Robert Leonard  01:14

As I mentioned in the intro, you have a very diverse background with a lot of experience that I’m excited to talk about today. We’ll probably have to have you on the show at least one more time, if not more to cover it all. But let’s start today by you telling us a bit more about your background. How did you know you were meant to be an entrepreneur and how did you ultimately get into real estate?

J Scott  01:35

Yeah, it’s a good question. I’m not really sure. It was a kind of a winding path. I went to school for electrical engineering. So I was an engineer, and I did the corporate thing for a long time. I got out of school, got a job, and another job, and another job. I ended up at Microsoft out in Silicon Valley for a long time. So that’s where I spent most of my career. I was an engineer, I got my MBA, so I kind of went the business route. It was always working for big companies.

Then back in 2006, I met my future wife. She also was in the tech world. When we decided to get married in 2008, we realized that she was traveling three weeks a month. I was traveling two and a half weeks a month. Basically, we were just living lives that just didn’t make sense when we were going to get married and start a family. So we sat down when we decided to get married, and we said, “What are we going to do? Because we can’t keep doing this corporate thing, traveling all the time working 80 hours a week,” and we decided, hey, I have a business background. She’s got marketing, sales, and corporate communications background. It’s a good mix. Between us, we could figure out like this business thing. I had run a couple of businesses for Microsoft. She had run a big department at eBay. So, we thought we could be successful in doing the business thing.

So 2008, right around the time of the crash, we said, “Okay, we’re getting ready to get married. We’re just going to quit our jobs. We’re going to move from California, back to the east coast, closer to our families, and we’re going to start one or two or five businesses. I always wanted to be a serial entrepreneur. For some reason, that always seemed kind of cool to me. But we had no idea what those businesses were going to be.

So in the summer of 2008, we had quit our jobs. We moved back to Atlanta. We just picked Atlanta randomly. It was probably one of the hardest-hit areas in the country for real estate. Probably during the worst part of the downturn, we were sitting on the couch, just watching TV, waiting for our wedding to come up because we decided we weren’t going to do anything for the summer. We’re just going to take the summer off, relax, and then figure out what we wanted to do. My wife was watching HGTV, and, back then, there was a flip show on. And so, there was a flip show on TV that she watching, then she said, “We should flip the house.” Honestly, I thought she was joking. I had no contractor skills whatsoever. We’ve literally just purchased our first house ever, like just three months earlier. I am not the handyman type, but she was serious. She’s said, “Let’s flip a house.” It’s just something to do, and she’s a design person, and so I knew she probably just wanted to do the interior design of a house. I said, “Okay, let’s do it.”

We spent a couple of months just kind of figuring out what flipping houses meant; learned the financial side, learned the numbers, and learned how to analyze deals. We looked at maybe 100 properties, and then August of 2008, literally on our wedding day, we closed on our first deal.

Now, we had found after looking at about 100 properties and not finding anything, my wife finally said, “We just need to buy something. Because if we don’t just buy something, we’ll probably never take that leap.” So I said, “Okay, next house that we’d look at, we’re going to buy.” We actually looked at three houses the day we decided to do that, and we put all three under contract. We said we’re going to figure out which one of these we want. We have an inspection contingency in each of them so we could have backed out. At the end of the day, we said, “Let’s just buy all three of them.” And so, we closed on the first one on our wedding day. We closed on the second one a week later. We closed on the third one about two weeks after that. We were basically doing our first three flips simultaneously with no experience, no real estate background, and no plan to do it. Literally, this was just serendipitous. We just fell into it. 

Luckily, we bought the second and third right after the first because the first didn’t go well. Had we not bought the second and third, right at that time, we probably never would have done the second deal. But the second deal went well. The third deal went well. We decided to buy another one, and another one, and another one. Before we knew it, it became our business. That’s what we decided we wanted to be doing, and here we are, 12 years later. We’ve probably done about 400-450 of those, and most of them have gone well. And somehow we’re now real estate investors.

Robert Leonard  05:36

Was this right before the crash? Was this during the crash? Was it right after?

J Scott  05:40

We were very fortunate with our timing. This was not during the worst part of the crash, but parts of Atlanta got hit tremendously hard. There were areas that saw drops of 50-60%. At this point, we were probably 70-80% towards the worst of it, so prices had dropped tremendously. They still had a little way to go, and then they flattened out at the bottom for a while. But the worst of it was already passed, and so, had we done this 6-12 months earlier, we probably would have lost our shirts. We were very fortunate with the timing.

Again, we had no idea what we were doing, but the fact that prices were tremendously depressed, basically, all of our competition had gone out of business. Nobody was flipping houses, and there were very few renovated houses back on the market. So, for the few buyers that were out there that were actually looking for houses, we had basically the only inventory they were interested in. So, I look back and it was kind of weird. There were very, very few buyers, but those buyers had essentially no choices for decent housing except for our properties. So yeah, it was a pretty bad time in real estate.

Robert Leonard  06:44

If we were about 70-80% through that crash, why did you have to look at so many deals just to find three?

J Scott  06:51

Because we had analysis paralysis. We were in the same position that a vast majority of it investors find themselves in where they study, and they read, and they talk to people, and they want to pull the trigger, but they’re just scared to do it. Because there’s always the doubt of “Do I really know the numbers? And do I really understand what I’m getting into? What am I missing? What’s the hidden surprise that I’m going to come upon?” So I was just scared to take that leap. 

Luckily, my wife looked at me and said, “Look, we’re passing up on all these deals. The numbers always seemed to work, but you’re too conservative. You don’t want to do any of these. We just need to buy one. Worst case is we lose some money, we learn from it, and maybe we don’t ever do it again.” What we realized after the first couple of properties was exactly what you said. There were so many deals out there. Back then, there were so many REOs, which are basically bank-owned foreclosures that are sold right off the MLS. I joke today that, literally, I could open up the MLS, take a dart, and throw it in whatever property it hit, and it was probably going to be a great deal. But it took us actually buying those first three properties before we realized how fortunate we were and what a great opportunity we have.

Robert Leonard  08:04

I wanted to ask that question because it wasn’t a matter of deals not being available. I mean, it sounds like there were a lot of deals. It was paralysis by analysis, which I think a lot of investors get stuck in.

J Scott  08:14

Yep, absolutely. I give my wife all the credit in the world. Fortunately, she said that we’re buying the next one we look at, and we did. That got the ball rolling.

Robert Leonard  08:26

It’s interesting. My background is sort of similar. I haven’t done 400 deals yet by any means, but I was in a similar boat. I only wanted to buy a multifamily rental. That was the only thing I was going to be buying. I was not willing to buy any single-family, but I got into a paralysis by analysis, and as my business partner and I came across good deals, I just couldn’t pull the trigger. Then one day, I came across a single-family property, and I said, “We’re buying it.” The numbers were good, and I decided we’re buying it because if we don’t, we’re never going to take the leap, and we’re never going to get started. Ever since then, we’ve gotten over that hurdle.

J Scott  08:58

Yeah. I often tell people when they ask me “What’s the secret to real estate?” I always tell them there are no secrets in real estate. But there’s one truism that if I wanted to pretend like there was a secret in real estate, this is what I would say it is. It’s probably the most powerful thing out there for anybody that hasn’t done that first deal yet. I talked about the fact that I meet literally thousands of people every year who are looking to get into real estate or who are in real estate. And what I found is those thousands of people always fall into one of two categories. Most of them have done no deals, zero deals, the rest of them have done 3, 5, 10, 50 deals.

The one type of person I rarely ever, ever, ever see is that person that’s done one deal because in this business, when you get that first deal, your whole mindset shifts. You have context for what you’re doing. You have an understanding that couldn’t be there before you got that first deal done. You can read all the books you want. You can talk to all the people, and go to all the conferences you want to go to, but until you do that first deal, there’s something that’s missing, that just doesn’t click into place, and that only clicks into place when you get that first deal. Once that happens, that second deal is so much easier. And the third deal is so much easier, and the fifth and the 10th. The 15th deals are so much easier. So, what I tell people is that, if you can get to that first deal, if you don’t give up before that first deal, you’re not going to stop at one deal. You’re going to do 3 or 4 or 5, or 50, or 100 deals. I just reassure people that it gets easier. Because everybody thinks, “If it’s this hard to get one deal, I’m not going to get the second or the third.” It’s not the way it is. You get that first deal, and everything starts to snowball after that.

Robert Leonard  10:36

I couldn’t agree more. It really is so true. So how many flips did you do? What did your portfolio look like when you were comfortable to quit your job? Was there a tipping point that made it clear and you went, “Aha! I know this is the time,” and how about for Carol, your wife. Was it at the same time? When did that happen?

J Scott  10:54

Yes, so we quit our jobs before we ever did our first flip. We wanted to start a business. We considered real estate, but we were looking at buy-and-hold real estate. We were thinking about buying multifamily just for long-term cash flow. We didn’t consider active real estate strategies until literally the day she was sitting on the couch, after we quit our jobs, waiting to figure out what our next step was going to be, and saying, “Hey, let’s flip a house.”

So for us, we had already taken that leap, it was just a question of where we landed. That we landed in real estate was blind luck. The bigger question for us, or for me, when I think back, is when did I decide that real estate was going to be what we were going to dedicate our time to now that we were out of our job? Because again, we were thinking about starting a business and I didn’t know what kind of business it was going to be. I was thinking about buying a business or starting a business or buying a franchise. I didn’t know. At some point, and I don’t know exactly when it happened, my wife and I just kind of looked up and said, “Okay, we’re real estate investors now. This is the business that we were talking about that we would eventually start.” I don’t think we ever made that conscious decision that we were going to do real estate. It just sort of happened. In the first year, I think we did 14 deals. I think we were too busy to look up and say, “Hey, what are we doing? Do we really want to be doing this?” We were just so busy actually doing it that we didn’t ask. We didn’t ask ourselves that question until years later.

Robert Leonard  12:24

Fast forward to today, what does your current real estate portfolio look like? I know you’ve done like you said over 400 or 450 flips, but does your portfolio consist of any other types of real estate investments? Any rentals or anything like that?

J Scott  12:38

Yeah, absolutely. So, unfortunately, we didn’t realize it until a few years in, but rentals are the opportunity that we really missed from 2008 to 2010. I think we bought our first rental in 2009, and we probably bought 30 to 50 rentals in the first 5 years that we were investing in. We sold every one of them because I hated property management. It didn’t occur to me until years later that, “Hey, I don’t need to be doing my own property management.” We would buy a rental, get a tenant in there, and everything would be fine. Then one day something would happen where the tenant would just annoy me or there’d be some issue, and I don’t feel like dealing with this anymore. So we’d sell our whole portfolio, then I’d go out and buy three or four more rentals, and then one day, I’d get annoyed, and I just sell all three of them. This happened over and over and over again.

It was probably 2013 or 2014, that again, my wife said to me, “Why are we selling all these properties?” She was thinking the whole time, “We shouldn’t be selling these.” She finally put her foot down, and said, “We can’t sell any more properties,” and she was right. We missed an amazing opportunity. We had bought some properties back in 2009 to 2013 that today would have tripled or quadrupled in value, that we would have been making literally 50-60% cash on cash returns because they were so cheap back then. But I wasn’t smart enough to hold on to them.

So in 2014, we started collecting rentals again, we started buying some small multifamily units. A couple of years ago, we started buying some mid-size multifamily, so we built a pretty big portfolio. We sold a decent amount of that back in 2018 following a plan, instead of it just me being annoyed and saying I don’t want to hold these anymore. The market was really strong in the areas where we were investing in. I’m one of those people that like passive income, but I also know that I understand market cycles. I saw an opportunity to take, even if there was going to be a tax hit, there was a big capital gain on our portfolio. So 2018 to 2019, we sold about 50% of our units. We’re still holding some mid-size multifamily. We’re still holding some single-family. We are looking for some large multifamily to syndicate, so we’re still doing buy-and-hold deals, but we slowed down in 2018.

Robert Leonard  14:52

That’s really interesting to hear, given that you wrote the book on recession-proof real estate investing. So it’s interesting to hear that.

J Scott  14:59

I spent a lot of time in 2018 and 2019 really thinking about the economy. Again, it’s a topic that I’ve always been interested in. Economics has always been a passion of mine, but I’d never really sat down and thought about how economic cycles impact us as real estate investors in 2018. I really sat down and I spent some time thinking about strategies because anybody that’s familiar with economic cycles knows that there are downturns, then upturns, then downturns, and then upturns. The cycle is always going to continue. I can’t tell you when the next recession is going to occur. I can’t tell you how bad it’s going to be, but if history is any indicator, and history is any indicator, we know that the next one’s going to come at some point. And so, in 2018, I started thinking about what do I want to be doing when the next downturn comes? How do I want to protect myself? How do I want to protect my investments? How do I want to modify my strategies and my tactics to ensure that when the next downturn comes, even if it’s not nearly as bad as 2008, what can I do to ensure that I’m still making a profit? That I’m minimizing my risk?

One of the things I decided to do back again around 2018, was to take those units in my portfolio that were either underperforming or that weren’t generating the returns I thought they would continue to generate, and, more importantly, units in areas where I thought would be more susceptible of being hit harder than average if there’s a downturn. I made a conscious decision to think about what I wanted to be doing what I didn’t want to be doing and then I modified my portfolio to match my thoughts. 

Robert Leonard  16:40

Where were these properties located? Both the ones you sold and then just your overall portfolio? What areas of the country were you investing in?

J Scott  16:49

We owned a lot in Atlanta. We owned a lot in a city about an hour and a half south of Atlanta, called Columbus, Georgia. We owned several multifamily properties in Columbus, Georgia. We owned a bunch of single-family rentals in Maryland. And we own a couple of things in Upstate New York. We were up and down the East Coast as these were areas that we knew well. We lived in Atlanta for a long time, so we knew the area and the suburbs. I grew up in Maryland, and we moved to Maryland, so I knew that area well. We had family in Upstate New York, so we knew that area well. We had some friends down in Columbus, Georgia, so we knew that area well. So basically, we were investing in the areas that we knew well, and that we had people that could help us manage our properties.

Robert Leonard  17:33

With the talk about where you think we are in the real estate cycle, I think you mentioned that you were selling some off in 2018. I think that gives a good indication of where you think we might be, but how does that impact your flipping? Are you still flipping to this day?

J Scott  17:45

Yes, I am. Flipping is one of those strategies that work in most parts of the market cycle. It doesn’t work during a recession when property values are dropping. You don’t want to be flipping houses then. Right now, I believe we’re probably around the top of the market, and the data indicates we’ve probably been at the top of the market for 6-12 months. We could bounce around the top of the market for another 6-36 months. Who knows how long again? I can’t predict when it’s going to happen, but I don’t think that we’re going to see a tremendous increase in values from here for a whole lot of reasons. But flipping still works. The strategy of flipping works, but the tactics that I’ve implemented have changed. I’ve modified a number of my tactics.

First of all, typically at the beginning of a downturn, the first parts of the market that start to soften and lose value are those parts of the real estate market that are well above or well below median house price. Let’s say you live in an area where the median house price is $400,000. Houses that are well-above that price point or well-below that price point, when the market starts to turn, those are the parts of the market that are going to soften first. That’s where the demand is going to be reduced first. Let’s say I’m flipping in a market where the average house price is around $300,000. I want the resale value for my flips to be somewhere in the $300,000 range. I’m no longer flipping high-end properties in those markets, because, again, when the market turns, that’s what’s gonna soften first; and I’m no longer flipping houses that are well below the median house price in those markets either. So that’s the first thing.

Number two, I’m not concerned that the market is going to crash in the next month or four. It might. It could definitely go down in the next month or four, but I’m not overly concerned that we’re going to see a major 10-30% crash overnight. Again, I don’t know for certain, but I’m willing to bet some money on that. I’m not as confident that we’re not going to see a major downturn in 6-18 months, so given that, I’m trying to keep my project short. I’m no longer doing those projects that are going to take me 12 months from the day of purchase to the day I sell. I’m no longer doing ground-up construction, which can take 18 months. I’m no longer doing big additions, which could take 6 months just to get permits. I’m focused on deals that are going to go quick. I’m focused on those deals that I can be in and out of in 2-4 months. That way, even if the market starts to turn, we’re probably not going to hit the worst part of the downturn before I’m ready to get out of those properties. So, that’s the second thing I’m doing: I’m keeping my projects quick.

For the third thing I’m doing, I think we’ve been really fortunate. The one thing we’re really fortunate about 2008 is it was a great barometer for how bad things will really ever get. Not going to say it’ll never be worse. We’ve seen worse downturns than in 2008. Back in the 1930s, we saw a worse downturn. I’m sure at some point in the future we’ll see those again. Again, history is the best predictor of the future, and at some point, there’s going to be a big downturn, another depression like the 1930s. It may be worse, but historically speaking, 2008 was much worse than what we can expect to see in the next downturn, or the one after that.

So, 2008 is a great barometer of the worst-case scenario. 2008 is probably a little worse than what is realistically the worst-case scenario. So what I like to tell people is to take a look in your area. Take a look at the data in your area, and see exactly what happened in 2008. Assume that that’s going to be your worst-case scenario. Don’t do any deals that you’re not comfortable with, with that being your worst-case scenario.

To put actual numbers behind that, we were doing a lot of flips in Maryland. I grew up in Baltimore, and we moved back there a few years ago. We just moved from there about 8 months ago, and we still do a bunch of flips in Baltimore. Back in 2008, we saw a market drop of about 13-14% in the areas where I was flipping houses. I knew that, again, assuming history is a good predictor of the future, my worst-case scenario in that area during the next downturn is probably a drop of 13-14%. It probably won’t even be that bad, but that’s more or less the worst-case scenario. So I knew that if I were going into flips with a cash on cash margin of at least 13 or 14%, we could see a 2008 type scenario, and I still won’t lose money on those properties. I’ll break even. My target when I’m flipping in those areas is to get at least 13-14% cash on cash return or margin on those deals, to keep from having any tremendous risk.

Now, I also did a lot of flips in Atlanta. In certain parts of Atlanta, especially where I was flipping back in 2008-2010. The market dropped 40-50%, and in some places, 60%. So, assuming that the underlying foundations of the economy in Atlanta haven’t changed, assuming the economy is basically the same as it was back in 2008, probably my worst-case scenario in the next downturn is a 40-60% drop in Atlanta. For that reason, I’m not doing many flips in Atlanta anymore because I can’t or I won’t absorb that type of loss nor subject myself to that type of risk.

So, I’ve been starting to do a lot more flips in Maryland. I’m starting to do fewer flips in Atlanta. And what I tell people is 2008 was a great opportunity to see what the worst-case scenario is in whatever area you’re in. Look at the data. If you’re a buy-and-hold investor, see what the market did with respect to buy-and-hold. Did market rents drop? Did the occupancy drop? What happened with cap rates? Because again, that’s likely to be your worst-case scenario in that particular area during the next downturn. If a deal that you’re considering can absorb that type of downturn, then do the deal. If it can’t, don’t do the deal.

I was really long-winded, but I just like to reiterate, look at your data in your market from 2008, consider that to be your worst-case scenario, and decide, “Am I willing to accept that risk of my next deal or not?”

Robert Leonard  23:57

I think that’s really good advice. I don’t hear a lot of people talking about that strategy of going back to look at 2008 and using that as a baseline for the worst-case scenario. I think that’s a really good idea. I think a lot of people should start doing that.

Now, we’ve been talking a lot about flipping, and we’ve been assuming that the audience listening knows what flipping is. But for someone who doesn’t, what exactly is the strategy of flipping? What does it mean to flip a house?

J Scott  24:22

Different people use the term differently, but generally speaking, you’re buying a distressed property, a property that is not necessarily in good condition, purchasing it, renovating it, and then reselling it to a retail homeowner, so somebody that’s moving in with their family. Presumably, because you’re buying it distressed, you’re buying it below market value, and the renovations you put in, if you choose the right renovations and you do them well, you can improve or you can increase the value of the property to the point that, when you resell it at market value to a retail buyer, there is a profit to be made. There’s a spread, and that spread is your profit on that deal.

Robert Leonard  25:00

I think that house flipping is probably one of the most popular real estate strategies, partly because of all the popular TV shows on HGTV, like you mentioned before, and partly due to the large returns that investors can receive, and usually pretty quickly. I think the shows and online gurus tend to make it seem like flipping is made for everyone, but who do you think the strategy is actually good for? And who should probably try to avoid it?

J Scott  25:26

First of all, I would say nobody should be taking those shows seriously. Back in 2014, my wife and I actually did a pilot for an HGTV show. It’s out there on YouTube. If anybody is a really good investigator, you can probably dig it up. It was very eye-opening. Literally, they asked us to lie about numbers. They asked us to make up stories and scenarios, and most of it was just acting. They had us pretend that I bought a house without my wife’s knowledge, which is something I’d never do. They had us pretend that we made a big mistake and lost tens of thousands of dollars on a mistake we made, which is a mistake we’d never make. Again, really eye-opening. They offered us a show, but we refused because we just weren’t willing to sign the contract that says almost flat out, “We can make you look bad. We can destroy your reputation. We can give you any persona we want, and you have to deal with it.” We just weren’t willing to compromise our reputation by doing a show like that.

The process was very eye-opening. One of the biggest things I learned was, don’t trust the numbers because, literally, they had us on camera, and we were talking about a deal for the pilot. We said we bought it for this amount. We put this much in it. We sold it for this much, and this was our profit. But the producer looked at us, and said, “No, nobody’s going to be interested in those numbers. You need to say you bought it for this, you put this much in, you sold it for this, and your profit was this.” He was literally telling us what numbers we should spit out.

After that, we actually looked at some of the deals because there were some housekeeping shows that were done in the areas where we lived, and we found a couple of houses that had been flipped on the shows. We looked at the numbers and compared them to what they did on the show. It was all lies. So, the first thing I would say to anybody that watches those shows, it’s entertainment. Don’t trust the numbers. Don’t trust the stories. Don’t trust anything. If you enjoy the entertainment great, but it’s not real life.

In terms of whom flipping is for, and whom flipping is not for, flipping is a great strategy for somebody that has the time, energy, money, and fortitude to deal with active real estate investing. Active real estate investing is hard. It’s tiresome. It’s frustrating. It’s stressful. A lot of things can go wrong. It’s a grind. Honestly, I don’t enjoy real estate. People are surprised when I say that, but pretty much, from the day I started flipping houses, I hated it. It’s part of the reason why I’ve always been big on focusing on building my business and hiring people to manage the day-to-day because I really don’t like it. But if you’re one of those people that don’t mind getting your hands dirty, don’t mind working really hard, got the cash, willing to study, willing to persevere, and willing to be frustrated, flipping houses is a great way to make money.

Now, that said, flipping houses is a horrible tax avoidance strategy, you’re going to pay more taxes flipping houses than you will have with a W2 job. Basically, taxes for flipping is the same as a regular nine-to-five job, plus self-employment tax, as well. So don’t look at real estate as a great tax shelter. Flipping houses is not a great tax shelter, but it is a great way to generate piles of cash.

What I tell people is that if you’re going to flip houses, you have to have a secondary strategy. Flipping houses maybe your active strategy, your way of generating piles of cash, but then you need something to do with those piles of cash. You’ll need to put it someplace where it’s going to generate passive returns for you. That’s why I tell people, “If you’re going to flip houses, make sure you have a secondary strategy as well.” Maybe it’s buy-and-hold real estate. Maybe it’s lending. Maybe it’s buying notes. Maybe it’s investing in even the stock market or into a business or something. You have to have a passive strategy that goes along with it because I’ve seen too many people that get into flipping, doing about 10-20 flips a year and making large piles of cash, but are just blowing it on toys, vacations, cars, bikes, or whatever it is that they love, and at the end of the day, they don’t realize it’s really just a job. And the minute you stop doing it, the income stops. So if you don’t mind having a stressful job that is capital intensive and be frustrating and requires really hard work, flipping is great.

Robert Leonard  29:43

I want to go back to what you were saying about the show. I was going to say the exact same thing about finding the numbers, and I’m kind of surprised that they would ask you to lie because real estate information is on public record. Anybody can go and find the data and find out the truth, so I’m surprised by that. But like you said, it is reality TV, in a sense, and it is just entertainment, so I’m not overly surprised. I do have to say that I do enjoy the show as entertainment, and I’m glad that the internet has become more mainstream. Because I think before the internet was really around, people would take those TV shows, learn from them as an educational source, and then try to replicate that. Whereas now that we have the internet, we have social media. We have everything that we could get to get all the really good information to go learn. I’m glad that that came around.

J Scott  30:25

Here’s the interesting thing for anybody that thinks the numbers might be real. You can prove that the numbers are not real just by virtue of the fact on most of these shows they talked about. I’ll use round numbers. I bought the property for $100,000. I put $50,000 into it. I sold it for $250,000. I made a $100,000 profit. On the surface, yeah, that seems right. $250,000 minus $100,000 that you put into it, and then the $100,000 you bought it for and the $50,000 you put into it. But even that is too simplistic. You’re ignoring your closing cost when you purchase. You’re ignoring your loan costs and your interest payments. Or ignoring your taxes and your utilities.

You’re ignoring your commissions, that you have to pay to the realtor on the back end. You’re ignoring your closing costs on the back end. Maybe you have transfer taxes. Maybe you have all these other costs that can literally eat up 10-20% of the sale price, so even in a best-case scenario, the numbers that they portray on those shows are ignoring all these fixed costs. All these holding costs and closing costs contribute to a reduced profit on your deal, and they never talk about those. So even in the best-case scenario, they’re fudging the numbers by ignoring those holding costs. And those are very real costs that you really need to take into consideration when you’re flipping a house. 

Robert Leonard  31:38

Absolutely! To your point about it being such an active strategy, I think that’s such a good point because I think a lot of people get into real estate because they want more passive income or tax preferable income if you will. And then they get into flipping and realize that that’s neither the case for flipping. It’s very active. I’ve even heard it be called buying another job. So it’s not really very passive. It’s really building up rather than, investing, if you will.

J Scott  32:04

I’ve heard people that have said, “Well, I’m doing a flip and it’s taken me like 9 months. I might as well just wait 12 months, and then I get long-term capital gains.” I have to explain. First of all, it’s not long term capital gains if you hold it for over 12 months. It’s not short term capital gains if you hold it for less than 12 months.

Flipping is literally ordinary income, and ordinary income is what you generate from a job. It could be a consulting business, you could have a nine-to-five job. Your tax burden is exactly the same. It’s based on your tax bracket and your marginal tax rate. Again, flipping is actually worse than having a job because the IRS considers you self-employed. So, not only do you pay taxes based on that marginal tax bracket your tax rate, but you also have to pay self-employment taxes as well, which can be another 6-12%.

Robert Leonard  32:52

Yeah, you’re paying all your employer side of the taxes that most people don’t really think of a lot of times and they get their paycheck.

J Scott  32:58

Exactly.

Robert Leonard  32:59

For someone who’s new to investing but they decide that they’re okay with the active part of flipping and they want to give it a try, what are the best ways for them to find properties to buy?

J Scott  33:09

So that changed, and it’s at different points again in the market cycle. There are going to be different strategies that work, different strategies that don’t work, or don’t work as well. Just to give some context, back in 2008 when I started, as I said, there were so many bank-owned foreclosures, these properties that were being sold right off the MLS, that I could just call up a real estate agent and say, “Find me a deal on the MLS,” and they could find me 20 deals in the next two hours. That strategy, just buying right off the MLS worked for 2-4 years, then that strategy stopped working.

So, we started doing a strategy called short sales, where basically people who were in financial distress and couldn’t pay their mortgage, negotiated with their bank to sell their property for less than what they owed on the property, and less than what they owed on their mortgage. We would go in and buy these properties for less than what the homeowners owed on their mortgage. That’s called a short sale. We were doing a lot of those from 2011 to 2012.

In 2012 and 2013, we started finding a lot of deals on the courthouse steps. Basically, foreclosures before they were taken back by the bank. So literally, you go out to where lenders and banks are auctioning off these properties in real-time, and you have to come and pay with cash to buy these properties, without a chance to look at them or to pull title.

We were doing that for a while, and then we started doing direct mail. Basically, we stopped finding these publicly listed deals, these deals that anybody could find by going on the MLS or going down to the courthouse. We had to start finding deals because things started getting tougher. We had to start finding what are called off-market deals. Off-market deals are basically where you try to contact potential sellers yourself. You can do that in a number of ways. You can knock on their door. You can pick up a phone and call them. You can send letters. You can put out what are called bandit signs, which are just those “We buy houses” signs. I know people that put up billboards. I know people that do radio advertising. But basically, you’re trying to communicate directly with potential sellers that haven’t yet decided to sell, and you’re trying to convince them, “Hey, maybe now’s a good time to sell. Give me a call if you’re interested.” That way, you’re not competing with 10 or 20 or 100 other people, you’re basically competing with that homeowner, convincing them to sell at a price that works for you.

So, between 2014 and now, essentially, it’s these off-market deals that have been the best way to find property because that’s the only way that you’re not competing with all the other real estate investors out there. And these days, there are so many other investors out there. All it takes is one investor who’s willing to pay too much money for a property, and everybody else loses out. And these days, there’s always going to be that one investor. There’s probably going to be 50 investors that are willing to overpay for a property, so going after properties that are publicly listed just isn’t a good way to find deals.

What I’m recommending people do is see what’s working for other investors in your area. In some areas, direct mail works great. That’s essentially where you send letters to prospective sellers. In certain areas, certain types of letters work better. For example, in many of the areas where we send direct mail, I’m a big fan of targeting what are called absentee landlords. Basically, these are people that own rental properties but don’t live in the same state where they own rental properties. In a lot of cases, that’s a sign that they bought the property, turned it into a rental, maybe live there, and then couldn’t sell it or didn’t want to sell it, so they held on to it as a rental. Maybe they were in the military and they bought a property. Every time they were stationed to the new location, they’d buy a property. That’s pretty common in the military. But basically, people that buy these one-off houses don’t really have a plan for them, and then it’s not uncommon that 2-10 years down the road, they wonder, “Why am I doing this?” Every time they have a turnover or a vacancy, and they have to travel to fix up the place, they get frustrated. If you can catch one of those landlords when they’re dealing with a frustrating situation, we’re targeting these out-of-state landlords.

Secondarily, we’re still doing some targeting of people that are in what is called what’s called pre-foreclosure. Maybe they’re 30 days late on their mortgage payment, or 60 or 90 days late on the mortgage payments, so they’re somewhat distressed. Oftentimes, these people, if you can offer them a good solution for how to get out under their mortgage without having to go through bankruptcy or foreclosure or short sale, a lot of times they want to sell their house and they’ll give you a good deal. 

There are a lot of ways that you can search for off-market properties. Again, direct mail is a great one. Knocking on doors, I know people that literally will just knock on doors instead of sending a letter. They want to save the cost of the stamp, so they don’t want to spend any money on their marketing. They would literally just go knock on the door, or they’d get a list of phone numbers, and they’ll text send ringless voicemail or pick up the phone and call. There are a lot of ways that you can use technology to hit sellers these days. And if you are persistent enough, and you’re not scared to get out there and really try and sell and do the cold calling, you can make a lot of money doing it.

Robert Leonard  38:08

Yeah, I personally could not go door-to-door. I could do some of the other strategies, but I could not do the door-to-door stuff.

J Scott  38:15

I’m the same way.

Robert Leonard  38:16

So let’s assume that somebody found a good property. They’re walking it, trying to decide if they want to purchase it for a flip. What are some of the major red flags that they need to watch out for? I understand that this is going to vary drastically from property to property, but just in general, what are some of the red flags that you look for?

J Scott  38:35

I like to tell people that most things on a flip have a pretty well-defined range of how much they’re going to cost. There are things that can be expensive if you have to replace a roof. A roof can be $5,000 or $10,000 on a typical house. That’s not cheap. But you know that your upper limit is probably going to be somewhere in the $10,000 range for a typical single-family house. Likewise, with if you have to replace a siding or cabinetry, countertops or flooring, some sheetrock or those sorts of things. All of those things have well-defined ranges. If you mess up on one of those things, you’re going to lose x number of dollars, where x is pretty well-defined.

The places that I tell people to focus on are those places where that x that the cost to fix something isn’t well defined; where the cost to fix something could potentially be more than the value of the house. Those areas are places like foundation repair. I’ve seen houses where, literally, it costs less to knock the house down and rebuild than it would be to fix a foundation problem. If there are foundation problems, better off no. Typically, it’s not that bad, but that’s a potential situation. Foundations can cost tens of thousands of dollars. So foundation’s, the first area.

Second is environmental issues. A good example is a septic system. A lot of people buy houses in areas where they’re not on the public sewer system. They have what is called septic, which is basically a tank in your backyard where all your sewage goes. The sewage kind of seeps through the tank and kind of gets cleaned up and then sent into the ground. But septic systems can fail. And if the assessed septic system fails, there’s always the possibility that you can’t fix it because of environmental problems. There are houses out there that have had septic systems that fail. Basically, if you can’t get public sewer access, and you can’t replace the septic system, there’s no sewage removal from the house, and that house is no longer livable, and the house value has gone to zero. So, I tell people to look for environmental problems. 

Next mold and termites. Those are two other big things where the cost to remediate can potentially be much, much more than anything else in the house. I’ve seen houses with mold issues. Typically, if it has a really bad mold issue, you’re going to see signs of it. I’ve seen houses that have had mold issues that have cost tens of thousands of dollars to remediate.

I’ve seen houses that you walk in and they seemed absolutely fine. I saw a house back in probably 2012 or 2013. It was a bank-owned foreclosure. We went, and the house looked great. We made an offer, and we came back to do a quick inspection just to make sure we didn’t miss anything. And I noticed that a piece of baseboard in the kitchen was really soft. I took a key, and I hit the key on different pieces of wood around the house just to make sure all the wood is pretty solid, and the key went right through the wood. I realized, “Oh, there’s a problem there. Termites.” So I started walking around the house, and I realized the house had been destroyed by termites. A lot of times with termites inside the house, you don’t see a lot of evidence if it’s in the framing or it’s behind the walls. Turns out this house literally needed to be taken down to the studs, and a lot of the framing needed to be redone. It was probably $50,000 worth of work just to remediate the termite damage that most people wouldn’t have found.

So it’s these sorts of things. Again, it’s the foundation, environmental, mold, and termites. Those are the four big things that I tell people to look out for, because those are the things that have no bounded cost for necessarily, and can really make the difference between not just losing money, but losing your shirt on the deal.

Robert Leonard  42:13

Once somebody has a good deal with good bones, a good property, and it’s set up to be a good success, how do they not blow it in terms of their renovation and upgrades? How does somebody know or how should somebody think about which upgrades to make, versus which ones not to make? Which upgrade options actually provide the biggest bang for the buck?

J Scott  42:34

Real estate investing flipping is much like any other business. You’re going to have competitors out there, and your job is to provide a product that is better than the competitor for a price that’s no higher than the competitor. It’s no different in flipping houses. You want to provide a product or house that is similar, maybe a little bit better than your competition, but not priced higher.

Let’s say you’re selling watches, and the average price of a watch is $200. You can go out there and you can try and sell a $5,000 watch, but you’re not going to have a whole lot of buyers that are looking at that price point. Buyers are looking at the median price point for watches in their market.

It’s the same thing with houses. The typical renovated house in your market sells for $200,000. Your house, at the end of the day, should probably sell for about $200,000. If you’re going to over-improve that house thinking that you’re going to get $250,000 or $300,000 in a neighborhood where all the other houses are getting $200,000, you’re probably going to be disappointed for a couple of reasons.

One, you’re not going to find a lot of buyers. Buyers don’t want to buy a $250,000 house in a $200,000 neighborhood. People don’t like to have the nicest house in the neighborhood. And number two, even if you can get somebody who might say, “Okay, I’ll pay $250,000 for that house,” it’s going to be difficult to get an appraiser or bank to give you a loan for $250,000 in a neighborhood where the houses are worth $200,000 because that’s not good collateral for the lender.

So, what I tell people first of all is to know your competition. Know what the average housing price in your market is, and that should be what you’re targeting. You also don’t want to target too far below market value because if you’re selling too far below market value, people will wonder, “What’s wrong with the house? Why is this house $20,000 cheaper than every other house out there?” Maybe it’s because you’re altruistic and you just want to give somebody a really great deal but most people don’t believe that. So typically, you want to target the median house price in your area.

Now you want to be able to do that, but you want your house to be a little bit better than the competition. If your competition has, let’s say, granite countertops, laminate hardwood flooring, and decent light fixtures, you want your house to have granite countertops, laminate hardwood flooring, and decent light fixtures. You could do a couple of upgrades. Maybe instead of laminate hardwood, use real hardwood. You could do a nice lighting package so that your light fixtures are a little bit nicer. You could do what a lot of people refer to as a sizzle feature. For example, you put like a really, really nice upgraded showerhead, or you put in a really nice kitchen range and vent fan. You do something that makes the house stand out, but 90% of your house should still be similar to all the other houses or all the other renovated houses in your neighborhood for a couple of reasons.

One, again, you don’t want to over-improve. Two, if you’re making it much nicer, you’re probably giving up a whole lot of profit, even if you can sell it for that same median price point. If you’re thinking of putting in an extra $20,000, you don’t need to because to sell at the median price point, you just need to be as good as the competition. So you’re giving up $20,000 in profit, potentially.

Next, people typically buy in a neighborhood because they like the other houses in the neighborhood. If your house is substantially different, even if it’s nicer, you’re going to potentially lose some buyers. What I typically recommend is to go walk through some of the other houses. Hopefully, there are other houses that have been rehabbed and are still in the market that your real estate agent can get you into. Go walk through those houses, see what the investor or the homeowner did when they renovated that house and target your house at about the same price point and about the same level of repair with one or two upgrades that make your house stand out.

Robert Leonard  46:22

What are some of the most common mistakes that you see new flippers make and how should they avoid those mistakes?

J Scott  46:28

One is over-improving. Like I just said, they’ll go in and they’ll say, “Okay, everybody has a carpet, but I really need the Italian tile” or “everybody has laminate countertops, but I really need the quartz countertops.” “I need the $8,000 kitchen appliance package because I want this to be a gourmet kitchen” when none of the other houses are. So, again, even if you can get your price, even if you can easily get a buyer, you’re probably just giving up money there.

Another big mistake that I see is under-improvement, where investors will use inferior materials that are lower grade than that of the competition. But the bigger issue that I see is a lot of investors will go in with subpar contractors. So maybe you’re putting in the same countertops, the same flooring, the same windows, the same appliances, and the same cabinets; maybe your house looks exactly the same as your competition, but if you’re using subpar contractors, that’s going to come up in an inspection. A smart home buyer or smart real estate agent, a smart inspector or a smart appraiser is going to see that there are quality issues, and they’re going to point that out to the homeowner. Even if you’re using the exact materials, subpar contractors, to save money, can really cost you a lot of money in the end. That’s the next thing I see.

Next, people that try and sell their houses without listing them on the MLS. I used to tell people to try and sell their houses without a real estate agent. These days, you don’t necessarily need a real estate agent, but if you want to sell your house, you want your house to be listed on the MLS. There are ways to do that without a real estate agent. There are what are called flat fee listing services where you basically put your house for a few hundred dollars or $1,000 on the MLS without having a real estate agent. But for those people who think that they can sell their house FSBO (for sale by owner), by putting it on Craigslist or doing other things other than putting it on the MLS, I’d say you’re probably diluting a very large percentage of buyers. Buyers these days are still coming through the MLS. People that have real estate agents. And the number of people that I see that don’t sell on the MLS because they don’t want to give away 2-6% because they want to save that money, they’re not getting a large buyer pool. That’s another one that I see people miss.

Here’s another one. I just saw somebody the other day do this, so this is top of mind for me. When you’re flipping a house, unless you’re flipping a $5 million or $50 million house, or a house where you’re gonna have one or two or buyers in the world, you typically want to keep your finishes as neutral as possible. You don’t want to do something that’s taste-specific, that’s too custom, that’s going to reduce your buyer pool. The reason why house-flippers are successful is that they have the greatest number of potential buyers to buy their end-product. If you go and make a house too custom, you do fancy wall colors, some type of fancy flooring, or rare cabinets that nobody ever sees, you’re basically shutting out a large percentage of your buyers that don’t have that fashion sense, that don’t come in and say, “Oh my god! Those are the Italian floors that Elton John has in his house.” Most people don’t have that. What they want to see is “No, everyplace else has hardwoods that are brown. I want to see brown hardwoods,” and,  “Every other place has standard quartz countertops. I want to see standard quartz countertops,” or “Every other place is painted beige or brown or some neutral gray. I want to house that’s beige or brown or neutral gray.” They can’t see past that neutrality, so don’t try and get fancy.

We learned this lesson when we first started out. My wife would literally spend hours and hours and hours at Home Depot, picking up custom lighting packages and custom faucet packages and custom color schemes for every single one of our houses. We were selling $100,000 houses and our buyers didn’t want custom. Even if they liked custom, we were spending too much money and we were wasting so much time trying to customize each of these houses that we were losing time, and time is money.

So keep things neutral. Do the same thing in every house. Doing the same thing in every house means you can buy things in quantity. We buy our paint in hundreds of gallons at a time because we use the same paint in every house, so we might as well get quantity discounts. We do the same thing with our appliances. We do the same thing with our flooring. We do the same thing with our cabinets and countertops. We do the same thing with everything. Our contractors never have to wonder, “What color am I supposed to paint this house?” I once walked into one of my houses where the trim was painted purple. What happened was my wife just wrote down a Sherwin-Williams number incorrectly. She transcribed a couple of numbers. My contractors, for some reason never questioned why we might have suggested purple trim. So they went out and bought this light purple trim to repaint it. These days, we use the same color paint in every house. We use the same color trim, same color ceiling paint, and that way our contractors never have to wonder, “Am I doing this right? Did they make a mistake on this?” They can buy things in bulk. So I always recommend to do things as neutral as possible and just replicate your finishes in every house.

Robert Leonard  51:33

Whether it’s the neutrality or just over-improving a house specifically for new investors, do you think that comes from people trying to build houses that they want themselves?

J Scott  51:44

I can’t speak for everybody. I know for my wife it was that she loves design, and she just enjoyed doing it. It was so hard for me to tell her, “No, we’re going to use the same color in every house, and you’re not going to go pick those fancy light fixtures. You’re not going to spend 20 hours shopping forever for every house.” Some people, I think, it may just come down to they enjoy doing it. They’re designers and they want to do it. I think for other people, they feel like they have to do it. They feel like every house has to be different and unique, but what you don’t realize is if you have a good product, a buyer is going to walk into one of your houses and buy it. They’re not going to look at five of your houses. So they don’t care that every one of your houses is different because none of your buyers are going to see more than one of your houses.

There’s actually a benefit. I mean, some of the crazy benefits that we’ve seen by doing the same finishes in every house are that there were times when our movers weren’t available to stage a house before we put it on the market. But we always wanted really good pictures on the MLS, so we could literally take pictures from previous houses that we had staged, and we could put those on the MLS. If we picked the right pictures, people would walk into the house and not realize that they were pictures of a different house because the carpet was the same color. The walls are the same color. We use the same staging furniture. We use the same light fixtures, the same plumbing fixtures. And so, we could literally use pictures from other houses and people wouldn’t know they weren’t from that house.

Secondarily, we used to have agents. Not so much anymore because again, there’s a ton of competition. But back in 2008 to 2013, when literally, we were the only house flippers in our county that were doing more than one or two a year, we’d have agents that knew our product. They knew what our houses would look like, and so they would call us and say. “I have a buyer for you.” It wasn’t I have somebody that wants to come to look at your house. It was literally, “I have a buyer for you. They’ve seen one of your houses before. Even if they didn’t get it, they know what your houses look like. They like that neighborhood. They’re going to buy your house,” because every one of our houses looks the same. We didn’t have to walk them through and let them decide if they liked it or not, because it was exactly the same as another one they might have seen.

So, why do people [over customize]? I think a lot of people do it because they don’t realize they don’t have to. I think a lot of it is TV. I mean, if you look at HGTV, all of the house flippers on those shows go out and buy custom materials because they’re on sale, or they’re buying something custom because it’s the latest fashion trend in house design. You never see them just using all neutral finishes. And people think, “Well, that’s what they’re doing on TV, so I should be doing the same thing.” It’s not the case.

Robert Leonard  54:16

Even if you had used the exact same everything for every single one of your flips, and you’ve done a lot of flips, I mean, over 400 flips, that’s a lot, but that’s still small in terms of the number of houses that are in a city, right? I mean, you’re talking the suburbs of Baltimore, even if every single one of those was in Baltimore, that’s tiny.

J Scott  54:36

Right? Nobody’s going to see multiple of our houses anymore. There was a time when they would because we were like the only one doing renovated houses in our county back from 2008 to 2010. But these days, I mean, there are hundreds or thousands of houses and even if they did walk into three of our houses, they wouldn’t make that connection that they were all the same finishes.

Robert Leonard  54:56

Even if they did, you’re keeping it neutral. Which should fit a lot of people, and then they can just pick, “Oh, this has two bedrooms, but there’s three bedrooms or four. This is in the neighborhood we want or the backyard that we want,” or whatever it may be.

J Scott  55:08

Exactly.

Robert Leonard  55:09

I know early on, my business partner and I would walk into properties and he’d always want to fix things the way that he’d want to live in it. You know, he’s always lived in nice houses, so he’d always want to over-renovate just because, and I have to remind him, “This is going to be a rental, maybe not in the perfect part of town. So we don’t necessarily need to have all of the best materials in here.”

J Scott  55:29

Exactly, and I’ll tell you when you’re doing a rental, it’s actually looking forward not just neutral, but you want to fortify your properties. So you might have a nice carpet or nice hardwood, but in a rental, I’d rather have a lot of time because it’s more sturdy. I’m going to spend more on granite versus laminate countertops, even if laminate is more common in that area because I know the granite is going to last for 10 years. I’m not gonna have to replace it every two years.

A good rule of thumb with rentals: as few moving parts as possible. Don’t have fans if you don’t need them. Don’t have garbage disposals if you don’t need garbage disposals, because anything that moves in a rental is going to break. So few moving parts as possible. Yeah, it’s a whole different world.

Robert Leonard  56:10

It’s funny you say that. My dad’s a mechanic, and he gives me the same advice when buying cars when it comes to all-wheel-drive cars. I ride four-wheelers, dirt bikes, things like that. Same thing with that. If you want to buy a four-wheel drive, it’s just twice as many moving parts that you’re going to have to fix.

J Scott  56:23

Exactly.

Robert Leonard  56:24

So as we near the end of the show, I have two questions that I want to wrap up with. And the first one is: What is a common piece of real estate investing advice that you often hear given that you think is potentially misleading or just incorrect? And how would you make that true?

J Scott  56:39

That’s a really, really good question. So a lot of people think that to be a good real estate investor, you have to know what people affectionately refer to sticks and bricks. You’ve got to understand the contracting piece of it. You have to know how houses are built. You have to know how contractors work and how to estimate, and how to schedule.

I have built my entire real estate career on knowing as little of that as possible. Obviously, I know a lot of it. I’ve written books on the topic, but there are plenty of people out there that know so much more about construction and scheduling and budgeting and contracting than I do. And the reason I think I’ve been successful in this business is that I don’t focus on those things. I focus on bringing in people and surrounding myself with people who are really good at that. I focus on having great project managers and great contractors and a great general contractor. And so, for anybody out there who thinks, “I can’t be good at real estate because I’ve never done contracting,” literally, my wife jokes that when we got married and bought our first property, I didn’t know how to change a light bulb. I was an electrical engineer that practically didn’t know how to change a light bulb. It’s 12 years later, and I still barely know how to change light bulbs, but I run my business like a business, and I focus on bringing in smart people that know how to do those things.

So the biggest misconception is you have to be a good contractor to be a good real estate investor. And if anything, I like to think that being a good contractor is a hindrance, because then you try and do too much yourself. You don’t step out of the day-to-day role and focus on building the business. The best real estate investors are the ones that don’t spend their time at the houses. They spend their time looking for deals and looking for the money to buy those deals. So don’t think you have to know about contracting and real estate. You just need to know how to run a business.

Robert Leonard  58:35

Yeah, I think that’s definitely a very good misconception to point out because I had that exact same misconception. I mean, I’m an accounting finance person, by trade. I can barely swing a hammer, so I didn’t think I could become a real estate investor. I never thought I was going to be able to because I’m probably one of the least handy people you’ll ever meet.

And the final question to wrap up the show is: What has been the biggest thing that you’ve learned from interviewing some of the best minds in the business on your podcast?

J Scott  59:03

I’ve learned so much! We’ve gotten to interview some amazing people. It’s funny. People know the big names. We’ve interviewed Barbara Corcoran; and Jay Papasan, who is Gary Keller’s partner in writing The ONE thing; Mike Michalowicz, who is the best-selling author for Profit First, which was one of my favorite books ever. But the nice thing is, we’ve also interviewed a lot of people nobody has ever heard of. And these are the people that are really inspiring. These are the people that make you realize that it doesn’t matter if you don’t have a college education. It doesn’t matter if you don’t have a business background; if you don’t have an MBA; if you’ve never started a business before. These are the people that make you realize that anybody can be successful in business if you follow the process. You work hard, surround yourself with smart people, and focus on making good decisions.

There have been so many people on the show that they’re the first to say, “I don’t know how I got successful. I shouldn’t have gotten successful,” and yet they did. And so it’s just a great testament to the fact that anybody can be a successful business person. Especially since we’re talking about real estate here. Real estate as a business, and people that focus on real estate as a business as opposed to a hobby, as opposed to being a contractor and going in and doing the work yourself. Those who focus on real estate as a business are the most successful business people. And so that’s just the best thing about doing the business podcast. It’s just talking to everyday people like you and me and other just small business owners that have been successful despite the odds.

Robert Leonard  60:34

J, thanks so much for your time. Like I mentioned at the beginning of the show, we’ll probably have to have you back multiple times to cover everything that I want to cover, and I’m already looking forward to that.

J Scott  60:42

Coming back anytime you want!

Robert Leonard  60:44

Awesome! I’m looking forward to it! So for those who have joined this episode, and want to connect with you further, where should they go?

J Scott  60:51

So I’m gonna do a little plug again for the podcast because that’s my baby and my wife’s baby. My wife and I are hosts of the BiggerPockets Business podcast. I hope people will tune in. For anybody that wants to connect with me, my website is jscott.com, just like my name. I am on Facebook and Instagram, @jscott_123flip. If anybody wants to reach out to me, they can catch me at my email, which is j@jscott.com.

Robert Leonard  61:20

I’ll be sure to put links to all the resources that J and I’ve talked about throughout the show, as well as everything he just mentioned so that you can go connect with him. I also put links to his books in the show notes. So if you guys want to go check those out as well, you can definitely do that.

J, thanks so much for coming on the show. I really appreciate it!

J Scott  61:37

Thank you, Robert. I really appreciate it!

Robert Leonard  61:39

Alright, guys! That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week!

Outro  61:45

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