Wholesaling and Flipping: Navigating the Deal Pipeline with Bill Allen | Part 1 #893

Bill Allen, a retired Navy Test Pilot and real estate professional, is the Owner of 7 Figure Flipping and host of the 7 Figure Flipping Podcast, where he leads one of the top house flipping and wholesaling mentoring groups in the world. Just a few years ago, he was stuck flipping 1 or 2 houses per year and doing all the work himself, but since then, he’s built a systematized business that runs without him. His wholesaling and flipping company Blackjack Real Estate does over 60 deals a year in today’s market.

Bill founded Blackjack Real Estate, LLC in 2015 with the mission of helping homeowners sell their houses for cash. The company started in Pensacola, FL and over time has expanded to Chattanooga and Nashville, TN as well as Tampa, FL.  Based out of Nashville, TN, Bill and his team currently flip and wholesale over 60 deals per year. What began as a one-man operation has quickly become a team of 15+ who are experts in their fields and passionate about real estate and helping others.

Bill’s journey in real estate has built his knowledge and expertise in leadership and hiring, raising private money, self-directed IRAs and 401k’s as well as private and hard money lending. If you would like to get in touch with Bill, please visit:

www.7figureflipping.com
Facebook at www.facebook.com/billallenrei
Instagram @billallenrei and @7figureflipping
YouTube – @billallenrei and @7figureflipping

Our October Live event:
www.fliphackinglive.com


In this episode:

• Craig welcomes Bill Allen
• Bill's early life and career before Real Estate
• Transition to Real Estate Investing
• Starting with rental properties and fixing houses
• Building Blackjack Real Estate
• Wholesaling & Flipping Strategies
• Challenges of  Wholesaling 

I Suvived Real Estate is on October 25, 2024

To purchase an individual ticket please Click HERE!

More info HERE

The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


Video Link

Radio Show

Transcript

Narrator: 0:01

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Craig Evans: 0:45

Hey everybody, we are excited. We have got a phenomenal guest on with us. We have got Bill Allen, the owner of 7 Figure Flipping. Bill's a retired Navy Test Pilot and real estate professional, and is the owner of seven figure flipping and host of the 7 Figure Flipping podcast, where he leads one of the top house flipping and wholesale mentoring groups in the world. Just a few years ago, he was stuck flipping one or two houses per year and doing all the work himself. Since then, he has built a systemized business that runs without him. His wholesaling and flipping company, Blackjack Real Estate is based out of Nashville, Tennessee, and does over 60 deals a year throughout the southeast. Bill has also been investing as a limited partner in apartment syndications since around 2018, and in 2020 he began focusing on getting more involved as a general partner. Since then, he has grown his portfolio to over 2000 apartment doors, and has taken 18 buildings full cycle Since 2020. Bill, it is an honor and a pleasure. I want to say, first of all, thank you so much for being with us today.

Bill Allen: 1:50

Well, thanks for having me. I'm excited to talk to you guys.

Craig Evans: 1:52

I am really happy to not only have you on the podcast, but to finally be able to get you on the panel for I Survive Real Estate. I know you were going to be on the panel with us during, I believe it was 2020, when we were going to do the virtual panel. We had certain circumstances, and we were, you know, we had to miss you that year. It is really cool for you to be a part of not only our event as a whole, but for me, you know, as the new owner of The Norris Group, to have you on my first panel. I was very, very excited with that. You know, we've got a really, really great investor panel that you're going to be a part of. We've got you, we've got Mark de Lautour from Creative Genius, and, of course, Bruce Norris. You know, we're putting a good, good investor panel. But you know, there's a lot of people in our that listen to us and follow us that may not have ever heard of everything about you. So if it's all right, what I'd like to do is start diving into who you are, what you do, but I know you've got a big event coming up that you're going to be putting on. I want to talk about that a little later. But, you know, really, before we do that, I want to go back and start talking about who is Bill Allen, pre real estate, you know, I want to start talking about the pilot, the podcaster and the investor that really is Bill Allen, is that all right with you?

Bill Allen: 3:02

Yeah, absolutely. So let's see, before real estate, I was investing in as a young kid, I, like, always wanted to turn$1 in $2, so I was really, I really loved, like, I remember my first little business venture was, like, my dad was in the military also, so we would go to the commissary and buy candy in bulk, and then I would split you know, the stuff that says, like, not for resale. And then I would, like, strip apart the packages and like, set them up in a little pencil box. So if you're old as me, you remember these like little cardboard pencil boxes. And then I'd set up in front of my school, because we'd walk to school, and they'd have, it was cold in Maryland, and they'd have these little, like areas where you could sit inside the school. But this actual school wasn't open. It was like a little foyer, and I would just open my shop and just start wheeling and dealing and selling candy and gum to all the kids. And I loved it, like it was really exciting for me, until the school got kind of ticked off that gum was, I guess, like, all under the tables and everything, and so they, they said it's my fault. So they, like, shut my business down, called my parents in, threatened to suspend me from school and all this stuff so. So, then I went to, like, mowing lawns. And then I started flipping cars, like I would work on cars, fix them up, and then drive them for a while and resell them. I really loved cars when I got, you know, 1617, and then I went to college, like my, you know, my dad was very much go to college, get a good education, make, you know, 100$250,000 a year, that's your path, and that's all I knew. So that was kind of my life. I went to college. I was mechanical engineering major in Georgia Tech. I went into aviation for the Navy. So I got commissioned in the Navy in 2003 I went to grad school. I got a Master's Degree in Aeronautical Engineering from the Air Force Institute of Technology in Dayton, Ohio, Wright Patterson Air Force Base. And then after that, I went to flight school. So then all I knew was, like, I have to do well as a Navy, a naval officer in the beginning, and work to get my wings. You know, aviation wings as a pilot. So I did that. I got my wings and, let's see. 2006 i. And then went out to San Diego. So at that point for me, like, I My dad always instilled in me, like, save money. So I was, I was actually really cheap. Like, I would never spend any money. I, yeah, I was really cheap like, really, really cheap. So if anybody knows me that's listening to this, they'll know what I'm talking about. And I would just, I got to save like, 40, 50% of my salary at that point, and I just dumped it into index funds, and my IRA and my 401K, so at that point, it was a thrift savings plan for the government. And so it was all stock market. Like everything was in the stock market is all I knew. My parents didn't invest in real estate. They owned the one house that they had, and that was it. No rental properties, no real estate, no nothing. And that was just kind of all I knew. But I wanted to, like, be wealthy, like I wanted to become a millionaire. That was my path, like I mapped it out in the stock market. By time I was 65 I was going to become a millionaire. Just, you know, saving money. I was saving my way to be a millionaire and get like, you know, 8% returns in the stock market. And so that was my life saved like 50. And eventually it was like 60, 65% of my salary, I would just live like it was a Millionaire Next Door kind of concept, right for my whole life. And then in, so that was kind of like early phases of this, just flying, having fun, getting to travel, maximizing every government stipend that I could get, dumping it all in my 401K, in my IRA, and tracking my net worth every single month, and just watching it like slowly tick up. And then in 2006 I bought a condo in San Diego. It was$385,000 but 395 I think it's 395 and then in 2009 I sold that thing for 200,000 so almost half, you know, real estate market crashed. It was my first ever purchase. It was a block from the beach in Pacific Beach. I loved it. It was amazing, but I was losing like 800 bucks a month, renting it out to a friend when I left to go to Pensacola. And fortunately, the government bailed me out. There was a program called the housing assistance program that the army was doing. It's called HAP and they bailed me out. And so it was basically like break even. I had, like a restart. I was able to start fresh, and I bought a house in Pensacola in 2009 I had to sell a car to get the down payment, but I bought a house, got the down payment, and I started fixing it up. That's when I was watching all these HGTV shows like, you know, fix and flip type TV shows. And I bought this house, and I was like, you know what, the master bedroom had been redone, but the house is like, it was like a 80s house, like an older house in Pensacola, really nice location, great neighborhood. And I was single, so I was like, You know what the spare bathroom could use some work. And so I just took a sledgehammer, like it was on TV on Demo Day, and I just bashed the thing up, like, completely smashed it all to pieces, threw it out, like, took it in my pickup truck to the dump. And then I was like, All right, now I got to figure out how to put this thing back together. And so just like working on cars, I just, I always love learning new things, like trying to figure it out. So I just got on YouTube. My uncle's a contractor in Maryland. I called him, and I just started figuring out how to put the thing back together and fix it up. So I was doing all the work there. Probably took me like six months to fix that thing up. You know, just because I was flying 10 or 12 hours a day, every weekend, non stop. But any downtime I had, I was just like trying to figure out the next thing that I could do in there. And then my plan was, I'll go to the kitchen next, and then I'll do the flooring. And all said after that, like I fixed it up, it was time to leave to go to a new duty station. Looked beautiful. Turned out great. I rented that house out. And then what I noticed was, you know, the equity of that house kept going up likethe home was appreciating. I bought in 2009 when everybody else was like, don't buy a house, you're crazy, and especially after getting burned on the previous house, right? The condo that I bought, but fixed it up, rented it out. I was making like, 800 bucks a month cash flow, and it was going up in equity. And the guy was paying my mortgage down. And so I was doing the math on my net worth sheet, and I noticed that I the real estate was making me way more money than the stock market just with one house. And I was like, man, what if I had like, 10 of these? And so I went to work over the next few years, just like buying rental housesand it was all rentals like, for the next two years, just trying to figure out how to buy rentals. And so I was saving up for a down payment, putting 20% down, buying them retail, because I didn't know any better. And I ended up, I so my next duty station was in Maryland. I bought a short sale there. It had 1000 square foot basement that was unfinished. So I was like, I can add a bedroom and a bathroom down here. I have the skills to finish this whole thing. So I finished the whole basement in six weeks, and myself, I mean, I didn't do the drywall. I had some guys come in and do drywall. That's just not my skill set. And but, like, I wired everything. It was already pretty much framed. I had my uncle was close by, so I had him come down to help me with some of the framing, because teach me some stuff. My dad came down to help me wire it. He's electrical engineer, so him and I, like, wired the basement, built a sub panel, I learned all this cool stuff, it's amazing, and finished the basement in six weeks, and then rented that house out. And I actually rented a house in a cheaper area, because I had just gotten engaged at that time, and I didn't want to pay the high rent in the neighborhood that I bought in. So I paid like, 1800 bucks a month of rent, and then I rented my house out for 2750 so I, you know, I made the difference. Got great cash flow. That house started going up in value. It was, I was just like, how many more of these can I do? So now I had two. We got pregnant, and then I was like, Oh, crap, I have to feed three mouths. And my, so my 60% savings, remember that it went down to, like, 10, 20% savings, and I'm really cheap, and I'm like, this is not gonna do it for me. I'm never gonna become a millionaire this way. Like, I'll be 70, now, I started mapping it out, and then so I just started trying to figure out the real estate thing. So I know it's a little bit long story, but that was kind of my life, and I don't know five minutes or 10 minutes or so before, like, really getting bigger in real estate. Like, how do I scale this? How do I do more? And I hadn't even really flipped a house yet at that point, that was, like, the next year I was I found a rental property, I was gonna fix it up and rent it out again for number three. And my realtor wanted a second commission. So she was like, hey, you know you could flip this thing and make some money. And we fixed it up, sold it. I made $43,000 it was like half of my annual salary. And I was hooked. So from then on, I was like, how many more of these can I flip?

Craig Evans: 11:27

Well, you know, I'm from Georgia originally, so, you know, I think a lot of the things that I look back as you're saying, you know, I did this and I tried this, you know, if you'd have been at University of Georgia versus Georgia Tech, there's probably been a faster outcome for you, right?

Bill Allen: 11:43

I would probably agree with that as much as I hate the Bulldogs. Yeah, they pretty much just don't overthink things and just do it. What roof can I jump off of into the pool?

Craig Evans: 11:55

That's right. Oh, man, no, that's great. Listen, I was, I was excited to see that you're from tech, even though, you know, I am a bulldog fan, but I was excited to see, you know, that there's that camaraderie there. So, really, then, if my math is correct, and that's got, you really starting to get into this 2010 or 11? Is that right?

Bill Allen: 12:20

Yeah, 2009 bought my first rental house, but I would say I've been like a real investor, probably for the last 10 years.

Craig Evans: 12:26

Okay.

Bill Allen: 12:26

So 2020 13, probably when I got back from England. I went to England for a year, went to Test Pilot School, came back. That's when me and my wife got engaged. I met her in England. She came back with me, and then we that's about 2013 was when I was in Southern Maryland.

Craig Evans: 12:42

Okay.

Bill Allen: 12:43

And that's when I bought my second rental house. And the whole time I was in England, on the side, I was like, trying to figure out what I was going to do in real estate. When I got back, I was like, scheming of how to buy rental properties, how to build this portfolio, just looking at all the numbers, I was like, this is the way to go. Real Estate is the way and so, yeah, probably maybe 10, 11, years ago. That's kind of, my timeline of really being in real estate.

Craig Evans: 13:06

So let me ask you a question. You know, your bio talks about that you're a Navy Test Pilot. You know, obviously that brings pictures to mind for me you got, you know, Chuck Yeager as test pilot. You've got, you know, you got into recent movies, you know, Top Gun, things like that. I guess my question had a couple questions, actually, just diving back into you before real estate, did you ever consider, you know, you were a test pilot? Did you ever consider being an astronaut?

Bill Allen: 13:37

Yeah, you know, I when I went to test pilot school, I was a little bit senior, but that is the path to an astronaut, for sure. And I thought about that. I was interested that program is hyper, hyper competitive. And typically, if you're not a previous jet pilot, you're not usually flying the space shuttle, or, you know, any or the actual, like craft. So, yeah, I was interested in that. It was something that I was like, Well, you know, if, if this is my career path, and maybe I'll explore it down the road. But I didn't, like, grow up as a kid being like, I'm gonna go to the moon or anything like that. I didn't even know I really wanted to be a pilot. I kind of went in the Navy. I was gonna, I wanted to be a Navy SEAL. That was my plan for the first few years. So, but the pilots, like, their life was a lot easier, a lot more relaxed. They played golf, they drank beer, and they flew airplanes. It was kind of cool. So, so there's a couple things and factors at play. A few guys that I knew went through the whole process of astronaut training and acceptance and stuff, and it's really rigorous, like, it's really hard to compete to get one of those slots. There's, like, 1000s of people for maybe one slot. And also the stuff that was happening with the space program wasn't overly interesting to me at that time. We kind of, like stopped going to space so it was, you know, it was, and it was a little bit before, like, what's going on now too. So there wasn't like, SpaceX and all this other stuff that was happening either. So it's kind of like a lull in the market, if you will. So I was like, yeah, it doesn't sound that exciting anymore. And then when I got, to be honest, when I got married and had a son, I was like, I probably need to de risk my life a little bit as far as some of the things that I do go and because I need to be around for them. So yeah, it's always something that I'm like, it seems kind of risky. So that's kind of a lot of the decision making around that time of and I always just kind of take my life one step at a time. So like, hey, if, if that door opens and it's interesting, and if the timing's right, then I'll say yes to it. So it was definitely in the back of my head at some point. Yeah.

Craig Evans: 15:35

So, with that, I'm looking, you know, now that you've been kind of rolling through things, you've also got a couple podcasts going, and again, I want to dive into a lot of your real estate stuff, but I know there's been a lot of things that I've kicked around and looked at, you know, as learning more about you. So I'm anxious here. You've got both your podcasts. You got a couple channels, you know, you got the aviation pod and the 7 Figure pod. So one of the things I thought was pretty cool is that that, that, from what I can see, is most of your aviation pod is done while you're actually flying.

Bill Allen: 16:06

Yeah, yeah. So, yeah. So we have a, you know, I bought a, I bought a pretty nice so I bought an okay airplane, like, six years ago, and then I bought, like, a really nice airplane a little over two years ago. So when I bought that, when I bought the airplanes, as always, you know, neat, the business write off availability, to me, is insane for airplanes. So I can, you know, depreciate the entire purchase in the first year when it had 100% bonus depreciation. And then you can even look into section 179, for some of that stuff. So when I bought this plane a little over two years ago, the price tag was really high. The monthly payment is really high that I make. And so I wanted to figure out how to use this as a tool for my business and and just create, like, cool relationships with people and do something different. So if I'm gonna fly somewhere anyway, like, why don't I bring somebody up with me, set up a bunch of cameras and just interview them in the plane. And so we started doing that about two years ago, and I've had a ton of fun doing it. I've gotten to meet some really cool people. I've gotten a lot of opportunities open to me. Last year, I went to the Super Bowl in Las Vegas, and I got to fly Ed Reed, he's the safety for the avens, you know, retired safety Hall of Fame Super Bowl champ. And he was like, I grew up in Baltimore, so Ed Reed and Ray Lewis were, like, my absolute heroes As a kid growing up watching the NFL and so to get to hang out with him for an entire weekend, I was like, if you've ever seen entourage, I was like, turtle on entourage for the weekend at the Super Bowl. Like, literally, I was in the room with, like, 20 hall of famers in 4 hours and people. I mean, Jerry Rice was in the room. Emmett Smith, Dan Marino, Michael Vick, Eli Manning, I mean, I could just go on and on. Eric Dickerson, I mean, it's just Lawrence Taylor, it was insane. Jim Kelly, Thurman Thomas, like, I could just keep, like, rattling off people that I watched when I was a kid. And if I didn't have the airplane, there's no possible way that I would have been on that trip. I basically flew him to and from the Super Bowl. And now, you know, we talk, we message, you know, if he needs something, he's like, Hey, can you take me here or whatever? Like, it's just, it's been really cool to have an opportunity to open some doors and do the thing that I love, like, I would love to fly my airplane for free, right? You know? And so, so it was a cool opportunity for me to try to figure out how to do something that I would do anyway and you know, hear some cool stories and talk to people. And usually I just, like, fly with somebody on the way to a trip that I'm going on anyway. You know, if somebody is going to a mastermind or a meet up with me, like, hey, let's just fly with me, and we'll do an interview in the cockpit. And then some people will come out to Nashville and do an interview, and it's just been really fun to do.

Craig Evans: 18:44

So I'm a little bit of a a plane guy, where we're actually shopping as well. But so are you flying jets? Are you flying turbo props?

Bill Allen: 18:52

Yeah, it's a turbo prop. It's a TBM 850 so gas single engine, gas turbine, and it's the PT six engine that I've been flying almost my entire career as a trainer. So I've got a couple 1000 hours in that thing. I'm very comfortable with that engine and gas turbine setup. I really only have, like, I probably only have a couple 100 hours in a piston and that's only because I owned a a 36 before this a bonanza. So okay, yeah, before that, I had like, 15 piston hours and 1000s of gas turbine hours in the military.

Craig Evans: 19:20

Yep, yep. That's pretty cool. So when you're taking guys up and you're, you know, guys, girls, when you're interviewing people. Are you going with a preset focus and a topic in mind? Are you just getting them up and you start

Bill Allen: 19:35

Uhm, little bit? So, you know, the cool thing is, I talking? let them take off and land and fly around. So I've been, like, a navy flight instructor for over 10 years. And so just, you know, let I mean, Ed Reed. Ed almost crashed my plane. He was like, pulling back so hard, and he's so strong, I had trouble, like pushing the controls forward, and his manager was in the background, like, don't let him touch the controls again. Are you crazy? And so you can see all that on the interview, if you want to check it out on our YouTube channel. And you know, I just, I usually have it do some research. If you've ever watched, there's a YouTube channel called hot ones. It's really cool, where they eat hot wings and they do an interview, and the hot wings get hotter and hotter over time. What I've noticed is, I try to watch that and study what other people do that are really good at this. What I've noticed is the amount and level at which they do research before that show and the questions that they're asking and the way that the conversation flows is really incredible. So I definitely try to come prepared with a talk track, because nobody really cares about their background or their history or what they did before. It's kind of like what's in it for them. So I, what I usually find is in the airplane, I can get people to tell me things that they wouldn't normally say on a podcast because they feel like so comfortable we're just flying around, like they forget the cameras are even there. They're looking out the windows and stuff. So my goal is, can I get them to tell me things that they've never told anyone on a podcast before?

Craig Evans: 20:59

Right.

Bill Allen: 20:59

And so that's even, like, one of my questions, like, what is something that nobody knows, and as you've ever told about on a, you know, something like this. So I really, I flew Russell Brunson. He's the owner of Clickfunnels, and, you know, a big marketer. And so I really wanted to get him to tell me how much, because they were, they were going to sell Clickfunnels a few years ago, and they got an offer from a VC company, right? And I wanted to know how much it was for. I was like, if I can get Russell to tell me how much it's for. I've never heard him tell anyone. He's never told me. I'm in his inner circle. I know all the people that know him. Nobody knows if he can tell me on this show this people will watch it. And so, so I did. I got him to tell me, and it's like he was like, Oh yeah, I guess I can tell you, I don't know if I'm supposed to, but, you know, we were, like, flying around, like, around his house and his church and all this stuff and, yeah, I got that kind of information out of folks, so.

Craig Evans: 21:52

That's cool. Well, alright, so listen, let's talk about your seven figure podcast.

Bill Allen: 21:57

Yeah.

Craig Evans: 21:58

You know, between the two, I guess, which one do you like the best? Which one do you enjoy doing the most?

Bill Allen: 22:03

Yeah, I like them both. You know, really, our seven figure flipping podcast has a ton of our members that come on. So like people that are our community, our mastermind group, there are people that nobody would know who they are. So they're not the Ed Reed, they're not the Russell brunsons, they're not people that anybody knows. We had George camel on the airplane show from Dave Ramsey's office. So it's one of Ramsey personalities does the podcast for Dave. And like, they just, you won't know who they are, but they're doing really cool, big things, especially for them. And it's just so, so relatable for people that are wanting to get into real estate of seeing somebody else have success, early wins, first deals being done, a tip, a trick, things like that. So I still, I enjoy doing that. I've done, like, I don't know, probably five or 600 of those so, and we've probably done, I don't know, 15 or so the airplane ones, just because it's also way cheaper for me to do this empirical podcast in my office. You know, instead of, like, burning a bunch of jet fuel and flying around.

Craig Evans: 22:58

Fuel's a lot cheaper.

Bill Allen: 23:00

For sure. But you know, I have fun doing that too, especially getting to know our members at a more like, a deeper level who are in our mastermind usually that sometimes that's the first time that I've, like, truly connected with them and like, in person. Because maybe they haven't come to an event yet, or they're they're newer to the community, and so it's just cool to hear people's stories and get to know them a little bit better. So very different structure. After five or 600 it can be challenging to just keep going, you know, to do a podcast that many times and it's cool because now I have a couple other people that helped me with it. So Adam Whitney is one, and Caitlin Phillips a couple of folks from our community and on the staff, they're helping me with the podcast by doing some from time to time, and that's really kind of been able to let me, like, you know, not getting the monotony of doing it over and over again, and really enjoy it. So I think we always have to figure out, like, where we're at and and what works for us.

Craig Evans: 23:56

So all right, let's start shifting into some of your real estate now, because I know the people want to realize, they want to know. All right, let's find out about Bill, right? So, so let's start out. Tell me about Blackjack, real estate. Tell me, kind of, I mean, you told me how that started and but really, kind of get me into that, if you will.

Bill Allen: 24:11

Yeah, absolutely. So I flipped that first house made$43,000 that was in 2013 and I'm kind of hard headed, so I'm like, this is a fluke. Like, I don't think, I don't believe that this is true. You make half your salary flipping one house, and I was doing it like on the side. So I was a test pilot in Pax River Maryland, in Southern Maryland, and I, like, made more money than I've ever made in one transaction in my life. And I was like, All right, let's see if I can do this again. Because I'm not exactly sure that this is duplicatable and real. And so we moved to Pensacola. It was a new market. I Pensacola, Florida. I knew it well. I've been I've lived there twice before. So this is the third time that I live it might have been the fourth time. It was the fourth time that I've lived there.

Craig Evans: 24:54

To the military?

Bill Allen: 24:56

Yep, I was there as a flight student. I came back for helicopter school. And then I came back for a flight instructor tour. And then this is my fourth tour back there. And so I knew the area, I knew where we wanted to live. We bought a new construction house, and I just kind of started, like, using my VA loan, I bought that house, and then I just kind of started looking around for another project and almost gave up. It took me, like, four or five months to find it, sending some some letters and things like that, like I read on online, and found one. It was an estate sale. Found it. Walked in. I was in my flights, who was on the way home from work. I was literally about to quit this real estate thing. I was like, this, it was a fluke, like, it doesn't work. Everybody's lying on Bigger Pockets and all these podcasts and everywhere else. They're full of crap. And I talked to the guy who his father had passed away. His mom was still living there. They were moving back to Alabama, and I was like, Well, what are you gonna do with the house? And he's like, Well, we're talking to a real estate agent about it this week. I was like, Well, hey, could I make you a cash offer on it? And he's like, yeah, we'd be open to that. So I worked up some numbers, made an offer. They decided to go with me, and I bought it, fixed that house up and sold it. Made$45,000 I was like, okay, 43 grand. 45 grand. This is repeatable. I can keep doing this. And I was, you know, doing backflips again, because, you know, half my salary again for working part time, you know, I was there on the side. It was a hassle. It was a lot of work, but, you know, made great money. And then I was listening to this guy's podcast. He was in California actually, he's, I'm sure that Bruce remembers him. He would talk about Bruce Norris all the time. This is how I originally heard about Bruce and The Norris Group. And his name was Justin Williams. He had this coaching business called house flipping HQ, and he was starting this 7 Figure Flipping like mastermind group on the podcast. So the podcast was called House swimming, HQ podcast. I was listening to it. I was like, this guy sounds like a moron, frankly. Like he says he can't screw in a light bulb. He's fixing and flipping 100 houses all around the country. He doesn't, you know, know anything. He's not smart enough to do it. He's got people helping him, and he's singing in the shower during the show. It was just like, I was weird, but he was talking about systems, and I was like, man, as an engineer, I love systems and processes and things like that. It was really kind of speaking my language. And he launched this program called 7 Figure Flipping. It was 25 grand, and there was going to be a race to make a million dollars in a year. So the first person to make a million dollars was going to get crowned the champion. I was like, I like competitions. I like to win competitions. And I needed some help, you know. And so I took 25 grand of that 45,000 from that house, and I invested in myself for the first time ever, and I joined 7 Figure Flipping. and thatcommunity, like, changed my life, like Justin Williams and Andy McFarland, the two coaches of the program there, they changed my life, like they showed me what was possible. I got around people who were making a million dollars a year. I've never even heard of that before. I didn't think that was true, like I thought it was just a bunch of rich people like up on the hill, like my dad would say when we were kids, and they were wearing T shirts, shorts and sandals, and like normal people, had a wife, kids like, you know, it was wild, and so we ended up then ,I Andy taught me how to hire people. And really over I overcame the fear of delegating things and not doing everything myself. I was really stuck on that. I didn't want to be responsible for anybody else's paycheck. But he helped me get through that, and I hired my first person, and that next year after joining we ended up doing 67 transactions. So I did 12 flips, 55 wholesale deals in about eight and a half months in 2015.

Craig Evans: 28:41

Wow.

Bill Allen: 28:42

So 2013 one house, 2014 one house, 2015 67 and then the year after that, we did 135 the year after that, we did 187 we were doing about 200 deals a year up until covid. And covid kind of had to retool and regroup on the business, especially because it was primarily wholesale business. So for like, three months, our entire pipeline and transactions basically shut down. And I remember I interviewed Bruce at that time in 2020 on the podcast, and he said exactly what was going to happen. I sent that I sent that recording of that podcast on 7 Figure Flipping podcast to every single buyer on my list. And it was like, if you stop buying, you're going to have a big problem, and so you need to keep buying from me. And a few of them listen, but most of them just them just stopped, and they had no pipeline after three or four or five months, when the market just started cranking up again, which he called it like, I mean, you, you know, that's what he does. And so I was grateful to him to come on the podcast and to share that with my audience, and it changed, like I just kept buying through it. I had to change the team a little bit. We had to reduce the size of the team, change our spending, make some adjustments. We started doing, like high margin deals, and about 50 or 60 a year after that. And then that's kind of the story of that company. It still runs today. I have a partner in that business. So he runs the majority. He's the CEO and owner of the business. I am a partner. I'm a minority partner in that business. That's Blackjack? Blackjack real estate, yeah. So I'm a minority partner now I really am not involved at all. I had hired a COO. He was running the business all the way through 2021 scaling it up. I was working a couple hours a week inside that company and, but I built it, you know, built it from home. It was from my office. We were, we got to doing about three and a half million gross revenue a year. It was, it was pretty cool to see us doing 200 deals and a bunch of transaction help a lot of people we, you know, made a big difference. At one point, we were doing about 55% of thecash transactions in Pensacola,

Craig Evans: 30:44

Wow. Florida.

Bill Allen: 30:45

Inside the company, it was really cool to see.

Craig Evans: 30:47

Let me ask you this, because, you know, there's a lot of times that, especially in you mentioned the wholesaling, it's super interesting. Lot of times investors are rolling their eyes at wholesaling, you know.

Bill Allen: 30:56

Yeah, I was too, by the way. And maybe I maybe a quick story will, will help.

Craig Evans: 31:00

Yeah, because my question was like, you know what separates Blackjack from the other wholesalers? And then kind of a tag on to that, when you're looking at that, is there a certain yield that you're looking at on the back end of the wholesale project?

Bill Allen: 31:14

Yeah, so, like, the way I look at a wholesaler is, it the only we only really roll our eyes in the real estate business. It seems like it's like a dirty word. It's like disgusting, sleazy people, but like, when you go to the grocery store and you buy a chicken, you're not like, there's someone in the middle of the farmer in the grocery store that whole bought wholesale and sold a slight markup to the grocery store. Like, you know, everything in our entire ecosystem of what we buy, there's somebody in the middle that is making money on a inefficiency in the marketplace. Like, it's that simple, it's the unethical people in any business that give a bad name. And it's the same thing in real estate wholesaling. Like, if you can do this with ethics and morals. And that was the difference. I went in, again, I went into this seven figure flipping community as a flip. You know, I had flipped two houses, but one a year for two years, and I wanted to be a flipper. My goal when I showed up was, I want to flip 12 houses this year. But nobody was finding the inventory in Pensacola, Florida. And exactly like you said, some of the wholesalers that were there. I was like, I don't trust these people. Like, they will, like, run over their grandmother with a car for a couple bucks.

Craig Evans: 32:27

Yep.

Bill Allen: 32:28

And so I'm not really interested in working with some of them. So I was like, Okay, I gotta go find my own inventory. And so when I went out looking for my own inventory to flip, what I found was I went fishing, right? I went fishing with a net that was only, I only wanted to catch houses that I was going to flip. And what I found was there was a whole bunch of trash fish in the net that I was spending money on acquiring these leads, but I couldn't do anything with them, because they're not houses that I would flip. So I originally, I gave them to the wholesalers and said, Hey, if you find a buyer for this or get a deal done, then just give me a percentage, you know, throw me a marketing fee or something. Well, they never sent me any money. They never did anything with them. And I was like, screw this. I'm going to do it myself. And so I started building a buyer's list. And I started, you know, the deals that I wasn't going to flip myself either. I didn't have time, money, the staff. It wasn't the right Buy Box for me. I started wholesaling. And next thing you know, people are like, wow. Like, like you're doing all the work, like I'm doing all the logistics back in, like, I had it all dialed in. I had a system for it. All they had to do was wire them, walk the property, wire their money, and sign the paperwork. They didn't have to deal with any of the problems, any of the title issues, any of the, so we were adding value to the marketplace, where that's how you get paid. You get paid by the value that you add to the not just like, oh, I have a name and email, a phone number. I went into this person's house, I negotiated the deal, and then here you go. You figure it out. Like, we made it really easy for people, and we were finding them good deals and leaving, you know, meat on the bone. And so there are really ethical, great people out there that wholesale real estate that are good at what they do. And yeah, they're running a business too, so their job is to make as much money as possible. And so where, usually the flippers are, like, they're taking all the meat off the bone. Like, dude, if the numbers don't work for you, don't buy it. It's cool, like, you don't have to buy it. But there's plenty. Nobody's calling me up when they made too much money.

Craig Evans: 34:17

Right.

Bill Allen: 34:18

You know? And so, like, I've sold so many deals where I made 10 grand and somebody else made 70. They didn't like throw me an extra 10 right? When they all thought they were only gonna make 35. No, they didn't say anything. So, you know, in every business, there's someone making money in the inefficiencies of the marketplace, and it's an ecosystem. And so I think there's, like, there's a need, because flippers should not be focused on finding their own properties like flippers should be focused on underwriting the deal, finding money and running the project. You're a project manager, a flipper has to be a really good project manager and to raise capital and run project management and know the numbers and a good wholesaler is somebody who's really good at marketing and sales and. If you can be really good at marketing and sales, that's what you should be doing. So as far as margins go, like, the challenge with wholesaling is you put a lot of money or time up front, and you don't have like, a lot of assets to show for it. So that's the challenge with it. I would say if you're a wholesaler, you should be shooting for like 25 to 30% like, all in margins. It's really hard to get, like, a scalable wholesaling business up to like, 40 or 50% margins, because, especially today, it's just expensive to find a deal. And so if you're doing that, it's probably, like, less number of deals. If you're up at like, you know, you're spending 10 grand a month on marketing and people and manpower and systems, and you're making 20 a month consistently, or 30 a month, you know, if you have really high margins, you probably haven't, like, scaled up the business much yet, which is, okay.

Craig Evans: 35:46

So now, is that something that Blackjack still does? Are they still wholesaling for people? Okay.

Bill Allen: 35:51

Almost, almost primarily wholesaling. We were, we've always been like, an 80/20 kind of business after that. So, like, we'll flip like 20% of those projects. So we're doing like 200 deals. We're flipping like 30 to 50 a year.

Craig Evans: 36:02

Okay.

Bill Allen: 36:03

Like fixing them up, or just, you know, throwing a coat of paint on them, clean them up, putting on the MLS. Because, you know, people think it's really easy to fix up a house. Now, like, we'll just make money again. We just look at the market in 2021, '22 it was almost all wholesaling. Like we would actually, we would close the property, we'd buy it, and we'd put it on the MLS as is, and just let the MLS be our buyers list for, but in 2015, 16, 17, 18, we had to work really hard to find the buyers. It was easier to find the deals, harder to find the buyers.

Craig Evans: 36:35

Yep.

Bill Allen: 36:35

Now it's harder to find the deals, easier to find the buyers.

Craig Evans: 36:38

Yeah.

Bill Allen: 36:38

So it's just as the market changes, you got to shift your business model a little bit. You got to adapt and pivot a little.

Craig Evans: 36:43

All right, that's going to do it for part one with Bill Allen. Make sure and tune in next week for part two.

Narrator: 36:47

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero: 37:07

The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.