Welcome To The Real Estate Underground Show #101!
In today's episode, we have a special guest, Scott Jelinek, author of The Real Estate Investors Guide to Guerilla Marketing. Originally from Long Island, Scott moved to Virginia Beach in 1992. Starting out by mowing lawns, he bought his first house in 1994 with a non-profit qualifying assumption, putting $5,000 down and paying $675 a month. Little did he know, this would ignite his passion for real estate.
In this episode,
If you're curious to learn more about Scott, and his business, or read his insightful books, head over to slowflip.com or find him on social media by searching for Scott Jelinek. Get ready for an information-packed and inspiring conversation!
Resources:
Additional Resources:
Welcome To The Real Estate Underground Show #101!
In today's episode, we have a special guest, Scott Jelinek, author of The Real Estate Investors Guide to Guerilla Marketing. Originally from Long Island, Scott moved to Virginia Beach in 1992. Starting out by mowing lawns, he bought his first house in 1994 with a non-profit qualifying assumption, putting $5,000 down and paying $675 a month. Little did he know, this would ignite his passion for real estate.
In this episode,
If you're curious to learn more about Scott, and his business, or read his insightful books, head over to slowflip.com or find him on social media by searching for Scott Jelinek. Get ready for an information-packed and inspiring conversation!
Resources:
Additional Resources:
And this is Real Estate Underground. Greetings and salutations, real estate undergrunders. This is Ed Matthews with the Real Estate Underground. Thank you so much for joining us today. So this interview and this conversation is actually one that I probably should have had about 10 years ago and in fact I kind of did, because when I was preparing for conversations with this gentleman today, I realized I had read his book like nine, 10 years ago and it was really helpful in getting me going in our flip and small multifamily business. And so, you know, we had Ron LeGrand on a few months ago. You know, I've been working my way through all the really smart and successful authors and fortunately this gentleman also has a new book coming out which I'm going to make him tell us all about. But, scott Jelnyk, thank you so much for joining us today. I am so excited to have this conversation and welcome to the show.
Speaker 2:Well, I thank you for having me and I loved your story telling me that you read that book, because that was the one book that was never really even promoted. And you know, my last two books everybody knew about but that one was very, very small promoted. So I love the fact that that was the one that you read, yeah, so I'm a marketing guy by trade, right.
Speaker 1:So, yeah, when I was looking for ways to, you know, create deal flow and, you know, create awareness around my company, Clark Street, yeah, it was recommended to me by a friend of mine. So the book we're talking about is the real estate investor's guide to gorilla marketing, right, and so it's. You know, if you've ever heard me talk at, you know, the local RIA or one of the meetups or whatever, you know some of the things that I talk about in terms of how to go find off market deals. I have to admit, I stole directly from this guy, so I'm pretty excited to to meet with you today because I have a lot of respect for how you approach the market.
Speaker 1:So, Scott, for those of us who haven't read your book or are having books plural, why don't you tell us a little bit about yourself and who you are, and then we'll get into it?
Speaker 2:Well, I'm going to give you a condensed version because I know we only have four or five hours to do that and so I'm called Joe Rogan on this. Yeah, so the condensed version is I. You know, I'm originally from Long Island. I moved to Virginia Beach in 1992, started mowing lawns was kind of my business back then. I bought my first house in 1994, and it was a non qualifying assumption and I don't know how old you are, even if you even remember those. They did away with them in 1987 and 89 for VA and what it was was basically like a sub two, but the bank blessed it, the bank. It was allowed by the bank, where now we do it and the bank doesn't know about it.
Speaker 2:And I bought my first house. It was $5,000 down, $675 a month, and I moved into it and I had no interest in real estate. I bought it to live in. And then about three weeks later another house on the block came up for sale. White sign, magic marker on it said $2,000 takeover payment. And without knowing anything about the value, the balance, anything about anything, I felt like I got ripped off because I'm like I just paid $5,000 down, this one's only 2000 down and so and I know it sounds stupid in hindsight, you know, but at the time I just felt like mine was five, this is two, that's the only number I paid attention to, much like the way I sell now, right down to a monthly payment, right. And so my genius brain decided to buy that one, also right. And so I did. So I bought that one, figuring well, I'll cost the average amount 3,500 each, instead of me having the five. And that was my first spark of real estate, right.
Speaker 2:I started becoming obsessed. Every month, people would pay me the rent and I would pay the mortgage. And I'm constantly thinking I borrowed this money and they're paying it all. And so I started buying anything and everything I could. With that premise. I always called it my McDonald's plan. My McDonald's plan had nothing to do. I never worked at McDonald's, nothing to do with McDonald's. But I used to jokingly tell my friend I'm going to buy a million dollars worth of these and then I can go work at McDonald's for 30 years and I'll be a million. That was my plan, simple as that. And I was well on my way. And so, by about 2000, I got to about 20 properties, all Virginia Beach houses, and the values were low. Back then I was buying them $65,000, $70,000. But in 2001 was the first spark, the first inkling of appreciation we ever had from the time I started, because I was buying in 94, 95, 98, for the same price as these guys paid for them in 85, 86, 87.
Speaker 2:It was the same exact price. So in 2001, I first started to see appreciation and now I'm already into real estate and I'm reading all the books and I'm going to these seminars and everybody's training, basically telling me I'm an idiot. They're like well, you have debt equity. You got to refinance, pull that money out and buy more and all the stuff that everybody was preaching. And so I did everything they taught me to do. I felt stupid. I got all this equity sitting in these houses, so I refied it, pulled the money out and bought more house. I got to 84 properties by 2007.
Speaker 2:And again, ed, I don't know how long you've been investing, but in 2008, and I'm sure it was 2007 when we started in 2007, the whole world got turned upside down and everything went to crap. I talk about it sometimes to people like it was yesterday. And somebody told me just recently Scott, you know that was 15 years ago and I'm like, I feel like it's in my brain like it was yesterday and I had about a million dollars in cash saved. I had 84 houses and I spent every dollar trying to save these houses because nobody was paying. The world was in turmoil and couldn't refi, couldn't sell, and I ended up losing about 55 of them to foreclosure. And it was devastating, especially on the guy on the side of my escalade said we buy houses, stop foreclosure. I mean, I'm the guy who stops foreclosure. And so it was. It was absolutely devastating, but in hindsight I still say it's the best thing that ever happened to me.
Speaker 2:In hindsight, at the time it was, you know, everything I did was it was all a mess right. So then I started paying attention to the guys who were still crushing it. And there were people still crushing it and most investors went back to their jobs, went back to IBM or wherever. They quit to be a real estate investor and they just left and never looked back. Some of the guys were killing it more than ever. And then there was people like me who I was crushed, but I didn't have anything to fall back on. I was living a lifestyle that was like a brain surgeon and yet I would have. I had no other. There was no fallback. I was mowing lawns before this. There was no fallback to maintain.
Speaker 2:And so I started talking to a lot of these older guys and, you know, having lunch, and they didn't realize. But I was interviewing them trying to find out what did you guys do different? And one of the things I found like not some of them, but 100% across the board that they had in common was free and clear, which was the antithesis of everything everybody taught. Everybody was like you're an idiot if you have stuff free and clear. You're an idiot. If you have equity, you're an idiot. You can make so much more money if right, and I believed all of that. I was like no, refi, pull it out. Refi, pull it out, finance everything, make a higher return. I believed all of it, but then, after the bust, I was like wait a second. All these guys are killing it and they own everything their car free and clear, their house free and clear, all of their properties free and clear and now they're buying more and more and more. And so it really struck me as okay. Well, maybe I need to rethink what I'm doing here.
Speaker 2:The second part of it was I didn't have any money and I had no credit. Now I just lost all my money and I lost my credit. I couldn't finance a pack of gum, so these deals started coming up, but how could I buy them? Because I don't have any money and I have no credit. It sounds great to have free and clear, but you got to pay for them, right? And so that's where I kind of devised what we call the slow flip model now, which is it's a, it's hard selling without a financing. But then the other part was borrowing five year money. I was buying houses on five year mortgages and it's like everybody's like you can't do that, you can't do that, you can't do that. I'm like well, we have been. I have 170 plus of them now. I've been doing it since 2011. And so we buy them. You know, I joke and tell people. What came in my head one time was I was trying to get the first one. Finance banks won't finance these small amounts and I'm like why does it have to be 30 years? You buy a car for the same amount of money and it's a five year loan. How come, if I buy a house, they want to do it for 30 years? And so I always joke and I say we buy them like a car, we sell them like a house. So I kind of flipped the whole model on its head.
Speaker 2:What made me start teaching it and what made me really get passionate about advising other people is after the dust settled and we all went back. Everybody went back to investing. I started going to seminars again and I started going with the thought of I can't wait to hear what's new, what's changed, what are they teaching now? And I was shocked to see they were still teaching the exact same thing and I'm just blown away by it and I said well, you know what? That's great for them. But I am going down a different path and I believe in free and clear. Now we obviously still have to borrow, because unless you have $10 million to go invest, you're going to borrow to get there. But once we borrow it, my goal is to pay them off as quickly as possible, which is generally five years. But rather than rent them, we sell them now with long-term owner financing. That's the slow flip model. We don't do any work and we sell them immediately with owner financing. And that was a long answer to a very short question you asked me.
Speaker 1:Yeah, but I'm going to make you unpack all of it. So we're good. So let's talk slow, flip. So buy it like a car, sell it like a house. So when I hear you say that, basically what I think you're saying is you're going to the bank and saying, hey, I need to finance 10% of the value of this house. Hypothetically the seller is picking up the rest of it.
Speaker 2:I'm dead to banks. I haven't not used a bank since 2007. And I'm kind of committed to not going back. Even my house I live in, I mean, I have not used a bank since 2007. And so we buy them with private money. So we raise private money from private lenders and we put five-year mortgages on them and I sell them on 30-year mortgages and now we collect the payment and so for the first five years we really don't make any money. And I'm going to give you numbers so I can make it make more sense to you. And when I say these numbers, a lot of times people's first instinct is you're out of your mind. You can't do that. There's not houses in this price range. I tell people I said before you argue with me, just spend a minute on the internet and you can Google and there might not be where you live, but there are houses in these price ranges. So on average we buy these houses from $30,000 to $50,000. And I'm going to use 30 as an example For a $30,000 mortgage on a five-year term, 12% interest.
Speaker 2:We pay a lot of interest and we do that because that's what keeps our lenders happy and full. Where we have unlimited money, our payment comes to $667.33 a month for five years. Then it's paid off. There is no balloon, it's just paid off, it's amortized. We sell them instantly. So we buy them for 30. We sell them instantly, depending on what market we're in, from anywhere from $69,000 to $89,000 instantly that day. We don't do any cleanup, we don't clean out the junk, we don't mow the lawn. We sell them instantly for 89, and they will sell it on a 30-year mortgage. Our average payment is $8.75 a month. So now you say well, your payment is $667. You're not making any money, and you're right. We do not make any money for the first five years, but then, after five years, it's all free and clear. It's our cash flow.
Speaker 2:Most people operate with the other premise of they want to make money right now and what happens is they want to take a $200, $300 spread right now. And if you have rentals, you know that's all theory, but in reality it ends up being where you just have a job working for the bank. You borrowed this money and you now have to collect. You have to do the repairs, you have to fix the AC unit, you have to go to court and then you collect the money every month and you send it on up to the bank and in this transaction we twisted it to where we're the bank. We're the bank. Other people are.
Speaker 2:A lot of our buyers are investors and they're the ones renovating and renting them, doing all that work I just talked about. But then they're mailing us the check. My job is strictly I have over 170 now. I have no employees my job is strictly going to the PO box and collecting my check. It's all a cash flow play. It's not about you know everyone teaching all this other stuff they love to talk about With the Burr method. Everybody loves that and I'm like, yeah, that's all great. That's what I did until it's not great. But since it's since, like we said, it's been 15 years now. Nobody remembers anymore.
Speaker 1:Right.
Speaker 2:One of the great sayings I heard once, and this is when we were only at 10 years. They say real estate has a 10 year cycle, but only a seven year memory. Right, and I love that. But now we're at 15 years, nobody even remembers anymore, right?
Speaker 1:Wow, okay. So I am fascinated. So in terms of so you're raising capital at a 12% preferred return, right, and then you're turning around and lending out 30 years on and it's just it's what's the interest rate you're charging? I'm just curious what's the range?
Speaker 2:The range based on whatever the state is, because we're in four different states right now. So some states the maximum is nine and some the maximum is 12 and some states don't have a maximum. So we do. We do it on an amortization calculator. But sometimes people say, well, you're crazy, you're borrowing 12 and lending it out at nine. And I say, yeah, but I borrowed it 30 and I'm selling it at 89.
Speaker 2:And on a 30 year amortization, when you're on a five year amortization and if you if you're like I am in your you geek out on little things like that, if you play on an amortization calculator, it makes no difference. It's such a short like. On a. On a 30 year mortgage, 12% interest rate is it would kill you, right. But on a five year mortgage it makes almost no difference whatsoever. The payment. Everybody's like, oh, I can get my guy for 11%. I'm like, dude, the math. It's like 15 bucks difference. I said I'm going to, I'm going to go through pissing off my lenders to save 15 bucks. I try and keep my lenders happy and so we pay high interest and I don't mind and they're happy and that's why we're able to buy so many Right.
Speaker 1:So. So how does this work from the lender's perspective? I'm going to deconstruct this whole thing, Cause I am. You have me hooked. I'm reading the book, for sure now.
Speaker 2:Let me tell you something I love real estate, but more than real estate, I love slow flips and I love talking about it, so I never get bored.
Speaker 1:I never get bored, yeah, so. So, in terms of raising capital, is this a? Have you started a fund or I'm against those funds.
Speaker 2:I'm against syndications, not for the people doing multifamily. For them it's fine. But I am not. And I hate to sound like I'm putting myself down, but I am not organized enough to manage other people's money, right, I don't want to manage other people's money. I have had the realization years ago that I said if I start putting people's money together, I'm going to, and it's not because of being criminal, but it's because of being disorganized, right, and you can't mismanage other people's money.
Speaker 2:And so what we do is we do one lender, one house, one loan and that's it. We won't commingle anybody's money. So if somebody wants to loan $300,000, say we won't take 300, we will take 30,000, $1000 per loan. So they'll only give us 30, well, they won't give it to us, they'll give it to the lawyer at closing the 30 for one house, and they'll get a note and deed of trust for that one house, and then they'll get a monthly payment for that one house. When they do their second one they'll put out another 30 and it'll go over and over again. But we'll never say we're going to take the whole 300 and then use it as we buy new houses. Got it Because I don't want to manage anyone else's money and I'll never mix. If you had two people say they wanted to put in 15 grand each, I won't do it. I don't want to mix other people's money.
Speaker 1:Yeah, and you're at the One lender, one house, and you're at the bookkeeper, keeping it all straight, right, yeah, wow, okay, and so I guess my next question why wouldn't this work on more expensive houses?
Speaker 2:I would love for it to. It doesn't. Now, part of it the slow flip comes in two parts. That comes on the buy side and the sell side. So the buy side is where we try and pay them off in five years. Right, I have some of my guys do it in seven years because they're young. You know, I feel like I'm old now and I don't want to do anything over five years. There's the buy side and the sell side. The sell side works on any house. I have one I just did. That's $875,000 house and I bought it sub two and I got I got a real good deal on it. I'm making like almost $4,000 a month positive cash flow on it, it was a great deal, but it can work on any size property.
Speaker 2:I've done it on commercial buildings. I you know. Again, the slow flip has two sides the buy and the sell side. So the sell side you can do on any size property. Buy side, the reason it doesn't work on more expensive houses and I'm just going to use simple math for my area If I was to spend $100,000 on a house and we can't even get them for 100 anymore, but like on a Virginia Beach townhouse, it might bring in $1200 a month in rent right, or $1200 a month in a payment.
Speaker 2:But if I was to take $3,000, $30,000 houses, I can get $875 each form. So now I'm getting $2400, $2500 a month for the same amount of cash outlay that I would get. You know I can get 2400 or I can get 1200. So then you do the math on the monthly payment. If I was to borrow that same $100,000, now you're talking it's going to be about $2,000 a month where, as opposed to the amount coming in, I'm going to be negative $800 a month. It doesn't work. The only way to make it work, which is what people end up doing, and I always say it's a slippery slope Well, let's extend it, let's do it for 10 years. I've been doing this for 15 years. I said, well, now you're doing the same thing as the conventional model, right, because my whole goal is to be free and clear. The challenge we have is and this goes back, and I refer to this guy. So, ed, don't mind if you think I'm crazy when I say this, I refer to this guy as 2005 Scott, which is me back then. Right? Okay, the challenge is 2005.
Speaker 2:Scott used to love his house. I loved my house. I drive by, I wanted to kiss it and polish off the doorknob. I loved my houses 2000. And what are we in 23 Scott? Houses are just pieces of paper. They're just cash flow generating mechanisms. They're just pieces of paper. I have houses I've never seen. I have houses for 10 years I've never seen them. I have 47 of them out now in the Midwest and I've seen maybe four of them. The only reason I did that is because I was out in St Louis for a meeting and I said, hey, let me go a day early and see some of my house, because I own them out there for years and I've never even seen them. So it's a different mindset than what we were raised with, right On loving our houses, and we want to put in the best light fixture and put in this fancy doorknob, but it's going to raise your rent and all this stuff and nothing against all of that. That was 2005, scott.
Speaker 2:Back then I was all about, I loved my houses and I wanted to put a fancy doorknob, I wanted to put a fancy bow on them and show everybody I own them. Listen, I just have pieces of paper and every month I collect a piece of paper, a tech and if I have a payment, still. So. I have 173 or 74. Right now I have 79 of them are already paid off, and they're all paid off at some point within five years because I do five year notes on them.
Speaker 2:So it's a whole different world than what I used to do, because now it's like and I don't want this to sound bad but now it's like you're swimming in cash once you have to get through the first five years, and so this is where most people don't do it, because they're like well, I need to make money right now.
Speaker 2:I get that, and that's why I will say I also teach wholesaling. I'm like listen, if you need to make money right now. Wholesaling is the best way to a check, slow flips are the best way to well, and so, if you're, most people get caught up in that bird trap and regular conventional rentals because they want to. Well, I don't want to wait five years, I want to get paid right now. And there's a saying that I love and you probably already heard it, but I really think it equates to slow flips is they say if you do what's hard, life will be easy, and if you do what's easy, life will be hard. And I repeat that all the time because I'm like, yeah, it's easier to go that path, you're right, but now the rest of your life is going to be harder. Or you can do what's harder right now and the rest of your life is going to be easier, and so that's my mindset on that. Wow.
Speaker 1:It's. I am fascinated, so. So you said you had 170 of these.
Speaker 2:Right now I think I have 173 right now and I have one closing on Friday. I think I have four more pending, awesome.
Speaker 1:And so who services the loans?
Speaker 2:We do not use a loan servicer. Now a couple of I have a. I have a program called the freedom accelerator program and I have a group that use a loan servicer and they they use a couple of different ones that use and I think they they charge them $18 a month but they make the buyer pay for it. I've thought about doing it, but it's so hands off for me as it is that I didn't really get the value. I didn't see the value If I had a couple and it was just I didn't want it.
Speaker 2:If I had a job still and I only had a couple and I was like, well, I don't want to have to even think about them. But real estate is my life and so I'm like so what am I really? I'm still going to have to manage what they're doing and I so I don't use a servicer, I do it all on my own Cause. Again, we're not landlords, so we're not handling leaky toilets, we're not fixing anything, we're not handling lawn mowing. All we're doing is processing the payment. That's it. So I don't really have a need for a servicer, at least not at this time in my life. Maybe, you know, maybe if I'm buying a house in the Bahamas now. But I'm not. I don't plan on going until my son leaves for college. You know I'm going to do like the winters. Maybe then I might say well, I'm going to be gone three, four months. I should have somebody. But I got another four or five years till I have to worry about that.
Speaker 1:Yeah, and they have these. These people call it virtual assistants that will do it for you as well, for you know really reasonable price, Okay, so so obviously the systems here are pretty simple, right.
Speaker 2:It's. You know, I, I didn't tell you this part, so I and this again not putting myself down but I dropped out of school in 11th grade, right? I'm a very, very quit educated and I feel like I'm a smart guy as far as street smart, but I'm not an educated person other than I do read a lot and I do attend a lot of seminars and I'm constantly learned, but not formal education, right. But sometimes I talk to people and when I'm going over my business, they have such a high level look at things that they confuse me and I'm like it's my business and I don't even know what you're talking about. I'm a very simple person, you know. I'm really really simple.
Speaker 2:I my whole life is based on being simplicity, right, and so, yeah, I don't have anything softwares and complicated stuff going on. I'm very simple. We do one deal they mail in their payment, I check it off as paid, I mail if I have a lender. We mail all our payments on the first every month and it you know a very, very simple business. By the 10th, 99% of them are paid and then we pretty much hang out unless I'm buying new properties until the first to next month. It's a very simple business.
Speaker 1:Because we're not landlord. Yeah, yeah, no, I get that, and that's as someone who is in the multifamily business. I'm like wait a minute, you've got my brain cooking here, All right. So so when you buy a house, right, and you said you're immediately selling it, there's no cosmetic, there's nothing that you're doing.
Speaker 2:Other than I'll tell you what I do. I change the locks and put it on a lot box. That's it, okay. And who does that for you? Well, it depends on what city and state it is. We'll hire a locksmith to go out and do it for us, okay?
Speaker 1:And and then you're hiring a realtor to sell it. Or are you selling it? No, no realtor.
Speaker 2:We have different people that I call them headhunters, but I just made up that name because I pay them. I pay them 50%. I didn't tell you this part. So when we sell them, we get $3,000 to $5,000 down and $8,75 a month. So I pay my guys who fill them half of the down payment so they have an incentive. So they'll go and do their own pictures and video. They run their own ads, they put out their own signs and I don't never give it to just one person. I'm minimum of three people in any house because I want them to compete. And then so they're doing all the marketing, the showings, they do everything. I don't do any credit checks. Everything is first come, first serve.
Speaker 2:You know, what's funny is I was telling you my very first house I bought was non-qualifying assumption, right, and I was. And I was obsessed with buying non-qualifying assumptions Cause I was you know, I'm old lawns I had no credit, I had no job on the book and I was able to buy anything I wanted just by coming up with the down payment. There was no credit check, there was no job check. It was non-qualifying right.
Speaker 2:Well, I sell now the exact same way I used to buy. I used to buy and you know everybody's like well, how'd you come up with it? I said I didn't really come up with anything. I'm doing. That's what I used to do.
Speaker 2:I used to buy anything because anything I could, if I could afford the down payment. I was an investor but somebody else was going to make the monthly payments. I just had to come up with the down payment and the banks would put the mortgage in my name, because that's what they did back then. It's the exact same thing now, except I sell that way because I know that there's plenty of 2005 Scots running around who are looking to buy rentals but don't have the bank qualifications or don't have the credit or don't have a large down payment. And here they can go and buy this one with just three grand and then they're going to go in and fix it up and paint it and make it all shiny and put a brandy going up on it and then they rent it out and some of them crush it.
Speaker 2:I have some guys that are doing like by the room getting two grand a month, paying me 875. I have guys doing section eight. They're getting 15, 1600 a month, paying me 875. I want them to crush it.
Speaker 1:You know I want them to crush it. The more they crush it, the more they buy it. Right, exactly Right. You're creating happy customers, absolutely, wow, okay. So I'm interested in your mindset and because you're obviously a very positive person and you know the guys that I knew, so I started investing in 2011,. But I think we're roughly the same age. I'm in my early fifties. I'm 53.
Speaker 2:And I'm okay, I'm in my early fifties.
Speaker 1:All right, yes, so the. So as far as the you know the process goes and all that. How did you figure this out, Like, how did you get your head right? Because I know plenty of folks in that 070809 who got decimated. Mostly everybody I know did Pretty much everybody, and the, the most of them never came back and I'm curious how you got over that that hum.
Speaker 2:It wasn't. I don't want. I almost feel like it wasn't a positive thing, a positive reason why and my friends argue with me and say, oh, you could have. I feel like I didn't have a choice, and what I mean by that is I literally I had a whole year. We made almost no money from mid 2007 to mid 2008. I just spent and spent and spent and had nothing coming in.
Speaker 2:And I had meetings with my friends about okay, if I can't do real estate anymore, what could I do? Right, what could I do if real estate's over? Apparently, what can I do with my life? And I came up empty every single time. And a lot of my friends argue with me and they're like, well, you could have done sales, you could have, there's stuff you could have done.
Speaker 2:And I'm like not to make the money I needed to make, you know, to pay for my house. I already had my cars, I already had my life, I already had going. I said nobody was going to pay me that much money and so it was like I was forced, I had to figure it out. I was like I don't know what I'm going to do, but I can't get a job. Nobody's going to hire me. I haven't had a job since I'm 19 years old. I said what am I going to do? And so it was.
Speaker 2:I love to say that I was just so committed that I knew it was going to work. I don't remember having another, a fallback plan, and I feel like I almost feel like if I had a fallback plan, I may have, I may have gone with it. If I had a previous job, I could have went back. If I had anything that I could have went to, I might have done it and I'm glad and that's why I say I'm thankful for the bust now. I wasn't then, but I didn't really have anywhere else. I could go and still make the money. I guess I can get a job, I can mow lawns again and make a couple hundred bucks a day, but it wasn't going to support my life.
Speaker 1:I already had, right? Yeah, I wasn't going to pay for the house and the escalate and all that, right, it wasn't going to pay for anything, right? And so you know it's. It's so. Your boats were completely burned.
Speaker 2:You know the court yes, you were highly motivated. Yeah, didn't have a whole lot of choices, right.
Speaker 1:Right, right on. That's awesome. So, as you have kind of gotten over that, that loss right, and you started to figure out, okay, this is how I'm going to, I'm going to make this work. You know, I assume and maybe I'm, maybe I'm wrong that you had people in your life who were giving you advice on how to execute what you're executing today, and so, you know, I'm always curious about mentors and coaches and folks that we have. You know, guys like you and me surround ourselves with, and so, you know, I'm curious. You know what was the advice you were getting and who gave it to you. So a couple of different things.
Speaker 2:Firstly, they were from older guys that during the boom I would like they were lenders. Lenders friends mostly became really good friends afterwards but at the time we're lenders and I could remember during the boom, when I'm doing what I'm doing refining, pulling out I could remember leaving lunches with them and shaking my head Like if only this guy knew what he was doing, because he's got 20 houses the 30 houses but theirs were all free and clear. Right, I'm like man, he could turn those into 300 houses and all this and that. And feeling like I knew better. Right, I was following everything I was taught. And then after the bus, being like, okay, tell me more. And I'll tell you an interesting thing. I used to. I had two Cadillac Escalades. I had a Cadillac XLR convertible. I paid $105,000 for it. I loved this car more than anything. Right, I used to go and meet my lenders who were dropping me off checks for 200,000, 250,000. They have tens of millions of dollars and they'll drive up in a Honda Accord or a pickup truck.
Speaker 1:Isn't that amazing.
Speaker 2:And I remember and I remember it never really struck me then until after the bus. And I'm still, even when I'm broke, trying to figure how I'm keeping paying for this stuff. And they're pulling up in a Honda Accord and it's funny and I'll tell you the end of the story right now. And I always tell it when I was doing my live events. I would always say can anybody guess what I drive now? And a Honda Accord, and I have more money now than I have ever had in my entire life. I can buy any car I want, writing a check for it tomorrow. And I still drive a Honda Accord and everybody always laughs. They're like.
Speaker 2:I had a friend recently said to me. He said, scott, when are you going to get a car to keep up with your image? And I was like I don't think you know what my image is. I said that's it. I am all about my house. I mean, mind you, I have a very expensive house, but it's free and clear. My cars are free and clear. I have no credit cards, I have no anything, I have no bills whatsoever and that is the ultimate in freedom and I'm all about freedom and this is what I teach my people always.
Speaker 2:We all think we want money and yes, we do, but we want money for what money can buy, not for the money itself. Right, and the biggest thing money can buy, which people don't appreciate, is freedom. It's your time. Money can buy your time and it's amazing and I sometimes almost feel I don't want to say bad, I feel awkward. I had an awkward time. I was sitting out back and sitting by my pole and I'm reading a book and I'm you know it's in the middle of an afternoon, probably on a Wednesday, I don't remember and I remember cool guys came and the landscaper came, and then someone came and was fixing something else and I remember I'm almost like you know I'm. How blessed am I that I'm literally sitting here enjoying the sun, reading a book and all the stuff that I had to do myself. At one time. I got to buy my freedom by paying someone else to come and do it all and that's really the value in my opinion. Everybody has different goals, but my, the value of money is your time, it's your freedom, 100%.
Speaker 1:I agree, yeah, I mean, the biggest thing that that real estate gave me is the ability you know we were talking about you, you know spending time at the college world series. For me it's chasing my youngest. You know I've been. I have an older daughter in in school down in Philly and I get to go see her whenever I want to. And being able to chase my my youngest, you know, all over the country to watch her play without having any sort of responsibility to call a boss or you know someone to ask if I can, you know, get a get away for a week. I just make the reservations and get, make sure my team's good to go and I go that's it.
Speaker 2:Yeah, and, and you know, I, I read something and it's probably Facebook or something recently that somebody's quote they said is that the only one who will remember, the only one who will remember how hard you worked will be your boss, everything else.
Speaker 2:Your kids are going to remember that you were at the games. Your kids are going to remember that you showed up, that you took them away, that you did everything else. If, just because you worked extra overtime or whatever, nobody, nobody cares, nobody's going to remember that, and and so it's like you got to turn all of the normalcy, what the world sees as normal, off.
Speaker 1:Yeah, but you know, my boss once a mentor who was one of my bosses years ago told me you know, on your death bed, no one ever wishes they were right or had more money or any you know whatever, right, yeah. And so I know you have a book that just came out in March and you can you can talk about that. But also I'm also curious about. You said you read a lot and and you know people are taking in information these days very differently, right? Some of them it's physical books, some of it's audio, you know YouTube videos, whatever, right. And so I'm curious. I want to talk about your book, but I also I'm also curious about who are you reading, who are you paying attention to these days, and how do you take in information?
Speaker 2:So I read and I listen in my car. So I do audible because I drive a lot. I look at houses. Whenever I'm in my car, I listen to books and then I also read. I like physical books, but you can't do it when you're when you're traveling. So when I'm, when I'm in my car, I listen to audible, and at home, yeah.
Speaker 1:All right, so so who are you paying attention to these days?
Speaker 2:You know it's interesting. I read, I read a lot, but I try a lot of books that I don't even know if they're going to. You know people, people write one, the one I'm listening to right now. What's it called? Two X is better than 10 X. I'm not, I'm sorry. 10 X is easier than two X. I think a Kennedy and it's a new one Russell.
Speaker 2:Brunson. No, no, no, not Russell Brunson, it's the same one he did another book with just recently. I'm sitting here talking to you while I'm looking it up the Gap and the Gain, benjamin Hardy.
Speaker 2:Oh, okay, I haven't read that yet, and the Gap and the Gain was also very, very good. That was an excellent book. All right, it's going on the list. Yeah, I like their book. I I'll tell you. You know it's, it's an old one now. I say now because I I can't. Time flies when you get to be, when you get to be older, I'm like, oh, I feel like it was yesterday.
Speaker 2:But one of my books that I recommend to people often because it's a more of a lifestyle book and it's nothing to do with real estate is I love the four hour work week. I'm a big fan of promoting that, even though you know certain things in there don't apply. But what does apply is the value on your life. I'm not just walking away for some day type thing. There's a there's a book that that I really liked, that called Life in Air. Have you read Life in Air? I have not. I recommend that book and you know and I know it's a small book, but put the bed for you in life partner's name wrote it and I really, really liked that book. That was one of the few books that when I got it, I was disappointed because I opened it up and I was disappointed because it was written in fiction form and I generally just read business books, and so I was like heck is this? And it was literally so good that I started it and stayed up until I finished it.
Speaker 1:Wow, really, it was really good that goes on.
Speaker 2:And it was one of those books that I believe, when you're done with it, it has an impact on you.
Speaker 1:Yeah, you know and I really enjoyed that.
Speaker 2:Yep, I recommend that one to a lot of people as well.
Speaker 1:Most people never even heard of that book, but I really think it was very good.
Speaker 1:Yeah, I had never heard of it either. So all of these books that we're talking about will be on the show notes so that everyone else can enjoy this too. I'll put a link on Amazon so that you all can partake of these books as well.
Speaker 1:So, speaking of books, you know, one of the things that I'm always interested in is the whole concept of being an author, right, and from the perspective of you know, when you write a book, you know 200 pages of blood, sweat and tears for you, and the really amazing thing about it is you're basically taking the last 10, 12, 15 years and compressing it into those 200 books. So Ed Matthews, who doesn't know anything about slow flipping, can read your book and jump that far ahead. You know I may not skip 15 years ahead, but I'm certainly going to skip 8, 10, 12 years ahead and and you know, really start to understand something that it took, you know, many, many, many hours and a whole lot of heartache and a whole lot of hard work to figure out right. So tell me about the your latest book.
Speaker 2:So it's interesting. On, what you just said is because and I know, before we get into telling you about the book is I always think about people who don't read, because I love reading, but mostly because of what you just said is that you got a person who's successful and whatever it is that they do, and they're giving you their best stuff because they want the book to be great. So they're giving you their best stuff for 20 bucks or whatever it may cost 15 bucks, 25 bucks for whatever it may cost. You're getting their best stuff in 200 pages or 250 pages, as opposed to you living out all those years and I'm like people who don't. I'm like you're missing out on the easiest cheat code you could possibly get, absolutely Taking someone's best stuff. So I wrote a book. My other book was called work just gets in the way of making money and everybody loved that book. But I kept getting questions and comments going that flow flips was just a chapter in there and this was. This book came out in 2016 and everybody was constantly sending me questions and stuff on slow flips. The whole book was great, mind you, but everybody wanted to know more about slow flip and so I kept telling them. I said, okay, I'll write, I'm going to write a book just on slow flips, just on slow books, and I finally, finally, just came out a couple months ago and it's called the art of the slow flip and it is literally. I held nothing back. It's, from start to finish, exactly what a slow flip is.
Speaker 2:How do you find them, how do you fund them, how do you market them, how do you sell them? How do you answer questions? Because there's some questions that you might have in your head right now, ed, that you're not even saying like. I'll give you a good question that people ask is, for instance, how are you selling this for 89 when there's another one on the block right now for sale for 30,? Right? How? Why would anyone buy that for 89? When there's one set of reality is we sell the finance and the house comes with it, right, and? And so when, when I'm asked that question, I answer I'm always a brutally 100%, blunt and honest right.
Speaker 2:So when people say, oh well, this is 89, there's one for sale on the block for 30. My answer is well, I would buy that one. That's a way better deal, and then they're like good, but that one you got to pay 30 grand in cash, well then I would buy mine and I just and I basically just lay it out for him. But in the book I touch on all those things that are questions that people say, yeah, but what am I going to do with this and what am I going to say when they say that? And so I literally held nothing back. It's all in there, and and that's what I was telling you earlier is that I'm giving a free copy for anybody that's listening that wants one they can go to amazing low flipcom, slow FLIPcom and I have 200 available right now and it just pay the shipping and handling.
Speaker 2:I think it's $7 or $7.50 or something and we're going to send it out to them, you know, right away. So the book is so far I've been all 100% five-story views. Everybody that's read it has loved it. I've been getting all kinds of positive feedback on and I enjoy. One of the things I enjoy most and you're probably the same way it is is it's not so much you can teach anybody anything, right, and but teaching them doesn't really do anything unless they actually do something. Because I've had a lot of people come through and they're like, oh, there's the greatest thing in the world, and then you talk to them six months later what have you done?
Speaker 2:Well, I'm still planning on getting started and I'm like my whole thing is to push people to do something, and one of the ways I do that like in my program, one of the ways I get my people successful is by breaking it down into a tiny do something. You know, I end every one of my meetings with my coaching students. I end them with do something today. Your future self will thank you for right. And and I'm always like you don't have to do everything, but just do something today towards your business, because if you can do that every single day, you will be amazed. And that's another great book the Compound Effect. Have you?
Speaker 1:read that. That's phenomenal.
Speaker 2:You will be amazed that after 10 days and 10 weeks and 10 months, how you have a full business but you never really fully working on it. You just did something every day. And so that's why I'm always stressing with people don't worry about doing everything, just worry about doing something, get something done. As long as you consistently are doing something, it's going to compound.
Speaker 1:Yeah over time. It's, you know, it's that old. I think Tony Robbins says it's. You know people over estimate what they can get done in a year and woefully underestimate what they can get done in 10 years. Yeah, absolutely yeah same thing.
Speaker 2:So I'm a big incremental.
Speaker 1:Yeah, it's an incremental improvement every day. Right, something? I get it All. Right, that's awesome. So so let me ask you I mean knowing what you know. Now, if I waived the magic wand in age 18 years old, you can take all your knowledge back with you. Okay, what would you if you had to start over? What would you?
Speaker 2:do differently. So two things I would do, two things I could think off the top of my head on a split. Second answer is one not participate in the boom, which sounds counterintuitive. You're in real estate. That's when booms are made, right? You make all your money. Well, I might have still wholesaleed and stuff, but not participate as far as whole. Of course I would. I had 20 houses going into the boom and I could have been at 20 grand a month, positive come bus time with no, no debt, having them paid off by them. And it wouldn't do it, you know, it would have been okay.
Speaker 2:So number one not participate in the boom. And number two is don't fall for the biggest marketing tactic on the planet earth, which is debt. That you know, I, most people don't know. Debt is the highest marketed product on the planet, is that? And? And it's hard not to fall for it because it's everywhere, everywhere you go, you save 20% today if you fill this card out. Every time I'm on a plane which I was last night I'm shaking my head when they're trying everything to talk to you and they're filling up this application, doug will give you free tickets and free upgrade and free coming to the lounge and it.
Speaker 2:and how would you know? I mean, the whole world is telling you to get in debt. How would you know? And so if I, knowing what I know now, if I could talk to my younger self, I would be like turn it off. That is not. You know, I know, and you're in multifamily. So in multifamily it's different and multifamily debt is good.
Speaker 1:You know, there's something and there's leverage right. It's two different things Right.
Speaker 2:And so in multifamily, that part of the business and there's, you know, nobody's going to go into buying apartment complexes without using debt. That's it. You have to, but with and single family still buying them, we can, but multifamily, most people and you'll never pay them off. Very rarely Do people ever do that. That's part of the business model. But in single family houses I believe in paying them off.
Speaker 2:And not just that the credit card cars, vacations, the stuff people finance fills me. And you know, and I'll tell you something, and I know this is unrelated, but I talk a lot. If you can't tell it, you do One. I, you know my wife will come home and she'll be like oh well, pohl's is offering this free, whatever, if I fill this out, or this target's offering this, and the answer I always give her mind you, she doesn't like it. I tell everybody this. I say I say I say, think of it this way.
Speaker 2:I said they didn't have a corporate board meeting and come up with a new marketing plan so that they can make less money. They're not giving this away so they can make less money. They're giving it to you to entrap you. That's it. That's why they're giving it to you. They didn't say you know how can we make less money next month? Oh, let's give everybody 10% off, that'll be a good plan. No, they're giving it to you because they know the statistics bring you in that funnel and next thing you know, you were enslaved to them, paying 29% interest forever. There's department stores, and some of them aren't even here, like Sears was. Sears was making more money off their credit card than they were off all their retail sale.
Speaker 2:I don't know how insane that is, you have all this brick and mortar, all these products, all this labor and everything, and they were making more money off the interest from people that already bought stuff than they were from all of that other stuff combined. I said that's crazy.
Speaker 1:Yeah, it's nuts, but it's true, right? I mean, there's a reason why the Chase Manhattan's and city groups and all that. Not only do they operate in large, beautiful towers all over the world, they probably own most of them, right?
Speaker 2:And that's kind of a slow flip premise. And I always tell people I said, when you go to any city in the country, you can look up at the big buildings and they're all banks, right, and life insurance companies, but they're all, primarily all banks. I said, and that's because we're running around and sending them up the money. Well, with the slow flip model, we turned it on its head. Where we're the one that they're sending the money to, you're the bank, we are the bank, everybody's running around and sending us the check. And it's a whole different feeling to when we were landlord. Now we're just the bank.
Speaker 1:Yeah, and way fewer moving parts.
Speaker 2:So on 800 and not to go down a whole mathematical rabbit hole, but on $875 a month, on a 360 month, which is 30 years, which is a typical mortgage, it's $315,000. They end up paying you back on a house that you got for $30,000 and didn't pay anything out of pocket. You had a private lender fund, the whole thing $315,000 coming back your way.
Speaker 1:Technically it's an infinite return, but if you factor in your partner it's still a 10x return. The slow flip returns are insane. You have me thoroughly intrigued.
Speaker 2:Well, I'd love to get your feedback after you read the book. I'd love to talk to you again as soon as we hang up.
Speaker 1:I'm hopping on your website, so thank you for that. So let me ask you this when you're not talking about real estate, how do you like to spend your time?
Speaker 2:Well, like I said, I just got back from the College World Series. Yeah, and one time we were out there for two full weeks I took my son. We do travel a lot. We go to games. We do travel around a lot and go to games. And I also travel a lot Period. I go to the Bahamas a lot. We're going to Italy for 17 days in August. I like we like traveling. I like boating. We live on the water as well, so we, we like boating. My son likes to fish but not catch, but he likes to fish and well, they call it fishing for a reason, right yeah?
Speaker 2:exactly. Otherwise they call it catching. I love using that line Right yeah.
Speaker 2:And I, you know, I enjoy the sun. As you can see, I've been a little too suned this past week and we go to a lot of ball games at home too, as I know you said you do. I, you know, I enjoy going. I enjoy going and enjoying the sun and going to games. There is nothing like sitting in a ballpark, nothing like, yeah, I love it. I love on a Wednesday or a Thursday afternoon at noon when everyone else is at work, and I got, you know, I got a whole group of people and we're having the time of our lives.
Speaker 1:Absolutely, yeah, fantastic. So, hey, scott, I've really enjoyed this conversation and you know, if someone wants to learn more about you, know you or your business, your coaching or anything like that you know what's the best way to get a hold of you.
Speaker 2:So the best way would be to first off, start off by reading the book, and they can get that for free at slow flip dot com. Other than that, I am on all socials under my own name, so you can just type in Scott Jelenick, j E L I N E K, scott Jelenick, and I pop up on everything I'm on. You know TikTok, instagram, you know Twitter, linkedin, facebook, you name it, you name it on everything, and so all of those as well have messaging platforms. If anybody needed to, you can. But I always suggest people. I always say the best way is to read the book, because sometimes I get a question and I'm like well, did you read? No, I have it, but I didn't. I said, well, the question you're asking is answered in there.
Speaker 2:So, chapter 12. Start off with that, yeah, start off with reading the book, and it pretty much answers most everything, and then I'm happy to answer anything further than that. Awesome.
Speaker 1:Well, scott Jelenick, thank you so much for joining us today. This has been, this has been phenomenal, and I'm I can't wait to read the book. So congratulations on the book. Thank you for all the information you just dropped for our audience, and I look forward to reading it and look forward to seeing you again, my friend.
Speaker 2:Awesome and I look forward to your feedback. Thank you for having me on. I look forward to your feedback after you read the book. All right, thanks, scott, have a fantastic day.
Speaker 1:This has been the real estate underground podcast. Thank you so much for listening. Don't forget to rate, review and subscribe. It helps us grow. Until next time, happy investing.