The Real Estate Investing Club

Getting Started in Investing & Construction with David Brown | The Real Estate Investing Club #21

Transcript for “Getting Started in Investing & Construction with David Brown | The Real Estate Investing Club #21

Gabriel Petersen 0:02
Hello and welcome to another episode of real estate investment. Place investors go to learn tips, tricks and stories from other investors in the field. Today we have a special guest with us. So buckle up, grab your pen and paper and enjoy the ride.

And we are live. David, thank you for joining us today. How you doing, man?

David Brown 0:27
I’m doing pretty good. How are you today?

Gabriel Petersen 0:29
I’m doing great. Where are you calling from?

David Brown 0:31
I’m calling from Orlando, Florida. Sunshine State of Lando Florida. Yes. Sounds good. One of the best places for real estate right now. Yes, it’s doing pretty good. I can’t complain. It’s you know, we’re staying busy despite all of the things happening. That’s,

Gabriel Petersen 0:46
you know, there’s a silver lining and everything that I said here. That’s it. My grandma always said,

David Brown 0:51

Gabriel Petersen 0:52
So, to get started, why don’t you you know, tell people who you are, where you’re from and how you got into real estate in the first place.

David Brown 1:00
Well, um, I My name is David Brown I run Black Diamond associates and holdings, LLC. It’s a real estate investing company that helps people not only just get into real estate investing, even if it’s just their personal investing side, you know, buying their first home, their second home, whatever it may be, and selling it as the as the time comes. But it’s also about education as well. We we have different programs to help educate buyers and sellers and, you know, everybody and investors on what’s going on. I got into real estate back in 2009, unfortunately after the crash, so my jump was into the legal aspects of real estate. I worked for several law firms, a couple large ones. And we unfortunately were doing the sad part of which was foreclosure because the crash took a lot of people down but I learned a lot I also finished my college degree around the same time. So which was in law and legal studies, and I can’t say the amount of stuff that I learned from that was very invaluable. I also done title work. I also have done legal work and as far as real estate goes, and Maryland, DC, Virginia and Florida, okay. So it’s just been a whirlwind. I wanted to get right into real estate right after high school, but, you know, things happen in life, you know, can’t control those things. But I said, you know, what, let me just do this. And I jumped in officially got my license as a realtor in 2017. And I haven’t really looked back. I mean, I, you know, given everything that’s going on, you know, have a secondary job just to keep things afloat, you know, till we figure out what’s going on with COVID. But I can’t And it’s still real estate related, I won’t leave the real estate world no matter what happens at this point. But I’m, I also have now opened my own new construction part of the business. Because I have seen so much happen, you know, with past clients and new construction good and bad. And, you know, the things I’ve seen, I feel like there’s a lot lost in the new construction world. And, you know, I feel like people kind of get thrown away if you don’t be you can’t buy that same day or month or whatever. They’re just like, Oh, well pie and they you don’t ever hear from him again, you don’t ever see anything from him again. And I think that’s a disadvantage to those who may be really trying and really want to first time homebuyers. People try to recover from 2008 and 2009. You know, so I’ve really made money and worked on the affordable housing side. So most of my home pricing is not going to be above 300 thousand. So that makes it we’re focused on the average family out here trying to try to live and you know, just find peace and happiness.

Gabriel Petersen 4:10
Very nice. So just kind of summing that up so it sounds like you are your broker for one. So you know, you help people buy and sell houses. You also do new construction. So you run a construction company, and you invest in real estate.

Unknown Speaker 4:27

Gabriel Petersen 4:28
Wow, that’s that is a lot different on one plate. I’m impressed. All right, so I mean, you’ve already kind of gone into this but the next question so what describe your business model? What is it that you you know, what’s your bread and butter? What’s really putting putting the, you know, food on the table?

David Brown 4:46
Right now the bread and butter is I’ve been focusing more on my real estate license just buying and self help people buy and sell real estate. But I since I’ve started the business as far as doing new construction, that’s where my focus has been. And the most recent, so unfortunately, you know, here we are in 2020. But there has been no shortage of things happening, you know, people are still buying and selling houses. I mean, when I decided to really put out there the business as far as the new construction, I one Facebook ad alone rendered me between some return me about 75 leads and 24 hours.

Gabriel Petersen 5:28
Wow, that’s great.

David Brown 5:29
So people are still looking people are still wanting to buy that real estate. So and at the price point, and at that range, yes, it’s a little difficult, but I believe that, you know, there’s a room to grow. And there’s different ways to approach things. You know, like my mom always said, there’s more than one way to skin a cat. I’m sorry to anybody who are cat people, but

Gabriel Petersen 5:56
thought that was an odd phrase.

David Brown 5:59
So you know, and I Trust me, I love cats. I’ve had them and I have a dog now but you know, I just really think that we have to really start getting back to the actual people in our communities. I’m a military kid. So community is very important to me. And, you know, not walking away from our community and still being tied to the community is important

Gabriel Petersen 6:22
and agree more and you’ve already next question you’ve already kind of touched on it just a little bit there so so right now you’re kind of focused on on your realty side of things, you know, finding you know, helping people buy and sell houses and you’re also doing new construction. So how do you go about finding deals, how do you go about finding leads?

David Brown 6:47
I mean, the as many ways as you can possibly think of, you know, I work with different coaches I social network, you know, I use my social media, Facebook, Twitter, LinkedIn, Instagram. You know, I also talk to my neighbors. I also do the old fashioned mailers and things of that nature just to really get the information out there to people. And, you know, you have varying degrees, you know, mailers, you know, people get it, they may or may not respond. But, you know, social media has always been the biggest thing that’s really worked on it. And, you know, I just

Gabriel Petersen 7:24
thought that’s good. I want to go a little bit into that because, you know, a lot of people that I’ve, that I’ve talked with they’re they’re struggling the most to find a very effective way to to get inbound leads to, you know, get deals. And so, you said social media is the one that’s working the best for you. So what what is it that you’re doing in social media that’s having, you know, the biggest the biggest net impact on your on your bottom line?

David Brown 7:53
It’s all about personality, and it’s also all about what information And how you present it to them. You know, it’s people on social media are very visual, as we are human beings in general. So when you you have to be very mindful about what you put out there you need something that looks clean, inviting, bright, to really draw people in. You know, I’ve, you know, as a realtor I’ve learned and unfortunately we’ve all seen these pictures on Facebook that are cell phone pictures, you can see people in the shadows you can see you know, the house doesn’t look as dark, you know, people and those homes generally sit on the market you know, so in market research, which shows that we have to really be mindful of what we do and you know, colors you know, I’ve actually done some reading and research on what colors you use. Because colors signify different things and trigger different things in the brain. You know, so that’s why a lot of you know, my business colors you know, I changed my website just to kind of keep it fresh, but I you know, blues and greens have blue greens and oranges always get kind of this trusting factor. You know, people if it’s not, you have people have to trust you with their money, they have to trust you with this transaction, which is one of the largest transaction people make in their lives. So building that trust is important. So people feel like they’re relaxed, they can talk to you, that makes them makes a big difference. And people feel like they can now and then I mean, it’s a good thing or a bad thing. You get bombarded with questions, because now people want to know, they’re like, Oh, my God, we really liked this house. What do we do? what’s the what’s the process, you know, and that draws those people in and all it takes is just, I use certain programs that just provided me make a flyer they gave me I can choose my color. So I have control over that I put my pictures and content. And I don’t have to work really hard. I mean, that means work. But you know, it takes maybe 3040 minutes per one that I have to do. But it draws people in can post one and I’ll have, you know, 500 engagements, you know, in the next three or four days, you know, that’s really good because you have people saying, Oh, you know, you’re gonna have your negative values and you’re gonna have,

Gabriel Petersen 10:12
you know, on the internet man.

David Brown 10:15
Yeah, exactly. So you have to just take it as you go, you can, you know, take it or leave it, but you never remove those negative comments. You never do those things, because we’re trying to hide them, because that’s still an engagement. You never know who their friends page may see it or who how it spirals out. You know, people see it, people are like, Oh, why are you being so rude, you know? And then people start tagging me we see it happening with news stories all time.

Gabriel Petersen 10:43
Yeah. So it’s a good way to get your name out there good or bad, whatever people’s opinions are. Absolutely. So so. So going down that line of you know, how you’re getting leads on how you’re getting people in the door. Social media is what’s working really well for you. You’re saying Got, it’s got to be engaging. It’s got to be, it’s got to be bright blue, green, orange other colors that you use. So what are the tools that you found to be most effective? So I’m sure you do paid advertising. is Facebook the best is Instagram best. I know the same platform. And you know, you, you mentioned that you use the tool to create your flyers. So what are the most effective tools that you use so far? I will say that

David Brown 11:25
Facebook ads and I think Facebook and Instagram, I think Facebook and Instagram are still the same parent company. But so lately, they if you run a Facebook ad, you can sync it up with Instagram, and that those ads run simultaneously. Mm hmm. Um, and so you know, I think, and I’m not spending, I’m not going out and spending $500 on ads right away. You know, if you like, and this is thing, it’s about being smart as a small business. You know, we have to be smart and very particular about how much we spend and where we spend it. So I say, you know, Every two weeks, let’s spend $60. Okay, and then you just scale. So as you start to get your business and everything starts to run $60 every two weeks, that what that does is it gives you a potential of how many your people are going to reach if you reach 10,000 people in two weeks, that’s not like global, but it’s a good start, especially when you’re working in your general area. And you’re working around trying to build your community, because you want to continue to hit your community. And farm like, you know, this, we say in real estate, you want to farm that area. So you keep hitting that 2000 people in that same, you know, 10 mile radius. Great because guess what, now they’re constantly seeing you, and that drives the business to your website that drives the context.

Gabriel Petersen 12:46
Absolutely. I that’s actually not ironically, but coincidentally that’s how I got into real estate in the first place. I’m actually digital marketing is how is my my bread and butter and I was good at it and I you Did to get leads PPC advertising? Now that’s how I first gotten into real estate was digital advertising. I still think it’s the best way to generate leads if you do it right. I mean, yes, you can definitely waste money but it’s one of the best ways if not the best way to generate leads.

David Brown 13:16
Yeah, I mean, I learned the hard way a couple of times, you know, I paid for some ads before for someone else to do them and they were by far the most generic ads, nothing really branded. And I was like, you know, I think was a was about $250 a month. And you know, it’s about $750 that you’re locked into and for because you had to do three months since so I was like after the first three months and like, I haven’t gotten anything that’s panned out any interest or anything. So I just stopped and I said, You know what, let me do it myself and, you know, start small and see what I get. And that’s smaller number and that smaller reach seem to be was able to target better Then what I was doing with just overall general Oh Facebook blast to you know, the entire country, right? is good because you see people see you but it’s also comes a disadvantage because people like oh can you do it here like Well no, this is Florida only, you know

Gabriel Petersen 14:16
so you definitely have to be when it comes to Facebook advertising and real estate you have to be geographic specific it cannot I would not recommend doing a national campaign to anyone unless you’re a national company. I mean, I we do flips nationally and are wholesales nationally and flips and we’ve run national campaigns and and so it depends on what you’re going for. But if you’re if you’re focused on one area, Seattle or you know Orlando or where, wherever you are just just market into that city. Don’t try to go anywhere else.

David Brown 14:47

Gabriel Petersen 14:48
All right. I’m gonna I’m going to switch our gears just a little bit here. I’m gonna go kind of into your experiences. We all know real estate is an up and down business. Sometimes you feel like you’re on the top of the world kicking butt Next time here in the valley, you know, how am I going to get out of this? So I kind of take us through those moments, you know, at your Valley, what what, you know, what was has been the most difficult thing that you’ve gone through? And what was the lesson that you learned from that? And then, you know, at the peak, like, what do you love about real estate? What What have been some of the best experiences you had?

David Brown 15:19
Okay, well, you know, we’ll get the negative stuff out the way. So, you know, the difficult the most difficult challenging, I would have to say is probably at least for me right now, like during this whole pandemic stuff as a small business. You know, we had a lot of interest we had people prepare like we’re writing contracts, we’re doing everything and then the bottom falls out of everything and you know, everything’s canceled yours yours. You have things happening cancellation contracts money going out that you’re not getting back anytime soon. You know, so we’re, we’re struggling just, you know, as most small businesses are just, you know, maintaining and the No financing so far we’re holding steady at this point we, you know, I guess a benefit to being a small, you know, one person run business it allows me a little more freedom and control to kind of take take the reins and just say, okay, we’re gonna just pull back and see and just redirect ourselves and then but not don’t stop, you know, I had to learn like okay, this sucks that you know the money’s not coming in like I had planned, but you change how you market you change how you reach people you you find the like the the frugal aspects of how to reach people and you have to be inventive. You have to come up with new ways and new ideas and new programs or whatever is needed. And, you know, as a real estate agent as well in conjunction with this, I mean, I’ve lost about three or four contract about three contracts now since COVID-19. You know, pick between people writing them or getting ready to close and I’m done. $20,000 just in three contracts. So, you know, it’s, it’s not easy because, you know, you’re thinking about Okay, where am I get that $20,000 from like, I, you know, the check was supposed to be here two days ago and now I have no check in. Yeah, you know, so it’s, it’s hard, but what I’ve always had to get moved towards the upside of this. I’ve been lucky to have some really great preferred lenders that I work with, you know, they’re close friends of mine as well. And they are brutally honest. Which I appreciate, you know, that’s kind of how I am like, I’m gonna be straight up with you. And it’s like, Okay, this ain’t happening, you know, or, you know, I want to make it happen. But even though I’m gonna say, this is not gonna happen right now, and you may not like it, I’m gonna give you a plan. My lenders are going to give you a plan saying, hey, okay, your credit score may not be where we need it now, but here’s a list of things to do. You No, take the next 30 or 60 days, especially with COVID-19. And just say, You know what? That extra stimulus check you’re getting knock these things out. And then you’ll see the change that you need that we need. And then guess what we’re going in, you know, I’ve created a program to address that, as a builder. Most builders aren’t doing anything. They’re just like trying to just show houses down people’s throats. Like you’re gonna buy it today. It’s like, well, that’s well and good, but they have to qualify. And, you know, the rules have changed with that. So I’ve worked and talk to my lenders and say how things work and what we could do. And, you know, I do have a program that’s just I’m launching and getting out there within the next couple weeks to really help people focus on that. So

Gabriel Petersen 18:44
I’m so kind of also just take us real quick, if somebody were interested in adding new builds to their repertoire, what is what are the things that they need to know like, just really, really quick bullet points? What are the things that are first needs to know when they’re thinking about starting up new builds.

David Brown 19:03
If you start thinking of starting a new builds, the things you need to look at are, you know, land costs, you need to look check. And then you need to pick a specific area that you want to be in maybe one or two just to have backups because the cost could be different. You need to look at the county building cost and permitting and impact fees because those they it may not seem like something big, but when you start adding them into what the general contractors are going to have to be paying to get things done. It can change the pricing of your home. Get real, get real estate advice. If you’re not a licensed agent in your area. definitely talk to a real estate agent. Figure out what you do what the average price per square foot is for a home. Then make sure you work with find yourself some good lenders or something because those partners will help get your information out. Also, pick a title company if you don’t have one. If you’re an investor, you probably have one But definitely make sure that they can handle the work. You know, I know there’s the big companies and small companies and everything in between, but, you know, make sure you trust them, but also they can handle the work.

Gabriel Petersen 20:11
Alright, I like it. All right, we’re going into the closing period here. We’re almost we’re past our 20 minutes, we’re closing on a 30. So to close things out, kind of tell people if you know, you started way back, you wanted to start right out of high school, or right out of college, whichever one was, and you’ve always really liked real estate. So if you could go back and talk to that version of David, and give him one piece of advice, what would that piece of advice be?

David Brown 20:40
buckle up Bart. And, you know, put your big boy pants on and yeah, life might throw you some curveballs. But, you know, don’t back down. You know, when people present issues or stoppages in front of you just keep pushing through it, you know, and ask for the help that you need. Love it.

Gabriel Petersen 21:00
David, it has been a pleasure having you on if, if people you know listening and wanting and watching, if they want to get in contact you with you, what’s the best way for them to get in contact with you,

David Brown 21:10
um, the best way most likely is through my website just so that I don’t lose anybody. If they can go, if they go to my website, you can google Black Diamond associates and holdings, we should pop up pretty close in your Google selection. And you can definitely go to our Contact Us page. And see, just reach out to us that way with questions and concerns or anything you have real estate related and we’ll we’ll take it from there. And you can also reach us by phone as

Gabriel Petersen 21:38
well. Okay, perfect. And if you guys are interested, the the link to the website will be in the show notes so you can check it out there. All right, David, again, thank you for having us on. I’ve learned a lot I’m sure everybody listening and watching. There’s a lot as well, for everybody watching. Thank you for joining us again. And if you want to reach out to David, check out his website or his LinkedIn On both in the comments, and we’ll see you next time.

David Brown 22:03
All right, thanks, Gabe.

Gabriel Petersen 22:06
Thank you for joining us on another episode of The Real Estate Investing club. More information on how to work with Peterson go to WWW dot investing club comm otherwise we will see you guys in the next steps.

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The Real Estate Investing Club is a podcast and YouTube show where real estate investing professionals share their best advice, greatest stories, and favorite tips in real estate. Join us as we delve into every aspect of real estate investing – from self-storage, to mobile home parks, to single family rentals, to real estate syndication!

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Join us as we learn about these REI pro’s career peaks and valleys and the lessons they learned along the way!

Topics you’ll learn more about throughout our episodes:

– Using the BRRR strategy to buy income properties

– Flipping houses the right way, building quality housing and taking home a large payday

– Using hard money and bridge loans for real estate investments

– How to bounce back from bankruptcy and build a thriving empire in the wake of failure

– How to use property management companies to help scale your real estate business

– The best online and offline tools out there to take your real estate investing business to the next level

– How to do out of state investing without risking your shirt in the process

– Going from broke to 300+ deals in a month (really!)

– Investing in commercial real estate

– Stories about brand-new investors and the lesson’s they’re learning as they take on their very first flips and rentals

– How to use Google Ads and Facebook Ads to crush it in off market real estate marketing

– How to fill your pipeline with off market deals using direct mail, voiceless mail drops, and text blasting

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