A Success Story About Leaving Your W2 Job for Real Estate Investing
On this episode of Next Level American Dream, Abigail and Sean are joined by James & Christina Spence. This couple left their corporate jobs to pursue real estate in hopes of achieving financing freedom and the lifestyle they wanted. On this episode, they talk about their story, how they did it, and what they have learned in the process.
Key Topics
How to leave your corporate job and build a successful business?
What are some of the challenges you face when building a business from scratch?
What is it like having your husband as your business partner as well?
Connect with James & Christina:
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SUMMARY KEYWORDS
business, work, people, money, real estate, Christina, deal, American Dream, day, years, James, mentor, buy, selling, core values, talk, marketing, rehab, set, company
SPEAKERS
James Spence, Sean Thomson, Abigail Thomson, Christina Spence, James & Christina Spence
Abigail Thomson 00:00
Welcome to the Next Level American Dream Podcast brought to you by Thomson Multifamily Group. Your hosts, Abigail and Sean, will discuss how you can take your American Dream to the next level through real estate investing, business practices, and personal development. Join us as we share our experiences as a father daughter duo who are trying to accomplish our goal of financial freedom. We hope you learn more about how to define and achieve your American Dream. Here's another episode of Next Level American Dream. Today on Next Level American Dream, Sean interviews James and Christina Spence. This couple left their corporate jobs, got out of the rat race, and started pursuing real estate in hopes of achieving financial freedom and the lifestyle they wanted. On this episode, they talk about their story, how they did it, and what they learned. To find out more about James and Christina and their business freedom, check out the description below. To learn more about our sponsors and multifamily investing, visit www.thomsonmultifamilygroup.com.
Sean Thomson 01:05
Hello Christina & James, welcome to The Next Level American Dream Podcast. Thanks for being on the show!
James & Christina Spence 01:12
Thanks for having us!
Sean Thomson 01:15
I wanted to ask you guys; you guys have a pretty interesting background coming from corporate America into entrepreneurship. I just kind of want to ask you guys. Tell me a little bit about that. your background and how you how you made that transition? Maybe James, if you'd like to start with that, that'd be great.
James Spence 01:31
Sure. Well, Christina and I both had, you know, a typical corporate background, you know, working for some pretty, pretty large companies. And, you know, my background was primarily in, you know, financial sales, investments, commercial banking, Christina and Telecom. And, you know, we had, we had pretty decent careers, you know, enjoyed what we did. But, you know, we reached the point where we saw more and more of our friends, you know, kind of getting let go at very inopportune, you know, moments, because that's kind of corporate reality these days. And it's not personal, but it is, you know, it's reality. And so, we, we wanted to kind of be ahead of that curve. And, you know, we had a couple of personal things came up to where we're, you know, asking, you know, hey, what would we what would we do if, and so we decided to be proactive about it, and, you know, set up, you know, our own company, so that instead of making, you know, millions of dollars for the companies and firms and banks that we are with, we could make a small, you know, piece of that for ourselves, because, well, we're making them a ton of money, they weren't necessarily paying us, you know, a fair a fair amount of that. So we decided that we wanted to start our own business. And so for us, it was a decisioning process, where we looked at what what we were going to do, we put together a pretty solid plan, made sure that we were in alignment, and then when it was, when it was go time, you know, we jumped off, and we did it, you know, 100%, both of us, you know, completely committed, and that's, that's been a lot of the reason why we're able to get through some of the more difficult startup things that everyone's gonna have, maybe a little more quickly, because we're both doing it the same time, both doing it, you know, 10 hours a week, and just trying to, you know, grind over that first hill as quickly as we could.
Sean Thomson 03:24
And so what are you, what are you doing now? You're in real estate, you're doing investments, kind of give us a breakdown of your business, then.
James Spence 03:31
So our business is kind of equal thirds, where we do, we do a great deal of marketing with the objective being we want to do about, you know, four deals a month, you know, we're not trying to do you know, 1020, you know, wholesales. But to do about four deals, five deals a month, and we want at the end of the year, for those to work out to where about a third of those, we've done rehabs and flips. About a third, we've done either wholesale or wholesale, you know, to other investors. And about a third, we want to put, you know, into our buy and hold portfolio. And we're not real obsessed about, okay, you know, where, you know, are we on one, two, or three on any given deal, we just want, you know, each, we want to be a little bit agnostic to the exit strategy as we go in and just look at what's going to be the best solution with an eye toward you know, we kind of want equal thirds for, you know, cash flow to kind of feed the marketing beast, you know, with the wholesalers, etc. Hopefully higher margins with the rehabs and you know, renovations and flips, and then the the buy and holds and we put owner finance in that category for you know, cash, a little bit of cash flow now, but you know, a lot more cash flow down the road.
Sean Thomson 04:46
Yeah, that's good. And then maybe Christina, so you guys, tell me kind of what the decision process was deciding to leave corporate america and how you kind of landed on Real Estate as as the vehicle that you chose to go forward?
Christina Spence 05:04
I think that's a that's a great question. Thank you. Um, you know, we started our careers early, as Jane said and had strong careers, you know, I originally came from Greece, went to college, you know, wanted to live the American dream as we've known it, right? And put all that together. So moving into that we had great success, we moved around a lot on new places, you know, things were working super great. But I think as we got older, and as James said, some of our friends were losing their jobs or had nowhere to go in their careers, we had also maxed out a lot of what where we could go next as well, both from a compensation and also from a position standpoint, right. And, and so so we started thinking about what would we want to do if we were to do our own, and we looked at different things. So you know, ATM machines, and chick fil a franchises, right, and elderly care franchises and all kinds of things for a while. And then we settled into real estate, because that was something that James was very passionate about. And I thought that was going to be a great idea. After all, I was watching a lot of HGTV, too, right? So isn't that what we do? No, just kidding. You know, that's not what we do. So, yeah, so we were like, Okay, let's do that. And but, you know, we knew for a fact that it's very hard to get into real estate, not only because it's very competitive, but also because there's a lot of knowledge to be had. So once we decided on that, we actually went around for a couple of years and looked at different guru type seminars, clearly, a lot of those are scams, or they want to take your money, and then take some more of your money. But we were very fortunate in the fall of 2017, we found a fantastic mentor, Shawn, you know, him, we're common friends, right, Mike hambright. And we went through his program for about six weeks. And then continued on with all the great tools and resources he had, and also personal support. So that helped us in 2018, propel ourselves into what we do with the knowledge. And then of course, every day, get new experience plus the, you know, everything moves in the industry as we go. So it was kind of like that, first, we didn't know what we wanted to do just our own business, we really wanted to do that. Then we settled in real estate, then we looked around for a while, very fortunate to meet my code took us really to that next level. And and I think his training has been tremendous for us, and, and also the training of other people in the industry, we're super good. Because we've been able to scale to the, you know, to the four or five properties a month that James is talking about.
Sean Thomson 07:46
Yeah. So James, I'm going to go back to something, Christina said that real estate was a big, big part of what your decision making. So what was it about real estate, that, that you like, so much.
James Spence 08:00
So I, I kind of accidentally done a deal, you know, over 20 years ago, and, you know, ended up you know, making kind of accidentally making some money. And it was a situation where I bought, I bought a duplex, you know, with the idea that I live in half and rent out half, and then you know, move on to something else rent both out, and I got transferred to Dallas, and had to sell it just three years in, but because I made some improvements, you know, and I'm making, you know, a pretty tidy profit. And it you know, it felt like it was you know, it was like stealing that you didn't have to feel guilty about it's like, man, I just like got away with something it was, it was a lot of fun. And the landlord piece of it, you know, I had, you know, I had great renters and so I enjoyed it. And then I knew a lot of people that did, you know, mostly flips. And, you know, I had a lot of clients in the investment world, that's where that's where the money came from, was was real estate. So I I know that the majority of people that you know, create wealth in America, you know, for going back a couple hundred years, the majority of them it has to do with real estate that things always change values change how business is done changes, but you know, owning real estate is, you know, is kind of the American dream. And so to facilitate that, and to be you know, kind of a dealer and a transact we're in that kind of just fits right in with us as a society. We we know that the markets will change going forward. We've seen in our lifetimes, and if you look through history, there's been a ton of that. But as long as we're not kind of married to just one specific strategy, and we're kind of flexible in how we do things. It really doesn't matter what the market does, there will always be opportunities as long as we're, you know, kind of managing our business properly. So I I liked it from, from a long term, you know, perspective that it wasn't like, you know, getting into something that was going to be, you know, a fad that just would pass. And, you know, we built this great business, but then there, you know, there's no demand any longer. I understood the business. And the the math is, you know, as you know, it's pretty straightforward and pretty simple. And so as long as you're disciplined with it, you can, you can factor out about as many things as, as possible, and a lot more things than you can in any other industry. So, you know, some, some early accidental success, knowing a lot of people that have created, you know, a great deal of wealth, in real estate in various ways. And also, you know, having kind of an understanding of, and, you know, for moving around having transact a lot of properties personally, it just, it seemed like a natural fit. And it's, it's, it's exceeded our expectations.
Christina Spence 10:59
I think I think that's really important. If, if I could add here, as people are looking to see where they're coming from, and what they're going to go and do, no matter what industry you pick, right, it's really important to say, I'm going to get up every day and 90% of the time, I'm going to love what I'm doing. Right. And not only that, but I'm committing for the long term, because no small business can succeed wildly in one day, and then you're, you know, you're done. Right? You have to have a path. But But also, I think you need to be able to feel like, this is something that is in touch with your core values, as well. Right. And every business that we considered had a lot to do with our core values, is that something that we can apply our core values into what what we're going to be doing, and real estate definitely fulfill that in so many ways.
Sean Thomson 11:52
Yeah, I feel the same way. I I'd like real estate, it's very stable, it's very consistent. It's very predictable. It's, you know, it's it's fulfilling, right? It's I like providing shelter for somebody. You know, that's that's a thing that everybody needs, you know, food, water, shelter, everybody needs those things. And providing that for somebody is really gratifying. I think. I want to kind of rewind a little bit to again, and talk about you guys were in corporate America. We've talked about your business now what you're doing now. Let's talk technically about what was your exit strategy for from going from corporate America to, to real estate you mentioned? joining up with Mike and all those other things you talked about a moment ago, Christina, talk to me about Did you guys? How long was it? When you kept your job? Was it three or four or five years? Was it like six months that you're like, Hey, we're out of here, we're just going to leave? Did you? Did you sort of stockpile cash? What sort of things steps did you take on a more technical level to go from your corporate job to where you are now, if you don't mind, maybe just kind of talk about what someone might have to do to or to secure themselves to be safe when they do finally decide to make the jump.
Christina Spence 13:09
I think that's really important. Because definitely whoever says that real estate is super easy. That's not the case. And whoever says you need no money on day one, that's definitely not the case, either. So appreciate your asking that. So for us, you know, it took a couple of years to see what we were going to do and who we were going to work with on real estate. But during that time, we were actually thinking through what's our exit strategy going to be so about a year, before we actually exited, I started talking to my boss, hey, you know, I'd like to see if my company's going to give any packages soon, or retirement packages or risk type packages that's happening in corporate America quite a bit. So had started the conversation, I would never want to leave my team hanging by just walking out with two weeks notice, right? That's not who we are. And they've been super great to me over the years and my team. So those conversations with your boss now my another boss had said to me before the day you start talking about leaving, be sure to know that you're going to be the first one to go. So this is advice matters. But it matters based on what environment you're in. Right? So find a friendly boss, find a friendly mentor who can actually help you get to that next level, but also make sure that they know you're not leaving them hanging. So my boss said, you know, you can't go right now. That's fine. Let's plan towards the end of the year and get some people to replace you and pick up other responsibilities you had right. So becomes a win win situation. And he knew where I was right at the top of my pay scale and so on for the for the work. Another thing we did is we looked at our IRAs, right and made sure that those were going to be ready to go in regards to potentially funding some deals of our own if we needed to, or lending that money out which we continue to do to this day. So positioning our For one case, to be ready to be moved into an IRA, because that happens after you leave a company, right, you could take your 401k and move it to your IRA. Other things, we looked at refi rates for houses, right? We looked at if we wanted to have a keylock for a rainy day, right, we don't advise that people use, he locks to do deals because you're putting your house at risk. But if you had a rainy day, then that money is available and ready to go. And really important to say, for a lot of people who are doing their business for the first time, for the first couple of years, banks aren't going to know, are you going to make it? Do you know, you have no history as a company, so they're going to be less likely to lend you money to start with operational capital, buying a house capital, right, those kind of things. So you need to have, I don't want to say a big stash, but as much of a stash as you can in order to get started. Those are some of those things. So preparing your own finances, you know, one of the things we could have done is bought another car before I lost my w two income right before James lost his w two income. We didn't need a car at the time. But if you do, that's the time to buy it. Because in a little while, you won't have the ability to buy that because people won't think that your credit worthy, right? Other things build up your credit score, right? If your credit score is not great, while you're in your W two income, this is the time pay off credit cards, you know, fixed credit issues you have, because the high credit score is going to be an important aspect of your first two years, right in regards to creditworthiness. So, make sure your financials are in order, make sure you're in the right house, right are you going to need to move to a smaller house because if you need a loan within the first year to go to a smaller house, you might not be able to get that. Right. So make sure you have the stash. Make sure you're taking care of your own company that you work for. And don't leave them hanging no matter how good or bad they've been to you. And then make sure your finances house, refinancing new cars, whatever you need, is also ready to go. And we were able to step out, because at the end of the year, there was a package at my company and my boss asked me if I wanted to that and it worked out great in that respect. So we had a cushion of a pocket for the first few months that carried us while there was no other income coming in.
Sean Thomson 17:30
Right. That's good. Yeah. Let me see if So James, tell me, once you've got once you guys have kind of got that all that dialed in. The next step, I suppose is to discover, hey, we want to start this real estate business, but you need to find people like Mike hambright in his programs and things like that. What was what were the steps that you guys took to kind of go through that process? Was it just going to different seminars or looking at people on the internet? How did you kind of get to the right people in that in that process?
James Spence 18:05
So we we had gone to a few seminars, we had, you know, gone and researched, you know, people on the internet. And ironically, Mike and sensitive land reached out and found us because they have a pretty tight marketing machine and something flagged them that, hey, these guys might be you know, people that you know, would be looking for, you know, real estate mentors. And we were invited to go to, you know, a quick, you know, one, you know, like, couple our thing with them kind of like just a kick the tires, steel. And you know, we did and we pretty much knew right away, because we looked into so many different things a these guys really feel like the right fit. Prior to that, you know, Christina had like some of the people I didn't I like some of people she didn't this was the the first, you know, system and team that were both like, yeah, these guys, you know, really seemed like a good fit for us. So I would highly suggest that, you know, anybody that's contemplating this business, you want to do all the things that Christina just mentioned, I would, I would summarize that as just imagine that you're going to be without the ability to get any credit or anything for two years, right, you're, you're going on a trip for two years, you're not going to be able to just you know whip out, you know, a credit card or you know, finance a new car or anything that you didn't already have like set up before you left. So get all that in order as she you know, did a great job detailing, then you want to get a mentor that is going to be local to you. And as accessible to you. There. There are a lot of gurus out there that have knowledge of the industry, but there's no substitute for local knowledge. Now, we're in the primarily in the single family space, loyalty is a little different, as you know, but in the in the single family space, there's, there's a lot of strategic knowledge that comes with, you know, just knowing a local area. And so we highly suggest, you know, getting a mentor that that you know, is reputable. And that really isn't just there to take your money, but is going to kind of partner with you, we got that, and more with, with Mike and his program. And from there, you know, as we started, the last the last month, before we actually kicked it off, Christina was still working, you know, I wasn't at that time, I went and got a real estate license, just because we thought, you know, it would be advantageous to us, in our business, and it, it certainly has been, I wouldn't necessarily suggest that for everyone, because that's, you know, it's got a lot of its own, you know, learning curve. But, you know, we did that. And for us, we were glad that we did, because, you know, day one for our business, that was already in the past, I mean, I passed all the licensing stuff, you know, it was it was a sponsor with a broker, and, you know, that was up to speed and there, we kind of started doing the same things, you know, Christina and I, at the same time, same days, you know, working through, you know, kind of this, you know, all the initial things that you do, you know, with with logos and, you know, legal structure and, you know, setting up accounts and learning putting together marketing strategy. And so, we planned, we then, you know, had a system with mentors to kind of guide us, we looked at, we put together a pro forma for the first two years, based on, you know, what, our mentors, you know, thought would be some likely outcomes, I can't say that our pro forma worked out anywhere near the way we thought it would. But it was a you know, as a good starting point, we kind of plan to that. So if somebody who's contemplating, you know, setting up a business in real estate, and they have experience in business, the thing is, just use the experience, you have to put together a plan, same as you do at a fortune 500 company, with the full knowledge that you you know, and or your your partner or, or the whole staff initially. And so you get to wear all the hats, and you get to you know, you know, sit in all the seats and do all the jobs, but have a plan in place, and work that plan, stay disciplined to that, and then as you grow, you can kind of, you know, peel some of that off and put people in to do some of those things. So you can do the higher, you know, higher value more productive things. And by you know, kind of following that it the the advantage of the plan and jumping into this, you know, just 100% you know, commitment, no looking back. Even though it didn't work out nearly in the way that we thought it would, it's been, you know exactly what we hoped it would be. And, you know, we've, we've gotten to, you know, a really great place that we're, you know, that we're happy with, even though you know, things will never work according to plan. Exactly. If you don't have a plan, you know, your success would end up being an accident. And we, you know, we wanted to be very intentional. And so we we feel very blessed that we met, you know, my and his team when we did, and you know that Christina's boss, you know, was able to, you know, set up a package for her at the time that made sense for us. So, you know, with some, some planning some faith, and then just some determination, everything's really worked out great, you know, not without surprises and hiccups, or you know, speed bumps and all that. But by having all those things that we've just talked about in place, you can manage those, and you you're not out on an island, you can reach out to your mentor and say, Hey, this thing just happened. We didn't anticipate this, you know, what are we going to do? Kind of whatever that is somebody that's been in this business any time at all is like, I don't worry about that, just do this. And so that's a, having a plan in advance and then saying super disciplined to executing that plan is, you know, is kind of, or it's kind of our M.O.
Christina Spence 24:17
Well said, well said James on that. And, you know, Shawn, we're lucky because Jameson is, as he said, we're very committed, and we do this together. And we're also blessed to start at the same time, right? So the knowledge flow together, but there will be some people who get started right on their spouses, husbands or wives or friends or whoever are not going to be part of the business. And I just want to say that's okay. But I think one of the things before you get started into any new business, is that you got to have the buy in of your significant other, right? Whether that's your parents, or your your spouse, or your kids, because when you start a new business, you have to have that rigor. Right? And sometimes things get weird and people don't really know what you're doing exactly every day, right? But you have to have that buy in. And so that's probably another thing I would add to that. How do you prepare the starting a business?
Sean Thomson 25:08
Yeah, that's a big part of it, I think I'll make two points. But I think you know, what we do, what you guys are doing, it takes everything you have every day, right? You have to, you have to really give everything you've got for that day to be successful every day. And I think it's you just don't have it's not the same as a corporate job, you just there's a lot on the line. And everybody that's around you influences the motivation you have and the impact you're going to have on the day. And if you don't have that support from your, from your, your network, your very immediate, tight network, it just, it just slows you down. And it becomes a burden more than anything, to not have that support. Because everything else is you know, already kind of weighing you down every day to try and be successful, right? This is not an easy life. That's why it's so so I guess rewarding, right? You know, the hardest work is most rewarding, right? So I believe in that too, for sure. And I was going to circle back as well. We you talked about finding Mike and Stenson. And I wanted that's why I asked that question I wanted to talk about your process of sort of narrowing down the guru you were going to sort of latch on to and the problem I have in, in the real estate space is that you know, almost anybody can call themselves a guru, you can get the, you know, fancy websites and all these other things and, and, and teach people how to do things. And I think a lot of the Guru's they sell probabilities, not possibly sell possibilities, not probabilities, right. So that it is possible. I mean, I've bought houses for $1,000 and sold them for $135,000. Right? You know, so it's it, there are possibilities that are out there. But it's not, you can't build your business on those, you have to build your business on probabilities, right. And probabilities only come from predictable KPIs, you know, predictable marketing, and good business practices. So you need to find a guru or a mentor, or a program that you're going to be working with that looks at your business as a business, if they're just selling the concept, like wholesaling, or, you know, fix and flip, if they're selling a concept, and they're selling possibilities, I would be very wary of that. You want to find someone that's selling a business mindset, and a business sort of operating system, right. That's what my concern do with, you know, all their programs. You know, I'm Mike's a personal friend of mine. And I know the guy. So I mean, I know, I know, how he conducts his business, and how he teaches and things. And he teaches all the fundamentals based on a successful business. And I think that's the most critical piece in when you're finding someone to guide you through that initial process. Because this is a, this is a it's a great business, but it is very hard. And you do have to work very hard. But like you mentioned earlier, Christina HGTV really gives a poor representation of what this business actually looks like when you get involved. So yeah, finding someone that that is, that's that's not just selling a concept or selling a business system, I think is an important part. So I want to touch on too. You guys have kind of been through this whole thing. And it's been it's pretty fresh. You guys are what are your second or third year, I guess have fully engaged in this business? Right?
Christina Spence 28:31
Yes, almost three years. Yeah.
Sean Thomson 28:33
Yeah. Well tell people, some of the lessons that you kind of have learned. If you were to sit, if you were to sit down and talk to somebody and say, Hey, don't do this, be sure to do this. Are there one or two things that you may be able to tell them that says hey, this, this will be critical for your success? I guess maybe each of you can take a turn at this one.
James Spence 28:53
We can probably both add something there. Christina, I'll let you be the the first first up to the plate there. And because I know we have a few key takeaways. So why don't why don't you take your top two.
Christina Spence 29:07
The most important thing is that you never stop learning, right? Every day, there's something different a different customer situation, a different title issue, right? All kinds of things. So you have to have an open mindset. And most of all be a problem solver. Right? If you're the guy or girl who throws in the towel quick, this is not a business for you. Right? But for us, very important. And part of the training we received was early on set up your systems, set up your processes. And that sounds like a total geek thing to say. But can I tell you when the phone rang the first time did we really need to have a big call system? No. But that was set up and it was right and we could put things on our business cards and we could give this phone number out and all kinds of things. So we had our systems ready so that we could scale to those five properties. A lot of people find themselves in a whiteboard right and trying to manage their business and That's not possible. And when you if you're looking to scale and really make that work, and I want to talk about scaling just a little bit, then you really need to be set up. So for us, having the systems, knowing what are the different steps that we have to get from the moment, we get a phone call all the way till the business is closed, right? The customer bought the deal, or we sold the deal. Those are important things. And can I tell you no matter what, how many books you listen, or read, or how many podcasts you listen to, there's no substitute then, to you having people who do that with you every day. So for us, you know, Mike says, your network is your net worth, we totally believe, to this day, three years later, we have questions we get on a private Facebook group, someone's gonna have the right answer for you. ideas, right. So we're connected in a network that continues to feed us and we continue to feed them. And that is significant. And it should start on day one. One of the things that James and I did when we first started is we went to every seminar, every social hour, happy hour thing, right? meeting, people going to see houses that we will never buy, but someone was having an investor open house, we went, why? because we wanted to see how are the other investors? What are these people who are called, you know, something that homebuyers right people? How does it all work? So really plunge yourselves into that for those people who are starting to get to know other people, we have friends now that we didn't on day one. And on day one, we met people that we don't talk with now. And that's okay, because it's a big industry. But having a big network has been huge for us, and we'll continue to be. and Shawn, that's how we met you. Right? And how valuable it is for us to know you and how, what great advice you have given us over the last three years. So love that.
Sean Thomson 31:58
You will really say that to me today. I don't know, I was just talking to you. I don't even know what I said. But that's good. I appreciate it. Um, video, I guess all right, your two takeaways would be work on your network. And I thought for me, I think a quality network is important, you have to go meet a lot of people to find those people that you know, think you know, have kind of core alignment with what you're thinking. And that also you don't do that, you know, have the experience that you can rely on to so just talking to anybody? It's not a good idea. But that's right, yes, well, I think your network needs to be quality network, and then what was your other one.
Christina Spence 32:33
And the second one is being set up as a business, right? Having systems and processes and not waiting till the moment that you need to enter some receipts right, or you have to send out an email to a customer to figure all that out. Because at that moment you're on the show is on your customers on the phone, right? So you got to have everything set up,
Sean Thomson 32:51
build your business for tomorrow, not where you are today start to think about where you want to be, and start to create those processes and systems to put into place that you can get there. Now, the Lean Startup methodology can work as well to where you start with one or two things and kind of get your business built as it goes. So you're not having to spend a bunch of money resources, you can kind of get that ball rolling. But you always want to have in mind, I think, the end product so that you so you're always working towards getting that done. But I agree with that as well. What do you think, James? So what are what are a couple things that you would say to somebody, hey, make sure you get these taken care of.
James Spence 33:30
The first one is about capital, and that is, you know, don't use your own capital period, you're gonna have to use some for down payments, and you're gonna have to use it for, you know, for various things for rehab budgets, but we were told going in, hey, don't use your own money to buy the property and rehab the property. But because we hadn't set up in advance as much as we just described, you know, earlier in the, in the, in the podcast, about what you want to do, to where we had, you know, access to capital, but it was our own. And so the very first big rehab we did, we got to where we had set aside money so that we could continue to market you know, you want to be very consistent in whatever marketing you're doing. And you want to budget that so you never have to stop that. Well. we budgeted for that we still have budget for it, but we reached the point where, okay, if we find deals, we're not gonna have the capital to do them. And so that was you know, Mike had told us that in advance, but we kind of got, you know, our first big deal kind of earlier than we thought we'd get into something of that level. And all I can say is that the day that that and close and we got that check back, and we made a decent profit on that. But you know, we felt like we just hit the lottery because we got This huge check, you know, we took a picture of it, you know, we're, but you know, a lot of that was our money coming back. So you, you want to do the setup and startup things that we talked about earlier in advance that you don't have to use your own money for the whole project, you're always gonna need some and that's why, you know, you want to have capital. The other thing is there, there are a lot, you know, we talked about mentors, and we talked about, you know, what to, you know, how do we look for them, and the, the, there are a lot of people out there that talk about how to do real estate with no money down? Well, there are a lot of ways to do that. However, if you're competing with our business or with your business, and your only option is to, you know, get an offer accepted that is going to require, you know, no money from from you, we're probably going to win that because, you know, sure we get owner financing at times, you know, when it makes sense for us and for the seller. But that's not that's that, you know, there's there's, it's important understand, there's two distinctly different elements of a deal. There's the the acquisition price, right? There's, you know, what, what can you buy it for, and then whether you're doing it sub two, or owner finance, or you know, whether you're doing hard money, or you know, private money, or however you do it, that's how you pay for it. So a mentor, that saying, Here, I'm gonna teach you how to do real estate with no money down, you're not really teaching me how to do real estate, you're teaching me how to pay for real estate. But if you haven't taught me how to market instead of, you know, my business to where I was, you know, a full on marketing company, because that's what we are. And it's important to understand that, then my only option is to either, you know, get lucky that, you know, I drove by and knocked on Sweeney's door and said, Hey, I see your roof fell in, and you want to sell your house at a deep discount, or you have to buy from wholesale. And we've never bought a house from wholesale. Not that we haven't, you know, tried look. But it's just never made no financial sense. And so, if you don't use your own money, and then you don't get sucked into the no money down, or owner finance or assignment or whatever strategy it is, you have to understand that this business is really about marketing, it's about finding opportunities. And when you do, you've got a marketable product, that you can now become the wholesale and sell that to another investor, or, you know, you can do the rehab, you can do the buy and hold or a lot of different things, but the identification of a deal, and knowing what's the deal, and what you know what the value of that is, that's the that's the bedrock of this. So any mentor, that's, that's gonna say, Hey, I can teach you how to do you know, money, how to do real estate with no money down, they're either just, you know, paying you are, excuse me having you pay them to be their bird dog, or they're just going to teach you some exit strategies that if you don't have the, the marketing systems in place, and the budget for that, to identify those on your own, you know, your that all this, you know, going back to, you know, you're talking about, you know, possibility versus probability, that's a possibility play, right, where, hey, if you can find a deal, then I can show you how to structure it to where you don't need any of your own money. That's true, there are some ways to do that. But that's, that's 10%, or 20% of the business and 80% of it, or more is the marketing and find the property. So that's, that's kind of what we focus on, we've never lost sight of the fact that we're marketing company, that's what we do. And all the other stuff is, you know, how we, you know, can be profitable with that. But if you understand that you're getting into this as a, you know, a marketing venture, it, it will help because we didn't understand that at first, we kind of knew that we had to do all these various things. But at one point, we kind of looked each other and said, Wait, we're just a marketing company, that's what we do. And once you figure that out, it helps. So there's a ton of information out, you know, you can watch YouTube videos, and it's easy to appear as if you've got a lot of credibility, because you know, you've got a YouTube channel. And I think there's, there's room for, you know, all that information out there. But that should be, you know, kind of subject matter expertise that you're looking for in a certain area, the the nuts and bolts of, you know, setting up your business and all the things that we just talked about and go into it. You know, understanding, this is a marketing business, you know, you need a budget, you need to have as much capital as you can, but then you guard that capital carefully. Don't use your own money any more than you have to make your borrowing costs just another, you know, cost component in the deal. And that will, that'll put you six months ahead of us because it took us a while to figure out hey, we're really marketers. And once we grasp that, it kind of you know, let it took us to the next level. And if you can start with that in mind, you'll be ahead of you know where we started.
Christina Spence 39:49
I love that you said that James, because that's a huge realization. A lot of people get into real estate thinking I'm going to rehab the house and make it beautiful, right and those kind of But truly the the finding the customers and then the selling the houses, those are both marketing aspects of what we do. Right? Those are super important without customers to buy houses from or customers to sell your houses to doesn't work. So I love that you said that James. And I think the easy part of our job is actually the rehab. But that also ties into what you said before, Shawn, about having quality people that your network was, I also want to add, you need to have quality partners, right, your contractors, your banks that you deal with your title companies, these guys make a shine every day and we take good care of them too. It's a two way street. But you got to look around and and you might not find the best contractor the first day, or the bank might shut you out, right or the title company might not be your favorite. There is multiple key partners in your business. And it's really important to get those set up and get to know them early and show them the caliber of a person that you are, though you're you know, new to the business. So and those are relationships that carry you for the long term they all the people I've talked about, and many others have been great today, our photographer called right, hey, you know, blah, blah, blah, and we have this new thing. And you know, he's going to do three more things for us coming up shortly. But he made that phone call to us. Because, you know, we've complimented his work many times and and done what we said we're going to do on our end.
Sean Thomson 41:25
Yeah, good. I was gonna circle back on the one thing James said about don't use your own money. So a lot of people look at, they hear that, and they're like, well, how does that work? Right? So I've had this conversation with lenders quite a bit, you know, lenders always say to me, you have to have skin in the game. And the way I look at my business is my money operates my business, and I use other people's money to invest in assets that I then improve and sell for profits, right. And so when people say to me, you have to have skin in the game, I have all my you know, all my money is always in my game. But it's I use it for operations, I don't use it for asset investments. So I think what you're talking about James isn't when you say don't use your own money, you're absolutely using your own money, but it's in an operational component, as opposed to locking it into an investment. And you take someone else's money, put it in an investment, and then you give them a return on that money in exchange for using their capital. And that keeps your that keeps your capital in in the operational component of your business. So you can pay for marketing, you can pay for your phones, you can pay for those things, you need to do the travel, all those things that have to happen. So I always laugh at lenders, when I say you need to have skin in the game, and I just don't look, all my skin is in this game all the time. You know, my whole my whole existence is this business. And they don't understand my business. They're just they're just wanting me to put equity into a lending situation. And I always laugh at them cuz I'm like, Look, I'm bringing you a 65 or 70% LTV deal, that should be adequate, that should be adequate skin in the game, you know whether I have my cash in my out of my bank account in this deal or not, it's still it's still a good lending opportunity for you. So some bankers look at it differently than others. But, but that's how I look at that, that component of the business. So when someone when you say that to someone, don't use your own money, what you're saying is find people that will lend you money to buy those assets that you then turn around and create value add or whatever and create profits from that. And then keep your money for operating your business with marketing, things like that. So let's let's I don't want to keep you guys any longer. We've had a great conversation and talk to time. So let's wrap this up. I guess I want to I always like to ask everybody, and especially you guys, you know the name of the podcast is Next Level American Dream. And we'd like to hear from people what their American Dream is. And you know, and the other part of that is what's maybe one or two things you could tell someone else that is helping you take your American Dream to the next level. Well, both of you guys can can feel this one if you want.
James Spence 44:05
Christina, why don't you start.
Christina Spence 44:09
Now, I think before we started the call, we were talking about how the American Dream is evolving. And that's true. And I as I said before I came to live the American dream, get an education, get a job and so on. But I think as people evolve, you know, now companies have no pensions, they get rid of you in five minutes, right? It doesn't matter how good you are those kind of things happen. So you really need to figure out what's important to you what your core values are. What do you want to be known when people when you're no longer on this earth? What do you want people to say about you? And what kind of quality of life do you want to have? So for us being true to our core values, you know, God first family next and then you know, all the means that we need to provide building a wealth for future generations for us so that our children have the ability to live. Not only comfortably, but also to be useful to society, right? In many ways, those are a couple of our of our core values, we have many others, we pray every day to be hands and feet, you know, for God and what we do and inspire others and him as well through our work. So there's, there's several different things that we're super focused on those, the people who work for us are also on the same boat on core values. And that's what really makes things work. But James, I know you have some, some things to talk about.
James Spence 45:30
Well, the, the, the idea that the American Dream is shifting, I mean, it certainly is, and just like a couple generations, when I look at the advice I got from my parents, about, you know, go to school and go to work for a big company, because it's going to be a more stable thing, and you can work, you know, your whole career there. And, yeah, that that's all changed, that that may return at some point in the future, but you know, not in my lifetime. So, for us, the, the American Dream is really self determination. And the the idea of having a job, you're really selling your time, hopefully, you're selling it for a lot of money, but you're still selling your time. And if you don't have any any more time to give, you know, they don't have any more money, you know, for you and so for for us, you know, we really, as a, as a society, we're really approaching, you know, where everything is kind of like just a gig economy where you know, I'm getting paid to do this, and maybe I work for five different people. And, you know, there's so many people now that, you know, hey, they drive for doordash, and Uber and Lyft. And they're doing that all simultaneously. And they're grinding out a living, because they're doing three things at once. And, you know, they might have, you know, a side hustle on top of that, knowing that that's kind of going to be the reality for more and more people going forward, the idea that we can set up our own business chart our own path, and work as hard excuse me, or, as you know, as much or as little as we want to that that's kind of the American Dream, and we, we worked a ton. But the the difference now is that we can, we can decide, hey, we're not, you know, we're not doing anything. Well, it's kind of hard to do day to day, because we do schedule a lot. But we can say next, next Tuesday, Wednesday, and Thursday, we're going to go out of town, and we're going to you know, only do the things that we you know, operationally have to do. But we're set up to be able to do that remotely. And so even though we probably work as many hours as we did in corporate America because we get to pick the hours, it doesn't feel like we work nearly as much as we did. And I'm going to give a day, if one of us could say, Hey, I'm not really feeling it, the other one can kind of pick up the slack a little bit. And so it, it feels like, you know, we're in control of our own destiny. If Christina touched on our faith, which is which is the hallmark and a core value to our business. I often tell people, you know, we both work for, you know, super large, reputable companies, banks, firms, etc, they never asked us to do anything illegal or even on ethical. However, if, in the financial world, if there's option A, B, and C and A is the most profitable for the bank, I really have to present option A and that's that's kind of it. Whereas now, we are completely transparent with with people and doing deals and we'll say, look, smartest thing for you to do is not to sell us your house, you need to just, but you know, X amount of you know, repairs into it, let's just say on the MLS, you're gonna make a lot more money. And they appreciate hearing that some say, yeah, you know, I know, I should do that, but I don't want to So, you know, you guys are honest with me here, I'm going to sell my house to you. And so we have, you know, everybody that we do business with is always, you know, really happy that, you know, we met them and, and likewise. And so it's, we get to, on top of the self determination, we also get to do the business, the way that we want to do it, whereas before wasn't really our business, we were kind of, you know, pirate hands were mercenaries at the bidding of the company or the firm. And now we can make decisions to, hey, we can't buy this house, but there's a need here, we can help these people and make a decision to do that where we couldn't do that before. So we're we're both more empowered, which is, you know, certainly an American value, but we're also able to help people which we think is equally an American value and part of the American Dream to be in a position to be able to help, you know, people that just we get the opportunity to do that. And when you put those together, that that really inspires us every day and so that that takes us to the next level and you know, lets us work even harder.
Sean Thomson 49:45
Yeah, so you like just the freedom component of being able to make your own decisions and control your own destiny and to conduct your life and your business according to what you think is important. Right. Is that right?
James Spence 49:57
Absolutely.
Christina Spence 50:01
Yeah, I was gonna say that's part of why the word freedom is part of our corporate. I sort of JCA Freedom Homes. So, yeah, freedom really matters.
Sean Thomson 50:09
Yeah, freedom is the number one thing for most people I talk to you about their American Dream, you know, freedom is freedom to just kind of conduct your life in your own, on your own terms is a big deal. That's a very American spirit thing, you know. So I think that's, that's pretty much a thread that runs through all of our interviews for sure. Well, guys, I really appreciate you coming on the show. It's been amazing talking to you guys. I love your story. I was I was happy when you agreed to come on and talk about it. Tell everybody if they wanted to kind of get in touch with you maybe learn more about what you have going on or anything like that. Do you have a website? Or can they find you on social media?
Christina Spence 50:44
Definitely, website is freedomhomestexas.com. And you can also find us on Facebook. It's uh, Christina JCA Freedom. And then James JCA Freedom as well. And I phone number if if you'd be interested in having someone call us (469) 888-8207. All three ways to reach out.
Sean Thomson 51:09
Okay, great. Yeah. I appreciate you guys coming on. It's a great talk. And hopefully we'll get to hang out again soon, you know, the COVID stuffs kind of going away. So maybe we'll get the hang out at an event or something somewhere soon, too.
James Spence 51:23
Well, we'll look forward to it. Thanks so much for having us, Sean. It's been an honor for us to be on your podcast. Thank you!
Christina Spence 51:28
It really has Thank you so much!
Sean Thomson 51:31
Yes! Thank you guys. See you soon.
Abigail Thomson 51:33
Thanks for joining us for another episode of Next Level American Dream. If you would like to learn more about what we talked about today, want to contact the team directly, or are interested in passively investing and being a part of our deal room, head over to our website at www.thomsonmultifamilygroup.com. Before you go, please leave a review! Your comments help us create more episodes for you to enjoy.