Arresting Developments: A Deal Case Study w/ Mason Bridges

Dan Austin: [0:00] Hey there. Welcome back to another episode of the Collecting Keys Friday Focus. Today we have a case study with one of our scale community members, Mason Bridges from Georgia. Mason, you've been in the group for gosh, quite a bit now, like six, eight months, is that about how long you've been here?

Mason Bridges: [0:16] Yeah, I'd say about six months.

Dan Austin: [0:17] Yeah, you were working a day job when you started this on the side, and came to us, and you've been, like I will say, I'm very impressed with you, you've been very engaged, I think it really shows like, being engaged in a group, asking the simple questions, or what we all like to call as like dumb questions, asking all the questions that come to mind and learning, really has proven that that's how you need to do this, right, there is no dumb question in this game, and having community around you is what you need. If you're listening to this and you're not familiar with the scale community, it is a rebrand of our instant investor program, which is what Mason actually joined, and now we call it the scale community, which is stands for scaling, cash flow, assets, leverage, and appreciation, all the awesome things about real estate, and that's what people come to our group for. So Mason, how you doing man? Living the dream. Living the dream, yeah man, you are. So you are W two free right now, and you're doing this full time, right? So you like literally, you're pivoted in this full time.

Mason Bridges: [1:10] Totally. Yeah. When I say living the dream, I mean, I literally had to look back the other day and was like, I am doing kind of what I envisioned over the last four or five years, and it's it's kinda surreal. But, yeah, I got actually got laid off, massive tech layoff, and it's kinda propelled what I'm doing, you know? Yeah. Which is super,

Dan Austin: [1:29] I don't wanna pull the thread on this too much, because we'll do a full episode with Mason here in the future on one of our our Monday interviews, but like, it's, you right, you were forced into it, but you started this side hustle, and you were doing it, and you did it long enough that you were prepared, and this is exactly why like having a side hustle is huge, because it diversifies your income and your skill set, and now you're here doing this. So let's dive in, we're gonna get right into the questions, we have the same four questions, we're gonna really understand this deal and talk about real investors doing real deals and getting away from that fluffy stuff, the zero to hero stuff that you seem to only hear on other podcasts. So first question, what kind of

Mason Bridges: [2:06] property are we talking about? Single family, three bed, one bath.

Dan Austin: [2:09] Alright, standard. That is that is a very standard property, residential real estate, easy. How did you find it?

Mason Bridges: [2:16] So I call it the core four, so it's kind of the the core direct mail list that we use. Mhmm. You know, pull it through PropStream and create the letter and and get it out and the owner called me and got in the mailer.

Dan Austin: [2:31] Nice. Okay. So direct mail, that's simple, that's easy. That's one of our favorite types of marketing, we like to teach in the program, or the group, should say, the community now, and a lot of people are using that, it's not our only lead source, but a solid one to say the least because sellers typically when they raise their hand and call you are motivated. Yep. Speaking of the seller, let's talk about it, like what kind of seller was this, what's their profile, what was their whole situation,

Mason Bridges: [2:52] what what was the motivation here? This seller has essentially kind of had to dealt with drug issues on and off for the last twenty, thirty years. Okay. And I'm in a decently small town, right? So at one point, you know, he ran a successful insurance brokerage in town, a lot of people knew this guy and just, you know, gotten into some bad situations and had some motivation to sell the house, right, for money purposes. When you

Dan Austin: [3:21] say the core, you mentioned the core four list, which part of the core four, which list was he landing on, do you remember?

Mason Bridges: [3:26] Yeah, so it's weird, you'll get these things with direct mail sometimes but it was on my absent well, was actually on like five different lists. It showed up on lien list, absentee, but he was actually living at the house So when he called at one point, he was living in a different place and and the house was being rented.

Dan Austin: [3:46] Gotcha. So yeah, was on multiple lists which typically we like to say is the higher amount of list they're on, the higher amount of their motivation is because like if I'm on a liens list.

Mason Bridges: [3:54] Totally.

Dan Austin: [3:55] If you're an absentee owner and on a liens list, that's a real problem. That means you're not paying your bills and it's a rental property, it's probably a headache, but it sounds like it was a rental and he moved back in, which is never usually a good sign. It means that some other life event happened. So when you met him, I guess when you first met him, was he actively on drugs or was it just a drug abuse thing that actually caused the financial distress?

Mason Bridges: [4:18] Yeah, I mean if you've been around stuff like that before, right, then you can kinda tell when people are a little off and yeah, I mean, he was off from day one. Yeah. But you know, we worked through it but absolutely, it was a little bit of a sketchy situation from day Okay,

Dan Austin: [4:33] let's dive it out, let's get into our fourth question here, what's the story on this whole deal? Like, let's go, give us a brief synopsis from like lead intake to what it took for you to get it under contract and then kind of where you're at with it today?

Mason Bridges: [4:46] Yeah, I'll tell you, it was a tricky one. This was pretty early on, I think it was my second batch of mail. And you know, one of the benefits and can also be a hindrance, being in a kind of a smaller market, right, is you can do a lot of intel, right? And I was talking to some people just in my network, family and friends about this deal because I went and saw the house, knew it was a potential deal, right? Knew how much he owed on the loan still and you start working into your numbers and you, you know, you start to spot things that could be a potential deal, right? So I'm talking to some folks about this and everybody's like, yeah, we know that guy. He's dealt with all of these types of situations his whole life, right? And people knew his family, knew him, so I'm gathering intel that I can use as ammo. I don't mean this in a disrespectful way, but that's what you do, right? It's part of the business, right? You have to find the motivation and find those little pieces and nuggets that you can use to try and get deals done. So didn't know any of this when I originally went and saw the house the first time. Start to get those nuggets, right, we get into conversations. Now, this is a guy that's got his master's from the University of Georgia, so don't get, like he's not a dummy, so he's working it, I'm working it. We had a good month of just conversations.

Dan Austin: [6:02] How long was the courtship, we'll call it, between your intake on this and you getting the contract and like within that, how many times did you have how many times did you call them?

Mason Bridges: [6:12] Yeah, very first call was on September 9 Okay. And I think we got it under contract. Got this one under contract till like mid November. Wow. So, you know, it's a solid sixty, close to ninety days of follow-up. Mhmm. And main motivation behind this was, Hey, he's got this girlfriend. He's going to be moving up to the neighboring county. Just no longer needs the house, needs some money. Right? You know, I go through and do my thing, run my numbers, given an initial range. We're talking and I think we're gonna get it done, but we're about $40,000 off, right? Yep. There's a pretty decent gap there. And then it just goes AWOL, right? Yeah. Which Not uncommon. These types of sellers, sometimes you see this, right? And I was talking to the group and they're like, what should I do? I'd, you know, just been hitting this guy up, riding by the house to see if I could find him. And then one day he finally calls me and says, hey, I think I'm ready to get a deal done. Comes down to a number within $15 of where I'm at. I pushed it. I got him into the office, my office to go over the contract, and I'd already written the contract at my price. And then I go to hand it over to him and temper actually flares a little bit, got a little sketch in the office.

Mason Bridges: [7:28] Nice. And he's trying to walk out the door and this is where inexperience comes to play, right? And this is all a learning game. I said, Hey, I wanna get the deal right. I don't wanna nickel and dime to lose a deal. Sure. So I came up to his number, which was 90,000. I was trying to get it done at 75, right? And proceeded to three weeks for three weeks try and disposition. This was the hardest I've ever pushed a deal to try and disposition. I mean, can't tell you I called 50 different real estate agents. I'm pulling lists and I'm talking to buyers from different cities and I literally sent it to 75 different potential cash buyers in my market, and I got about seven verbals all at the price I was under contract at, right?

Dan Austin: [8:14] Of course, You

Mason Bridges: [8:16] know, it was then I, you know, I remember at that time, it was really an moment for me. It was like, hey, I've valued real estate for a while now. I've been in this business and I've run comps and I know how to value deals. And so I was good with my numbers and I should have stuck with it, Because he would have eventually taken it. Yeah. But that's what it was, right? I couldn't disposition it, couldn't make any money on it on a wholesale, so I felt pretty good about my numbers, it was tight, but essentially ended up deciding to go the whole tail route. Yep, so you're in

Dan Austin: [8:47] it now, fixing it up, you're getting ready to sell it, What is the situation here? Because I

Mason Bridges: [8:53] know you kinda have some funny business going after you close on it. It's been a pretty straightforward process to be completely honest. Yeah. I've never fully managed a project, so this has been a learning experience for me and I'm the type of person that's quick to trust. And also we'll take that trust away. Right. If, if it, if the situation calls for it, but I have a guy in town that's kind of a do it all type of person. He, you know, worked in the motel and hotel industry and I gave him a pretty big leash, right. To kind of do things and gave him a general idea of what needs to be done. We've been getting quotes, budgets a little bit over, but it's in, it's in line with where we needed it to be. Yeah. And then yesterday, you know, things just kind of hit the fan, right? My countertop guys show up. I get a call from a contractor down the road that I know pretty well. And he's like, Hey man, I can't get into your house keys aren't in the lockbox. I get over there, this meth head lady shows up. She's like, I need to get in that house and get my stuff out of there. I'm just sitting there with all these people, look like an idiot. Oh my God. And you know, and you can be quick to blame in those scenarios, but you really take a step back and you're like, okay, this is all my fault, right?

Mason Bridges: [10:05] Right, right. I gave my guy too much of a leash, but essentially what had happened, he's had a helper, helper had been holed up in the house for like a month supposedly and it's just under my nose somehow and has this lady in there, there's little, as I get in there I start to see little baggies and all the signs of sketchy stuff happening in your house. This lady telling, she's running and trying to hide in the closet and I'm just sitting there just like holy shit. But either way, he'd gotten arrested, had my keys on him when he got arrested, so then I go and spend two hours at the Sheriff's Office trying to get my keys just so that I can get my countertops installed, and all while my contractor's dodging me. Of course, yep. Won't answer my calls, so that's where we're at. The biggest thing about it is I have the property under contract, So I was like, this is worst case scenario, We've got it under contract, $10 over what I was gonna list it at with a USDA buyer. That's right. Because I'd done some pre shopping, right? But we got it all handled, countertops are in, they look great, and we got a final punch list, and now I'm just gonna have to be a military, like, drill sergeant with my contractor over the next two weeks to make sure

Dan Austin: [11:19] it gets done. Absolutely, and set some solid expectations, either fire him or set some new some new boundaries with him going into this So what did you say was your your net profit on this one looking to be?

Mason Bridges: [11:32] Yeah. I actually have it pulled up right here. Yeah. I think we're looking at if all things go well with this USDA loan, which is a new process for

Dan Austin: [11:40] me Mhmm.

Mason Bridges: [11:41] I am paying a good bit of closing costs, but it's looking like I'm gonna net right at 30,000 on this one. There you go. You know, because my holding costs are actually gonna be a little bit less than what I was anticipating because we're we're moving it faster than I thought I was going to. There you go, so

Dan Austin: [11:53] that's awesome. 30 k profit on a deal that you initially couldn't wholesale because you were a little bit high. Yep. Doesn't necessarily mean you can't still profit on it, but when you feel confident in your numbers and you have an ability to take this down and do somewhat of what you said was a whole tail, there's still money to be made, still money on the table, doesn't mean that you're home free like you found out with contractor issues, but I love the story about this, I love the perseverance, you had like a sixty day lead intake to locking it up process, that's an expectation, you said it was on your second batch of mail, so it's not like your first mailer got you, your first month of mail has got you anything, like you have to just keep pushing and believing in the system, and you're honestly a testament to that, and that is why you're sitting in this spot with it, you worked your tail off even after you sent 75 emails or you know, offers out to cash buyers, I still couldn't get locked up, but alright, we'll end it with that, I hope all of you listening to this found this super valuable, I know I did, because this is like the real deal in the trenches, not all deals are zero to hero, make a $100 on your first wholesale deal, sometimes you have to work for it and work your butt off, but it's worth it, as Mason's a testament to this, doing this full time now, after getting forced out of his W2 career, so it's definitely possible if that's what you're hoping to do here.

Dan Austin: [13:04] Again, if you wanna learn more about the scale community, and learn what Mason is doing, and how he's doing it, go to collectingkeys.com/scale and check us out. If you're not ready to step into that realm, we do have the instant investor program that we have now, basically peeled out and made it an end to end online course that you can listen to at your convenience and learn at your convenience. You can also go to collectingkeys.com and check that out. Other than that, I will see you all next week. See you.