Real estate is undeniably a worthy investment. With the use of a proper exit strategy, you will boost your bottom line dramatically! In this episode, Don Costa welcomes Jason Lavender to have a rehabbing conversation and delve deeper into how rehabbing is much preferable when exiting your business. Jason Lavender shares his experience and tips to help first-time investors navigate the waters of rehabbing. Tune in to this episode now!

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Rehabbing As An Exit Strategy With Jason Lavender

Welcome to another episode of the show. We’re going to talk about some cool stuff. I’m sure we’re going to have some rehabbing conversations in this particular interview. Before I jump into that, I want to talk about some of the cool things we’re doing over here in the Flip Talk community. If you go to FlipTalk.com, you can check out the show’s episodes. You can also look at what we’re doing when it comes to mentoring and coaching. We’re doing some cool stuff there.

We have the mastermind community as well, the Inner Circle Elite. You can go to FlipTalk.com and check out again episodes and what we have going on. You can apply for coaching or the mastermind and see what we have the offer. We’re doing some amazing events as well. We’ll have some updates in that particular place for you. With that said, I have Jason with me. Jason, how are you doing?

I’m good. What’s up?

How’s it going? I’m doing good. I’m sure you’re doing good. We saw each other not too long ago in St. Louis at the Inner Circle meeting. You and I have known each other for a few years now. We have interacted at a few different events and stuff like that. I’ve gotten to see your progression in your career. For those people who don’t know you, have never heard of you, or wouldn’t even know you when you’re walking down the street, they should because you’re famous, who are you, what are you about, and how did you get started?

Thanks for having me on. My name is Jason Lavender. I’m in the Wichita, Kansas market. We are smacked out in the middle of the flyover country. I am a fix and flipper. I jumped into real estate in 2017. You and I met in 2018 out of your office in Fresno. I jumped in as a house flipper. I came from a remodeling background. That was my foray into flipping hands-on style. I knew that wasn’t going to be a long-term way to go about investing, so I adapted quickly to wholesaling, flipping at scale, and putting in systems. We’re growing a rental portfolio. I’ve got a team. We’re loving life and excited about whatever this crazy market is going to give us. That’s a little bit about me and where we’re at now.

 

 

Tell us what your first deal looked like. How did you even get into real estate investing? What did that first deal look like and how did you come across it?

My wife and I watched the shows. We always wanted to flip houses. It was a pipe dream. In 2017, I had a midlife crisis. I’ve always had entrepreneurial blood in me. I’ve owned several other businesses. I come from an entrepreneurial family. I wanted to pull the trigger. I’m a shoot first, aim later type of person. I got that first deal online from AuctionZoom.com. I learned the online action secret sauce.

I landed that particular deal. I was very hands-on with the rehab. I bought the second one when I was about halfway done with that, and did the onesies and twosies there for a while at whatever speed I could rehab until I finally learned how to scale and systematize things. I was hands-on for that first year or so. I enjoyed it. I hit every bump in the road and made every mistake I could make. Honestly, I haven’t looked back. I wouldn’t change it for the world. I love it.

You are a rehabber like me. That has been what you’ve done primarily. Why did you choose rehabbing as your strategy versus wholesaling or some of the other options? I know you still do wholesale as well, but why rehabbing preferably?

I love the hands-on aspect. Wholesaling is sexy. Wholesaling is marketing. Sales is not my strength. We’ve got a good wholesaling team. I’ve got a great acquisition manager. We’ve got systems for that as well. At my core, I love rehabbing. I love seeing old things restored. It sounds stupid, but I enjoy seeing houses flipped.

I took deliberately 2018, 2019 and 2020 to wholesale and flip as a side hustle, not at scale. We were doing 5 or 6 a year to deliberately do that, to blow through 2021 and 2020 where we were slamming them out by the process. I love flipping. I like the margins. It fits my core values and principles. I like old things fixed up and seeing old things made new. I’m allergic to spreadsheets and everything that goes along with a lot of the things that go along with wholesaling, so I hire good people for that and stay in my lane.

What are some of the challenges? You’ve been flipping for a minute now. COVID made some changes and impacts as far as the labor force and supply chain. What are some of the challenges you’ve encountered since COVID? How did pre-COVID and COVID impact flipping?

There are supply chain issues. It’s even hard to pin down what it’s going to look like from month to month. There’s inventory. We can’t keep an inventory on the sell side. It’s tighter to find the deals on the buy side, but you dig deep. COVID, more or less, has been a blessing in disguise for real estate. I didn’t see that coming. I was ready for the hard pivot and to be hunkered down on some rentals and write it out, but that didn’t happen. We have not seen the prices come down. I keep a particular watch on days on market on our flips and inventory here. We’re still selling. On the first weekend, we list multiple offers. Until that stops, I’m going to keep flipping. Whatever challenges are coming, we’ll take them in stride. I’ve got my foot on the gas.

Supply chain issue is a challenge in rehabbing because the prices are up. We can't keep an inventory on the sell side, and it's just harder and tighter to find the deals on the buy side, but you dig deep. Click To Tweet

With the supply chain list, for instance, what are some of the things you’re having a hard time getting, and what have you done to mitigate some of that?

It’s like everybody. Those are cabinets, windows, and flooring. All of it. Lumber was $350 a board. It’s $8 for 2×4. We pivoted. Instead of our standard custom-placed windows, we pivot. We go in stock, frame it out, trim it out, and keep moving. We use materials that are readily available so we do not delay. We turn and burn.

I’m not trying to win any awards for our houses. We do nice products. We have a nice inventory, but I’m not going to wait twelve weeks for windows. We’re going to get that thing done. I’m not waiting for appliance packages. Whatever is on sale, whether it’s stainless, we’ll get it. We put it in there. It’s a good product. That’s particularly with supply chain issues. We’re pivoting and moving forward with what is available.

Time is money. You want to order custom windows to fit what’s there already or replace what’s there already, but you’re talking about anywhere from 4 weeks to 12 weeks versus what used to be two weeks. In some markets, it has caught back up. In some markets, it hasn’t. Instead of paying the extra interest, the time, having other work, and being held up on your project, you’re talking about reframing the size of the window and making them a little bigger or a little smaller so that they fit what’s in stock. You can order what’s in stock and move a little faster. I’ve always been a, “What does Lowe’s have for appliances? That’s what I’m ordering.” That’s the advantage of being a first-time buyer or second-time buyer with the price points and not doing high-end homes.

 

That’s my price point. We stick to our first-time home buyers and our medium price. It’s crazy. With sales price, people around the country are like, “You’re selling stuff for $130,000? That’s stupid. It’s crazy.” We buy them cheap and rehab them well. That’s our price point. It’s $120,000 to $200,000. I’m selling $300,000 to $400,000 houses. I can’t do in-stock packages. Time is everything to us. Our average close-to-close is 86 days. We don’t like to mess around. We want to keep going and turn over our investor’s money.

What are some of the systems you have in place to be able to keep those things rolling the way you want to roll?

People are the systems. We’ve got software and systems like everybody else. We have CRMs and things like that, but people drive. My team is invaluable and I rely on them heavily. You’ve met much of my team. Those are the systems that we have in place. We’ve got good people. I’ve got people that are invested in the culture and the cause of what we’re doing here. I incentivize well. We pay well. We’re family. That’s something I firmly believe in.

I realize it’s not the charm of business. It’s going to go on forever. I realize circumstances will change and team members will come and go, but that’s the culture that we’ve created. Outside of that, we plug and play some of the normal systems, things, and software that everyone uses. I don’t have any secret sauce or any of that. It’s really the people.

What does your team look like if you had to break it down?

I’ve got Tyson, my acquisition manager. He’s locking up all our deals and runs our wholesale division. I’ve got two project managers, Brandy and Antonio. I’ve got a personal assistant, Jaden. We’ve got a couple of in-house employees, Randy, Noah, and James as well. They are, more or less, dedicated to our flips in our maintenance division through our rental portfolio and stuff. We’ve got three virtual assistants as well running data, following up, and doing lead management, data, and admin stuff.

What marketing are you using that you feel is working well for you?

Admittedly, I’m not a good marketer. It’s crazy being around geniuses. You guys are killing it in marketing, split testing, this and that, and everything. I get the concepts. I probably am too impatient. I’ve tried most of it and I’ve given most of it a good runway. What we’re doing are postcards and letters on a niche list. We’re doing RVMs at scale.

Networking has been my sweet spot. I run multiple meetups, investor clubs, and mentor groups. With social media. I’m on TikTok. I’m networking and building relationships with agents and whoever will listen to me. I’ll meet people with coffee throughout the night and day. Networking has been where the majority of my deals and relationships are built in our deal flow in our pipeline.

How about raising private money? What are some of the things you do to finance your projects?

That was a big game-changer for me. I don’t have any rich uncles that I can come to for money, new money or old money. I don’t have that. I learned some stuff that you shed light on about using your circle of influence and your sphere of people that you know. I’m never begging for money or asking for money. People come to me.

With some of my first investors, I have crazy stories. A guy that worked for me in my painting company came into an inheritance. His father-in-law passed away. He knew I had flipped a couple of houses. He came to me and was like, “I heard sometimes, people can invest in real estate. Is this something you could do?” He has invested with me ever since. We’ve done probably twenty deals together.

I’ve networked with acquaintances and people I’ve known for such a long time to the point where I have people approach me extending lines of credit based on my track record. I met with an attorney. He was gracious enough. I got to know him. He’s an investor as well. He was extending lines of credit and banking on me. Something you told me a long time ago is, “Any private money lender, you’re the horse they’re betting on,” and I believe it. I take that seriously.

 

The people who trust me to invest their money in our projects and the return that I give them, that is as serious as a heart attack. People realize that. I’m very vocal about that. Starting with friends and family, and those conversations to now having a track record, having a social media following, and people seeing the volume that we’re doing, people are coming to me with conversations like, “Can you put some money into work?” It has allowed us to scale. I couldn’t flip 50 houses a year with onesie or twosie money. That wouldn’t work. Most of those have been built through relationships. In these investor clubs and meetups that I run, I made so many friendships and relationships through those. That’s been a gold mine, honestly.

What advice would you give somebody that’s starting out?

Define your goals. You need to put a target on the wall. I’ve got a mentor group. They get that question a lot. I’m like, “You need to define where you’re heading.” I’ll sit down with newer investors and help them put words into what they want to do. If they say, “I want to flip houses,” I’m like, “Let’s break that down.” First of all, define your goals and educate yourself. There’s no substitute for education, but you don’t want to spend too much time there. You got to take action and just go.

Define your goals and educate yourself. There's no substitute for education, but you don't want to spend too much time there. You have to take action. Click To Tweet

I’ve seen a lot of people sit on the sidelines for a long time, absorbing the material, reading more books, and listening. You can’t miss that piece of the puzzle. Once you define what your goals are, short, medium and long-term, educate yourself on what you’re wanting to do. You just got to go. That’s always been my advice. “Fail forward” should be tattooed on me somewhere.

Fail forward is important and great advice. Tell everybody how to get ahold of you. If they want to find you or reach out, how do they do that?

I’m on Facebook. My Facebook page is Harmony Home Buyer. We’re in Wichita. Jason@HarmonyHomeBuyer.com is my email. My TikTok is @Jason_Lavender. I’m trying to get TikTok content out there. Are you on TikTok?

I am. I’m starting to put TikTok out there more. We’ve gotten pretty consistent at it, so we’ll see if it takes off.

It’s consistency. It’s a whole different demographic, but it’s good. You got to be consistent. I am @Jason_Lavender on TikTok. Hit me up anytime. I love answering questions. I like talking about faith, my family, and real estate. After that, I’m pretty boring.

Let’s talk about this for a second. You’re part of our Inner Circle Elite community. Why be a part of a mastermind? What value do you get from a mastermind?

What value do I not get? To me, the people that you surround yourself with, you’re going to elevate your game. You need to be having conversations. This is something I did when I first met you a few years ago. I knew I needed to be having high-level conversations with intelligent people. They’re not perfect people. They’re not people without flaws that weren’t making mistakes, but people that were taking action. There wasn’t any fluff. This isn’t a theory. People are doing deals in the trenches type of thing. That’s exactly where I needed to be, and that’s where I feel most comfortable. That’s why I’ve never missed any of our quarterly meetups.

 

There’s so much value in osmosis and absorbing real estate knowledge. Quite honestly, you gain so much when you’re able to give too. I love having conversations and being able to share things that are working, things that aren’t working, the pitfalls to avoid, and things like that. There are zero substitutes for a good high-level mastermind in conversations to elevate and accelerate your investing. I firmly believe if I hadn’t made that decision, I might not even be in real estate. If I was, I’d be doing the onesie or twosie houses. I might have two rentals instead of a big old portfolio. I attribute that completely to accelerated learning through mastermind.

It’s a pleasure having you here. If you’re getting value from this episode, make sure you’re sharing it out there. Give us a great review. Go to FlipTalk.com. There are opportunities there to work with us, join our mastermind community, or even come to one of our events. There are some amazing episodes there as well.

I’m also launching Rookie Playbook 2.0. If you have listened to Rookie Playbook or even if you haven’t, you’re going to want to listen to Rookie Playbook 2.0. Rookie Playbook was a series I did about a couple of years ago with a buddy, Ryan, where we started with week zero. It was a crazy idea. I was like, “I want to be a real estate investor. What do I do first?” He and I did 49 weeks.

I’m launching that with my son. He’s turning eighteen. We’re going to do 2.0 and we’re going to start from scratch in the world of 2022. We’re like, “What would we do?” I’m going to do two versions of it. I’m going to do a wholesaling version and a rehabbing version. The first number of episodes will be the same, but we’re going to split it into two. If you’re wanting to check that out, go to FlipTalk.com/RookiePlaybook. Throw your name and email in. You’ll be able to sign up to be notified when that show releases. Jason, I appreciate your time. Thank you for being with me. Thank you for the value that you add.

I’ll see you in Chicago.

 

Important Links

• FlipTalk.com
• Inner Circle Elite
• Jason Lavender
• AuctionZoom.com
• Harmony Home Buyer – Facebook
• Jason@HarmonyHomeBuyer.com
• @Jason_Lavender – TikTok
• Rookie Playbook
• FlipTalk.com/app
• BeInThisRoom.com

 

About Jason Lavender

Jason has been an entrepreneur his entire life. Born and raised in Wichita, he is proud to be able to partner with people who share the desire to continue to improve our local community one flip at a time.

Heidi Lavender is the love of his life, and together they have two children and one shaggy dog.