In this episode we have Ed Peugh, Licensed North Carolina Real Estate Broker and Co-founder of CLT Buyers. Ed Peugh shares his real estate journey and discusses his off-market opportunities for Rehab and Resell, Rehab and Rent, and Wholesale. He shares the biggest lessons he has learned as an entrepreneur and how businesspeople can become better tycoons. Ed also shares exclusive tips and expert advice on jumping into the real estate investing arena or becoming a thriving entrepreneur who can take on any competitor. Tune in now!

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Rent, Resell, And Wholesale: Getting Started On Your Real Estate Journey And Entrepreneurial Life With Ed Peugh

Before I jump into the episode, I got to do my business as usual. We have some amazing things going on in The Flip Talk community. I want to make sure everybody knows some of these incredible things. Head over to FlipTalk.com and check out the episodes we have. You can check out some of the coaching and mentoring we have going on. You can apply to be part of the Inner Circle, a mastermind. You can also check out some upcoming events and we have some free resources there for you as well, free tools, gifts, contracts, videos and some stuff. FlipTalk.com is where you want to go to find out everything going on in the Flip Talk universe. With that said, I got my guest Ed. Ed, how are you doing?

Good, Don. Thanks for having me on the show. We appreciate you.

I’m glad to have you here. You and I met each other through another community a handful of years ago. I’ve gotten the pleasure of getting to know you and working with you through the years. I’m excited to have this conversation. Before we jump into everything going on and your universe, what is it that you are all about? How did you get started in real estate investing and who are you?

 

 

For those of your readers who don’t know who we are, I’m a real estate investor. Our primary time in the business is spent running a sourcing business. Some of those deals will keep us. Others will be wholesale. Rewinding to the beginning, I started real estate investing when I was in the Marine Corps. When you’re in the Marine Corps, you don’t have the benefit to generate extra income by going and getting another job or having a true side hustle.

When you're in the Marine Corps, you don't have the benefit of having extra income by going and getting another job or having a true side hustle. Click To Tweet

I had to try and find ways to generate some income. Everyone picked up the Rich Dad Poor Dad book and I was like, “This is something that I can implement.” I bought my first real estate investment back in 2005. Fast forward many years later, we’re full-time in real estate doing creative financing, private lending and all of this stuff. It’s a lot of fun and challenging. One of the things we like to remind people in our business is the challenges we run into. Ed Peugh’s 2005 version would have been praying for these challenges, and that’s a real blessing.

You started in the Marine Corps. What did your first deal look like? How did you decide that this was a thing you wanted to do?

It’s an interesting property. It’s 2005, and I see this duplex that’s owned by the bank. They have it listed. It’s been identified and it had been sitting on the market for a long time. We go and look at it. We walk in and the subfloor of the house has collapsed. There’s an 8-foot hole where you can see down in the crawlspace. They had it listed for $107,000 or $112,000. Through a series of negotiations, we got that house for $27,000.

What did you do with it?

One side has significantly deteriorated and one of the sides was almost moving-ready. We did a significant update and put renters in there. We were then off and running, understanding how cashflow worked. That was conventionally financed by a series of transactions. Later we started to learn about private money and that was a big pivot point in the business. When you learn that you can go to individuals, not ask for permission, present them with an opportunity and your business runs faster.

Fast forward through the years, how has your strategy evolved into what you are?

The thing that I would give a lot of credit to over the last few years is I used to be a one-man band and opportunity would land on my desk. I’d chase that down. It would either close or it wouldn’t and we’d personally get a check and that’s cool. You could keep the whole check. A $25,000 or $30,000 check can go a long way when you’re an individual. That happened to me and my business partner. He said, “What if we took what you know about real estate and put a process behind it?”

That journey of how we build a process behind it is part of what you and I have been working on over the last couple of years, looking at our business and saying, “How do we build a better business, not just a bigger business or more deals but how do we build a more effective business with processes and tools?” Those are the things that have been key in the business.

You’re trying to build a better business. Also systems and processes around your business. What does your leadership look like? Let’s talk about that for a minute. What are you doing to lead? What’s working best for you in 2022?

We’re exclusively cold calling. Back when I was a one-man band, I used to be a go-knock-the-door guy and that’s a very effective approach but generally speaking, it’s not scalable. We’ve transitioned to being a virtual shop. Cold calling’s our primary lead generation source. In parallel with that, we do some texting and referrals from our network. The reputation we’ve developed locally is the three levers that we use to bring leads into the business.

You keep your wholetail and wholesale. How do you choose? What goes where?

The capital requirement is normally how we make that decision. If we’re going to have to come into the property and do some substantial rehab, we get it updated. We did a project where we had $30,000 put into it. In our business, often that’s too much capital to have locked in one place. That deal’s going to have to go wholesale or get sold to retail. If we can find a deal that is generally rent-ready, creative terms might be in place. One of our private lenders is willing to fund all of it. That’s stuff that we’ll try and retain ourselves.

I’m going to ask a question based on some conversations we had and I don’t want you to go into full detail but what are some of the biggest lessons you’ve learned as an entrepreneur? If you were to talk to yourself years ago, what are the things you wish you’d known and learned that made you a better business person?

You and I have a background on this so not going into any detail but vetting and having your board of directors or folks you can bounce something off of. I’ve made at least 3 or 4 major missteps that have put at risk $60,000 or $70,000 of money. Had I had folks to bounce the deal off of or bounce the idea off of like, “This guy’s asking me to wire this. Does that sound right? How can I protect myself here,” those would’ve been substantial lessons that I wouldn’t have had to learn the hard way.

One is to create a board of directors and an environment where you have people you can bounce something off of. That used to be that we could only do that locally. You’d have to go to meetups and find people you could learn and rely on locally. Thanks to things you and I speaking across the country. Technology and our ability to communicate more effectively with social media and the ability to create those masterminds and networks have increased. That’s the first thing. Create a circle of people around you that you can vet deals off of. Even more importantly, stop being the one-man band.

Create an environment where you have people you can bounce something off of. Click To Tweet

Had I started scaling this in ‘05, ‘08, ‘09, or even in 2010, we’d be a lot further along than we are. The last few years have taught me the value of a team. That means you may have salary expenses and some overhead, but the ability to focus, not just have to run around and try to touch every marketing, transaction coordination and financing, when you’re doing all of those things, being effective in any one of them is difficult.

One particular lesson you learned was never to wire money outside of escrow. That ultimately led to a situation that we’re not going to dive into here. You don’t ever want to let to wire money outside of escrow. You always want to borrow into escrow and pay out of escrow. If it’s an earnest money deposit or you’re buying properties, you want to wire into escrow. It’s the only way you’re protected as an investor. With the market being as hot as it is, everybody’s doing it. What can go wrong? It’s that one time it does and it can be an issue.

To acknowledge, thanks for your help in that situation. We’ve reached a resolution because of your help so thank you.

You took the initiative to solve it but we’ll leave that there. What advice would you give somebody that’s just starting? I asked that question but you’re one of the ideal people to ask. You’ve been helping people starting for a number of years. You’re a giver. If you were talking to somebody that was trying to get started in a real estate investing arena where they had done no deals or done one, what advice would you give them?

Coming back to create the community, that’s key. Meet the key people in your market. Go to the meetups. Even if you’re working a 9:00 to 5:00, in most markets, there’s a dinner meeting or a breakfast meeting. Go to something at lunch or jump on a Zoom. The second piece is to take action. We’re having our monthly meetup and when they show up and say, “I’ve been researching real estate for two years,” that makes me cringe.

I don’t necessarily think that you need to go out and buy all of these fancy tools and programs at least not initially but you do need to take action. Have you spoken with a seller, a potential buyer or a potential lender for your deal? If you’re not touching 1 of each of those 3 every week, you’re going to struggle to move the business forward in a way that you don’t get frustrated and just quit.

 

It’s massive imperfect action. It’s always good to get somebody around you that can mentor or coach you and give you a system or a process but that’s not necessarily needed to take action. Even when you get somebody around you to mentor you, the first thing they’re going to tell you is to take action. It’s very important. You’re big on books and that’s one of the reasons why I want to make sure you share some of your favorite books. Let’s do that. What are some books you’d recommend as somebody that’s in the space as an entrepreneur or in general that has affected you? Tell me why on each one.

Never Split the Difference is one that we lead consistently. It’s important in our business to understand that if you’re trying to split the pie in different percentages, that’s not an effective negotiation strategy and trying to enlarge the pie. Instead of talking about price, let’s talk about timing that serves you and your family. Maybe I can meet you at your price but we’re going to make some payments over time. Taking the negotiation from a very linear flat surface to creating some dynamic to it becomes interesting for all parties, which is certainly a key for me.

 

We talked about Rich Dad and Poor Dad. I don’t think that’s a very tactical book, but it’s key for the mindset that is required in business. The other book we’ve read is The Debt Millionaire, and that’s talking about how to use leverage in your business and how using future dollars to pay current obligations can create a lot of value. For those folks who are reading, one of the books that we recommend consistently is Todd Fleming’s book, If You Can’t Wholesale After This: I’ve Got Nothing For You. If you’re looking for a play-by-play of how to do this in the market, that’s a book that we think is relevant.

You’re part of our Inner Circle League community. You are one of the founding members. I’m going to shameless plug, I don’t necessarily do this on this episode but how do you feel about having a mastermind? The word mastermind has been misused a lot. People utilize it in coaching programs. They call them masterminds. People use them in one-off events. They call them masterminds and in some fashion they are.

The real original mastermind was started way back by Henry Ford and some amazing men back that day. It’s mentioned in the Plain Tales from the Hills book and the idea was a collective community of individuals that shared knowledge and supported each other or that council. How would you define what a mastermind is and what it does for your business?

If it’s okay, I’ll switch right into ICE and what it means to us. When you first talked about it, I know a lot of awesome people and I want to get them all in the right room. If that happens, there’ll be a lot of synergies created. You were talking to some people and we were one of them. You were like, “Would you be interested in being involved?” We immediately said yes. You’re someone we have a lot of respect for. We know a lot of the people who are in your peer group. Those are people we have respect for. Our business is going to benefit. I would’ve anticipated how much it would affect our business.

We have the ability to walk into those rooms, the virtual spaces that we create, the social media groups and all that and have constant communication with people who were chasing. There are 5 or 6 members of the group, for one reason or another, are doing things that we find interesting and we know our business is going to benefit if we can implement it.

The ability to be able to do that is neat conversely, knowing that there are individuals who each time we see at the events trail us in one feature or another of their business and being able to tap them on the shoulder and be like, “Last time we were together, you had mentioned you were struggling with your project management process, your hiring process or that COO role was emptying your business. 3 or 6 months later, has that been resolved or are you good to go or do you still need some guidance?” In our business, like the Go-Giver model, that part is important to us as well.

The reason why I’m hitting you up on this is that I had a conversation with somebody who set up a mastermind, a glorified network group. How would you define the difference between a glorified networking group and an actual mastermind community?

By virtue of our marketing processes, we had a lead come up in Reno. We’re in Charlotte, North Carolina. We don’t have a great way to work through that lead at a distance by default of our network and whom we have. The difference between a networking group and a mastermind is that when I drop into our mastermind group and say, “Who’ve got boots on the ground in Reno, Nevada,” I know that the people who are responding to that are only answering it out of their interest in me winning.

It doesn’t matter for their business. What’s in it for their type of behavior is, “This is a part of the community we’re all trying to build together. Here’s my resource, go chase it.” This is the thing that sets a networking group or however, you call those, the BNI groups, all that type of stuff. Apart from what we do, at least in our mastermind, is there’s none of this. There’s no, “What’s in it for me?” There is, “Let’s help the community grow. If someone’s outrunning me, that’s great, and if I can keep up with them, that’s great too.”

What do the next years hold for you? What’s your plan?

 

With the sourcing organization, we’re in the cap of CLT Buyers. Hopefully, that becomes a regional player that can stand on its two feet. I find joy in traveling. If I can find a way to travel a bit more than I’ve been able to do the last couple of years and keep that running, that would be awesome. By virtue of the group, we’re following the model of our friends who is taking long-term buys and holds and generating a lot of wealth out of those without having to sell them. That’s a model that’s interesting for us. If we can deploy that model at a greater scale, that’d be successful for us too.

Is there anything I didn’t touch on or ask that you feel we need to cover?

I don’t want it to sound like a plug fest for ICE because your group’s doing great. We’ve got a powerful room and the right people in the room, but we can always benefit from the opportunity to interview 1 or 2 people who may add value to the room and see if they’re a fit for what we’re doing and where they’re at in their business. If someone is reading this and is on the fence about whether that’s right for them, they should reach out to you, have a conversation and get a feel for what we’re doing. Those are powerful rooms if generated. When we look at our P&L prior to our involvement, it’s substantially different.

You can always benefit from interviewing people who may add value to the room. See if you are a fit for each other’s businesses. Click To Tweet

Tell everybody how to get ahold of you.

We’re on socials. @CLTBuyers on Instagram and Facebook. They’ve got us on TikTok. There’s some video out there of me spinning a shirt around or something. Our social media team has a lot of fun with that stuff. Socials CLT Buyers are everywhere. Ed Peugh on Instagram and Facebook. They can add me there too, as long as Facebook isn’t at its limit.

If you want to reach out to Ed, talk shop, or have an opportunity to do some business with him, make sure you reach out to him with the information he gave to you. If you’re looking to be part of something like a community, make sure you go to FlipTalk.com and check it out. We have the offer right up in the menu section. There is an opportunity to apply and be part of many things that we’re doing. We’re always looking for great individuals that are a core value fit to what we’re doing as well. You can find me on Instagram at TheRealDonCosta. I’m all over Facebook and TikTok as well. If you’re getting value from the show, make sure you are liking, subscribing, and sharing it out there. Ed, I appreciate you being with me.

Thanks, Don.

 

Important Links

• Ed Peugh
• Inner Circle
• Rich Dad Poor Dad
• Never Split the Difference
• The Debt Millionaire
• If You Can’t Wholesale After This: I’ve Got Nothing For You
• Plain Tales From The Hills
• @CLTBuyers – Instagram
• Facebook – @CLTBuyers
• TikTok – @CLTBuyers
• Instagram – @EdPeugh
• Facebook – @EdPeugh
• @TheRealDonCosta on Instagram
• @TheRealDonCosta on Facebook
• @TheRealDonCosta on TikTok