Hausflipping in Missouri: Den echten Wachstumsengpass finden

0:00Unternehmer/Gast My name's Cameron. [clears throat] We do residential real estate flipping in the state of Missouri. We did 15 million revenue last year for 3.7 gross before overhead, so 2.5 after you take into account our team. Is 15 million like the how much the houses were when you sold them? And then the three whatever >> sold 15 million dollars. Yeah, that was like house sale price. The profit on each project was 3.7, which is it helps us tell how well we're doing on the projects. And then you take out our team and you end up with 2.5 like EBITDA, I guess.

0:33Alex Um I was trying to think of the constraint all all week, you know, zero revenue retention got highlighted in the in the thing. But for us, I think it's going to be that I would we've kind of captured the market we can capture, which for what we do is a driving radius. Like we've I would say dominated within 4 hours of where we're at, which is like you drive 4 hours to a house to evaluate it and 4 hours half your day is gone.

1:01Um and so we're kind of at a push or pivot moment of like do we we do no advertising. It's 95% foreclosures and then like a few word of mouth. So do we pivot, would you say to the rest of Missouri? Like almost franchise out, like get four little like find other big cities and and try to get the rest of Missouri. There's probably like four quadrants or would you go into marketing? Cuz I know I mean doing 95% foreclosures, it's like we don't control our income of properties whatsoever and we kind of have like that that one funnel. And like if foreclosure like if the economy gets good, then you have no deal flow kind of thing.

1:40Alex >> Exactly. And we're constant and through COVID foreclosing was literally illegal in Missouri and we made 2.7 that year. So somehow we made it happen. Like you said, it's just a lot freaking harder, but there's ways. >> [laughter] >> So I don't know if it's a push or a pivot. I would say that's our main constraint there's things we can improve on, but that's like the one that keeps us up at night right So let me just say what's the goal?

2:04We have a mission statement and it's to make sure that all houses within our reach are at their highest and best value because we don't see a house falling off the market as a good thing. That just makes other real estate more expensive. I know the goal is not necessarily to ever sell. So it would probably be to expand, I guess. >> Okay. So so you know, path one is you just go to another city. And I wouldn't necessarily call it franchising, you just expand. It's just like opening another lighting thing. Like that's just that's just the normal way of things.

2:36Like if you just get better and better at it, you open another location. Um I see that as another another set of skills for you, which I think will be valuable. Um and you could and this time like if it's basically there's no point I mean you could go in Missouri, but you could also do any other market that you'd want because if you're if you're going past 4 hours of driving, now you're in like flying range, in which case pick the right city. You know, like pick whatever city you want to go to.

3:03Um you'll also go into a city that's going to probably have competitors. You know what I mean, which I see as a good thing. Um because it means like the more competitors there are, the more of a market there is. As long as you're, you know, number one, then more for you. Um and so that's that's how I that's at least my perceptive perception. Like whenever people are like, "Oh, there's a ton of competition in my market." I'm like, "That's awesome. It means there's tons of buyers." Um and so just side note there. But um cuz the alternative of this is like literally changing the entirety of your business.

3:32Alex >> Exactly. Which I I would [clears throat] I would like you're doing well with it. How long have you been doing this? I've been doing it for 8 years. >> Yeah, dude. You've already paid down like all the ignorance debt. So like you're at this point, you're like you're like here on your curve. Like you're like right here. And so it's like well don't don't jump back down to like here again. >> [laughter] >> Right? Don't go there. Like there's an ultimate version of this. And so what's the who's the biggest wholesaler in the nation? The biggest wholesaler in the nation is We Buy Ugly Houses, probably. I mean there's a lot of them. Okay.

4:06Alex So what do they do that you don't do? Um a lot of advertising. A ton of advertising. Paid paid for click. Mailers is huge. Billboards. We do none of that. >> Yeah. So I'll bet that there's still way more deals even probably even within your current market. I think so. And so I would probably if I were you. So either either you have to replicate what you're currently doing in a new market, but you have some of the risks that you've already brought up, which is like you're all inbound based on foreclosures and you have some of these other things you're not real like the income's not necessarily reliable. Um I would definitely learn the advertising stuff for your own business cuz like whenever there's a an ultimate version of the business that I'm currently in, it's like they already did it.

4:51Alex And so now all I have to do is do it better than them. And whoever built that business is already gone, probably. And so it's just a bunch of suits who don't know how this business works. And so it's just ripe for us to just murder them. I'm just being I'm just being super honest. Like this is how I see it. Um and so I think I would just like go 100% try and pants them. Um and do PPC like and like also do some of the stuff they're probably not doing well. They probably aren't doing social well. They probably aren't running like not as well as they could. Obviously their billboards, I know the billboards that they run.

5:21Alex Um and but I'll bet you they've got great sales training and I'll bet you've got they've got great floors of people and kind of infrastructure in place. And so I would look at that. I would look at their overarching model as well cuz I'll bet you they get a piece on the back end as well. Like cuz they probably vertically integrated as much as they possibly could within business that that they actually make more on every deal than you do. So they can spend more on every deal. Like they can pay more like so they have they have ways to beat other people in all these different markets cuz they're national. Exactly.

5:51Alex [clears throat] And so step one would be start advertising more cuz then that'll just immediately make more within your current market. Like that would just that might double your business if you just did that. Um And then number two is I would analyze the living hell out of them. Like that's what I would do. And then think about it like, "Okay, this is this is the future version of my business. One, can I replicate it? Two, is there anything I can do to make it better?" 100%. I definitely wouldn't change my business. For sure. I think that I think your advice is dead on. It's just what I'm afraid to do cuz I don't know how to do it. It's like I'll just go do it in a different city. But I guess I got to learn new things.

6:26>> Yeah. Make it darn. Right? Yeah, well maybe we can help. So if you've hit a revenue ceiling or your entire business relies on you to grow, then I'd love to invite you out to our headquarters here in Vegas to learn how we scale. It's a my team spends two days with you to identify the thing that's holding your business back. And so if that sounds interesting, click book a call and if you're a fit, we'd love to potentially see you out here in Vegas.