Check out our CEO, Greg Kurzner featured on The Atlanta Real Estate Investor Podcast talking about Resideum and reverse wholesaling among a lot of other interesting topics.
[00:00:02.280] – Spencer Sutton
All right, everybody, welcome back to another episode of the Atlanta real estate investor. I am one of your co-hosts, Spencer Sutton, and I’m joined, as always, by Matthew Whitaker. So here he is. And we are excited to have a special guest, somebody that we’ve known for a while, Greg Kurzner. So, Greg, thanks so much for joining us today.
[00:00:24.870] – Greg Kurzner
Thank you for having me. It’s always fun. I appreciate it.
[00:00:27.600] – Matt Whittaker
Greg, we are super excited to have you. I think for us to be very transparent, we do have a history. One of the reasons that we’re in Atlanta is because we bought a business from you.
[00:00:38.490] – Matt Whittaker
We bought your property management company. Is it good to be out of the property management business?
[00:00:43.530] – Greg Kurzner
I tell you that the air smells sweeter, the birds chirp louder. You know, property management is such a vital and critical function to an investor, but it is, as everyone knows, what I call a thankless job and you guys do it amazingly well. And so, yeah, it really is nice to not have it’s just so much work. So we’re able to focus on the stuff and it’s good. We’re good.
[00:01:08.820] – Matt Whittaker
Well, I appreciate you saying that. I’d love to just get started kind of hearing your story. I know it. But for the audience, tell us how you even got into real estate.
[00:01:19.410] – Greg Kurzner
Well, to try to make a very long story short, I’m pretty old. I started out in consulting when I got out of graduate school and I really hated the travel. So I was kind of looking for a job that I could get into where I didn’t have to travel. And so real estate made perfect sense because essentially you have to sort of be in the city that you work in. And so I looked, I went to Clemson, as it were, kind of probably see as an undergrad and had a bunch of friends that had settled in the metro Atlanta area afterwards.
[00:01:50.010] – Greg Kurzner
So I reached out to some of them. They said, yeah, it’s great up here, come on up. And so I kind of quit my job and consulting and moved to Atlanta without a job and and fell into real estate. And my first real estate job was working for what doesn’t exist anymore. But it used to be called the Federal Savings and Loan Insurance Corporation, which is kind of the sister to the FDIC back when savings and loans were the ones that primarily made mortgages.
[00:02:17.820] – Greg Kurzner
And that was right at that sort of first market crash. The savings and loan crisis crashed. And I was hired there to sell the foreclosed real estate out of the savings and loan crisis for the government. And that was my first experience in real estate and in default real estate. So I kind of figured out my long term path right off the bat in real estate. I went from there to a commercial real estate developer, did shopping centers and office buildings for a while.
[00:02:46.710] – Greg Kurzner
But I kind of gravitated back towards the residential side and had been a broker ever since. You know, through the years built our team really focused on foreclosures and default real estate on both sides as a buyer, as well as also the broker for the seller. We did our management, as I mentioned, in 2006. Then we decided back in 2015 to set up a separate company that is a now a licensed general contracting company that now allows us to kind of do the renovation in the work that we need to.
[00:03:20.250] – Greg Kurzner
So we have kind of a vertically integrated group here with brokerage and with renovation remodeling services in addition to our investment side.
[00:03:28.380] – Matt Whittaker
And I’m super excited to talk about that. We’re going to get into that so in a little bit. But I want to go back through your career and just talk about a few lessons, because I think there’s some things that are really important to point out.
[00:03:40.080] – Matt Whittaker
Number one, for those of you listening to this on audio, Greg has a huge Clemson football helmet behind him. I think the lesson there is that you don’t have to be real smart to be in real estate.
[00:03:53.790] – Matt Whittaker
I’m just kidding. Spencer and I are huge Alabama fans, and obviously still stinging over our last loss to Clemson. Right.
[00:04:02.070] – Matt Whittaker
But one of the things I want to go into is just the idea of buying. You bought for a lot of institutions back during the last recession. And and I kind of believe we’re headed towards another recession at some point. You know, it’s hard to see it in the stock market today, but at some point, the real estate market is going to soften.
[00:04:21.910] – Matt Whittaker
So I’d love to know what you learned buying for those institutions during a recession.
[00:04:27.510] – Greg Kurzner
Well, I mean, cash is king. And obviously they had access to capital that was allowing them to really take advantage of the real estate market swing. And so I think, you know, obviously everyone that was buying their homes in 2005, six and seven didn’t really see that in 08 and 09 and 10, that we’re going to be worth 70 percent of what they were paying.
[00:04:52.140] – Greg Kurzner
They just assumed things were going to continue to go up the way that they had. And we’re in that that realm right now really out of say, 2017, the market has increased, it’s been very strong since then, and that’s really a combination of of the economy and in supply. So if we do anticipate that we’re going to have a decline and a lot of people–it’s sort of what I call the bottom of the pyramid–are the group that gets hit because they’re the ones that are buying at retail.
[00:05:22.330] – Greg Kurzner
And then if the market kind of goes down, they’re the ones that are stuck. And so investors, those that have kind of put their money on the sidelines or have cash available are able to take huge advantage of that. You just have to kind of make sure that where is the opportunity when it’s in a hot market? The opportunity is that it’s easy to sell something. So you have to do a better job of buying it. You have to really buy it right.
[00:05:48.300] – Greg Kurzner
In a market where it’s really soft, you can find deals everywhere. But the key is how do you add the value and then sell it, make a profit? So I think you can be successful in any market. It’s so critical to know what the hard part is in the market that you’re in to make sure that you don’t overspend on the front end or overestimate your market on the out, if that makes sense.
[00:06:11.760] – Matt Whittaker
And you’re kind of helping people now buy these homes that are kind of off market deals.
[00:06:17.730] – Matt Whittaker
So why don’t you tell everybody kind of what your plan is and what you’re doing with Resideum partners.
[00:06:24.660] – Greg Kurzner
So Resideum kind of came out of a desire for us to sort of do for ourselves what we’ve been doing for others for a long time. And initially we were approached back in 2012 by one of the large hedge fund institutional acquisition buyers called Progress Residential. And they were coming into the Atlanta market with 2.3 billion dollars with the money to kind of invest across the country.
[00:06:54.270] – Greg Kurzner
And we’re looking for brokers to help them find properties that worked. And because we had a big REO shop and we were able to kind of mobilize that sort of staffing to kind of put high volume towards them, we were an attractive broker partner for them. That has continued, even though now at this point we don’t work for Progress Residential. We do work for two other very large institutions. The biggest is Invitation Homes, and they are the largest corporate homeowner in the country.
[00:07:25.710] – Greg Kurzner
And then Tricon American, which is also a top five institutional group. So we were, we had the luxury of of helping them buy properties for rental. And we also had the opportunity for a period of time to do the management of that. They did subsequently vertically integrate their management. But the great part of that was it wasn’t our money. And we got to see through several years and thousands of transactions what worked and what didn’t. So it was very helpful for us from a learning point of view to understand what makes a great investment, whether it’s a flipped investment or a rental hold investment.
[00:08:06.650] – Greg Kurzner
When I say that, that means not only where to buy, how to buy, how to renovate those properties so that they’re good long term rentals and how to model those things. That’s one of the things I think a lot of investors, especially anxious investors in a market like we’re in right now, which is kind of a hot market, deals are hard to find. They’ve got money burning a hole in their pocket. And a lot of times they make bad decisions and invest properties that they shouldn’t: either overpay or they buy properties because they want to.
[00:08:38.250] – Greg Kurzner
And it’s not a good deal. And so that’s that’s what we’re seeing in our market right now. Inventories are very, very low. There’s a lot of competition for them. So they’re selling at sometimes numbers that don’t make sense.
[00:08:52.800] – Matt Whittaker
So so let me ask you this. What are you telling investors? Because I’m sure you talk to investors who are looking at some of these people who are anxious to get a deal. What are you telling them when you talk to them? What’s your best advice?
[00:09:03.030] – Greg Kurzner
Well, I think, again, for us, it comes down to beginning with the end in mind. So when you’re looking at a property investment, what what’s your outcome? What is it that you want to accomplish? So if it’s a property that you want to rent, then there’s a different approach to it that I would suggest they do versus if they’re looking at a pure fix and flip investment or just a regular investment like that where they’re going to try and earn their profitability in a short period of time, 90 days, 120 days.
[00:09:35.460] – Greg Kurzner
Obviously, still, location is key because in my opinion, you want to turn your money. So I’m more focused on what the house will sell for and making sure I have a really legitimate solid after-repair value that that isn’t going to sit on the market for several months or the same token would be, am I going to have good, solid rents? That’s so critical. I don’t want to be in a market where rents are iffy, there’s there’s an oversupply or we’re seeing kind of rents decline.
[00:10:05.390] – Greg Kurzner
So it kind of depends on what they want. But if it were me and I put myself in their situation, I always say figure out what it is that you want to accomplish and what the time frame is that’ll lead you to what the right deal is for you.
[00:10:17.290] – Matt Whittaker
So do investors come to you and you help them work this out? Because I know one of the strategies that you’re implementing is called essentially a reverse wholesale, which you’re going out and finding property just like you did for the institutions, for these investors.
[00:10:35.100] – Matt Whittaker
Are people calling you and basically telling you their goals and you’re kind of helping them with that? Or do they need to have their goals in mind and have the strategy in their buy box before they call you?
[00:10:46.690] – Greg Kurzner
Well, you know, a lot of what even before we launched Resideum, when we were primarily working as an acquisition broker for the institutions with the property management connections that we had, as you know, we have a lot of investors who say, gosh, you know, I own two and I want to I want to buy two more. And we were really almost kind of like, we don’t really have time for two where we’re selling 40, 50 a month to these institutions.
[00:11:13.700] – Greg Kurzner
So we kind of have to put the time and energy to please them. And we would give it a little bit of lip service, but we wouldn’t really if some drops in our lap we thought was a good deal, we would say, hey, what about this? But also, in fairness, a lot of investors kind of like the idea of investing, but they really aren’t there to pull the trigger. They don’t when you put something on their plate.
[00:11:35.870] – Greg Kurzner
Say this is a good deal. You should buy it and they don’t, at some point, you kind of get frustrated. So I think there’s a little bit of a fairness that investors, now that we are, you know, are focused on this and we are looking to to accomplish. I’m sorry, somebody must, my phone’s going crazy, so forgive me. But, you know, we’re looking not only to to buy properties for ourselves to fix and flip, but also potentially the wholesale properties that just don’t work for us.
[00:12:06.940] – Greg Kurzner
Rental investors are a tremendous beneficiary of some of the stuff we’re doing. And the reason I say that is, is that if you’re a fix and flip investor or you’re trying to wholesale a property, you’re trying to make your money very quickly. And those deals are very difficult to find. But if you’re buying a property for rental, you know that the cap rates work extremely well if you get a good discount, but you don’t have to have a great discount.
[00:12:32.020] – Greg Kurzner
And so there are many more opportunities if you’re buying to hold, than there would be on a fix and flip basis. So when I say reverse wholesaling, what we’re doing is essentially spending a lot of time and energy trying to create seller distressed leads. We get several a day and these are not just sort of bogus leads, they’re good leads. The problem is many of them we can’t buy, we just can’t make our numbers work. And, you know, I’m very kind of kind of corporate institutional.
[00:12:58.630] – Greg Kurzner
We do a little gut going, but they don’t if the numbers don’t work, we don’t buy it. And so there are many opportunities that we feel like we just waste because the numbers don’t work. But they could work for others. So for us to have a, if you will, a cache of ready, willing and able buyers, most of them sort of being buy and hold buyers, we would rather work with them and understand what their buy boxes are and then kind of go out and market or use our marketing efforts to target homes that’re going to fit for them.
[00:13:31.330] – Greg Kurzner
And that works great for us, because if we buy two of the houses that out of the 10 that we find and we’re able to help eight other investors buy those properties and we make a little bit of money on the wholesale side, it works great. And the thing that I find most of these small investors, they don’t have the capacity or the power of like an institutional group to get brokers to really run around and look for them on deals.
[00:13:57.760] – Greg Kurzner
The brokers will lose interest and effort over a period of time or they’ll get busy with something else and then nothing happens. Or again, it becomes a scenario where they can’t find deals elsewhere. So the only solution is Zillow or Craigslist or some broker. And so that’s an opportunity, we think, for us, because we just we hate to waste leads that have great opportunity that may not be a good fit for our business model. Does that make sense?
[00:14:25.180] – Matt Whittaker
Absolutely. And what would somebody need to do to be prepared to buy from you? I would imagine they would need to know what their buy box is?
[00:14:34.030] – Greg Kurzner
[00:14:34.420] – Greg Kurzner
And the areas that they’re looking in.
[00:14:35.950] – Matt Whittaker
Just give me a quick idea of if you had the ideal buyer come and tell you, you know, area, what are the things that you would want to know?
[00:14:45.280] – Greg Kurzner
Well, obviously, we’d want to make sure that they were financially capable of acting on a good deal. So if they have cash without getting into too much detail, show us the proof of funds that you’ve got the cash available, if you have an LLC set up, kind of let us know that they’re actually really prepared to be in this business because that helps us know that they’re serious. Understand, because some people say, I don’t want to do anything right away.
[00:15:14.150] – Greg Kurzner
That’s fine. Or I’ve got money to burn if I can find it and it works, I’ll buy tomorrow. So kind of what their motivation level is going to be. But the financing part, their ability to perform on a contract and move forward on a deal quickly is important to us. So if it’s proof of funds, if it’s a private lender letter or something like that, and if they don’t have it but they want it, we can put them in the right direction to get that set up.
[00:15:38.180] – Greg Kurzner
Because if we’re going to essentially talk to a distressed seller and say this doesn’t work well for us, but we’ve got somebody that will buy it from us and we’ll offer you X, most of these folks are going to take that. And what we want to make sure of is that we don’t have to go back to them a week later like a lot of wholesalers do and say, you know, I got to get I’ve got to give you a termination and give me my money back.
[00:16:01.620] – Greg Kurzner
We just would rather not do it in the first place because we know from the other side of the coin, these people are a lot of times distressed financially. They’ve got foreclosures, facing divorces. And the last thing in the world we want to do is be one of those guys that’s sort of you know, it’s almost like a used car salesman. The wholesale and the kind of investor business has a bit of a bad taste to it because there’s a lot of folks running around, you know, that are all hat and no cattle, if you will, that’s what we say in Texas right?
[00:16:28.370] – Greg Kurzner
Now, you certainly don’t want to add on to their problems.
[00:16:30.680] – Greg Kurzner
And I think one of the things that people that first get into this business mistakenly do is they’re so busy trying to make a deal that they’re willing to sacrifice reputation.
[00:16:42.140] – Matt Whittaker
And if you want to be in this for the long game, which is what the three of us preach, is you need to really build your–even, even sacrificing early profitability to build your reputation. And that’s what you’re talking about there is you really want as a wholesaler, if you’re going to essentially resell this home to somebody, you really want a done deal because you’re putting your reputation on the line. And what you don’t need is somebody getting cold feet on the back end then all of a sudden it ruins your reputation or you may even have to buy it to protect your reputation.
[00:17:16.730] – Matt Whittaker
And now you have a house that doesn’t meet your model.
[00:17:19.280] – Greg Kurzner
Right. Well, and your other point is really well taken, which is that we feel like when we talk to an investor or an investor calls us and says, look, I’m trying to find a home to buy and we can say, look, we can help you look on the MLS, we can help you as a broker do this. But we are actively looking for distressed properties for ourselves and we are finding many properties that may not fit for our business model, but they would be ideal for yours.
[00:17:46.300] – Greg Kurzner
And the difference here is, is that most wholesaler’s my opinion of them is I mean, we get hundreds of wholesale deals pushed to us a month and we bought one. One. And that one ended up probably of the number that we’ve done, one of the least or the worst performing deals. But we felt like we got to do one just to kind of sort of feel like it. And there are some of them out there, here and there. But wholesalers, by and large, are there.
[00:18:14.970] – Greg Kurzner
They’re they’re spinners of the truth. As I would say, you know, comparables are not accurate and the house condition is not accurate and their repair estimates are not accurate. Their goal is to get you to buy this house, not necessarily make sure that is a good deal for you. And, well, everybody is buyer beware. We come out of the acquisition-for-others model. We have to prove that we know what the rents are and that they’re legitimate and that they will rent for that or close to that or better than that, that the after repair values are accurate.
[00:18:48.820] – Greg Kurzner
So we feel like that if we have an investor that’s coming to us and say, look, you know, I want to buy this property, and if you find something off market, that’s a good deal, I’d like to work through you, then we’re going to give them the straight numbers. We’re not going to just necessarily– because it’s not so much that you’re going to risk your reputation with a seller, but if you risk your reputation with buyers, then you’re out as well.
[00:19:11.110] – Greg Kurzner
So we would rather them say it’s not for me, then, gosh, no. I bought this house and said it would sell for three hundred and only sold for two hundred. So…
[00:19:19.960] – Spencer Sutton
I think that’s a great point because when Matthew and I were wholesaling houses, we were doing it in Birmingham. Ninety five or maybe one hundred percent of our buyers who were buying houses from us were living in Birmingham.
[00:19:32.860] – Spencer Sutton
We were we were literally building this reputation. We were looking at, we were taking them to lunch. We were shaking hands. I mean, so it was a, it was definitely a, something you wanted to build your reputation on and not just pass it off as “it’s better than it was.”
[00:19:47.950] – Greg Kurzner
[00:19:48.370] – Spencer Sutton
But now, today, with so many out-of-state investors, the temptation for wholesalers is to potentially be that spinner of truth.
[00:19:56.440] – Greg Kurzner
Yeah, well, and I also think that a lot of these folks are, they just jump in the business.
[00:20:02.380] – Greg Kurzner
A lot of these these companies that are wholesalers, you talk to these the points of contact and these are kids fresh out of college or not even out of college, are young and they don’t know that much about the market. They just kind of know how to run the modeling. So, you know, I mean, I don’t want to bash them. All we’re saying is, is that from our perspective, what’s a very successful approach for us is this reversal selling.
[00:20:26.470] – Greg Kurzner
Because we already have contact relationships and we have a reputation that people can trust. So if we say, hey, look, tell us what you’re looking for and back to Matt’s question of “what is it that works?” I mean, right now we have a property that we bought that is a fire damaged property that we paid twenty thousand dollars for. We’ve also bought a property that we spent four hundred thousand dollars on and we’re going to be doing three hundred thousand dollars worth of renovations.
[00:20:51.190] – Greg Kurzner
So that’s a pop top. I mean, almost a complete renovation, lead based paint. You name any kind of mitigating factor, we got in that one, we got. So we’re, we’re an opportunity buyer. And what I don’t want somebody to come to me and say, hey, look, can you help me find anything? Because that’s hard to find. But if they have a particular geographic area, beds and baths, a rental price point range that they’re looking for. Age. That becomes very easy.
[00:21:17.800] – Greg Kurzner
And while we are, we’re actively trying to get leads for distressed homeowners all over the place, what we find is that if we target them in a particular area, geographically or demographically, we’re pretty successful finding others. As an example, the property that we bought in Buckhead, right near Piedmont Hospital, which is a higher end property, we’ve already had three neighbors approach us that want to potentially sell their homes off market to us as well. And so you don’t know where it comes from, but it generally comes from around the neighborhood. There’s opportunities that pop up just by being in that market. So…
[00:21:58.330] – Matt Whittaker
And Greg, don’t let Spencer fool you. He was a spinner of the truth. He sold me my first wholesale deal that led me to this life of real estate.
[00:22:08.410] – Matt Whittaker
So he’s the drug dealer.
[00:22:10.900] – Matt Whittaker
He’s the drug dealer that swore I was going to make millions on every avenue.
[00:22:15.250] – Spencer Sutton
But but I mean, you literally walked the house. What else could I do? Yeah.
[00:22:20.550] – Matt Whittaker
I should have known, when I was attacked by fleas that there was more extra fleas.
[00:22:25.660] – Matt Whittaker
That you were…
[00:22:26.890] – Spencer Sutton
Don’t mind the foundation, sir. Just keep walking.
[00:22:30.520] – Greg Kurzner
We literally were in a house yesterday that I felt like I was on a rollercoaster. It was it was wavy.
[00:22:38.560] – Matt Whittaker
So let’s talk.
[00:22:39.640] – Matt Whittaker
That’s kind of you know, we were talking about first deals. Tell us what you see investors doing. Right, especially new investors when they get in. What are some things that you see that they do right?
[00:22:53.140] – Greg Kurzner
OK, and this is a little pandering. So bear with me. But I respect investors who are not penny wise and pound foolish. A lot of newer investors or let’s just say not so much newer, but maybe from out of state. Don’t know the market area. Don’t try and do it yourself. Not the first time. Not the second time. It’s worth investing in a team, whether it’s the broker, whether it’s a general contractor, pay the price, put the budget numbers in that you need to to have that professional advice so that you don’t lose.
[00:23:25.900] – Greg Kurzner
Because one of the guys that I took training from when I first started real estate had a great saying and I always say, which is is the fastest way to make a million dollars in real estate is to start with two million dollars so you can lose one while you’re learning.
[00:23:39.640] – Matt Whittaker
Spencer should’ve told me that.
[00:23:41.440] – Greg Kurzner
Yeah. And there are a lot of snakes out there, too. But I think if you can, you know, once you feel like you’ve got it and it’s a waste of money to have somebody else do a portion of whatever you’re doing, great. But until then, especially by the expertise that you need to be successful and just make a little less profit because you’ll be a lot safer that way. You don’t go, you don’t lose by hitting singles and doubles.
[00:24:06.790] – Greg Kurzner
You know, you lose by trying to hit a home run and striking out all the time. So that’s my opinion for a newer investor. Get help and vet them. I mean, if somebody wants to do vet me, great, because I want them to know that we have integrity. We’ve been around a while. We know what we’re doing and we’re doing it for ourselves. So I think that’s a good demonstration of how we can do it for others.
[00:24:28.420] – Greg Kurzner
So that would be my biggest advice is to get help.
[00:24:31.870] – Matt Whittaker
And the worst thing you can do is have a big loss right off the bat.
[00:24:35.020] – Matt Whittaker
I mean, if you’re going to get into this business, you need to expect some small losses, but you don’t want to be out of the game loss right off the bat. And the way you can avoid that is by getting expert help. So I appreciate that advice.
[00:24:48.190] – Greg Kurzner
And I would say, too, especially because I think the majority of investors who are not kind of down in the weeds with us all the time are buy and hold investors. And that’s where most of them should be, because that’s where you’re going to build wealth over the long term. And you know and I know it’s a little bit of a plug on you guys, too, but I’ll say it because it’s true, which is that the biggest area where you can have a problem and lose money is in the management of a property that you own. If you don’t love it and you’re not right down around the corner and have all the software and all the licenses and all the training, that is absolutely the most important component to a successful investment is to have a property management company that knows what they’re doing and to be professional about it. That, that has to be budgeted because, you know, to scale and to be able to enjoy that investment return.
[00:25:39.520] – Greg Kurzner
You gotta have tenants, you have good tenants. You have to have problems solved. And, you know, personally, I’m in the industry, but you get busy with other stuff. If it’s not your primary thing, things don’t get done as quickly or, you know, you just lose money slowly and you don’t notice it. So I stress that, that those buy and hold investors definitely need to have that property management partner that helps them out.
[00:26:03.150] – Matt Whittaker
And when you’re evaluating a deal, I’m curious what the decision looks like when you’re deciding whether it’s a fix and flip or a buy and hold .What are the, what are, what are kind of the things you look at to make that decision?
[00:26:16.370] – Greg Kurzner
Well, a lot of times, if we’re, it’s kind of made at the beginning, because if we can fix and flip it, we’d rather. And the reason for that is that we don’t have to then find a, we don’t have to put it into permanent financing. We don’t have to find an end user because we’re not in the management business and we’re not at this point in our development wanting to build a larger portfolio. We don’t have a fund behind us as kind of a buy and hold fund behind us.
[00:26:47.040] – Greg Kurzner
So our primary focus is always going to be fix and flip. Now, that could change as we kind of move out of phase one and we look to leverage additional partners or money. We may end up sending a small, set up a small fund to take properties that aren’t good retail flips and put them into a rental portfolio. But what we’re happier to do now is to focus on fixing and flipping. And that flip then goes to either maybe eventually a portfolio that we have.
[00:27:18.410] – Greg Kurzner
But until then, to another investor, if it’s not going to go to an owner user. Typically the only difference between selling to a, to an investor versus selling to an owner occupant is money and time. And so if we, most properties that are going to be in the 400 to 500 above that price point aren’t good rental investments because they don’t return the cap rates that are necessary. So some of it is strictly driven by the value.
[00:27:48.380] – Greg Kurzner
You know, a lot of what we’ve bought kind of wheelhouse has been buy it for about 185, put about 50 in it and sell it for about 350. Then those are rough numbers. The problem with 350 is not a lot of investors want to buy that in that price point. So, but, like the deal, we bought the fire damage house, we bought it for 20. We’re going to put about 93,000 into it.
[00:28:14.330] – Greg Kurzner
And it should retail in the 160 to 170 price point. So that would be a great rental investment. And that may be what we’ll look to do, which is even before we’ve finished it, we might push it out to investors and say, this is a bird in the hand. If you can give us this price we’ll sell it to you now. And what’s the benefit of that? Because maybe if we stick it on the market, we sell it for five or ten grand more.
[00:28:39.530] – Greg Kurzner
Well, there’s risk. We have a property on the market now that’s been on the market for coming up 60 days that we thought we would sell for 350. We’re now down to 309, getting ready to go to 299. So every once in a while things just don’t work right. And to have an exit for that, that’s a bird in the hand is where we would really love to be, because for us it’s about philosophy.
[00:29:02.330] – Greg Kurzner
A lot of wholesalers, a lot of fix-and-flippers, it’s not about maximizing the return, it’s about turning the money. So if you could come to me and say, look, I’ll buy everything that fits my buy box the moment it’s ready to buy. We’d take that all day long. We would we take the haircut on the sale because it’s a certain sale. It cuts 30 to 45 days off the market and the interest carry on our money.
[00:29:28.550] – Greg Kurzner
So there are great opportunities to do that and partner with investors who are buying to hold.
[00:29:33.830] – Matt Whittaker
I think if people understand what you just said and wholesaler’s reason for doing that, then there are a lot of people out there that would want to be a wholesaler’s go to for that type of velocity.
[00:29:46.610] – Matt Whittaker
Because if you look at the numbers and if wholesalers really understand the numbers, then velocity is much more profitable than maximizing each deal, especially when capital is limited, which most wholesalers, the reason they’re in that is because capital is limited.
[00:30:03.440] – Matt Whittaker
I’d be curious about some areas that you’re buying in or some areas that you’re excited about in and around the metro area.
[00:30:12.410] – Greg Kurzner
You know, we’ve we’ve purposely in this first phase, really, I mean, we’ve seen lots and lots of property sold all around, whether it’s in town or it’s out in the suburbs or even in what I would call the exurbs, the kind of outer circle. And right now, everything in Atlanta is pretty hot. That’s sort of the, it’s easy to be successful right now because you don’t have to be real smart, everything selling so in a price point.
[00:30:39.470] – Greg Kurzner
So that being said, over the years that we’ve seen how things have developed, what we feel more comfortable with is suburban stuff because it’s homogeneous and it’s it’s everybody knows it. The intown stuff is, can be very profitable. There’s markets here like everything that’s around this new belt line of the project that runs all the way through. And so we do have some intown deals that are working, but we would much be happier with first time home buyer and suburban type properties that work well because there is multiple exits.
[00:31:15.020] – Greg Kurzner
Those are the properties you know, from your portfolio here in Atlanta that rent well and consistently continue to increase in value, and those are the ones where you’re getting good quality tenants and you’re getting good, solid home buyers. There’s not a bunch of investors. These are people with families and kids and dogs and stuff. So that’s what we like. It’s easier and there’s just not a worry because there’s so much more comparable data on those types of deals as well.
[00:31:46.210] – Matt Whittaker
Yeah, I always think of especially rental homes, you don’t want to be different. You want to be kind of the same as the market because you want to appeal to the broadest audience. A lot of people are very focused on being different. Maybe personally, maybe your personal residence is very different and you enjoy that, but you don’t want to translate that into your investment career where you’re buying the different house all the time because it’s only going to appeal to certain people.
[00:32:11.590] – Matt Whittaker
And so when you’re doing this, and especially when you’re doing it at scale, you’re wanting to get kind of that, what you said, homogeneous house.
[00:32:20.230] – Matt Whittaker
That is just like every other house in the neighborhood that you know what it’s going to rent for. You know, what you’re going to need to do when you turn it. And, you know, the the type of people that are going to rent these homes and what they’re going to rent them for.
[00:32:34.300] – Greg Kurzner
You know, and I think even further, some of it’s, it doesn’t, you know I can’t take credit for because having worked for so many years with these institutions that have bought properties and seeing where they’ve bought and then where they’ve stopped buying and and how they’ve kind of eliminated. What they’ve essentially tried to do is to eliminate what I would call any kind of location-based negatives. So properties that have deep slopes down, properties that have high driveways up, properties that back up to retention ponds, to the interstate, to…
[00:33:08.590] – Spencer Sutton
[00:33:09.520] – Greg Kurzner
Yeah, those kinds things. Eliminate the properties on septic. Now, again, we’ll buy properties on septic, but it depends on how much risk you want to take, because the more homogeneous you are, the more vanilla you are, the easier it is and the more consistent it’s going to sell or rent. So you might say, well, gosh, you know, but if you do that, it’s harder to find deals. You’re right. But you’re going to have a much better outcome exit-wise as well.
[00:33:38.170] – Greg Kurzner
So a lot of times I also say you don’t make money when you sell real estate. You make money when you buy it. But also making money when you buy it is about buying a good investment that’s going to continue to appreciate. You put a location negative on it. Sometimes it doesn’t. So that’s important to know.
[00:33:56.110] – Spencer Sutton
There’s a reason why the largest homebuilders in the nation have just certain, they have certain layouts that they do all the time because they sell. It’s because that’s what people want.
[00:34:07.160] – Spencer Sutton
And so those are the types of houses you really need to look for. We used to call white elephants, Matthew, those location deficiencies.
[00:34:15.340] – Greg Kurzner
I think, again, too even comes down to preference because I know lots of people who disagree with me in a lot of ways about where to buy, what types to buy that, they’re happy with three bedroom, one baths. They’re happy with, you know, areas that are pretty saturated or that have lots of, that have poor schools and other kinds of stuff like that, and they’re able to be successful. So this is just my opinion. But what I like at my age and with my gray hair is less stress.
[00:34:44.860] – Greg Kurzner
And the elimination of stress comes from eliminating things that can be gotchas. And if you can do as many as you want to by doing that, great. If you have to then start to make an exception to scale or to add more properties because of the market or whatever, then be very cautious and judicious about what you’re willing to give up, whether it’s maybe it’s a school score, maybe it’s that the grade of the property isn’t right or the configuration is not right, or maybe it’s you know, it’s it’s got stucco and you don’t like that or whatever.
[00:35:19.270] – Greg Kurzner
But I think that’s a really important thing to think about, is finding something that everybody else is going to like.
[00:35:25.710] – Matt Whittaker
I think that’s the perfect place to leave it, Greg. This has been very awesome. It was good to catch up with you and thanks so much for taking the time with us.
[00:35:34.980] – Greg Kurzner
You’re very welcome. I always love to talk. So, you know, you can hire me any time to come on board and fill you in on my opinion. Nobody else wants to listen to it.
[00:35:44.700] – Matt Whittaker
Wait. Did we tell you we’re going to pay you for this? Oh, gosh.
[00:35:48.120] – Greg Kurzner
No, I don’t. I’m just kidding. I know.
[00:35:51.930] – Greg Kurzner
And it’s great to see you guys. Appreciate the opportunity.
[00:35:55.640] – Spencer Sutton
[00:36:00.680] – Spencer Sutton
All right, everybody, if you haven’t subscribed, go ahead and do that. And Greg, where can people get in touch with you if they’re interested in learning more about what you’re doing, this reverse wholesaling, they’d love to get in touch with you?
[00:36:12.140] – Greg Kurzner
Perfect, our fix and flip fund is called Residium and they can reach us at firstname.lastname@example.org. 678-710-6130.
[00:36:18.500] – Spencer Sutton
Thanks everybody for listening. And stay tuned. We’ll, we’ll be back with another episode.
Greg Kurzner, is CEO of Resideum, Atlanta’s Professional Homebuyer company. Greg has been a force in Atlanta real estate for over 30 years. He has been involved in the sale of over 1 Billion in real estate transactions in his career and consistently ranks #1 in sales by units by Atlanta Realtor Association. In addition to Greg being a licensed real estate broker, he is also a licensed general contractor and a nationally-recognized expert in investment real estate.