There are numerous paths to achieving success in real estate, and in this episode, we will delve into how you can accomplish it through property flipping. From discovering lucrative deals to mapping out a roadmap for success, join us as we share insights to elevate your investment game with Kyle Doney. Dial in now!
Key takeaways to listen for
Resources mentioned in this episode
About Kyle Doney
Kyle is the president of LVN Real Estate and creates the vision for the company and his team, leading the way as one of Denver's top home buyers. He is an Air Force Veteran, having served six years. He entered the real estate business in 2013 and has successfully operated in the Denver real estate market. Kyle's hobbies include motocross, biking, hiking, snowboarding, and traveling.
LVN real estate buys in most of Colorado, Cheyenne, WY, and Austin, TX area. They fix and flip, buy rentals in the residential and commercial space, develop, and lend.
Connect with Kyle
Connect with Us
To learn more about growing your wealth through multifamily investment opportunities, visit Monument Real Estate Capital and schedule a call!
Follow our social media pages!
Facebook: Monument Real Estate Capital
LinkedIn: Monument Real Estate Capital
There are numerous paths to achieving success in real estate, and in this episode, we will delve into how you can accomplish it through property flipping. From discovering lucrative deals to mapping out a roadmap for success, join us as we share insights to elevate your investment game with Kyle Doney. Dial in now!
Key takeaways to listen for
Resources mentioned in this episode
About Kyle Doney
Kyle is the president of LVN Real Estate and creates the vision for the company and his team, leading the way as one of Denver's top home buyers. He is an Air Force Veteran, having served six years. He entered the real estate business in 2013 and has successfully operated in the Denver real estate market. Kyle's hobbies include motocross, biking, hiking, snowboarding, and traveling.
LVN real estate buys in most of Colorado, Cheyenne, WY, and Austin, TX area. They fix and flip, buy rentals in the residential and commercial space, develop, and lend.
Connect with Kyle
Connect with Us
To learn more about growing your wealth through multifamily investment opportunities, visit Monument Real Estate Capital and schedule a call!
Follow our social media pages!
Facebook: Monument Real Estate Capital
LinkedIn: Monument Real Estate Capital
[00:00:00] Kyle Doney
Finding good workers that work for a reasonable price is tough. You can find great guys, but you can't make it work in flipping because there's not enough room to hire that tier-one GC that makes your life really easy because they want too much money.
[00:00:14] Podcast Intro
You are working professional but struggling to balance the workload of your career, family obligations, and preparing for your financial future. If so, this podcast is for you. You've spent years learning your craft, and now it's time to focus on your financial future. This podcast will teach you what you need to retire wealthy and happy. Let's dive in.
[00:00:36] Ben Waller
You've seen those great shows on H G T V that show you how easy it is to flip a property. On today's episode, we're excited to learn from Kyle Doney, who's been flipping homes full-time for about 10 years. Let's jump in so you can learn if it's as easy as they make it seem on tv. Welcome to the Retire Wealthy and Happy podcast. We created this podcast to provide financial tips and tricks to help you build up your passive income and also provide methods that you can use to protect your wealth so that you can plan a better future for yourself and your family.
[00:01:13]
We're grateful to have this podcast sponsored by Monument Real Estate Capital. Monument Real Estate Capital, helping you retire 10 years early through real estate investments. On today's episode, we're excited to have Kyle Doney with us. A brief background about Kyle. He's the president of L V N Real Estate and has been since 2015. This is a real estate company based in Denver, Colorado. He's been involved in real estate investing since 2013, Hess into motocross, biking, hiking, snowboarding, and likes road trips. He also served six years in the Air Force. Kyle, we appreciate your service to the country. A brief overview of what will be covered in today's episode. We're gonna talk about fix and flips. We're gonna talk about market selection and other real estate strategies, plus how you can build a successful team. Kyle, thanks for being on the show with us today.
[00:02:01] Kyle Doney
Awesome. Thanks Ben. Appreciate the intro and thanks for having me.
[00:02:03] Ben Waller
Absolutely. Kyle, I know I just gave a brief intro on you, but I'd love if you take a few minutes and share a little bit more about your personal story and kind of how you got to where you are today, if you're willing.
[00:02:13] Kyle Doney
Yeah. As far as entrepreneurship goes, I was in Air Force till 2012. Got done with that. And was all, I was in college at the same time as well, so I was active duty, then went to the reserves, did college and got done, and I was like, what am I gonna do? And started looking into businesses that I could buy. I figured out during my time in the Air Force that I didn't really like being told what to do. So a little bit of a long six years doing that, it wasn't my cup of tea. I like to be the boss. I like to be in charge and I kinda like to do my thing, but that was my real life work experience right there. My corporate job, if you wanna call it that. And from there I'm like, Hey, I need to. Do my own thing.
[00:02:48]
And so started researching. I had some money saved from being in the military and, and I was like, what am I gonna do next? I need to get a business going like that was my mindset. And so I ended up buying a vending machine business, a healthy vending business, and I was in North Carolina at the time and moved from North Carolina out to Colorado. And started this. I didn't started, I bought this business. I took over this business actually and based outta Boulder, and I grew that and I did that for about five years. During the same time, I started getting another businesses as well, and so I got into a wholesale business with electronics and I got into real estate all pretty much in the same timeframe, all in 20 13, 20.
[00:03:25]
I started in the vending business and then 2013 I started these other two as like actual businesses, and so I was busy. I had a lot going on. Fun for me. I was in my 25 when I. I started all this stuff, just really figured out that I like hustling, I like flipping things, I like selling. And so I was selling snacks, I was selling phones, I was selling real estate, selling things. That was fun for me. That's how I got started in entrepreneurship, in real estate as well.
[00:03:46] Ben Waller
That's awesome. Thank you for sharing those details. And even though the Air Force may have had some challenges, you probably learned some pretty good life principles in there too as well, right?
[00:03:53] Kyle Doney
Oh, yeah. Taught me discipline and discipline is definitely important thing. I didn't have any of that really before going in, coming outta high school, going directly in there, wore my ass in the shape, really. And so. It was a good thing for me overall and set me in the right direction and started my work ethic. I would say.
[00:04:06] Ben Waller
You're talking about owning several businesses, like you gotta be disciplined to be running three different businesses. That's a lot of work. Yeah. That's all I did. I'm sure you're very disciplined. So, Kyle, can you tell us what was it that made you wanted to get started in real estate investing?
[00:04:18] Kyle Doney
I don't know. I always kind of had this interest in it. Even when I was in college during that time in North Carolina, I was looking at houses, I was looking at condos. I was like, oh, I got this amount of money saved up. And what can I buy with this? Right? And so I was always interested reading on BiggerPockets and reading articles and just curious about it for years before I ever even started doing it. Never really took action. Never really took the steps to do it. I think I probably perceived it as a higher and barrier to entry than it really.
[00:04:46]
Or was at the time thought, oh, I gotta have all this money to do this and buy this property and I gotta have credit and I gotta have whatever. You know, that's not really the case. You can start this with bad credit and no money and all that. Didn't really get going. I had interested in it and it was kind of a one house at a time thing, but I'm not exactly sure like why did I just start doing it? But I think it, this is cool, right? Like I just, I liked it.
[00:05:08] Ben Waller
When you started in real estate, did you have some like grand vision of what it would turn into, or you were just like, let's see where this goes.
[00:05:14] Kyle Doney
Yeah, it was more like a side hustle. It was more like, let's see where this goes. Bought my first house and house hack before house hacking, was house hacking. Rented out some rooms to my friends. Did that, so that was kind of my start. And then the same year I bought a rental and rehab that. And it wasn't really like, Hey, I'm gonna start a business. So it wasn't, that wasn't my mindset. It was more like, I just wanna buy real estate and have these assets and start growing my wealth and have passive income.
[00:05:37]
And there was a vision of like what I wanted, right? Like I wanted to. Gain assets and passive income. I, I think, was probably the main driver. Cause I was really active in the other two businesses that I was doing. I was like, this is just a place to put money and have cashflow. Right. Have money rolling in. So that was probably the. Vision initially was just to do that, and then it just started going from there and then it turned into what it's turned into over the years. But it wasn't like, I'm gonna flip all these houses and be this big flipper and do all these things, like wasn't thinking that.
[00:06:07] Ben Waller
It's kind of funny. I talked to a lot of people in the real estate space and it seems like people that start real estate as like a side hustle somehow get sucked in. And they end up doing much more real estate probably, cuz there's so many opportunities that you can be involved in in real estate. It seems like a common trend. Like you're like, oh, I'll just do a little bit in here. And then now you're running the whole real estate business and it's a slippery slope.
[00:06:28] Kyle Doney
It's addicting with what I was doing. Vending, like I gotta sell a lot, lot of snacks to make wood on one flip or one wholesale or whatever, right? Like I gotta sell. A lot of you estate, you're. You know what, this is starting to make a lot of sense, right? And you just start doing more. I think that's pretty much how it goes, right? Like you just start to realize as it goes, like this makes sense.
[00:06:49] Ben Waller
There's a lot of money to be made. And just as a disclaimer, there's also money you could lose if you do it wrong. So make sure you're set up properly so that doesn't happen to you. Let's flip gears or switch gears a little bit and, uh, I wanna talk about fix and flips because you have a ton of experience doing. Fix and flips on your own. And are you also doing it with partners or anybody, or you do it strictly on your own?
[00:07:10] Kyle Doney
Mostly on my own, but I, I'll partner with people, you know, I'm not partnering with a ton of people, but here and there, guys that I've known for years will bring a deal and, and say, Hey Kyle, I got this. Like, do you wanna go in on, it's like, Yeah, let's do it right, but they bring value to the table. I have one partnership deal right now on a five unit condo conversion. Basically, you know, we're flipping each unit, selling them individually. That one, I have a, a partner on development. I'm doing some development. I have a partner there, and then pretty much most of everything else is on my own within my company.
[00:07:40] Ben Waller
So one of the things I'm really hoping to get out of our conversation today, Kyle, is what is really involved in flipping a property? Because our listeners might be watching those shows like a referenced on H G T V. They're thinking, oh, you can buy a property and flip it in 30 minutes, cuz that's what they show you on tv. But you and I both know that's not really what it's like. So I was doing research on you before this call and you had previously written an article called Five Flipping 1 0 1 Tips, and I want to talk about what it is that really is involved with flipping so that somebody can understand like the actual time commitment that it takes for you to be successful in a flip.
[00:08:14] Kyle Doney
The first thing is finding a deal, right? Like that's step one. How do you find a deal? Networking is connections and it's marketing. Probably gonna be one of those making offers. So in my company we do a lot of marketing. And we do a lot of networking and connecting as well. So I would roughly like, we track this, roughly 30 ish percent of our deals are just from connections that we have within the area. So that'd be wholesalers, that'd be agents, that'd be whoever, bringing us deals and saying, Hey, I got this. Do you wanna buy it? That's about 30% of our deals. The other 70%. Would be, it's from our marketing. And so we're sending out a lot of marketing, all the things that everybody knows about. We're texting, we're calling, we're mailing, we're doing all the things right? We're getting online leads. Those leads come in, and then we have sales guys. They work those leads and they get it to a point where they put it on their contract and they figure out, Hey, this is a deal. And so that's step one. That's how it works in my business. And when you're starting out, you gotta find deals. Step one, find the deal before you.
[00:09:05] Ben Waller
Go on Kyle. That's a huge percentage. Over two thirds of your deals you're finding on your own. That's what you're saying.
[00:09:12] Kyle Doney
Yeah. The other third would be from wholesalers and agents network. We call it self-generated stuff that we're not spending money to get necessarily. It's, you bring me a deal and I buy it. That's a self-generated deal.
[00:09:23] Ben Waller
Okay. So if somebody's gonna be successful in, in flipping, they have to be able to find the deal. And a lot of that is with marketing that you are doing or they would have to be doing on their own.
[00:09:30] Kyle Doney
Correct. Yep. Picking up the phone, talking to people, making offers. Okay. So what's step two? Step two is due diligence. It's underwriting the deal and making sure it works. And so for us, what that looks like initially, one, the sales guys is even either going there or a project manager is going there. So we'll get it under contract. A lot of times we'll get it under contract based on the comps, the comparables, and so we know, hey, this three bedroom, two bath house in wherever Denver is worth $500,000. And the seller's asking 300, and we know we're gonna put roughly X dollars in it. So let's just say we estimate, okay, we're gonna put 60,000 in this house. Well, we'll estimate that. We'll figure out, hey, this meets our criteria of buying as a flip. And so we'll put it under contract at that time. And then that's the start of the due diligence basically, where we'll send out our project manager and he'll go walk it and he'll look at it, he'll go, it needs boom, boom, boom, boom, boom.
[00:10:26]
And I roughly think it's gonna be this amount of a rehab. And then we'll see, Hey, is that in line with what we initially thought or. Is there something that we didn't hear about from Stellar initially that needs done? Like let's say sewer line we got, they got water backing up, or there's mold or there's there needs a roof, whatever, right? Like things we didn't know about. We'll say, okay, well we thought this was a 60 K rehab, but really it's an 80 k because all your mechanicals are. 30 years old and we're gonna have to replace them. That'd be step one.
[00:10:54] Ben Waller
How do you come up with those numbers, Kyle? Do you just have that experience or do you bring in contractors to give you bids and stuff? We've done hundreds of flips.
[00:10:59] Kyle Doney
I can look at pictures and pretty much know what's gonna cost. You know, for the most part, something I can't see. If you're starting out, I would say you'd wanna bring in a contractor. You'd want to bring in somebody that knows what they're doing and and can give you some numbers, give you some bids. But for us, like we internally, we figure out that number, we get a rough idea, and then we. Spill out scope of work and really define it and get down to the exact number that we're trying to hit.
[00:11:22] Ben Waller
That makes sense. Are we still on step two or are we moving to step three? We go to step two.
[00:11:27] Kyle Doney
Um, step two. And the article you're referencing is having a plan. And so this is where we'll put together the scope and we'll put together like the exact plan we're gonna do, how crazy are we gonna go in this house? So we're gonna do a full gut rehab, or we kind of just sprucing it up and putting it back on the market. Are we selling it as is or is it to the point where, It needs so much work that we don't wanna That's kinda stuff too, figuring out what is the plan? How are we doing this deal? Sometimes we'll hold 'em as rentals as well. We buy rentals and so we'll look at it and say, yeah, this makes sense. This pencil doesn a rental, like this is gonna be a rental rehab. Kind of like a make ready, you would call it, right? Like just get it kind it ready, and then we'll rent it. Sub two would be making a plan and figuring out exactly what's gonna happen there. That three would be hiring the contractor who's gonna do the work? What's the timeline, what's the budget? Agreeing on a price, getting the paperwork in place, getting a contract in place, and really like putting it in motion.
[00:12:23]
Pretty much like we're good to go. Finding the contractor. Step three, paperwork, step four. Putting all that stuff I just talked about in place, signing and agreeing like, Hey, you're gonna do this rehab for X dollars. Here's exactly what you're gonna do. And we make that very detailed. We have a really detailed scope of work, and so we map out exactly what it's gonna cost and if the contractor has a change order, this wasn't in my scope, I need more money. Well, it's all agreed upon. It's all mapped out, and we've done this the wrong way. I think one piece of advice for people getting into it is don't make handshake deals. Really, really write this stuff out and define it. Really define it. Cause you could talk to the contractor and say, yeah, here's the deal.
[00:12:58]
You're gonna do this, this, and this. But you didn't write it down, you didn't sign, you didn't agree, you didn't put a contract in place. And then they come to you and go, actually, you know what? I told you 40, but this, this reason now it's 60. And you're like, Uh, come on man. Like we set 40 right? And now you got a dispute. Now you got an argument. We try to knit that in the bud ahead of time and really be dialed in on what they're gonna do and have those agreements in place, right? We don't wanna deal with that on the backend. If there's a change order, things come up, you open up a, a wall and all of a sudden a bunch more work comes up. Then we do a change order paperwork, and we agree like, here's the amount that the change order is gonna cost. We sign it, we send it over on DocuSign, and it's like, we're not willy nilly about this. This is a business. We run it like a business. We have the paperwork in place and we try to keep people trust but have that paperwork on the backend.
[00:13:44] Ben Waller
Right. Well I appreciate that you said you treat it like a business, cuz that's what it's sounding like is that you have plans, you have contractors, you're running the numbers, very detailed. You talked about marketing, that is a business. So I'm glad to hear you that you're running it that way. I wanted to ask you, when you're doing a flip, can you help the listeners and myself understand. How much time would you say it takes to do one flip? And obviously I'm asking a general question, but hopefully you can kind of break it down a little bit. I mean, that's super dependent on what work it entails.
[00:14:10] Kyle Doney
Well, it's just an average deal, like I would say an average deal. We're in and out. I know this cuz we track it, it used to be four months. We're more on like the five month stage now, but somewhere between four and five months. We're in and out. So that's between buying and selling the rehab itself, it depends on the extent of the rehab. It could literally be two weeks or it could be two or three months. It depends on how much we're doing in the house. There's other factors too. I mean, we have one right now that we just bought that it has to be fully permanented. It's a firehouse. It has some issues with, uh, fire. And so it's already condemned. Right. And so the city already. Knows about it. And so we gotta go there and we gotta pull permits and that's a process.
[00:14:46]
So that's gonna add to that timeframe. That one will probably take us, I would guess this, that house probably takes us somewhere between six and nine months, be fully done, like exited, you know, the rehab will probably take three or four months, but just all the fluff time in between of getting permits, getting everything that the city wants, all the inspections, all the things that they're gonna say, you did this, but we want this. That was gonna take us longer. So it's highly dependent on. The scope of work and what's involved in the rehab.
[00:15:13] Ben Waller
Yeah, absolutely. Now, I know that flipping can be very enticing for people because in theory you can make really good returns on your money, right? Yeah. I'm asking this maybe too broadly, but would you say that flipping is an active or a passive investment strategy? Very active. I mean, you're talking four to five months and that's probably a fairly heavy four to five months, right? Like you're dealing with contractors and whatnot. Probably almost on a daily basis, or at least every other day maybe.
[00:15:38] Kyle Doney
Yeah. I mean, I would say on a daily basis, phone communicating or dealing with materials. We're dealing with somebody one way or another, typically on a daily basis as far as showing up. Project manager would show up. Generally one time a week, sometimes more for getting near the end of the project. They might be there two or three times a week to, to get it finaled and everything. But generally they're showing up with these projects once a week and checking in, seeing what status is and and pushing on the contractors.
[00:16:02] Ben Waller
So a lot of time commitments is the point. So thank you for sharing those details. I wanna know your opinion. Would you say that flipping has gotten easier or more challenging over the last couple years?
[00:16:12] Kyle Doney
It's a tough question to answer because the more of these that we do, the better that we get. The more we do, the more our process dials in, because we've learned all the mistakes, the pitfalls. We know where the gotchas, and so we continue to get better. Flipping. So in theory, like it should be getting easier, but at the same time we're doing more. And so we have more projects all over the place and we have a, a heavy workload. And so the process itself, I would say we're pretty dialed in, but we're always tweaking. We're always figuring things out, trying to get better. To answer the question directly. I would lean towards it's getting harder. And there's a lot of reasons for that. I think some of it is here in Denver, labor is is a big issue, and so finding good workers that work for a reasonable price is tough.
[00:16:56]
Like you can find great guys but can't make it work in flipping because there's just not enough room, right? There's not enough room to hire that tier one gc. That makes your life really easy because they want too much money, right? And so we just don't have the margin to do that. We wanna make any money. And so we're kind of working at the lower scale of, uh, contractors, right? They take more management, they take more time. They're tough to find and you gotta be on 'em. Like you really gotta be on them. Um, but that's how we can make it work, right? Like we have to compress in all areas, right? Like we need to get a great deal. We need to get materials at a good price. We need to get the contractors labor at a good price. And we need the quality to be high. It's hard to do all that, right? Like you're asking a lot, you're squeezing all in and trying to get this awesome product so that it sells on the market and people are interested in it.
[00:17:39]
I would say it's always been hard. It's probably getting a little bit harder just because holding costs are going up with where rates are at now, and so it costs more to sit on these houses. Labors more materials. There's a lot of people in this business, there's a lot of people gunning for these houses. Highly competitive. The margins. We try to buy at the same margins, but as always, we try not to push it and make our margins super slim. We have set criteria, but it's just highly competitive, right? And so you just gotta be dialed on all ends. And it's a constant work in progress. We're constantly looking for new contractors. The hunt is always on. If we're doing more projects that that means we need more guys. It's, it's a tough business.
[00:18:13] Ben Waller
Sounds like it's a lot to manage. And with that, there's a lot of places you could mess up, which could cost you heavily financially. Right?
[00:18:20] Kyle Doney
A hundred percent. You get the wrong guy in there. Like that's why you gotta be home. You get the wrong guy in there. You don't have to check on 'em for a couple weeks. Like you might be tearing out all their work and redoing it. Right now you're buying more materials and higher than the next guy holding costs, all that. So yeah.
[00:18:34] Ben Waller
I've had experience with that, so I can relate. Kyle, another opinion question from you. What do you think the next five years or so looks like, uh, for flipping? Do you think it'll get more difficult? Do you think it'll get easier? I know interest rates have impacted us a lot, so there's so many economic drivers to this, right?
[00:18:48] Kyle Doney
Like, what are interest rates gonna do? Lucky for us, like we've been in this period where things are pretty great as far as selling, you know, like over the past number of years, like you could totally screw up and still come out ahead because of the appreciation how. Prices were going up. And so like, all right, yeah, you blew your budget, 20, 30 grand, but like you're still killing it, you know, because your ARV is 50 higher than what you thought it was gonna be. And so in this environment, the get's been good. It's been pretty great. But that's changing, right? Like there's less inventory, less people are selling because they're holding onto their three year. 4% interest rate or whatever, two and a half, whatever that is, right? Like do they really want to sell their house and upgrade and not pay 8%, 7% or whatever? It's, I think for that reason, it's gonna get harder and less rates start to go back down. Just less people are selling houses are less affordable, right? Like, You're going from 3% to seven, eight, whatever the rate is now, it's less house you can buy. So I think it's getting harder.
[00:19:49] Ben Waller
Kyle, maybe you and I should call our local governments and tell 'em to lower the interest rates. It's a cash 22, right?
[00:19:53] Kyle Doney
Because they do that and then it's like booming again and uh, things are flying off the shelf and there's less opportunity, right? So I don't know. How do you fix that, right? It's a weird time.
[00:20:02] Ben Waller
We need a balance. We're definitely not balanced. So Kyle, thank you for sharing those comments. I wanna switch topics slightly and talk about market selection because I know you guys are based in Colorado. You do a lot there. But I also understand that you've added several other markets to your operations. Is that correct?
[00:20:18] Kyle Doney
Yeah, we are in some other markets. Yep. We cover a lot of ground of, of Colorado. Uh, mostly the, we call it the front range, so mostly like Denver Metro. We do projects up in Northern Colorado. We go up to Cheyenne, Wyoming, which actually isn't very far away. It's about an hour and a half from Denver. Uh, so we do stuff in Wyoming and then we were in North Carolina and Little Rock, but we pulled out a little rock just. Wasn't a market that worked for us. North Carolina had a partner there that moved to Texas, to Austin, and so now we're doing stuff in Austin, Texas as well. And so our main markets are Colorado, Wyoming, just one specific city in Wyoming, Cheyenne, and then, uh, Austin, Texas area.
[00:20:58] Ben Waller
Maybe this is a dumb question, but what pushed you to look outside of just the Denver market since I know you're local there?
[00:21:03] Kyle Doney
Wyoming made sense because it's kind of an extension of Northern Colorado, really. Like it's close. Like we'll go within, I would say about two hour radius of Denver. And so that's within two hours and so we'll go there. Uh, so that just made sense, right? It's close. Close enough that we have contractors we can send up there. And, um, we can manage it. Um, going into Texas, that was all based around a partnership, a partner there. And so we have boosting the ground and I wouldn't be there otherwise. Um, just being Colorado and Wyoming.
[00:21:36] Ben Waller
That makes sense. Have you had any major challenges investing outta state?
[00:21:40] Kyle Doney
No, at the moment, cuz I, I have people there. If I didn't have boots on the ground, it'd be a lot more challenging. I think probably the biggest challenge would be not having a strong grasp on the market there, like Texas in particular. Like I don't, I've never lived there. I'm not from there. I don't know all the little pockets and the nuances. Colorado, I've been here 10 years and in this business, and so I know you tell me a neighborhood in the house price, and I probably know if it's a deal, right? Like I know all the little pockets, I know the neighborhoods. I know all the players. I know everybody, right? So that. Is an advantage from somebody else coming in here and trying to do business that would be outta state. I, I think that's the biggest obstacle.
[00:22:14] Ben Waller
I'm just summarizing so far what we've learned today. You're saying that you should run your real estate operations like a business. Having partners in markets, uh, boots on the ground is extremely important cause you can probably operate better. And understanding the local market really well helps you to know if you've got deals or not.
[00:22:31] Kyle Doney
Right. Yeah, like, like that's that I told you earlier, about 30% of my deals are self generated. That's Colorado only. That doesn't happen in Texas. It's zero in Texas. That's cause I don't have a network. I don't have a good network there. You know, like that takes time to build. Maybe in the future. Yeah, maybe in the future if anybody from Texas is listening to.
[00:22:46] Ben Waller
Just a reminder for our listeners today. I like that about fix and flips. We've talked a little bit about market selection. We're gonna talk about other real estate strategies and also how to build a successful team. So Kyle, let's talk briefly about other real estate strategies. You mentioned this a little bit previously, but let's talk about it again. You said that when you're looking at projects, you first look at it through the lens of a flipper. But you also might consider either wholesaling it or keeping it as a rental. What is, what is the main things that help you determine what you're gonna do with a project when you're looking at it?
[00:23:15] Kyle Doney
I would call myself a pretty strategic or creative investor, and so I don't pigeon hold myself in the one thing. I don't look at everything through the lens of just a flipper. I've done a lot of different things. We actively buy rentals, and I've been doing that since 2013. Right. So I've been doing that for 10 years. I'd lend, you know, so I'll lend and partner on deals in that sense. I'll lend money on deals and still I'm developing. And I'm learning that game. I'm new to that game, so I'm not the guy that you come to for advice there. Cause I'm learning it, but I get it and I'm getting better at it. Been doing that for a couple years now. We do creative stuff and so we've taken properties subject too. We've done owner financing deals where we finance buyers. We've done a little bit of everything. And so I, I think I'm well versed in how to look at the deal and monetize it. And I think that really helps. So I don't just look at it through one lens. I look it through a lot of lenses and. How do we make this deal work and, and what can we do here Now I'm open to, to all those different ways. It's, it's fun for me.
[00:24:04] Ben Waller
That's awesome. So I would add to that, that in real estate specifically, there's thousands of ways you can make money as an investor, right? And you are pointing out here that you are specializing in several of those, which is awesome. You've got a lot of experience in that. And because of that, You're able to take advantage of more situations because you know how to analyze things from multiple different perspectives and that makes you make the best decision on what you can do with the specific projects that's brought to you.
[00:24:31] Kyle Doney
Right? Yeah. It's gotta be creative. I mean, they don't all work for one strategy, that's for sure.
[00:24:35] Ben Waller
You probably didn't start by doing all those things, right? You were focusing on building up one category maybe, and then. Getting better at each one over time?
[00:24:42] Kyle Doney
Yeah. I mean, it started with rentals and rehabbing. I mean, so even if I wasn't flipping, I was doing rehabs, which leads to flipping, right? So I was buying property, rehabbing it, and running it. Same thing if I would've flipped it right. I'm learning how to rehab and improve a property's value. That's where I started. The rest of the stuff is just over time, right? Like I've just been interested in learning. I have a thirst for knowledge and so I've been in, uh, the same mastermind for five years. Investor fuel, shout out to them, like that's been a great group to be a part of and lots of good connections and knowledge there. I've gone to a lot of different one events, just learning about how do I invest in my IRA and my 401k. Try to do these deals and not pay tax, right? Like, how do I not pay tax on this? Cause if I don't pay tax, I can grow substantially. I like that type of stuff. And to learn how to do all that, you gotta educate yourself. So just going to events, going to these one-off events, spending the money, hiring mentors, coaches, I mean, I've done that since I've started. And that's propelled me upwards.
[00:25:38] Ben Waller
In a couple previous episodes we've talked about how the system teaches people to like keep their head down and not work with other people, cuz it's considered cheating if you're like copying somebody else. But you're talking about being in a mentorship program. We've talked about that in another episodes, that really putting in the time and investing in yourself by building that network is extremely important in wealth creation because, You surround yourself with people that have done it before you or can give you other ideas to help you grow at the same time. So I appreciate you sharing those thoughts about being in the mentorship or in your mentorship groups. Um, I know you also do quite a bit in wholesaling, right?
[00:26:12] Kyle Doney
I would say that I'm like a big wholesaler. Well, wholesale properties, if they don't make sense for us to hold the rental or flip. So we wholesale, but the small percentage of of our business.
[00:26:22] Ben Waller
Okay. So Kyle, I know you've got some experience in wholesaling. Um, we've talked about wholesaling and some other episodes, so let's not go too deep into it, but just real quick, will you tell us what wholesaling means to you? Yeah.
[00:26:32] Kyle Doney
Wholesaling to me is locking up a property at X price and selling it for Y price. So we lock it up at, let's say, a hundred grand, and we go find a buyer to buy our contract for 120 grand. We never close on it. We make a 20 grand spread spread and we, we move along.
[00:26:46] Ben Waller
You've been doing that for quite a while, right? I have. So the, the main thing I wanna pull from this conversation is what challenges or opportunities are you seeing in the wholesaling space right now? Because I know we've had a lot of changes. Covid affected us. Interest rates, would you say it's different now than it was five years ago? I would say it ebbs and flows.
[00:27:03] Kyle Doney
Sometimes people, like when there's less deals to be had, like right now there's just not a lot of inventory. People are willing to pay more and they're hungry for deals anytime that there's some type of economic change. Like when interest rates started going up, everybody got scared. When covid happened, everybody got scared, and so wholesaling was harder. And for us, that meant more opportunity because we actually buy stuff as well. So we were able to scoop stuff up off. Wholesalers were cheap during covid was like, it was great, you know, so it, it ebbs and flows, uh, depends on, you know, during those five years, there's a lot of different change on how motivated people are to buy wholesale. So sometimes again, it's good and sometimes it's slow and, and people are having to take less for deals.
[00:27:43] Ben Waller
I love how you say ebbs and flows because if you don't know this, real estate goes in cycles and the cycles are impacted by many different things and certain types of real estate investing strategies work better in some cycles than others do. So it's important to understand what it is you're focusing on and how that is impacted by what's happening in the current cycle. Would you agree with that, Kyle? A hundred percent. I wanna talk briefly. I know switching subjects a little bit. I was looking, you recently did a, a mobile home. Tear down and rebuild.
[00:28:12] Kyle Doney
Right. Are you working on that right now? Yeah, we did it. We did it and completed it and that was the first one that we've ever done.
[00:28:16] Ben Waller
And I wanted to ask you about it cuz I'm curious, I, I don't know anybody else that's been doing that. So was there something specific about that deal that make a lot of sense? Or why did you go that route?
[00:28:24] Kyle Doney
Honestly, I just wanted to learn it and so a wholesaler brought me a lot and it was like, Hey, I got this manufactured home. He knew that I bought in this area. It was like a out of town area, like where not a lot of people buy. And so I looked at it and he was kind of pitching it as a fixer-upper. And it was really, it was a scrape. Like there was no, we weren't gonna be able to flip it. It was destroyed, right? Like it was just done. So the lot was, uh, at a great price and it had water and sewer already there, right? So we didn't have to bring that in. So it was like plug and play pretty much. And so we just tore it down and bought a Clayton Homes, uh, manufactured house.
[00:28:59]
A foundation, build a garage, put the house it, sold it. And again, like wanna learn process. And at some point, I wanna be able to do that on a larger scale. If let's. 20 acre piece of land, I wanna be able to look at it and say, okay, yeah, I know I could do this. I could put whatever X amount. Let's just say they're acre loss. I could put 20 homes on this and I can sell 'em for this and it's gonna cost me this. Like I just wanna learn the game. And so that's why I did that deal and it was a learning experience for sure.
[00:29:28] Ben Waller
Well, since you did it as a learning experience, is there anything you could share with our listeners about what you would do differently next time?
[00:29:33] Kyle Doney
Everything just costs more than you think. So I would say that we made money on the deal. It definitely wasn't smooth. And that's just cuz we didn't know the process. Very well for doing these and for this city that we were working with. I guess the one piece of advice is just the home costs. Let's say 120 grand, well, it's gonna cost you a lot more than that to put the home on, on the lot and do the deal. Like there's just a lot of other things that come up. So really just have a pretty. Big budget and have a good spread if you're gonna do it. Like, especially if it's your first time, like make sure you have a fat spread or you're gonna, you're probably gonna lose money. Cause there, there's a lot of things that you don't think about going into a deal like that and they just, they just continue to come up. It's different with than a flip where you're just kind of coming in, you're, you're doing it and you're good. There's a lot of coordination with the city and getting approvals and things. Gotta be a specific way. And it's just stuff that we didn't think about going into it that, oh crap, we gotta do this. It's gonna cost us this. Right? Just takes longer and costs more than you think.
[00:30:29] Ben Waller
Well, I appreciate you sharing those thoughts. It seems like, uh, real estate, there's a learning cost and you can either pay it on your own like you're talking about, or sometimes it's worth it to find like a partner or a joint venture situation. And give them some of the ownership in the deal so that you can have it be successful from the beginning. Obviously, you'd wanna be partnering with someone who has more experience than you and can help you get it to the closing table. Partnerships in themselves have some other challenges, so we are gonna talk about that in a minute. But would you agree that there's a lot of learning costs when we're talking about different real estate strategies? Yeah.
[00:31:02] Kyle Doney
Yeah. We got hit with like the, the dumb tax, the, just the process. I, I think on that particular situation, like. Had we hired, there's companies out there that do A to Z on putting manufactured home in a lot. So like they would literally do everything for you. And we didn't do that. We did it all ourselves, right? We hired all the subs for grading and for hooking up plumbing and for electric. We hired all the different subs and managed all that ourselves. Had we just hired. So companies, that's all they do. They put manufactured homes a lot. We likely would've saved a lot of time and a lot of money. Uh, you know, so I think the guys that do it over and over and over again, like they know the process, they do it at scale and they would've made our lives a lot easier. Um, we kind of went at it the hard way and did it all ourselves, and so it just cost us more overall, I guess that would probably be the tip if you do manufac build for the first time. Go find a company that does it for you and hire them, and then following the process that they did before you try to do it yourself and do all the, the whole process on your own.
[00:31:59] Ben Waller
Kyle, I love how transparent you're being right now because a few minutes ago you were telling us about your flip business, which you've been doing for many years, and you were saying that it's almost super smooth now. You can look at a couple pictures and say, I know how much it's gonna cost, and you're scaling up your business, but then you're also talking about doing something different. It's similar, but different and you're, you're having to go through the same learning curve just cuz it's a niche of its own. Right?
[00:32:22] Kyle Doney
Exactly. Yeah. And there's, and there's so many other ones out there in real estate, right. So, Yeah, always learning. Just cuz you know one thing doesn't mean you know, the next, like real estate is pretty diverse and deep. There's a lot of different things to.
[00:32:34] Ben Waller
And you can generally find more success if you focus on one or two of them. Would you agree with that as well?
[00:32:39] Kyle Doney
Oh yeah, a hundred percent. But you know, at the same time for me, like I want to try these other things out. Cause I want to see if it's a fit. I want to see like, okay, if I do that manufactured home build and I learn a bunch of stuff and we keep doing a couple more, it might open the door to some big. Other department, I guess, of our business I would call it. Or division, right? Like could be a whole new thing. So for me, I like trying those things. Uh, yeah, I'm focused on mostly flipping and, and rentals, but I like trying other things and cuz you never know where it's gonna go. We're doing the same thing in commercial right now. We've been buying commercial property the past couple years and learning that game as well. And again, like whole different animal, whole different set of things that you have to think about and know about and be first in. It takes time. And so for me, I, I like to dabble in these other asset classes of real estate. Cause I wanna learn and I wanna see where it takes me and where it goes.
[00:33:28] Ben Waller
Just adding to that, Kyle, you're very smart. You're doing a lot of great things. I would say to our listeners, Kyle's not doing all of these from day one. He's picking one, learning it, and then picking another one. Learning that. Cuz if you tried to pick five or six and start them all at the same time, You're probably failing for sure. So Kyle's a good example of continuing to learn but doing it in a good order. Also, talk about your real estate business and how you've gone about building the team. Cuz I understand you may have had some interesting experiences getting to that point. I'm curious, uh, if you have any advice to our listeners about how to go about building partnerships the right way.
[00:34:02] Kyle Doney
Yes. As far as like partnering with somebody on a deal, not a hiring somebody, like just partnering whatever, 50, 50 or whatever. Right. I.
[00:34:10] Ben Waller
Is that what you're referring to? Anything you would consider a partnership? Cuz maybe I read wrong, but it looked like in a previous story you had, uh, you had had some painful experiences with partnerships or didn't I read that wrong?
[00:34:22] Kyle Doney
No, you read that, right? For sure. I have. That was early on. When I got into flipping, I partnered with this guy that I thought, Better than he was. Right? Like I thought he had more experience, had more going on, and really it kind of just turned out that he was crook, didn't know. The image wasn't the reality. And so I learned a lot of hard lessons with that because I was mostly, when I went into that partnership, I was trying to scale, I was trying to do more flips. I was trying to just do more right and, and grow the business and get bigger. And so I saw this guy that was getting deals. I'm like, oh, he knows what he's doing. I'm gonna tag along with him. And we went into three deals. Like right off the bat. I didn't bet him out, I didn't bet out his business. I didn't bet out him very well. I didn't bet out his partners, other people he was working with. I just didn't do a good job of digging in on him and understanding really where, who is he and where is he at in the business and what his financial look like and, and all that stuff.
[00:35:16]
And turned out really not great, right? Because I was red flag number one. Like I was the money guy, right? Like he had no money in it. What was his motivation? Right? Like he didn't have any, he had no skin in the game. So when I partner with people now, like I want skin in the game. I want them to have money in the deal. I want them to be bring something to the table that either I don't have, or that makes sense for me to say, okay, yeah, I'm gonna give you. Whatever percent of this deal, whether it's 50% or 30% or whatever it is, you're gonna ask him in the game, you're gonna have some type of benefit to me of doing the deal. Cause I don't need to do the deal with you. So if you wanna do the deal together, you're bringing something to the table. That wasn't the case when on that first partnership.
[00:35:54] Ben Waller
That makes a lot of sense to me, and I appreciate you sharing those and experience. I'm sure it was painful to go through. Do you have any other comments you'd add about, um, how people can go about finding the right people for their team or for their partnerships?
[00:36:05] Kyle Doney
As far as partnerships? I mean, again, it's like what are they bringing to the table? I think if you're looking to partner some with somebody, let's say it's a flip or a rental, are they bringing the deal? Uh, if they bring the deal, then what does that mean for you? Like, what is your role? Why are they bringing you the deal? Are you doing the rehab? Are you bringing the money? Like, what is your role and why does it make sense to partner with them? Um, you gotta identify that and, and figure out like, does this make sense or not? Again, like, I like to see them have skin in the game. I like to see them have money in it. Knowing their background.
[00:36:33]
What have they done, where have they at in the business? Who knows them, who knows about them? Like, you gotta look into them a bit, talk to other people and figure out. What have they done? Who are they? Who knows them? Who can vouch for 'em? You gotta vet 'em out. And so as far as partnerships goes, like if you don't know the person and you don't know their background, you really need to dig into who they are and what they've done. And then you gotta define what is your, what is your role? Why are you two coming together? What are they gonna do? And what are you gonna do? And you need to define that, get that on paper, get an agreement in place and spell it out. Hey, I'm bringing 50 grand. You're bringing 30 grand because you brought the deal. I'm gonna manage the rehab. You're gonna manage the tenants, or whatever it is. You've gotta define all those little pieces and make sure you're on the same page before you put the money in, before you move forward. Define everything. That's how it's gonna go to best if you have all that upfront. That'd be my piece of advice for partners.
[00:37:28] Ben Waller
And like you said, with your contractors before, you probably want all that in writing, right?
[00:37:32] Kyle Doney
Exact same thing. Everything in writing. I'm not saying you have to hire an attorney, but if you need to hire an attorney, spend the money, right? Like it's better to spend the, call it two grand to get that agreement in place than to put your 50 or your a hundred grand and then be fighting to get your 50, a hundred grand back, right? Like you gotta spend the money upfront and spend the time up to have these things in place so it's not painful later.
[00:37:53] Ben Waller
Obviously business partners are not the same as being married, but you do. Tend to get into some of these partnerships or relationships where you can be partners for several years. I mean, maybe with the flips it's not as long, but if you're doing long-term rentals, like you could be several years into a project where you have to work well with that person. And if, if it doesn't go well, like you're saying, you could get into a lot of legal battle that isn't worth it. So, great points, Kyle. Thank you for giving that advice on how to set up a, a partnership correctly from the beginning. Uh, Kyle, we're coming up on our hour here. Is there anything that you were hoping to cover in this podcast or questions you were hoping I would ask you that we haven't gone through yet?
[00:38:32] Kyle Doney
No, I, I think we went through a lot. I'm an open book. I'm hoping to talking about anything. If you have anything else, let me know. And for the people out there listening, I try to be a great communicator. If somebody hits me up and they have a question or want to, you know, connect and chat, I'm, I'm open to that and I'll try to get back to you in a timely manner and help people out.
[00:38:50] Ben Waller
So we appreciate that. Kyle, we're gonna put all your, uh, information in the show notes as well so people can reach out to you. We've got four questions that we ask everybody, Kyle, so let's jump into that. Kyle, this is the, the final four, four questions we have ask everybody on our show. The first question for you today is, what is your favorite business book?
[00:39:06] Kyle Doney
I'm gonna say that I don't necessarily have a favorite business book. I don't have one that I've read seven times. There's books that I referenced back and. Books. I can think of that really helpful. One that comes to mind would be The Road Less Stupid. That's a really good book. Um, makes you really think about your business and what you're doing, and so I'd recommend that one to everybody. It's a good book and it's one that you can kind of just flip into any page and get value out of it. Like you don't have to read it in chronic logical order, like you can open it up and take notes and whatever. That's a good book. I've never even heard of it, but
[00:39:36] Ben Waller
I really liked that title. I'll have to check it out.
[00:39:39] Kyle Doney
Yeah, the road less stupid. I think it's Mark Cunningham, I think is the author.
[00:39:43] Ben Waller
Okay, thank you. Alright, second question today, Kyle, tell us what brings you happiness.
[00:39:49] Kyle Doney
For me, I like a challenge and I like growth and so I like building this business. I like the daily things that come up and sometimes it's like I'm pulling my hair out. And other times I'm quick in my boots. There's ups and downs, but it's fun for me growing this business. It makes me happy when I see the final product of whatever we're doing. I just like being in the game. That's kind of be my business answer. As far as like personal, I love two wheels. I love biking, and so I do a lot of biking. I like to be outside and, and in the mountains. Um, I'm in Colorado and I definitely live the Colorado lifestyle. I got a travel van, and so I like to take road trips, ride mountain, bike ride, moving across, and just be outside.
[00:40:25] Ben Waller
That makes me happy. That's awesome. And I like that you're, you're so much into growth. It's obvious with what you're doing and the experience you've shared with us that you're, you're doing a great job with that, Kyle, tell us what your future retirement looks like.
[00:40:37] Kyle Doney
I've thought about this and I don't think I'll ever retire. I like making deals. I'm a deal junkie. I like the game. And you know, I know guys that are in their seventies and plus and they're still doing deals. I think that'll morph into a different type of deal making. I'm already doing some lending and I could see myself going to more of that space where I'm bringing capital into deals and I'm lending to guys and. More of like an advisory, like, Hey, young buck, here's why, you know, here's why you shouldn't do this deal. Or yeah, here's the money to do this deal. And I think it's a good one, and I could see myself more in that role as I get older and wanna be. Less active right now. It takes a lot of my time and energy to run this business. I think eventually I'll wanna take a backseat role, but still be involved in, in deals and real estate. So I think that's how it'll evolve, my guess.
[00:41:25] Ben Waller
That's awesome. Thank you for sharing that. Kyle. What do you think is the best way to give back?
[00:41:30] Kyle Doney
For me, doing stuff like this, right? Like putting out information. I'm not a guru. I don't sell coaching and I don't do any of that, but I love to talk to people. I love to help when young guys come to me for advice. I like to give 'em advice. It feels good to help people out and avoid the pitfalls that I've, I've done and give advice to guys coming up in the real estate game. And so that's mostly how I give back is through that type of thing. Me mentorship and talking to people that are coming up and just, uh, giving advice that feels good and that's fun for me.
[00:41:57] Ben Waller
So whether people are getting into flipping, either if they're in the Colorado market or not, but especially if they're in the Colorado market, they should reach out to you. Talk about how they can, uh, do flipping and maybe how they can work together with you. Hundred percent. Always looking to connect Kyle. So where can our listeners find you online?
[00:42:12] Kyle Doney
I would say probably Facebook is the best place They look me up on Facebook. You know, I, I try to do a weekly post of what we got going on as far as our projects go. And so I would say probably Facebook is the best place to reach out to me. Thank you.
[00:42:23] Ben Waller
And we'll have those links in our show notes as well. So just a quick summary for our listeners on today's episode. We talked about fix and flips. We covered market selection and a couple other real estate strategies you can use, and also the importance of finding the right partners so that you can build a successful team. We wanna thank Kyle for joining us on the show today, and we wanna thank everybody for listening to Retire Wealthy and Happy podcast. We hope to see you next time. Thanks, Kyle.
[00:42:45] Kyle Doney
Awesome. Thank you, Ben. Appreciate it.
[00:42:47] Podcast Outro
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