Flipping Success: How 21-Year-Old Donovan Camarotti Built a Real Estate Empire

Summary

Podcast Summary: "Flipping Success: How 21-Year-Old Donovan Camarotti Built a Real Estate Empire"

Episode Details:

• Title: Flipping Success: How 21-Year-Old Donovan Camarotti Built a Real Estate Empire
• Host: John Gafford
• Guest: Donovan Camarotti
• Release Date: October 22, 2024

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Introduction

In this episode of "Escaping the Drift," host John Gafford welcomes Donovan Camarotti, a 21-year-old real estate mogul from Florida, who has impressively flipped 80 houses a year in the Treasure Coast. At such a young age, Donovan shares his journey from juggling his first jobs to establishing a burgeoning real estate empire, offering invaluable insights for aspiring entrepreneurs and real estate enthusiasts alike.

Donovan’s Background and Early Steps

[02:21] Donovan reflects on his upbringing in Miami and later in Port St. Lucie, Florida, detailing his academic performance and early entrepreneurial endeavors. Despite being a decent student with mostly A's and some B's, Donovan felt unfulfilled by traditional education and chose to drop out of college to pursue his passion for real estate.

• Notable Quote:
  • Donovan Camarotti (02:25): “I had gone to middle school, high school, and even a lot of elementary school up north. In high school, I was like, I really should probably figure something out to do with my life right after high school.”

Building the Real Estate Empire

First Flips and Early Successes

Donovan began his real estate journey by learning the ropes through YouTube University, leveraging free resources to understand property valuation, seller communication, and renovation budgeting.

[05:50] He started with a modest investment from his car detailing business profits and ventured into his first condo flip, investing $2,500 and making a $27,000 profit.

• Notable Quote:
  • Donovan Camarotti (06:03): “I made my whole paycheck in a day from detailing, so I decided to go into detailing full time. It was a low barrier to entry, and I made that back fairly quickly.”

Learning from Failures and Managing Risks

While Donovan experienced early successes, not all deals were profitable. His third flip resulted in a $50,000 loss due to over-renovation and unreliable contractors. This taught him the importance of hiring specialized tradespeople and avoiding single contractors handling multiple aspects of renovations.

• Notable Quote:
  • Donovan Camarotti (18:28): “This house sucked. I wouldn't recommend it, but I'm very happy that I did because I learned all these valuable lessons on it.”

Team Building and Management

Hiring Contractors and Project Managers

As Donovan scaled his operations, he recognized the necessity of a robust team. Initially managing renovations himself with the help of a handyman, he eventually hired a general contractor (GC) and project managers to handle multiple projects simultaneously.

[30:22] Donovan emphasizes the importance of timely payments to contractors to maintain good relationships and ensure project efficiency.

• Notable Quote:
  • Donovan Camarotti (29:41): “One big thing to keep trades happy is you just pay them on time, like the day they're done or the next day at the latest.”

Maintaining Good Relationships with Trades

Donovan discusses strategies to keep his subcontractors motivated, including offering bonuses for early completion and ensuring they are paid promptly. He highlights the challenges of finding reliable tradespeople and the need to build a trusted network.

• Notable Quote:
  • Donovan Camarotti (30:09): “If you're done by this date, you get bonuses. It's a way to ensure quality and timeliness.”

Acquisition Strategies

Sourcing Deals via YouTube, Google Ads, and Realtors

Donovan details his multifaceted approach to sourcing deals, primarily utilizing Google Ads to attract motivated sellers. He contrasts this with less effective platforms like Facebook, where lead quality is lower.

[37:52] He explains that his success with Google Ads is due to targeting individuals actively seeking to sell their properties quickly, resulting in more qualified leads.

• Notable Quote:
  • Donovan Camarotti (37:52): “Google's been pretty good. The leads that come through are more qualified because they're actively looking to sell.”

Pricing and Competitive Offers

Understanding the market is crucial. Donovan aims for at least $40,000 or 10% profit on each deal, whichever is greater, and adjusts his strategy based on whether the property comes through wholesalers or direct seller marketing.

• Notable Quote:
  • Donovan Camarotti (46:12): “So anything that gets direct is a higher fee because there’s a lot more work to do.”

Financial Strategies

Using Hard Money Loans

Donovan initially financed his deals using hard money loans with high-interest rates and points. Over time, he has refined his approach to secure better terms and manage holding costs effectively.

• Notable Quote:
  • Donovan Camarotti (14:00): “It was expensive. I paid for it.”

Dealing with Interest Rates and Carrying Costs

He discusses the impact of fluctuating interest rates on his financing and the importance of minimizing holding costs by accelerating project timelines and efficient project management.

• Notable Quote:
  • Donovan Camarotti (11:26): “Rule number one with contractors: never let them get ahead of you.”

Tax Strategies

Reinvesting Profits and Cost Segregation

To optimize tax liabilities, Donovan reinvests profits back into the business and plans to conduct cost segregation studies to accelerate depreciation on properties, thereby reducing taxable income.

• Notable Quote:
  • Donovan Camarotti (61:07): “We’re planning to buy multifamily before the end of the year and do a cost segregation study to depreciate what we can.”

Insights and Lessons Learned

Importance of Team and Contractors

Donovan underscores that building a reliable team is foundational to scaling a real estate business. This includes having specialized tradespeople and project managers to handle multiple projects efficiently.

Being Flexible and Learning from Mistakes

His journey highlights the necessity of adaptability and continuous learning. Donovan's ability to learn from failed projects and adjust his strategies has been pivotal to his success.

• Notable Quote:
  • Donovan Camarotti (20:24): “Expensive lesson. That was the hard way.”

Conclusion and Future Plans

As of the episode's release, Donovan manages 37 flips concurrently, indicating significant growth from his initial endeavors. He plans to continue expanding his portfolio, entering the multifamily market, and further refining his operational strategies to sustain and enhance profitability.

• Notable Quote:
  • Donovan Camarotti (65:35): “We're getting more into it for sure. I’m hoping to scale further and learn even more along the way.”

John Gafford commends Donovan’s achievements and expresses excitement for his future growth, encouraging listeners to take inspiration from his proactive and resilient approach to entrepreneurship.

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Key Takeaways

1. Start Small and Scale Gradually: Donovan’s journey began with small investments and expanded as he gained experience.
2. Build a Reliable Team: Hiring specialized contractors and project managers is crucial for managing multiple projects effectively.
3. Leverage Free Resources: Utilizing platforms like YouTube for education can significantly reduce initial costs.
4. Effective Financing: Understanding and managing financing options, including hard money loans, is essential for sustaining cash flow.
5. Tax Optimization: Reinvesting profits and conducting cost segregation studies can help mitigate tax liabilities.
6. Learn from Failures: Every setback offers a valuable lesson that can refine strategies and prevent future mistakes.

Final Thoughts

Donovan Camarotti exemplifies how youthful ambition, combined with strategic learning and perseverance, can lead to substantial success in the real estate industry. This episode serves as an empowering roadmap for listeners aiming to break free from stagnation and achieve remarkable success in their entrepreneurial ventures.

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Learn More: For more insights and future episodes, visit www.EscapingtheDrift.com.

Transcript

[John Gafford]

The kind of burgers you get today.

[Donovan Camaraderie]

Tells you a lot about yourself. You're either someone who settles for sad.

[John Gafford]

Same old, same old burgers, or you're Edit Carl's Jr.

[Donovan Camaraderie]

Obsessed with a tangy OG Western bacon cheeseburger, demanding a house made guacamole, loaded guac bacon fired up for the insanely hot El Diablo or craving a classic Charbold famous star. Give in to your flavored cravings.

[John Gafford]

Do your mouth to Carl's junior Big burger, Good burger. Did you find yourself chronically unemployable, most high level?

[Donovan Camaraderie]

That was really the only job I had.

[John Gafford]

Really, this is the only job for.

[Donovan Camaraderie]

Like a month, you know, and then I was like, I was like starting detailing at the same time and I was like, man, you know, I just made my whole paycheck in a day.

[John Gafford]

And now, Escaping the Drift, the show designed to get you from where you are to where you want to be. I'm John Gafford and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the Drift, and it's time to start right now. Back again, back again for another episode of the podcast, like I said in the opening, man, that gets you from where you are to where you want to be. And today, you know, here's a funny thing, man, I'm going to tell you. I always tell people when they come on this show and they ask me what it's about, I say this is kind of a love letter to my dip shit drifting along with the current 25 year old self. So it's always, I don't know if it's bittersweet or if it's just unique or if it's just exceptional. When I can get somebody on here that is doing something at an incredibly high level at an incredibly young age. Because when I was this dude's age, I'm trying to think back what I was even doing when I was 21. And it was not what this dude's doing. So this is a guy that lives in from my home state of Florida. God bless for Floridians out there from my home state of Florida. And this is a dude that at 21 years old is flipping 80 houses a year in the Treasure Coast. And that's a lot, folks. I mean, that is a lot of houses to turn a burn. He has just done so much at such a young age. We're excited to get to that. So if you're one of my younger listeners and it's listening to this, man. This is one you probably want to pay attention to, because this dude's doing it, and he didn't wait. So. Welcome to the program, ladies and gentlemen. This is Donovan Canemarati. How are you, buddy?

[Donovan Camaraderie]

Good, man. How are you?

[John Gafford]

Good to have you, man. So good to have you in studio. So I, you know, this is. I. It's like, normally we start these things out with, tell me the origin story of Donovan. Tell me the backstory of what made you. You could. Dude, you're still. I do. No offense. You're still a kid. Yeah, right.

[Donovan Camaraderie]

Yeah.

[John Gafford]

So, you know, tell me the backstory, man. Where'd you grow, like, obviously, where'd you grow up? Start with that.

[Donovan Camaraderie]

So I was born and raised for a little bit in Miami.

[John Gafford]

Okay.

[Donovan Camaraderie]

It's where my parents lived. You know, I spent a lot of time with my grandma, where my parents were at work. Then my dad retired, and we moved up about, like, two hours north to Port Lucy, Florida. Um, my mom continued her career for a few years, and then she retired. Um, during that time, I was, you know, I. I had gone to, like, middle school, high school, and even a lot of elementary school up north. And in high school, I was, you know, I was in my senior year. I was like, well, I really should probably figure out something to do with my life right after high school. Um, my parents.

[John Gafford]

Did you get good grades? Were you a good grades kid?

[Donovan Camaraderie]

Yeah, I was pretty good. I was. Got mostly A's, you know, one or two B's. Um, so, I mean, it was decent. I wasn't, like, you know, always straight A's, but, you know, I was. I was decent in school, but, you know, my parents, they. They encouraged me to try college. Right? And so I did. I did it for a year.

[John Gafford]

And where'd you go?

[Donovan Camaraderie]

I went to fault.

[John Gafford]

Yeah, there you go.

[Donovan Camaraderie]

Yeah. So I tried it for a year and a week of my second year, and then I called it quits. We could get into that.

[John Gafford]

What was the catalyst that caused you to call it quits? What was the thing that you're like, this isn't for me.

[Donovan Camaraderie]

So it was about an hour and 20 minutes from where I lived or, you know, back home at the time. And, you know, I would stay on campus, and I was, like, really, you know, getting into real estate pretty seriously at that point. And I would have to, like, go see properties. I drive, you know, an hour and 20 minutes there, hours, 20 minutes back. Like, it didn't really make sense. So.

[John Gafford]

So you are. You essentially were doing what you, what you thought you were going to do, going to school for anyway? And you were like, why am I going to school?

[Donovan Camaraderie]

Exactly. Like, the classes were so slow, you know, and then they weren't teaching you, like, you know, real estate investing. They just like, you know, real estate law, or real estate, you know, taxes, whatever it is.

[John Gafford]

I have a similar story. I was in a beverage class because I was going to school for a hospital administration. I opened my first bar at 20 years old.

[Donovan Camaraderie]

Okay.

[John Gafford]

In Tallahassee.

[Donovan Camaraderie]

So you couldn't even drink and you opened a bar?

[John Gafford]

No. Yeah. I was literally writing checks for like 150 kegs at once.

[Donovan Camaraderie]

Nice.

[John Gafford]

And I wasn't enough drink, which is pretty funny. I don't know. I don't know if Anheuser Busch could get trouble for that. But that's, that's true story. And I remember they were talking about liquor tax in Florida and how you pay beverage tax. And they were like, okay, so every quarter barrel is 15.5 gallons. This is how you do the math. Blah, blah. And I'm like, you can write off a gallon of every, of every keg for spill and foam. And they're like, no, you can't. I'm like, I just did it. Right? I just, I literally just did this. And that's when I decided the institution just kind of had nothing further off from.

[Donovan Camaraderie]

Right.

[John Gafford]

Summer stories. I get it. So when did you start in real estate?

[Donovan Camaraderie]

So I started really trying to like, learn real estate as much as I could, like my senior year in high school.

[John Gafford]

What was the catalyst for that?

[Donovan Camaraderie]

You know, my parents had a family friend, um, who he flipped houses. And I was like, oh, that's cool. Like, he just bought this ugly house, you know, fixed it up and then sold it. He made like 60 grand. I was like, well, you know, kids out of college make 60 grand. I gotta do this a lot sooner. And I get multiple. Right? So I was like, yeah, this, this seems cool. And originally, I wasn't even going to flip. I, I wanted to hold in, you know, have rentals because, you know, everyone says passive income, which is great when you have money already and you have a good active income. Me, I was like, I put all my money into my first deal and then I was going to hold it and I was like, wait, I don't have any money anymore.

[John Gafford]

Well, let's back up. Where did you make the money for your first deal?

[Donovan Camaraderie]

So I had a little car detailing business in high school for like, you know, a year or two.

[John Gafford]

Oh, let's talk about that.

[Donovan Camaraderie]

Yeah, I mean, it was just, you know, I liked cleaning my car.

[John Gafford]

Is this the first house. Was this the first real hustle you had, or. Yeah, okay.

[Donovan Camaraderie]

Yeah, I had, like, a little local restaurant job for, like, a month, and I think maybe in that month they made, like, 600 bucks. Like, it was a total waste of time.

[John Gafford]

Did you find yourself chronically unemployable, most high level?

[Donovan Camaraderie]

That was really the only job I had.

[John Gafford]

Really the only job for, like, a.

[Donovan Camaraderie]

Month, you know, and then I was like. I was, like, starting detailing at the same time, and I was like, man, you know, I just made my whole paycheck in a day. You know, at the restaurant, I was detailing. So I was like, all right, cool. I'm gonna. I'm gonna do detailing, right. I'm gonna go in on that. And it's like a low barrier to entry. You know, we maybe bought everything for, like, you know, 2500 bucks, and then, you know, made that back fairly quickly.

[John Gafford]

What'd your parents think about you, about you doing all this hustling? What do your parents do? What do they do?

[Donovan Camaraderie]

So they were both retired teachers and coaches.

[John Gafford]

Okay.

[Donovan Camaraderie]

Yeah. Yeah.

[John Gafford]

All right.

[Donovan Camaraderie]

So, yeah, I mean, they always supported me. Like, my dad, he would always say, like, hey, you know, whatever you do, man, like, I'm going to support you. You know what I mean? And then he encouraged me, like, he was never the type to, like, you know, like, cut me down or anything like that, which I think that that played a big part, you know, My mom, the same way, you know, my mom, she was a little more concerned when I got into real estate. She was like, oh, it's a lot of money. You know, you're risking whatever, this and that, which is true. But then, you know, I think she saw, like, you know, some of the success and, like, showed her, like, hey, like, these are some of the wires that are coming in. And she's like, oh, okay, maybe it does work.

[John Gafford]

Maybe this works. So. So you saved up your. Your 2500 bucks from your detailing job.

[Donovan Camaraderie]

Yeah.

[John Gafford]

You bought your first deal.

[Donovan Camaraderie]

So well invested, like, 2500 bucks into, like, starting it. Just, you know, from little money I had saved up here and there, Made some money in that for a while. I. You know, when crypto was a big thing, you know, in, like, 2020, you know, I put some money into that. It went up, you know, a little bit, but then, like, it went down, and then it went up a little bit, and I, like, cashed out, put that money into a down payment on the first place was like, around, I think, 30, 40 grand.

[John Gafford]

All right, so stop. So you started to get to this point, so you saved up money, you did a little crypto play, which was, we all know, was like, it's like Frack Eye Casino. We get it.

[Donovan Camaraderie]

Yeah, it's luck.

[John Gafford]

You hit a hit on a shit coin. I get it. It's fine. Dude. Okay.

[Donovan Camaraderie]

Oh, wasn't. It wasn't even normal stuff.

[John Gafford]

Okay, cool.

[Donovan Camaraderie]

Yeah, it was like, normal. It was like, you know, bitcoin, ethereum. It wasn't.

[John Gafford]

Okay, cool. All right, so you weren't hard gambling. You were right, okay. You're right. That's better. That's better. So you did research on how to do this. You learned pretty much everything from where, like, YouTube. Did you buy somebody's course? What'd you do?

[Donovan Camaraderie]

YouTube. YouTube University, man.

[John Gafford]

Everything. YouTube, man.

[Donovan Camaraderie]

Yeah. And I mean, YouTube is great because it's one. It's free, right? And then you can just like, you can learn a lot of, like, how to get started, right? Like, you know, if you want to really grow and scale, then, yeah, you should probably do some type of coaching or mentorship, which is what I'm doing now. But YouTube is great. Starting out, you know, I learned how to comp properties. I learned how to, you know, what to say to sellers, you, how to estimate rehab costs, all on YouTube. And then, so I had learned for maybe like nine months or so to before the time, like, I, like, started walking properties, like, making offers, right? So I just, like, absorb that information as much as I could. And then, like the summer after high school, I started walking properties and, you know, making like, a couple offers here and there. And then I was moving into my college dorm when my real estate agent gave me a call and he was like, hey, man, I got this property you might really like. It's a little condo by the beach, and, you know, they're going to sell it off market. I was like, oh, cool, that's awesome. So then I had moved in and then like, immediately went back to see the condo up north, back home, saw it, wrote an offer on it, and I didn't hear, hear from them for like, you know, maybe a week or two. And then it was like my first week in college. I think it was like a Thursday or Friday. I was like, sitting in front of the cafeteria waiting for it to open. And my agent gives me calls like, hey, you got the house or you got the condo, right?

[John Gafford]

So okay, well, back up, though, so. So to get. To get in.

[Donovan Camaraderie]

Yeah.

[John Gafford]

There was no marketing there's no band designs.

[Donovan Camaraderie]

There's no.

[John Gafford]

There's no direct mail. This was just straight mls.

[Donovan Camaraderie]

It was. It was mls. But even though it wasn't, this one specifically was like a off market.

[John Gafford]

Right, but what I'm saying is you went to. You went to an agent.

[Donovan Camaraderie]

Yeah, I did.

[John Gafford]

And said, okay, so if you're thinking you got to start out with some huge marketing budget to get started doing this, you don't. You just got to find a good agent that can hopefully find you a deal.

[Donovan Camaraderie]

Yeah, absolutely. There's so many free ways to get deals. You know, agents, wholesalers, whatever it is. I mean, yeah, obviously, you know, in the future, you're going to want to, like, do your own marketing, control your own deals.

[John Gafford]

Sure.

[Donovan Camaraderie]

But I mean, we still buy, you know, from other people. You know, it's. It's easy. It doesn't cost anything.

[John Gafford]

No, of course, a little bit of time, and if it pencils a pencil, so it's good. All right, so keep going.

[Donovan Camaraderie]

So he called me, said, hey, they accepted your offer. I was, like, jumping up, like, I was so excited, you know, went, and then ended up closing on it. My parents had, like, this handyman that, like, kind of did, like, little stuff around the house for them every once in a while. And I was like, hey, like, you know, do you want to, like, renovate this condo? I was like, do you do this? He's like, yeah, I could do it. And so he did, like, the bathrooms, the kitchen, paint, and then I had to, like, find another guy for the flooring, which is fine. And, you know, that kind of like, started me getting into, like, how to find, you know, the trades. Right. Yeah, because that's a big one like, that people seem to have trouble with.

[John Gafford]

Well, you know, I personally, I always tell people, I say, dude, if you want to start flipping, you need to figure out who your trades are first, who's going to.

[Donovan Camaraderie]

Who's going to actually do.

[John Gafford]

Because here's the. Here's the. For me, right? This is the mistake that I find so many people make when they flip houses or start flipping houses. They don't factor in the carry cost of the interest on the money into the. Into the overall deal. And every day you're trying to figure out, holy. Who's gonna do this drywall? Holy crap, I can't find a plumber that will come out who's gonna do this. Every day that you're. You're jerking around with that those decisions cost you money.

[Donovan Camaraderie]

Yeah, absolutely.

[John Gafford]

Every day. And so line your trades up first. I think is a good piece of advice.

[Donovan Camaraderie]

Yeah. At least have some type of idea, right? Like, don't go buy a house and then have no one to work on it. At least, like, you know, talk to people, interview some people. Like, hey, you know, if I buy these houses, would you be down to fix them up? And then, you know, say yes. Like, okay, cool. Now I have that.

[John Gafford]

So that first condo, was it full rehab or was it light? Did you do light or. I mean, I put like cosmetic or what was it?

[Donovan Camaraderie]

Yeah, I put like 26 grand into it. It was like, you know, two bathrooms, you know, floor paint, kitchen. I mean, it was. It was, you know, easy stuff to require permits or.

[John Gafford]

No, no. Okay, cool. So it was like. It was light work. Easy work, which is good. I mean, I think if you're perfect.

[Donovan Camaraderie]

For a first one.

[John Gafford]

If you're getting a flipping again, you know, don't, don't, you know, people watch htv, hgtv and then they see like walls getting moved and they see structural happening and like, oh, we'll just rip out this bathroom, move it. Like, dude, no. Your first flip should. It should be cosmetic and should not require permits.

[Donovan Camaraderie]

Yeah, absolutely.

[John Gafford]

Keep going.

[Donovan Camaraderie]

Yeah. So then got that one renovated, you know, listed it for sale, listed a little too high, which, you know, learned that lesson, you know, ended up dropping it, getting a decent offer on it, and then sold it.

[John Gafford]

I say because that's another nugget. You bounced over it and solid.

[Donovan Camaraderie]

Yeah.

[John Gafford]

You know, people don't understand that when you go to price a property, talk about how important it is to price it right. What happens if you price it too high and what happens if you price it a little under?

[Donovan Camaraderie]

You know, if you especially like, you know, back a couple of years ago, if you priced it like a little under, you would probably end up getting bid up and going over a lot of you.

[John Gafford]

Yep, there's the answer we're looking for.

[Donovan Camaraderie]

You know, pricing it right is like. So, for example, like how I always price stuff now is like, hey, if it's worth 450, I'll try to price it like, you know, 439 or something like that just to, you know, try to get some good interest on it because, you know, we're in a business or at least I am sure of, you know, selling houses and moving them and not holding onto them because we don't have tenants in them. And, you know, it's very expensive. Like right now I'm spending like 160 grand a month on holding costs.

[John Gafford]

Yeah.

[Donovan Camaraderie]

For all the properties I have on the books. So, like, that really adds up. But back then, you know, it was worth, like 300 grand fixed up. I had an agent, different agent, which was. Which was a mistake, because I was going to rent it, and I got that agent to live listed as a rental. And I was like, hey, just out of curiosity, what would the property be worth if I went to sell it? And she was like, oh, you know, maybe 325. I was like, oh, wow, this makes way more sense for me to flip it. So. Ended up not being worth 325 was worth, like, 300, which is fine.

[John Gafford]

And so what'd you make on that first deal?

[Donovan Camaraderie]

Like, 27 grand.

[John Gafford]

Okay.

[Donovan Camaraderie]

Yeah. Which is great for a first. First deal.

[John Gafford]

So. But the finance of it. So what did you put. What. Who did you finance with? Who?

[Donovan Camaraderie]

I got, like, hard money then.

[John Gafford]

Okay. From local hard money?

[Donovan Camaraderie]

Yeah.

[John Gafford]

Okay, cool.

[Donovan Camaraderie]

Like a local Rio.

[John Gafford]

You found a local Rio. Okay. They gave you hard money. What was the rate on the hard money? Do you remember?

[Donovan Camaraderie]

It was like 12 and 3 points.

[John Gafford]

12.

[Donovan Camaraderie]

It was expensive. I paid for it.

[John Gafford]

All right, so those are your listeners. Don't know what that means. That means that 3%. The three points means you got to pay 3% of the total loan for acquisition costs, and then it's 12% running on the interest, which is. That's a lot. Yeah. And what was the LTV on it?

[Donovan Camaraderie]

I think they gave me 82 and a half percent loan to value on the purchase, and they gave me 100% of the rehab in draws.

[John Gafford]

Okay, so which means. Okay, what that means was they had. He had to come up with 18.5% down, and then they financed the entire rehab cost based on the ARV value, which is the finished value of the property. So they take the finished value of the property. They gave me 82 and a half of that, which included the rehab costs. They hold that money in escrow. And then as long as you're going along, you submit work. You, like, take pictures of the work, and you submit, like, scope reports, and you say, this is where we are. And then they essentially release money as you go along. They don't just hand you the money.

[Donovan Camaraderie]

And take it away.

[John Gafford]

No, no, they don't do that. You have to prove that the work is getting done, and they release it back to you. The thing people, you're paying juice on that money, even though you don't have it the whole time.

[Donovan Camaraderie]

Yeah. So, yeah, that depends on a lender, too. It's like, you know, that lender. I think they did charge me on everything.

[John Gafford]

Oh, I'm sure they did it.

[Donovan Camaraderie]

Yeah, I definitely paid for it on the first deal, but, but it's fine. You know, I always tell people, I was like, hey man, like, you know, just, just get in the door, right? Account for it in your, in your calculator and just get it. Like, yes, you're going to pay. But now, you know, now I pay like, you know, 0.75 points, you know, and then like, you know, sometimes less than 10%. So it's, you know, the more you have experience, well, it's going to go down.

[John Gafford]

Well. The good news is there's a lot of good institutional large lenders that do this.

[C]

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[Donovan Camaraderie]

I finally have a home office.

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Get a free upgrade to T Mobile Home Internet plus while supplies last. Home Internet plus starts at 50 bucks a month with AUT any voice line check availability@t mobile.com Home Internet during congestion, customers on this plan may notice speeds lower than other customers and further reduction of using greater than 1.2 terabytes per month due to data prioritization. After $20 bill credit plus $5 per month without auto pay debit, bank account required, regulatory fees included for qualifying accounts. $35 connection charge applies. It's what they do in the more of a track you know it's competitive. It is. There's a lot in the more of a track record you can build with them, the better off you are. And even through some of the networks you can be in and some of the groups you can be in, you get better pricing just by being a member of some of these different groups.

[Donovan Camaraderie]

Yeah. Like I'm a collective geni. Yeah. You know, 100% financing with, with, you know, certain lenders and you know, like.

[John Gafford]

A point low just because you're in Joe Polish's group.

[Donovan Camaraderie]

Yeah.

[John Gafford]

No 100%. Yeah. So there's things like, there's, there's a lot of ways to skin this cat is what we're saying. Finance was. Okay, go back. So first deal goes pretty well. Make 27,000.

[Donovan Camaraderie]

First deal goes well, second deal goes even better. Yeah. Again, really hot market. How to compete with a bunch of offers to get this under contract. Got under contract for, let me, let me think Now, I believe 200,000 and put about 49,000 into the property and then sold it, listed it on the market for 339, ended up selling 16,000 over asking price.

[John Gafford]

Great.

[Donovan Camaraderie]

Hot market. Right. Happening all the time now. Anyway, so that one went great. We were like, wow, this is easy. Third deal went horribly right. So third deal, ended up owning that house for like a year and over the course of that year lost like 50 grand on that house.

[John Gafford]

They're not all winners.

[Donovan Camaraderie]

No, they're not.

[John Gafford]

Anybody that tells you they big buddy on every house they've ever flipped is lying to you.

[Donovan Camaraderie]

Yeah, yeah. And then so the good thing is though, it's like, you know, throughout that time, it wasn't the only house. Right. Like I had gone and gotten other houses, you know, to flip and you know, those made money and those, you know, are what basically facilitate us to survive that. Right. Because if that was our only house, like we lost like everything, you know, without, you know, having to figure out some other financing source.

[John Gafford]

Yep.

[Donovan Camaraderie]

So ended up losing like 50 grand on a house. Way bigger renovation than I should have taken on as like a third flip. Right. About the house. Now I would have been fine, would have made money. But what I did is I made the mistake of thinking my handyman was qualified to do a four bedroom, four bath, 3,000 square feet. That was in like horrible shape in, you know, it was like an 800 plus thousand dollar house. Not the guy for the job. Right. At all. So that taught me a very valuable lesson.

[John Gafford]

Yeah.

[Donovan Camaraderie]

Of you know, making sure you hire the right people. Right.

[John Gafford]

Yeah.

[Donovan Camaraderie]

And you know, you don't have the one guy doing everything right. Like you have the plumber doing plumbing. You have the drywall guy doing drywall. You have the electrician doing electricity. You don't have one guy doing all those things because he's not going to be great at any given trade. Like.

[John Gafford]

And chances are your house is going to fail in its.

[Donovan Camaraderie]

Yeah, yeah. Right, so. And the reason we lost so much money, I mean, the holding time was one thing, but we ended up renovating this house, like, three times. Because first time, the guy underbid the job, and then, you know, towards the end, he, like, ran out of money. Right. And then he just, like, ghosted us. I was like, all right, well, that sucks. Anyway, rule.

[John Gafford]

Rule number. Rule number, rule number one with contractors. Never let them get ahead of you.

[Donovan Camaraderie]

Yeah, absolutely.

[John Gafford]

Just like we talked about the draws earlier. You've got us. You got to slow roll that money out as slow as you can, and they can never get ahead of you for that very reason. That was a lesson learned. There you go.

[Donovan Camaraderie]

Let's learn. Expensive lesson. That was the hard way.

[John Gafford]

I've learned that same lesson.

[Donovan Camaraderie]

So I feel.

[John Gafford]

Yeah, yeah.

[Donovan Camaraderie]

And then so I had another guy come in, and he finished the house. He did. Well, the only thing is that when you kind of, like, pick up on someone else's work, like, you know, the quality wasn't quite there, especially for, you know, an expensive.

[John Gafford]

Trying to get top dollar.

[Donovan Camaraderie]

Yeah, Right. So put the house on the market, and then it ended up not selling because of all these, like, little weird defects. Right. You know, little stuff that basically were cosmetic and it just caused people not to buy the house. So end up having to pull it off the market, redo all those things we had to do, redo all the drywall texture, redo, like, most of the trim, you know, floors were scratched because it's a bad contractor. So, like, how to redo all that stuff anyway, Put it back on the market the third time, or, I'm sorry, the second time, and it sold. Right. Because.

[John Gafford]

Okay, was this the first disaster house? Was this. Okay, so were there. Were there moments in this time, in this time when you were like, I'm fucking done with this. Like, I just want to do anything else but this. I'm just so done. This is just. This is not what I thought it.

[Donovan Camaraderie]

Was going to be with that house. Yes, absolutely. But if you're asking, like, you know, flipping as a whole. Yeah, no, I still liked it because I had other projects that were going well. Right.

[John Gafford]

Yeah.

[Donovan Camaraderie]

You know, this house, I. I hated seeing it. You know, I was just like, every time I would go Drive up there for like a year. I'm like, oh, man, here we go again. I'm going back to this house and it's still not done, you know, so anyway, that house sucked. And I. I wouldn't recommend, you know, someone to do it, but I'm very happy that I did because I learned all these valuable lessons on it.

[John Gafford]

So you said you were flipping. That was an $800,000 house.

[Donovan Camaraderie]

Yeah.

[John Gafford]

Is there a price point that you try to stay in to keep things moving or you would flip anything?

[Donovan Camaraderie]

So, yeah, I'll flip most stuff. I mean, I won't go like crazy multi, multimillion dollar stuff.

[John Gafford]

It's not good.

[Donovan Camaraderie]

Yeah, I mean, I know some people have made a lot of money doing it. It's just not. Not for me.

[John Gafford]

Well, the reason, the reason you got to be careful. I like to address price point when I'm talking about flipping with people because everybody thinks I'm going to buy this multimillion dollar house and then, you know, if I put in 200,000, I'm going to make 400,000. It's just like, why would I run around to five job sites when I can put all. I can put everything. And speaking from experience, when the mark, when the interest rates changed on us, when they turned back in 2020, late 2022, early 2023, when the rate shot to the roof, I was sitting on a $4 million house in Sedona. $3 million house here. Two or three, two and a half million dollar houses. I mean, we got caught with a lot of cards in our hands. I mean, our hand.

[Donovan Camaraderie]

That's a lot of exposure.

[John Gafford]

It was massive exposure.

[Donovan Camaraderie]

Yeah.

[John Gafford]

And. Yeah, and took a pretty deep, you know, some of like the Sedona house. Sedona we made, I want to say that turned almost a million and a half Sedona. But we took a beating on everything else to the point where really kind of broke even on it.

[Donovan Camaraderie]

Right on.

[John Gafford]

A lot of it through that turn. And so, yeah, it's be. You got to kind of stay within yourself, within those price points, make sure it's always something that's going to sell, which I like that.

[Donovan Camaraderie]

Absolutely.

[John Gafford]

So keep going.

[Donovan Camaraderie]

Yeah. And you know, but to that point too is like recently and this is just like our market specifically, like everything, you know, 500,000 and under is selling, you know, pretty fast. Right. Anything like a million and over a million to like 2 million, selling pretty quickly as well. It's like that middle ground, like, you know, that like 6, 7, $800,000 price point that's like, just not moving for us.

[John Gafford]

We're going to do something crazy. So we do it like the Joe Rogan podcast here where, like, people get up and use the bathroom.

[Donovan Camaraderie]

Okay.

[John Gafford]

I just. I just got to check a camera real quick. It is Saturday here in the studio, which means that my help is not here, but I just want to. I'm looking at this came camera, and I'm worried it's blurry, so I'm gonna check it.

[Donovan Camaraderie]

Okay, hang on a second. Yeah.

[John Gafford]

Because I don't want to get the whole thing done.

[Donovan Camaraderie]

Good. Okay.

[John Gafford]

I'm just blind.

[Donovan Camaraderie]

Cool.

[John Gafford]

That's how it works.

[Donovan Camaraderie]

Yeah. Sorry, you got me concerned there.

[John Gafford]

No, no, you're crisp. I just. I just. For whatever reason, I looked up there and I'm like, man, does he look blurry? No, it's just me.

[Donovan Camaraderie]

There you go.

[John Gafford]

I'm just blurry today. I guess that's how it works. So you did the mod, you did the crazy house. You were at three houses. How many? So at what point did you start to scale?

[Donovan Camaraderie]

So first year. Did like, nine houses.

[John Gafford]

Okay, so you're doing kind of one or maybe twosies at a time.

[Donovan Camaraderie]

Yeah, yeah, exactly.

[John Gafford]

Then what's your team look like when you're doing this?

[Donovan Camaraderie]

So with those First. So first one, I did it by myself. Okay, okay.

[John Gafford]

Like, you did the work?

[Donovan Camaraderie]

No, no.

[John Gafford]

Okay.

[Donovan Camaraderie]

Like, no partners.

[John Gafford]

I mean, but it was you and handyman.

[Donovan Camaraderie]

Handyman. Realtor, basically.

[John Gafford]

Got it. Okay. That's the team. That's number one. Okay, Got it.

[Donovan Camaraderie]

Number two, brought on a partner because I needed to show reserves. Right. Because, like, the hard money.

[John Gafford]

Sure.

[Donovan Camaraderie]

You know, lenders, they want to see, like, hey, you can pay the interest for, you know, six, nine months, whatever it is. So how to do that? Brought a partner. I mean, we did probably number two through number, like, maybe 14 together.

[John Gafford]

Okay.

[Donovan Camaraderie]

And then after that, we kind of just went separate ways. Nothing bad happened. We just had, like, different visions for it.

[John Gafford]

Okay, so what? Can we talk about that?

[Donovan Camaraderie]

Yeah.

[John Gafford]

Okay. So where did you find your partner?

[Donovan Camaraderie]

Local ria. Local meetup group.

[John Gafford]

Okay, so you just found this person, a local meetup group, and they were like, yeah, cool. Okay. I like what you're doing. I like what you're doing. Let's. Let's do it.

[Donovan Camaraderie]

Yeah.

[John Gafford]

Was there any formal agreement about how things would go up front? There was. Okay. Was there any part of that agreement that involved the dissolution of what happens if things didn't go well?

[Donovan Camaraderie]

I don't believe there was. It was just a very basic, like, we had an LLC together and, you know, just very basic operating agreement. And, you know, we. It was, it was, it was a very mutual thing and it really went well. Like, you know, we're still, you know, very friendly today. You know, we'll see each other every now and then. But, you know, obviously it could go.

[John Gafford]

You got lucky. You got lucky.

[Donovan Camaraderie]

You could go very.

[John Gafford]

The point I was going to make is in a lot of people that. A lot of people that jump into partnerships earlier, especially around real estate, like, you had a need. You needed his capital to back up your reserves. That could make you more bankable. You needed that. I understand that.

[Donovan Camaraderie]

So.

[John Gafford]

And probably from his end of it, you brought the expertise of the project management. Is that, Is that accurate?

[Donovan Camaraderie]

Yeah, you know, trades.

[John Gafford]

The trades.

[Donovan Camaraderie]

And you know, I was going to like, see properties make offers. Yeah.

[John Gafford]

So you were the sweat. He was, he was the back end capitol.

[Donovan Camaraderie]

He would do, he would do work, though. It wasn't like he was totally.

[John Gafford]

I'm not saying. Yeah, I'm not saying he was a silent partner. But my point being is there was a reason for both of you at that time in the equation. So many people, especially in real estate flipping, just want to do it with somebody else because they just don't want to do it themselves. They don't. They want to go scared or. Yeah, yeah, they're scared. They just want somebody to do it with them and we can do this with them. That's a terrible reason to get into business with anybody is because you don't want to do it by yourself. Absolutely. So make sure that there's something that you both need to do equivalently on both sides of it. Now, the reason he got very lucky, you got extremely lucky that it was a good amicable split and everybody's happy. So many business relationships do not end that way. They end very poorly.

[Donovan Camaraderie]

Yeah.

[John Gafford]

And the best way to avoid that is if you're going to get into a relationship with somebody contractually that involves what's going to happen. What my end of the business is. Your end of the business is make sure you include kind of that prenup. What happens when you break up that way, if things aren't going the way that either party. Party wants, you just trigger the disc solution clause that says, I'm going this way, you're going this way. You get this. I get this. This is how everything breaks down and everybody's good. And the people that I've given that advice to that have gone into business that I've seen those businesses stop for Whatever reason, they're always still friendly with the people that they were business with because it was just. It's just a dissolution.

[Donovan Camaraderie]

You have those expectations set up.

[John Gafford]

You know, if this doesn't work, this is what's going to happen. And then there's no. There's no. There's no money grab. There's no. There's no asset grabs. There's no relationship grabs. There's no reputational damage. There's none of that stuff. It just. Hey, man. We just. We got to a point where it was in and we moved on. Glad that worked out for you. So that was good. So the team with this guy. When you were with this guy, what was the team like other than that?

[Donovan Camaraderie]

It was basically. It was him, it was me, it was our realtor, and, you know, just our. Our subcontractors. Like, that was it. We didn't have any employees. Oh, we had. Well, we had a bookkeeper, which was like, you know, a vendor, you know. Okay. Which is great, by the way. Everyone should hire bookkeeper. Like.

[John Gafford]

So your subs, you weren't doing. You weren't doing anything, gc?

[Donovan Camaraderie]

No.

[John Gafford]

Okay, so you weren't. At this point, you're still doing roughly cosmetic stuff because you're not pulling permits.

[Donovan Camaraderie]

Yeah, no, we didn't really. The only thing we really pulled permits for were like, you know, roofs or ACs or, you know, just like majors.

[John Gafford]

But. But in. But in Florida, if I'm not mistaken, the subs. A roofer can come pull his own. He can pull his own permits and plumbers can pull their own permits and all that. You don't need a GC to oversee that stuff. Okay, cool. So the trades you're using are licensed trades. Are pulling permits where you need them. That's fine. Okay, good. Keep going.

[Donovan Camaraderie]

Yeah. And then, you know, we obviously, like, you know, we. We blew through a lot of trades. Just like, you know, you know, we didn't have the process there. They weren't capable of what we wanted. So, you know, we cycled through a lot. But then, you know, after a while, we figured out, like, hey, these are our good guys. You know, let's make sure, you know, we can keep them. And now a lot of them, you know, still work for us, you know, or me. And he'll do like, you know, a couple flips here and there.

[John Gafford]

So the question. Okay, let me ask. Let me ask you this. So how do you keep trades happy? Number one, one of the hardest things in the world, especially at scale flipping houses is. Or the worst thing ever is pulling up to a house when somebody's supposed to be there and they're not there.

[Donovan Camaraderie]

Right.

[John Gafford]

It's the, you just like the rage button just goes through the top of your head when this happens and it happens too much. So do you have a way that you incentivize your contractors? Do you give them bonuses for finishing early? Are, are there anything you do like that?

[Donovan Camaraderie]

Yeah. So I mean one big thing to keep trades happy is like you just pay them on time, right? Like, hey, they're done.

[John Gafford]

How that works?

[Donovan Camaraderie]

Pay them like that day. Right. Or you know, maybe next day at latest. It's like, you know, I, I talked to so many guys, it's like they work for other flippers that like pay them at the end of the month or when they sell the property, which is even worse.

[John Gafford]

Yeah, that's crazy.

[Donovan Camaraderie]

And then, then that screws them up. But to like, to answer your question is like, what we'll do is like, hey, you know if you're done by this date, you know you get exponents, right?

[John Gafford]

Yeah.

[Donovan Camaraderie]

And I now that I have like project management, you know, now I do that with them for the subcontractors. They're usually like in and out doing like their own job. So it's not really totally necessary. It's more like an overall project thing. Yeah. But like, you know, we do have one general contractor that we use now and he's, he, he's like, hey, we need like this payment schedule. Like I can do your jobs really fast, but I need to like get paid X amount every week just so I could have more guys at the house, you know, which is, which is a little bit nerve wracking. And I wouldn't do it unless I completely trusted them. But we also have, you know, it has, it's this. If this work is done. Done.

[John Gafford]

Yeah.

[Donovan Camaraderie]

Right. It's like, hey, you can get paid on Friday, but this amount of work has to be done.

[John Gafford]

You know my favorite thing about construction is it's like a three legged stool. One of them is good, one of them is fast, and one of them is right, right. You're gonna get two of those three legs, but you're never gonna go all three. Yeah, just if you want it done, if you want it done right and you want it done cheap, it's gonna take a long time.

[Donovan Camaraderie]

Right.

[John Gafford]

You know, just, it's.

[Donovan Camaraderie]

Yeah, yeah, good. Fast and cheap.

[John Gafford]

You're just never gonna get that.

[Donovan Camaraderie]

You just.

[John Gafford]

Those three do not go together. You get two of them, but that's it. So you you got through. So now you've. At what point did you decide you needed a project manager? Because I love that so.

[Donovan Camaraderie]

Well, that was honestly probably like the biggest like difference in, in my business and like hiring a project manager made me do. You know, we were doing, I was doing one or maybe two at a time or like one or two a month almost immediately. Within a month I did four or five inconsistently just by having some, just by having.

[John Gafford]

At the job sites, running the job sites, making sure.

[Donovan Camaraderie]

Absolutely. Now it was a lot of work, you know, to train them up front. Like on the first couple projects after that, man, it's like you know, they, they're sailing well.

[John Gafford]

You're essentially teaching somebody from scratch to be a super.

[Donovan Camaraderie]

Yeah, basically that's exactly what it is.

[John Gafford]

That's exactly what you're doing. Yeah. To work with in that role for you is they handle all of your construction, they make sure the jobs are on time and you're bonusing them for work being a part of time.

[Donovan Camaraderie]

Exactly. And the reason is, is like, you know, in our market, like if we could use the GC man on every job.

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[Donovan Camaraderie]

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[Donovan Camaraderie]

I would totally prefer to do that. It's just so much easier. It's less risk. You know, they kind of just got their bid and you know, if they go over, they go over, you know, reasonably. But where we are is like the general. Contractors are extremely expensive.

[John Gafford]

Yeah.

[Donovan Camaraderie]

So it's like, man, like we're doing.

[John Gafford]

Stuff that can you get cost plus 10. Doesn't happen.

[Donovan Camaraderie]

No, no. With our one guy, it's like, you know, he'll, he'll basically just say, hey, like, you know, this is the best I can do. This is my cost and this is what I want to make on it. He will do that. But most of them are just like, no, kick rocks. Like, we're not doing that.

[John Gafford]

I, I have friends in the trades here in Vegas that are contractors that are. They'll say stuff like, like, dude, I went over this lady's house and she wanted me to redo her bathroom and I did not want the job, so I gave her the stupidest number on the planet.

[Donovan Camaraderie]

Right.

[John Gafford]

She's like, yes, I'll do it. And now I've got to SC able to find jobs to go to this bathroom job because there's just so many more people. You know, it seems like every year skilled trades are getting less and less yeah. Of people that are really talented at what they do and can do things on time. They're more and more in demand, which is pushing that price up.

[Donovan Camaraderie]

Yeah, absolutely.

[John Gafford]

So I'm guessing that when you walk a property for acquisition, like, we'll talk about acquisition first. So when you walk a property for acquisition, I'm assuming you have your term sheet and, you know, you do it. You have your budget that you fill out. How often is your budget that you fill out the house in line with what you end up paying the subs or the gcs?

[Donovan Camaraderie]

It's. It's usually fairly close. Obviously, you know, line item by line might vary a little bit, but it's. It's usually pretty close. And that was not always that way. It was like, you know, the first maybe 10 properties were like, why are we going over budget all the time? You know, because you were.

[John Gafford]

Did you pull the. Did you pull your. Did you pull your cap rate sheet off the Internet? Your walk sheet?

[Donovan Camaraderie]

No, I really just kind of like pulled it from my head. I was like, okay, hey, this bathroom cost, you know, 3500 in labor and it costs about, you know, 1700 material. And I would just kind of like take that, you know, from job to job. As it grew in my head. Then where I really got, you know, kind of screwed up is. Well, I didn't realize, like, you know, a five by ten bathroom is not going to be the same price as a, you know, six by 15 bathroom.

[John Gafford]

Right.

[Donovan Camaraderie]

I was like, oh, well, you know, it's about the same. So I was like, well, maybe 500 more. Not the case. Right. And I think that's. That's what happened. You know, now we're. We're fairly close, you know, I mean, only really if like something unexpected comes up, then, you know, hey, we might go over. But. And it also depends on the project manager too. Like, I have one project manager who will get that stuff done super fast, but he always tends to go over budget a little bit.

[John Gafford]

Yeah.

[Donovan Camaraderie]

Because he'll just pay for the person that can do it sooner. Whereas I have another project manager who's a lot slower, but he's always on budget every single time.

[John Gafford]

Yeah.

[Donovan Camaraderie]

So maybe, maybe other.

[John Gafford]

So. So yeah, there's a give and take. There's a give and take there. It's like, know, it's like Cody Sperber always talks about real estate's levers. Right?

[Donovan Camaraderie]

There's.

[John Gafford]

There's lever here, lever there, and on budget and over budget, but faster, but you're paying the carry time, right?

[Donovan Camaraderie]

So it ends up being the same.

[John Gafford]

It ends up washing out. Right. One lever turns the other.

[Donovan Camaraderie]

Yeah. Which, I mean, if I, if I had a preference, I would say probably do it faster because you can just, you know, get the property listed and, you know, get your money back. Turn the money, you know. Yeah. At the same time, though, it's like, hey, if we're going over budget, you know, $10,000 on every house, over 80 houses, that. That's a lot of money. Yeah.

[John Gafford]

Well, let's talk about your acquisition model. So where do you get. So obviously you still work with wholesalers, you still work with. You still work with realtors, but do you have a direct to consumer marketing you're doing now?

[Donovan Camaraderie]

Yeah, yeah. Google. Google's been pretty good.

[John Gafford]

So you're on Google. Do you do direct mail or.

[Donovan Camaraderie]

No, we. We haven't. We will do like, some here and there, just on like, specific ones. Like if we know, like spec property or owner or whatever you know, has a high. A high equity. Yeah, no, like a high. What's the percentage chance of, like, selling? You know, other than that, though? No, I mean, we might roll that out in the future. But, you know, we did Facebook for a while, and the Facebook didn't really convert how I wanted it to. And I know it works for some people, but for, you know, me and in our operation, it didn't really work the best because I think what happened is it was very competitive. Right. Like with Google, we're number one on like a. Not a crazy ad spend in our area. Yeah. So the leads that come through Google a lot more qualified because think about it, right? They're saying, hey, I need to sell my house faster cash today.

[John Gafford]

They're specifically looking for this.

[Donovan Camaraderie]

They're looking for it. Whereas on Facebook, they're like, oh, it's entertainment.

[John Gafford]

Yeah.

[Donovan Camaraderie]

They're like, oh, I'm scrolling through Facebook on my lunch break and they're like, oh, I guess I do want to sell my house. Let me fill out this form.

[John Gafford]

Well, I always compare that to like, same. Same thing with residential real estate that we do. Somebody searches in, you know, what's my house worth? Whatever. Same thing. They're looking to really sell it. But if they're on Facebook and it's like, what Game of Thrones character are you? I don't know how much my house. I don't know how much is my house worth? They're not really. They're just. They're just entertainment scrolling. So I can, I can definitely see that with the Google Ads, are your Competitors also running, even though you're number one, are they also running there?

[Donovan Camaraderie]

Yeah.

[John Gafford]

Do you find that when. Because you're on Google and I have found this in the past with direct to consumer like that, doing acquisitions that, that because it's on Google, how many competitors do you normally up against or do you assume you're up against when you go to the walk the house?

[Donovan Camaraderie]

It's a lot less. It's a lot of times we're the only ones, really. Yeah.

[John Gafford]

Good for you. And I probably shouldn't have said where you work. Probably should have edited that out just to protect your business a little bit.

[Donovan Camaraderie]

Yeah, well, but the other thing is too, is like our competition has gone down a lot too. So like, you know, whereas when I used to walk properties and I would go to like a wholesaler's deal or like an MLS deal that was like priced very well. Yeah. There'd be like 20 people at the house right now it's like there may be three people. So it's just like a lot of people got out of the business. Just, you know, in the past couple years has been more difficult. So our competition has definitely gone down.

[John Gafford]

So less competition. I know that, I know that Florida's, Florida's markets are a little bit in turmoil. You're sort of to a beach city just north of Palm beach. So you're pro. You may be a little more protected than some of the more rural area. Rural areas. I don't have any idea what's going on with your market. Yeah, I'm very, I'm very aware that markets are very, very, very micro, not macro.

[Donovan Camaraderie]

I'll tell you. Like the houses that I bought at like the end of last year, I just had to take ELS on. Right. Like interest rates, we, we got affected like where you guys here are in Vegas. Like you guys got affected like six months before we did. So it was interesting. So like you guys were saying, market's bad. I was like, man, market's great. What are you talking about? And then we got hit.

[John Gafford]

Oh, no, no. I mean the market here has been great.

[Donovan Camaraderie]

Yeah.

[John Gafford]

You know those high end flips, we just, we got caught in the shock of when the interest rates first went up. And it was like that, holy shit, what just happened?

[Donovan Camaraderie]

Right?

[John Gafford]

And everybody kind of put the brakes on everything, which is why we got kind of Z. But as far as overall sales here, man, Vegas has been, Vegas is an anomaly to this thing.

[Donovan Camaraderie]

Interesting.

[John Gafford]

Just because if you look at the growth pattern that we've had in the city over the last 10 years. What other city in the history of the United States has gotten every major sports team in the period of 10 years?

[Donovan Camaraderie]

Yeah, right?

[John Gafford]

It's crazy.

[Donovan Camaraderie]

You're right. That's a good point.

[John Gafford]

It's crazy the growth that we've added in the city, and it continues to grow, but. Yeah, keep going. So Port St. Lucie, is the market receding? Is it? What's going on?

[Donovan Camaraderie]

No, I wouldn't say that's receding. I would say there are some pockets, you know, maybe a little north, little south of us that are. But there are other parts of water.

[John Gafford]

Over there if you want to grab one.

[Donovan Camaraderie]

You know what I will grab.

[John Gafford]

Yeah. See, this how we do it. We don't care. We keep it real in this thing. That's what we do. Yeah, dude. Doesn't matter. That was a real choke right there.

[Donovan Camaraderie]

That was authentic.

[John Gafford]

The authentic joke. That's exactly why we keep those things over there. So there you go. Yeah, they just sat down.

[Donovan Camaraderie]

What were we saying? Oh, market. Yeah. So I would say where we're at, important is growing very fast as well. So that's been good. And there's a lot of new construction, which obviously, as flippers, we're competing with. But, you know, it's. It's interesting because the cons, the new construction is not for the price point. Not quite as nice as, you know, where we're doing flips. Like, they have maybe, you know, they don't have quartz countertops or they don't have, you know, tile shower. They maybe have, like, fiberglass or, you know, for my tiger. So we're around the same price point. Older house, but much nicer, you know, so, you know, it. We still sell our flips even in highly new construction areas, which is good. That being said, though, there are certain things with HOAs. I know you guys have a lot of HOAs here, but, like, Florida is very mixed, right? Certain cities are like, all HOAs. Certain cities are none. Certain cities are, you know, 50. 50. I would say certain cities where it's 50, 50, those HOA communities, especially with high fees, get, like, no buyers.

[John Gafford]

Really?

[Donovan Camaraderie]

Yeah. And condos are even worse because no one wants to buy condos.

[John Gafford]

Yeah, dude, it's funny. You did your first deal, and people are probably hearing that. They're like, oh, I'm gonna buy a condo this and that, but I wouldn't.

[Donovan Camaraderie]

Recommend buying a condo.

[John Gafford]

No, no, no, no, no. Well, I don't. I don't like. I don't like flipping condos. I don't like investing in condos. I'll tell you why floor's a little different because you've got those big ones on the beach. That's fine. But I'm talking about here, the mid rise. Not a mid rise. You're talking about two story condo complexes that have a gazillion units in them. To me those are like Kansas soup on a shelf. Right. I don't care how far you improve your product. Like somebody else can sell their. The neighbor can sell their identical unit that maybe doesn't have as nice as cabinetry and flooring and demolish your pricing. So you really to. If I like single family homes because it's. You're able to create a level of uniqueness in that product that'll hold your pricing much better than the cost.

[Donovan Camaraderie]

Yes. And. Well, one thing that's bad in Florida is like, you know, I mean, I'm sure you've probably heard of it, but like, you know, buildings over a certain age, they have to get their milestone inspections to make sure.

[John Gafford]

Yeah, the roofs.

[Donovan Camaraderie]

Yeah, roofs. Like all the structure. Because you know, we had that building in Miami collapse like a few years ago. Now everyone, I think by like 2025 has to have their milestone inspection. They have to have so much in reserves, like per unit. And if they don't, then it, it's bad with huge assessment.

[John Gafford]

That's a good point, dude. In Florida is. Is a new roof part of your standard scope of what you do?

[Donovan Camaraderie]

We do new roofs like 95% of our houses. Yeah. Yeah. It's like you have to. That we don't do a new roof.

[John Gafford]

Yeah. Because that's what. That's one. I'm guessing that's one of the first questions buyers there ask is how's the roof? Yeah.

[Donovan Camaraderie]

Well, because number one, if they need to get insurance and if they can't get insurance, then, you know, they have to buy cash. Most, most retail buyers aren't buying cash.

[John Gafford]

Yeah.

[Donovan Camaraderie]

Then if they can get insurance and it's an older roof and it's probably going to be more expensive. Right. So yeah, I mean we. I've sold houses with new roofs and without the new roofs. Always sell way faster.

[John Gafford]

Always sell faster.

[Donovan Camaraderie]

Always.

[John Gafford]

So it's worth it.

[Donovan Camaraderie]

Yeah. We had a few hurricanes come in like, you know, 40506 and like, so everyone's roof was like, you know, 506. And now those are coming to the time where they need to be replaced.

[John Gafford]

Yeah.

[Donovan Camaraderie]

So even though they're perfectly fine, a lot of them, we still replace them.

[John Gafford]

Dude. A buddy of mine, I Won't mention his name. He's in, he's in my mastermind group. Just exited his roofing company. Nine figures.

[Donovan Camaraderie]

Wow, that's huge.

[John Gafford]

And dude. And you want to talk, you want to talk about a dude that you look at his face, that he used to be like the most stressed out guy I've seen, but you look at him now and he's like, looks like he just floats in on a pool of jello.

[Donovan Camaraderie]

Yeah. Every time.

[John Gafford]

I don't believe you. Dude. It's good. But yeah, he does a lot of business in Florida, so he's, he's from the Midwest, but he's grown his business all through Florida.

[Donovan Camaraderie]

Yeah, that's a, that's a big one in Florida. Like there's, there's so many roofers because.

[John Gafford]

There'S so much, there's so much business.

[Donovan Camaraderie]

Yeah.

[John Gafford]

It's crazy how much business. So when you're doing your acquisition on the acquisition end, you do your walk, you run your bids, you've obviously run your bid sheet comparable to what you're spending currently in the marketplace.

[Donovan Camaraderie]

Yep.

[John Gafford]

Adjust your bid sheets, kids. Make sure you adjust your bid sheets to what current pricing is for materials and for labor.

[Donovan Camaraderie]

Both.

[John Gafford]

Both. So you do that, you come up with your number. What, what do you, what margin you're looking for on a house when you make your offer?

[Donovan Camaraderie]

Yeah, great question. So for anything that's like we're buying from a wholesaler or on the mls, it's, it's easier. Right. Because we don't have to like, we don't have to market. We don't have to like lock up the deal. We just basically tell them a price. Right. So that being said, we shoot for like a minimum forty thousand dollar profit on every deal or 10% of the sales price, whichever is greater.

[John Gafford]

Okay.

[Donovan Camaraderie]

So even if it's like a three hundred thousand dollar after repair value value, we're still going to shoot to make 40 grand. Got it. For properties that are, you know, direct to seller, where we have to pay for marketing, you know, pay the sales guys more on it and you know, just more work. Right. Those properties, we shoot to make 65 grand or 15% of the after repair value, whichever is greater, whichever it is.

[John Gafford]

Yeah. And obviously now I guess with less competition, you're able to buy that deep there.

[Donovan Camaraderie]

Oh yeah, absolutely. I bought my personal house for like less than 50% of what it's worth and it wasn't even like that bad a shape.

[John Gafford]

What? What Personal? I mean, I'm not personal. I'm sorry, what Percentage of deals you walk an offer at that deep are you getting?

[Donovan Camaraderie]

I don't really walk any anymore. Right.

[John Gafford]

Your acquisition people. Yeah. I thought the company model, not so.

[Donovan Camaraderie]

Much you, but the, the guys. If, if there is access and we're close in price, we will walk it. If there's no access and you know.

[John Gafford]

You'Re going off the wholesaler. Pictures from investor.

[Donovan Camaraderie]

If they're good, they're good pictures, they're good walkthrough videos. Obviously we're still going to offer a little bit lower if we can't get access.

[John Gafford]

Sure. What percentage of the. I guess a better question rather than walk is what, what percentage of the offers? You're right.

[Donovan Camaraderie]

We usually, we'll usually up the, the what do you call it, the rehab budget by like 10% minimum, you know, or 10 grand.

[John Gafford]

No, no, but I'm saying what KPI. KPI wise. If I write 10 offers today, how many of those am I going to be? Lockup.

[Donovan Camaraderie]

Oh, if you write 10. So normally the guys will lock up and it depends on the, on the sales guys, but usually like 1 in 20 offers.

[John Gafford]

Okay, well so 1 in 20 is your, is your closer in that KPI.

[Donovan Camaraderie]

Yeah.

[John Gafford]

What. How are you incentivizing your acquisition people?

[Donovan Camaraderie]

So they get paid a certain fee for you know, any deals that are, that they you know, bring in that are MLS wholesale, you know, that's, that's a lower fee.

[John Gafford]

Okay.

[Donovan Camaraderie]

Anything that gets direct is, is a higher fee because a lot more work sure to do.

[John Gafford]

So now you're, but so you're also doing, you're doing direct through Google. So you're also wholesaling now. You're a wholesaler now as well?

[Donovan Camaraderie]

Yeah, I'm getting more into it for sure.

[John Gafford]

Okay, cool. So do you have a despo team that's handling that or not?

[Donovan Camaraderie]

Yes. So I have an in house real estate agent that is just like on salary to list all that retail stuff. But for wholesale dispo we actually contract it out just because the price is like basically what we would pay, you know, take like 10% of the assignment fee. It's like I pay a diso person.

[John Gafford]

That and who cares.

[Donovan Camaraderie]

Plus they already have, they're paying for investor lift, you know, have like, you know, caller and everything. Like it, it's well worth it for.

[John Gafford]

Those of you who don't know what that stuff that there's. There's a, there's like a, there's like a marketplace kind of like the MLS for off market properties from wholesalers that they will run out to Investor Lift, where you can put in your search and then they'll send you stuff that's off market out here. We just see the wholesaler fees are just stupid.

[Donovan Camaraderie]

Yeah, they're crazy.

[John Gafford]

They're just. I mean, you know, I, I swear it's like YouTube just spun these guys up into a frenzy. We're like, you can make $50,000 a deal by wholesaling it. And you're like, you get these numbers and you're like, I literally got one yesterday so I can find it. I got one yesterday. And this is. I'm hoping this was a mistake, but this was the dumbest shit I've ever seen. Hang on a minute, let me look up. Investor left this.

[Donovan Camaraderie]

Yeah, I paid a $50,000 assignment fee.

[John Gafford]

Hang on, Here we go.

[Donovan Camaraderie]

You ready?

[John Gafford]

Here we go. And you could read that. This is. I'm really reading this. It says, hi, John Price for Investor Lit, Dylan, Clark County, Las Vegas. 8913 was reduced to 640,000. ARV is 650.

[Donovan Camaraderie]

So where was it before?

[John Gafford]

I don't know. I'm praying this is wrong, but I'm like, what are you doing? What are you doing? And I mean, you look at some of the stuff and it's like ARV, 515 asking for 50. Like, dude, there's no meat on that bone. Like, it's just, it's stupid. What? Some of these things are coming back.

[Donovan Camaraderie]

Yeah.

[John Gafford]

So when you, when you deal with wholesalers, let me ask you this, in Florida, when you're dealing with this, how, how much are you undercut? Does it. How much you undercutting their investor lift? Ask, ask. Just here's what I can pay and that's it if you want to take it or leave it.

[Donovan Camaraderie]

Yeah, basically. Yeah. So it's not like, like, you know, we're not going to say, hey, you're asking 420. 420 works for us. You know, screw you. Three eighty.

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[Donovan Camaraderie]

We'll just tell them this is our number based on yeah, this is our number. Can we get it done? Yes or no? And if we Can't. Can you go get a reduction if you don't sell as anyone else? And wholesalers seem to appreciate that. I mean, I know, like, you know, myself, like, you know, I was like, hey, guys, even if you have an offer, give me the offer. Even if it's a low ball, tell me what you can actually do. Like, you know, be real with me, and if I don't sell it, I'll go try to get a reduction and then sell it to you.

[John Gafford]

Sure. I, you know, I. I love in. In residential real estate. It's so funny, man. That. And I tell, I tell, you know, we have 585 agents here. And I tell, preach this like the gospel. There's no such thing as a bad offer. There's just no such thing as an offer. An offer is an offer because an offer in the residential side of it can be used to show your client what the market is currently thinking of your house, whatever that may be. Absolutely. It's a vestor offer.

[Donovan Camaraderie]

It's leverage.

[John Gafford]

Dude. But you love these. You send offers to agents sometimes. They're like, I am outraged by this offer. I am disgusted, sir, by your offer of compensation for my property. I will not even bother to present this to myself. It's like, dude, calm down.

[Donovan Camaraderie]

Yeah. They personally like insults.

[John Gafford]

Yeah. Why are you personally. Did you build the house? Did you design the house? Did you decorate it? Like, why are you insulted? Just use the offer to either A, get me a counter or B, maybe it gets you a price reduction on a price that might be overpriced. But there's no such thing as a bad offer. No, never a bad thing.

[Donovan Camaraderie]

Hey, do you want to sell it or not?

[John Gafford]

Yeah. Are we. What do we want to do with this? Like, do something. So there you go. There's your. If you're a residential realtor, there's your. There's your lesson for today. No such thing as a bad offer. No such thing thing. So that's the acquisition. Then you go through. You have your property manager running this stuff. How many properties are you running at one time?

[Donovan Camaraderie]

So right now we have 37 flips in the books, which is a decent amount. I think we were like, at max, like up to 40, and then like, sold a couple recently. So, yeah, I mean, it's. It's a lot of. A lot of properties on the books right now.

[John Gafford]

I wish I would have done that, dude. Okay, so in 2017, I lost my ass on this one, right? Okay, 2017, we started Vulture Fund because there was money here. So we Raised that. We were. We had roughly 12 million buying power.

[Donovan Camaraderie]

Okay.

[John Gafford]

Right. And because we were spending on the capital, we were paying Juice on the capital, our thought was we got to place this capital. We had 137 flips going at one time. Wow. And it was a mitigated disaster.

[Donovan Camaraderie]

Wow.

[John Gafford]

It was. It was. It was. It was a disaster.

[Donovan Camaraderie]

What was your monthly liability on all.

[John Gafford]

Oh, bro. It was. Well, it was a disaster. I don't even remember. Maybe I blacked it out or blocked it out, but, like, my office is in there. Like, at one point, it just got. It was so hard to manage. Like, you see these squares on the. On the. On the wall in here? I had pictures of the front of the properties with the address written on them, and I just had them taped all over the walls of my office. And, like, this is. Like, these were done. And then I moved them to the dispo section of my wall, and then I move them to, like.

[Donovan Camaraderie]

So this was all just, like, paper and.

[John Gafford]

No, no, we were using. So there was a. There was a. There was a system called Taza reo. Okay, That I had used. The banks would use during their REO stuff, but it had really good workflow for, like. For field services and all stuff. And I called them, and I'm like, you're pretty much out of business with reo. There's not. Nobody's doing REO anymore. Can you tweak this for. For my business so we can communicate, do. Change orders, do all this stuff? And they built us really kind of just tweaked their system for us.

[Donovan Camaraderie]

That's cool.

[John Gafford]

So we had a great thing. Thing. But even with that many properties, I could get my head around it. So I just literally had to have this stuff. I look like Howard Hughes in there. Like, just houses taped all over the walls, all the way from the floor to the ceiling, every inch of my office.

[Donovan Camaraderie]

That's crazy.

[John Gafford]

And it was nuts. It was insane. And it was impossible to deal with at that scale. I mean, look, that's a lot to manage, dude, for a couple guys. And we had. We had, like. We ended up hiring, like, four property managers, and it was impossible. It was impossible. It did not go as we would like it to have go. Yeah, that was about big L. Quickly, quickly. We stopped that quickly. We got through one cycle of the money, and then that was it. It was just, no, we're not doing this. We're not doing it because the goal was to try to psych. The goal was to cycle that money two and a half Times a year. But there was no way. There was no. Anyway, back to you. That was just. I don't know why I just told that story, because I'm having flashbacks right now. Terrible. That was. But yeah, it was funny. So 67 barbers, that's. You're running 40 at a time is where you are.

[Donovan Camaraderie]

More or less.

[John Gafford]

Yeah, more or less. Which is manageable.

[Donovan Camaraderie]

Yeah.

[John Gafford]

So you. Because you. Because on 40 houses, you have the trades that can handle that. You're using the same guys. Now, do you have a spec. But is everything the same? Do you have spec using the same flooring, the same tile, using the same everything?

[Donovan Camaraderie]

Yep. So we have three different design packages. So houses, you know, under 400,000 get a certain design package. It's like, you know, a little bit cheaper tile a little bit cheaper. You know, cabinets, countertops, you know, 400, like a million gets a little bit, you know, nicer design. Pack a little bit nicer tile in the bathrooms, you know, different countertops.

[John Gafford]

Are you buying. Are you buying that in bulk?

[Donovan Camaraderie]

So it depends. Depends on what it is, right? Because obviously if you buy in bulk, stuff costs money to store, right?

[John Gafford]

No, no, it doesn't. Well, no, it does not.

[Donovan Camaraderie]

Depends where you buy it.

[John Gafford]

Bedrosians, we were buying flooring from. You have Drojans in Florida?

[Donovan Camaraderie]

No.

[John Gafford]

Okay. It's California here, I guess.

[Donovan Camaraderie]

Whatever.

[John Gafford]

It's a big. It's a big. They're hard skate. They're. They're hard surfaces. We were buying 100,000 square feet of flooring from them at a time. And they would store it for us.

[Donovan Camaraderie]

They would store it for you, really?

[John Gafford]

We could go get it.

[Donovan Camaraderie]

Because I was. I was literally just on the phone yesterday with this guy who's like, hey, you know, we can. We can get this, like, you know, 80,000 square feet at, you know, a much cheaper price. But you have to take it from us, you know, we can't store it.

[John Gafford]

Oh, see if they'll start. I guarantee you'll find somebody down there that'll store it.

[Donovan Camaraderie]

Interesting. I'm gonna have to ask that.

[John Gafford]

Yeah. Because here's. Here's what happened. Like, if they're having a bad quarter, ask it. Well, you just missed it. You just missed the. Cut off for the financial quarter. But ask at the end of the quarter if you can, because they're having a bad quarter order. They'll let you buy it in bulk up front and just say, I'll buy it. Your book's all great this month, but you hold on to it.

[Donovan Camaraderie]

Okay.

[John Gafford]

And we'll just come get out of the yard as we go. So, tiles easy, right? Slabs are a little harder, but tile's easy. I just stack this up and for you, it's. It's easy, but, yeah, I would definitely. We. That's.

[Donovan Camaraderie]

Yeah, no, that's a really good idea. I'm gonna. I'm so gonna do that.

[John Gafford]

That's good. Yeah. Yeah. Check that. We. We. It was what you just saw. What was it? What was the discount on the 80, 000 square feet you could have?

[Donovan Camaraderie]

So they were. They were doing it. Our original price was like 166. And then, you know, we did a lot, so they dropped us like a dollar 29 or one 19. I don't remember.

[John Gafford]

That's massive.

[Donovan Camaraderie]

And then.

[John Gafford]

And.

[Donovan Camaraderie]

But. And then if we bought, like, the 80,000, it drops to 80 cents.

[John Gafford]

Dude, that's. Yeah, that's a huge. That's massive.

[Donovan Camaraderie]

Yeah.

[John Gafford]

And was this. Is this Tyler or vinyl plank?

[Donovan Camaraderie]

Yeah, and it's like. It's nice. It's, like, good stuff. You know, it's not like, you know, cheap stuff from Home Depot.

[John Gafford]

That was the smartest thing they ever did, was put that L in front of it for. Was it luxury?

[Donovan Camaraderie]

Luxury?

[John Gafford]

Yeah. No, it's not. It's not vinyl flooring. It's luxury. Luxury vinyl flooring?

[Donovan Camaraderie]

Yeah.

[John Gafford]

Oh. Oh, really?

[Donovan Camaraderie]

In terms of as luxury as you can get with a vinyl.

[John Gafford]

Yeah. No, no, dude, it looks great. It's very, very durable. In certain places, like Florida, especially near the beach or near the water, it's magical.

[Donovan Camaraderie]

Oh, yeah, for sure. It's not like, you know, hardwood that's going to get, you know, like, damage with water or something like that, you know?

[John Gafford]

All right, so let's move on. Let's talk about taxes, because you're getting killed. You don't hold any of this stuff.

[Donovan Camaraderie]

No.

[John Gafford]

So what's. What's. What's the tax plan? Because, I mean, look, the number one reason to get into real estate is taxes. I mean, you know, the tax code is built to essentially, as much as possible, wipe out your tax liability by owning real estate. I mean, things like segregated cost, you know, evaluations where you can accelerate the depreciation on properties. I mean, this stuff is in the tax code for you to use. What's the plan, dude? Because you got to be getting murdered.

[Donovan Camaraderie]

Yeah, so the plan is. Well, obviously, we have to. We're reinvesting into the business big time now. So, like, I stopped taking a paycheck from July of this year. I. I took, you know, the first six months, July 1st, I stopped taking a paycheck.

[John Gafford]

So how are you handling the capital gains on these properties?

[Donovan Camaraderie]

So I'm not paying quarterly number one. I'm just getting hit with the bill at the end of the year in April. Right. Also, like, I'm. I'm just, you know, I got a new office. Right. I hired some new staff. And, you know, like, I still had a couple houses that, like, I had to take a little bit of a loss on last year. So those are, you know, offsetting it a little bit. I am planning, though, to buy some large multifamily before the end of the year.

[John Gafford]

Okay.

[Donovan Camaraderie]

And then we're gonna go and, you know, obviously do a cost segregation study.

[John Gafford]

Yeah.

[Donovan Camaraderie]

And, you know, depreciate what we can of that.

[John Gafford]

There's a lot of good deals, man, because I'm telling you, a lot of syndicators bought those deals. And the bill is due, check is due. They were on teaser rates that are now adjusting. And those deals no longer make any sense.

[Donovan Camaraderie]

Not at all.

[John Gafford]

And there's going to be some fire sales in that.

[Donovan Camaraderie]

There was. There's this one from this guy that I know. He. He was the one with the connection. But it's a. It's a 66 UN. It. And I mean, it's total disrepair. Like, it needs, you know, class C. Yeah, yeah, it's a class C. Needs work. Not a horrible area, but, you know, still class C. And fixed up, it's probably worth like 7 to 8 million dollars, depending on who you ask for.

[John Gafford]

66 units.

[Donovan Camaraderie]

66 units.

[John Gafford]

So what's the acquisition cost?

[Donovan Camaraderie]

Well, we're trying to get it for 900.

[John Gafford]

The guy wants to 66 units for 900,000.

[Donovan Camaraderie]

But the caveat is it needs over $3 million worth of work.

[John Gafford]

Okay.

[Donovan Camaraderie]

To get it fixed up, which is still a good deal.

[John Gafford]

Will he carry the debt? Huh? Will he carry the debt?

[Donovan Camaraderie]

He will carry a good majority of the debt. Yeah. But he does need a certain amount of money.

[John Gafford]

Six units for that. That's wild.

[Donovan Camaraderie]

Yeah. So we're. We're kind of in limbo at like 1.4 right now. And it's like. It's like an okay deal there, but it's just a lot of risk.

[John Gafford]

What's the vacant?

[Donovan Camaraderie]

What's the vacancy right on percent right now?

[John Gafford]

Oh, it's just a shell.

[Donovan Camaraderie]

Yeah, yeah, yeah.

[John Gafford]

This is a. This is an absolute box shell that's been sitting there for. Okay, so zero cash flow. No, this is your. You're buying a project. You're actually Going to project?

[Donovan Camaraderie]

Yeah.

[John Gafford]

You're buying a project. Okay.

[Donovan Camaraderie]

Yeah, yeah.

[John Gafford]

So you would have to get. Well, you're not going to get. I mean, the cost seg on that. If it's a shell, you're not going to get. I mean, you're going to get dog shit for this year.

[Donovan Camaraderie]

You'd be better off waiting till. That's. That's really going to be like a play for at least next year, you know?

[John Gafford]

Yeah.

[Donovan Camaraderie]

Um, I mean, you know, I obviously I purchased some vehicles and stuff, which, I mean, those are like, okay. Those are not like, you know, the greatest, but I mean, it still writes off, you know, a couple hundred grand.

[John Gafford]

I'll tell you again, I have a friend of mine that's a really good cost segregation guy. He's probably the best guy the country. And I learned something from him two weeks ago that I didn't even know, which is if you're doing cost segregation reports, you can do what's called a disposal section, where, like, for example, say you buy this property, right? Well, when you rip the roof off of that thing to redo the roof, say the roof is 40 grand, whatever it is, you can depreciate that $40,000 roof, even though you're ripping it off and throwing it in the dumpster.

[Donovan Camaraderie]

Really?

[John Gafford]

And then next year, depreciate the roof that you just put on.

[Donovan Camaraderie]

Really?

[John Gafford]

I had no idea. So as you're going into this project, you might want to, a cost segregation guy, look at it first and say, I want to get dispo. I want to get dispo. Advantage on everything we rip off.

[Donovan Camaraderie]

That's really good.

[John Gafford]

It was wild.

[Donovan Camaraderie]

Yeah.

[John Gafford]

I had no idea.

[Donovan Camaraderie]

I didn't know that either.

[John Gafford]

Nobody in the room did. Everybody was like, what the you talking about? And yeah, nobody knew. It was crazy. People were like, really? Because I don't need to know that, dude. I. It was wild.

[Donovan Camaraderie]

Yeah.

[John Gafford]

No idea that you could do that, but. Yes, that's absolutely in tax code. It's absolutely. This is, like I said, this guy's the best guy. He's the best guy. Phenomenal. Well, dude, really impressive.

[Donovan Camaraderie]

Thank you.

[John Gafford]

Really impressive. If anybody wants to, like, get in touch with you and maybe. I mean, look, I'm not going to say bend your ear because don't blow this dude up with like. I want you to mentor me. What's going on? Like, look, he. He's. He's. I'm sure he'll help you, but don't blow him up with a bunch of nonsense. It's crazy. More or Less if you got a deal or want to do deals or you have capital. Want to do bit like, look, if you. Yeah, that. Let's talk about that. You got a guy like this, you want to get. You want to learn how to do this. Bring some money to the table with this guy. Bring a deal to the table with this guy and partner with him on a deal. You guys do that?

[Donovan Camaraderie]

Yeah, yeah, that's. That's actually how I I. One of my really good guys, he's. He's actually here on this trip with me. Is he lent like 50 grand on a deal, right?

[John Gafford]

Yeah.

[Donovan Camaraderie]

Hey, you just want to like, you know, do this with you. Like, you know, get to know you, whatever. So let. Let the money on the deal. Then he brought like a few other deals and I told him they suck. And then he kept bringing me deals and he finally got like some good ones. I was like, oh, yeah, man. Like, I'll partner with you on these. Like, you know, like, we just. Hey, here. Here are the terms. And then now he's like, you know, just. We're bas. Just full time, you know, working together.

[John Gafford]

Yeah.

[Donovan Camaraderie]

And it's. And it's great. I have other people like that too.

[John Gafford]

That's. Dude, I'm telling you, that is. And people look at this the wrong way. They look at situations like that where they're like, oh, but I don't want to give up profits. Blah, blah. Dude, you're getting an education for free and you're actually making money. You're making money to get an education.

[Donovan Camaraderie]

Absolutely.

[John Gafford]

So that's how you have got to look at it.

[Donovan Camaraderie]

And you're providing value to whoever you're bringing that deal to because they're. They wouldn't have otherwise had that deal. Right. You know, so they're making that money. They're happy. I mean, I feel free to bring me deals.

[John Gafford]

Yeah, bring them deals. All right. So what's your Instagram, how they find you?

[Donovan Camaraderie]

So best way to get a hold of me. I'm very active. Instagram, Facebook, just at camaraderie homes. My last name. You can also look up Donovan Camaraderie. I should come up. So. And that's C A M A R O T T I.

[John Gafford]

There you go. I love it, man. Well, dude, I want you to come back in a year. I wonder how much. How much more you've scaled and where you're growing into and watch your journey. Super impressive for 21 years old.

[Donovan Camaraderie]

Thank you, man.

[John Gafford]

Good job, dude. Congratulations. Good job. Thank you all. Well, look, dude, if you listen to this today and you're sitting there thinking, man, I'm drifting along with the currents of life. I'm too old, I'm too young. I'm too whatever. This nobody is too anything to start doing what you want to do. We'll see you next week. What's up everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escapingthedrift.com you can join our mailing list. But do me a favor, if you wouldn't mind, throw up that five star review. Give us a share. Do something, man. We're here for you. Hopefully you'll be here for us. But anyway, in the meantime, we will see you at the next episode.

[E]

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