07 Aug The Realities of Residential Real Estate Investing & Entrepreneur’isms
Warning: listening to this show may result in increased levels of inspiration motivation and innovation. Side effects can include the immediate urge to take massive action to build a better business and life for yourself and others. You’ve been warned. Welcome to Influencers Radio with your host, Jack Mize.
Jack: Today, my guest is someone that I think a lot of people will connect with because he’s been where a lot of people have been, and one thing this guy is not afraid of is telling about the mistakes he’s made as well as the successes he’s had and I think that’s what makes him a true influencer with people that he works with.
Today’s guest is Brant Phillips. He’s a best-selling author, a corporate escapee, comes from a corporate background, a real estate investor, owner, founder of a construction company, remodeling company but really, what I want to talk to you about is the way that he helps not just real estate investors, but people that are in that position, that point of their lives where they have a job that they love.
They may not want to escape necessarily the rat race; maybe they enjoy what they do but maybe they do wanna escape but really what it is that they want – an alternative in investing and they see, you know, we see it every day on informercials, on TV, and seminars, the opportunity to invest in real estate and it can be a fairly hazardous course to navigate and that is what I feel really makes him an influencer is his ability and willingness to go out there and help folks navigate the train when it comes to deciding on how to use real estate as an alternative investment to grow the retirement, to build a better life for themselves and their family. Brant Phillips, welcome to Influencers Radio.
Brant: Thank you so much for having me on.
Jack: All right. So here’s what I want to know. So you, you actually founded a construction company remodeling company back in, was it 2008? 2009?
Brant: Yeah. 2009 was our first year.
Jack: 2009, This was right on the cusp of the collapse of the mortgage industry. Some one of the worst times in the past probably 10 years or 20 years, you’re fishing 30 years in the real estate industry real estate market and you had the bright idea to start a remodeling company.
Brant: You know I got to raise a lot of eyebrows whenever I had that idea. And you know in hindsight looking back I would like to say that I planned it all this way but kind of what happened was you know I got so committed to pursuing my, you know, entrepreneurial dreams and lifestyle dreams that I kind of just, you know, put together an informal business plan and just made a decision, you know, no matter what happened I’m going to give this a shot.
And as you mentioned my focus on construction is in real estate investments and in doing construction services for real estate investors and investment properties so kind of the genius thing that happened that I didn’t necessarily plan that way was despite the collapse there were a lot of construction companies going under at that time. And there was a lot of construction company that specialized in just, in just that you know helping real estate that there’s at least not in our market in the eastern Texas market. So you end up having that was really cool.
Was that a lot of foreclosures started coming onto the market and a lot of Real Estate Investors started buying the buying properties at really discounted rates and we kind of fill that void in providing the renovation services on those investment properties. So in hindsight it worked out. We were like, I think we completed close to 80 or 90 renovations our first year in business and we had a projection to do like possibly 30 to 40. So you know it was a great it was a great year as I worked a lot. I can tell you that much. But yeah in hindsight, everything worked out really really well. I just wish I could say that I plan planned it to be that way. I just can’t take credit for that but everything worked out well.
Jack: Well I got to say that I think that’s what I love about your transparency is that you know you don’t claim to have this clever plan that that, you know, 80 houses you know 80 remodeling jobs, construction jobs when construction companies were fighting and starving for work. You managed to fill a niche by accident or not.
That was actually almost a little cottage industry that came about because of the collapse of the mortgage industry, because of the collapse of the of the real estate market and the way that you dove into this, like you said you know it’s nothing unique for people jumping to business with blind enthusiasm “I’m going to do this”; kind of ignoring a lot of the signs that maybe this isn’t really a good idea. But you made it work.
So, obviously going through that time be an investor yourself you had some insight that helped you resonate and connect with real estate investors that were taking advantage of the opportunities that were coming up in the fact that you could I guess what would you say you could speak their lingo as far as when it came comes to remodeling. Know what are some of the things that you had insights to that that made you particularly attractive to investors versus all the remodels out there struggling and starving?
Brant: Well I think that was that’s one of the most enjoyable parts of what I did because whenever I was in corporate America you know I was buying 10 plus houses every year. Pretty close to a house a month while I was working my full time corporate job and I worked long hours at that job.
And I can tell you that I lived through every contractor horror story and headaches that, you know, that we’ve all heard and we’ve all seen and many of us have experienced some of those, I’ve experienced all of them.
And you know it was it was it was very contrary to what I had read in a lot of books and even learned there is some coaching cloud was that you know that the contractors really had the capacity to make or break your deal and meaning to turn in poor quality or they mismanage a job or they pick the wrong colors or things like that.
And what I saw was that a real lot of real estate investors were relying on contractors for a good portion of profitability on their job and a lot of the aesthetics on the job. The paint colors, floor colors, all that type of things. So I always viewed myself whenever I got into the construction business that I was a real estate investor first and that was how I was making the majority of my income and what my role I guess that business passion were, if you will, and so that’s what I got.
It took a lot of enjoyment from and still do is helping especially newbie real estate investors or people are just busy with the job and they’re not up today on market trends and things like that providing that expertise at the same time providing construction services with a higher level of trust and systemized process to get through the rehab or you know some of our competitors may take 60-90 days and well turn out that thing finished product in about 30 days and just know that those types of things are what we provide and I routinely meet with designers now and decorators and things like that just so we stay up to date on the changing trends and they’re always changing in terms of selection.
So that’s the kind of insight that we provide as well as you know we can help you know investors to gain plan financing decisions and strategies and market analysis on one to rent and one to sell, all of those types of decisions that other contractors just can’t provide because that’s not what they do.
Jack: Well you know one of the things that you made an important point is that you seem to imply that some of the infomercials and real estate seminars make it sound easier than it really is. Is that true? Of course I’m being facetious but we’ve all seen that, you know, you see the guy on TV that you know look how stupid I am and I’m successful you know it.
Brant: Yeah *laughs*
Jack: Yeah it is more difficult. All right. Well can we just establish that.
Brant: Yeah absolutely, you know I love the show. I’m not going to lie. I love the shows and I’ve shot some of these, they call them sizzles on the. You know to be basically considered for some of those shows and I love the shows once again but I won’t mention any names but you know speaking to some of these directors in the indie film as you know the goal isn’t always to paint the picture the most realistic flip or the most realistic rehab they’re gonna find you know.
Jack: You don’t say?
Brant: So yeah, believe it or not. But yeah there’s a vision of truth to the show but not the full truth.
Jack: Well I think that’s the important point is that it’s not as easy as they make it sound that it’s you know obviously real stays in the aggravation, the profitable aggravation but aggravation nonetheless. But what I think in, here’s the kind of the role I think about when I think about what you do is when you’re looking at financial advisers right you’re looking at people that help you with your money management and things like that.
There’s really two categories. There’s the people that work for the financial institutions that say we’re going to help you with your financial planning and then they make their money by selling you their stocks and mutual funds which to me there’s a conflict there right. And then there’s the financial planners that say “I have no affiliations with any of these people. I’m going to for a fee help you make the best decision for your circumstances.” And to me, that’s far more valuable financial planner to have. And so I think one of the things that is really attractive about what you do is that you don’t sell houses necessarily.
Even in construction, I think one of the unique values they have even though you do remodeling, I’ve seen in not just on one occasion but number of occasions that when people come to you for remodeling or estimates on houses that they’re considering to buy for investments where some construction folks might you know take every opportunity they have to get the job you’ve actually convince people that “you know what you should keep your money and not buy this house because based on my analysis it’s not going to be a good deal for you” or people that have even purchased houses and say I want to completely redo this and I want it done this way that you’ve come back and said “You know what you’re going to be much better off, you get a much better return on your investment by not doing this.”
Even though it cuts into your bottom line and you’re telling them don’t buy this much carpet from me. Don’t buy this much paint from me. But ultimately, what you’re doing is you’re giving them a much higher expectation to be successful with that with their real estate investment. And I think that’s probably been one of the reasons for your growth in the referrals and the reason that people do business with you is because you’re not out there trying to make the sale at all cost. You know how did you come across that what is it that drove you to tell that first person “No this probably isn’t going to be the best thing for you to do” even though it costs you business.
Brant: Well so yeah. So that’s one of the ways that we’ve built a really really loyal customer base. And so I think there’s a couple things. One there’s just you know that there’s the integrity that’s where it’s within all of us. And that’s the first thing that that that that I’m motivated by, that my team is motivated by, is just to be honest and have integrity and all of our relationships.
On the business side of things, though, I can tell you that I’ve been there and done had you know I’ve lost money on deals and I’ve experienced a lot of bad decisions and you know I’ve had deals that went wrong and that does happen and I’ve seen the other side where you know we’ve made a lot a lot of money on deals rental properties and floods. You know I’ve seen both sides of that.
So with our customer base we know that if we don’t provide honest input and an investor move forward on a deal or make some bad decisions and ends up taking a loss or just not being very profitable, we’re not going to have an opportunity possibly to work with them again either based off bad recommendations on our staff or are just being silent on a recommendation where we had information on, that or that investor may no longer be in the business. So that’s one thing that we’ve done a lot and we get a lot of deer in the headlights look with especially newbie investors or very were we’re helping them out.
Look, I’m going to do an estimate for a job and work on an absolutely that you know it’s not a good deal or that the House may need too many repairs therefore which makes it not a good deal. And in it. So that’s kind of the reason why. And our business is really built on repeat customers because the average contractor remodeling company when they do a remodel for their average customer, other typical customer it’s kind of a, it’s one-time, it’s a one-time service for that for that customer most likely because people don’t renovate their personal homes quite often.
And but we’ve got, we’ve got customers that we’ve done 20 plus remodels in a single year for. So we’re built on repeat business and the only way to really establish good relationships is to help them truly be successful in the real estate investments. And I can’t tell you how many times like literally hundreds and probably thousands of times that we’ve told people either to walk away from deals or we just talk them down on you know they may want to add some things to the projects something that they saw on HGTV but it just doesn’t make sense in that market.
So we’ll try to analyze what are what is the customer’s desired outcome but what’s really, you know, with that target market where that house is located kind of where’s the sweet spot. You know what are the minimum things that we do. What are the things that we thought must should allow like the things that you must do. There are some things that you probably should but you can have some leniency on that whether you live every now and then we throw in a couple of wow factors to the project and so we kind of help them make those decisions on a business perspective on what’s going to bring them the best return on their investment.
Jack: Yeah. One thing that I know we’ve talked about is you know clearly we see how you can help people avoid bad deals, avoid making mistakes that can be very costly and even you know life changing in their finances. But on the other side of the coin you actually, you’ve come across things that people think it’s a bad deal because of you know what I call 25 cent problems where they’ve gone in they’ve watched the shows on TV and they walk in the house and decide that they don’t want to buy the house because it has a hole in the sheet rock. Now that’s a 25 cent problem but they think it’s major that you know how many people do you come across that you actually can help them navigate and say “You know what? That’s not nearly as bad as you’re thinking. And this is actually a really good deal” and they’ve end up getting you know home runs off of things that they initially may have passed on because they weren’t educated in in what the true problem was?
Brant: Yes. So that happens quite a bit to you know people just either through just fear or really lack of knowledge or experience. You know they’ll make make a small situation so much bigger and really you know, unfortunately, a lot of people walk away from deals that end up. They could have made a really nice sized profit and our companies have actually bought quite a few of deals where we advise the customer, the client “you know this is a really good deal we ran all the numbers like everything in it makes sense.”
But you know there’s some obstacle in their mind that they can’t get over to move forward on that deal. And recently we had a we had a customer who had already purchased a home got into the rehab and unfortunately hired another contractor and things went bad, things went sideways and the contractor run off with some money left the on finished on the project and this investor wanted to ditch the project take a loss because they were just so in a state of shock at that point in time and they were afraid and just really you know she wasn’t thinking straight at that point in time and I was determined to just to walk away from the deal.
So, we came in, looked at her budget, looked at her numbers look you know assess the renovation where it was at that point in progress and they were able to come in advise her on that deal. She actually in that point in time with the contractor we recommended to her was to renegotiate the contact her contractor first to work things out communicate and go over and first seek to work things out with that original contractor rather than finally and he’s going through that process. And she was actually was able to do that. There was a misunderstanding, communication on both sides worked it out with them got the house listed and walked away with a really nice profit.
And so sometimes that’s a role as well just you know taking another perspective, looking at it their business perspective and kind of talking them off the cliff so to speak. And that was a great example where we weren’t even looking to do the construction work on a project. We just want to analyze it and see what needed to be done. And she you know to her credit took the steps and walked out with a nice profit.
Jack: Well, I think that’s right this perfect example is a spotlight on the fact that you’re an adviser you have this adviser capacity similar to the financial adviser they talked about in rather than making decisions or you know guiding a customer that’s going to be the most profitable for you, you go through what’s the best outcome for this customer’s success.
There was a lot of people that watch the shows that you know that the reality shows and they see that and they think that real estate investing means walking through dirty nasty houses swinging sledgehammers knocking down walls and that they have to get involved with the actual construction of this. How many of your clients are walking through the houses with you knocking out walls with sledgehammers and carrying paint brushes?
Brant: You know that I get that a lot as well and I’ve got that a couple times this week where people tell me you know they’ve always wanted to flip out. You always want to get into real estate investing but they didn’t know how to do construction. They didn’t know how to paint or they did not put down tile. And I think that’s one of the biggest misconceptions is that you know we personally as a company won’t take on a project the head homeowner that investor is going to be affiliated with doing some of the renovation aspects of the job because I’ve learned that from, I’ve learned that the hard way to you know my first couple projects I wanted to have a hand in it because I thought that’s what I needed to do, you know you see that on those shows and it didn’t take me very long to realize one that I wasn’t very good at actually doing many of the good jobs that are required to get a job done. And I was slowing down the project I was, I was very clearly costing myself time and money and time on the renovation. And as well as money on the renovation where you know I set a project back 20 or 30 days. And you add up.
Yeah. Mortgage payments and interest and taxes and just not being able to put your house on the market it adds up really quickly. So that’s. That’s another big one where people say wow I have a full time job I don’t have time to you know do this or do that. And that’s one of our you know that’s why we’re in the marketplace and that’s the void that we fill is that where we come in and fill that void where you don’t need to do anything we’ve got we actually have a lot of clients who don’t even they don’t live in the state.
We’ve had, we’ve worked with out of country out of country investors they they’re investing from other countries or they travel a lot. And so we use a lot of you know just you know cloud based management software and pictures and videos and things like that where there is are they in my book are the I guess wisest investors where you know if you look at the shows and we’re talking about how is it really you know like that it’s not, I mean, it’s for some who want to choose the hard way so to speak and then we’ve got other investors to come in and like this is the deal I have I want you to do everything and do what you do and they come back at the end of the project they might check and once or twice and then they’re getting it ready to lift or sell and for them it’s actually much easier than the shows are. They leave it to our company and project managers to deal with kind of the headaches, with kind of the nuts and bolts of the construction site and they focus on finding more deals raising money and just working on their business.
Jack: Selling it to stay out of their own way is the most profitable thing for them to do.
Brant: Yes, absolutely.
Jack: As for well you know clearly I think what you do is changing the way that people think about investing in real estate. You wipe out those obstacles of you know, how much money they need to do this how much time they need to be involved and how much knowledge about construction that they need to have.
And I think that’s where the successes is that you know you give people a tremendous sense of confidence. And it’s definitely earned confidence because you have such a track record of people you know that want to work with you not because you know you have the cheapest paint or you’re the cheapest carpet or any of that stuff they want to work with you because of the result that they see that you can provide of the result of selling their house faster the result of leasing their house quicker which is far more profitable than finding that one person that’ll you know knock 25 cents a yard off of the carpet.
Right? And I think that’s one of the big the helping people see through that and navigate through not only you know what’s good deals and bad deals but also some of the, what I think to your credit the most profitable things that you’ve ever done for your clients is tell them this is not something you should do. And I think that’s what really makes you an influencer for sure in my book and what I like to find out is what influences the influencer you know what is it that influences you inspires you to. Drive you to do what you do and finds its way into you know your work your business that then your clients can be your clients really benefit from.
Brant: So you know I’m like a lot of entrepreneurs and I guess my original calling was just that I was working too much and not spending time with my family and you know seeing you know just running that running that rat race that I was you know not living a great life physically you know with my family, health-wise and certainly not financially.
And so that’s just my biggest motivation is trying to create a well-balanced life where I can do something that I’m passionate about and have the time to spend with my family and exercise every day and just do the things that I love that that’s been my biggest my biggest passion not so much to you know make a million dollars a year and just pursue the money side of things although that is a big motivator for me. That one has that drive to have a security and to have good investments and have a retirement plan and so that there’s definitely a need that that what I do is still what I do there. But also just to have a well-rounded, well-balanced life this is what I’m looking for.
Jack: Well, Brant what is it, you know the people who see this you know clearly that they see opportunities and especially people that have been considering they watch the shows they watch the informercials, they’ve been to the seminar perhaps and they had hesitations had doubts about that and I think they probably find that you may be a person that can fill the void for that how can they find out more.
Brant: The best ways to go to my website which is brantphillips.com and they can get quite a bit of information there and also if that’s something they’re not sure about or they’re kind of thinking about right now that there’s a link on that website if they’d like to request a free strategy session with me, do a lot of phone calls just as kind of see where people were at. Talk to them about some of their fears or some of their, you know, aspirations or you know in line with what is reasonable starting out and just kind of help them out on that strategy session that brantphillips.com
Jack: All right. Perfect Brant. I want to thank you for being on influencers radio. You really are an influencer and I know that you have and will continue to inspire folks with what you’re doing. Thank you very much.
Brant: Thanks Jack. I really enjoyed it.
Jack: All right folks there you have it. brantphillips.com. Check it out. And you know a lot of lessons in this interview for sure just in the way Brant even built his business with getting very specialized in working with a group of folks like real estate investors so a lot of lessons that you may miss this one definitely to listen to more than once. So until next time on Influencers Radio. This is Jack Mize. Remember, you are the only game changer.
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