don't mind working hard, I don't mind. And when they say working hard, somebody thinks that's 40 hours a week. Man, I work 40 hours a week doing this. I'm like that's not even scratching the surface. And when you make a mistake, sometimes the only way out of it is to work harder. And when you're already out, what you think is you're breaking point. 40 or 50 hours, it's not until you are either going to lose everything you know out of taste with falling off that cliff and till you realize what really working hard is 70, 80 hour work week and eating a sticker bar for lunch because you can't afford more and you got to put the money into stuff that's working hard and that's sacrificing. That's because the alternative is failure, and so that's how we started.
Speaker 1:We then eventually, kind of like I said, we had some other partners. So eventually we ended up partnering up with and adding enough people to the equation where we add some like, say, some money came in as investment money as well. That allowed us to start maybe doing two properties at a time. So we did one that we basically refied, took the money, we repeated like the burbats and went to our next one. I think after we had done like one or two like that, we then started acquiring a couple of extra properties.
Speaker 1:We started staffing up if you could call it that staffing up with if I had a friend or two or anybody that was maybe between jobs or wanted to make an extra few bucks or whatever it was. So just part timers and some people that are looking to make cash under the table for a day, labor and tight stuff, and we would hire so and so to go slap some paint here or throw up there, sand the floors there, and now we're trying to manage operating, the renovation and bringing up of a couple of properties at the same time and then selling those units with tenants, managing tenancies, leasing people up, learning all that collecting, because that's not always a given that people are simply going to pay for what they would pay, and that's how we continue to grow. We work at a minimum. We work six days a week, roughly 12 hours a day for at least the first ten years.
Speaker 3:And what did work look like? Obviously it evolved over time. In the beginning, work looked like you being at the property doing shut contractor work. But how did that evolve and what were the systems that you put in place so you learn how to lease stuff up? But then did you hire in somebody to do property management in-house property management? What did that look like? That seems like a logistical process that you had to go through there.
Speaker 1:It was, and the thing is again, we made every mistake. So I'm not saying, hey, this is what you need to do, folks, this is how you do it. Be prepared to do this. The reason we had to work so much because we did what the hell we're doing we threw something up and the only way to fix that is by working harder and making more sacrifice, so that I ended up moving into what our rental properties, what our rental properties? So I lived in one unit, matt lived in another apartment, basically right above mine, and they had the first floor rented out.
Speaker 1:This is several years in, this is maybe about five or so years in and we had staff. We had some like basic actual employees, some office helpers, some maintenance helpers, that kind of thing and then we basically made my little room our office and that was basically. People come into work, maybe in the bathroom or microwave a bagel or something We'd like, go into my apartment and my kitchen and we borrowed my dad out of pickup truck and old Chevy S 10 and we borrowed his pickup truck. So we had a maintenance vehicle. We did everything we possibly do to do this and essentially create a staff and create a micro business, just like people that start out of the garage. Same kind of idea and the start of a management company to now manage our properties that we had purchased and got on track and yet that ended up being leasing and the collections and having to go to court and bring people through an eviction process if they wouldn't pay and wouldn't leave, which is incredibly common, again in certain states that create it I don't know, create an environment for that with laws that offer basically no consequences to people that do the wrong type of things that you're basically in.
Speaker 1:So that became a very real issue. A chunk of time as well is basically just after you do all these things and get somebody, a new customer, signed up and all these stuff and all moved in. Then it becomes I don't understand, why aren't you paying? And you're getting into payday plans, collections, following up. Of course they get into the court process because they won't pay and they won't leave. And then they surprise you at court by saying, oh, why should I have pay? I haven't had heat in six months, or this doesn't work and that doesn't work. So I have to all of a sudden try to defend these baseless allegations. They don't have any proof that whatever they're saying is a real thing, but I don't have any proof to prevail against it. How could I prove that there's nothing wrong with their eating system? I didn't even know they were going to bring it up, and so we started creating processes to document stuff.
Speaker 1:We couldn't afford management software at the time which would have helped us stay organized and keep all that stuff available. So we were like taking doing spreadsheets for everything and using Dropbox and all the free alternatives and software to track tendencies, to track payments, to track maintenance requests. To document that, we did a work order and then we did fix that leaky safe and here's a photograph of it. Here's their signature on a work order. We developed a property management company by fumbling our way in the dark and by saying, listen, we're not going to let them pull this out Again. Now we've learned, because we got beat by this guy, that we're going to do it this way from now on. So a lot of it was learning and it was grossed by continuing to add to our team as best we could build an infrastructure, having a small office we could operate out of and continue to acquire more and more apartments, growing further and further.
Speaker 3:So you started to run into these challenges and each challenge was a point that you could actually say, man, this sucks, I'm just going to give up, I am so done with this stuff and quit. But I think it becomes more important over time that we start seeing that life is this continuous thing and each challenge that pops up is a new opportunity for us to grow and learn something new, build a new skill, build a new system. So in the future, when we run into that problem again, we will be able to tackle and easily take it down with what we've learned in the past. And I love that you kept running into these things and basically building your own system, your own process around it. And now, from a high level view.
Speaker 3:What I want the listeners to realize is that this is not all just one big amalgamation of a business that they were building out here. There are two separate businesses here that are vertically integrated very well with each other. We have a property management business that they're building up and making sure that they could manage the properties that they are acquiring, and then they've got their business that's going out and possibly finding investors and buying more properties and getting these done. So I see two separate things here. I know you focus a lot on that management aspect and dealing with those types of issues and we've got two main things here. So who is dealing mainly with the acquisition of the properties, bringing in the investors? Is that something that Matt mainly handles? How do you split those responsibilities up and what does that look like?
Speaker 1:Yeah, so no responsibilities end up shifting as you grow and as things go. Of course things are going to shift. Yeah, I spend, I guess, more of my time dealing with situational things and Matt will often spend a lot of his time dealing with the acquisitions slash like renovations of a property or a project. But we do a lot of our property acquisition. We've done it a lot, as we talk about in our book, through foreclosures. So we'll go to a foreclosure auction. These things are happening, actually live at the property almost all the time. So when we go to these things it's usually it'll be the mad or myself.
Speaker 1:We're going to evaluate the property as best we can. We evaluate the comparable values, the ARVs, what it's worth after it's all repaired. How much does it get to cost, get it up to an ARV of that money, what kind of renovation budget you would need, and then also give ourselves some outs in terms of what kind of things we're going to do with it. So maybe we're going to flip it, maybe we're going to sell it as a wholesale deal to a contractor. Maybe we'll buy it, keep it and renovate it and fix it and turn it into a rental property or buy an old. Well, both handles. Maybe some aspect like I'll be going to auction one day you'll see me on live on a live stream doing that we do that a lot on our channels or maybe another day to do that and either way one of us will end up doing the acquisition of the property.
Speaker 1:But then maybe the property has occupants in it and I got to eventually, once we close on it, go knock on a door, find out who's behind that door. What is going on? Is it a squatter who took out all the copper? I mean, is it in the case of the property I just came back from in time for this broadcast is a is a. It's occupied by the slumber owners, like son, like the former owner passed away a few years back. Nobody did the mortgage for forever. The bank foreclosed on it, the son realizing, hey, I know where there's a vacant apartment I can live in for free stuck on in there and has been squatting there, forcing the bank to basically have no other option but to hold a foreclosure sale. And now we're dealing with him and you never know what you're going to be dealing with behind that door. Sometimes it is just a whole lot of it lost a place. A lot of times it's vacant, so you never know. But today.
Speaker 3:But today, what was the case today?
Speaker 1:Today is a one. Wow, just a people. I swear to you, if we didn't write a book, I swear I couldn't even tell people with a straight face some of the stuff that we deal with it have seen and we're going to have to have another one. I love to say I can't make this stuff up any better than this, because it is crazy. So today this property and I think I'd mentioned this is an ongoing situation. This didn't make it into the book because the book's already out. The book has stuff similar in style, like this, but this one is crazy. This could be its own story.
Speaker 1:It's a two family house. It's a duplex. We bought it at a foreclosure auction. At the auction we could tell it was half occupied, so half vacant, depending on if you're an optimist or pessimistic. Half occupied, we'll go with Left side vacant, right side occupied. The occupant comes out threatening people at the auction.
Speaker 1:A few bid on this house, coming to get you or going to have a problem. We used making very direct threats about the things you will do with weapons and whatnot. Of course, we know the freaking answer. They were stupid and Matt doesn't care. I'm not sure who bid on it. I think it was probably Matt. Matt doesn't care because he knows as soon as we own it, we're in. The idiot that's got to go over there and go knock on the door and be alive. All sharks spit out it. I don't look like I'm in a conversation with a guy who just threatened to hurt and that's exactly what I did to you and exactly what I did.
Speaker 1:I went to the house, knocked on the door. They slugged me some nonsense about why my wife is here. She's about to give birth, so I can't focus on anything else. I thought the house was going to be my house. It was my mother's property, my attorney, this, my attorney that I submitted. Give me your info for your attorney. Here's my info. Send her to reach out. Have me, email me. I'll be happy to talk to him. Focus on your family, focus on your health. This isn't a big deal. Nothing else to happen. Why, story short, be another that ever happens. It's now four months later and they're still coming up with the excuse that they have to be in the hospital today giving birth. The notice that they had a court date In the meantime, right after I left. This is four months ago.
Speaker 1:I leave the house meeting him. He advertises and rents out the vacant unit and he hustles these poor two women into renting a unit that had never been renovated. They had no smoke detectors. This place is not in great shape, it was a before closure sale and he takes a little over a thousand bucks off of them, lets them move in. They didn't even give him a key. The place didn't have them both on it. Now it's moving.
Speaker 1:A week later we go to show up at the property to do some work in that vacant unit and start making it safe and stuff. And they're like what are you doing? If you've got a problem, talk to my landlord. He lives next door. And we're like so this guy had fraudulently rented the place. Puts himself out there as the landlord. He's never owned the house. Anyway, we eventually resolved that whole left side. They move on. And so now that left unit is vacant Once again, as it was when we bought it.
Speaker 1:And I stopped by the house today to check on the place. Sure enough, there's somebody passed out asleep on the floor in one of the bedrooms. It's a flip level duplex. I tore on the corner not thinking this. I was just there on Friday, empty Out here. Now it's Tuesday and I show back up, and didn't definitely did. I like to see somebody there Digged, passed out on the floor and the first thing I said I should livestream and make some break. But I didn't. They got. I didn't because I probably wouldn't be here. I did go back outside, I called the police, had the police come over and wake the guy up, and I'm glad I did, because the guy woke up with a ruckus and with a loaded weapon, and so I'm really glad I wasn't the one that made him wake up. Surprise.
Speaker 3:Glad too, because, yeah, we wouldn't put what I said earlier, we'd be having this cover. I would still force you to do the podcast. We'd be doing this from the ER and we'd be having some beeps going on in the back. We would make it happen, man. But yet when you go through, when you have this many properties that you're buying, you run into these issues and I've, over the handful of properties that I've bought for myself, like I have run into enough of these issues.
Speaker 3:The first property I had a contractor working here, sleeping upstairs so he could get more work done, like he would work all day, sleep upstairs. When he broke in at night and then my contractor comes down and starts fighting with the guy. He makes the guy bleed and then the guy who broke into the house took my contractor to the court and then my contractor almost got deported because he didn't have all the proper documentation. It was a mess man. And this is my first property. It's a closed, it's a foreclosed property, and that's actually a good transition, because what I do want to hit on is a little bit of this. Foreclosure. Is buying foreclosures? Is it an auction everywhere? Is it at the property in every single state? How can people go about navigating the foreclosure space?
Speaker 1:Each state is a little bit different. There are two different types of states Some are judicial and some are non-judicial states. So when we go to these auctions, they're held at the property. But now in a non-judicial state, which is where we go to a lot of them, there is no judge overseeing the sale. And that can be good and that can be bad. But at a judicial state you could go, you could bet on a property and that still has to be reviewed and thumbsed up by a judge. The judge might say well, that property did not go for enough, so I don't approve the sale. And you could think you had an amazing deal.
Speaker 1:You show up and an auction happens. You bid not. A lot of other people bid against you. Whatever, you might have an awesome buying opportunity. You found yourself a duplex for $40,000. You're like, yes, this is amazing. I'm so glad I thought about this, I'm glad I listened, I'm glad I went to an auction, got a great deal. And then you spend all that time as it goes through this process and the judge still turns it down and they need to re-auction the property. Now it's lots of interest. Maybe other people show up and out bid you. You lose your opportunity.
Speaker 1:Well, here we have non-traditional ones, and so go to the auction. We'll deal with a lot of stuff. We've had some amazing deals Now. Unfortunately, then we've also had people come back and challenge a foreclosure and, for whatever reason, claim maybe the bank did something wrong, but claim the bank did something wrong and that could stall it out. Guess how they have to prove they didn't do something wrong. It could be very well that the bank made a mistake somewhere along the lines and of course, I didn't see it fixed as well. You might get a great deal and it might get unwind or dragged out.
Speaker 1:But yeah, these options we're going to and we teach all about the difference between those two types of things and how to approach an auction. We teach it in our book. We've got a thousands of options, so we've got hundreds of properties there and in a lot of cases you're bidding on a big old mystery box. You're looking at a property from the outside and trying to decide how many thousands of dollars you're going to risk, and it's not for the fate of heart. I tell people that all the time you want to wear this stuff a little bit better before you go jump it in with your wallet. But best way you can learn is by while reading our book. But be starting to go to some of these things and see how they work.
Speaker 3:Yeah, and again for our listeners, that book is called Port Closures Unlock, so you guys can check that out and get in there. That's very interesting. I'm going to take a look to see if New Jersey is a judicial or non-judicial state. I would assume that word judicial because I haven't seen any. I've always wanted to go to one of these right out front, right at the house auctions that are going on, because I'm like man, that would be so fun and like I just need to build X amount of dollars into there for the risk tolerance, for whatever is going to could be on the inside.
Speaker 1:Yeah, we live stream them all the time. So whenever, if you go to one of our YouTube or Instagram, you'll be able to see recorded lives of us just at an auction, talking like we would, explaining what we're doing, what we're bidding on, and maybe you see the inside of the house If we got there early enough and a window was poorly secured, I don't know, and it was big but otherwise we show you what we can see for ourselves about what we're going to bid on, and maybe you never know, it's always a different deal.
Speaker 3:Love that, love it. I am pretty excited to check that out for myself after this. So, before I dive into the final questions that we've got one area, one topic that I really want to hit on which is something that comes close to art for me, because I have used partnerships to build up my portfolio is partnering. In the beginning of your career, you had multiple partners and some disbanded off and it's come down to two guys that are taking on real estate the main partnership between you and Matt. Let's talk about some of the challenges, some of the disasters that you've had with partners and how can we mitigate that for some of our listeners out here who might be looking to jump into a partnership to buy a property or two.
Speaker 1:I'll say, one of the challenges we've had and I think it is pretty easy to understand is there's going to be some people maybe you're one of them, maybe yourself, maybe you're going to be that partner, but it's really, it's not surprising when somebody might want to get as much out of the partnership as they can, so they're going to maybe advocate for themselves all the time without really thinking of things from your perspective, and that might mean percentages splits, maybe one person's listen, I'm just better than you and I deserve 90% and you can take 10%. And then a lot of some people are used to standing up for themselves like that and saying wait a second, I could replace you and your 90% just by if it's maybe an investor, somebody's just bringing money to the table and not putting their time in their talent, in some kind of skill set, whatever. But you could. They don't, just because they're bringing all the money and this wouldn't be possible without them, that's true, but slip that around, and it wouldn't be possible without you and your abilities too. So you could maybe replace them with another investor and just pay them interest. Not even basically being able to look at stuff from more than one viewpoint, I would think is really important, but finding partners that aren't instinctively looking to just grab as much share as they can and understand the value of having somebody else. Matt and I both realize we will go farther as a team than we will as individuals.
Speaker 1:I think it was another podcast I mentioned to Sam, but I used this analogy from Matt quite a bit. I hope he doesn't dislike it, I don't know. But I think Matt and I have a really good balance for each other because I put him out there. Remember the Kool-Aid man? You know the Kool-Aid man, marshall, bursting through a wall. Oh yeah, that works out. So it works for him. But the Kool-Aid man never stops and thinks what if I run into a stud? What's on the other side of that wall? Just kind of thinks he is a doer, he's bursting through. I'm not really the guy that's looking to go punching through a wall. I'm like dude, you gotta think about this stuff. What if it's a low bearing wall? You know you get the stuff out.
Speaker 1:So having somebody that's in me instead of always is the same mindset as you and you have all still bursting through walls and fall off a cliff. On the other side of that wall. Have somebody that has a conflict in your mind, mindset, an appreciation for each other where you respect the fact that it's really important that other person challenges your thoughts and isn't always thinking exactly like you. People look at somebody with a different opinion as somebody they need to change, somebody they need to. They're always gonna butt heads with I in this case. Look at somebody with a differing mindset as somebody who's a good check or a balance for me. If I get super mad about a situation which is unusual for me, but something bothers me, I'm like I'm really pissed. I wanna throw this guy out. This isn't or that, whatever it might be, I say, am I wrong? Tell me, and I'll ask him to put it perspective or vice versa. So having somebody who you can also balance ideas and double check his thoughts off of really important. And then my last thing I'll say is respecting the fact that in treating somebody the way just like you learned in kindergarten, treat people the way you would wanna be treated.
Speaker 1:If there's a problem with your partner, whatever it is right, they're always. Whatever they don't wake up in the morning. They complain a lot about work. Whenever it might be right, they don't. Maybe they're just not working as hard. You feel they're not working as hard as you are or they should be. Instead of making me start to comments or calling them lazy or saying, hey, I think we need to go separate ways.
Speaker 1:Think about it, as somebody thought you weren't performing really very well. How would you want somebody to bring that to your attention? I mean say, hey, tav, I kind of get the impression like did I do something wrong? You don't want to seem to be around me. Every time we talk. You're always grumpy. Is there something that I'm doing that's pissing you off? Did I offend you? Did I do something? And giving you the chance to say you know what? No, I'm sorry, it's just this girl I've been seeing to see is nothing that it would work. And whenever, give somebody the ability to before I guess I'd treat them the way you'd want, approach them the way you would want to be approached. Give somebody had a problem with you. Give somebody the benefit of the doubt and approach them in a respectful way to resolve issues.
Speaker 3:Man, so much gold there and like three main depths. That, like, I really think you hit on. One of those three main tips that I really want to bring to the forefront is the skills, the knowledge, the mindsets. You want them to be a bit different. You want to find somebody that's conflicting with you, because if you're both good at the same things and you're both having the same opinions on everything, it's likely that you're the same exact, you're almost the same exact person, and that's not really what it teem, what a partnership is about. Being a partnership is about bringing different skills to the table and being able to add these two things up. I like to say it as the Pokemon or like Yu-Gi-Oh cards. Right, if you do like a power 10 card and a power eight card and you put the power eight versus the power 10, the power eight's gonna lose. But if you take the power eight and the power 10 and you team them up together, now it's power 18 and you can go so much further. You can do so much more with the partnership that you have building up and don't always be trying to pull. I want all the equity and all that I can get Like. It's not about that it's about the partnership and keeping the partnership together and growing together.
Speaker 3:And what you said there at the end really did hit home with a recent issue that I had with a partner with a deal that we're actually closing on this week five unit property and that deal was actually almost falling apart for a bit because my partner was having issues with his girlfriend at the time. That was going on and like he was not messaging me and I just kept. I kept calling him and call. He wouldn't message me, like he was having all these issues and sending the text and I get it. Like he was upset, he loves this girl and I didn't know that was going on. So I was like, dude, what is? Are we out on this deal? He's like no, I'm not out on this deal, I'm just doing it. And then eventually he told me what was going on and I see that happen. I see where the issue is.
Speaker 3:There's things outside of business that affect all of us that we're going through and I know we're rough on time here, so I'll dive into our final questions. What is the future of real estate for you? Look like you mentioned that you're getting into some self storage. You're doing some commercials residential. What is that? What do you think the big future looks like in five years? Are you going bigger or are you staying with residential stuff?
Speaker 1:Oh no, man, I'm always just so tired every day I'm thinking like I gotta get up and do this tomorrow and suddenly it's been 15 years I've been saying, oh, I don't know. I would say I think we're making a conscious thought out there to spend less time dealing with, I guess, what people would call the C and D class properties. We've done that for a very long time. That's incredibly time intensive to deal with those kind of things. Theoretically the margins should be better and all that other kind of stuff. But it's always content For an enchant, all the things.
Speaker 1:When it's always drama, there's always something going on. It's always something that's wildly crazy. It's like real life Jerry Sprayer show type stuff. And with that kind of stuff, with that you get dragged down into it as well. So you're going to get sued more. They're going to make Albury just counter claims or claims against you, because it's just a world that a lot of those kind of folks live in. So I think partly we're looking to make some changes there. We'll do more commercial. We'll probably do more towards the B class rentals if we're going to do buy and hold type stuff.
Speaker 1:Personally, again, the foreclosure situation, everybody speculates differently but I would not be surprised that we saw a tidal wave of foreclosures hitting on, and as unfortunate, of course, as that is, that's simply the nature of how economies work up and down, and I can't necessarily influence the problems with our country and then the economy situation that's happened over the last couple of years especially. However, I could definitely influence its effect on me, and so can your listeners, and you can do that by being proactive and making these moves. I've been probably pretty tired, but a lot of people said it that a lot of fortunes are made in these kind of tough and down market economic times. So this is the time to be learning before you leap, getting ready for seeing an opportunity when it's out there.
Speaker 3:Yeah, learn how to cock the gun and then you could pull the trigger. And you can do that first by getting following you guys on social media and grabbing your book foreclosures unlocked, and I will put a link to that in the show notes. What is one actionable step that our listeners should take today to start on their path towards financial freedom?
Speaker 1:I think it'd be really awesome to see guys track down some live foreclosure options in your area, your state, an area, and go to them. Don't bring a check, don't register, don't expect to bid. Just go and watch, get yourself warmed up to the idea and then maybe one day yeah, bring a check for registering, just in case. Because one of our examples in our book was an auction that had we just not gone to, we would have kicked ourselves. We bought. I'm not gonna tell you the whole story. You gotta buy it to read it but we bought a two family house in Massachusetts for a price that anybody could go up with on the spot if they needed to. I'm gonna tell you, if you had just gone to that auction, you would have made a life changing purchase just by showing up and just going and getting that experience is so valuable.
Speaker 3:It'll open you up to new opportunities in the future when you can go and you feel good going, and then eventually you'll bring that checkbook. You can make offers. Last question I got for you what is one question that you wish I would have asked or one topic that you wish I would have covered, and how would you have answered that question or how would you have expanded on that topic?
Speaker 1:Oh boy.
Speaker 3:I'm not good with these. Let me give you a second. I'll give you a sec. You got it. Let's see.
Speaker 1:Yeah, I guess probably asking more about how to deal with people who don't pay and really basically don't pay for your services, how to deal with tenants and rental properties, which is a huge part of real estate investing. Most people that are real estate investing are at some point could erect out a unit, and that is something you need to learn about, Definitely. Learn about first your rights as a property owner and, more importantly or as important, your responsibilities as a property owner. Many people think, hey, listen, I'm not paying, they're not paying. I'm not fixing crap, Shutting these heat off. They're not paying. Why should I be providing heat? It's ridiculous. Shut it down. Learn about your rights, learn about your responsibilities and because that can become business ending experience for you, you're something the right way. You step on the wrong way.
Speaker 3:Brother. Yeah, look into the laws, look into what you're responsible for and make sure that you are doing things the right way. I love it. We've dug into so many different things for Closer Oceans Partnering so much value to be had from this podcast. Kevin, I've already mentioned it, but where are the best places that my listeners and watchers can find you online?
Speaker 1:We go by. Two guys take on real estate, the world's longest screen name, and you can find us pretty much every social media channel under that name. We are a live YouTube, TikTok, quite a bit as well as Instagram, and yeah, and we're on Amazon Closures.
Speaker 3:Check it out guys, make sure you give them a follow, get that book and start learning about four closures. And from the Financial Freedom Fast Podcast, I'm your host, matt Ammabiel. Today we had on Kevin Chippie of Two Guys Take On Real Estate and we are signing off. Thanks for coming today, kevin. Thanks for having me.
Speaker 2:Thanks for listening to the Financial Freedom Fast Podcast, the show that teaches you to buy back your time and live life on your terms. Be sure to subscribe to this podcast wherever you're listening, and follow us online at Matt Ammabiel. That's Matt AMA B I L E. Be sure to tune in Monday, wednesday and Friday for our weekly podcast drops. Thanks for listening. Let's retire together and I'll see you guys next time.