The New Flip Model: 30-Day Turnarounds Without Contractors | Thomas Lehman | EP 76 - The Entrepreneur DNA

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[00:00]
A
What's up, entrepreneur? DNA, Family. Welcome back to another incredible episode. I have a great guest with me here because as a real estate investor for almost two decades, this man has found a way to flip differently. And that is what we're going to be talking about for all those out there that are trying to get into the flipping game, that are watching the TV shows, that are trying to build a business around flipping. My man Thomas Lehman is here talking about how we can flip differently.
[00:27]
B
Awesome, man. Thanks for having me today.
[00:28]
A
Yeah, man. I.
[00:30]
B
You.
[00:30]
A
You've been around for a very long time. You and I have been in the game for. We would be called the OGs.
[00:35]
B
Well, no, you're the OG. I'm. I'm. I'm under that a little.
[00:37]
A
There you go.
[00:38]
B
I got less time in.
[00:39]
A
There you go. Well, let's talk about your experience of. Of what we would all see on tv and what happened and then what changed for you to find a solution for us? The. The active fix and flippers yourself. What changed? What was that story like, where you said, there's a better way, there's a better mousetrap to be doing this type of business?
[00:58]
B
2022 changed all of us, didn't it?
[01:00]
A
Totally.
[01:01]
B
So my business model was like most people. I had the acquisition company. We had people calling, texting every day. They found our houses for us. We bought them. We either rent, renovated, and sold. Rented them. You know, we buy them at the rental or we wholesale what we didn't use. But interest rates. Okay, okay. That was going to change everything. And it did. So that summer, I had a mobile home.
[01:21]
A
Yeah.
[01:22]
B
Okay. I was going to renovate it. We had to get rid of squatters.
[01:24]
A
And this is a. Not you living in it. This is a true fix and flip.
[01:27]
B
Yeah.
[01:27]
A
You bought a mobile home.
[01:29]
B
You're gonna, you know, normal process. We buy them. We were going out there. We had to get rid of the squatters. They destroyed it. They took a chainsaw down the center of it.
[01:36]
A
Oof.
[01:37]
B
You're, you know, like me, a little older. Remember Bugs Bunny cartoon with the fleas jumping around? The sheriff opens the door, they want to go in. I'm like, nope. See all the fleas jumping? No, no. And. But it took a chainsaw. That taught me a process at Houzz, because an assistant and I in the office virtually knocked it down. Put the whole thing in with the old. Remember, call and get three estimates. We had no clue it took longer. I think we took it for 18 months.
[02:01]
A
Yeah.
[02:02]
B
We still made 11K.
[02:03]
A
Yeah. But we what could you have made, right.
[02:05]
B
If you had a process that taught us the process. You know what my Payroll then was 40, 50 grand a week because I had five contracting teams, okay? And I said, that's all done soon because one, interest rates were gonna change it.
[02:17]
A
Yeah.
[02:17]
B
You know, and two, I saw a simplified process to where, dude, you flipped 100 homes. Thousand homes, whatever it is, contractors think.
[02:26]
A
Oh, dude, it is literally why I'm bald. I say this every time.
[02:29]
B
Brett McCollum told me the same thing about you.
[02:31]
A
Yeah, it's why I'm bald. I'm just like, dude, they suck. And even when they're good for a short Runway.
[02:37]
B
Yes.
[02:37]
A
There's a day that they break and they end up sucking. And I don't know if you can ever see around the corner when that day comes.
[02:43]
B
No.
[02:44]
A
But it's inevitable. They break at some point anyways, keep going.
[02:47]
B
And so I saw a way to get rid of them because how many setup companies. Well, companies, septic companies are out there. If I don't like this one, I get rid of them. We did not need to have contractors, so to speak. So one of our companies, the construction company now only does construction management on our products. Okay. But everything is a 1099. If this, well, company doesn't perform, gone get a new one in there. And what we've learned is, for us, there's a sheet, it's 22 lines. It never changes. It's never different. It's always these same items. You can't do that in the flip.
[03:22]
A
Well, you're talking about a product. What does that mean? What do you mean when you say product?
[03:26]
B
Well, so a sheet for a project, okay. It's not going to be 200 line items. It's going to be these 22. How scalable? When you know exactly what everything is going to be, you can't do that.
[03:37]
A
On a flip very.
[03:37]
B
Because you don't know. Open your walls, everything changes.
[03:40]
A
But you're talking about a manufactured home.
[03:42]
B
Brand new. But brand new. Okay.
[03:44]
A
And that's what I was trying to get to is I want people to understand you're talking about instead of flipping, I'm going to change that game and I'm going to go into a manufacturer. Housing.
[03:53]
B
Yes.
[03:53]
A
And it's simpler, straightforward. It's. You have the known result, you have the known process. There's very little to no variance ever. That's what we're talking about.
[04:03]
B
Yeah. I mean, you got to learn land now. You got to learn a different terminology.
[04:07]
A
Sure.
[04:08]
B
But everything is. We do is Learning curves in business, so. But what I saw was simple, easy, scalable, and especially in when the economy was slowing down. Think about it like we had a wholesale company. I was losing 20k a month at that point.
[04:22]
A
That doesn't feel good.
[04:23]
B
No, no.
[04:24]
A
Yeah.
[04:24]
B
I got to unwind all that. We simplified the whole system, the process and our business. Okay. And then over time, we became a manufactured modular home dealer. Because, okay, we were. Think about, you know what people say. Mobile home dealer. They're all shady. Yeah, they are.
[04:40]
A
Yeah.
[04:40]
B
Okay. You know, I'm Russian Jew. My wife is Indian. She's much more calmer than me. When they were cheating us, we went into their office. The guy had three fingers. And when I showed him, hey, a mobile home dealer. Dealer, yeah. He. He showed me. We're talking and I can prove he stole. He said, yeah, I don't care. That's what he told me in the office with my wife there. And I'm like, you want to keep those fingers? I have a temper, you know? My wife said, no, no, come on, let's go. And we left. And she's like, we're just going to go get the dealer license and you can compete with him.
[05:10]
A
Your wife's a smart woman. I like that. Gave me shiver just thinking about that. Like, bro, here's how you beat him. You don't beat him up.
[05:17]
B
But isn't that how guys, you just.
[05:18]
A
Put him out of business?
[05:19]
B
We took a lot of his business year one, because we were right around him doing business in his county. I would sell people the home for nothing. I would make no money just to take it out of his pocket because I don't have his overhead.
[05:32]
A
Yeah, yeah, yeah, yeah. You know, well. And he did you wrong. Right? So this is a little bit like, hey, you stole. You literally stole from me.
[05:38]
B
Yep.
[05:39]
A
So I'd rather make no money, serve the client great. Impeccably, get good reputation and make no money on that. But just because you did me that bad, I mean, I'm going to take that client.
[05:50]
B
Yep. And now I've, like, I moved on from that. You know, I don't do. We don't do as much in that county anymore because we've moved towards central Florida a little better, but our reputation because of how we do business. And this morning, one of the realtors, who's. We're closing on a home next week with her on her buyer, she told her buyer, hey, you don't got to get an inspection. We know him. We do a lot of business. We can. I trust Him. I still told him, go and get the inspection.
[06:12]
A
Now. Let's rewind real quick. Let's talk about what you do. What is manufacturer housing? What is. Yeah. What is the, you know, misconception of it? Right. What are maybe the myths of it? Let's talk about manufacturer housing as a whole, because I think there's a lot of people that just have an idea of what it is, but they typically, I don't think would be accurate.
[06:32]
B
Oh, people think the old mobile homes and how they look. Yeah, right. They're way different today. I mean, you could have them. We have one as an Airbnb today. Made it so, so nice. But that's not our typical product. But you can go from a base unit to over here, and what you see inside can be changed. You can have drywall. You can have everything you want, all the crazy showers and however you want to build them out.
[06:54]
A
Nowadays, it's a fricking home. I mean, you can have drywall. Like, I've remodeled mobile homes before, right. It had. It was always a nightmare.
[07:04]
B
But I don't care if I click on the walls.
[07:05]
A
All right.
[07:05]
B
And you put up drywall.
[07:06]
A
Yeah.
[07:06]
B
Or bad.
[07:07]
A
Yeah, yeah. But even, like, the ceiling, like, it's not really connected. So if you don't have a construction guy that understands how to connect the seat, like, you're just like, well, there's a seam.
[07:16]
B
And, you know, some brands have a peak, and that's harder. But the really good ones have flat ceilings, just like in home. Nine, eight or nine feet off.
[07:22]
A
Yeah.
[07:23]
B
Okay. Uh, we. We can get any of them. We prefer the flat ones because then you can do box ceilings. It's easier for your recessed lighting and vans. Just makes things simpler for us.
[07:33]
A
Right?
[07:34]
B
But people today, I think. I think now it's getting more accepted. I know just a few years ago, even me, I was like, oh, mobile homes now. Yeah, yeah, now it's. But that's the affordable.
[07:46]
A
I think we all. All you and me, specifically, because we grew up in a. In a time, specifically me. Like, I had friends that lived in mobile homes, in mobile home parks, right? Like, I didn't come from money, right?
[07:57]
B
That's me, either.
[07:58]
A
My claim to fame, right, Is, like, I didn't. Now, I wasn't destitute. Like, I don't have the story where my family and I were living on the street. I don't have that. But I didn't come from money. Like, I had friends living in mobile homes, in mobile home parks. Like, we would go and play in the park like, but the, the, the idea and concept is you think you're like, it's less than you're in a mobile home park. You're a poor family. That is just not the case. And the reason why we're having this episode is to almost reframe what people think about this. Because I have a piece of property in Pensacola. You and I talked about it before this, right? Like, yeah, we're likely going to tear it down. We're likely going to subdivide the lot. Do we put two manufactured homes on there? Right? Is that now the new option versus rebuilding a full blown home? Because what is the price discrepancy like based around your. I know you can't give exact numbers, but if I were going to rebuild two separate homes, we subdivided a lot. Two separate homes versus putting on two manufacturers. Is there a price difference? As many of you know, I'm constantly on the move, juggling multiple businesses, traveling and ensuring I get my morning workouts in. Staying fresh isn't just a preference, it's a necessity. But let's face it, after back to back meetings, juggling two kids at home and the hustle and bustle of everyday life, body odor can become an issue. But here's the deal. Mando has revolutionized how I stay fresh. This isn't just another deodorant. It's clinically proven to control odor better than a shower alone with soap. My favorite scent, Bourbon Leather. It's fresh, is subtle and doesn't clash with my clone. And I was surprised by how well the solid stick works. And even after an intense morning workout, Mando starter pack is perfect for the new customer. It comes with a solid stick Deodorant Cream Tube Deodorant. Two free products of your choice like a mini body wash or a deodorant wipe. And free shipping as a special offer for listeners and new customers. You get $5 off a starter pack with our exclusive code that equates to over 40% of your starter package. Use code colby@shopmando.com that is S H O P M A N D O.com Please support our show and tell them we sent you Smell fresher, stay drier and boost your confidence from the head to the toe with Mando.
[10:23]
B
So a county work is different because, well, for you, you're not going to have impact fees on the first slot. But if you subdivide, you'll have it on the second lot. What does that cost? For instance, Orange county, we're just running numbers today. 25k for impact fees a lot. Yeah. And they want to build affordable housing, but the average project for us runs anywhere from 140 to 180.
[10:45]
A
Yep.
[10:45]
B
Okay. We just, we just finished one with Alex, right, Cassetta?
[10:50]
A
Yeah.
[10:50]
B
We were in for 165 for the whole build out. Sold it for 269.
[10:56]
A
That's incredible.
[10:57]
B
Right?
[10:58]
A
That is a new way of flipping.
[10:59]
B
Right. But that's his. So what's his expertise? Finding distressed properties. We don't do that anymore. He came to me and said, hey, let's go work on this. Off we went. Right. Put it together, you know, so what.
[11:11]
A
Like now, Now I want to talk about this deal. So if I send you, what would be my process? And I want everyone to understand this. Thomas is very relatable. Like, you can reach him. What's your Instagram handle, Thomas?
[11:24]
B
Layman Real Estate. You know, we can post them later, you know.
[11:27]
A
Yeah, we'll give the link. Make sure to find them. Because I'm going to do what I think you guys all should be doing is figuring out, like, hey, if I have an asset, if I have this opportunity, if I have this piece of land, this is an option. Right. So I give you this piece of land and what your team kind of looks at what we can do with it, what it would cost.
[11:42]
B
Yeah.
[11:42]
A
Because my, my real options here, it's basically a double lot. Right on one. So it's about 25,000 square feet. We can break it up into two 12,000 square foot lots of as long.
[11:53]
B
As the planner says. We're good on that.
[11:55]
A
That's right.
[11:55]
B
We. You get the planner to agree that you're subdividable one. They give you the setbacks, which is the distance you have to be.
[12:01]
A
Yeah.
[12:01]
B
And then we just work from there on what we can do and build.
[12:05]
A
Out and then what's going to be affordable at the end of the sale.
[12:08]
B
And we look at what's selling in the area, like, what's the price point? So in central Florida market, we've narrowed ourselves to, we're 270 and under. Okay. Because we've took our. Our volume and we negotiated prices. This isn't 21 anymore where you couldn't do that. Right. We have a volume that we can bring anywhere and say, hey, we're going to do 100 units this year. What will you do with us? How can we work better together? Right. Yes. And by doing that now, we've lowered our prices and cost. We pass that on to the buyer today because our buyer pool, as we went Higher in numbers. Shrunk. So let's just say your numbers are 250 up there. Then we're going to build a house that's not above that, but it's a better value for the community. We want to be better priced on market than anybody else. Okay.
[12:55]
A
So, I mean, this is pretty straightforward. Do I give this to you?
[13:00]
B
You email it over to teamworks on it and give us a couple days. We'll let you know exactly what we can do in the cost.
[13:06]
A
And we would have to just make some assumptions because my team hasn't called the county to say, hey, can we submit?
[13:10]
B
Why don't you just send it and we'll like. We do that really well because we don't never call. Yeah, we don't. We don't never take a call with them. We want it all in writing because, you know, even in writing it's. It doesn't guarantee anything.
[13:20]
A
Oh, bro, you're telling the city. I'm dealing with the. You're telling me about these cities. Yeah, not a problem. That's totally acceptable. We go do it. The inspector comes and says, who told you that was going to be acceptable?
[13:31]
B
And you're like, we're going to a hearing on Monday. Lawyers. We were told we could put a replacement manufactured home down two days before delivery. They sent an email saying, hey, we made a mistake and you can't. So it's like, what?
[13:47]
A
Well, that mistake is. Is a costly mistake.
[13:50]
B
Exactly. Now we lawyer. It's going to get grandfathered in. But now it took 10 weeks longer. But I had to go to my lender who lent me everything and show him. And he's like, hey, what are you doing? I said, oh, I'm taking the unit over here because we're volume I'm going to put it on this one. I'm going to take the money for the unit. I'm going to put it back in your account. So it's good. He's like, okay, cool. That's all he said. Done. His lord is my lawyer. The same. The same lawyer. So we're good.
[14:12]
A
Yeah. So in my case, I would literally allow you to kind of. And by the way, I'm. I know you, so I emphatically. Just you. But you'll call the city, you'll email them. We'll email them. Right. But you guys will actually handle it and figure out what is going to be our best case scenario. That way it takes that need because otherwise I have to put that on my team. That might.
[14:32]
B
That's not their Expertise.
[14:33]
A
That's right. And it doesn't generate U.S. revenue. So they're going to go like, revenue operational. Right. And they're like, this is some operational thing that I would give to my opera. But you get my point.
[14:45]
B
But your operations manager doesn't do new construction homes.
[14:47]
A
Right.
[14:47]
B
Then.
[14:48]
A
So they're not just going to get an answer and be like, what do I do with this? And then I have to go send it to you. And then. So now if you just do that for me, then I don't have to go send it to you to go. And I have. Now that we're talking about this, this is a fun episode, guys. I have two properties I'm going to give you you. Because there's another one that is a fourplex that I think we would need another almost 200 grand to finish out. Well, if I can build a brand new asset for the same dollar amount. I mean, you just said you and Casada did it for 160.
[15:18]
B
No, no. 164, 166. Right.
[15:21]
A
Then. Then I just got to think about maybe there's the same play. We could subdivide that lot if it's big enough.
[15:26]
B
Yeah, bigger might be the. They just sent me. I'm. They were. Had a meetup, whatever, last week, and I went out to his office and. Or the floor underneath his office. Yeah, I haven't seen him in a while. So I show up and Anthony's like, hey, we have this lot and everything. But I'm trying to figure it out. I'm like, dude, can you just send to us? Like, you take so Turtle long.
[15:43]
A
Right?
[15:43]
B
Let us just. And my assistant reached out and said, give us the information. He's like, here you go. We got it today. It's in the inbox already this morning. Because he just gave it over like a day ago because he was trying to figure it out. Dude, go, go. Do what you do. Give us what we do. Because we're trying to subdivide this lot into eight lots. But when you think about affordable housing today, you know, when you were flipping homes probably in vast numbers, was that wasn't the sexy play at all?
[16:09]
A
No, not at all.
[16:10]
B
Okay. But in this market, it is because people need a home. Buy a home. If you have a 7, $800,000 home, maybe you don't buy it right now at 7%.
[16:20]
A
I will. I just connect you with my general manager right now on this episode. This is why everyone should have a podcast, by the way, because if I.
[16:26]
B
Don'T, my lady's screaming about doing a podcast. She's like, you got her, dude.
[16:30]
A
If we don't do this together. I don't know whether I remember. I know what you do, but I don't know, with all the things I going on. Oh, man. I gotta remember to reach out to Thomas. You know what I mean? But now I'm sitting here.
[16:40]
B
But now our females will handle it.
[16:41]
A
That's right. Okay, now, I just connected you, because I don't know your team, but I.
[16:44]
B
Don'T look at email. They do.
[16:46]
A
But no, no, I text you. So. Okay, add your assistant into that thread.
[16:50]
B
Okay. Yep.
[16:50]
A
And then Anthony and your team will take it from there.
[16:53]
B
Yeah, and. But see, isn't that what we're supposed to do? Like, we have to have people handle that for us, because if we do, we're not doing what we do, which is. Isn't revenue.
[17:01]
A
That's right.
[17:01]
B
You know, and.
[17:02]
A
And there's so many. You know, it's funny, in talking about being a CEO and entrepreneur, we may not have to be in the trenches doing the smaller things. Like, hey, let's go do the. But what you and I have to go do have the bigger problems, the bigger issues, the bigger growth, the bigger trajectory, the bigger. And so a lot of people want to be the. The president, the owner, whatever. But you got to understand, we may remove ourselves from the tactical small things. That was different. The things that come to us, though. Oh, yeah, those are the. The city, actually.
[17:30]
B
Why we don't have, like, less hair and. And stress and insomnia. We talked about totally, you know, not.
[17:36]
A
Sleeping well and just staying up. I mean, I have an event that I wanted you to be out, unfortunately, but, like, Easter. Yeah. You. Dude, I'm Invent Mode. Like, I am going. Of course, dude. I. My wife is like, why can't you sleep? Because I'm. And flipping around all night last night, I'm like, honey, we are going to crush the next two days. I can't sleep.
[17:53]
B
Yeah, but your team's handling a lot for you. And that's the benefit of it. You know, one thing that, you know, you. You had my. My coach on here like a month too.
[18:01]
A
Gary.
[18:01]
B
Gary Harper.
[18:02]
A
I love this man. I told him to be at the same event. Like, get in the room, dude. More people need what you got.
[18:08]
B
And unfortunately, they don't know him as much. Right.
[18:10]
A
That's what he needs.
[18:11]
B
He's a mate. Let me tell you something. We are 20% or more of Central Florida's market. 50 to 30. Okay, 30. 40% in Pasco, Hernando, 50 in Polk County. Of all the new units going down in central Florida.
[18:23]
A
Okay.
[18:23]
B
Because of his company. Because I went to him. I kept hearing Tiffany High and all these other people. It was like 1-800- call Gary. Who the hell's Gary?
[18:32]
A
Underdog Gary.
[18:32]
B
I love. I joke about it. But then he came to Florida and he met me on a Saturday morning because he's a Disney guy. I'm not. But we met, had coffee. He had all the answers with. He looked me up. He said, you're experiencing this, and he's big into that PI. And I took it. His son Jacob couldn't get me to take it until we had an appointment with. With Gary.
[18:53]
A
Sure.
[18:53]
B
So I took it the night before. But using that, he described the Me.
[18:57]
A
Yeah.
[18:58]
B
What he read in there.
[18:59]
A
Yeah.
[18:59]
B
Because in our business, we have to be social.
[19:01]
A
Yeah.
[19:02]
B
People think I'm a social animal.
[19:03]
A
Yeah.
[19:04]
B
It's not my thing. I don't need to be for me. If you put me in my house for a week, I'm good without talking to anybody. He's like. And he said, you're a cat. I'm like, okay, what do you mean by that? You know, he's like, you want to get scratched, you'll get scratched, but you don't need it.
[19:16]
A
Yeah.
[19:17]
B
And then I bought into it because that's me.
[19:19]
A
Yeah. Yeah.
[19:20]
B
Right. And he's never steered me wrong yet.
[19:23]
A
He. Well, he was one of those people. I was like, bro, get in the room for this. Exact. His value of what he does is so amazing. But genuinely, no one knows about him.
[19:36]
B
And my story is fascinating.
[19:37]
A
Let the best of the best show you how to build out this sequence of your content.
[19:42]
B
Yeah.
[19:42]
A
So everyone know. And then you hand choose who you want to work with.
[19:45]
B
He's the one who got me on TikTok. He challenged me in October to do. Do this. Right. I got my first viral vid out of it.
[19:52]
A
Nice.
[19:53]
B
Like 5,8000 followers.
[19:55]
A
All.
[19:55]
B
All organic. Okay. And now we were arguing because we had a bet. He's like, I'm not doing it anymore. I'm like, oh, because you lost.
[20:03]
A
Yeah. Yeah, yeah, yeah.
[20:04]
B
But his team's amazing. They take care of you, so it's great.
[20:07]
A
Yeah. So being that you're now kind of reshaping how things should go in real estate, because I think the thing that has kept me in this business for almost two decades is being adaptable.
[20:20]
B
Yeah.
[20:20]
A
Iterating. Right. The reality is I got in this space in 2007 when the economy was going south. Right. Like hardcore. I was a victim of that. Right. I lost my home.
[20:29]
B
I heard the story. The car, different stage with your buddy.
[20:32]
A
But through that trajectory of two decades, things have changed. I was buying homes at auction. The hedge funds came in, bought 110 cents on the dollar. I had to buy 80 cents on those. So how am I going to compete? Well, I have to iterate after change.
[20:45]
B
Yeah.
[20:46]
A
Same thing we're talking about here and why this is so important. If anyone's going to be in the space of real estate.
[20:51]
B
Yes.
[20:51]
A
They need to understand this can be a new vertical. I'm literally real time right now. We just put our team together to look at a deal that I already own.
[20:59]
B
Yep.
[21:00]
A
Because I need to be able to iterate. That might be just a better way to go do more deals. Because the cost of it.
[21:07]
B
Exactly. Everything we do cost money. But that is normally our biggest expense in real estate. Isn't it going to get the money? And so you need to be profitable with flips. The problem is you have to wait to list it.
[21:21]
A
Yep.
[21:21]
B
You don't know what's going on till you open the walls. With this. It's different. We don't run into those disasters.
[21:27]
A
What is now. It's totally financeable now. Right. Because I think again, let's. There's a lot of myths and not really myths. I think there's just misconceptions. I think.
[21:36]
B
I think there's idiots out there talking crap all the time. Excuse me if that's the wrong word, but it's true. Because like on Facebook people say, oh, but you can't finance. What are you talking about? We sold 76 last year.
[21:45]
A
Right.
[21:45]
B
Two conventional loans.
[21:46]
A
Yeah.
[21:47]
B
The rest, FHA, VA, USDA. What are you talking about?
[21:50]
A
And so let's bust the misconception of what isn't financeable. Right. So that people are very clear. There is a section of this industry.
[21:59]
B
Old ones.
[21:59]
A
Correct.
[22:00]
B
Old ones.
[22:00]
A
So let's talk about that. So people are very aware of what we're. What they're thinking is the reality versus what is reality? Let's talk about the old ones. What that looks like. Let's talk about what we are talking about what you are doing. And kind of. So people are very clear on the difference.
[22:13]
B
So what we only do is brand new.
[22:15]
A
Okay.
[22:15]
B
Okay. We. Our license allows us to do use, but it takes away from my core, which is new. Okay. And different animal. So brand new manufactured. The majority, 98% are double wides.
[22:28]
A
Okay.
[22:28]
B
Some triple wides, less single wides.
[22:31]
A
What's the Biggest size. Like, I don't even know that answer. Like, what would be a triple wide? What square footage would that be?
[22:35]
B
Oh, man. Over 2,000 plus square feet. Because it's basically just three sections and you can put like, it's. It's think of Legos. Right? You have two here and you attach one here or over there. We're doing one as an ADU for somebody right now. Yeah, they want their mom living over that side.
[22:49]
A
Freaking. Freaking brilliant, dude. I mean, there's a lot of people that need to consider that.
[22:53]
B
Yes, because you know what? He was doing it with a different company and they wanted separate. Then you have to put two separate systems for septic and wells. You can't tie them together. If I do it as an ADU and I attach it, guess what? It's one.
[23:04]
A
Yeah.
[23:05]
B
Saved them a ton of money. Okay. Friend of mine, you know, called me up and I'm like, dude, I got this for you. Relax.
[23:09]
A
Yeah, okay. That's brilliant.
[23:11]
B
And I did it on the. The transport from the hotel to the Bright Line station yesterday for him. Well, it all worked out okay.
[23:18]
A
Bright Line's great, by the way.
[23:19]
B
Never. Never driving again now.
[23:21]
A
Never after that.
[23:21]
B
Right.
[23:22]
A
Was that your first Bright. Oh, no. Oh, yeah.
[23:24]
B
No, no.
[23:25]
A
Learns amazing.
[23:25]
B
And then you work and then you got Uber. Right. No parking. But we'll get back.
[23:29]
A
Yeah, yeah, yeah.
[23:30]
B
But brand new. Never a problem with any financing or insurance. Single wides are a little different. There's less. Say 70% of all the financing works on a single wide.
[23:42]
A
Okay.
[23:42]
B
Okay. But usually pretty good people just have to know that.
[23:47]
A
Double wides and triple wide. No, I don't know.
[23:49]
B
Yeah, it's just single. Yes. Yeah, yeah, not a problem.
[23:52]
A
Better. Less financers, less banks, less financial institutions. Yes.
[23:55]
B
I mean, you can get an FHA va, but some of the programs, like the down payment assistant, do not work on them.
[24:01]
A
Got it.
[24:02]
B
But like Hometown Heroes, which was big in Florida. Okay. All worked on double wides. We sold a ton that way.
[24:07]
A
Okay. So how big can they go? The new ones? Like, what. What is like. Oh, no.
[24:12]
B
I mean, we can go 4,000 square feet. They have two story ones.
[24:16]
A
You can. And you can get all that?
[24:18]
B
I could order it. Yeah, I don't. I don't normally. I haven't done a two story or that big. Because the lane for us, with what we do as our bread and butter is affordable. That wouldn't be affordable.
[24:27]
A
That's right.
[24:27]
B
Would we build it for somebody who came in? Sure. Like, we've gone construction to perm. For people.
[24:31]
A
Yeah.
[24:32]
B
We can get a finance for that. We can say. Okay, how much do you. What are you looking to spend? Okay, we're going to build it out. This is what it is. We go and get them a construction loan.
[24:40]
A
Yeah.
[24:40]
B
Withdraws same way.
[24:41]
A
Yeah.
[24:42]
B
But now I'm using their money and not mine. I don't have to charge them more that because the interest isn't there for me.
[24:48]
A
That's right. You know, that's incredible. And so now what is? So the new stuff's totally financeable. You get up to 4,000ft if you want to, but the reality is most people will get like a double wide. Maybe you get a triple wide. How often do you get the triple widespread?
[25:01]
B
Twice.
[25:01]
A
Okay.
[25:02]
B
Nope.
[25:02]
A
So different.
[25:04]
B
Yeah.
[25:05]
A
Right. Which is what? 1500 square feet.
[25:07]
B
So the bread and butter, what we're putting down on an acre is about 1800 square feet.
[25:12]
A
Okay.
[25:12]
B
But what we've done, we've taken our volume and we went to another manufacturer and negotiated better terms.
[25:17]
A
Yeah.
[25:18]
B
To bring it to them. And now we're selling more, bigger units for less price. Which helps our buyers right now, of course. So this economy, we have to help them in.
[25:28]
A
In the. A hundred percent. So if I'm the buyer. Let's work this through. I already own the land. Your team figures out. Citi says yes. You can subdivide it. We need to sign these docs. Great. Now you have two parcels.
[25:38]
B
Yep.
[25:39]
A
The financing of said manufactured home, do I need to pay out of pocket? Is there financing to purchase it? How do I finance that from you?
[25:48]
B
We now, because we have the longevity in can get people financed for the units through the major lender is Triad.
[25:55]
A
Which is essentially a construction loan.
[25:57]
B
Yes, but if you own the land.
[26:00]
A
I need the land as security to them.
[26:02]
B
And they will.
[26:03]
A
I mean, it's a construction loan. I mean, that's what it is.
[26:05]
B
So simple. And they will do. I think it's 135% of the unit value.
[26:09]
A
Okay.
[26:09]
B
Which gives you a lot of your infrastructure.
[26:11]
A
Right.
[26:12]
B
So your cash in is so much less.
[26:14]
A
I mean drastically. I mean, to some extent it could be zero.
[26:19]
B
It could be because they. Well, you have to pay interest payments for whatever. They start 60 days after delivery.
[26:23]
A
Okay.
[26:24]
B
But as long as you're. I mean, so the. If you have a 650 or above credit score, the numbers are good. They'll work with 550 and above though.
[26:31]
A
Now, delivery means put together. No.
[26:37]
B
So delivery just means it goes from the factory to the lot. Then you have a setup company who puts it all together?
[26:44]
A
How long does that take?
[26:47]
B
In the olden days? For me, up to 78 days now that we are operationally efficient, thanks to those other people we talked about and not me doing it. 24 days.
[26:56]
A
Let's round to 30. Whatever.
[26:57]
B
Yeah, but look at that timeline though, right? I mean, 78 to 24. We just discussed it this morning.
[27:02]
A
Yeah, there's no. I mean, you can't do that. You can't build a home in 78 days.
[27:06]
B
From the day it was delivered. 24 days later. We have now our CO and we can. We. We've already had it on the market. Now we can close.
[27:13]
A
Okay, that's amazing. So I'm already marketing, I'm already finding buyers. We can close.
[27:17]
B
Well, you have the dirt, you're listing new construction.
[27:20]
A
Yeah.
[27:20]
B
As soon as you know what unit you can put down, you can lift it.
[27:23]
A
That's it.
[27:23]
B
We can't do that with a flip.
[27:24]
A
That's right. Ah, and what, you're already finding the buyer. It's like reverse is like Kent Clothiers whole reverse wholesale model, but now your reverse flipping model.
[27:32]
B
And. Yes, and what if you put in. You build urgency and say, hey, look, we're going to build this unit here, but if you want to, if you want to live here and you want something different, if you do it in.
[27:40]
A
This timeline, you let me know, we'll change it. I'll go shopping for you.
[27:43]
B
Yeah. So you build the urgency in the people because then they, they, they'll just say, oh, if we don't. Can't do anything. We'll wait till it gets there.
[27:51]
A
Yep.
[27:51]
B
And look, in this business, we want to have a contract on a home. End the story. Right. And that's what our business model is. So we have ways to show them the unit 3D walk through. We have units all over central Florida down. They can go walk and see the same unit.
[28:05]
A
Okay, man, this is. It just relieves. So but you said 30 days or 60 days after delivery. The right now we're.
[28:14]
B
We're on 20. Okay. For the financing. Yeah, it could be. So if it's for me as the business, I'm 30. But I think the customer is 60.
[28:22]
A
Okay.
[28:22]
B
Right.
[28:23]
A
So because it's different, it's already built. We've already been marketing it. I mean, in a perfect world, we sell it within 30 days. They close within 30, there might only be two months of interest payments. I'm on the hook for. In a perfect world, I get our life is imperfect, but I mean, that's reality. Right? It's ordered, they finance it, it gets delivered. It's turned in 30 days. Let's call it 24 technically, but 30. We find the buyer because we're pre marketing it. They close another 21 days later.
[28:52]
B
Yeah.
[28:52]
A
So, you know, am I off on any numbers?
[28:55]
B
I'm just trying to figure out my past. Conversion cycle is 180 days on a project max.
[29:01]
A
Right.
[29:01]
B
Okay. So it's different for. If you own the land already. That's from the day we start the process and finish. Okay.
[29:07]
A
So we should be 90 days back.
[29:09]
B
Okay. It's different if you live in it because now you're an owner's permit versus a builder's permit. It becomes. It's easier. Right. Because it's your land. You know, we're still doing the work for you.
[29:20]
A
And they just essentially give me a construction loan. I mean, this is someone. No brainer. But it's fun for that price. Stuff like I wouldn't buy a 1975 home and then tear it down, per se. This.
[29:32]
B
What do you mean? I do. That's our. One of our. We. We buy a ton of old homes. You don't have impact fees anymore. So the last three deals in Orlando were all old units. It cost me 5,000 to knock them down. I don't have to pay 25,000 in impact fees.
[29:48]
A
But you just have to buy it at the right price to make that make sense. Right.
[29:51]
B
Look, we make our money when we buy.
[29:52]
A
That's right.
[29:53]
B
But we don't market anymore. I work with people like Alex.
[29:56]
A
Yeah.
[29:56]
B
With Brandon Schwab and all them.
[29:58]
A
Who.
[29:58]
B
That's their business.
[29:59]
A
How do you work with Alex? Is it more of a partnership of sorts, or is it.
[30:03]
B
We partner on it. Here's. Let's go. Right. You know, put it into the pipeline because he partners with. You know, Alex is a real smart person. I. I've known him for years and I've watched his just trajectory.
[30:12]
A
He's going to be here, by the way.
[30:14]
B
Oh, yeah, yeah. You'll be great.
[30:15]
A
Because he's on that. Like, I need more content. Where I'm like, bro, get in the.
[30:18]
B
Yeah. And you know, but he's one of those people who knows that this is my vertical. Oh, call Tom. Boom. Called me. Up we go. He's a hard negotiator. Right?
[30:27]
A
Yeah.
[30:27]
B
There's no. We made the deal and it worked out well.
[30:30]
A
So what would a deal. Like, how would you play a piece in this? Like, I already own the property. You have the manufacturer. Like, would there be a reason that we would do it.
[30:37]
B
I mean, you could hire us just to manage it, I would suggest. And you already own it. Right. But if you're buying stuff and we partner, it's different. And then every. Every one is different as we look at it.
[30:45]
A
Okay.
[30:46]
B
Okay.
[30:46]
A
So, yeah, I think the economics I would have to understand more about, like, on whether we would. Other. Other properties that we don't already own at or understand, like, what do we need to buy at so financially it can make sense for us to build these things.
[30:58]
B
And we'll look at your back end, what's selling in the area. See, I don't look at land value.
[31:03]
A
Yeah.
[31:03]
B
Until I'm. I work backwards. Okay. If my comps say I can get this, what. What are my cost? And then what do I need to do for the land? Because, you know, there's things we'll overpay for. City water soar every day.
[31:15]
A
Yeah.
[31:15]
B
Okay. Because you don't need permits. Step pick and well can be $30,000. Easy.
[31:20]
A
Easy. Yeah.
[31:21]
B
So I'll overpay for that lot if it connects to the city for both of those. Because I change my timeline and my cost. So, you know, remember, I. I buy from a lot of wholesalers, and I always want to see their contracts.
[31:33]
A
Yeah.
[31:34]
B
And I'm like, dude, I don't care what you're making. I want you to make money.
[31:36]
A
Sure.
[31:36]
B
Okay. I just want to make sure you don't have some crazy clause in there that I gotta. I just told the guy. But I'm not dancing on the table naked at closing day.
[31:44]
A
Yeah, yeah. Because. Because I'm.
[31:45]
B
I'm agreeing to it.
[31:46]
A
See?
[31:47]
B
How do you know this? I. Dude, I've done that business. I want you to make money with me because guess what? You're gonna bring me more stuff.
[31:51]
A
That's right.
[31:51]
B
Right. But we educated a bunch of people, wholesalers, on how to negotiate the septic cost, the well cost, because there's a map called the B map in Florida. Now, you put in the address, the darker the color gets, you go from like yellow to purple. You go from a 5000 system to a $25,000 system. And if you don't have that information, how can you negotiate with the seller?
[32:15]
A
What is. What are you finding on your own deals? Is the right buy price typically? Like, is there a range? Like, if you want to stay under 100 grand, you want to stay under 200 grand on land.
[32:28]
B
Oh, man. Land. You know, like.
[32:29]
A
Well, when you're buying. So with intention to put these things.
[32:32]
B
Yeah. I mean, so our. We've paid as much as 90 for land.
[32:36]
A
Okay.
[32:36]
B
But it was in the right area. I know what the back end numbers.
[32:39]
A
Are going to be. And so what did Alex contract the. The deal?
[32:42]
B
You know, I mean, he got it for like 29 grand.
[32:44]
A
Okay. Yeah. So you want to. You want to be low, but his.
[32:47]
B
Was an old unit. Just so you know, lots in the same neighborhood, vacant lots are selling for 39 grand. He got the old unit for 29 grand.
[32:55]
A
Yeah, but he had a different exit than everyone else would. But.
[32:58]
B
But we didn't have to pay in what a great deal. See the value of the partnership there? He did his expertise, which is fine. Distressed properties at a discount.
[33:04]
A
Right. And then what did you bring to him to figure it out?
[33:08]
B
No, he brought it to me, and I said, perfect, because the land selling for more will save on septic, whale and impact fees. It's like a $40,000 swing. So let's say we walk away with whatever it is. It just paid for itself to split it up already. Right there.
[33:19]
A
That's right.
[33:19]
B
Using their expertise. We don't do that anymore. And we were never as good as him. Okay, but why do it then, when I can partner with people? Yeah, we don't market anymore.
[33:28]
A
Yeah.
[33:29]
B
Zero. Zero marketing dollars.
[33:31]
A
I mean, that's the reason why I do the same thing. The reason why I'll buy from my students. So I. I've created a ecosystem that, you know, that I'm helping them get deals. The reason why I want to help them buy it from them.
[33:43]
B
Of course.
[33:43]
A
Right. And by the way, they make a full assignment on their side. So as an example, if they go, if I help them get 1, 2, 3 Main street, and we would technically wholesale this out for 20 grand. But I want it. They'll still make their 10 grand as an assignment fee.
[33:59]
B
Nice.
[34:00]
A
Because I want them to win. And then I'll buy it and then do this. Right. They don't have to be a part of it. Right.
[34:06]
B
But that's building the ecosystem.
[34:08]
A
Right.
[34:08]
B
You know, and I've learned that from you and others that I've networked so much in my area to where I've trained people, taught them how to go find the land for us.
[34:18]
A
Yeah.
[34:18]
B
But we're in masterminds together. And, you know, this is my vertical. Some people who don't play in this just bring me the land now, partner. Okay?
[34:28]
A
That's right.
[34:29]
B
Because I think that as we grow in real estate, we go from being competitors to collaborate. Right. We collaborate more because different expertise.
[34:39]
A
Yeah. The immature people still Compete. I'd rather collaborate all day. Yeah. I'll make more money with people than I will without.
[34:46]
B
Yeah. And you stay in your lane. You like, I do not do anything that doesn't contribute to my core. And some people want to do wholesaling on scale, you know, whatever. Eight states plus new construction. It's like, dude, how can you do it all?
[35:00]
A
You know, it's funny in every time I get. I don't want to say too big for my bridges, but, you know, I take some big swings sometimes. Also, there's always that, like, oh, I am out of my depths. Right. Like, this is new.
[35:12]
B
Yeah.
[35:12]
A
But I've also done it a long time that I can recalibrate and I can fix and I have a team.
[35:17]
B
Yeah.
[35:17]
A
But to your point, most entrepreneurs that, like, they get a couple bucks in their pocket and now they're doing something else and doing over there and shiny object, and you just go, why? Just be really great at the thing. And when you make enough money, then you can go, all right, I'm going to take a swing at this thing over here.
[35:33]
B
But even, you know, look, everything we're doing now is adding the other verticals to contribute to our core.
[35:39]
A
That's right.
[35:40]
B
We're going to own our transport company. We're going to own our septic company because we can shave timelines now. Guy who was going to lend me money, he's lending me money for both septic and transport. I explained to him the process, how he would shave this much time off it. And with septics, let's say we're doing 100 deals. We wouldn't use it 50 times. Yeah, but with the transfer, I mean, with the setup company, we'll use it a hundred times. He's like, oh, yeah, good. That's all. That's all he had to say because he's done business with me before. How much do you need? And when. I love people like that. Right. Because he's going to make money. He can't do with his IRA money or whatever it is what I can do for him.
[36:17]
A
Yeah.
[36:17]
B
He's want to either. He's like, dude, I don't. You know, I'll go see your property, like our deals one. One time maybe.
[36:22]
A
Do you have a better place for people to kind of check out more? Because I think people are.
[36:26]
B
Yeah. The website, we can lift it all up.
[36:28]
A
What's the Website?
[36:28]
B
It's the PropertySolutionSteam dealership.com.
[36:32]
A
The Property SolutionSteam dealership.com.
[36:36]
B
Yeah.
[36:36]
A
Because I know a lot of you watching this and listening to this are like, this makes a lot of sense. I just need something to look at. Right. Because you and I get it. We've done this a long time. But someone might be like, man, I have this inherited property I have, and I don't really even know what to do with this dam.
[36:49]
B
Yep.
[36:50]
A
They should be calling Thomas. Right. That's the. That's what I'm trying to get to for everybody is this isn't have to be a business for you, but all of us to some extent have a component of real estate. Whether you inherit a property, you own your own personal property, you are fix and flipping. Like, this is a vertical that just financially can make sense a lot of the time.
[37:08]
B
Yes. I see people moving like we, we teach people how to do this as well. We slowed down on the coaching because we were adding the verticals. But I also hired new operations managers and I'll go back to it more in June. I kept some of my students, one who wasn't performing. We just said, hey, you know what? Maybe it's best both of us go separate ways because you're not doing anything. I don't want to take your money either.
[37:27]
A
Yeah, yeah.
[37:27]
B
But you know anybody who's going to build affordable housing, I'm going to help. Okay. I had meetings here yesterday with people who do it.
[37:33]
A
Yeah.
[37:34]
B
Okay.
[37:34]
A
This area needs it. I mean, there's nothing affordable here.
[37:37]
B
Well, yeah, I looked over their systems and, you know, the, the husband, wife and the brother came, we sat down and. And they. One of my events last year. So I'm here, I met with them, they showed me what they're doing and I'm like, why? And I showed them our whole process. I gave it to them.
[37:51]
A
Yeah.
[37:52]
B
Right. What a. Thank you. Because you're going to go build affordable housing, you're going to help people.
[37:55]
A
Yeah.
[37:56]
B
But if I help you, then you help them. That's me helping them. Cool. We're good, right?
[37:59]
A
Ed Mylet said that at the last board.
[38:01]
B
Dude, I love him.
[38:02]
A
I. I use.
[38:03]
B
I almost gave all the money to go to go to his house, but my wife said no.
[38:06]
A
That's it. That's right. That's right. Well, dude, thank you for coming on.
[38:10]
B
Absolutely.
[38:11]
A
I really appreciate it. I want everyone to start following him on Instagram, Facebook, Tik tok, linked. We'll post it all in the show notes, the website in the show notes. I appreciate you coming by and thanks for having me. Yeah. All right. If this was pretty cool and you think there's some people that need to know this, and you want to share it, please do share with at least two of your friends. Make sure you follow Thomas, and we'll see you on the next episode.
[38:32]
B
Thank you, everybody.
[38:33]
A
Peace.

Summary5 min read

Podcast Summary: The Entrepreneur DNA – Episode 76: The New Flip Model: 30-Day Turnarounds Without Contractors | Thomas Lehman

Release Date: June 16, 2025

Introduction

In Episode 76 of The Entrepreneur DNA, host Justin Colby engages in a dynamic conversation with seasoned real estate investor Thomas Lehman. With nearly two decades of experience in the real estate flipping arena, Thomas introduces a transformative approach to property flipping that diverges from traditional methods. This episode delves into Thomas's innovative strategies, the challenges he faced, and the insights he offers to entrepreneurs aiming to scale their real estate businesses efficiently.

Traditional Flipping Challenges

Thomas begins by reflecting on the conventional flip model prevalent before 2022. Typically, this involved an acquisition company sourcing properties through constant communication channels like calls and texts. The process included purchasing, renovating, renting, or wholesaling homes. However, rising interest rates in 2022 significantly disrupted this model.

"2022 changed all of us, didn't it?" [00:58]

He shares a pivotal experience where a mobile home he intended to renovate was vandalized by squatters, extending the renovation timeline from a typical duration to an excruciating 18 months. Despite the delays, the project yielded a modest profit of $11K. Reflecting on this, Thomas highlights the inefficiency of traditional methods, particularly the high payroll costs associated with maintaining multiple contracting teams.

The New Flip Model with Manufactured Housing

Faced with escalating costs and economic shifts, Thomas pivoted to a novel flipping model centered around manufactured (mobile) homes. This approach emphasizes simplicity, scalability, and reduced reliance on contractors.

"We saw a way to get rid of [contractors] because how many setup companies… we don't need to have contractors, so to speak." [02:46]

Instead of traditional flipping, Thomas's model involves purchasing brand-new manufactured homes, which allows for a streamlined and predictable renovation process. By focusing on standardized projects with a fixed set of 22 line items, scalability becomes achievable without the complexities of variable renovation tasks.

Simplifying Processes and Contractor Management

A significant shift in Thomas's approach is the elimination of traditional contractors. By operating with 1099 contractors, he maintains flexibility and ensures that only reliable partners are involved in projects. This method drastically reduces expenses and mitigates the risks associated with contractor reliability.

"We have a sheet, it's 22 lines. It never changes. It's always these same items." [03:21]

This standardized process ensures consistency across all projects, allowing for rapid turnaround times and maintaining high-quality outcomes without the unpredictability of traditional contractor engagements.

Enhancing Scalability and Efficiency

Thomas underscores the efficiency gains from his new model. Historically, flipping projects could take up to 78 days post-delivery, but with the new approach, this timeline has been slashed to approximately 24 days.

"From the day it was delivered. 24 days later. We have now our CO [Certificate of Occupancy] and we can… We've already had it on the market. Now we can close." [26:44]

This reduction in turnaround time not only accelerates profit realization but also enhances the ability to undertake multiple projects concurrently, significantly boosting business scalability.

Financing and Cost Management

Addressing financing concerns, Thomas clarifies that modern manufactured homes are entirely financeable, debunking prevalent misconceptions. With options like conventional loans, FHA, VA, and USDA loans available, financing these properties is more accessible than ever.

"We sold 76 last year. Two conventional loans. The rest, FHA, VA, USDA. What are you talking about?" [21:44]

Additionally, by owning manufactured homes outright and utilizing construction loans, buyers can minimize out-of-pocket expenses. Thomas emphasizes that securing land with city water and sewer connections can further reduce costs by avoiding hefty impact fees.

Partnerships and Collaboration in Real Estate

A recurring theme in the discussion is the power of collaboration over competition. Thomas advocates for building an ecosystem where expertise is shared, and partnerships are formed to enhance business operations.

"But why do it then, when I can partner with people?" [33:28]

He highlights successful collaborations with professionals like Alex Cassetta and Brandon Schwab, underscoring how strategic partnerships can lead to mutually beneficial outcomes and business growth.

Addressing Affordable Housing Needs

Thomas's model not only offers a profitable flipping strategy but also addresses the critical need for affordable housing. By focusing on manufactured homes priced under $270K in Central Florida, his approach ensures that properties remain accessible to a broader demographic.

"We're 270 and under. Okay. Because we've took our volume and we negotiated prices. This isn't 2021 anymore where you couldn't do that." [12:54]

This commitment to affordability reinforces the societal impact of his business model, positioning it as a solution to the housing affordability crisis.

Misconceptions about Manufactured Housing

Throughout the episode, Justin and Thomas address and dispel common myths surrounding manufactured homes. Contrary to outdated perceptions, modern manufactured homes offer quality comparable to traditional houses, with customizable interiors and efficient designs.

"People think the old mobile homes and how they look. Yeah, right. They're way different today." [06:31]

Thomas illustrates this by sharing successful projects, including an Airbnb setup that showcases the versatility and modern appeal of manufactured homes.

Conclusion and Resources

Wrapping up the episode, Thomas provides valuable resources for listeners interested in adopting his flipping model. He directs them to PropertySolutionStreamDealership.com for more information and encourages entrepreneurs to leverage his expertise in transforming their real estate ventures.

The episode concludes with a strong endorsement of the collaborative approach, reinforcing the idea that success in real estate flipping is attainable through innovation, strategic partnerships, and adaptability.

Notable Quotes

"2022 changed all of us, didn't it?" – Thomas Lehman [00:58]
"We have a sheet, it's 22 lines. It never changes. It's always these same items." – Thomas Lehman [03:21]
"From the day it was delivered. 24 days later. We have now our CO and we can… We've already had it on the market. Now we can close." – Thomas Lehman [26:44]
"We sold 76 last year. Two conventional loans. The rest, FHA, VA, USDA. What are you talking about?" – Thomas Lehman [21:44]
"But why do it then, when I can partner with people?" – Thomas Lehman [33:28]
"People think the old mobile homes and how they look. Yeah, right. They're way different today." – Thomas Lehman [06:31]

Resources Mentioned

Thomas Lehman’s Social Media:
- Instagram: @LehmanRealEstate
- Facebook: Lehman Real Estate
- TikTok: @LehmanRealEstate
- LinkedIn: Thomas Lehman
Website: PropertySolutionStreamDealership.com

Takeaways

Thomas Lehman's innovative flip model offers a compelling alternative to traditional real estate flipping by leveraging manufactured homes, simplifying processes, and fostering strategic collaborations. Entrepreneurs can glean insights on reducing costs, accelerating project timelines, and meeting the growing demand for affordable housing through adaptable and scalable business practices.

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Transcript413 lines

[00:00]
A
What's up, entrepreneur? DNA, Family. Welcome back to another incredible episode. I have a great guest with me here because as a real estate investor for almost two decades, this man has found a way to flip differently. And that is what we're going to be talking about for all those out there that are trying to get into the flipping game, that are watching the TV shows, that are trying to build a business around flipping. My man Thomas Lehman is here talking about how we can flip differently.
[00:27]
B
Awesome, man. Thanks for having me today.
[00:28]
A
Yeah, man. I.
[00:30]
B
You.
[00:30]
A
You've been around for a very long time. You and I have been in the game for. We would be called the OGs.
[00:35]
B
Well, no, you're the OG. I'm. I'm. I'm under that a little.
[00:37]
A
There you go.
[00:38]
B
I got less time in.
[00:39]
A
There you go. Well, let's talk about your experience of. Of what we would all see on tv and what happened and then what changed for you to find a solution for us? The. The active fix and flippers yourself. What changed? What was that story like, where you said, there's a better way, there's a better mousetrap to be doing this type of business?
[00:58]
B
2022 changed all of us, didn't it?
[01:00]
A
Totally.
[01:01]
B
So my business model was like most people. I had the acquisition company. We had people calling, texting every day. They found our houses for us. We bought them. We either rent, renovated, and sold. Rented them. You know, we buy them at the rental or we wholesale what we didn't use. But interest rates. Okay, okay. That was going to change everything. And it did. So that summer, I had a mobile home.
[01:21]
A
Yeah.
[01:22]
B
Okay. I was going to renovate it. We had to get rid of squatters.
[01:24]
A
And this is a. Not you living in it. This is a true fix and flip.
[01:27]
B
Yeah.
[01:27]
A
You bought a mobile home.
[01:29]
B
You're gonna, you know, normal process. We buy them. We were going out there. We had to get rid of the squatters. They destroyed it. They took a chainsaw down the center of it.
[01:36]
A
Oof.
[01:37]
B
You're, you know, like me, a little older. Remember Bugs Bunny cartoon with the fleas jumping around? The sheriff opens the door, they want to go in. I'm like, nope. See all the fleas jumping? No, no. And. But it took a chainsaw. That taught me a process at Houzz, because an assistant and I in the office virtually knocked it down. Put the whole thing in with the old. Remember, call and get three estimates. We had no clue it took longer. I think we took it for 18 months.
[02:01]
A
Yeah.
[02:02]
B
We still made 11K.
[02:03]
A
Yeah. But we what could you have made, right.
[02:05]
B
If you had a process that taught us the process. You know what my Payroll then was 40, 50 grand a week because I had five contracting teams, okay? And I said, that's all done soon because one, interest rates were gonna change it.
[02:17]
A
Yeah.
[02:17]
B
You know, and two, I saw a simplified process to where, dude, you flipped 100 homes. Thousand homes, whatever it is, contractors think.
[02:26]
A
Oh, dude, it is literally why I'm bald. I say this every time.
[02:29]
B
Brett McCollum told me the same thing about you.
[02:31]
A
Yeah, it's why I'm bald. I'm just like, dude, they suck. And even when they're good for a short Runway.
[02:37]
B
Yes.
[02:37]
A
There's a day that they break and they end up sucking. And I don't know if you can ever see around the corner when that day comes.
[02:43]
B
No.
[02:44]
A
But it's inevitable. They break at some point anyways, keep going.
[02:47]
B
And so I saw a way to get rid of them because how many setup companies. Well, companies, septic companies are out there. If I don't like this one, I get rid of them. We did not need to have contractors, so to speak. So one of our companies, the construction company now only does construction management on our products. Okay. But everything is a 1099. If this, well, company doesn't perform, gone get a new one in there. And what we've learned is, for us, there's a sheet, it's 22 lines. It never changes. It's never different. It's always these same items. You can't do that in the flip.
[03:22]
A
Well, you're talking about a product. What does that mean? What do you mean when you say product?
[03:26]
B
Well, so a sheet for a project, okay. It's not going to be 200 line items. It's going to be these 22. How scalable? When you know exactly what everything is going to be, you can't do that.
[03:37]
A
On a flip very.
[03:37]
B
Because you don't know. Open your walls, everything changes.
[03:40]
A
But you're talking about a manufactured home.
[03:42]
B
Brand new. But brand new. Okay.
[03:44]
A
And that's what I was trying to get to is I want people to understand you're talking about instead of flipping, I'm going to change that game and I'm going to go into a manufacturer. Housing.
[03:53]
B
Yes.
[03:53]
A
And it's simpler, straightforward. It's. You have the known result, you have the known process. There's very little to no variance ever. That's what we're talking about.
[04:03]
B
Yeah. I mean, you got to learn land now. You got to learn a different terminology.
[04:07]
A
Sure.
[04:08]
B
But everything is. We do is Learning curves in business, so. But what I saw was simple, easy, scalable, and especially in when the economy was slowing down. Think about it like we had a wholesale company. I was losing 20k a month at that point.
[04:22]
A
That doesn't feel good.
[04:23]
B
No, no.
[04:24]
A
Yeah.
[04:24]
B
I got to unwind all that. We simplified the whole system, the process and our business. Okay. And then over time, we became a manufactured modular home dealer. Because, okay, we were. Think about, you know what people say. Mobile home dealer. They're all shady. Yeah, they are.
[04:40]
A
Yeah.
[04:40]
B
Okay. You know, I'm Russian Jew. My wife is Indian. She's much more calmer than me. When they were cheating us, we went into their office. The guy had three fingers. And when I showed him, hey, a mobile home dealer. Dealer, yeah. He. He showed me. We're talking and I can prove he stole. He said, yeah, I don't care. That's what he told me in the office with my wife there. And I'm like, you want to keep those fingers? I have a temper, you know? My wife said, no, no, come on, let's go. And we left. And she's like, we're just going to go get the dealer license and you can compete with him.
[05:10]
A
Your wife's a smart woman. I like that. Gave me shiver just thinking about that. Like, bro, here's how you beat him. You don't beat him up.
[05:17]
B
But isn't that how guys, you just.
[05:18]
A
Put him out of business?
[05:19]
B
We took a lot of his business year one, because we were right around him doing business in his county. I would sell people the home for nothing. I would make no money just to take it out of his pocket because I don't have his overhead.
[05:32]
A
Yeah, yeah, yeah, yeah. You know, well. And he did you wrong. Right? So this is a little bit like, hey, you stole. You literally stole from me.
[05:38]
B
Yep.
[05:39]
A
So I'd rather make no money, serve the client great. Impeccably, get good reputation and make no money on that. But just because you did me that bad, I mean, I'm going to take that client.
[05:50]
B
Yep. And now I've, like, I moved on from that. You know, I don't do. We don't do as much in that county anymore because we've moved towards central Florida a little better, but our reputation because of how we do business. And this morning, one of the realtors, who's. We're closing on a home next week with her on her buyer, she told her buyer, hey, you don't got to get an inspection. We know him. We do a lot of business. We can. I trust Him. I still told him, go and get the inspection.
[06:12]
A
Now. Let's rewind real quick. Let's talk about what you do. What is manufacturer housing? What is. Yeah. What is the, you know, misconception of it? Right. What are maybe the myths of it? Let's talk about manufacturer housing as a whole, because I think there's a lot of people that just have an idea of what it is, but they typically, I don't think would be accurate.
[06:32]
B
Oh, people think the old mobile homes and how they look. Yeah, right. They're way different today. I mean, you could have them. We have one as an Airbnb today. Made it so, so nice. But that's not our typical product. But you can go from a base unit to over here, and what you see inside can be changed. You can have drywall. You can have everything you want, all the crazy showers and however you want to build them out.
[06:54]
A
Nowadays, it's a fricking home. I mean, you can have drywall. Like, I've remodeled mobile homes before, right. It had. It was always a nightmare.
[07:04]
B
But I don't care if I click on the walls.
[07:05]
A
All right.
[07:05]
B
And you put up drywall.
[07:06]
A
Yeah.
[07:06]
B
Or bad.
[07:07]
A
Yeah, yeah. But even, like, the ceiling, like, it's not really connected. So if you don't have a construction guy that understands how to connect the seat, like, you're just like, well, there's a seam.
[07:16]
B
And, you know, some brands have a peak, and that's harder. But the really good ones have flat ceilings, just like in home. Nine, eight or nine feet off.
[07:22]
A
Yeah.
[07:23]
B
Okay. Uh, we. We can get any of them. We prefer the flat ones because then you can do box ceilings. It's easier for your recessed lighting and vans. Just makes things simpler for us.
[07:33]
A
Right?
[07:34]
B
But people today, I think. I think now it's getting more accepted. I know just a few years ago, even me, I was like, oh, mobile homes now. Yeah, yeah, now it's. But that's the affordable.
[07:46]
A
I think we all. All you and me, specifically, because we grew up in a. In a time, specifically me. Like, I had friends that lived in mobile homes, in mobile home parks, right? Like, I didn't come from money, right?
[07:57]
B
That's me, either.
[07:58]
A
My claim to fame, right, Is, like, I didn't. Now, I wasn't destitute. Like, I don't have the story where my family and I were living on the street. I don't have that. But I didn't come from money. Like, I had friends living in mobile homes, in mobile home parks. Like, we would go and play in the park like, but the, the, the idea and concept is you think you're like, it's less than you're in a mobile home park. You're a poor family. That is just not the case. And the reason why we're having this episode is to almost reframe what people think about this. Because I have a piece of property in Pensacola. You and I talked about it before this, right? Like, yeah, we're likely going to tear it down. We're likely going to subdivide the lot. Do we put two manufactured homes on there? Right? Is that now the new option versus rebuilding a full blown home? Because what is the price discrepancy like based around your. I know you can't give exact numbers, but if I were going to rebuild two separate homes, we subdivided a lot. Two separate homes versus putting on two manufacturers. Is there a price difference? As many of you know, I'm constantly on the move, juggling multiple businesses, traveling and ensuring I get my morning workouts in. Staying fresh isn't just a preference, it's a necessity. But let's face it, after back to back meetings, juggling two kids at home and the hustle and bustle of everyday life, body odor can become an issue. But here's the deal. Mando has revolutionized how I stay fresh. This isn't just another deodorant. It's clinically proven to control odor better than a shower alone with soap. My favorite scent, Bourbon Leather. It's fresh, is subtle and doesn't clash with my clone. And I was surprised by how well the solid stick works. And even after an intense morning workout, Mando starter pack is perfect for the new customer. It comes with a solid stick Deodorant Cream Tube Deodorant. Two free products of your choice like a mini body wash or a deodorant wipe. And free shipping as a special offer for listeners and new customers. You get $5 off a starter pack with our exclusive code that equates to over 40% of your starter package. Use code colby@shopmando.com that is S H O P M A N D O.com Please support our show and tell them we sent you Smell fresher, stay drier and boost your confidence from the head to the toe with Mando.
[10:23]
B
So a county work is different because, well, for you, you're not going to have impact fees on the first slot. But if you subdivide, you'll have it on the second lot. What does that cost? For instance, Orange county, we're just running numbers today. 25k for impact fees a lot. Yeah. And they want to build affordable housing, but the average project for us runs anywhere from 140 to 180.
[10:45]
A
Yep.
[10:45]
B
Okay. We just, we just finished one with Alex, right, Cassetta?
[10:50]
A
Yeah.
[10:50]
B
We were in for 165 for the whole build out. Sold it for 269.
[10:56]
A
That's incredible.
[10:57]
B
Right?
[10:58]
A
That is a new way of flipping.
[10:59]
B
Right. But that's his. So what's his expertise? Finding distressed properties. We don't do that anymore. He came to me and said, hey, let's go work on this. Off we went. Right. Put it together, you know, so what.
[11:11]
A
Like now, Now I want to talk about this deal. So if I send you, what would be my process? And I want everyone to understand this. Thomas is very relatable. Like, you can reach him. What's your Instagram handle, Thomas?
[11:24]
B
Layman Real Estate. You know, we can post them later, you know.
[11:27]
A
Yeah, we'll give the link. Make sure to find them. Because I'm going to do what I think you guys all should be doing is figuring out, like, hey, if I have an asset, if I have this opportunity, if I have this piece of land, this is an option. Right. So I give you this piece of land and what your team kind of looks at what we can do with it, what it would cost.
[11:42]
B
Yeah.
[11:42]
A
Because my, my real options here, it's basically a double lot. Right on one. So it's about 25,000 square feet. We can break it up into two 12,000 square foot lots of as long.
[11:53]
B
As the planner says. We're good on that.
[11:55]
A
That's right.
[11:55]
B
We. You get the planner to agree that you're subdividable one. They give you the setbacks, which is the distance you have to be.
[12:01]
A
Yeah.
[12:01]
B
And then we just work from there on what we can do and build.
[12:05]
A
Out and then what's going to be affordable at the end of the sale.
[12:08]
B
And we look at what's selling in the area, like, what's the price point? So in central Florida market, we've narrowed ourselves to, we're 270 and under. Okay. Because we've took our. Our volume and we negotiated prices. This isn't 21 anymore where you couldn't do that. Right. We have a volume that we can bring anywhere and say, hey, we're going to do 100 units this year. What will you do with us? How can we work better together? Right. Yes. And by doing that now, we've lowered our prices and cost. We pass that on to the buyer today because our buyer pool, as we went Higher in numbers. Shrunk. So let's just say your numbers are 250 up there. Then we're going to build a house that's not above that, but it's a better value for the community. We want to be better priced on market than anybody else. Okay.
[12:55]
A
So, I mean, this is pretty straightforward. Do I give this to you?
[13:00]
B
You email it over to teamworks on it and give us a couple days. We'll let you know exactly what we can do in the cost.
[13:06]
A
And we would have to just make some assumptions because my team hasn't called the county to say, hey, can we submit?
[13:10]
B
Why don't you just send it and we'll like. We do that really well because we don't never call. Yeah, we don't. We don't never take a call with them. We want it all in writing because, you know, even in writing it's. It doesn't guarantee anything.
[13:20]
A
Oh, bro, you're telling the city. I'm dealing with the. You're telling me about these cities. Yeah, not a problem. That's totally acceptable. We go do it. The inspector comes and says, who told you that was going to be acceptable?
[13:31]
B
And you're like, we're going to a hearing on Monday. Lawyers. We were told we could put a replacement manufactured home down two days before delivery. They sent an email saying, hey, we made a mistake and you can't. So it's like, what?
[13:47]
A
Well, that mistake is. Is a costly mistake.
[13:50]
B
Exactly. Now we lawyer. It's going to get grandfathered in. But now it took 10 weeks longer. But I had to go to my lender who lent me everything and show him. And he's like, hey, what are you doing? I said, oh, I'm taking the unit over here because we're volume I'm going to put it on this one. I'm going to take the money for the unit. I'm going to put it back in your account. So it's good. He's like, okay, cool. That's all he said. Done. His lord is my lawyer. The same. The same lawyer. So we're good.
[14:12]
A
Yeah. So in my case, I would literally allow you to kind of. And by the way, I'm. I know you, so I emphatically. Just you. But you'll call the city, you'll email them. We'll email them. Right. But you guys will actually handle it and figure out what is going to be our best case scenario. That way it takes that need because otherwise I have to put that on my team. That might.
[14:32]
B
That's not their Expertise.
[14:33]
A
That's right. And it doesn't generate U.S. revenue. So they're going to go like, revenue operational. Right. And they're like, this is some operational thing that I would give to my opera. But you get my point.
[14:45]
B
But your operations manager doesn't do new construction homes.
[14:47]
A
Right.
[14:47]
B
Then.
[14:48]
A
So they're not just going to get an answer and be like, what do I do with this? And then I have to go send it to you. And then. So now if you just do that for me, then I don't have to go send it to you to go. And I have. Now that we're talking about this, this is a fun episode, guys. I have two properties I'm going to give you you. Because there's another one that is a fourplex that I think we would need another almost 200 grand to finish out. Well, if I can build a brand new asset for the same dollar amount. I mean, you just said you and Casada did it for 160.
[15:18]
B
No, no. 164, 166. Right.
[15:21]
A
Then. Then I just got to think about maybe there's the same play. We could subdivide that lot if it's big enough.
[15:26]
B
Yeah, bigger might be the. They just sent me. I'm. They were. Had a meetup, whatever, last week, and I went out to his office and. Or the floor underneath his office. Yeah, I haven't seen him in a while. So I show up and Anthony's like, hey, we have this lot and everything. But I'm trying to figure it out. I'm like, dude, can you just send to us? Like, you take so Turtle long.
[15:43]
A
Right?
[15:43]
B
Let us just. And my assistant reached out and said, give us the information. He's like, here you go. We got it today. It's in the inbox already this morning. Because he just gave it over like a day ago because he was trying to figure it out. Dude, go, go. Do what you do. Give us what we do. Because we're trying to subdivide this lot into eight lots. But when you think about affordable housing today, you know, when you were flipping homes probably in vast numbers, was that wasn't the sexy play at all?
[16:09]
A
No, not at all.
[16:10]
B
Okay. But in this market, it is because people need a home. Buy a home. If you have a 7, $800,000 home, maybe you don't buy it right now at 7%.
[16:20]
A
I will. I just connect you with my general manager right now on this episode. This is why everyone should have a podcast, by the way, because if I.
[16:26]
B
Don'T, my lady's screaming about doing a podcast. She's like, you got her, dude.
[16:30]
A
If we don't do this together. I don't know whether I remember. I know what you do, but I don't know, with all the things I going on. Oh, man. I gotta remember to reach out to Thomas. You know what I mean? But now I'm sitting here.
[16:40]
B
But now our females will handle it.
[16:41]
A
That's right. Okay, now, I just connected you, because I don't know your team, but I.
[16:44]
B
Don'T look at email. They do.
[16:46]
A
But no, no, I text you. So. Okay, add your assistant into that thread.
[16:50]
B
Okay. Yep.
[16:50]
A
And then Anthony and your team will take it from there.
[16:53]
B
Yeah, and. But see, isn't that what we're supposed to do? Like, we have to have people handle that for us, because if we do, we're not doing what we do, which is. Isn't revenue.
[17:01]
A
That's right.
[17:01]
B
You know, and.
[17:02]
A
And there's so many. You know, it's funny, in talking about being a CEO and entrepreneur, we may not have to be in the trenches doing the smaller things. Like, hey, let's go do the. But what you and I have to go do have the bigger problems, the bigger issues, the bigger growth, the bigger trajectory, the bigger. And so a lot of people want to be the. The president, the owner, whatever. But you got to understand, we may remove ourselves from the tactical small things. That was different. The things that come to us, though. Oh, yeah, those are the. The city, actually.
[17:30]
B
Why we don't have, like, less hair and. And stress and insomnia. We talked about totally, you know, not.
[17:36]
A
Sleeping well and just staying up. I mean, I have an event that I wanted you to be out, unfortunately, but, like, Easter. Yeah. You. Dude, I'm Invent Mode. Like, I am going. Of course, dude. I. My wife is like, why can't you sleep? Because I'm. And flipping around all night last night, I'm like, honey, we are going to crush the next two days. I can't sleep.
[17:53]
B
Yeah, but your team's handling a lot for you. And that's the benefit of it. You know, one thing that, you know, you. You had my. My coach on here like a month too.
[18:01]
A
Gary.
[18:01]
B
Gary Harper.
[18:02]
A
I love this man. I told him to be at the same event. Like, get in the room, dude. More people need what you got.
[18:08]
B
And unfortunately, they don't know him as much. Right.
[18:10]
A
That's what he needs.
[18:11]
B
He's a mate. Let me tell you something. We are 20% or more of Central Florida's market. 50 to 30. Okay, 30. 40% in Pasco, Hernando, 50 in Polk County. Of all the new units going down in central Florida.
[18:23]
A
Okay.
[18:23]
B
Because of his company. Because I went to him. I kept hearing Tiffany High and all these other people. It was like 1-800- call Gary. Who the hell's Gary?
[18:32]
A
Underdog Gary.
[18:32]
B
I love. I joke about it. But then he came to Florida and he met me on a Saturday morning because he's a Disney guy. I'm not. But we met, had coffee. He had all the answers with. He looked me up. He said, you're experiencing this, and he's big into that PI. And I took it. His son Jacob couldn't get me to take it until we had an appointment with. With Gary.
[18:53]
A
Sure.
[18:53]
B
So I took it the night before. But using that, he described the Me.
[18:57]
A
Yeah.
[18:58]
B
What he read in there.
[18:59]
A
Yeah.
[18:59]
B
Because in our business, we have to be social.
[19:01]
A
Yeah.
[19:02]
B
People think I'm a social animal.
[19:03]
A
Yeah.
[19:04]
B
It's not my thing. I don't need to be for me. If you put me in my house for a week, I'm good without talking to anybody. He's like. And he said, you're a cat. I'm like, okay, what do you mean by that? You know, he's like, you want to get scratched, you'll get scratched, but you don't need it.
[19:16]
A
Yeah.
[19:17]
B
And then I bought into it because that's me.
[19:19]
A
Yeah. Yeah.
[19:20]
B
Right. And he's never steered me wrong yet.
[19:23]
A
He. Well, he was one of those people. I was like, bro, get in the room for this. Exact. His value of what he does is so amazing. But genuinely, no one knows about him.
[19:36]
B
And my story is fascinating.
[19:37]
A
Let the best of the best show you how to build out this sequence of your content.
[19:42]
B
Yeah.
[19:42]
A
So everyone know. And then you hand choose who you want to work with.
[19:45]
B
He's the one who got me on TikTok. He challenged me in October to do. Do this. Right. I got my first viral vid out of it.
[19:52]
A
Nice.
[19:53]
B
Like 5,8000 followers.
[19:55]
A
All.
[19:55]
B
All organic. Okay. And now we were arguing because we had a bet. He's like, I'm not doing it anymore. I'm like, oh, because you lost.
[20:03]
A
Yeah. Yeah, yeah, yeah.
[20:04]
B
But his team's amazing. They take care of you, so it's great.
[20:07]
A
Yeah. So being that you're now kind of reshaping how things should go in real estate, because I think the thing that has kept me in this business for almost two decades is being adaptable.
[20:20]
B
Yeah.
[20:20]
A
Iterating. Right. The reality is I got in this space in 2007 when the economy was going south. Right. Like hardcore. I was a victim of that. Right. I lost my home.
[20:29]
B
I heard the story. The car, different stage with your buddy.
[20:32]
A
But through that trajectory of two decades, things have changed. I was buying homes at auction. The hedge funds came in, bought 110 cents on the dollar. I had to buy 80 cents on those. So how am I going to compete? Well, I have to iterate after change.
[20:45]
B
Yeah.
[20:46]
A
Same thing we're talking about here and why this is so important. If anyone's going to be in the space of real estate.
[20:51]
B
Yes.
[20:51]
A
They need to understand this can be a new vertical. I'm literally real time right now. We just put our team together to look at a deal that I already own.
[20:59]
B
Yep.
[21:00]
A
Because I need to be able to iterate. That might be just a better way to go do more deals. Because the cost of it.
[21:07]
B
Exactly. Everything we do cost money. But that is normally our biggest expense in real estate. Isn't it going to get the money? And so you need to be profitable with flips. The problem is you have to wait to list it.
[21:21]
A
Yep.
[21:21]
B
You don't know what's going on till you open the walls. With this. It's different. We don't run into those disasters.
[21:27]
A
What is now. It's totally financeable now. Right. Because I think again, let's. There's a lot of myths and not really myths. I think there's just misconceptions. I think.
[21:36]
B
I think there's idiots out there talking crap all the time. Excuse me if that's the wrong word, but it's true. Because like on Facebook people say, oh, but you can't finance. What are you talking about? We sold 76 last year.
[21:45]
A
Right.
[21:45]
B
Two conventional loans.
[21:46]
A
Yeah.
[21:47]
B
The rest, FHA, VA, USDA. What are you talking about?
[21:50]
A
And so let's bust the misconception of what isn't financeable. Right. So that people are very clear. There is a section of this industry.
[21:59]
B
Old ones.
[21:59]
A
Correct.
[22:00]
B
Old ones.
[22:00]
A
So let's talk about that. So people are very aware of what we're. What they're thinking is the reality versus what is reality? Let's talk about the old ones. What that looks like. Let's talk about what we are talking about what you are doing. And kind of. So people are very clear on the difference.
[22:13]
B
So what we only do is brand new.
[22:15]
A
Okay.
[22:15]
B
Okay. We. Our license allows us to do use, but it takes away from my core, which is new. Okay. And different animal. So brand new manufactured. The majority, 98% are double wides.
[22:28]
A
Okay.
[22:28]
B
Some triple wides, less single wides.
[22:31]
A
What's the Biggest size. Like, I don't even know that answer. Like, what would be a triple wide? What square footage would that be?
[22:35]
B
Oh, man. Over 2,000 plus square feet. Because it's basically just three sections and you can put like, it's. It's think of Legos. Right? You have two here and you attach one here or over there. We're doing one as an ADU for somebody right now. Yeah, they want their mom living over that side.
[22:49]
A
Freaking. Freaking brilliant, dude. I mean, there's a lot of people that need to consider that.
[22:53]
B
Yes, because you know what? He was doing it with a different company and they wanted separate. Then you have to put two separate systems for septic and wells. You can't tie them together. If I do it as an ADU and I attach it, guess what? It's one.
[23:04]
A
Yeah.
[23:05]
B
Saved them a ton of money. Okay. Friend of mine, you know, called me up and I'm like, dude, I got this for you. Relax.
[23:09]
A
Yeah, okay. That's brilliant.
[23:11]
B
And I did it on the. The transport from the hotel to the Bright Line station yesterday for him. Well, it all worked out okay.
[23:18]
A
Bright Line's great, by the way.
[23:19]
B
Never. Never driving again now.
[23:21]
A
Never after that.
[23:21]
B
Right.
[23:22]
A
Was that your first Bright. Oh, no. Oh, yeah.
[23:24]
B
No, no.
[23:25]
A
Learns amazing.
[23:25]
B
And then you work and then you got Uber. Right. No parking. But we'll get back.
[23:29]
A
Yeah, yeah, yeah.
[23:30]
B
But brand new. Never a problem with any financing or insurance. Single wides are a little different. There's less. Say 70% of all the financing works on a single wide.
[23:42]
A
Okay.
[23:42]
B
Okay. But usually pretty good people just have to know that.
[23:47]
A
Double wides and triple wide. No, I don't know.
[23:49]
B
Yeah, it's just single. Yes. Yeah, yeah, not a problem.
[23:52]
A
Better. Less financers, less banks, less financial institutions. Yes.
[23:55]
B
I mean, you can get an FHA va, but some of the programs, like the down payment assistant, do not work on them.
[24:01]
A
Got it.
[24:02]
B
But like Hometown Heroes, which was big in Florida. Okay. All worked on double wides. We sold a ton that way.
[24:07]
A
Okay. So how big can they go? The new ones? Like, what. What is like. Oh, no.
[24:12]
B
I mean, we can go 4,000 square feet. They have two story ones.
[24:16]
A
You can. And you can get all that?
[24:18]
B
I could order it. Yeah, I don't. I don't normally. I haven't done a two story or that big. Because the lane for us, with what we do as our bread and butter is affordable. That wouldn't be affordable.
[24:27]
A
That's right.
[24:27]
B
Would we build it for somebody who came in? Sure. Like, we've gone construction to perm. For people.
[24:31]
A
Yeah.
[24:32]
B
We can get a finance for that. We can say. Okay, how much do you. What are you looking to spend? Okay, we're going to build it out. This is what it is. We go and get them a construction loan.
[24:40]
A
Yeah.
[24:40]
B
Withdraws same way.
[24:41]
A
Yeah.
[24:42]
B
But now I'm using their money and not mine. I don't have to charge them more that because the interest isn't there for me.
[24:48]
A
That's right. You know, that's incredible. And so now what is? So the new stuff's totally financeable. You get up to 4,000ft if you want to, but the reality is most people will get like a double wide. Maybe you get a triple wide. How often do you get the triple widespread?
[25:01]
B
Twice.
[25:01]
A
Okay.
[25:02]
B
Nope.
[25:02]
A
So different.
[25:04]
B
Yeah.
[25:05]
A
Right. Which is what? 1500 square feet.
[25:07]
B
So the bread and butter, what we're putting down on an acre is about 1800 square feet.
[25:12]
A
Okay.
[25:12]
B
But what we've done, we've taken our volume and we went to another manufacturer and negotiated better terms.
[25:17]
A
Yeah.
[25:18]
B
To bring it to them. And now we're selling more, bigger units for less price. Which helps our buyers right now, of course. So this economy, we have to help them in.
[25:28]
A
In the. A hundred percent. So if I'm the buyer. Let's work this through. I already own the land. Your team figures out. Citi says yes. You can subdivide it. We need to sign these docs. Great. Now you have two parcels.
[25:38]
B
Yep.
[25:39]
A
The financing of said manufactured home, do I need to pay out of pocket? Is there financing to purchase it? How do I finance that from you?
[25:48]
B
We now, because we have the longevity in can get people financed for the units through the major lender is Triad.
[25:55]
A
Which is essentially a construction loan.
[25:57]
B
Yes, but if you own the land.
[26:00]
A
I need the land as security to them.
[26:02]
B
And they will.
[26:03]
A
I mean, it's a construction loan. I mean, that's what it is.
[26:05]
B
So simple. And they will do. I think it's 135% of the unit value.
[26:09]
A
Okay.
[26:09]
B
Which gives you a lot of your infrastructure.
[26:11]
A
Right.
[26:12]
B
So your cash in is so much less.
[26:14]
A
I mean drastically. I mean, to some extent it could be zero.
[26:19]
B
It could be because they. Well, you have to pay interest payments for whatever. They start 60 days after delivery.
[26:23]
A
Okay.
[26:24]
B
But as long as you're. I mean, so the. If you have a 650 or above credit score, the numbers are good. They'll work with 550 and above though.
[26:31]
A
Now, delivery means put together. No.
[26:37]
B
So delivery just means it goes from the factory to the lot. Then you have a setup company who puts it all together?
[26:44]
A
How long does that take?
[26:47]
B
In the olden days? For me, up to 78 days now that we are operationally efficient, thanks to those other people we talked about and not me doing it. 24 days.
[26:56]
A
Let's round to 30. Whatever.
[26:57]
B
Yeah, but look at that timeline though, right? I mean, 78 to 24. We just discussed it this morning.
[27:02]
A
Yeah, there's no. I mean, you can't do that. You can't build a home in 78 days.
[27:06]
B
From the day it was delivered. 24 days later. We have now our CO and we can. We. We've already had it on the market. Now we can close.
[27:13]
A
Okay, that's amazing. So I'm already marketing, I'm already finding buyers. We can close.
[27:17]
B
Well, you have the dirt, you're listing new construction.
[27:20]
A
Yeah.
[27:20]
B
As soon as you know what unit you can put down, you can lift it.
[27:23]
A
That's it.
[27:23]
B
We can't do that with a flip.
[27:24]
A
That's right. Ah, and what, you're already finding the buyer. It's like reverse is like Kent Clothiers whole reverse wholesale model, but now your reverse flipping model.
[27:32]
B
And. Yes, and what if you put in. You build urgency and say, hey, look, we're going to build this unit here, but if you want to, if you want to live here and you want something different, if you do it in.
[27:40]
A
This timeline, you let me know, we'll change it. I'll go shopping for you.
[27:43]
B
Yeah. So you build the urgency in the people because then they, they, they'll just say, oh, if we don't. Can't do anything. We'll wait till it gets there.
[27:51]
A
Yep.
[27:51]
B
And look, in this business, we want to have a contract on a home. End the story. Right. And that's what our business model is. So we have ways to show them the unit 3D walk through. We have units all over central Florida down. They can go walk and see the same unit.
[28:05]
A
Okay, man, this is. It just relieves. So but you said 30 days or 60 days after delivery. The right now we're.
[28:14]
B
We're on 20. Okay. For the financing. Yeah, it could be. So if it's for me as the business, I'm 30. But I think the customer is 60.
[28:22]
A
Okay.
[28:22]
B
Right.
[28:23]
A
So because it's different, it's already built. We've already been marketing it. I mean, in a perfect world, we sell it within 30 days. They close within 30, there might only be two months of interest payments. I'm on the hook for. In a perfect world, I get our life is imperfect, but I mean, that's reality. Right? It's ordered, they finance it, it gets delivered. It's turned in 30 days. Let's call it 24 technically, but 30. We find the buyer because we're pre marketing it. They close another 21 days later.
[28:52]
B
Yeah.
[28:52]
A
So, you know, am I off on any numbers?
[28:55]
B
I'm just trying to figure out my past. Conversion cycle is 180 days on a project max.
[29:01]
A
Right.
[29:01]
B
Okay. So it's different for. If you own the land already. That's from the day we start the process and finish. Okay.
[29:07]
A
So we should be 90 days back.
[29:09]
B
Okay. It's different if you live in it because now you're an owner's permit versus a builder's permit. It becomes. It's easier. Right. Because it's your land. You know, we're still doing the work for you.
[29:20]
A
And they just essentially give me a construction loan. I mean, this is someone. No brainer. But it's fun for that price. Stuff like I wouldn't buy a 1975 home and then tear it down, per se. This.
[29:32]
B
What do you mean? I do. That's our. One of our. We. We buy a ton of old homes. You don't have impact fees anymore. So the last three deals in Orlando were all old units. It cost me 5,000 to knock them down. I don't have to pay 25,000 in impact fees.
[29:48]
A
But you just have to buy it at the right price to make that make sense. Right.
[29:51]
B
Look, we make our money when we buy.
[29:52]
A
That's right.
[29:53]
B
But we don't market anymore. I work with people like Alex.
[29:56]
A
Yeah.
[29:56]
B
With Brandon Schwab and all them.
[29:58]
A
Who.
[29:58]
B
That's their business.
[29:59]
A
How do you work with Alex? Is it more of a partnership of sorts, or is it.
[30:03]
B
We partner on it. Here's. Let's go. Right. You know, put it into the pipeline because he partners with. You know, Alex is a real smart person. I. I've known him for years and I've watched his just trajectory.
[30:12]
A
He's going to be here, by the way.
[30:14]
B
Oh, yeah, yeah. You'll be great.
[30:15]
A
Because he's on that. Like, I need more content. Where I'm like, bro, get in the.
[30:18]
B
Yeah. And you know, but he's one of those people who knows that this is my vertical. Oh, call Tom. Boom. Called me. Up we go. He's a hard negotiator. Right?
[30:27]
A
Yeah.
[30:27]
B
There's no. We made the deal and it worked out well.
[30:30]
A
So what would a deal. Like, how would you play a piece in this? Like, I already own the property. You have the manufacturer. Like, would there be a reason that we would do it.
[30:37]
B
I mean, you could hire us just to manage it, I would suggest. And you already own it. Right. But if you're buying stuff and we partner, it's different. And then every. Every one is different as we look at it.
[30:45]
A
Okay.
[30:46]
B
Okay.
[30:46]
A
So, yeah, I think the economics I would have to understand more about, like, on whether we would. Other. Other properties that we don't already own at or understand, like, what do we need to buy at so financially it can make sense for us to build these things.
[30:58]
B
And we'll look at your back end, what's selling in the area. See, I don't look at land value.
[31:03]
A
Yeah.
[31:03]
B
Until I'm. I work backwards. Okay. If my comps say I can get this, what. What are my cost? And then what do I need to do for the land? Because, you know, there's things we'll overpay for. City water soar every day.
[31:15]
A
Yeah.
[31:15]
B
Okay. Because you don't need permits. Step pick and well can be $30,000. Easy.
[31:20]
A
Easy. Yeah.
[31:21]
B
So I'll overpay for that lot if it connects to the city for both of those. Because I change my timeline and my cost. So, you know, remember, I. I buy from a lot of wholesalers, and I always want to see their contracts.
[31:33]
A
Yeah.
[31:34]
B
And I'm like, dude, I don't care what you're making. I want you to make money.
[31:36]
A
Sure.
[31:36]
B
Okay. I just want to make sure you don't have some crazy clause in there that I gotta. I just told the guy. But I'm not dancing on the table naked at closing day.
[31:44]
A
Yeah, yeah. Because. Because I'm.
[31:45]
B
I'm agreeing to it.
[31:46]
A
See?
[31:47]
B
How do you know this? I. Dude, I've done that business. I want you to make money with me because guess what? You're gonna bring me more stuff.
[31:51]
A
That's right.
[31:51]
B
Right. But we educated a bunch of people, wholesalers, on how to negotiate the septic cost, the well cost, because there's a map called the B map in Florida. Now, you put in the address, the darker the color gets, you go from like yellow to purple. You go from a 5000 system to a $25,000 system. And if you don't have that information, how can you negotiate with the seller?
[32:15]
A
What is. What are you finding on your own deals? Is the right buy price typically? Like, is there a range? Like, if you want to stay under 100 grand, you want to stay under 200 grand on land.
[32:28]
B
Oh, man. Land. You know, like.
[32:29]
A
Well, when you're buying. So with intention to put these things.
[32:32]
B
Yeah. I mean, so our. We've paid as much as 90 for land.
[32:36]
A
Okay.
[32:36]
B
But it was in the right area. I know what the back end numbers.
[32:39]
A
Are going to be. And so what did Alex contract the. The deal?
[32:42]
B
You know, I mean, he got it for like 29 grand.
[32:44]
A
Okay. Yeah. So you want to. You want to be low, but his.
[32:47]
B
Was an old unit. Just so you know, lots in the same neighborhood, vacant lots are selling for 39 grand. He got the old unit for 29 grand.
[32:55]
A
Yeah, but he had a different exit than everyone else would. But.
[32:58]
B
But we didn't have to pay in what a great deal. See the value of the partnership there? He did his expertise, which is fine. Distressed properties at a discount.
[33:04]
A
Right. And then what did you bring to him to figure it out?
[33:08]
B
No, he brought it to me, and I said, perfect, because the land selling for more will save on septic, whale and impact fees. It's like a $40,000 swing. So let's say we walk away with whatever it is. It just paid for itself to split it up already. Right there.
[33:19]
A
That's right.
[33:19]
B
Using their expertise. We don't do that anymore. And we were never as good as him. Okay, but why do it then, when I can partner with people? Yeah, we don't market anymore.
[33:28]
A
Yeah.
[33:29]
B
Zero. Zero marketing dollars.
[33:31]
A
I mean, that's the reason why I do the same thing. The reason why I'll buy from my students. So I. I've created a ecosystem that, you know, that I'm helping them get deals. The reason why I want to help them buy it from them.
[33:43]
B
Of course.
[33:43]
A
Right. And by the way, they make a full assignment on their side. So as an example, if they go, if I help them get 1, 2, 3 Main street, and we would technically wholesale this out for 20 grand. But I want it. They'll still make their 10 grand as an assignment fee.
[33:59]
B
Nice.
[34:00]
A
Because I want them to win. And then I'll buy it and then do this. Right. They don't have to be a part of it. Right.
[34:06]
B
But that's building the ecosystem.
[34:08]
A
Right.
[34:08]
B
You know, and I've learned that from you and others that I've networked so much in my area to where I've trained people, taught them how to go find the land for us.
[34:18]
A
Yeah.
[34:18]
B
But we're in masterminds together. And, you know, this is my vertical. Some people who don't play in this just bring me the land now, partner. Okay?
[34:28]
A
That's right.
[34:29]
B
Because I think that as we grow in real estate, we go from being competitors to collaborate. Right. We collaborate more because different expertise.
[34:39]
A
Yeah. The immature people still Compete. I'd rather collaborate all day. Yeah. I'll make more money with people than I will without.
[34:46]
B
Yeah. And you stay in your lane. You like, I do not do anything that doesn't contribute to my core. And some people want to do wholesaling on scale, you know, whatever. Eight states plus new construction. It's like, dude, how can you do it all?
[35:00]
A
You know, it's funny in every time I get. I don't want to say too big for my bridges, but, you know, I take some big swings sometimes. Also, there's always that, like, oh, I am out of my depths. Right. Like, this is new.
[35:12]
B
Yeah.
[35:12]
A
But I've also done it a long time that I can recalibrate and I can fix and I have a team.
[35:17]
B
Yeah.
[35:17]
A
But to your point, most entrepreneurs that, like, they get a couple bucks in their pocket and now they're doing something else and doing over there and shiny object, and you just go, why? Just be really great at the thing. And when you make enough money, then you can go, all right, I'm going to take a swing at this thing over here.
[35:33]
B
But even, you know, look, everything we're doing now is adding the other verticals to contribute to our core.
[35:39]
A
That's right.
[35:40]
B
We're going to own our transport company. We're going to own our septic company because we can shave timelines now. Guy who was going to lend me money, he's lending me money for both septic and transport. I explained to him the process, how he would shave this much time off it. And with septics, let's say we're doing 100 deals. We wouldn't use it 50 times. Yeah, but with the transfer, I mean, with the setup company, we'll use it a hundred times. He's like, oh, yeah, good. That's all. That's all he had to say because he's done business with me before. How much do you need? And when. I love people like that. Right. Because he's going to make money. He can't do with his IRA money or whatever it is what I can do for him.
[36:17]
A
Yeah.
[36:17]
B
He's want to either. He's like, dude, I don't. You know, I'll go see your property, like our deals one. One time maybe.
[36:22]
A
Do you have a better place for people to kind of check out more? Because I think people are.
[36:26]
B
Yeah. The website, we can lift it all up.
[36:28]
A
What's the Website?
[36:28]
B
It's the PropertySolutionSteam dealership.com.
[36:32]
A
The Property SolutionSteam dealership.com.
[36:36]
B
Yeah.
[36:36]
A
Because I know a lot of you watching this and listening to this are like, this makes a lot of sense. I just need something to look at. Right. Because you and I get it. We've done this a long time. But someone might be like, man, I have this inherited property I have, and I don't really even know what to do with this dam.
[36:49]
B
Yep.
[36:50]
A
They should be calling Thomas. Right. That's the. That's what I'm trying to get to for everybody is this isn't have to be a business for you, but all of us to some extent have a component of real estate. Whether you inherit a property, you own your own personal property, you are fix and flipping. Like, this is a vertical that just financially can make sense a lot of the time.
[37:08]
B
Yes. I see people moving like we, we teach people how to do this as well. We slowed down on the coaching because we were adding the verticals. But I also hired new operations managers and I'll go back to it more in June. I kept some of my students, one who wasn't performing. We just said, hey, you know what? Maybe it's best both of us go separate ways because you're not doing anything. I don't want to take your money either.
[37:27]
A
Yeah, yeah.
[37:27]
B
But you know anybody who's going to build affordable housing, I'm going to help. Okay. I had meetings here yesterday with people who do it.
[37:33]
A
Yeah.
[37:34]
B
Okay.
[37:34]
A
This area needs it. I mean, there's nothing affordable here.
[37:37]
B
Well, yeah, I looked over their systems and, you know, the, the husband, wife and the brother came, we sat down and. And they. One of my events last year. So I'm here, I met with them, they showed me what they're doing and I'm like, why? And I showed them our whole process. I gave it to them.
[37:51]
A
Yeah.
[37:52]
B
Right. What a. Thank you. Because you're going to go build affordable housing, you're going to help people.
[37:55]
A
Yeah.
[37:56]
B
But if I help you, then you help them. That's me helping them. Cool. We're good, right?
[37:59]
A
Ed Mylet said that at the last board.
[38:01]
B
Dude, I love him.
[38:02]
A
I. I use.
[38:03]
B
I almost gave all the money to go to go to his house, but my wife said no.
[38:06]
A
That's it. That's right. That's right. Well, dude, thank you for coming on.
[38:10]
B
Absolutely.
[38:11]
A
I really appreciate it. I want everyone to start following him on Instagram, Facebook, Tik tok, linked. We'll post it all in the show notes, the website in the show notes. I appreciate you coming by and thanks for having me. Yeah. All right. If this was pretty cool and you think there's some people that need to know this, and you want to share it, please do share with at least two of your friends. Make sure you follow Thomas, and we'll see you on the next episode.
[38:32]
B
Thank you, everybody.
[38:33]
A
Peace.