Deals & Dollars: Real Estate Investors and Entrepreneurs
Welcome to the Deals & Dollars Podcast, hosted by David Choi, Eric Panecki, and John Libretti, three real estate executives from the New York City metro area. Every week, they bring on the best real estate investors and entrepreneurs they know to learn about how they got started, how they source their deals, and -- most importantly-- how they make their dollars.
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Deals & Dollars: Real Estate Investors and Entrepreneurs
The Good, Bad, and UGLY of +700 Wholesale Deals w/ Adam Devine
On today's show we have one of the partners of PurchRock: real estate investor Adam Devine.
From the ice rinks of hockey to the high stakes of real estate, Adam Devine has spent his entire life chasing excellence. A fellow CG Member and long time friend of the show, we're excited to have Adam back on the podcast and in our Newark studio. On our newest episode, Adam lays bare the emotional rollercoaster from a career-ending injury to co-owning a leading wholesale operation, PurchRock.
This episode is chock full of great advice and dramatic stories. Adam tells about how he grow his business to a $2,000,000 a year operation, how the business hit turbulance during the pandemic, and the strategies they're using to come back stronger than ever. We explore the profound impact of a solid foundation and a synergistic team in building an enterprise that not only withstands economic gales but sails forth, ever stronger. It's about sharpening focus on a singular, well-executed business model, a lesson learned in the trenches of rapid expansion. Our conversation serves as your compass to guide you through the complexities of scaling a business while maintaining the equilibrium essential for long-term success. Let's get into it!
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So that's the storyline for me reaching out to Bob to work in a forum at his VA company to get him fired to now be a business partner.
Speaker 2:Wow, what a story. What a freaking story. Three, two, one go All right. Today we have Adam Devine, probably one of my favorite people from Collective Genius. This guy not only is just a great human being, a true, true go-giver. Every time I see him, he tries to add value to my life. He's always checking in on how I'm doing and he's always one phone call away from giving me life-changing advice. Not only is he a great dude, but he runs a tremendous operation. He does wholesaling, novation, fix and flips hotels I mean, he does pretty much anything that has to do with flipping real estate throughout multiple states and probably runs one of the biggest wholesale operations in the country. And so, adam dude, thank you so much for coming on the show today. How you doing.
Speaker 1:Joey. What's up, brother, it's great to be here. The king of New Jersey rocking and rolling. Here he is, folks, it's great to be here. I appreciate the intro, brother, and it's always good to collaborate and connect with you, my man.
Speaker 2:Love you, man. Again, I appreciate you coming down here and I know you're a busy dude. So for you to take an hour, two-hour drive to come on the show, it really means a lot, not only to me but for the guests. I'm sure you're going to add a ton, a ton of value. Look so I know you really well, but the guests don't. So why don't you just give us a little background on who you are, where you came from and kind of where you are now?
Speaker 1:Yeah, absolutely so. My name's Adam Devine from Hampton, connecticut, 31 years old. I've been in real estate now for eight years. I got into this when I finished up school Kind of a funny path to getting here. So I'm going to backtrack a couple years prior.
Speaker 1:I grew up playing very competitive hockey. I played in high school, I played in prep school, played junior hockey, which is what you play in prior to either going professional or playing in college. For me, I was going off to play division three college in Framingham, massachusetts. So I commit about a month before school. I have a career ending concussion it's like concussion number eight or nine. So, doctors, you're not going to play hockey again.
Speaker 1:I'm waking up every day. I got migraine headaches, I'm in pain, pins and needles throughout my fingers. I'm like things are not right. So I actually played the responsible card and said, hey, we're done. You know it was a very devastating and depressing thing to do, cause it's all I knew.
Speaker 1:I grew up playing hockey. A buddy of mine reaches out to me. He's like hey, would you come to Marist College Gets me in a couple weeks prior to school. I go there for a month and I immediately drop out. I was forgetting where I was parking. I was mind blown. So I got to the point where I'm like I need to check out of here and just take care of my health. So I go home smoking weed every day, drinking every day. I'm drinking every day, just not in a really good spot. I go into like a three-year spiral of depression and finish my degree online. While I'm in that time I realized that I wasn't employable and every time I've ever had a job including I'll get to that story my business partner I've been fired from everything. So, funny enough, I finished up school. But during that time I saw online a guy named Nick Ruiz wrote a book called flip on how you can buy real estate and flip it without owning the property. I'm like this is brilliant. I'm in go.
Speaker 1:I finished up school in 2016. I'm going out there trying to find properties, contract them, buy them and sell the contract. I'm falling on my face. Funny enough, my business partner today, bob. A chance I'd reached out to him. We connected. I ended up working for Riva Global, which is debatably the biggest and best VA company in the business today. I think Bob's at about 1200 VAs now, but for us. I jumped on board. I was a sale manager. He fires me from that and here we are today, so I continue to real estate. I got licensed in 2017. I got my broker's license in 2021. A lot of pitfalls and bumps to get to where I'm at, but you know, if you have to go through failings, I always say you gotta, you gotta lose to learn. Yeah.
Speaker 2:I think the biggest growth happens during the most painful times and I'm sorry that you went through that. I'm sure it was really difficult to lose to lose hockey due to concussions. You said that you got fired from the sales manager job at Bob's VA company. How the hell did you end up from being fired to end up becoming owner of your wholesale operation with Bob?
Speaker 1:Yeah, that's a great question. So in May of 2016, I sent Bob a Facebook message. I knew Bob from playing men's league and I reached out to him at the time hey Bob, how's everything going at Fortune Builders? When he had helped start that company up, which most of us know today, fortune Builders being one of the biggest coaching programs I knew, this person had success and it was someone that I wanted to follow a path or be able to work with, being a top player in the industry. I will learn right. We all look for mentors. Not all mentors are created equally. You need to find people that you can align with him.
Speaker 1:He's a hockey guy like I'm in reach out, of course, no response. I'm reffing one of his son's games on a Sunday. This is like November 16 skating up and down the ice. He's yelling and screaming at me back and forth and I'm like who the hell is this coach? I look over my shoulder. I'm like that's the chance, so I bite my tongue. They win the game like 12 to 1. Doesn't shake my hand at the end of the game.
Speaker 2:I'm putting the nets up on the moorings as the Zamboni's cutting the ice.
Speaker 1:I'm like, ah, screw it. I was like, excuse me, coach. He's like what? I'm like, are you Bob LaChance from fortune builders? Like his face drops? Oh, hey, how are you doing so? Like total different person. I told him hey, I got a couple of deals going on. I'm falling on my face right now. Would you be interested in sitting down to go over it?
Speaker 1:Long story short, we sit down in a coffee shop twice. I jump on board as a sale manager there. Um, I'm going to events, I'm flying around, I'm selling to today some people that are still in cg. Guys like eric brewer bought one, uh, billy alvaro. So I learned a lot about the industry while we were also doing wholesale in our own fix and flip, but never treating it as a business. Um, right before my 27th birthday, I figured I knew enough. I'm like, hey, bob, I've here two years. I watched him go through a partnership breakup and what he did to salvage the company fly over to the Philippines for two weeks, literally no sleep and what do you build back. So I was always on board. I'm like, dude, this, this guy's a true leader. Um, but I wanted more. I wanted to make more. So on a Saturday morning, right before my birthday, I put a nice 10-page presentation together on why I should own 50% of your company.
Speaker 2:Wow, so I delivered it.
Speaker 1:The delivery was right at him. My PI is a captain, so you can imagine my approach to that. Baba kind of found it a little comical. And then that Monday, the day of my birthday, I got the boot Best thing that ever happened, wow. Funny enough, I had sent him and his wife a letter, cause his wife had ran the medical division. I had sent Beth in Bob a letter saying hey, listen, appreciate everything you guys did for me. I learned a ton from you, thank you, um, I never met anything by coming in aggressive. I just wanted to grow. I wanted more. I saw a vision here for us. We'd go to lunch every day, spend a lot of time connecting on different things, whether it was sales, real estate. So this day I talked to him. I don't know how many times a day, but I had said at the end of the letter I said you and I will be business partners one day. Sure enough, gives me a shout in August about doing some acquisition stuff, and you know we continued to move that forward. So that last part of 2019, when we reconnected, we stayed in touch, but it was nothing consistent.
Speaker 1:I had paid Bob about $7,500 that he had no idea was coming his way. So this is for deals that had closed. I had closed through the brokerage and I paid him. I said, dude, this is a business, this is January 2020. He's like, no, what's this money for? I'm like, dude, these are for your deals that closed. He's like, wow, you know, thank you. So the loyalty and the trust was built through that credibility to say, hey, listen, this isn't my money. You were sending me these leads. I closed them. I'm like, dude, this is a business. We got to stop doing one-off deals, right, all right, let's map this out. Sure enough, we did, and here we are today. So that's the storyline for me reaching out to Bob, to working for him at his VA company, to get him fire, to now be in business partners Wow.
Speaker 2:What a story. What a freaking story and I know about your personal financials, like between you and Bob and the company, and it's just it's it's incredible what you guys have done in such a short period of time. You said that you started the business fully, the whole the, the, the flipping wholesale operation per truck in 2019. Yep, it's only been five years, dude. That is absolutely incredible. It's amazing. I know that over the last two years has been I guess the last year has been really really rocky for you.
Speaker 1:Yeah, absolutely, and really glad you hit on that. I think a lot of people are really big on sharing the sunshine and rainbows of the business and they're not really ready to talk about the truths of the realities that actually make people successful, which is the thunderstorms and the lightning. So we had went through quite a bit of a roller coaster, if you will. You know, from launch to growth to a bit of a step back into a launch right In the beginning of 2023, we'd brought on COO. We were looking to bring on a recruiter, which we did At peak. We had two recruiters. We had several TCs, several administrative staff, 15 virtual assistants. We were at peak at about 42 people in the company. So for us, we saw a real big avenue of growth to say we can go and take this to the next level. We had actually got to see another CG member's office at the time, back in January, and what they were doing running a company doing 1,000-plus deals a year. So to us, we're sitting here like, wow, you know, we have the marketing, we have the lead gen, we figure out the right markets and the personal strategy. There's a real model here. What people do forego and miss is what goes into building that and for us we didn't take time, as Jason always shows you right. And that first day of CG, that house, that time as Jason always shows you right and that first day of CG, that house that's standing on the beach right after the storm we didn't take time to put the right foundations in place right.
Speaker 1:I'm big believer of wholesale being known as a human capital business. People say it's a sales business, it's a marketing business. In order to have a sales organization in a marketing department, you need to have human capital behind it to drive it. So those particular verticals do not exist without the component of people inside your business. We just had the wrong people in the wrong seats. We had people that were very greedy, self-centered. You do get that from time to time and it's really important that you're doing things like PI and you're interviewing folks and you really run a strict and rigid process to bring in people on board. So one of the things we didn't do is doing our due diligence right, bringing on the wrong people, just trying to fit people into the box and then those leadership positions. If you don't realize and really do, let's just say a basic background check on the people you're putting into those positions of trust, you can really really put yourself in a bad position, and that's what we did. We had to remove some people from leadership positions.
Speaker 1:Ultimately and it's been a blessing, right we would not be where we're at today, and the trajectory that this company's going on right now and where we're headed into 2024, after Q1, has been impeccable. Right. Leadership is great between myself and Bob. We have a phenomenal director of operations who's she stepped in. She's done a great job for our team, our culture, our recruiter that's in place, our team lead on acquisition.
Speaker 1:So we've really done a good job by being able to take a step back and say, hey, what can we do to learn from this? Right, sometimes you get the blessing you want in life. Sometimes you get the blessing you want in life. Sometimes you get the blessing you don't want. Either way, it's a blessing and you have to turn that into a positive and being a glass half full kind of person. We've been able to learn on what not to do. We hear about people in CG going through partnership breakups and getting into potential lawsuits or any type of disagreement with former employees or partners. It's a great opportunity to say I'll never make that mistake again, and that's how you learn.
Speaker 2:So it's been great For someone who I mean from. Can you just kind of walk me through what the revenue I mean? First off, adam dude, thank you for being super transparent and vulnerable about what happened and just talking openly about the mistakes that you made, and I really admire your positivity here because, um, a lot of people take those hits and they don't come back. When, when you lose, I mean I think more than you lost like almost 50, more than 50 of your team at a point, right, safe to say, yeah, I mean people go through that and they don't come back. But I know where you guys are now and the growth trajectory that you are now and things look really, really good this year. So can you kind of just walk me through what you have in store for 2024 and how you're going to grow this business with the learnings that you, that you know from the things that you learned in the prior?
Speaker 1:Yeah, that's a great question. So we can talk about a couple things here. A lot of people always use the word scale. Right, super sexy Scale, scale, scale growth, growth scale. Another vertical, another business avenue. It's like you know, business ventures it's slow down.
Speaker 1:Right, we were just very gung-ho on wholesale. Right, we do predominantly wholesale novation. Right, we're putting our deals in the MLS, get the most amount of buyers and transact in a very ordinary basic way. Right, we don't try to do, we're not doing fix and flip anymore. We don't have the company rentals. That was the scale.
Speaker 1:Right, let's continue to grow that, but it has to be done the right way. So for us, our biggest thing now is let's grow a sustainable business. Sustainability has way more validation than scalability and I'll tell you why. Because if I have a sustainable business, I can weather any economic cycle or storm. I've built the right team. I've built an indestructible business. I've heard Kava talk about that in CG and always stuck with me.
Speaker 1:If you look at the business that Frank built, he built a really good wholesale operation, a really good fix and flip company, a really good rental business with 300, 400 single family homes. He built something that's indestructible and always talk about that where, if the market shifts, he has the equity and the capital to persevere. And that's exactly what we did. And I look at wholesale as if you run the business correctly with the amount of leniency and being lean enough to actually weather those storms. When you have those types of pitfalls, they don't affect you as much. I'm a big believer of capital in the bank right, we have a really good capital position. How did we do that? We stayed responsible and disciplined. We didn't go and buy a ton of rental property. We cashed in and we focused on what was our baby. That's wholesale. So if something happens with personnel, you can have a longer runway for that burn rate. That's the only way you do it Right.
Speaker 1:I think the biggest thing to take away is for those who've ever read the book traction Gino Wakeman talks about in the book. I don't remember word for word, but it's something along the lines of do you want to run a hundred million dollar company at a 5% profit margin or do you want to go run a $10 million company at a 50% profit margin? Most people pick the a hundred million. Well, I tell you what, when you start to grow a bigger company, you have way more headaches of worrying about who's trying to stab you in the back, who's trying to start another company, who could be, you know, stealing from you. When you run a nice, tight business and you're putting all that money in your pocket and you get a nice lifestyle, it's pretty nice.
Speaker 1:And you've got to ask yourself, at the end of the day, what do you want? Do you want to go public and sell? I mean, how many wholesale companies do we see trading on the regular? Anything's possible. We don't see it. It's not a common thing. Those who are smart, like yourselves, they start a lending arm, they create another vertical that has success. They buy rentals, like yourself, but they put themselves in position to make sure that first vertical is set up for success to that second line of business, because otherwise you end up in a situation where the tumbling comes down all at once and you may not have the capital weather that storm. So take a step back. Always look at it how do I build something sustainable that then can be scaled?
Speaker 2:I love that man. I think that's great advice and I think that's kind of the theme of CG over the last year or two. You need to create a castle, and so many people that I meet in the real estate industry that are, you know that have a hundred, 200, $300 million portfolios, billion dollar portfolios. They all say at one point in time they lost it. Most of them say I lost it all and I had to start all over again in my mid forties, in my fifties. He goes Dave, that was the hardest thing I've ever gone through, rebuilding when you and getting divorced and just it's. It's terrifying to me because you know, like, as a business owner, am I creating a castle or am I creating a business? That's just scale, scale, scale, scale, scale.
Speaker 2:And I think that just being surrounded by people like you, it's something that I'm being more conscious of. You know what? Instead of taking the couple hundred thousand dollars of profit that we made this quarter and dumping it back into higher growth, like into marketing, and try to create more revenue the following quarter through direct mail or this or that, why don't we just keep some in the reserves? Right? Let's set up a bank account where, in the event. We made $0 for a year, like we're good to go, we still survived. And I think that's kind of a battle like of like I'm a maverick right, eric's adventure. We're just heavy freaking risk takers. We just want to grow, grow, grow, grow, grow and it's grown right, but at the cost of sometimes going to bed and being like, oh my God, things are really really tight, right, we're losing a lot of money and I don't know how we're going to survive over the next few months if we don't turn this ship around. And so for you to have the discipline to say you know what, we're going to just cash up, we're going to cash up and we're going to create a castle for ourselves.
Speaker 2:I mean, I know you own three rentals just free and clear. You own your primary residence free and clear. You bought your Porsche free and clear, right, like these are things that I think wise men have told me to do, but I just not have not listed to just yet, and so this was a really helpful reminder for me. Like the lever the portfolio right. Take more you know, pocket more money, have more retained earnings at. The lever the portfolio right. Um, take more you know. Pocket more money, have more retained earnings at the end of the year instead of dumping it back for growth. So, uh, dude, I think that's that's really practical advice.
Speaker 2:Uh, but getting back to you, adam, um, you know you guys have had like I mean, insane deal flow. I mean like we're doing not nearly as much volume as you guys are doing and like it's you're doing it on such a lean, freaking team. I mean you have one TC right now closing like 1718 deals. I think you had two TCs to like a year ago closing like 3540 deals a month. Like what's the secret, man, how are you getting that much deal flow?
Speaker 1:Yeah, I mean we didn't really top that exact number. We were pretty close. I mean, to have that kind of volume going, how to do it just so lean? It's just right, people, right, we have a rockstar TC. She's a freaking beast. Right. She's been in the business, I think, 20 plus years.
Speaker 1:Great attitude, great culture, fit team player whatever it takes mentality. We're fortunate to have that right. Same with having Bob as a business partner, right. So I mean, if you look at what Bob Lachance has built right over at Riva Global, we have everything at our fingertips, essentially costs and I say it all the time, just being very humble, Like we wouldn't be where we're at today if it wasn't for the partnership and what he brings to the table. I have my brokerage, so we don't have to pay to sell any of our deals. Right, Everything runs through the brokerage for free cost. I could eat that for the VA business. Bob's able to run it through there and we're paying for everything, again at cost. So when you think about getting going in this business and having that marketing channel at your fingertips, we could direct wherever we want to go. Right.
Speaker 1:In 2021, when we went virtual for hedge funds, we did, I think close to 38 or 42 deals with HomeSource Back in Q3 of 2021, we went live for Adam Rich. The only reason we were able to do it is because we had VAs at our fingertips. We're going to target into Arkansas. We're going to go into Alabama. This is our price point. This is our asset class. Start running the marketing. We could tweak the script. So I know a lot of people talk about outsourcing that there is no way in the world we would be able to have the same ROI that we have with what we get in-house with Riva Global, that we have in any other company, and having that at cost and being able to tweak a script, a call process, a technology piece, a software tool. We could do it at the snap of a finger. So we're already lean there. And then for us to then get the right people in the right seats. It's not about having volume. We've already went through that problem.
Speaker 1:I'd rather have a team full of A players that's a third of the size of a team with a bunch of Bs and C's. You kind of look at, say, Doug and Damon. Look what those guys have built. Massively lean, Massively lean, Crushing it, Simplistic, Own, free and clear rentals. Those guys get it.
Speaker 1:Because here's the thing so many of us get focused in this business on scale, scale, scale, sell, sell, sell, trade. You know company's going to buy me out for $50 million, Like, okay, guys, great, Love the mindset, the positivity, the optimism. Let's take a step back and look at the reality. I don't have a company sold yet. I don't even have a company that I know that would buy a wholesale company. I'm sure there's somebody out there if I build the right enterprise. But am I more likely to go out there and get in 10 years 20, 30 million in free and clear SFRs which I know, people that have done that through appreciation and equity pay down as well as build a wholesale business that could have five to $10 million in free and clear capital? That's really attainable.
Speaker 1:And what kind of damage can you do in the financial world in your own life? I mean, if you have 20 to 30 free and clear rental properties, 20 to $30 million of that equity, you sell them all, you're done. You have $10 million in your bank account, you're done. Why do you need to sell at that point? These businesses are so volatile. There is so much mitigation that has to take place because they're ever-changing businesses. One year you might be doing a certain marketing channel and then it gets turned off. Then you're doing a certain type of deal strategy and then there's a whole new legislation in place. Like what are you trying to tell me about selling to PE? Pe's going to say, okay, what's the SWOT analysis in this business? But you know what the SWOT analysis on rentals, Hedge against inflation, Equity, pay down Tax benefits, Depreciation Tax benefits, depreciation cash flow. I mean it's a no-brainer. Just simplify what you want Get cash, you can't lose. That's my motto, right? If you have cash, you can't lose.
Speaker 2:So you said you have a rock star TC. What's she look like? Does she work like an animal? Tell me about this girl.
Speaker 1:Good processor. She's been in the business. She understands how to do it. How long? 20 plus years, wow. How old is she Started out, say, mid-40s Gotcha? Yeah, she's just a savage.
Speaker 2:Yeah, what kind of PI is she?
Speaker 1:I don't know.
Speaker 2:Captain type no no.
Speaker 1:Not a pusher, no, not one of the social profiles Just does a good job right, really Gets it. I think those people exist almost in a lot of different categories. How well do you train? How well do they fit into your culture? How experienced are they? You know, gary talks about it a lot of time. Gary Harper's like hey, listen, you know, does this person have experience? No, Okay, well, if their profile and their PI doesn't match up, match up, it's going to take significantly longer to train them. If they have that low COG score, now let's say that same person has that low COG score and that PI, that doesn't align. But they've been doing the role for, excuse me, 10 plus years and they have that succession and experience. Nothing trumps that. You'd be foolish not to at least look at that person and say how do you fit in? Experience is just, it's inevitable. You can't buy it, bob and I talk about it all the time Bob has more experience and wisdom than I do, right? He's, I think, 49, 50 years old.
Speaker 1:He looks good bro, bob's a stud, the guy.
Speaker 2:I don't know he doesn't. Holy crap are you?
Speaker 1:kidding me. Five, six vodkas a night and goes to the gym the next morning at five. Yeah, that guy's a whole other animal, he's a beast, that guy's an animal, but yeah, he's a social butterfly, to say the least. But if you look at someone like that, right, he has so many years of experience. Now you've got to really be humble, especially in our age. Right? You've got a lot of millennials and younger guys that are saying, hey, listen, I want to get into this business, but I don't need to listen to anybody. Take a step back, back, look at what somebody who has more years, more tenure, maybe you may want to just listen to them. Just maybe right and sit there. And I always try to say this be curious, don't be judgmental, right? Always be curious. You don't have to align or agree, just be curious to understand it. You might get something from someone.
Speaker 1:So I went on a bit of a tangent there, but I think there's a lot of components that go into finding the right people. It's training, it's your onboarding process right. We have good operations in place to making sure that the people we bring on have success. But again, finding talent's really hard and I think it's hard for anybody. Wow.
Speaker 2:Wow, I guess, like someone with that much experience 20-plus years of real estate experience as a transaction coordinator or a processor or paralegal you kind of plug them into the role and they're just going to kick ass, no matter what, If they like our good culture fit. Yeah. Does she work hard? Yeah, absolutely. She takes calls on weekends.
Speaker 1:Reliable. Reliable, we have it in our office. This goes for everybody. We do have a you know policy of you can go at any time, right, we don't clock your days of the year. All right, you get 14 days off for vacation. You exceed that?
Speaker 1:you have to have a conversation and do put you on an improvement plan we just don't do that right we believe in trust and if you want people to come in here, be great, you need to understand what their purpose is. If you have a family your mother, a father of to three kids you got to take your son or daughter to practice, but we know you're going to, later on, get that work done. That creates a huge trust component. And when that person on your team is able to complete that task whether it's at a later time, but we know they're going to get it done Not only are they going to be more bought into your company and culture, they're going to work harder knowing that you're willing to give them what they need.
Speaker 1:It's a push and pull. You can't just be a dictator and for me as a leader, I had to learn a lot of that. I've grown a lot over the years because where I was, I just didn't know what I didn't know. There's the things we know. There's the things we don't know. There's the things we don't know. We don't know.
Speaker 1:I was in phase three and that's where I'm fortunate to have people like bob um to work with, because he could say dude, like you can't do this right and here's why. But sometimes we don't take time to self-reflect or we don't even know what to reflect on. Kind of read the book principles by ray dalio, so like be really consciously wise around who you surround yourself with and what their experience levels are, you know anyone can say I'm crushing it. I'll take someone at 50 years old that's crushing it, like a Billy Alvaro who's been through probably more storms than anyone ever before. I love his story. It's crazy.
Speaker 1:Then like a kid who's like 30, that just kills it. The people that know how to face adversity and overcome it have way more value than the person that's never seen it, for sure it's dude, it's I love.
Speaker 2:I only really like people. I'm not gonna say that I like a lot of people, but I really only like Truly build meaningful relationships with people that have been through the ringer. They have some trauma, they have some scars, because that builds character man and when you look at that guy and you're going to war with him or you need him to have your back that much or is going to persevere no matter what Dude. So the company is a lean, mean operation. Profits are you're crushing it right now. What's next? Like, what are you going to do? Are you going to stay lean? What's the plan for 24, dude?
Speaker 1:Great question. So Warren Buffett always says it right If your business is boring and having success, you're in a really good place. Like we're just trying to be boring, we're just trying to have a ton of success in wholesale and ride this wave. Like there's no reason for us to go get into development building fix and flip. Like this is what works. How do we continue to sustainably build on this with a scale component? We find a players, we find the unicorn that can come in here.
Speaker 1:I'm not looking to compete and say, all right, you know, last year I did 250 deals, I gotta do 300 deals next year and 400 deals and open another office and bring in all these people. And it's like, let me just slow down and make sure there's sustainability to each ring that we go up. Right, we've already been through that world, right, we We've tried to scale and we succeeded. But we also had a bit of a setback, which taught us something, right? It can be viewed in two ways negative or positive. So for us, the biggest thing for us lies in where are we at today? How do we achieve our goals tomorrow While we're putting more money into our bank account, right, we're putting more money into our bank account, right. So for us, you know people run like profit first model or X amount of their earnings and profit goes into like a reserve fund or towards reinvesting in their business. For us, because we're really fortunate that I don't have to take a salary, bob doesn't take a salary, our money goes back to the business, right, I have my brokerage and my rentals, bob has Riva, and that's how it was from day one. It's like let's dump this in and just it's a game. So for us, we do it in a way of like all right, if something hits a is a roadblock or adversity, we're in position to salvage. Right, because we have capital.
Speaker 1:So when you ask, like, what is in store for the company, it's to continue to bring on a players. We don't need all the players, we don't need a massive floor. We need a great floor of the right people. That might only be one or two people, that might be 10 really good people, because we did an awesome job. Again, we're in the business of human capital, so people have to come first.
Speaker 1:Wholesale is a human capital business, those who run the best businesses, right? You look in cg. What do they have? They have great ownership. They have great leadership. They have great acquisition. They have great disposition. They have great ownership. They have great leadership, they have great acquisition. They have great disposition. They have great administration and TCs and processors. They have great marketers. Who runs all that? They're people, so we're in the people business. So for us it's just let's stay boring and on a path of succession, and just where that takes us, we continue to ride the wave, I love that man you said you were looking to bring on maybe one, two people, as long as they're A players, fit the culture.
Speaker 2:What kind of positions are you hiring?
Speaker 1:for we're always hiring for acquisition. We're always hiring for disposition as long as it has a proper ratio. We try to run a two-to-one ratio, ratio to acquisition to one dispo and again, sometimes you'll get a really good dispo guy or gal in there that can handle X amount of files more than the average person. You just don't really like to bend too far because if something breaks then you got to fix it and you start from scratch. So you always want to anticipate kind of these. Gretzky says you know, go where the puck is going right, skate to where the puck's going to be, not where it is. So we're always trying to look ahead and make sure do we have enough people are? We had two tcs right now we have our individual there. We can always look to bring someone on. We have an in-house recruiter so we do have that privilege at our fingertips. Does a great job. Good culture, fit, gets the right people in the right seats.
Speaker 1:And I'd say one thing that we did really good in order to find these right people is we say no more than ever Before. We used to just give anyone a chance. I want to get into a full commission acquisition disposition role, which, again, we're always hiring for it, but we've done a much better job of saying no to candidates. We're not so quick to just say yes just because, hey, you're full commission. I think there's a chance that person would work. If we don't feel it intuitively. And it matches up with the data of pi, their cog, their past experience, their ability to communicate. We'll run three interviews like you're just, you're not a fit, it is what it is.
Speaker 2:Yeah, you gotta be willing to walk away what are you looking for um in an acquisition rep before you give them an offer?
Speaker 1:I look for people that match our core values. Right A hire and fire by something we you hear a lot. We didn't really do it in the past and now more than ever, as we've learned as leaders, it's attitude, accountability, grit, loyalty and team right. I want someone that has a great attitude. Do you come to work today and are you only happy when things are good, or can you persevere and be relentless when things aren't so good and still have a great attitude? Are you accountable, right? Did you screw a call up? Did you mess up? Did you not do something right? Are you coachable? Do you have that accountability component? Because if you don't, and you're quick to point the finger, then you're definitely not pointing the finger at the person in the mirror. Are you gritty? Are you willing to get on the phone? You got to be gritty. I mean, I see your, your content. You put out. We're in the Northeast, we deal with attorneys. Most people don't even want to think about that. Nonetheless, deal with them.
Speaker 1:There's constantly deals and litigation. If you don't have a certain level of edge and grit, you will never make it in our markets. You just don't Go work somewhere in I don't know Louisiana because you're not going to make it here. You've got to have that loyalty to be a part of the team. Right, are you a loyal person that we could trust? Are you a team player? Does the team come first? Right, are we all rowing in the right direction? Rising tide raises all ships. So all five of those are how we hire and fire.
Speaker 2:I love that man. What can an acquisition manager expect? Like, why would they come work for Perch Rock versus another? I don't know sales job or work as a broker or a loan officer?
Speaker 1:Yeah. So for us we won't. I don't pitch you or sell anybody on why they should work here. I mean you should tell yourself and pitch yourself on base the opportunity. But that's up to you, right we're. We're actually on a different avenue of how we hire. This is not here to sell you a job. You see a lot of companies today sell kids out of college the insurance world. Hey, kid, you can make a million dollars if you work hard Like yeah all right dude.
Speaker 1:Show me the one kid who did that in their first couple years at the company. Oh, you don't have that person Like great thanks, have a nice day. For us, it's putting realistic validation in place, and what I mean by that is we'll show people like this is what this particular rep made last year. Here's their 1099. I know you may have a little bit of doubt going to a full commission role. Here's the kind of life you can live. Here's what it looks like for a ramp-up period. Here's your training. Here's your ongoing training. Here's your support staff. This is what partnership looks like for your particular reps. We'll lay everything out, soup to nuts. I almost want you to tell me no, we go for no, just like we do with a sales call. If I can go for no and I can't get you to walk away from this, at least you now know the truth. This is a high-earning job man.
Speaker 2:This is six-figure plus. I know that we talked offline, but you're coming out with this company fund that's allowing your employees to start participating in rentals and acquisitions that Perch Rock is doing. Has that kind of been solidified yet, something that you're looking to open up on? Or, um, something you want to you want to hold off on?
Speaker 1:so this is in beta mode still. It's just, it's conversational, but it's something that bob came up with, which is a really good idea. And how do we create more legacy and wealth for our employees and for our reps that want to be able to grow and get into the rental business? You know, our top rep has, I think, double digits now into our account and started with us two and a half years ago, real, persistent, hungry kid.
Speaker 1:But we want them to also be able to buy into something from the company. So how do we create value? We don't have a 401k, we don't have a retirement plan, so is there an ability to put some structure in place where we can have them buy into a company portfolio? Bob and I used to own around 35 doors we sold off For us. We want to scale back and go into just a single family cookie cutter Southeastern Midwest market and that's going to have inclusion of our reps. Those reps that have been with us, say, x amount of years, that have a certain performance level and drive X amount of revenue, will have the eligibility to buy into that particular opportunity so they can have ownership into real estate like actually tangible ownership. They're not like a silent partner. They have common interest.
Speaker 2:Wow, dude, that's amazing. So, adam, this year, what are you hoping to do in terms of revenue units? What are some OKRs or rocks that you've set? You set up between?
Speaker 1:you and Bob. Yeah, and for this year we just finished up our quarterly with Gary Harper. They were in this past Monday. They did an awesome, freaking job. I always recommend them to anybody. They're just they're the best of the best and so passionate and caring just nobody like them. So they've always they've done so much for us in the best and so passionate and caring Just nobody like them. So they've always they've done so much for us in the two and a half years we worked with their, their organization for us, I mean our rocks that we've put in place and I'm looking to go buy a deal a month this year.
Speaker 1:So for on the rental side, I'm really putting more of an emphasis on that. I'm definitely going to blow that out of the water, but it was an attainable goal to buy one single family a month. I think I have six under contract right now. I own another six total so far in my total portfolio. So buying in like a pretty cookie cutter southeast market. It's easy to attain right. I buy in Jacksonville, florida Big city. A ton of single families all around. There's sub 100. It's not hard to gobble them up.
Speaker 1:You just got to make sure you're not overtly aggressive guys like us Like, wow, you know, these price points are great, I'll buy them all. And you're like, whoa, let me slow down, you need so many projects going on. So it's again that sustainability component. Um, bob and I were again. We're focused on bringing on the right people. We would like to continue to track upward with our profitability and revenue. Uh, deal counts, cool. Right, it's more of an ego thing, but I think it's irrelevant. Right, there's a lot of companies out there. They may only do anywhere from 75 to 125 deals a year. They're getting an average rip per deal around $42,000. Or you could be a company that's like I did 400 deals but your average spread was $13,000. Yeah, again.
Speaker 2:I'd much rather be the guy that makes $42,000 a year, Exactly because there's just so many moving operational procedures when you do more volume.
Speaker 1:So for us it's trying to really fine tune those. We've peeled back a lot of the states we were in. We're only really in three states right now and we're doing this to get really focused right. Operational efficiency is key. No one really talks about it. Everyone's like scale, scale, scale, more deals. But are you efficiently doing more deals? For us we're really trying to find too. How do we do less with more?
Speaker 1:if I can fine-tune that by doing less with or doing more with less. Yeah, we'll have, we'll just have, uh, have a better operation.
Speaker 2:So the goal is to hire great people, increase profitability, um and, and just get leaner and more operationally efficient across the board. Adam. Last question for you, man, well, I guess. Second to last question what three states are you operating in now and where's your office located?
Speaker 1:National headquarters is in Cheshire, connecticut. We're in Connecticut, pennsylvania and Florida, so that's where we're actively marketing. We were doing before. I mean, geez, we had Florida, massachusetts, connecticut, a little bit of New York and Rhode Island, pennsylvania, georgia, north Carolina, arkansas, alabama. We ran that like we're a virtual buyer and a lot of people brag about like we do nationwide and I just don't think it's a real good business model. How many states are you? We're a virtual buyer and like a lot of people brag about like we do nationwide and like I just don't think it's a real good business model. How many states are you going to be in with different title companies and one's an attorney, one's title, different types of buyers and then you have to have other processes built? How are you going to do innovations now? Like it's just when people tell me they're, they're virtual, like we've done it, it's. You don't really run a business, you're're just a deal junkie.
Speaker 2:I don't even know how people do it. Honestly, I don't think they do, I think it's just kind of BS.
Speaker 1:There's just a lot of BS in the industry. People that go on Instagram and Facebook and we talked about it. They bang their chest in public but they're crying in private and it's like to be honest. I don't want that makes a lot of money and gives a great lifestyle and ability to be free. And there's a simplicity component to it. You have to remove the ego, right. The whole word scale is not scalable if there's no sustainability. Right. What is sustainable simplicity? Keep it simple. Stupid. Everyone misses that because it's not sexy. That's why the guy that's like oh and CJ got 250 single family doing I think it's the Becklemeyers, the, the husband and wife, like. They probably don't do any marketing. They're like buying from wholesalers and agents. They probably have more money than 99% of the group why?
Speaker 1:Because they went the simplistic route. It fires me up. It's people like I'm going to run a business and do this and that and I'm like you're not making money, dude.
Speaker 2:There's so much gold, I do deals everywhere I do wholesale in Europe.
Speaker 1:It becomes comical, but you get my point.
Speaker 2:It's just simplicity. Keep it simple, stupid man. Just one focus. I love it, Dude. There was so much gold in this podcast. Adam, I love you, man. Thank you so much. If the people want to reach you, if they're looking for employment, if they have deals to send you in those markets, what's the best way to get in contact?
Speaker 1:Yeah, absolutely so. Anyone can reach out to me anytime. My email is Adam A-D-A-M at perchrock, p-u-r-c-h-r-o-c-kcom. You can reach out to me there. You can check me on Instagram at TheAdamDivine. You can reach out to me on Facebook, adam Divine LinkedIn. Shoot me a message. I'm pretty open with people. I have people reach out and just want me to run a run a deal by me or ask a question. But yeah, I mean always an open book. They're happy to help and give back and help those out that are looking to grow in the industry.
Speaker 2:Yeah, and Adam really means that this guy is a true go-giver. Every time I see him, he's trying to add value to other people's lives. So, adam, thank you so much again. I love you brother.
Speaker 1:Thanks, brother, love you too. Appreciate you having me on the show.
