00;00;07;12 - 00;00;29;05
Unknown
Back to the seven Figure Flipping podcast. I'm your host, Adam Whitney, and I have a good friend of mine, one of the members of the seven figure altitude community, who has a great story. And as a military guy, he was primarily an agent and turned into an investor. And he's one of the best agent investors I know. Role.
00;00;29;05 - 00;00;50;12
Unknown
Mendez. Welcome to the show, man. Thanks, man. Thanks for having me. I'm excited. It's super cool. I can't believe we actually haven't done a podcast yet with you, your family, for sure. You've been around for a minute now. Let's start with kind of your real estate journey. You started in the kind of agent space and you expanded your business.
00;00;50;12 - 00;01;12;14
Unknown
I'd love to just know how that start happened and that transition from agent to investor, where you're running both the retail and the investing side. Yeah, yeah. So I actually landed in real estate because I wanted to I saw one of the ads of learn how to flip houses. Not your money, you know, free course. Whatever. So I ended up going to that.
00;01;12;14 - 00;01;46;10
Unknown
And then I, you know, of course, there's an upsell $300 program and then $31,000 mastery program. And I was I was like, man, I need to get a loan to do this. Like, this is it. And so then I came back to reality. I'm like, what am I doing? Like, I knew nothing about real estate. So then this was as I had transition transitioned out of the military and then I was I had gone to a job fair because I was still kind of trying to figure out what I was going to do afterwards.
00;01;46;10 - 00;02;12;24
Unknown
Very little planning coming out of the military. So do not recommend and and so yeah. Anyways, so then I went to a job fair and I was approached by a brokerage and then it kind of clicked. I was like, well, what if I just become an agent and build the connections, build some experience, and then from there I can kind of transition to an investor so that that's kind of how it started.
00;02;12;24 - 00;02;31;16
Unknown
But the end goal was always to be be an investor. So so you knew in the beginning, when you became an agent, you wanted to ultimately become an investor. Do you think that if do you think somebody who wants who's not an agent or an investor yet they want to do it, do you think they need to be a real estate agent?
00;02;31;19 - 00;03;01;23
Unknown
I don't think you need to. That's the approach I took. But I don't think that you need to. I think had I taken a different approach and I would have gone full in as an investor from the start. I may have, I will I would probably be farther along on me on my investor journey. However, starting as an agent gave me the confidence, the connections, the resources, you know?
00;03;01;24 - 00;03;22;27
Unknown
So to me, I took that path and it worked for me. But I don't think you need to. Yeah, I don't think there's a wrong answer to that. I think there are definitely benefits either way. I tell people all the time, like because people assume they need to be, they don't know much about the industry. They think they need to be a licensed agent to be an investor.
00;03;22;27 - 00;03;52;06
Unknown
And I would say probably I mean, just even in our community, less than 5% of the investors are actually licensed agents, like very, very few. But it does give you a competitive advantage in a couple of ways. Like, number one, you get familiar with understanding values and access to the MLS. And you get you, you you open up another exit strategy for your business that a lot of investors aren't tapping into.
00;03;52;07 - 00;04;13;02
Unknown
So can you talk about, you know, how you built your agency. And then as you started investing, how has it helped you to be an agent? Yeah. So when I got into real estate, I you know, I've always kind of gone all in and whatever I do. So I kind of shelved the investor part and I was like, okay, I need to.
00;04;13;04 - 00;04;43;09
Unknown
And I was building from scratch. I mean, I had I had depleted savings, I mean, literally from scratch. So I'm like, okay, I need to get some resources for myself and get stable. So the first step was getting stability for myself. And I did that through creating my my realtor business. And so, so anyways, I, you know, it's very easy when you, when you join a good brokerage for them to get you on the path to creating a business and not being the one doing everything.
00;04;43;09 - 00;05;11;13
Unknown
So then you start focusing on creating a realtor team. And so I went through that path, you know, grew to a certain amount, had a rough year, then had to kind of reset. And then I had to really ask myself if that's the path I wanted to go through again. But it it really helped me in the aspect of I was already getting deals and opportunities kind of come my way by being an agent.
00;05;11;13 - 00;05;34;19
Unknown
And so then it just became of creating the business model around it, where it wasn't just landing on my lap and joining seven and becoming part of the community was was a huge help in creating the systems and really the business versus just kind of do it on the fly. Yeah, I love that. You've always been like, so what's cool about your business?
00;05;34;20 - 00;05;58;01
Unknown
Like, you came into altitude, you already started to create an agent business. And I think when I look at the agent community, the realtor community, it's like, you know, a really good realtor can make a good, you know, 2 or 3, 4 or $500,000 if they're, they're elite. And but there's like two ways to do that. There's you on production.
00;05;58;07 - 00;06;21;02
Unknown
Like you're going to be glued to your phone 24 over seven. And then there's you building a team around you, which is a really challenging thing to do in the agent space. Can you talk about that? Because you're driven. You'll get out there. You got in production, you close some listings and buyer stuff like, but then to bring other people on and think they'll work like you do.
00;06;21;04 - 00;06;47;24
Unknown
How do you how did you how how was that experience? And like, how did you mobilize those people to get their success on your team? And then why did you decide that that wasn't the model? Yeah, it's a that's a very good and loaded question because yeah. So we got to probably I don't know, I had a 6 to 7 person team and it was mainly me and another, another new agent that were doing the production.
00;06;47;24 - 00;07;10;19
Unknown
But we got to about and I didn't even get to like, you know, you get some teams that are doing like hundreds of sales throughout the year. I didn't need to get that far to realize I didn't want that skill of a of a realtor team business. So I think, why not? Why? Yeah. So good question. On kind of our peak of I think we got to about about 80 transactions.
00;07;10;19 - 00;07;32;14
Unknown
It was mostly me doing the work and another new agent kind of helping as well. And, you know, me kind of giving her opportunity. But so the overhead for you to produce at a high level as a realtor team is really high. And actually, as you're, you know, as you're growing and of course, we don't want to half do anything.
00;07;32;14 - 00;07;53;22
Unknown
So we're like, okay, what's the next step? Let's go. And you know, what can we do to grow? So you're having to you either have to become a recruiter or you have to become a recruiter to, to build like a high performing realtor team. And I'm like, man, like I didn't want to do either. I didn't want the overhead of a recruiter and I didn't want to be a recruiter.
00;07;53;22 - 00;08;14;01
Unknown
I mean, I'm okay with having a team. I have a team now, but it's not like to the scale of like, you're having to do that all the time. And then what I realize and what my wife pointed out as well, you know, I was still through this time. It took me about a little over two years for me to get my first flip after I got my license.
00;08;14;01 - 00;08;46;27
Unknown
And, you know, I was making 30 to 50. And then I had a deal I made. I made about 145,000 on the flip. And then, you know, I'm seeing the return of, of my time on that versus like going and selling 30 houses, you know, and I'm like, okay, so the margins for the realtor team, for me at least, the type of lifestyle that I wanted to to scale it, it wasn't something that I was willing to, to, to commit to for the lifestyle that I wanted.
00;08;46;27 - 00;09;11;26
Unknown
Once I saw the margins getting squeezed and my my profits being better on the investor side. Yeah, that dude, I think that is so like good on you for seeing that. I think being an agent can be a competitive advantage as an investor because as an investor, as particularly if we're like direct a seller marketing, we do get listing opportunities.
00;09;11;26 - 00;09;40;19
Unknown
And I'll tell you, this is maybe it's embarrassing, maybe it's a little bit vulnerable. But I just did an analysis in our database because I'm a licensed agent, I don't I've never done anything with it other than maybe a few referrals here and there and used the MLS. I just got my assistant. She's licensed. So now we're starting to list properties because I pulled all my leads out that I've spent, you know, hundreds of thousands of dollars on from the past 12 months.
00;09;40;22 - 00;10;05;03
Unknown
And I saw that we lost about 6 to $800,000 in commissions. So that means the lead came into my database and then eventually listed on to the MLS. Now, of course, we're not going to capture all of that. But even if I captured a couple hundred grand, that's like a that's all to the bottom line of the business there.
00;10;05;05 - 00;10;25;13
Unknown
So I think it's a great ancillary tool for an investment business. And I'm sure you list stuff because you get those opportunities. It's really easy for you because you came from the agent side. I'm having to learn it a little bit because it's almost like just setting money on fire and marketing. If you don't, why wouldn't you list it if they're going to list it anyways, right?
00;10;25;16 - 00;10;55;10
Unknown
Yep, yep. That has been the and it's been a it's been interesting to navigate because as an agent, you know you're overly disclosed and you know you have all these things that you can't do this and you can't do. You know what I mean? So there's definitely even transitioning from an agent to an investor. You have to, you know, you really have to get comfortable with with the way you're having the dialog with sellers being an agent.
00;10;55;10 - 00;11;17;11
Unknown
But to be honest with you, I mean, I run across people all the time. I'm I'm like, look, we can help you listen to make more, or we can make you an offer as is. And you move on and they're like, I don't even want to deal with the listing, the showings, what can you do? And they know they're taking a loss in a lesser price because of the convenience.
00;11;17;11 - 00;11;35;25
Unknown
And I mean that it's just some people, that's what they that's what they want. Yeah, I mean, almost all the deals that we do are that way, you know, of course we get some straight up retail people who come through the pipeline, but that that is in our industry, they know they can get more. They know how to look on Zillow.
00;11;35;26 - 00;11;55;08
Unknown
They're not fools like these people aren't idiots. We're not bamboozling anybody. They have some other problem that we're able to solve. And I do agree, like from an agent perspective, even on investor deals, if an agents walking in that house, you got to let them know, hey, I'm here as an investor, but I'm letting you know I'm also a licensed agent.
00;11;55;10 - 00;12;14;25
Unknown
That's not the role I'm here and sound. It's like you want a cash offer and I buy houses. So that's what I'm here to do. If you want to talk about something else, we can talk about that, too. I think the conversations aren't as complicated as I think people make them out to be. Just being clear and expectations and why they called you and what service you're providing for them.
00;12;14;25 - 00;12;35;29
Unknown
But that's really cool, man. I think your journey has been great. I can remember actually, I think we were in Baltimore in 2023, and I was talking to your wife and like just kind of the pain of running the retail team. Like, I remember her, like she could see it wearing on you, you know? And it's because you're, like such a highly driven person.
00;12;36;00 - 00;13;14;28
Unknown
You're going to win. You're going to make it happen. When you start to bring agents on, particularly the agent community, not everybody is that way. And that can be frustrating when you're the one running the team, spending the resources to provide for them, and they're not taking advantage of it. So you know what? I think the hardest thing as a as a high performing agent to kind of let go a little bit of that is that there's always a little bit of a grieving process because you've been chasing this like this vision for a long time, and then you realize, wait, like, you know, it's almost like a little bit of an identity identity crisis
00;13;14;28 - 00;13;32;15
Unknown
because you're like, I don't know that I want that anymore. And so that I had to go through that process to be real with myself and be like, look, our our goals are changing or end goal looks a little bit different. And so my wife has always been pushing me. She's like, you need to do more investing. You need to do more investing.
00;13;32;15 - 00;13;51;08
Unknown
It took me a while to be like to be like, yeah, you're right. You know, I do. And kind of let go of that initial vision that I had from the start on, on the realtor side. But it's it's been great. Sometimes we have to kill who we were to become who we need to become. I think that's a part of all of our journeys.
00;13;51;08 - 00;14;20;11
Unknown
And it's just cool to like. I can very vividly remember that conversation in the hotel lobby with your wife. And just to kind of watch you get your investing business kind of square, where you want to go through a time where, you know, the market shifted on us, start to add the wholesale function to it. It's just really cool to see it from the sidelines from if I'm like, there's a lot of agents who are always kicking the tires, kind of on trying to figure out the investing space.
00;14;20;11 - 00;14;44;03
Unknown
I think about this, right. You sell $300,000 house. It's a $9,000 commission at 3%, right? If I sell a $300,000 flip, I'm probably going to make 50, you know, 40, 50 somewhere in there on a on a kind of base hit or a double. So the math makes sense. Obviously it's a little bit of a different skill set.
00;14;44;03 - 00;15;09;29
Unknown
But what would you tell the agents out there who, like are thinking about investing. Like what guidance would you give to those agents? Yeah. So for me, I would definitely lean towards what you're better wired to do. Just because you're not wired for it doesn't mean that you can't be good at it. It just may take more effort.
00;15;10;01 - 00;15;33;14
Unknown
But what I would say is, I mean, you got to invest in what you know. And so even if you don't build this big, you know, real estate investing or flipping business or wholesaling, you should still be investing in real estate because this is literally what you do for a living. So I don't think there should be a question whether you do or don't invest.
00;15;33;16 - 00;16;02;17
Unknown
It's just figuring out what you're going to be investing on the real estate world. And to what capacity did you know? Do people individually want to take it to? Yeah, for sure. And I think that that's really cool. And, you know, the the interesting thing is, is that I tell people this whole time the average gross profit on a flip, Nationwide's 41 grand, like one flip a quarter is 160 grand a year.
00;16;02;19 - 00;16;18;25
Unknown
Like, I mean, that's pretty good money for a lot of people, you know what I mean? And, like, if you think about that, with what we do in our business is like one a quarter man. Come on, we could do that. That should be pretty easy, right? And you know, that's like you don't even need a team for that.
00;16;18;25 - 00;16;42;29
Unknown
I think another interesting thing too, because I see this a lot. I want to I want to go back to the team building, part of the agent side. I watched Kyle Robinson, who's like mega agent in the community, right? He had, you know, couple hundred agents, 70, in office in his market in Des Moines. You know, they've got the big team doing 700 plus transactions a year.
00;16;43;03 - 00;17;11;08
Unknown
And he killed that model because it was just such a high burn rate. It was. And it's not just the you got to spend money to feed all those people. It's all the leadership and management. And it's not structure like a typical business. And he has a chief operations officer helping him. And they still have because of your skill set as the agent, all those agents still need some part of you.
00;17;11;10 - 00;17;30;14
Unknown
And so now you're now you're putting all the revenue generation on them. You're the one having to coach them all. You're pretty much going to be out of production because of the the need for you to coach. And like I want I kind of just watch this happen with Kyle and watched him kind of retool his entire model over in Des Moines.
00;17;30;17 - 00;17;53;27
Unknown
And not that the big agent model doesn't work. It totally works for a lot of people in the country. But you have to really want to do that because you're going to be you're going to be on the phone and working just in a completely different capacity. You're going to be recruiting like you said, you're going to be doing tons of real estate realtor coaching to people.
00;17;53;29 - 00;18;20;28
Unknown
And if you're like passionate and life desires to like coach people, then that might be that might be good. But those people need you when they're sellers need them, which ain't 9 to 5. You know, it's like the seller just called me and the deal is blowing up. Help me fix it type stuff. So for sure, like, it's it's, you know, when you look at the noise per business and per service, like, it's just it takes so much.
00;18;21;01 - 00;18;44;14
Unknown
It's hard to build a lifestyle around it for sure, unless you get to a point that you invest upfront a lot into leverage, then I think you could get it sooner. But otherwise you got to kind of take small steps to get there. And it's it's it's a grind. Yeah. I'm also curious for the agents out there, you making kind of this transition throughout your career.
00;18;44;17 - 00;19;09;08
Unknown
Are there brokerages that are better for investors? Are there brokerages that are like not as investor friendly? I honestly I mean, I hang my license with epic. I they're they're fairly investor friendly. I know Exp was fairly investor friendly. None of them those two didn't I mean they have stuff in their language that is a type stuff like cover your butt type stuff.
00;19;09;08 - 00;19;37;05
Unknown
But at the end of the day, they're not they're not looking over your shoulder. What have you seen from the brokerage perspective? Because this is like something that agents talk about a lot to me. Sure. Yeah, we've had a good experience. So I'm currently with Exp and we've had a good experience with Exp. On the investor side, I would say it really depends on your like one your broker and kind of your local area as well because I mean it could be a small brokerage.
00;19;37;05 - 00;19;56;19
Unknown
And if, if they support you on the investing side and you know, don't put a bunch of red tape that you got to go through, then that may be it if the other places do so. But a lot of the times even, you know, I was in Keller Williams previously like it's it's independently owned and operated. So every one of them could be slightly different.
00;19;56;19 - 00;20;26;22
Unknown
So it just really depends in the location I think. Yeah I love that. And for you, you and your business and your journey, what what are your what are some of your goals this year and what are you doing in 2026 that's working? And what problems have you had to solve over the last 12 months? Yeah. So so as far as well, you know, when I joined seven, that was the end of 2023, had a terrible year, 2023.
00;20;26;23 - 00;20;51;22
Unknown
I mean, it was really I found out I had mismanaged $150,000, and thankfully I had made a few investments for flips, and that kind of got us at a break even point. But so after that, after I joined seven four, which was at the end of 2023, I got really serious about the investing side. And so last year we pulled back on our flips and we did more wholesaling.
00;20;51;22 - 00;21;18;02
Unknown
So we we only flipped the handful and then we, we wholesale the rest, which I had before that. Before 2025, I had only wholesale one. And I think we we made about two, a little over 200 in wholesale revenue last year. So so now this year we're kind of combining both because we got back into flipping and we're wholesaling also.
00;21;18;02 - 00;21;40;18
Unknown
So we're we're very fortunate for this year. We I mean it's it's it's leading up to be one of our, our best year actually with the blend of both of those because of the skill from, from last year of pulling back and, you know, kind of learning the wholesale process. So, so yeah, that's that's been really cool for us this year.
00;21;40;25 - 00;22;04;20
Unknown
I love that, man. This is what we often talk about revenue optimization. All these meetings we all go to. Right. And like a lot of it has to do with marketing and sales. And I think the thing that's under talked about is exit strategy optimization. Right. So because here's the thing we don't control. And the market has actually been pretty stable the last couple of years.
00;22;04;20 - 00;22;28;25
Unknown
It's not really like super great. It's also not terrible. It's just kind of flat you know, and it bumps down and bumps up a little. So to have the ability to list a house, to flip it when you know, you can make a good chunk to wholesale it and get quick money in the business to feed the cash flow or, you know, like us, we also added mobile homes to our our repertoire this year.
00;22;28;25 - 00;22;50;04
Unknown
And all of those things really strengthen your business and kind of optimize the efficiency of your marketing. And, you know, like if you can only do one thing, it's only going to take you so far. Like if you're just wholesaling and you're doing direct to seller marketing, like it's hard to have a really great return, you can get a good return.
00;22;50;04 - 00;23;16;25
Unknown
It's hard to have a great return. But when I can list it, when I can flip it, when I can wholesale it, that's when you really start to get like multiples on the investments you're making in your business. So I think it's cool to see you hit that part of your journey. And the best, honestly, the best businesses are the ones that realize that can see the the best exit strategies and make the the best, most optimized decision.
00;23;16;25 - 00;23;40;23
Unknown
So that's cool to see that you guys are getting there in your business and you guys are in the Virginia market. Is that right? Hampton Roads, the roads. Great market. Cool. What are you doing for rentals? Have you bought any rentals. Do you own rentals? Yeah we do, we do. We have I think we're working on our ninth right now as far as rentals.
00;23;40;23 - 00;24;06;03
Unknown
So we're we're working on finishing up two of them right now to rent out. So but yeah, we've honestly I think it came more we're doing a case right now actually we're working on finishing it up this morning for taxes of 2025. So that has been a big tax strategy for us because you know obviously it's not it's not only about what you make but what you keep as well.
00;24;06;03 - 00;24;29;08
Unknown
And cost have been really good for us. And even I mean we make we have a few houses paid off that bring in. I mean we have good cash flow on, on our rental portfolio. But moving forward has been more of, of the cost than how can we make it part of our tax strategy. So that's been yeah, that's been good I love that man.
00;24;29;08 - 00;24;47;16
Unknown
Because dude, we know people even in our community who only do active income stuff in real estate, you know, guys flipping 100 houses. And then I cannot tell you how many times every year without fail, somebody calls me and December because they're going to have a six figure tax bill because they made a bunch of money flipping houses, which is great.
00;24;47;16 - 00;25;14;17
Unknown
They had a good year, but they didn't keep anything. And I tell this story all the time to two investors, one doing 100 or so houses a year in like Utah, and then one who's multi market doing a few hundred houses a year like big flipping company. Jesse. You know Jesse. Yeah. And in 2022 when the rates changed, one of them held assets.
00;25;14;18 - 00;25;39;26
Unknown
And it basically saved his business because he had so much equity. He bought so many properties that he kept. When the market had the big dump and the interest rate skyrocketed, he was he still in business? He still recovered. Now the guys and gals who were flipping and they didn't buy anything. They you guys, like you said this about the agents, you should be investing even if you're buying rentals.
00;25;39;26 - 00;25;58;11
Unknown
And the competitive advantage for us as we know how to go get good deals, like, why would you not be buying assets? That's how wealth is built in real estate. It ain't built flipping houses. Yep. Like you can make a lot of money flipping houses. But if you don't ever take that money and put it into something, it's like, what are you doing here?
00;25;58;13 - 00;26;22;19
Unknown
Yeah, especially with discounting. You know, you're buying under market value properties. Your your ARV all in should still be under market value. And then you keep that as a rental even if you sell it 5 to 10 years. I mean that's a it's hard to go wrong with that. Yeah. And it's it is the, the primary it is the most valuable investing tool.
00;26;22;20 - 00;26;37;14
Unknown
Real estate, particularly when you buy and hold something for some period of time. And I watch a lot of house flippers and wholesalers never do it. And I'm like, you guys are missing the whole point of this. The whole point is to build wealth, not just to make a few bucks. Like, you're going to make a lot of money over your lifetime.
00;26;37;14 - 00;27;02;27
Unknown
But man, like you said, it's about what you keep. Dude. Super proud to have you as a friend, man. Just enjoy you and your family so much. You guys are awesome and grateful you're in the community. I enjoy learning from you all the time. I need you to coach me up on some retail stuff for sure. As I, I got my I got a listing right now and I'm probably going to have some more after I saw how much we lost in commission.
00;27;02;27 - 00;27;22;11
Unknown
So got a kick in the gut there. Yeah, I'll let you know. Why don't we just list these? How hard can it be? Yeah, yeah. So know I really appreciate you guys. I appreciate you spending some time here. You know, like I said, you guys are family here at seven figure flipping and just grateful to be around you guys.
00;27;22;11 - 00;27;45;08
Unknown
And hopefully I'll see you guys either in Nashville in July or in Port Saint Lucie Resort this, this, this fall. That's going to be going. I didn't know about the Saint Louis. Lucy. Is that what is that the in the baby all inclusive. It's going to be in November so it'll be cold up in Hampton Roads. You guys come down and get some warmth.
00;27;45;10 - 00;27;50;27
Unknown
Oh yeah. We yeah, we definitely would be down with that.
00;27;50;29 - 00;28;13;09
Unknown
Appreciate you guys man. Yeah. Thanks. And people want to reach out to you if they want to bring you deals or they want to invest in your deals in the Hampton Roads area, what's the best way for them to do that? Sure. My phone number or email email is probably best, actually. Raul at Prospera, and they can search up Raul Mendez on Facebook.
00;28;13;10 - 00;28;21;19
Unknown
I'm sure they can find me cool, man. Yeah, we'll drop that in the show notes. Appreciate you coming on, man. See you guys next one. All right man.
