How to Go All In And Succeed In Real Estate Investing with Jimmy Tu

Sean: [00:00:00] So thank you so much for coming on the show today go ahead and introduce yourself and let us know who you are and how you got into real estate investing.

Jimmy: [00:00:06] Hey guys! First and foremost thank you so much Sean for having me on the show. Really appreciate it. For those that don’t know me, my name is Jimmy Tu. I grew up here in the San Francisco Bay Area. I’m a full time real estate investor, and I’ve been working in the market for roughly since about 2008. As far as how I got into real estate, I’ve always had a love for real estate to be honest. I actually used to cold call for a mortgage broker back in the days. I think it was like my second or third job and I think during that time they were doing a lot of refi’s, and I somehow managed to, you know, I was the top caller for a few months in a row. And I would call to get people to refi, get people’s Social Security Numbers over the phone. I have no idea how I did that but that was kind of part of my blood already. But, you know growing up in an Asian family, the only thing I knew about investing was, you know, save up a bunch of money, buy a property, and just rent it out forever and that was that. And it wasn’t until, I guess, one day my wife met me for lunch. And she told me she had signed us up for this real estate class. That was Robert Allen at the time. That same day I found out I was going to be let go from my job because they were doing all remote service. And so pretty much from that day. I took whatever I could from my 401k which wasn’t very much at the time. Several thousand dollars, maybe less than 10,000 bucks. Maybe like eight, nine, ten. And I went to that class and it was really just one of these teaser courses where they just give you enough information before they try to sell you on the $50,000 coaching program. And so for me, I naturally gravitated towards rehabbing because you know, I’ve always been in cars. I’m a big car guy. And so I always like taking something that’s kind of that needs to be restored. So that’s kind of where I naturally gravitated towards at first. But, you know due to the lack of resources at the time, another thing they talked about was wholesale. And so, that really blew my mind because I’ve always been naturally a hustler, right? So I would go out and just like throw the hunt. I like finding things. So that’s where I started. You know, I started making a ton of offers. I think it was for a good nine months, right? And at the time they taught us to just make offers to REOs and short sales. You know, that wasn’t working very well and it wasn’t until I actually met my first direct-to-seller where it kind of changed the game for me. Kind of a long-winded answer but that’s kind of how I got into real estate.

Sean: [00:02:40] It’s pretty awesome. So did the class actually teach you anything useful would you say? Or did you kind of learn everything on your own?

Jimmy: [00:02:45] What it gave me was at least the foundation, right? So they talked about everything in that class which was you can do wholesaling. There’s rehabbing, there’s tax liens. There’s commercial. And so at the time I was just overwhelmed, but you know, I laser focused on wholesaling given my situation, and then rehabbing which was where I eventually wanted to go. So in a way it gave me just enough information to know what was out there. At the time I didn’t have $50,000 to sign up for this course or this mentorship. And so I went out to BiggerPockets. I found one of the books I can at the time and I just implement it to be honest.

Sean: [00:03:27] You just did it. And you said you took your 401k. Did you cashed out your 401k? Did you go all in?

Jimmy: [00:03:33] Yeah, I cashed my 401k. It was like basically a 101k at the time right? This is back in 08-09. It was scary man. Like, you know, we talked a little bit before this, you know, it wasn’t very much money. Right? But I’m one of these guys that I take action first. I’ll jump off the plane and I’ll figure out a way to grow wings on the way down. That’s what I kind of did here, right. You know like George Washington told is that “lieutenants burn their sails” and that’s exactly what I did. I contribute my growth basically to taking action to be honest.

Sean: [00:04:09] That’s awesome. So I mean, as you know, I recently quit my job too, and I have a little bit more than you did but I’m so scared myself. I’m like “damn that’s it. There’s nothing else coming in. I gotta go all in now!” So, what did you do during those nine months before you actually got your first deal.

Jimmy: [00:04:25] So during those nine months, I would make these offers right? So thank God I found a couple of agents that were relatively newer at the time. So they were just getting started as well. And you know, they were willing to write up these offers for me. But during those nine months, I think you know, I look back now and I’m glad I it took me those nine months because during that time what I was doing was I was looking at the data, I was learning my market, I was learning what days on markets were in certain areas, why maybe one specific property might sell for $200,000 more even though it’s less than half mile radius because of the school system. Basically, I pretty much became a master of my market and and that within those nine months, by me making tons of offers every day allowed me to be able to really understand my market. And so I contribute a lot of my success today from really going back and really understanding the market and values and all these areas that we work.

Sean: [00:05:28] So what market were you specifically working on when you first started?

Jimmy: [00:05:31] So at the time I was in San Francisco, so obviously, naturally San Francisco, Alameda, areas like Oakland, Hayward, Castro Valley, Fremont, Berkeley. Just that General East Bay Area along with San Francisco. I also grew up in San Jose. So I somewhat understood the market there as well, but it was a natural progression. So I would you know, I run comps and work certain zip codes and then once I really understood those zip codes, I would add additional zip codes and really look at the data, look at the days on market and really understand slowly and kind of build a database of all these areas and really familiarize myself with it.

Sean: [00:06:11] So I’m currently doing that. I’m trying to do more market research on my individual cities. But to be honest, I’m not actually sure what I’m looking at. You know, you can see all these numbers, you can see I guess three-bedroom two-bath go for this price point in this area. But what else were you looking at during that time?

Jimmy: [00:06:26] About that time, you know, I was just looking at crime rates. I was looking at school systems. One of the big things that really helped me was days on market. How many and what areas are more desirable than others, right? There’s so many more tools now that are available to people that weren’t available at that time. And so I would look… at the time the only tool that I really had was MLS, it’s got enough to give you access. And I was working with a realtor at the time. So I pretty much just pulled whatever data I could on the trend cash transactions and focused on those zip codes and really study those zip codes to understand, “Okay, why are they buying in this area? Why are certain areas have a lower days on market than others?” And so that’s kind of where I started. And so then I started familiarizing myself with which school systems were more desirable than others, which areas were in progression, that are in transition, and that will have more people were starting to buy in. And so really understanding that data kind of help me I’m kind of laser focus and which zip codes and areas I should be targeting.

Sean: [00:07:33] Right because if it has low days on market, that means that properties are selling very quickly and people love that place. And if you have a flip property you can sell it without having to have it on the market for like 90 days.

Jimmy: [00:07:43] Exactly. And also when you’re in an area where it has a lower days on market… so back then they have the old school mail formula, right? The maximum allowable off-of formula. Which you know the old school one was, 70% minus repairs, etc. So you can get away with that in some areas here in the Bay Area but you know some areas you’re going to price yourself out of the deal. So by understanding the market, understanding the data, it’s going to allow you and give you the confidence to be able to maybe bump that number up to be competitive in an offer situation and still allow you to be profitable at the same time. Does that make sense?

Sean: [00:08:23] Yeah makes sense. It’s kind of like you don’t need to have 70% off if you kinda know what the trends are for this property, right?

Jimmy: [00:08:30] Exactly.

Sean: [00:08:31] So if you don’t mind me asking, like what is your buying criteria? How do you kind of evaluate a property?

Jimmy: [00:08:36] So for me, I mean, it depends on the area and kind of what my exit strategy is, right? So these days I’m looking for underutilized lots, opportunities to where… the first thing I look at is what type of zoning is this property on? How big is the lot?Versus me, maybe I’d say eight years ago, I would look at it and say “Okay, what’s the ARV?” It was very cookie cutter it was “Okay. What’s the ARV? What value can I be at? I’m going to make the offer and if it doesn’t work, I’ll move on to the next.” So now what I’m doing is I’m trying to maximize every lead that comes in to see, “Okay, what’s this property going to be worth? Let’s see if I add another maybe five to six hundred square feet.” Or what’s the zoning potential? Can I actually maybe split the lot? Could I maybe get it entitled to maybe build, you know a commercial mixed use building? And so for me whenever we deploy marketing now, whenever we get a lead that comes in, we look at it from every single angle to determine, “Okay. Is there several ways to maybe skin this cat?” Versus looking at it very cookie cutter and saying, “Okay. Does this fit the 70% and below buy criteria? And if it doesn’t then we move on to the next one.” I’ve left a lot of money on the table that way I’m sure. Now we’re making sure that we dissect the data and the deal before we make a decision.

Sean: [00:09:59] Nice. When you say “we”, who is we?

Jimmy: [00:10:00] For me it was me and I had a partner at the time. And so you know for me right now, actually I don’t know so much, but I’m basically building a team. It’s me, and there’s one person that I work with right now that looks at the deal together for me that I’m training to be an acquisitions person. You know, I’m training him to really look at the data and kind of what I’m looking at to determine kind of where we need to be offer-wise in order to make it work.

Sean: [00:10:26] Gotcha. You see my own personal problem is that exactly what you said. You look at the ARV, you backtrack and you say “what can I actually buy it for?” Sometimes, especially in the Bay Area the comps aren’t quite there. Like there just aren’t comps, right? And I mean, what do you do in those situations?

Jimmy: [00:10:42] Some places where it’s a little bit harder to comp, you know first thing I do is I try to look at what price per square foot would be in that area. Once I do that then I’ll start looking at data that’s maybe a little bit further. So I like to be within the past three to six months. But there are some areas that may be a little bit more challenging, the comps, because they don’t have as many recent sales. So basically I start off with a price per square foot and then basically, I might look at that. Although you know it might be a little outdated, I might go back a year just to kind of give me a feel for maybe, what a property that sold that might be similar in square footage and bedrooms and baths, might have sold for a year back and then I’ll compensate for it. You know, maybe I’ll subtract a certain percentage. Or you know if it was a two-bedroom-three-bath, etc. So I make my adjustments accordingly, but that’s kind of where I would start if I’m unable to find comps for property.

Sean: [00:11:38] Got it. One of the craziest things too is that when the property is smaller, price per square foot naturally is higher, than when a property is bigger, right?

Jimmy: [00:11:47] Especially here in the Bay Area, it’s a different beast. I mean, sometimes you have to actually create value, right? So let’s say in certain areas what you can do is. You know say if you have a property that’s maybe under a thousand square feet, 800, 700, 900 square feet and it might be in a really desirable area in the South Bay right? So I’ll look at it and say,”Okay, well maybe if we get the plans approved, we’ll be able to add another 15 to a thousand square feet” Now it just went from a 2 million dollar property to a 3 million dollar. I try to look at it from an angle where “Okay, what can I do to maybe add value or create value out of the deal?” versus saying “Okay it’s 800 square feet. I’m going to comp it as an 800 square foot property.”

Sean: [00:12:34] Yeah, that’s how you make money in the business by doing some value add stuff.

Jimmy: [00:12:38] Absolutely.

Sean: [00:12:38] Yeah. I mean I’ve been doing research this morning. I saw this property on the MLS. It’s been on the market for over a hundred eighty plus days. It’s not moving and they drop the price by $300,000. You know it was like 1.6 million dollar home in Sunnyvale, 12,000 square foot lot; a huge lot! I was thinking wow! There’s a lot nearby that sold for 2.7. Similar sides and I was like “I don’t even know what’s going on there.”

Jimmy: [00:13:05] That’s Interesting.

Sean: [00:13:06] So I’m too scared to… I’ll send it to you later on to check it out, but for me, I’m like what’s going on here? And I’m scared now, right because no one’s touching it. There must be something wrong with it. Right?

Jimmy: [00:13:16] Don’t run away from it so just because… and I know that’s happened to me before too. Somebody sent me, you know, they might send me a deal. I’ll say “Okay, I don’t understand what’s going on with this. There must be something wrong with it.” And so I would try nitpicking and figure out what the hell was wrong with it and I just would pass it just because you know, my thought was “okay if somebody else passed on it, you know, there must be something wrong with it” And then I check on the MLS maybe like two or three months later and it was sold for more than what I was willing to pay for it. So I kick myself in the ass, and I’m sorry, I don’t mean to cuss but I kick myself in the butt and I’m saying like “Man I should’ve went for it!” And so I don’t let that deter me nowadays. I try to figure out and I’ll try to get as much information as possible. Like say the leads coming from an agent, I’ll ask him and I’ll say “Okay, are there any reports on the property?” I’ll try to get some information as far as why you know, people are passing up on it before I pass judgment as well. It might just be a lead that you know… or it might just be a deal that somebody forgot about. You know when something is listed and it sits there for a while there’s not as many eyes on it anymore.

Sean: [00:14:20] Maybe everyone’s thinking the same as me. That “Oh it’s sitting there for so many days. There must be something wrong with it.”

Jimmy: [00:14:25] Yeah, totally I was there at one point.

Sean: [00:14:28] Yeah. I mean, I’ll send it to you afterwards. You can take a look at it. So how are you currently financing your properties?

Jimmy: [00:14:34] So right now I have partnerships. I also have good friends that are very successful in business and don’t have necessarily the time to go out and do what I do. I have partnerships that I worked with through the years, through relationships to finance properties as well.

Sean: [00:14:50] So are you acquiring them through hard money still or is it all-cash offers with your business partners?

Jimmy: [00:14:55] It varies depends on what our exit strategy is, right? So, you know, if we’re just doing you know quick flip, you know, I have the resources for that. I don’t know if I told you this I got really burnt out doing projects back in 2012-2013. Once the market really started turning I had to make a decision as far as “Okay, you know, am I going to continue to burn myself out and try to maximize all these projects and be cash broke during the process, right, because doing projects, you’re using a lot of your own resources on the rehab as well, or do I go back to my roots and kind of just focus on what I do best which is you know, finding opportunities?” And so during that time I really switched my business model because I built a lot of ton of good relationships just in the REO groups that I was running, you know, and the common denominator was people were coming back to me asking you know if I can find them opportunities . So that’s where I went back and actually started doing a lot more wholesaling and cherry-picking opportunities on the way. So that’s kind of where I am now, but I’m using the same model that I am finding single-family opportunities now focusing my efforts into finding more underutilized lots and development opportunities to you know to sell to builders for now and eventually start doing all the entitlement process from start, from point A to point B.

Sean: [00:16:14] So you started rehabbing in 2008 and then by 2012-2013 you’re getting tired of…

Jimmy: [00:16:19] No, I started wholesaling right for to in 2008-2009. Did that for a couple of years until I really… and then I started developing really good relationships with some of these rehabbers that I was selling deals to. And you know through relationships I started building, getting my connections through with hard money. I was able to use some of their contractors. And so then I started doing my own projects. And so I was doing that for a couple of years got really tired and burnt out, you know, because we were pretty much a two to three-man operation at the time. And you know, I went back to just focusing on finding opportunities and just cherry-picking my deals along the way. So for me, I always look at a deal and say, “okay. what’s the best way to maximize on this deal? Am I going to make a quick 70 now versus a slow 120 later? Or does this deal allow me to create opportunity and it’s a multiple six-figure opportunity, but it’s going to take more time than I might be leaning towards going that route?” So for me, I don’t necessarily focus on one specific strategy. I try to look at the deal itself and see what’s the best way to maximize profit but still be able to be able to get out of it sooner than having to sit on it for several years.

Sean: [00:17:37] Now that makes sense. And you said you’ve built a huge network of real estate investors. Were you a group leader at some point? You created your own REO group?

Jimmy: [00:17:45] Yeah, so we ran a REO group in the Bay Area for about five years. Wasn’t until I had my son two years ago that it’s really tough to really to be consistent and do every month. That’s something that we’re thinking about picking back up now as he’s getting older. But those relationships that I’ve built, you know from that group, that’s invaluable. I mean, I’ve met money partners, business partners like JV’d with deals with people in those groups. I’ve built a really good relationships and you know, if I could go back I mean, I would say that that’s one of the things that really contributed to my success and where I am now is the relationships that I’ve built.

Sean: [00:18:29] Yeah, so I started my meetup group just this past year as well. I know it’s hard. Right? It’s hard to hosting groups.

Jimmy: [00:18:35] It’s you know, it’s tough. I mean because you know, you have to kind of commit yourself to it. You have to promote it and get people out there. But at the end of the day it’s worth the truck and I’m going to make myself out there one of these days to check out your group. It’s worth it. Then it’s it really is at the end of the day because this is a relationship business, right and to me my relationships are everything. And so for me, I like to add value to people, you know, in all walks and stages of their career, you know, so these could be people that are just starting out, you know, they haven’t gotten their first deal because I was there at that one at one point. You know back in 08-09, one of the things I was trying to do was go out to these meetups and meet the real players out here in the market. And some people, you know, they’ll see me as competition, they kind of brush me off and weren’t willing to share information. So one of the things that I promised myself was that, you know, when I reached at least some level of success that I would give back and help other people and so through the years and through the platform of having an REI group. I was able to do that. So I would have people, newer people that were starting out to seasoned vets that were out there as well that needed help with something.

Sean: [00:19:47] Nice. That’s pretty awesome. What are you doing right now to generate your source of leads? Like you have so many coming from different sources that you’re able to sell off most of them and then try to pick the best ones for yourself?

Jimmy: [00:19:57] So in terms of lead gen, so right now I have about five local cold callers. So I have a small call center. I’ve also built a network of like a property scout team a bird dog team of the consists of Uber drivers, UPS and Lyft drivers, postal workers, ADT installation people, water and mold remediation people. I’m always trying to keep my cost per lead down my business card. And you know, I get consistent deal flow through just my network of people. On top of that. We tapered a little bit down on the direct mail, right, but we’re a lot more strategic about it now and so we’re also doing some digital stuff as well. So PPC. So we’re trying to we’re trying to create multiple lead falls. So you never really want really want to rely on just one. Back in 2010-11 all the way up to maybe 2013, I’m sorry, maybe 2015, direct mail was our breadwinner and just due to the oversaturation, it’s caused our response for each to plummet. So we have to create ways to find opportunities.

Sean: [00:21:15] That’s hilarious. So you going with the Uber and you say, “Hey man, by the way, my name is Jimmy. I’m a real estate investor. Here’s my business card.” And what do you say to them?

Jimmy: [00:21:24] To me honestly, I just like to talk to people right? So whenever I get a ride somewhere, you know will just naturally I’ll just have a conversation with these people, learn their story, figure out how long they’ve been driving. Naturally they asked me kind of what I do as well. And so, you know, I typically just tell them “Hey. I invest in real estate. I buy properties locally in the area. I actually work with other drivers as well. You know, typically we’re looking for properties that you normally would pass up. So you would pass some of these properties that have high weeds. They might be boarded up, might be a ton of mail. It might look terrible from the outside. Basically we’re looking for the eyesores of neighborhoods, you know while you’re out in the street anyway, here’s my card. Once you want you to keep me posted if you see anything. Maybe snap a picture or something then send me the address and we’ll do the rest and if we’re able to put something together, we’ll take care of you.” And so people, especially when they’re already out there anyway doing their job, you know, people are always trying to create additional streams of income. Cost of living here in the Bay Area’s crazy. So naturally people always want to find a way to make money. So it’s a symbiotic relationship where it’s truly a win-win for everybody.

Sean: [00:22:37] That’s hilarious. So if you manage to close the deal from a lead from an Uber driver or UPS worker, you just go on like a thousand bucks or how does that work?

Jimmy: [00:22:45] Yep, typically about 1,000-2,000 depending on the deal size. But you know our base is about a thousand bucks.

Sean: [00:22:53] Nice. I imagine I have Juan Diaz. He said he went to like somewhere in Oakland. He met some homeless dude. He says “here’s my business card, find me a you know a property that’s off-market and I’ll give your some money”

Jimmy: [00:23:04] Yeah, you got it there. You got to think outside the box these days and it’s really cool when you’re able to you know, truly be able to help somebody else and everybody’s benefiting from it. I, for me personally, I take pride in creating, you know, win-win opportunities for everybody. And I see the value in long-term relationships versus you know, short-term situations.

Sean: [00:23:27] Right because we’re going to be here for a long time, right?

Jimmy: [00:23:29] Absolutely. I mean for the long haul baby.

Sean: [00:23:32] That’s right. So do you have like a favorite deal that you’ve done?

Jimmy: [00:23:35] Probably my Lot deal. And the reason for that is… so I bought these two lots over there in Hayward. Initially when the when the lead first came in it was a guy that says “I have two houses right next to each other. I’m looking to sell it. I’m looking to retire and I’m looking to move out of the country.” And so when I first comped the deal and I looked at the numbers, he said he wanted a million dollars each for each property. But when I looked at it I said “this property is only worth like maybe six to seven hundred tops”. Until I actually looked at the lot I said, “Wait a minute this is… there there an acre on each side.” What I did was we spoke to an architect and said we should actually… phase one do a feasibility study to see, “Okay, what were the possibilities of these lots. And so when they came back they said “Well, you know at first it was somewhere around 14 properties if we get to split it up into about 14 separate lots” and we got a second opinion and it turned out it was about 17. Immediately locked it up. Before I did that, but I’m glad I did and I was able to give him his full asking price on both lots. So, what I did was I contacted a few of the local builders in the area. One of them which went out there and looked at it and said “hey, yeah, this is something I’d love to do. Maybe we could JV and do something together.” But you know, he said that it would take somewhere around two years, maybe two and a half years to get it done. And so for me, you know, my mindset was a little different at the time right? And so, you know, we’re trying to be in and out of deals maximize profits. And so we had a second guy through my partner at the time that offered us 2.6 for the property. We ended up taking that. But now that I look back, you know, I think we could have gotten somewhere around 4 million for the property had we fully entitled from point A to point B to point C. So I like that deal because I was able to one, I was able to get the guy exactly what he wanted. Two, it helped me open my eyes and change the game for me to say, “Okay, we’ll …” versus me just looking at it from you know, very cookie cutter way of just “okay ARV in this area is X, I need to be at X.” I would have passed up on this deal had I not looked at the size of the lot or the potential of the lot, right? And lastly it really kind of pushed us to start going out there to develop more relationships with some of these builders in the area. You know, we’ve been able to gain a wealth of knowledge by, you know through those relationships as well. You know it brought a new level of excitement for me because now it’s almost like I’m learning this business all over again, right? So, you know, I’m learning what the parameters are, all the different zoning types for every county, to really understand that and I’m going to apply what I know from finding single-family opportunities into this development space because to be quite frank, I mean not too many builders or developers have the time nor the resources to really go out and do what we do. So we’re really adding a service for them and we’re creating value for everybody involved as well. That’s something I’m really excited about.

Sean: [00:26:55] Yeah, so you’re moving more towards that direction right trying to find commercial lots to entitling buildings.

Jimmy: [00:27:01] Yeah.

Sean: [00:27:02] Do you have a specific market you’re focusing on right now?

Jimmy: [00:27:04] Primarily the East Bay right now. So this is Oakland and San Leandro, Hayward. Simply areas that I’m familiar with at least and starting to learn a little bit more about the South Bay as well. There’s a lot of activity going on over there.

Sean: [00:27:20] San Jose right? Sounds they have a lot of activity.

Jimmy: [00:27:23] Totally so you know so I’m slowly kind of working my way out there and to go back with my story, this is kind of like how I was when I first started learning all this stuff, right? So it’s you’re never going to stop learning and that’s the thing I love about this business is always growing, always learning, never being complacent, and stepping outside your comfort zone and going out there to create opportunities for yourself.

Sean: [00:27:51] Have you ever had any like horror stories or things when projects didn’t go as well as planned?

Jimmy: [00:27:55] Yeah, my first rehab! So I bought this property in pretty bad area of San Francisco part of town. It’s in Hunter’s Point. I think we bought a property, it’s on Palouse Street back in 09. And we thought we bought and we smoked a deal. We bought it as a short sale for our… I forgot what the price was, it’s like a hundred sixty five to hundred sixty seven. I forgot it but it’s somewhere within that range. So we bought the property and you know, we got a couple estimates and so we’ve got a couple of different contractors there who were ranging from 40-60 thousand and there was one that we got that was of 30,000. So naturally as a newbie, you’re like, “Okay, well, let’s go with the 30,000 right? We’ll make a bunch of more money.” And so and on top of that, the hard money lender that we were using, he says “hey, this is…” I got the recommendation actually through him because he says,”hey this is the guy that actually goes out to inspect all my properties before we do the drawers. I trust him. Why don’t you go have them build your job and see how it goes?” When I talk to my partner about it he says, “Okay. Well, you know he must be good. He works for the hard money lender guy, right?” So we ended up using him. So we start the project. Property gets broken into. They steal our copper. You know then we started getting a bunch of these change orders. So the $30,000 bid, by month two turned into a 50,000 dollar repair bid. And so by that point out I called the lender. And I said, “hey, I think we’re going to have to bring in our own people. I don’t know if this is working out.” He says “well, oh Jimmy don’t worry. He’s probably saw something that you didn’t. Keep them on the job. You know, I trust him. “And so we’re naturally we’re trying to build a relationship with this guy. So we said okay, maybe we’re just missing something. So anyways fast forward nine months later and keep in mind we started at $30,000. At this point our budget’s at $90,000. So we blew past our budget, blew past our time frame. Property got broken into three times at this point, stole the copper every time. They also stole the tools that were outside of the property at the time. On top of that. We staged the property and you know at this point we got a buyer. We’re in escrow. I get a call from the stager. Stager says, “Hey Jimmy, I’m going to go pick up my stuff.” And I get a call about an hour later, “Hey, Jimmy, where’s my stuff?” These guys literally they must have had a moving van. They got like the fake apples, the fake beds, the washer dryer, all stainless steel appliances and they just left it bare bone. And I’m freaking out and I’m just like “oh my God, what are we going to do?” All right. And so, you know, we had to contact the buyer and kind of explain what happened. And so he says, “You know what I’ll I still want to move forward. Let’s go ahead and close but I want you guys to replace the washer and dryer and all the appliances, which we did. Basically we made every mistake in the book on that first deal. We lost about $25,000. We pretty much went over our budget, went over our time frame, bought in the worst part of town,over rehabbed the project and it was just a nightmare. It’s one of those things where it’s like the School of Hard Knocks, right? I pretty much… versus me learning that through several projects, I pretty much learned everything on that one project and knock on wood, I’ve never lost money on a project since.

Sean: [00:31:28] That’s great. So, what did you actually learn, like hard facts?

Jimmy: [00:31:32] Managing your budget like a hawk, managing and being on top of your guys. Slow to hire quick to fire, right? You know now, you don’t go with the cheapest bid. All right, you go with the guy that you know that you can trust, that does good work, understands your business at the same time. You have to have hard time lines and timeframes for these guys to follow. So we didn’t have that. So we were just, you know, we were just winging it then. And so there was no budget and I over rehabbed the place right? So that was one of the things: I fell in love with the property. I was like, “oh man, if I lived here I would want, you know, these nice appliances are and finishes. I want travertine. I want this, I want that.” But we just blew past our budget because I got emotionally attached to the property.

Sean: [00:32:19] Got it. So don’t be emotionally attached to the property.

Jimmy: [00:32:21] No, and manage your budgets and manager your time frames.

Sean: [00:32:26] Great, great. So if you go back in time and tell yourself the things that you don’t know, if you go back in time and tell yourself 20 years ago, what kind of tips would you give yourself?

Jimmy: [00:32:37] Focus on one thing and get really good at it. Avoid shiny object syndrome at all costs, right? So for me, one of the things that was a distraction for me was, during that time, you know, they were short sales and then there were tax liens and there was all these infomercials started coming out, all these different programs. And they were deterring me on different directions and I was losing focus, right? So I will try to learn all these things and never really master the one thing that really was my bread and butter at the time. Right? And so it’s especially nowadays with social media, with YouTube and Facebook, it’s so easy to get distracted with different types of courses. There’s this now,there’s this now. You can be so easily distracted nowadays with all the information that’s out there. You know, if I were to go back to you know, and talk to myself 10 years ago, I would say focus on one thing, become a master at it, don’t be distracted, and focus and get really good at that one thing before you look at other things. So that’s one. Second is I probably should have scaled my business a lot sooner than I did. And that was because you know at the time, naturally I would go out and go on these appointments. It was me and my partner and you know, I felt that if I trained somebody and they messed up on a negotiation that could potentially be a six-figure deal. And so, you know, naturally I tried to keep that to myself. I felt I was the best at it. Now it wasn’t until I actually had my son, you know where you know when I told my partner that I was going to take two months off to be with my wife, I would find myself constantly checking my phone, returning emails, and I’ve got to a point where I’m like “man, what am I doing?” Right? I can’t buy this time with my son back, you know, but you can always make money but you can’t buy time. So that was really an eye-opener for me. And I said, okay, you know what, maybe it’s time for me now to actually build a team to duplicate myself and to bring in people that are better than me, than what I think I am, right so. And just really build a team of quality people to really grow and work on the business versus working in you know, all these years.

Sean: [00:34:57] I saw you signed something yesterday. What was that?

Jimmy: [00:35:00] Yeah, so I just got an office. Shout out to my boys Carlos and Alex. Those guys who really pushed me to get out of my comfort zone. You know because it’s so easy to get distracted at home, right? You know, I might be working on something, my son might walk by and you know and I’ll just go hang out with him for like an hour. Before you know it, dude, I just… Where did all the time go? The office is really, you know designed for me to actually be more focused to start building a culture and so when we bring on people, you know, we want to create a culture, we want to create relationships. And so having a place to go do that foundation is key. And so I’m stepping a little bit out of my comfort zone, but I think ultimately at the end of the day it’s going to help me grow into the business owner that I want to go down the road.

Sean: [00:35:51] You have to have a good working environment because it’s so easy if you’re home to get you know, there’s a bed right there, there’s easy like food and stuff and…

Jimmy: [00:35:57] Right! you know, I mean Game of Thrones is on. TV is on. You know, it’s so easy to get distracted. I just really I mean, we made good money, right, we’re profitable and you know, I really enjoyed the freedom right? I think you know in order to get to the next level, you got to step out of your comfort zone sometimes right? And it’s all people, they didn’t speak right? And you know, that’s what I’m trying to implement into my business today.

Sean: [00:36:26] So, what would you tell someone who’s just getting into the business today? They want to be like you in a few years. What kind of advice would you tell them?

Jimmy: [00:36:35] I would say consistency is key. That’s one. You know, don’t be stuck on analysis paralysis, right? Because I see a lot of people they go to these events, right and they’re like, “oh man, I want to set up my LLC. I got to get my business cards.” Everything has to be perfect before I go out and find a deal right? I think that’s working backwards. I’m naturally like this, right? I am an implementer. So once I learned something I’ll go out and I’ll apply it. But what I see is there’s a lot of people that will come up to me and ask me for help and they’ll say “okay. where do I go?” I’ll tell them what to do. And you know, “let’s start off go read this book”, right and you know, I’ll talk to him to two weeks later and they’ll be “oh, you know, I had work come up. I had this come up” and so… It all starts with implementation and focus. And so focus because what you do in one area is pretty much how you’re doing everything else. So start training your mind. Start training yourself, creating habits to follow through on everything you do. That I would go back and start there. So, you know, start implementing. Don’t get caught up in just trying to learn everything and getting everything perfect. Just go out there and do it.

Sean: [00:37:49] Nice! Do you have any final words for our guests before we finish our show today?

Jimmy: [00:37:53] No. I mean, I appreciate you guys tuning in. You know, I appreciate you guys hearing my journey. And stay tuned, there’s a lot more to come.

Sean: [00:38:03] Looking forward to it. So Jimmy, how can people get in contact with you?

Jimmy: [00:38:07] Probably through Instagram. I can be reached at TheJimmyTuSF. It’s “the” and my name Jimmy Tu SF on Instagram and Facebook.

Sean: [00:38:18] Awesome. Well, thank you so much for sharing your story and your wise words of wisdom and looking forward to seeing you at our meetups sometime in the very near future.

Jimmy: [00:38:26] I look forward to it. Thanks for having me Sean. I appreciate it. And good luck with that deal.

Sean: [00:38:32] Thank you. Bye, Jimmy. See you later.