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- [00:00]
A
Welcome to Real Talk Real Estate, the show where we cover how to build wealth in real estate with no fluff, no BS, and no sales pitches. I'm David Green and I've been doing this for over 10 years. I've seen the ups, the downs, and everything in between. This is the show where we pull back the curtain and show it to you, too. So if you want to build wealth through real estate or you just love learning about it, you found your home. Welcome everybody, to the David Green Show, Real Talk Real Estate. We are continuing in my series on nightmare deals. We're talking about deals that went wrong that you may never have heard before with the hopes that you will recognize some of the red flags from the guests in the series and prevent yourself from making similar mistakes. I'm joined today by Tedman Chang, a real estate flipper who's got two different stories of deals that went terribly that we're going to share with you all today. Tedman, thank you for joining me.
- [00:48]
B
Yeah, thanks for having me on. Yeah, like you said, two flips that are going wonderfully.
- [00:55]
A
All right, let's get a quick background on you. What's your occupation? Where do you live? How did you get into real estate?
- [01:00]
B
Yeah, so I'm actually from the, from San Francisco Bay area. I work for a tech company in the city. Started investing in real estate a year or two ago, so currently have three flips under my belt with one duplex in Indianapolis that's going pretty well as a long term rental.
- [01:24]
A
Okay, and are the flips in Northern California?
- [01:28]
B
No, they are in Austin, Texas.
- [01:30]
A
Okay, and then what is your background? Like what do you do for work? Normally?
- [01:34]
B
Yeah, so I'm in the tech industry, but I work in the finance sort of department or umbrella. And I've been doing it my whole career since, since college.
- [01:45]
A
So. So what does that mean in layman's terms? What type of, what do you do every day when you go into the office?
- [01:51]
B
Yeah, basically, you know, when salespeople close deals, we do everything else related to accounting and finance behind the scenes. Okay.
- [02:01]
A
So someone catches a fish, brings it in, you're in charge of cleaning that fish and turning it into something that can actually be useful for the company.
- [02:07]
B
Exactly. Yeah.
- [02:08]
A
There we go. Okay. How did you get into real estate? Like, where did you first hear about it? What made you want to invest?
- [02:15]
B
You know what really kicked it off is when I first bought my, my primary, my first primary in 2020 during COVID kind of taught me a lot about real estate. Then I started listening to Baker Pockets, kind of religiously. I read all the books, all the different real estate podcasts, and basically the. I think buying the first. My first primary was sort of what kickstarted my interest in real estate. And like I said, I learned a lot. I have some friends that are, you know, agents, and we always discuss real estate and things like that, so.
- [02:51]
A
Okay. All right, so let's talk about this first flip. The one from early December when you first saw it. What stood out about it? How did you find it? What were you feeling when you looked at it?
- [03:02]
B
Yeah, so it was through a wholesaler that, you know, I was connected with because I have sort of a team that I built in Austin, you know, contractor, agent, whatnot, and they. They know this wholesaler pretty well. What stood out was this area has been kind of changing a lot or gentrifying, I guess. In North Austin, they're really popular area called the Domain. A lot of bars, a lot of restaurants, a lot of younger sort of folks there. And it was in a good neighborhood, next to a really big park, like a really nice park. And yeah, it was, you know, in the. In my buy box, you know, it was like a 3:2, about, you know, 1700 square feet, needed, you know, a new roof and everything. So I think the neighborhood and the vicinity to the Domain was sort of attractive to me, and that's sort of why. Why we bought it.
- [04:10]
A
Okay, so you purchased it for 350. And what were you thinking? That the rehab was going to be.
- [04:15]
B
On this thing about 100 to about 110. And we came in at 106.
- [04:21]
A
Okay.
- [04:22]
B
Yeah.
- [04:22]
A
So. So this was like a pretty extensive rehab. What were all the things that needed to be done on it?
- [04:28]
B
Everything. So we did the roof, new H vac, you know, floors smoothed out. The walls, opened up some walls. They built these weird walls for some reason that made like these skinny hallways. So we opened everything up, redid the fireplace. Yeah, everything. It was pretty extensive.
- [04:51]
A
Kitchens and bathrooms need to be done.
- [04:53]
B
Kitchens, Kitchen was complete. Remodel. Bathroom, same thing. We didn't really have to move any plumbing. We just kind of changed everything out.
- [05:03]
A
What about shower?
- [05:04]
B
A little bit bigger.
- [05:05]
A
What about like the roof, the plumbing, the electrical system? How was that?
- [05:09]
B
Yeah, the roof needed replacement. It was old. Replaced the roof. Electrical was fine. You know, we just changed out. We put in some recess lightings and whatnot and fixtures.
- [05:20]
A
Okay. And then you thought you were going to be selling it for 625, right? Yeah.
- [05:25]
B
All right.
- [05:26]
A
And then when you. Well, when you're looking at that, and you're thinking 625. What are you basing that off of?
- [05:33]
B
It was the comps at that point of sort of purchase and sort of during the first half of our rehab, we're constantly looking at the comps, and it was looking pretty good. So.
- [05:45]
A
Okay, so there were houses that were in the similar area, similar size and condition to what you were going to do, that were selling at 625.
- [05:53]
B
Yeah. Yeah.
- [05:54]
A
Okay. So you're trusting the numbers, which is what everyone tells you to do. Trust the numbers, Trust the numbers. Don't trust your gut. Makes you feel like you're safe. Where did things first start to go wrong?
- [06:06]
B
So we listed it in March, like near the end of March for 639. And we started seeing a lot of price cuts and a lot of other comps that were just sitting during, you know, spring and summer. And we just had to keep cutting the price, and it just kept sitting, and it just kept going down and down and down.
- [06:29]
A
So what was happening in March at that time in Austin?
- [06:33]
B
I don't know. I honestly don't know what was turning. I think a lot of it had to do with, you know, the persistent high rates and people returning to work. I know Austin had that big boom during COVID where everyone was moving there and, you know, everyone could work remote. And now, like a lot of tech companies, even my own company is requiring everyone to go back to the office, so.
- [06:57]
A
You make a good point. I was just thinking about how we tell people to look at the numbers, and it's often portrayed like, if you do it by the numbers, you can't go wrong. If you do it by your gut, you could go wrong. So go by the numbers. But the real intelligence here is knowing what is making the numbers show what they show. Numbers are a lag indicator. Right. So, like you just mentioned, a lot of people were moving to Austin during COVID because they could work remote, and Austin was a fun place to be. Austin also had a lot of stuff open because Texas didn't shut down, like where we are in California, where everything was shut down. I mean, realtors couldn't even take someone into an empty house to show it. It was really bad.
- [07:36]
B
Yeah.
- [07:37]
A
So then you also have high rates, which they kind of hurt all of real estate. But I think that they were less impactful in the most popular areas, the cities that had the most demand. You just got to pay what you got to pay, and you're going to pay it if you can afford it. Austin has persistently High wages. It has growing demand as more people are moving there. So high rates in Austin are going to be way less impactful than high rates in somewhere like maybe San Francisco where people are moving out of it. They're not moving into that area. So I can see how the numbers would show exactly what you're looking at. There's literal comparable sales showing 625. You probably just, like most people don't know what's driving those numbers. You just know what the numbers show. Right. Okay. So you put it on the market at 6:39. And you said it starts to sit for a while. It's not getting any action.
- [08:28]
B
Yep. It's that for, I think, like a month and a half or so. We dropped it 10,000, I think, and then it kept sitting. We dropped it another 10. And eventually we list the final sort of drop. We dropped it to, I think 569 was sort of where we got an offer finally. So there was, you know, no offers this whole time for the, you know, the five months that it was on the market until the last sort of price drop.
- [08:58]
A
Were you getting showings?
- [09:01]
B
Yeah, people. People were looking at it. Not a lot, but there were some. Yeah. And zero offers for five months, which is pretty insane.
- [09:14]
A
Did your realtor happen to go over with you how many active listings there were that compared to yours versus how many pending listings were actually in escrow?
- [09:24]
B
So what? Ha. So during when we listed it, during. When it was on the market, a lot of flips started popping up in the area. A ton of them. Like maybe like 20 or so within a few blocks or even a couple miles of that area. 20 or 30 flips just came on the market during the summer and kind of made it worse. But to ask your question, not really in that much detail. Not. I think she was more so just telling me, you know, what the markets, how the market's changing, how many active listings there are in the new flips that are coming out to the market.
- [10:07]
A
Yeah. So you think it was just that influx of flippers kind of moving into the Austin area?
- [10:12]
B
Yeah, yeah. Especially in that area, I think. Yeah.
- [10:15]
A
And then I'm imagining that is usually accompanied with a whole bunch of wholesalers that are also out there pounding the pavement trying to find these deals, offloading them to the flippers. Now your contractors are spread thin because they've got all these projects. Did the. Did the rehab take longer than you thought it would take?
- [10:31]
B
So this one, I think it was a little. Maybe a little bit longer. I think total was like four Months or so. We were estimating around like three or four months.
- [10:40]
A
So.
- [10:40]
B
Okay, it wasn't too bad. Yeah.
- [10:42]
A
So you're dropping the price bit by bit. You're getting some showings, by the way, when that happens, when you get a steady amount of showings, but not a lot and you don't get offers, people assume that that means someone's interested in their house, but it doesn't because nobody goes to look at one house. That's one of the problems with real estate. And I see this because I've been a real estate agent for so long. They look at six houses in one day, so they got one they really like, another one they kind of like. And then they have three or four more that they throw in there that become the context to help them understand how much they like the other ones or if it's worth it. So a lot of the times, like, I as an agent would see a listing that was maybe priced too high or there's too many listings on the market, and this one is at 625. The one that they really like is at 5 75. Well, if they see the one at 625 and they see the one they like at 575, it helps me talk them up to coming up to 595 where they need to be to get it, because there's multiple offers by saying you're still less than the one at 625. So, like, your listing could very well be the one helping other realtors sell different homes. And you don't realize it and your realtor doesn't realize it. The only way that you figure that out is you have to look at how many houses are active for sale versus how many are pending. And my guess would be the active number was growing quite a bit. The pending number wasn't growing nearly as fast. So you get into this death spiral where you're already not selling after 30 or 45 days. Now more houses are hitting the market. You're getting more competition. Buyers have more to choose from, and there's less people that are actually buying. And there is not a way out of that. There is nothing that can be done unless you have some super secret. I put a pool in my house when nobody else had a pool or I had a view that nobody else had. But absent something like that, your only option is to drop the price. And if you have to keep dropping the price, you can get to where you're losing money. So you said you dropped it and you got an offer at what point.
- [12:37]
B
Basically 5:32, and we're closing this week, so.
- [12:40]
A
No, but I thought it was higher than that. You mentioned originally you got a first offer that was more.
- [12:45]
B
No, no, no. Okay, so we only got one offer, and it was at 5:32.
- [12:51]
A
Okay, so you got an offer at 532. Did you counter it? Did you accept it? How did that offer come in?
- [12:56]
B
We countered a little bit and we gave some concessions like repairs and whatnot, but basically we were like, we just gotta get rid of it. We'll take the offer. We'll get rid of it. So.
- [13:11]
A
So are you doing this with partners? You said we.
- [13:14]
B
This one was with one partner, correct? Yep.
- [13:17]
A
And were you both money partners? Were you deal partners? How did. How does the partnership look?
- [13:22]
B
He was basically just investing some money half and half, and I was kind of running the project.
- [13:30]
A
Gotcha on my side, so.
- [13:31]
B
Yeah.
- [13:31]
A
Okay, so you're selling it at 5:32. Has it already sold?
- [13:36]
B
It's closing on Friday.
- [13:38]
A
Okay. So contingencies are waived.
- [13:42]
B
Yeah, yeah.
- [13:43]
A
Good news there.
- [13:43]
B
So everything's good to go. We just had to make some repairs that they requested, which is normal. I think it was like wear and tear, fix some cracks here and there. And, you know.
- [13:55]
A
So you initially had planned to make about $100,000 on this thing. What's the. What's the damage going to be when it's finally sold?
- [14:04]
B
I think we're basically even with, you know, depending on the random closing costs and everything, we're basically even. I'm not even going to count it.
- [14:15]
A
Yeah, but that's. I mean, from start to end, how many months went by, do you think, from the time that you started looking for this deal and analyzing deals to where it's going to close?
- [14:27]
B
What month are we in? We're in October, so about 11 months.
- [14:31]
A
Yeah, it's like almost a year's worth of work to break even. And I say that because a lot of people might hear, oh, that's not that bad. He didn't lose money. No, you still lost money, because if you had been compensated for your time just at something like minimum wage, it would have been a significant more amount of money than walking out of it with zero. And that's. I mean, you were cutting a super close. Like you were saying. Now here's something I do want to highlight. You did buy that property, right. If it went that bad and you still got out breaking even, you paid a good price for the property, and that's the one thing that can save your keister. Whenever you get in these situations, man, like, if you overpay hoping that you get the very top arv, you can be okay if rates are low and the market's really hot, but you might not be versus if you buy it. Right. Even if things go wrong, usually you end up in a situation like this where the rehab spins out of control or the house just sits there. There's too much competition, but you still can get rid of it. You can still sell it for less than what's owed on it.
- [15:33]
B
Yeah. Yeah.
- [15:34]
A
So what did you learn from this deal?
- [15:39]
B
Honestly, I. I think, like you said, there wasn't much we could do, and just. I think we should have maybe dropped the price a little bit more drastically in the beginning just to get some attention. More attention on. On the property. But like you said, I. I don't think there was much else we could have done differently. And I think everything went well until, you know, the market kind of tanked a little bit.
- [16:08]
A
What were your emotions like during this deal?
- [16:12]
B
Stressful. You know, having a partner that invested money in the project and having it sort of. You start. You see it kind of drop lower and lower and lower. And in the back of my mind, it's just, you know, if we lose money on this, you know, it's not going to be good for me, not going to be good for my partner. And it was just a stressful three, four months towards the end. Yeah.
- [16:43]
A
Did you consider foreclosure? Was there? Did you and your partner start arguing about anything? Did it hurt the relationship with that person?
- [16:51]
B
No, not really. Now that we're not actually losing any money, I think we're okay. I think it's just we live and we learn, and we're probably going to try another project elsewhere, maybe outside of Austin.
- [17:05]
A
Okay.
- [17:06]
B
But we'll see. Yeah.
- [17:08]
A
All right, let's talk about the second flip. So how long ago was this?
- [17:13]
B
This one's fun. So I closed on this mid March, and we are finishing the rehab now in October, hopefully by the end of the month.
- [17:28]
A
All right. And where did you find this deal?
- [17:32]
B
Same wholesaler, also in North Austin. So basically, I bought this right before we listed the other one.
- [17:41]
A
Okay, right. Because you're thinking, hey, the other one's gonna sell. I'll make 100 grand. I got the. Now I got my second one lined up. I'm a flipper. I'm. I'm pacing things out. I'm lining up my dominoes. If I make 100 grand on every one of them, I can make 600 grand a year and I'm gonna be on HGTV and Bigger Pockets talking about that's. I learned it all from Brandon Turner. I totally understand that.
- [18:03]
B
That's exactly what my mindset was in that. In that month.
- [18:07]
A
Right. Which I appreciate you coming on to share like the. The Icarus fall from the heights down to just the despair of, what the hell am I supposed to do here? So let's go over the details. What'd you pay for this one? What was your rehab budget? What do you think you're going to sell for?
- [18:21]
B
Yeah. So this one was purchased at 450. Rehab was estimated around 60,000. And it was only going to take two to three months. Two and a half months, maybe. Because it was mostly just a cosmetic flip. We didn't have to take down walls. We didn't have to move plumbing. We. It was basically just paint and new fixtures, new kitchen cabinets, pretty cosmetic. Supposed to take two months. And we are on month seven.
- [18:56]
A
Okay, month seven. Now, what happened with that first contractor that you hired?
- [19:04]
B
He was a. You know, it was going. It was going well for the first month or two. Then he kind of started falling apart a little bit, and he left the project around two and a half months in. 90% complete with the project, nothing was fully complete. Like the bathroom had some stuff missing. The kitchen was missing some stuff. Cracks in the walls. Eventually he left. Didn't pick up my phone calls, couldn't find him, texted him, emailed him, you know, called his wife. No one picked up. So I don't. I still don't know what happened. I don't know why he walked away from the project. And there was a permanent issue with the windows, which he left without, you know, fixing. And then two. One month went by. Two months went by. I was trying to fix the permitting issue with the city, and I also found a new contractor to help me out. And we started work about a week ago.
- [20:14]
A
Okay, so what took so long to find the second contractor?
- [20:20]
B
So he's actually the contractor that I worked on the other flip, but he was. He was really busy, and I couldn't really continue work without fixing the permitting issue.
- [20:29]
A
Right. Okay. So you're stuck with the city and you're on their timeline. So what was that process like? Walk us through what it was like trying to talk to the city what the actual structure of their process is.
- [20:42]
B
Yeah. So I had no idea what I was doing, especially because it's in Austin, and I just don't know if it's any different from, you know, the San Francisco Bay area. But I contacted them. I applied for an express permit, but it somehow added plumbing and electrical, like, permitting on there, which caused issues because they needed, like, a master plumber and electrician to fill out all these crazy forms and. And sign off and then like, transfer the permit to themselves and everything. Then I realized after, like, two months of talking to them back and forth, that I could have removed those two permits from my express permit, and it would have just been smooth, you know, and quick. So I removed it eventually, and now we can start working.
- [21:40]
A
Okay, so that wasn't much you could do there because the city just halts everything and you're stuck. At least in Texas, they got that done in a couple of months. I've got some deals. I've been two years waiting for the city to approve this thing, and they don't care. So. So you're. You get the work started with the second contractor. What's the rehab going to be on this one?
- [22:05]
B
Probably about 15 to 20 on top of what I already paid the other guy, which was about, I think, like 50. So in total, probably 70.
- [22:17]
A
Okay. And what work are they doing? What work has been done and what work is the new contractor gonna do?
- [22:22]
B
Yeah, so he's really just fixing the mess that the other guy left. Everything was kind of 90% complete. Like, the bathroom was missing a few tiles. Some of the walls weren't painted, and then the kitchen was not complete. There's no countertops. So he's coming in and just doing, like, the finishing touches, basically fixing the walls, adding countertops, installing the vanities and the fixtures.
- [22:54]
A
Okay, so this is mostly the stuff that's going to make it pop. Stuff that's going to make it look good in the pictures. It's not the foundational type work. It's the finishes, and it's the stuff that is going to make it sell.
- [23:06]
B
Yeah. Yeah.
- [23:07]
A
Okay, so what happened? What were you planning on listing it for when it got done?
- [23:12]
B
Probably about the same. Like 25.
- [23:14]
A
All right. Now you're probably a couple months into your other one, sitting there not selling. So you got a little bit more data to analyze here, right?
- [23:23]
B
Yeah, yeah, yeah. So now I'm like, I'm hoping by the time we get it up and up and ready by the end of the month, that we'll get some better comps. But as of right now, I mean, I'm just. I'm just hoping to break even. Listed probably around like 5:70 or something like that and break even, just get rid of it. But I'm hoping with the. With the rates dropping this month and hopefully the market picking back up. That, you know, we'll get better calls, but we'll see.
- [24:01]
A
Now let me ask you a couple of questions because you're still working at W2 while this is going on, right? Right. What would your financial picture look like if you had quit your job six months ago, a year ago, and said, I want to be a full time flipper? You line up the flips, you got your core four, the comps are looking good, you're doing it by the numbers, and then this happens. I don't know.
- [24:24]
B
I would be selling off all my stocks and trying to stay afloat.
- [24:29]
A
Yeah, like the stress you go through right now sucks because you're working a job and you're trying to manage, manage these. But imagine the stress you'd go through if you had quit that job and you didn't have a backup plan. And now the things that are going wrong in real estate are out of your control. You can't control how many houses hit the market after you bought it. You can't control your contractor not answering your calls. You can't control the city screwing you up with the permitting. You can't control the price that a buyer is going to want to pay for that house. Like all of these things, I feel like that's where the most stress in life comes from. The things that I can't fix, I. It's not like my effort can improve this. I'm just helpless along with the current of life, wherever it's going to take me. If you've given up your W2 job, which is a thing that you actually have some providing stability and you have some control over, I actually think your stress levels would have been worse. Whereas it's frequently told to people that real estate should replace your W2, you're a real estate investor. You've had deals and went good. You had these deals that went bad. You also have a W2. What is your perspective on if people should quit their job?
- [25:33]
B
I think in my opinion, going through all this, I think people should keep their W2 as long as possible and try to invest on the side. Sort of like what I'm trying to do. You know, flipping is active, but you can still do it on the side. And I think having that stability and having that income coming in to keep you afloat, if things do go wrong is very important. I don't think I'll be quitting my W2 anytime soon, but I will continue investing in real estate and, you know, flipping, buying long term Rentals. So I think maybe there comes a certain point where I would quit. But that's probably a long ways from now.
- [26:18]
A
So long ways away. I like that because I don't think people want to work at W2 forever. It's just frequently expressed like you did a couple flips now you could do more flips if you go full time. And people don't realize that doing more can actually be more problems. It's not always more blessings because things go wrong and in this case things that you didn't anticipate. Now you're still holding on to this second one. You haven't sold it yet, right?
- [26:41]
B
No. Finishing the rehab hopefully in a couple of weeks and then we'll get it listed by the end of October. Hopefully.
- [26:48]
A
All right. Well, I have a good agent out there in Austin if you want some help getting that thing sold. Yep. And the one brokerage can pre approve your potential buyers as well to let you know if they're full of it. That's. People don't think about that a lot, but you're usually relying on your listing agent talking to the buyer's agent about the buyer's financing. And of course the buyer's agent's going to tell you that they're good financing. Of course their lender is going to tell you that they've been vetted. But they never know. They just say that, oh yeah, yeah, yeah, they're good to go. Sometimes they don't even look at their file. Versus I have a mortgage company so when I'm selling a house I tell the buyer, you have to get pre approved. With my company you don't have to use them, but you do have to go through the pre approval process because I want them to find the cracks in this financing and what could go wrong because oftentimes they're self employed, they're using income from real estate or dividends that the lender isn't going to let them use when the time comes. So their debt to income ratio doesn't support it and you get all the way to where closings on Friday, we're good to go and oops, we can't close. We need another 60 days or another 30 days to move this to another lender. And the buyers never take responsibility for that. They're mad at the lender, the lender never takes responsibility for it. They say, not my fault. The underwriter said it. The underwriter couldn't care less who's mad at them. They're just some little troll sitting in a cave somewhere that no one ever actually gets to talk to. Right. Like you're just stuck here and there's nobody to blame and there's nothing to do and that's the worst. So there's a couple of quick tips for you for how you could try to protect yourself here. Have you thought about investing in California or flipping here?
- [28:25]
B
Yes, actually, you know, I talked to my partner and a couple of my agent friends and I think we, me, me, myself might want to start flipping in the Bay Area. I think the reason we started with Austin was just the price point's a little bit lower. Oh, yeah.
- [28:43]
A
And it was a red hot market at the time. It seemed like the safest place.
- [28:46]
B
It was. Yeah. But I think there are some sort of lower price point cities in the Bay Area that, you know, can match Austin and be a good flip. But I don't know, after these two, I'm a little traumatized. I might take a break. But I do want to kind of start flipping it in Barria too. Just I think to have more control and be able to be present. Check on the project if I need to.
- [29:17]
A
But yeah, I don't blame you for this. And it's. I mean, checking on the project could help a little bit. It's more when you get to see the contractor face to face, it's harder for them to give you a runaround about why they're waiting on something, but really they're working on someone else's deal when you see them there, it's like it's harder to lie. Right. And I think that's just. It's often it's not the property that you need to see when you're investing locally, it's the people. If you have really good people, like I talk about a long distance real estate investing, you're good. But when you're first breaking into a market, you don't know if they're good or not. You're told they're good. They always tell you they're good. Someone else might have vouched for them, but you're going to go through several frogs before you find that prince that's going to be the right fit. So another thing I want to highlight about why not all of this is like your fault. There is a pattern, I notice where the market is going up. This is typically in a rising market where it starts to cool. That can happen from rates going up unexpectedly. That can happen from unemployment numbers going up unexpectedly. This can happen if there's rumors of a war. Right. Everyone's like, oh crap, like we're about to go to war. I don't want to buy a house right now. So there's, like, things that will happen in the news cycle that can stop what was previously a rising market. And what I find is that the news will report this and the other influencers in my space will say, there's a correction. Prices are plummeting, right? They're not. They're correcting to where they should have been. And it only happens in the hottest markets. It doesn't happen in, like, somewhere in Mississippi or Alabama. It's like Phoenix, Las Vegas, Austin, Texas, San Francisco, Oakland, Miami. It's almost always the places that are hubs of industry where you don't just have investors buying for cash flow. You have flippers operating, and you have regular millennials that are just looking to buy a house to drive up prices. And so if you're in those specific markets, they are the most sensitive to the corrections because they were at the front of the race, they were leading the pack. They're also the ones where you're going to make the most money when there isn't a thing in the news, you're going to be able to sell your house faster because everybody's buying there. So it's just something to be aware of that when you get in, I always notice those specific areas. Los Angeles is another one that, like, when the market's good, they outpace everybody. But then when the market turns, they're the first ones to feel it. It doesn't mean you should or shouldn't invest in them. It means that if you're investing in those areas, you need to be aware you're more sensitive to a turn in the market, so the stakes are higher. You're just playing like a high stakes table as opposed to the low stakes table, where you don't hear about people taking big losses, but you also don't hear about people really moving the needle. Some investors have been in these, like, safe markets in the Midwest for 10 years, and their net worth is $400,000. And, like, they've never missed, but they haven't really done anything that significant either. And that's not necessarily a win. Right? You could say you've never lost, but if you haven't done enough to impact your financial position to where it's made a difference in your life, then you're just throwing time and energy and effort into a bucket that isn't really giving you a return on that investment. So I know that, like, Austin's one of those markets where this is going to happen. Whatever. The new cities that are going to emerge as the next front runners in the next wave, depending on where industry moves and, and who's elected president, could have something to do with that. I've heard Trump talking quite a bit about the fact that he wants to bring businesses back to America. Just listening today that he has a plan, that he's trying to get other companies to manufacture their vehicles, their clothing, their products here in America. They're probably going to put plants in specific locations. Those areas are probably going to have a more steady labor base, and you're going to have the corporation officials that make more money that are going to move into those areas. Those cities will probably become the next front runners, and they'll stay that way until there's something that comes out in the news. If Israel goes to war with somebody else, if there's another terror attack, if we're afraid of Russia or China doing something, boom, that all the demand slows down going into those spaces, and then people like you get caught with your pants down. It's just, I don't hear this story and think you're a bad investor. I don't think that at all. I just think, like, that's how it goes sometimes. Like, you do everything right and then you slip on a spot on the floor on the basketball court and you miss the layup. Like, could someone say, you should have saw the sweat there? I suppose that's possible, but who's looking at sweat on the floor? You're usually looking at all the other moving pieces. So anything that you want to add for the listeners that are in a position where everything's going wrong, they're stuck, they feel like they suck. They wondering why they did this, and they think they're the only one.
- [33:52]
B
Yeah, I think just throughout the past few months, every, what every week was just, you know, you think everything's going wrong and you think, you know, nothing's gonna go right. But then you get one little, you know, one little piece of news, good news, and, and, you know, everything starts going smoothly again. And, you know, I, I, it's not going to stay like that forever. Like, it's not, you're not always gonna be in this position forever. It's gonna get better. Like, we finally, you know, got the first flipping contract when we thought we would never get it in contract. You know, this, this other one, you know, it's going again and hopefully the market picks up, but we don't know. But I think anyone who's stuck in this sort of position should know that it'll get better.
- [34:39]
A
There you go. I appreciate that. Because it doesn't feel like it will when you're in it. It can be overwhelmingly negative, like really, really bad. And it's just piling on you. And every phone call you get is more bad news. And there's nobody out there that's saying they're going through it too. And you open your Instagram and It's another freaking 25 year old is standing in a Airbnb that he rented, holding his arms up, saying, you two can have this lifestyle if you just take my course. And you're like, oh, another person that made it and I didn't. And I'm an idiot slaving away at my W2. Man, that W2 is what saved your bacon. And most of those.
- [35:15]
B
That was my life the last couple months, so I know exactly what you're talking about.
- [35:18]
A
Well, kudos to you, man, for sticking with it and I appreciate you being here to share your story, type in if people want to find out more about you or reach out. Where can they go?
- [35:27]
B
My Instagram is just my name. Tedmanchang T E D M A N C H E N G that's probably the best way to find me.
- [35:36]
A
All right, thanks for being here. We will follow up with you soon.
- [35:40]
B
Thanks for having me on. Sa.