Drive ’til you qualify with Jarrod Weaver (CFFL 0016)

Drive ’til you qualify with Jarrod Weaver (CFFL 0016)

Jack Butala:                   Jarrod Weaver is a licensed real estate broker in Texas and Florida. He helps his clients reach their financial goals through conservative investments in single and multi family residential properties. He utilizes an intimate market knowledge in financial analysis to identify and acquire the right assets. He tries to teach his clients and agents how to leverage technology by implementing a organic marketing system with guaranteed results. I can’t wait to find out how that works. Jarrod, how are you? Welcome to the show.

Jarrod Weaver:                 Hi. How are you Steven?

Jack Butala:                   Excellent. Jill, you with us?

Jill DeWit:                            I’m here. Thank you.

Jack Butala:                   Are you doing your nails?

Jill DeWit:                            I am.

Jack Butala:                   I can tell when we had more than two podcasts in one day, when we record because your nails look great.

Jill DeWit:                            Yeah. Thanks. Very funny.

Jack Butala:                   Jarrod, tell us who you are in the real estate industry. Explain your niche. It sounds unique.

Jarrod Weaver:                 I live in Texas. Yes I am a broker here and also in Florida where I’m originally from twenty one years ago or so. I’ve really cut out a niche working with people who want to … Sometimes new guys that want to get their first income property. Get a little cash flow rolling. Other larger holders that want to pick up some portfolios stuff.

Jack Butala:                   Okay. Good. Are you working with a lot of people right now? What’s your typical load like?

Jarrod Weaver:                 Yeah. About twenty people is my typical service.

Jack Butala:                   Mm-hmm (affirmative).

Jarrod Weaver:                 Some of those are portfolio holders with a dozen or more properties. Others are smaller time guys. We have a lot of tech guys here of course in Austin.

Jill DeWit:                            Mm.

Jarrod Weaver:                 There a lot of dissatisfied tech employees, engineers, sales guys, that actually make quit a bit of money. They realize that’s not going to last forever. They decide that they want to invest in some cash flow properties. We bring those guys in and explain to them how we work and find them properties that work for what they want to do.

Jack Butala:                   That’s great. It sounds like we have the same type of customer. Land Academy is substantially made up of seasoned employees of large companies that make really, really good money. They want to enhance it. You said it perfectly. It’s not going to last forever.

Jarrod Weaver:                 Right.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   What makes this successful?

Jarrod Weaver:                 What makes this successful is dissatisfaction with tech.

Jack Butala:                   We’ll show about that.

Jarrod Weaver:                 There’s nothing wrong with that.

Jack Butala:                   I’m really dissatisfied with the tech in my life by the way right now too.

Jarrod Weaver:                 Everybody needs to be good stewards of what they’ve been given. When you’ve got money that’s sitting there, it doesn’t have to be a whole lot of money that you don’t know what to do with, but you know you want to do something with it. Let’s find a way to put it to work.

Jack Butala:                   Mm-hmm (affirmative).

Jarrod Weaver:                 In real estate, it may not be extraordinarily liquid but it’s not going to disappear. So many of these guys have lost a killing in the markets. They just can’t bear it. They can’t deal with it anymore. With the volatility of the market, that’s perfect if you can ride peak to peak but good luck with that.

Jack Butala:                   Yeah.

Jarrod Weaver:                 When you got a real asset, a tangible thing as real estate is, that provides the asset that gives a cash flow, is completely safe. In my bio it was about conservative investing. That’s what we really do. We don’t want to buy properties that are speculative in nature. Where we’re buying on top of a bubble. The properties we help people acquire, I can sleep at night knowing that their not going to loose money.

Jack Butala:                   That’s great.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Does a typical deal for you involve buying an under valued, let’s say single family residential home then renting it out with your client [crosstalk 00:04:29]?

Jarrod Weaver:                 Typically yes. Typically yes.

Jack Butala:                   Okay.

Jarrod Weaver:                 Right now we’re in a period that prices are high again, very high again. Right now we’re taking some long term looks at some of these portfolios and we’re doing some sales. The upside, we’re gaining on the sale is dramatic enough that it’s going to take a whole lot of months to ever get back to that cash [crosstalk 00:04:56].

Jack Butala:                   Yeah.

Jarrod Weaver:                 We’re taking some money off the table and reallocating it into other assets or going on the sidelines a minute waiting for whatever the next blip’s going to be.

Jack Butala:                   Jill and I go through that on probably eighty percent of the properties that we purchase. We try to buy properties that are at least eighty percent, maybe seventy five percent below what we can sell them for cash the next day.

Jarrod Weaver:                 [inaudible 00:05:21].

Jack Butala:                   Right. In the past I’ve been really quick to say, “Let’s do that. Let’s utilize it. Let’s double our money. Let’s triple our money.” Lately what we’ve been doing instead is getting a good asset, paying cash for it. Then selling it on terms and earning a eighteen to a twenty year, year after year, fifty percent return on our money.

Jarrod Weaver:                 Right.

Jack Butala:                   Then the numbers are staggering. It takes a lot of patience. I like to joke I have a bottle of Maalox on my desk. I literally do. I really want to sell these properties but we need some long term cash flow.

Jarrod Weaver:                 I was having that conversation today at lunch with one of my clients. We were talking about a storage facility. The thing is, it’s not large. It’s not a huge money maker but when it can sit there and be an ATM and generate a thousand to twelve hundred dollars a month without a whole lot of over sight. The upside on that one you could probably turn it around any day of the week. Probably get close to a hundred thousand dollars positive on that thing.

Jack Butala:                   Mm-hmm (affirmative).

Jarrod Weaver:                 Why sell it? It’s not like it can only be that money today. It’s money in the bank for whatever day you want to sell it.

Jack Butala:                   Yeah.

Jarrod Weaver:                 A thousand plus a month cash flow is pretty good for not doing a whole lot of anything.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   I’ve seen some really good storage deals. Storage facilities typically are on relatively large pieces of property if they’re medium size or maybe larger. They usually are in the growth path. I had a guy I worked with a long time ago that would buy these things, they would cash flow like you’re saying. Not make that much money. He’d keep them for five years and then highest and best use for that land was no longer for storage facility, it was an apartment building or something. He’d sell it for the land value. He did really, really, really well.

Jarrod Weaver:                 Yeah. It’s a nice hold over instead of having vacant land.

Jack Butala:                   Yeah. Exactly. It’s cash flowing vacant land really.

Jarrod Weaver:                 Exactly. Reality of the units is the way they’re built. You can actually disassemble them and put them somewhere else.

Jack Butala:                   Aw. That’s great.

Jarrod Weaver:                 Yeah. It’s not like you got to push them down with a bulldozer.

Jack Butala:                   If you didn’t have to pave the parking lot, that would be the perfect investment deal.

Jarrod Weaver:                 There you go.

Jack Butala:                   Would cost nothing.

Jarrod Weaver:                 Right.

Jack Butala:                   No utilities or anything really. That’s great. Give us an example of a deal you’re working on right now. I guess you gave us the storage situation. [crosstalk 00:08:12] deal.

Jarrod Weaver:                 Some of the single family stuff. We’ve got houses that we’ve bought. Outside of the Austin metro, you can’t go into the city of Austin and do any of this. It doesn’t work. The numbers are just ridiculous down there. If anybodies thinking you can buy a hundred thousand dollar house in Austin, good luck. Not far outside, you go fifteen, twenty, thirty miles outside of the CBB of Austin, you get into some of these suburb communities. We try to pick up houses distressed in some way. Be it a repo, be it a HUD home, be it a whatever. Foreclosure, divorce, you name it. We search everyday for that type of thing.

Let’s say for instance, one of the ones we picked up over in a little town called Gerald. About thirty miles outside of Austin straight North. We pick up houses over there all the time. Every time we can find one that is worthy of getting, we’ll pick it up. Maybe eighty five, eighty six thousand dollars. We put around two thousand twenty five hundred dollars in them to freshen them up. Give them some fresh paint, fresh floors. Make them look nice. Get the yards cleaned up. We rent a house like that for twelve to thirteen hundred dollars a month.

Jack Butala:                   Great.

Jarrod Weaver:                 It gives a real positive cash flow.

Jack Butala:                   Yeah.

Jarrod Weaver:                 Right now the prices are going up. These houses that we got let’s say less than eighty eight thousand dollars in, are worth close to a hundred and thirty. That’s where these guys who are taking a look at these properties and going, “Well, should we pull that cash out now and reallocate it?” That’s typically what we’re doing. Yeah. There cash flow, they’ve been great cash flow but it’s time to pull that out. Typically what we’re looking at now is trying to get into apartment deals with the cash that’s been made on those properties.

Jack Butala:                   Yeah. I’ll tell you, we do not have that roller coaster problem with land. We buy a piece of property then we sell it on terms for ten, fifteen, sometimes twenty years. The worst thing that could happen is that the person just stops paying. Which once in a while that happens. We do everything we can to help them out or whatever and then we just go back and sell it to somebody else.

Jarrod Weaver:                 Start over. Yeah.

Jack Butala:                   Yeah.

Jill DeWit:                            Can I ask a question? Jarrod’s painting a really pretty picture like there’s never any issues with tenants and it’s just so easy. I got to ask, give us a funny story. One of the things that … We’ve done some flipping. We keep coming back to land for a reason. I was going to pick your brain about one of your craziest, funniest, oh my gosh I can’t believe that happened story.

Jack Butala:                   Good point.

Jill DeWit:                            Thank you.

Jack Butala:                   Good point.

Jarrod Weaver:                 Well Jill, the good news is we do our best to keep those at a minimum.

Jill DeWit:                            Right.

Jarrod Weaver:                 We screen pretty strongly ahead of getting tenants in. The things that make you pull your hair out are … This really isn’t funny. It’s more tragic. One of them that just really frustrated me beyond belief is have a couple come into a house. The house is a year old. It’s worth two hundred and sixty thousand dollars. Beautiful new home in a really nice subdivision in Round Rock, closer to Austin. They got a couple of kids. Everything checks out. They’re ideal family. Guys a veteran. Had some hard times. That’s why he’s renting. Everything checks out. Good criminal, good income, good job. We lease the place to him. He’s in there for about four months. All of a sudden I’m having a problem getting paid. We are like, “Hey. What’s going on?” “Oh. Low and behold poor me. Wife left me and I don’t have enough money to pay the rent.”

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