Dave is a real estate investor and the star of the home-flipping show, Flipping Boston. He worked as a firefighter for years before he got smarter and learned to invest in real estate. Now, he is based in Boston and eager to share with us today how he went from fighting fires to flipping houses
In 1986, Dave immigrated from London, England. Coming from a working-class background, he tried a few things which didn’t work out. At 20 years old, he had the entrepreneurial spirit, but he was not good at being told what to do.
He ended up getting a good government job that later became a trap. After working for 16 years, he found himself at 36 years old, married with a kid, and finding it difficult to make ends meet.
He would work 2-3 jobs, but he still couldn’t pay off his credit card bills. From 2006-2008, he got sucked into subprime lending. This lead to his house going in foreclosure, $70,000 in unsecured debt, and plans to short sell his property
Dave found himself screaming and shouting. His American dream had become a nightmare. A ‘Teach Me Foreclosure’ radio ad pushed him to show up at a seminar along with 300 broker people who were looking to get out of financial destitution.
Dave looked at other real estate investors, saw that they weren’t smart and engaging, and believed he could be successful in this.
His first transaction was a wholesale deal. He found out he could do real estate with no money down. He made $5,000 on that first deal in 2008.
So with the last $27,000 they could put on his wife’s credit card, he invested in his training and education. That move bought accountability as his wife wasn’t going to let him off the hook.
Dave believes that he succeeded because he stopped his pride and ego of getting in the way of his progress. He stopped analysis paralysis and was willing to do what his mentors told him to do.
He worked a lot on his personal and business development to transition from a working-class mentality into higher financial literacy.
Most people are just lazy. Dave sacrificed a lot. He just needed the structure to implement what he wanted. He learned from his mentors and implemented a mindset of reciprocity. The system works if you work it.
One of the strengths of a good CEO is to get out of the way and get the right team together.
Dave suggests that people should stop talking and start listening to identify true operators. He learned who to be around and who to not be around.
He made a list of the things he found valuable about himself and what he could offer someone else. Check your ego and find out how you can be of value. The thing is around 95% is bullshit and only 5% is reality.
Build a relationship based on reciprocity first. Dave doesn’t do business with people he doesn’t like. His team is built around passion, authenticity, drive, automating, systems, and creativity.
One of his mentors suggested he should teach. Dave first didn’t think it was possible, but he realized that he could go out and tell the truth, and he didn’t have to be an expert. He can just report on what the experts have done and how that has worked for him.
Since he was hanging out with the best online marketers, one of them sent him a link to a New York film company trying to produce a new show. Dave sent an online application that was so egregious to read that they would either call him up or throw his application away.
He would come out as either a genius or a lunatic. The film company loved his application, so they flew down to see him and his team. He had fun with his team, getting angry and all that. The film company loved it.
So Dave became the big, angry guy on the TV show, Flipping Boston.
Dave gained a lot of recognition over the years. Now, he could send an invite from LinkedIn, and he would get CEOs from various organizations wanting to connect. He benefits from being accepted without needing to qualify first.
Dave has nothing to prove now, but he has a lot to give.
Nowadays, you can easily outsource managing your social media, but you still need to produce the content that gets people engaged. So you need to find out what works and what doesn’t. Study what other people are doing.
You can run your business from your iPhone. But you still need to be vulnerable and ask for feedback. Dave suggests that people can create an online show for fun and see the traction they will get.
The world is changing. People will either change with it or resist it.
The herd mentality of those with the fear of missing out is very strong in Boston. There are no fundamentals or intelligence in the market right now.
The market has low inventory and high demand. There is enough mortgage capital that people can close on those assets.
But Dave worries that the economy is being propped up by Mickey Mouse money. It’s not money that has been earned.
If the government keeps printing money, it would lead to the devaluation of the U.S. dollar. Higher inflation will follow after that. This is why Dave is investing as if he’s right in what would happen when the corrections come in.
Dave isn’t interested in single-family units whether for a fix and flip or buy and hold. He might consider them in 6-8 months from now. For now, he’s taking a step back until the end of this year.
If the transaction doesn’t cash flow 30 days after acquisition, he’s not interested in it. He no longer pursues long-term plays.
Dave has set up a $100M private equity fund investing in multifamily properties. They look for 40-160-unit, Class B buildings.
The fund has a 5-6 year plan with the fund being the owner. Investors participate in the cash flow and in the equity at the time of liquidation.
With their online portal, their investors can check and see how the fund is performing. Dave wants to raise as much money as he can. Syndicating now has more risk attached to it. With his fund, they buy-in on the opportunities of scale and with the expertise of the operators.
Educate don’t speculate.
The professional investor understands underwriting, processes, and systems. Believe that we’ll come through this pandemic after some pain, but for sure, we’ll come through.
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