ITF 55 | Real Estate

 

Noah Evans and Jeff Fawson both had rocky starts, but they hustled and found real estate in their desire to level up their lives. Now, they work together as the owners of Tree City Home Buyers and the hosts of the Chasing Freedom podcast.

In this episode, Jeff and Noah talk with hosts, Craig Curelop and Zeona McIntyre, to look back on their “for real” deals and how they ended up becoming business partners. They drop plenty of gold nuggets on being resourceful and finding a mentor, stressing the importance of taking action and being consistent.

Listen to the podcast here

 

Hustling And Crushing It With Noah Evans & Jeff Fawson

Z, how are you doing?

I am great. I’m back in Colorado. We had a little hiatus but nobody knew because we recorded everything ahead. I’m happy to be back. I missed this. This is a fun part of all my weeks.

I always love getting on and talking to you. Some fun things happened to you. Your hands may have gotten a little heavier.

It’s so much weight from my engagement ring. I’m feeling very excited about that.

For people with big crushes on Zeona, she is officially off the market forever. Sorry. How did it happen? Tell us how did it go down.

We were in Annecy, which looks like Venice. If anybody’s curious, there’s a video on my Instagram. You can go check it out. You could scope out my ring and be all kinds of creeper if you like. It’s a place that meant a lot to my partner, who’s from France. He surprised me. That’s sweet.

Did you cry?

I did cry.

You are awesome. It’s fun. There have been worse places where people have gotten engaged. Speaking of marriage, we have two guests on the show. They’re not married but they are in a partnership and have a cool story. What did you think of Jeff and Noah?

I love them. These guys are scrappy coming from a poor background, so they didn’t expect anything. They worked for everything that they had. They got creative about everything. They made relationships. Sometimes, when things are handed to you in your life, it’s the service because you expect that it’s going to continue to happen. I love seeing their creative ideas and the ways they came together.

A lot of special people come from troubled backgrounds because they have decided that they need to take responsibility for everything in their lives. Relying on other people hasn’t been working for them forever. It’s on them to do it. They’re doing whatever it takes. Jeff was introduced to his girlfriend’s friend’s dad. I don’t think I’ve ever talked to my girlfriend’s friend’s dad. It’s far along the degrees of separation to find someone to mentor you.

Noah did crazy hustle and lost money on wholesale deals but still sticking with it, going eight months on a paycheck and he makes $10,000. $10,000 is a good amount of money but after eight months, it’s fine. I’m almost spoiling everything in the story. There’s plenty more to hear in these guys. Coming from next to nothing to where they are is amazing. You will all enjoy the show.

Jeff and Noah, welcome to the show. Thanks so much for coming on.

Thanks for having us on, Craig. We’re excited.

We chatted and it was a fun conversation. We’re like, “We got to get these guys on our show.” Let’s take it back to the beginning. How did you first hear about financial independence and what year was that?

As far as I was chasing financial independence, I grew up poor and always knew I didn’t want to go the route of work in front of people. Financial independence got presented as a concept for me to chase and pursue by a mentor of mine when I was about nineteen. I was a horrible employee. I pursued financial independence because I would have been fired from a W-2 job eventually for being too stubborn anyways. It wasn’t a hard push for me to do.

You grew up poor. Let’s dig into that a little bit more. What does poor look like for you?

My dad got sentenced to life in prison when I was eleven years old. Mom worked three jobs. I had five siblings. We lived in a pretty rough area in California. That was the lifestyle that we grew up in. We had some family support around us but we started hustling from an early age. We did whatever we could to make money. We bought candy from a cheap store, sold it to people, and said it might be for Boy Scouts but it wasn’t. We started hustling and pursuing business at a pretty young age because that was the only option.

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At nineteen, you met this mentor. How did you find this mentor coming from where you came from?

I got in a little bit of trouble. My junior high school got shifted to Southern Oregon to move in with my grandparents from Southern California. I was living there and started focusing on school a little bit more. With my life story, I was able to get a grant from the school. The Gilmore Education Fund gave me a full ride to college on an educational basis.

I got a full ride to college, met my wife and decided I didn’t want to go to school because I wasn’t good at that either. I moved to Portland and this was her best friend’s dad, who was like, “You’re a punk. My goal is to break you up.” Quickly, he hired me to be his puppy. It was my job title on the paperwork. It was filed, saying I am the puppy and the job description was to do whatever he told me to do.

It sounds like Rich Dad Poor Dad.

I read the book. He was a firm believer. If you got a Christmas present from Scott, it was probably Rich Dad Poor Dad or some investment book. He was always pushing people not to live a normal life.

That move from Southern California to Oregon. That trouble you got in your junior year was probably the best trouble you ever got because if not, you’re probably hanging out with the wrong kids. Maybe you followed the same path. I don’t want to say you follow the same path as your dad. Oftentimes, it goes that way, depending on who you are.

In hindsight, the best thing that ever happened to me was that move being forced upon me. I got a bunch of friends who are still down there being knuckleheads, getting in trouble and stuff. It created this cool move. I had the opportunity to learn about growing a business. My brother lives here. I moved my mom up to Boise. This is the new family hub. We’re out of that environment and living a life that we never thought was going to be possible for the entire family basis. In hindsight, it was a good move. I’m glad it happened.

You’re nineteen years old and that’s when that first flicker of financial independence went off in your head. What year was it when you were nineteen?

  1.  

We’ve got some things to catch up on. I don’t want to leave you behind. How did you first hear about financial independence?

There have always been some entrepreneurial tendencies if I look back on my past, how I got started and everything like that. It’s so funny because it’s easy to think your life was hard until you meet somebody who had a harder life. I always struggled with my childhood. I had an absent father. My stepdad and I would get in fistfights and stuff like that. I also was not a great kid either. I didn’t make great choices. It’s some of the stuff I deserved. That’s for sure. Either way, a lot of that motivated me.

It was the catalyst for me wanting to be better and prove to everybody that I could do anything I set my mind to do. My mom has a picture of me. At one point, I was six years old and trying to sell my rocking horses for money to buy Legos because I had outgrown the rocking horses’ toys and was ready for Legos. That was my first experience of trying to trade something up or flip something. They were all laughing because they didn’t think I was going to get it. I got $21. I sold it but it wasn’t enough to buy the Legos but it’s a good learning lesson.

From there, I started doing duct tape wallets in middle school. I got in trouble for everything I did. I have been escorted off of my college campus by the police because I was standing in front of the bookstore telling students to stop selling their books to the bookstore because they were ripping them off. I was like, “On Thursday, meet me off campus and I’ll buy your textbooks. I’ll beat the bookstore price.”

My first official business was in college. I was buying students’ textbooks and selling them back online. Students were making more money and I was making money, so it was a great winning situation for all parties. The school didn’t like that. They sent me a cease and desist letter telling me I couldn’t talk about my business on campus. It was a fun journey. I learned a lot.

That sounds what happens if you get in the way of the government. Both of you are probably friends because it sounds like you’ve come from similar backgrounds. Was that one thing that you guys have in common is why you get along so much?

Yes. I had never even shared a large portion of my story with somebody. I met Noah casually. We started talking about why we were pursuing real estate and why this was happening. We both went pretty deep into the conversation pretty quickly. We were like, “We’re pretty similar. Maybe we should try and do something together.” We realized that we had similar stories, which motivated us to a common goal but our skillsets were completely different. We were like, “This could work for a partnership,” instead of like, “We’re friends. Let’s do business together because it goes well.”

Jeff, you’re nineteen finding out about financial dependence from your friend’s dad. He gave you the Rich Dad Poor Dad. Noah, you’re straight hustle. Do you know why you are independent at this point or are you trying to make a buck?

To me, financial independence up until I was about twenty meant saving as much as you could to an extreme point. Even when I met Jeff, I’d go to coffee shops and use their free Wi-Fi but never get a coffee because I didn’t want to spend the money. It was extreme frugalness and also choosing to walk places instead of using my car because I didn’t want to use gas or wear out my tires. That’s how far my education of financial independence was. It’s like, “Make everything last forever. Wear socks until they fall off your feet because the holes are so big.” That was financial independence for me.

We’re on the same boat. I was walking three miles because I didn’t want to take a $4 Uber. It was super late at night too.

You got started with your house hack. There’s a lot of parallel between your thought process and my thought process on saving money. The fact that you put up a curtain in a family room blows my mind. It’s so impressive.

I still think that the more you can hustle in the beginning and save every cent you can, allow you to stand higher and build a more strong foundation for what you do later on. We’re all like, “We don’t care about these little expenses.” We got there quickly because of the beginning.

You can loosen those purse strings fast. You guys knocked me out but I wasn’t in the same boat. Jeff and I were the same people. I used to hustle candy bars and I’m a terrible employee. That entrepreneurial spirit shows itself real young. It’s fun when you can recognize others in that same boat.

We got to the point where you’re in college being hostile. Jeff, you’re working for whom?

It was with my girlfriend’s best friend’s dad.

Where did these two storms meet? How did you meet each other? Where did that come to be?

ITF 55 | Real Estate
Real Estate: Entrepreneurship offers the freedom of not having anyone else tell you when or what or with whom you could do what you want to go do.

 

We only met years ago. A lot of stuff happened between 19 and 25 when Noah and I met. I flipped houses for years in Portland, two at a time. I tried to scale up one time and do multiple houses. It went horrible. I lost pretty much everything I made the first three years. That was cool. I learned what scaling of business improperly would do to you. I started studying like, “How do you build a real estate business and not just be a flipper outside?” I was the guy swinging the hammer, laying the floors and painting the wall. That was me forever, my brother and me.

We would do everything but I always knew that wasn’t my main goal. It was a means to an end at the time. We made it happen and it worked. We moved to Boise and I was doing flips for some other folks, running their projects, still doing one at a time. For me, that felt like a nice little safety net. I met Noah. Somebody recommended that my crew turn Noah’s house into a duplex because he was ready to do his house hack. I went over there and gave him a bed.

We struck a friendship and quickly decided. He was talking about sales, acquisitions and marketing. That was always the piece of business that was way over my head. I’m an admin operations day-to-day type of guy like, “Get it done. Figure it out.” I never understood sales, marketing and data technology. That wasn’t me. When I realized that was his piece, I got a couple of houses in the contract and had a way to plug him into some of those. He provided some financing on some flips. That’s how we started working together.

We got to slow way down. You went from like, “I was a teenager,” and then it was 500 deals later. It would be interesting to hear how you both found real estate independently and see what your deals look like together. I imagine you found real estate is getting a puppy. How did that go?

The dude owns six other businesses and casually flipped homes on the side. My mentor was excited about flipping houses. That’s what he wanted to do. He just wasn’t willing to commit all the way. He needed some vehicles for another company of his and I bought some vehicles. I accidentally purchased the wrong vehicles and convinced him that it was a good deal, so we were going to flip up. We flipped two cars and he was like, “We made $17,000. That was awesome.” I turned the whole thing. I have a knack for finding bad things and selling them at a high price.

He was like, “I know you like to flip houses. Would you consider doing that with me?” I had heard one BiggerPockets episode. It was a seminar that had blown through the town and I attended for two days. I was like, “I could do that.” He said like, “I’ll put up the money if you find a house.” I started studying in Portland and said, “What’s a good neighborhood that’s on the edge of being gentrified and has some upside potential?”

I started knocking on doors over there and eventually found some tenants who were like, “We’re getting a big dip. Here’s our landlord’s number.” I called the landlord. He was like, “That thing is a piece of crap. Do you want to buy it? Sure. Take it off my hands.” That was the first flip we did. It went horrible. The market billed us out though Portland did well and we made money. That was the first project that I did. It was a little 3-bedroom and 2-bath project in Portland, Oregon. It went from there.

What made it go so badly, especially your first deal?

I had a contractor steal my money and never show up. I was very naive and gave the contractor $10,000 to start the project because I wanted to make it easy. That was my justification at the time. “You’re going to do labor and materials. Here’s your down payment to buy materials to get started on the projects.” What was supposed to be a $30,000 rehab, $10,000 of it disappeared before any work was done.

I was horrible with my hands. I wasn’t the lawn boy and the guy doing any of that stuff. Quickly, I looked at the numbers and was like, “$10,000 is gone?” I have no choice but to go and do this flip myself. I talked to my brother-in-law and said, “Partner up with me.” We were out there with our phones, watching YouTube videos on how to install the window properly.

Luckily, my wife’s dad was a contractor. He would come by once every two days to check on things and make sure we weren’t building a house that was going to fall. The contractor took the money then we had to do the work, which wasn’t the plan. We didn’t know we were doing. Instead of taking three months, it took nine months to do that flip. That’s back when hard money was three points at 18%. You can imagine that started adding up super quickly. I spent $42,000 on the points of financing for that flip.

What I love hearing about this is your hustle to make it work. A lot of people would be like, “We lost $10,000. We’re going to spend $10,000 more.” I love hearing that you’re like, “We’re going to make this happen. We’re going to learn how to do it. We’re going to watch some YouTube videos.” That shows promise. That’s a cool thing.

I went to my mentor and he’s like, “I asked for that cigarette.” To solely take the credit, I was like, “Can I get more? The project still makes sense.” He was like, “That was your mistake. You should never pay that guy up front.” He was one of those leaders who wanted to let you do things, so you learn. He wasn’t writing checks. He just wired the $40,000 to me and said, “Here’s your construction budget.” Eventually, he’s like, “You messed it up. You’re not getting any more. Go figure out how to do it.” It forced upon me but we learned. In hindsight, that was great because I built my business by being the general contractor. I got good at construction and enjoyed it for several years. It was fun to do.

A lot of people would say like, “It’s luck. It so happens that your wife’s best friend’s dad is this guy.” It’s also purposely putting yourself around people that are doing what you want to do. It’s great to see that you went out and found this guy who could be your mentor, then also finding this contractor that could come and check on your work. That’s all great pieces of the puzzle people need to see.

You said that it was his girlfriend’s best friend’s dad. That’s three degrees of separation between you and your mentor. If you can’t find a mentor within three degrees of separation from you, there’s no luck involved there. That is a skill. You found someone that did what you wanted to do. You seek them out and you become their puppy.

He was honest. He intended to hire me to break us up because he didn’t think I was good enough for Sarah. Not only to separate but I also had to earn my way into his good graces.

That’s amazing. That deal sounds like a total crap show. Let’s go into the numbers flip because this is your real deal. What would you buy it for? What would you end up putting into it? What would you sell it for?

We got that deal for $165,000. We ended up putting $60,000 into it compared to the $40,000 that we originally planned because $10,000 was stolen and it was our first construction job. I went over budget. We were in it for $220,000 and financing was $42,000 for the entire nine-month term based on the 18% interest at the point, so we paid upfront. We were in at about $302,000.

We got super lucky because the market did well. We decided, “If we pay a realtor commission, we’re not making any money on this deal.” We listed it for sale by the owner about a week before completion and ended up getting an all-cash offer for $345,000. We ended up making $35,000 to $40,000 on it. It ended up making money, which was good because if not, it was over like, “I was never flipping a house again. There was no way I was getting money.” The market bailed us out. A big learning lesson of that is how to manage projects correctly.

You’re very lucky that you made money and it kept good graces with your girlfriend’s best friend’s dad. Did that scare you to go into doing the next one or were you excited that you made money and you’re like, “It sucked but it worked. It’s going to be some the next time?” What was your thought process after that first flip?

I got scared. We picked up a project halfway through that one on our owner carry that we only ended up making $5,000 on. The combination of those two not going well scared me. We decided, “We’re not going to flip houses anymore.” I got hired as a high-end carpenter for a remodeling company in Southeast Portland and got promoted three months later to be a superintendent there and run projects. There were some things I’m lucky but it ultimately led to where I am.

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You went from watching YouTube videos to being hired as a high-end contractor. That was amazing.

The construction skills came naturally. The bigger and modern terms that glow up would be going from the carpenter to the project manager because aside from my two flips that failed, I had no degree or project manager experience. I was good at getting excited about stuff and getting other people excited about what I was excited about. I did that for a little bit when I was 6 or 7 months. I kept having that bug like, “Jeff, go do something.” I got a little home office set up and started looking on Zillow and stuff, trying to find houses. I found my next deal on Craigslist. I was able to go solo on it and not have a partner.

Getting the money from a hard money lender and borrowing money from a private lender who does the traditional setup than a lot of flippers do. I didn’t have to give away any equity and I was able to do that deal. I liked that neighborhood. It was Milwaukie, Oregon. It’s right outside of Portland, Oregon. I became the Milwaukie, Oregon guy for two years. If anybody had wholesale in Milwaukie, it was the number one city featured on the show Cops for five years in a row. It wasn’t an amazing city. Nobody wanted to do flips there but I liked it. The numbers were cheap and it worked out. I knew what I could buy and what I could exit for. I became the Milwaukie, Oregon flipper for two years.

Craig, should we go into Jeff’s last deal that he talked about before we switch over to Noah? Do you want to run those numbers and the deal that worked?

I want to ask one quick question. How did you become the eye in Milwaukie, Oregon? How could someone else become the guy in their market? What did you do?

I became the Milwaukie, Oregon guy because I started saying I was the Milwaukie, Oregon guy. We’re living on the West side of Portland. We moved to the Eastside and lived right outside of Milwaukie in Southeast Portland. I started going to church in Milwaukie and I was like, “I like this little vibe over here. It’s a cool neighborhood.” That’s where I had found that other deal, so I bought that one. I started telling everybody, “I’m the Milwaukie, Oregon guy. Send me what you have.” I did a flip on 40th, 42nd, 44th and 46th Avenue, all in Milwaukie within six months.

I went buying two blocks over and took over that area and told everybody. At least when I was in Portland, it was weird. Boise’s small. Portland’s much larger but the investor circle in Portland almost felt smaller than it does in Boise. There’s a ton of flippers here. There wasn’t a ton there. It was easy to become the Milwaukie, Oregon guy by going to meetups and saying, “I’m that guy.” People started sending me wholesales.

What made you get excited about flipping houses and building a business?

Once I realized that I understood construction and project management, the rest before jumping into my first two flips, I took on pretty naturally. I understood borrowing money, how that tied in and the necessity of running a project with speed and success. The numbers always made sense to me. I could pull comps and analyze a deal in two minutes. That always was easy.

Once I figured out the project management side and running actual construction, I was like, “There’s no reason I shouldn’t do this.” My mentor also showed me what his projections were on inflation and what I would be paying for a cheeseburger in 25 years. It terrified me. I had no other choice. I can’t afford a $200 cheeseburger. I was going to go and work and make money that he taught me could grow faster and fight against inflation. It became the only option.

I remember explaining this to my wife, who is not business motivated and being like, “Sarah, this is the only option. It’s either this or living in poverty for the rest of our lives. We might pretend we’re middle-class for a while but eventually, by the time we’re 40 to 50, we will no longer be alive. We can tell ourselves.”

We had no choice other than going to flip houses because that was the skillset I had. I found a good deal and got lucky. It had a bonus lot that I didn’t know about when I bought it. I made $30,000 on the flip, sold the lot and made another $70,000. I made six figures on my third flip and it finally went well. It motivated me to keep doing it.

Were you building a business at that point or is it still you as the jack of all trades?

It was me. My brother had moved out to Portland. We were doing stuff together. I have some subcontractors that I would use. We didn’t do everything. I built out some subcontractors because we bought that one and three others in that same neighborhood and I couldn’t keep up doing it all myself. It wasn’t a business at all. It didn’t become a business for me and stuff years ago. Everything before that was like, “Let’s focus on 1 or 2 deals at a time, make money and go from there.”

You created a job for yourself. If I get this right, what happened years ago is you met the gentleman sitting next to you, which is Noah.

Yes.

Noah, let’s talk about you a little bit. We left off on your story. You’re sitting inside of your college bookstore, telling people to stop selling their books to the bookstore or sell them to you. Your dean is coming out with the pitchfork. What happens next with you?

Unfortunately, the school didn’t have any type of entrepreneurship program. I was always interested in it simply for freedom. The way I grew up, I didn’t get to make a lot of my own choices. They were all dictated either by finances, stepdad or my parents. I was like, “I do not want anyone else to tell me when, what or with whom I could do what I want to do.” For me, it was more about freedom and entrepreneurship has that freedom. If not entrepreneurship, I need to be highly educated so that way I can still make choices within a job.

One of my marketing classes had a business competition one time and these two entrepreneurs walked in. I was like, “Whatever it takes, without a doubt in my mind, I’m going to win this competition, impress them and get connected to them.” Sure enough, I won the competition. I got connected to them. It landed me in an internship with these guys who both had multi-seven figure businesses exits and successes. They both have written books. Going to an internship with them was the start of entrepreneurship for me.

When you say entrepreneurship, do you mean starting a tech company or real estate company? Entrepreneurship, in the college sense, is like, “I went to a tech-heavy college.” Everyone is starting their own tech companies where it attracted you to them.

The business that I went to help them with was a double-edged sword. They had a venture capital company. They would fund other business startups in Silicon Valley. They also had a drop shipping company where they wholesale clothing like Roxy, Quiksilver and stuff like that. Their biggest client was Costco that they landed that Summer. I was there. From that, this is the same thought process as Jeff. I was like, “This is the only option.” I can’t work for somebody else. I can’t have a job. I quit and studied accounting. That was my original major. I went into marketing. I was like, “I got to get out of school as fast as possible.”

ITF 55 | Real Estate
Real Estate: Wholesaling, in essence, is finding distressed property owners with issues that you can solve.

 

I had a couple of business ideas I was trying to get off the ground. One of them was an idea I had called DriveGuard, where I was going to sell this product to insurance companies where they could monitor if someone was texting or not texting but block like teenagers. I was like, “Anyone under the age of eighteen should have it blocked when you cannot text and drive. Otherwise, you can’t get insurance in your car.”

I was like, “How many lives could we save if we could simply stop young people from texting and driving?” I started pitching it to insurance companies being a young kid with no business sense or knowledge. They didn’t go anywhere. Even my mentors are like, “It’s a cool idea but not unless you figured out how to make the technology work. We’re not funding any ideas.”

I gave up on that and got married. My wife took me to Washington. I lost all of my connections in Utah and all these other entrepreneurs. I had a couple of cool job offers to go starting in mid-level management, would have made six figures and lived a very comfortable life. It’s good that all that got stripped away from me. I went to Washington with zero connections and took a crappy job with Enterprise Rent-A-Car. I got into management there pretty quickly but still hated every minute of it.

They worked me 55 to 60 hours a week and made $50,000 a year. In Washington, it barely covered my living expenses. Six months into that job, I was like, “This is not sustainable.” I can’t save up to even buy a house. I wanted to buy a house, a duplex or something. There was a kid from my college named Brody Fausett. He was the first guest on our show. Brody already owned six rentals at the top. I was like, “Coming from the same place of education, he owned six rentals and I own none. It means it’s possible but I’m not doing the right things.”

I started listening to the podcast. I got on the BiggerPockets Podcast and heard a guy named Elliot Smith. Smith was only an hour and a half away from me, where I lived in Washington. For me, it was like, “This is real. I can’t come up with excuses of why I can’t do this because Elliot’s doing it and he’s an hour and a half away from me.”

I called Elliot. I found his phone number somehow and called him. I was like, “Can you help me get started?” He’s like, “Don’t call me again until you listen to the first 80 episodes of The Real Dealz Podcast.” I did and called him back a week later. I was like, “I did it. Here are the three things I need to get started. Can you help me?” He was like, “I’ll help you.” To help Elliot’s reputation because he’s a good guy, we spent the last week with Elliot. We’re best friends. We’ve come a long way in years.

I have a lot of questions and things to unpack here. It sounds like you were leading a pretty cushy life in Utah. Maybe you weren’t super happy but you might have settled for a six-figure job working for somebody else. You might hate your life but you’re getting paid. It was you, your girlfriend and your future family.

It’s a blessing in disguise to move to Washington, get a job at Enterprise Rent-A-Car, get paid half of what you would have been paid and certainly no glory with that job. Tell me if I’m wrong but you hit that jump so much that you needed to get out and figure out a way. Without that hatred for that job, you might still be in a $100,000 job somewhere where you’re working at W-2. You got this podcast and listened to Elliot Smith. I know Elliot. I don’t know if we’ve ever met but he’s a bigger name on BiggerPockets. You called him. You can do that.

I don’t tell people they can do that because they will start calling us.

You reached out and called him. He gave you homework to see if you were for real or not because it’s a bunch of calls. We do that too. I’m sure you are doing that. If not, you’re pretty close. You did it. That’s why he chose you because you listened to 80 episodes in 1 week.

He didn’t believe me. He was like, “You didn’t.” I was like, “I did and I’ll show you that I did because I know the three things I need from you. I’m not here to waste your time. Give me an assignment contract. Tell me how that works with the title company and how to run comps. Give me those three things. I’ll do a deal.”

What happened?

It didn’t happen quite as fast as I thought it did. That was January of 2016. One of my buddies who was at enterprise with me decided to start this wholesale company together. We were going to try to do wholesale. We got an LLC and started doing some marketing and driving for dollars. It’s how we got started. It was funny because while we were at our job, we drove people home, picked people up, drove cars to shops and picked them up from shops.

He and I would always take the longest possible route anywhere, purposely get lost of customers in the car, so we could drive, remember where addresses were, go back, write down the addresses and be like, “Here’s the distressed town.” We ended up accumulating a list of 1,000 distressed properties and started mailing to it. We’re going to start spending money until we know what we’re doing. I got 1,000 distressed properties and decided to start mailing them.

The phone rang too much because we’re still working 55 hours a week. I couldn’t answer all the calls. I missed a lot of great leads. Also, I still didn’t know what I was doing. I had a $17,000 wholesale that was this close to closing. It fell apart and broke my heart because I was so excited. I was like, “This is it. We’re done. We’re quitting.” We got nothing from it. I had another $20,000 wholesale lined up, almost to the finish line and fell apart again because I didn’t know what I was doing.

You’re talking a lot about assigning contracts. You got this assignment from Elliot. How does the wholesale work? How would you do that? Why is someone going to sell to you for less when they could list it and get more for it? Dive deep into that a little bit.

I also personally decided to go with wholesaling because even being as frugal as I was, I couldn’t save enough to flip a property. I didn’t yet understand how raising private money works and that I could do it without my own money and all these things. Wholesaling, in essence, is finding distressed properties or property owners with issues that you can solve in exchange. They’re exchanging your ability to problem solve for them for a discount on their home.

That discount needs to be steep enough that someone like what Jeff was doing could buy the home from me, pay me my assignment fee and Jeff can still make money on the flip. How that works is someone like me, a wholesaler, would lock up the property with a contract, a purchase and a sales agreement. I would take that purchase and sales agreement and say, “I have this contract for sale. If you’re willing to pay me $10,000 more than I have it for sell for, I’m willing to give you the right to purchase it. We will do that via an assignment form.”

We take all that to the title company. The title company will be like, “It looks like Noah locked this up.” Jeff is taking it as an assignment. He is going to at closing. Noah gets $10,000. Jeff takes ownership of the property and the previous homeowner walks away with the closed property with whatever proceeds are left for them.

It was one of the best places I’ve ever heard explained. It was in your first time explaining it.

I would love to hear a little bit about what went wrong that made them fall apart because it seems so simple. You find somebody who wants it and transfer it over but some things can go wrong in that process.

Taking action, having humility, and being consistent build successful people, and successful people build successful companies. Click To Tweet

The first one was this old gentleman. Jeff and I are both super religious people but one of the red flags that someone taught me later on down the road is people who say God bless you at the end of everything are usually not good people. I’m a religious person. I believe in God and I give glory to God for my success, so does Jeff. Jeff’s post was giving glory to God. The funny thing was this guy would say God bless you at the end of everything. My initial thought was, “This is a nice old guy.”

His story to me was this is the one family home that he has. He needs to sell it to get a motor home so he can start up a charity in the Midwest somewhere and do all these great things with this money. I was like, “That’s it. No matter what, I’m going to help this guy sell this home and help him get everything he can for it. We’re going to make this work.” It turns out he owned 150 homes between where he was in the middle of Oregon.

I don’t know how to explain all the ins and outs of everything that he was involved in but it was some pretty weird stuff. He ended up trying to go around me directly to the buyer and cut me out of all of it but the buyer was my friend. The buyer was like, “I don’t want anything to do with that.” A realtor came in and snaked the whole deal. That’s what happened on the first one.

That goes back to my point. As a wholesaler, can a realtor come in and put it on the market? They’re going to get in front of more eyes. It’s going to get a higher price. I’m not trying to be biassed because I am a realtor and I like wholesalers. I do some stuff with wholesalers for my investing side of things. What is the value of a wholesaler?

I would say two. My mistake on that lead is like, “Did he have the true motivation? Did he have urgency to sell?” Those are the needs that I could satisfy as a wholesaler. The answer was no. He led me to believe he did but he wasn’t being honest about it. In essence, a realtor could have listed that property. There was also half the foundation was falling apart, so for them, they list it. They need a cash buyer. They need someone that isn’t subject to financing contingency because the bank is not going to give a loan on a property like that. You need a hard money lender.

I never followed through to see what happened. I was pretty upset. I blocked that guy’s number and made sure he couldn’t call me again. The essence of a wholesaler versus a realtor and the difference on why a property owner would go with one over the other, I could solve issues that a lot of times a realtor can’t simply because they don’t get it.

We paid for a pod for a 93-year-old lady who sold her house in Boise and had the pod shipped to where she was moving. Sometimes, realtors wouldn’t pay for that because they only get a 3% commission on selling the home. Why would they pay $3,000 for a shipping pod? Why would they hire movers and say, “Leave behind all the stuff you don’t want and we’ll donate it for you?”

Wholesalers tend to be a little bit more creative to have to hustle a little bit more to get that deal and get that extra buck. Usually, they are houses that are in distress. I get a lot of clients and guys who are first-time house hackers. They want something that is turnkey. That’s the easy route when you’re house hacking. They’re asking me about all these off-market deals and all these wholesalers. I’m like, “I can give you wholesalers.” How often do you get someone that’s a beautiful home turnkey to move in and ready for a family? It doesn’t happen. Your market is flippers.

I had to do a little bit of venting there. That’s how you lose a deal. There are a lot of different ways the buyer can be. The seller and buyer could be a knucklehead. I’ve heard of buyers going ghosts. They’re about to sign a deal and when closing day comes, they don’t show up. They don’t have smartphones and nothing happens. There are a lot of things that can go wrong during that process. How have you gone from those first couple of wholesales? Did you scale that up at all? What happened?

My partner quit on me. It took us eight months to do our first deal. Our first one finally closed. That was my first one because that was just me at that point. It was $10,000 and I was like, “I can freaking do this. Let’s double down.” I started thinking about it and was like, “I perform a lot better working with partners or teammates. I’m not a lone wolf type of person.” I found a mentor. He was one of the guys that had called on a previous contract I was trying to assign. I had started working with this company with him as a potential buyer for my stuff.

They are flipping a whole side of an operation that I had never seen. I was like, “I should join up with this guy, watch what he’s doing and figure out how to scale this.” He and I got together. We partnered up. He would pay for all of the marketing material and set me up with leads. I would take the appointments, close the leads and he would handle disposition. He would find buyers for me and make sure that stuff got sold. It was pretty close. I got to do the part that I’m the best at and he took care of everything else I wasn’t good at.

I want to highlight that both of you found mentors. What you didn’t do is call somebody up and be like, “Tell me how to do everything.” You did that for Elliot for a second. People reached out to me and probably reached out to Craig a bunch and want a mentor. What people need to realize is you have to add value.

You either need to be their assistant or be able to do something in their business that they don’t have time to do because most of us are doing business. We don’t have time to sit and teach somebody for free. If you’re going to approach people, try to figure out a way that you can add value. Ask them how you can add value to their lives because they will tell you.

Our core values are on the wall behind us. The one right over my head is, “Add value.” That’s the main reason we’re successful. I used to be so corny about it. I don’t know if there’s a better approach but on the BiggerPockets episode, it said, “Call people and say, ‘How can I add value?’” That was my whole pitch. I would call people and say, “How can I add value to your business?” If you want to get plugged in with somebody who’s doing this, it’s simple. You can call, find out how you can help them and eventually, they will help you out and you get a step up.

It’s even taking it a step further, too. Even by you calling me or someone else and saying, “How can I add value?” You’re giving us work. You’re giving us an assignment of, “I have to think about how you can add value to our business.” The best way to do it is like, “My name is Jeff or my name is Noah. I’m good at marketing. Your marketing sucks. Do you mind if I take a look at some of your material, whip up some stuff for you and take over your Instagram for a week?”

They would be like, “Let me think about that.” See how that goes. The less thinking your mentor has to do, the better. Another great way to get a mentor is to make friends. Be chill. Be your authentic self. Be a good person. You’re going to realize that you will make friends farther along and are not as far along as you. You will be the mentor and mentee to these guys. You live in a happy place.

One of the easiest ways to do that is you’re somebody trying to get a mentor. I agree with you, Craig. I wouldn’t be like, “How can I add value to it?” It’s because we have to think about it. If you’re like, “What’s the bottleneck in your business? What’s something that’s holding you from getting to the next level? How can I play a part in helping you to fix that issue? I’m not asking for anything other than to be around you.”

“Is your bottleneck setting up a lead flow? I will go watch 100 hours of lead flow and marketing operations for real estate companies on YouTube. I will take down the five best ideas I can find. I’ll bring them to you. We’ll figure out how much they cost and you can implement one of them. I’m happy to help in any way you see fit. I don’t expect anything in return.” How much are you going to learn from that?

I will hire that person. Call me up. I have so many lazy agents that need to figure out how to do leads. This is great. I appreciate it.

In quick summary, Jeff, you had a flip business that you scale, knowing you had this wholesaling business that you’ve scaled. Up until years ago, the lovers met. How did you meet? What happened? What made you decide that you wanted to partner up?

ITF 55 | Real Estate
Real Estate: You have to add value to what your mentor teaches you. The less thinking that your mentor has to do, the better.

 

My whole goal through wholesaling was to get into my investment property. When I moved to Boise, I was able to do that. I had saved up enough for a down payment and rehab. I was hunting on the MLS for something that I could make a duplex in some way, shape or form. This is not advice but I didn’t care if it was conforming or nonconforming because I was going to be owner-occupied. That’s not advice. Don’t take that. Go make your duplexes at conforming. I started calling around and was like, “Who should I use? Who’s a good contractor.”

I was interviewing contractors. That’s how I met Jeff and his brother. His brother was mad the first time they met me because I had them come to the basement of a home that I didn’t even own. I was like, “I need to get the bed before I put it in our contract. I need to know how much turning this basement into a whole another unit is going to cost.” Luckily, I handed that to them once because the next basement I brought them to was I owned the house at that point. They ended up doing this whole basement rehab for me for $12,000.

Jeff can tell his side of the story but they didn’t end up making a bunch of money because he tried to cut me a deal. I’m pretty sure I nickeled and dimed him too. I was like, “You said the egress windows will cost this?” He’s like, “I didn’t know your concrete walls are 18 inches instead of 12.” I’m like, “You said.” We ended up becoming buddies through it.

He traded me a brand new stainless steel stove because I bootstrapped the heck out of this apartment. I found the appliances on Craigslist. He gave me the stove. In exchange for it, we went up to Bogus Basin, which is the ski area here. I taught them how to snowboard for a day. The cheapest way I could get into this unit is how I got into it. That was the start of our friendship.

My brother was pretty mad. We didn’t do bids for people. We only worked for investors and referrals. Our big thing was it was the lifestyle business to a point. We only wanted to work with people we liked and enjoyed and wanted to hang out with. There was no marketing. You couldn’t find a website for our construction page. It was just investors that we liked. We went to the house. My brother was like, “He doesn’t even own this thing.”

They got in the truck and left early. I was like, “I’ll do the rest of the appointment.” He was like, “I got a $12,000 budget.” I was like, “That’s my cost on this but I can be good for you.” Our construction business was booming at the time. We would do a flip every two months and make $30,000 to $40,000. Our construction company was clearing $30,000 a month doing other people’s flips. I was like, “We’re doing well. We have a scaled-out company on the construction side. We’ll take on the job and do it at cost because I can tell I like.”

I had this weird feeling. We’re so similar with our stories that something could come of this. I did the lone wolf things for four years running a business and hiring people. I made a lot of mistakes because I was a lone wolf. I’m a guy who needs to be held accountable. I’m a little weirdo who shows up to the office with no shoes and wants to be a hippie and play ping pong all day.

If somebody doesn’t hold me accountable for doing something, sometimes it will get done but I knew my weaknesses and having a partner was going to be beneficial. I was like, “This guy could be the guy.” We made it work and that was the way we developed a friendship first and decided to do business together after that.

How long did it take for you to decide to be in his house doing the quote to becoming friends to, “Let’s sign the papers and make this thing official?”

It wasn’t quick to the official. It was quick friends and we joint ventured on things before we formed a party.

We took it real slow. We dated before we got married. I was still deal hunting for wholesales and stuff like that. I found it for sale by owner property, called them and got it locked up. In hindsight, this is an insane deal. I don’t know why I assigned it to Jeff but it worked out because we’re doing awesome. I locked up this house in Nampa for $100,000. This is a $300,000 neighborhood.

You didn’t assign it to me. You called and said, “I’ll represent you out.”

I did because I had gotten my license. I was like, “Maybe I’ll go be an agent.” That didn’t work out. I represented Jeff on it. The solidifying point for me was being like, “We’re going to figure out ways to work together.” He had done something with the numbers on it where he needed the purchase price to be another $7,000 higher or something like that. You need the purchase price to be $7,000 higher.

Instead of him taking it or telling however he was going to do it, he’s like, “Can I pay you $7,000 more as a realtor?” I was like, “Seriously?” He’s like, “Go mark it on your commission thing that you’re getting a flat fee of X amount instead of your percentage.” I was like, “Are you for real?” That $7,000 shot me because I put everything I own into that house for the rehab, down payment and all that stuff. At that point, I was like, “I’m pretty loyal to Jeff. Whatever Jeff needs, I’m going to go figure out how to do.”

After that deal, he called me up 30 to 60 days later. He’s like, “I got another deal but I need $25,000 for the rehab. Would you want to fund it? You could be a 20% partner.” I had $5,000 left in my name but I said yes. He didn’t find out that I didn’t have that money. I forgot that I didn’t tell him. I was like, “We’re going to do it. We’ll figure out how to do this deal together.”

I called up friends and family and asked everyone if I could borrow $5,000. I asked 4 or 5 people. I was like, “Can I borrow $5,000? I’ll pay you back. Call it 120 days and I will pay back with 20% interest.” I paid everybody back $6,000. They gave me $5,000. They’re all stoked because they didn’t have to do anything other than some check to me. I syndicated the smallest syndication in the world. I send a kid $25,000 together. We went out and did this first partnership on a deal together.

It’s the whole “I can’t do it but how can I do it” thing. You want it to be together and want to help each other out. Both of you went to extremes to help each other out, which is why the partnership seems to be working. What are you doing now? Are you flipping homes or wholesaling?

Our primary focus is a fix and flip company in Boise, Idaho. We started acquiring rentals in 2021. We have units in Indiana. That’s our Midwest market that we buy rentals for cashflow. We have 14 units out there and we’re refinancing 18 units here in our local market that we’re going to hold as long-term rentals. Some of them will be Airbnbs and some are traditional rentals. The focus of the company is we do 35 to 40 flips a year to create revenue to buy long-term assets. We’re spending a ton of money on actual marketing that a wholesaler will do but we don’t hold.

We want off-market discounts. We’re the flippers with bigger margins because we’re using no background in my flip knowledge to get good projects. We do all those and we’re starting to do that in Indianapolis as well. We’re going to do the BRRRR model out there and hope it sold. We’re going to start another wholesale market in Texas. That’s what we’re doing.

You’re rock, rolling and scaling. That’s great. There’s that quote out there where it’s like, “If you go alone, you can go fast. If you go together, you go far.” You are going fast and far. Z, are you ready to head over to the Final Four? Take us off.

What are you guys reading?

You want to work with people who you like and enjoy hanging out with. Click To Tweet

I am reading very slowly. Noah can attest that I’m not a big reader. I’m reading The Checklist Manifesto. One of our coaches has recommended that as a book. Since I’m overseeing operations, I got to build out some processes and procedures. That’s what I’m going through.

I am reading The 21 Irrefutable Laws Of Leadership. I try to do one book for myself and my role as a leader in the company. I also tried to do one with the sales team every month too. If the sales team are reading the $100M Offer, I have not got to 40 pages into it but it’s been a cool book so far.

What is the best piece of advice you have ever received?

The best piece of advice is to take action and be consistent. I tell people all the time that I have grown that into a three-phase program. I’s take action, have humility and be consistent. Those are the three things that build a successful person and successful people build successful companies.

Mine came as I was talking about those entrepreneurs that I was lucky enough to be able to intern with while in college. One of them had this formula for success that I will never forget and changed my life. It was intellectual capital plus relationship capital equals financial capital. What he was saying was what you know plus who you know equals how much you will be worth. I have seen that resonated throughout my entire real estate career, like what I’ve learned, plus who I know equals what I have.

Question number three, what is your why?

My why is for my kids to never experience the life that I grew up with and one day, they will make a decision on what they want to do with their life solely based on what they want to do with their lives. It’s not going to be what they feel obligated to or what money allows them to do. It’s going to be when they turn eighteen and they get the decision because I built a legacy that regardless of what mistakes they make in life, they will be financially free and financially set to pursue their biggest fashion.

You say that you’re going to be like, “When you’re eighteen, you’re puppy number one.”

I can selfishly say that’s my hope. I hope what they want to do is come and learn from dad. I hope he goes to play in the NBA. That’s the big goal but if not, they would come, learn from dad and do some business stuff. We’ll see.

I have a very similar why to Jeff. For me, it’s my future family that comes after me. I want my kids to make different decisions because of the decisions I made. It’s not by breaking the line of poverty but it’s changing the way that my future family will think and make decisions. I want to equip them with all the knowledge I wish I had.

I’m lucky to have it early but how much can I change my children’s lives if, at eighteen years old, they run a million-dollar business? For me, it’s having the time to be with them to be able to do that. Most parents are so busy. They don’t get to be with their kid. I don’t even have kids yet. Kids have been my main motivation. I can’t wait to start a family and be an awesome dad. That’s my why. That’s what gets me up in the morning.

If you are together, we’re transported 400 years since the past with no clothes or anything else, how would you prove that you were from the future?

I have a tattoo on my arm that’s a watch. That’s a month and a year. I’m hoping that would do it for me if my tattoos stay. I simply pointed that and be like, “I’m from the future. Look at this tattoo.” At that time, I don’t think tattoos even exist yet. I’m not a history buff, so I’m not positive on that aspect but I’m hoping that will do it.

I might be screwed because history is my least favorite subject. I couldn’t tell you any times war started or ended. I could be like, “I know who’s going to win this war but I wouldn’t be able to tell you.” I might be in a lot of trouble. Maybe I could give some predictions to some things and they might stick me in jail until those things happen.

How can people find out more about you?

We’re big Instagram guys. Mine is @Jeff_Fawson. I handle my own Instagram, so DM me. I’ll be the one DM-ing back and we’ll talk real estate. That’s the easiest way to get ahold of me.

Same for me. I’m on Instagram. I post a ton of content. @NoahEvans_RealEstate, that may change to Noah’s Arc. Brandon Turner told me to change my Instagram name to something more memorable but the Arc would be Acquisitions, Rehabs and Cashflow. It was cool.

Thank you so much for coming to the show. This was a fun little episode. Honestly, your stories are inspiring. Against all odds, it seems both of you have come to each other and you are crushing it. I love to hear it. We’re still in the beginning stages of your story.

It was a privilege to be on your show, Craig. We appreciate the invite.

Thanks for coming on. We’ll talk soon.

Have a good one. Thanks.

That was Jeff and Noah. Z, what do you think?

I liked this episode. I love the way they found mentors. Even when we set it for one second like, “How do you provide value to a mentor?” Noah immediately was like, “You are agents. These are X, Y, Z. What could someone do to bring value to your business?” Sometimes, people are not trying hard enough. If you get out there, you’re scrappy and you’re willing to listen to 80 podcasts, a couple of hours on YouTube or read a few books, you would be surprised how quickly you can gain that intellectual capital that can help you make friends with people that you admire.

If you could talk the talk, go to a real estate or financial dependence conference to be able to have a conversation. Be yourself, have some genuine connection and make some genuine connections there. There’s a game-changer right there that in itself. Naturally, you become friends. Z, when we first talked, we had known each other for a long time. It was because we chatted one time at Thanksgiving, Mindy’s potluck or whatever it was. We were chatting about Airbnb and had nothing come of it. Here we are years later and we’re doing this together.

I have some friends that are in my little committee that is my real estate board of directors. I have three people that I call anytime I have a deal and run numbers and this crazy idea by them. One of them was I only met him because he did a console with me. We hit it off and I realized he was super smart. I feel like, “He got even faster ahead of me.” I ask him stuff all the time. You can make mentors and friendships in the unlikeliest of places. You just need to put yourself out there.

ITF 55 | Real Estate
Real Estate: When you’re financially free, your children will be able to make a decision solely based on what they want to do with their lives.

 

You got to get out there and network. Show up to events and shake someone’s hand. It’s all you have to do. Go to someone. Once you shake someone’s hands, you’re either in and had a conversation. I don’t think anyone would ever deny a handshake. It’s super easy to get to talk to somebody. I don’t know what’s with COVID but people are doing handshakes again. You can do that and most people are not freaked out.

Thanks so much for reading. If you don’t know, we’re very active on Instagram. Follow us there. We do weekly lives where you can ask us anything and we teach on a topic. Tune in there. Anything else you want to shout out, Craig?

I’m @TheFIGuy on Instagram.

It’s @ZeonaMcintyre. We’re both agents in Colorado. I also instruct people how to buy out of state. If you’re looking into that, do a consult with me. Who knows, you might be my new best friend.

We’ll see you next time. Bye-bye.

 

Important Links

 

About Noah Evans

Noah successfully manages a fund of $3,100,000 that was privately raised through building trust, a solid reputation as residential developer, marketer, and Investor. Turning profits for their investors upwards of 19% year over year. Noah oversees the marketing efforts, finding distressed properties, and creatively helping sellers. The company stands firm on one policy, money is made when you buy the deal not when you sell it. Noah also handles the dispositions of the completed flips, yielding a 107% sold price to list price ratio.

 

About Jeff Fawson

Jeff oversees the operations of Tree City Homes producing some of the highest quality remodels in the state. As well as assisting in overseeing our investor relations. In addition to this, Jeff has a background in construction and construction management and has led Tree City Homes to being one of the most profitable real estate re-development companies in Boise, Idaho year over year. Jeff handles the creation and implementation of our admin and operation systems and processes to help keep our project profitable and on schedule.

 

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