Balancing a High Demand W2 and Building A Business with Kyle Nelson

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses, so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades and who has time for that. So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So again, collectingkeys.com/scale, go ahead and apply, and we'll see if you're a good fit.

Kyle Nelson: [0:38] Getting to know your market as far as what people actually wanna buy at is gonna be a game changer and differentiator for you as a wholesaler versus your competitors in that market.

Mike DeHaan: [0:48] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. Today is the scale show, and we are welcomed by Kyle Nelson out of the McIntyre, Minnesota. Is that how you say it? Somewhere over there in the Midwest. I'm on the West Coast. Everywhere on, like, that side of the Rockies is kind of the same. I have no idea. But Kyle has been a member of the scale community for a little bit, probably come up on a year now. And you have really been taking your market up by storm up there, all while, you know, managing a family and a job and everything else. And so, dude, super excited to have you on the show. To give us a little bit of context, once you give us a three minute breakdown, who exactly you are, where exactly you're based, like, what kind of stuff you're pursuing, and what your team currently looks like.

Kyle Nelson: [1:36] First of all, thanks for having me. What an honor to be able to be on the show and really tell you guys a little about my story and where we're at. It's been pretty fun so far and looking forward to where we go. I'm based in Southern Minnesota, really small town. I grew up in kind of the Minneapolis Metro Area and then moved to Southern Minnesota. During that time, I was an IT nerd and then turned into a finance nerd, now I'm doing real estate. So I started out doing IT for government and then went into finance industry. Then from there, started listening to podcasts. Of course, read all the books with Brandon Turner and Bigger Pockets, and that fueled the fire to really kind of look into real real estate and figure out what we wanted to do. So far, we're really only doing real estate for about seven months now. We are solidly involved in that, seeking for kind of multifamily properties, but we're wholesaling along the way to really kind of generate that capital that we're then using for buying multifamily assets.

Mike DeHaan: [2:31] Totally. And can you give us a breakdown of kind of the deals that you've done? Because you jumped in some big stuff pretty quick.

Kyle Nelson: [2:37] Yeah. I'm in a kind of unique position. So my wife and I, between our w two jobs, we are very high income earners, and so we've got the capital to be able to jump in with both feet and really kind of do this thing. So we started our first mailing 12/06/2023. By December 28, we had locked down our first deal, and that's actually the flip that we're currently working on right now. Since then, we've done five wholesale deals, one flip, one buy and hold, is a nine unit apartment building. And, we're on our way right now next week to actually close on another flip opportunity. So, we are well within the trenches here.

Mike DeHaan: [3:11] Yeah. And I think that nine unit that you bought, dude, that was one of, like, your first leads. I remember talking to you about that in the group, like, a long time ago.

Kyle Nelson: [3:18] Yeah. The crazy part is, like, between that multifamily property and then the the flip that we bought was all with the first batch of mail mail marketing. So, I mean, I I hear from wholesalers all the time is that, yeah, it takes, you know, two, three batches for you to finally start to get a lot of traction. I mean, shoot, we got it within the first batch, which I think really goes to show the market in some of these rural areas is actually pretty hot if you're if you know what you're doing.

Dylan Koch: [3:41] You're probably the only one doing it too. And then like areas like that. So I mean, honestly, you have more opportunities. Didn't you get good terms on that nine unit too? Or did you buy buy that straight up?

Kyle Nelson: [3:52] No, we actually got pretty good terms. So we got that one for about, I'd say 85% of what the value should have been just through conversations with the seller and then trying to figure out, okay, he's got more properties. He wants to continue to move those along. So it's really building the relationship with this gentleman that we eventually are going to continue to buy more of his property. So he's kind of a big portfolio guy, and he's going to be moving his way out of that portfolio over time. So we're gonna try and bite off as much as we can over time here and and continue to build our portfolio up while helping him to kinda divest and and get out of the business.

Dylan Koch: [4:24] Perfect relationship, especially from the start like that. Kyle, do you have anybody but you working in the business right now?

Kyle Nelson: [4:31] No, is literally just me and my wife's an absolute saint because she's really good on the operational side. And with her owning her own business, she's been extremely helpful in really kind of walking me through business ownership, things you need to consider. And from an operational perspective, she's been able to bring a lot of insights into things that I probably wouldn't have thought about. Naturally, I just kind of feel like I'm more of a salesman and understand like the, hey, let's just go 100% at it, and really kind of skip over a lot of the finer details, which she's kind of been able to help me out with. So it's been tremendously helpful to have her on the back end. But otherwise, I'm just a solopreneur at this point. Very cool.

Mike DeHaan: [5:06] Yeah. That is huge to have a, like, a spouse slash business partner like that. Like, some of the biggest, I would say, companies, groups I know out there are those, like, couples that can, like, figure out how to work together. Because here's the great thing about, you know, if your spouse, your business partner, you gotta keep all the money. If you have, like, a business partner that is just like a friend or whatever, you gotta split stuff fifty fifty. And as much as I love Dan, sometimes I'm like, damn. I'd love to have your money too because it would definitely be a I would be living a different lifestyle at this point if I had that. But the trade off is obviously, you know, if your spouse is your business partner, it's kinda hard to get away from work. Right? Right on, man. So how are you sourcing all your deals right now?

Kyle Nelson: [5:45] So all of our deals right now are direct mail marketing. We did sprinkle in a little bit of cold calling as well as texting. The majority of our leads that we're actively working right now are all through direct mail marketing.

Dylan Koch: [5:57] And how much marketing are you sending out on a monthly basis, would you say?

Kyle Nelson: [6:00] Yeah, so right now we're sending out about $3,000 consistently every month is what's going out. And of those right now, we've got about a 164 leads that we're currently kind of working. I'd say probably of those 164, we've got about 18 that are active. We have truly opportunities with. So, know, I think we've got a pretty good, pretty good flow going right now from leads perspective.

Dylan Koch: [6:23] And you've been in scale for seven months. So anyone doing that math? And this is this is unusual. Typically, when you count even the first one or two months, that's about 25 leads per month, just occurring from those for those leads.

Mike DeHaan: [6:35] Yeah. Well, you've been in scale for longer, because you came in and learned for like a while before you jumped in. But quick math I have on that, though, Dylan is recording this in August, you started beginning in December with your marketing. Sets, what eight months paid hundreds for leads. That's $146 a lead. That's pretty standard.

Dylan Koch: [6:51] Yeah.

Mike DeHaan: [6:51] I mean, I think the keys are doing it consistently, though. I think a lot of people what happens if as soon as they have a down month, they try to shift it. So nice. And then you said how many deals have you done? You said you've done 10?

Kyle Nelson: [7:02] We have five wholesale deals that we've done one flip, one buy and hold, and then we've got another that we're closing on next week.

Mike DeHaan: [7:08] That's eight.

Kyle Nelson: [7:09] Yeah.

Mike DeHaan: [7:09] Right? Five, three. So perfect. Right? So that's a cost per deal about 3,000. Like, you're right on the money, dude. Like, that's exactly what we would expect. That's sick. Yep. You know, especially as, a solo operator, you don't have a lot of the, I don't know, like, the inefficiencies that that happen that bring up your cost per lead.

Dylan Koch: [7:24] Kyle, when you did those first couple of wholesale deals, being new, not late to your market, but new to kind of real estate in general, how was this going, those first couple deals?

Kyle Nelson: [7:32] Oh my gosh. I've never been so stressed in my life. Honestly. So being new, one of the things that I didn't really take into consideration was just having phone conversations, figuring out who the buyers are in these areas. Immediately, my first thought was, alright. Let's just get the deals, and then we'll figure it out from there on how to get rid of it. And we did that, but then I felt like it created a little more stress than we otherwise needed to have. And so, you know, if I could go back and do it all over again, the one thing I'd probably do is try and build up that buyers list ASAP. As soon as you send out that first batch of marketing, if not before, you just start calling some of the buyers in the area and say, hey, what are you looking for? What you know, what's the price range you're looking to acquire these at? Things like that. Just get to know the markets that you're you're investing in or or marketing to because that at the end is gonna help you. Actually, give you guys one of my stories later on for the first wholesale deal that I think would be pretty interesting. But, we almost had to go with a a cloud on title situation with one of those wholesalers just to dispo it. But honestly, the dispo part of it was probably the the most stressful for me just because I didn't have that list.

Kyle Nelson: [8:36] I didn't know any of buyers. So that was probably the hardest part

Mike DeHaan: [8:39] for me.

Dylan Koch: [8:40] So the follow-up question to that, I'm gonna guess at that first wholesale deal, your spread was anywhere between 3 and $10,000

Kyle Nelson: [8:46] 100%.

Mike DeHaan: [8:47] Yeah. Yeah. It always is.

Dylan Koch: [8:50] Yeah. One is you just don't know. And two, if you're having a tough time displaying it, this means that spreads probably not always there.

Kyle Nelson: [8:56] Yep. Yeah. And that's probably the hardest part too where I think a lot of any any of you that are listening right now that are maybe new to the game is just that underwriting side of it is trying to figure out what the numbers are because you could do the numbers all day long based on statistics and, you know, rules of thumb and things like that. But at end of the day, depending on your market, people are gonna buy at certain prices. And so if you get outside of that, it's really hard to, you know, get that spread. And so I think getting to know your market as far as what people actually wanna buy at is gonna be a game changer and differentiator for you as a wholesaler versus, you know, your competitors in that market.

Mike DeHaan: [9:27] Yeah. On that note, like, your market is a lower price point market. We get people all the time that, I don't know, are from different parts of the country where stuff is cheap. And that's one of the biggest questions they ask is, is it even possible to wholesale there because the way the margins are? You know, like, if you have a house only worth $50, there's only so much mathematically you can carve out of that thing. Right? So what is your average, like, deal size that you have there? How do you handle stuff in this cheaper market?

Kyle Nelson: [9:56] Yeah. So, like, for example, for us, the foot that we're gonna close on next week, I'm buying it for 38,000. You know, that one will probably be able to either you know, if we put a whole whole bunch of money into it, probably upwards of $1.40. If we do just a little bit of paint and things like that and carpet, You know, we'll probably get, you know, somewhere in that 60 to 70,000 range. So there's still enough margin there that if you wanted to do, you can. Now as far as a wholesale deal, again, it's knowing your market. And so for my market, at least where I'm at, the average deal, these guys want to buy them at 40,000 or less. So you got to be well below that somewhere between

Dylan Koch: [10:29] Congrats on your $2,000 Yeah.

Mike DeHaan: [10:30] Right? Exactly. You

Kyle Nelson: [10:33] got to know where you're at. So if I know that my buyers are trying to be at somewhere between that 40 to $50,000 range, I know that I've got to get this thing locked up 25 to 35,000 in order to have any sort of margin there for, you know, decent little wholesale fee. Usually, would say if you're looking at it, it's gonna be somewhere between that 5,000 to 7,500, you know, and those are really good base hits.

Dylan Koch: [10:54] And for the audience, like to speak to what Kyle's saying, you can go on, if you don't have PropStream, or you don't have InvestorLift, or any of these other tools, you can go on Zillow, and you can find as is sales to find out what's selling in that area, and use that as your benchmark, You know? And you can reverse engineer where you need to be at for

Kyle Nelson: [11:10] some of your stuff.

Mike DeHaan: [11:11] Yeah. Something I wanna highlight too, Kyle, is when you got into this, I remember getting on Zoom with you and your wife before you ended up joining scale. But you didn't know, like, any of this. Right? You were as green as green could be. And, normally, we don't let people like that into scale, but the reason that we chose to was, a, you had the money to actually be able to afford building a business. You weren't gonna, like, bankrupt yourself. And b, just from talking to you, could tell that you were, I don't know, gonna be proactive about stuff. But what was it like, I would say, jumping into, you know, a community of people that are, like, active in these businesses and kind of, like, having to learn? How did you, I would say, get the courage to take that big leap? What was your biggest mental roadblocks you had to overcome on that?

Kyle Nelson: [11:59] Honestly, so we actually we spent a lot of time, my wife and I did, trying to interview different programs, collecting keys being one of them, which is now Scale Community. We interviewed so many, honestly, probably about 10 to 12 different, quote unquote, gurus or guys that are in the space selling mentorships and programs. And I remember when we actually sat down with you, Mike, and we interviewed and asked you questions, you know, we felt really good about the conversations, the genuineness of what you guys are trying to do and help people in not just, you know, scaling their existing business, but taking someone like us that is 100% green behind the ears, has no idea what they're doing and really showing us the ropes. I remember, I might come across as confident, but going into that first call, that scale call, but not knowing anything, and you had said, Kyle, introduce yourself to the team. I felt like an idiot introducing myself. Yeah, I got nothing. I have not experienced at all. I could barely spell real estate at that point in time. And it was really nervous for me to do that. But I am so proud of what we did there, just to take that first step. And what we did is I think we joined it in, gosh, it's probably April 2023. And literally, I attended as many calls as I could, knowing that I still had a newborn at that point in time, a young family trying to take everything, but I made sure that I attended those calls just to get to know, you know, the real estate, what people are doing, how people are talking, the lingo, what should I be thinking about? What should I be looking for? And I didn't ask a single question for probably two months. I just kind of sat there and observed and listened.

Kyle Nelson: [13:34] And then I remember, you know, the Keys Con event came up, and that was really the turning point for me. I told my wife, he sat down at a dinner table, and I said, hey, this this event is coming up. You know, it's gonna cost us some money, but I think we need to do this because at the end of the day, I need to be around people that are doing this to really kinda light that fire and ignite this what we've done so far, this forest fire, so to speak, that's just gone. And so she said, you know what? At the end of the day, do what you need to do. But if this is truly what you're passionate about, make sure that you put everything into it. And I took that seriously. And I remember, you know, we got to KeyesCon in November 2023. And at that point in time, I remember dealing, you and I sat, you know, we arrived at the airport, we shared a car together, you're sitting there closing deals in the car.

Mike DeHaan: [14:17] Yeah. Remember

Kyle Nelson: [14:18] And it's like, man, this is this is the real deal. But you know, that to me was inspirational. And being around guys that are doing deals and actually in the business talking to them really lighted a fire for me that said, kind of get off your ass and do this, just commit to it and do it. And that for me was the game changer. Because then as soon as I got back, I'm one of those guys, it's like a ready fire aim sort of deal. I just started going and I was like, yep, we're doing this, this, this, this and this. And my wife's like, did you I mean, you read everything? Have you done everything? But that's her operational side versus me, where I'm just like, let's go, baby.

Dylan Koch: [14:54] Yeah. No. I mean, that speaks volumes. I do remember you picked me up from the airport because you had that rental car, and then we traveled on the way to Keyskaw. I think we talked about business and life for a good ninety minutes, and I could tell just then, I was like, he doesn't have a lot of experience, but he's gonna be good just because you're a sponge with everything else, you know.

Mike DeHaan: [15:11] So credit to you. Yo, If you don't follow me on Instagram, which is at mike underscore invests, by the way, then you might not know that we officially have a new mission as a brand, and that is to help 2,000 real estate investors build million dollar businesses. Obviously, to do that, we need to get in front of as many people as possible. So quick little ask to help us reach that goal. First, shoot me a follow on Instagram at Mike underscore invests. Second, follow collecting keys podcast on Instagram. That's at collecting keys podcast all written out. And third, every time the algorithm is kind enough to show you a post from either of us, share it on your story or in your post and tag us. If you do that, I'll DM you and we can have a little DM conversation about what is preventing you from having that million dollar business that everyone is seeking. And we can see if we can come up with a plan to help you make that massive income, not just passive income. So again, if you see any of our posts, just go ahead, reshare them, tag us and let everyone know that you enjoy the content we produce. It will help us a ton. And then I'll be happy to help you as well. Willingness learning willingness to take action are two of the biggest things that lead to success. Right?

Mike DeHaan: [16:23] A 100%. Like, pretty much every person that we've ever worked with that hasn't been successful, it's either because they're not willing to learn or try new things, or they aren't willing to, like, actually fully commit to stuff, and they kinda do, like, pinky toe in and nothing else. I mean, even that. There's there's people in the group right now that we see on a regular basis that are kind of asking the same questions, aren't, taking big action. And I'm hoping someone listen to the show and feel a kick in the ass because we do see you, scale guys that aren't doing what you need to be doing. But like Dylan said, we could just tell right from the get go that you're gonna figure it out. Like, you always kinda get a feeling about people. That's a good segue though to, like, obviously, when you jumped into that, you know, like you said, you guys were high income earners. You had just had a newborn. How do you balance, like, growing your business like you have been with your life and, like, your lifestyle? You also have w two. And so, like, there's a lot of balancing going on across all pieces. Because also how many kids you have? Four?

Kyle Nelson: [17:19] We have two, thankfully. Okay.

Mike DeHaan: [17:21] But I don't know why I don't why I thought you had more than that,

Dylan Koch: [17:23] but his wife doesn't know about the other two.

Mike DeHaan: [17:25] Yeah. Officially. Officially. Yeah.

Kyle Nelson: [17:28] Yeah. We've got two kids both under age five, so it's it's pretty hectic. But with having a job, the one thing that I encourage people to do is is don't don't be afraid of starting something even though you've got a job. Right? You can still do things at night, you know, on weekends, things like that. But what I'll say is when I came across opportunities and leads, I wasn't walking all of these houses. I found people in the different markets that I was marketing to. And and here, this will give perspective to people. The radius of what I was marketing was about 90 miles east, west, and north of me. And so within that area, you just find people that you can trust. Again, going to real estate meetups and having conversations, talking to agents, figuring out, hey, who should I talk to? Get to know somewhere in that market. And I was having people walk these houses for me that I just paid them $50 to go walk a house, take pictures, give me a little bit of rundown of what the house actually looks like. And then from there, then we can generate our offers, get those sent out, and I didn't have to step foot in that place. So, you know, it really allowed me to continue to be in my w two job, not have to worry about it, still be able to get deals going, submit offers, and continue to run the business from there.

Kyle Nelson: [18:32] So I think the hardest part for us was was trying to balance, you know, time with the kids, right? Because I work the w two, I get home, you know, you want to spend time with the kiddos before they go to bed and and then, of course, have a little bit of time with their life. But then when everybody kind of settles down, kids are asleep, that's when I log in and start just pounding out work. So it's a couple three hours at night, you just get it done and just commit to it. Again, this is something if you want this for your future, you have to commit to it. You got to do the actions in order for it to work.

Dylan Koch: [19:00] You need time, money, or hustle, and you've got the money and the hustle. Right? Just not all the time. So you find someone else to do the time. And that's perfect. There's a players in every single market in The United States. So that can work anywhere.

Mike DeHaan: [19:10] Yeah. And I think that, you know, the thing is there too is you weren't a real estate expert, admittedly. Right? And so being able to leverage people in different markets that were maybe a little bit more experts or even not, right? If they're also kind of ignorant, but you kind of tell them what exactly you're looking for, that's pretty much the same as you being there. You know, it's always one of the biggest farces to me is you have a new real estate investor, and they feel like they need to walk every house. So like, and they always say, like, I just want to get eyes on it. It's like, what the fuck are you looking for? You don't even know. Like, you just wanna be

Kyle Nelson: [19:40] able to go and, like, touch the walls.

Mike DeHaan: [19:42] If you're gonna drive two hours round trip to this lady, you got no. Just like hire someone there to go and be ignorant in the house and send you the pictures.

Dylan Koch: [19:49] And then send those pictures to somebody who knows what they're doing.

Mike DeHaan: [19:52] Exactly. Right? Right. Yeah. It's the same fundamental thing, but it saves you so much time, and it allows you to do the stuff that's actually going to make you money, which is, you know, as you know, calling leads, making offers, like structuring deals, things like that.

Dylan Koch: [20:05] So Kyle, I do wanna ask because this is something that's important in this business is speed to lead, and obviously you are kind of stretched or limited on time. So what does that look like when a lead does come in from mailers? Like, what is your how quickly are you getting to this leads? Do you have anything in place to help with that? Or what does that currently look like?

Kyle Nelson: [20:22] Yeah. So admittedly, because we have a lot going on, at least in our lives, my speed to lead is not near what it should be. Most successful wholesalers are doing it within twenty four hours. They're getting there. They're getting contracts signed, things like that. So we could probably have higher ratios than what we currently do if we had better speed to lead. So right now, you know, call comes in, goes to Call Porter. Call Porter then puts it into already simply, and then from there, then we work the lead. I usually try and give her give a callback within the first twenty four hours getting that lead into our our CRM. And then from there, you know, try and get someone out there as quickly as I can. Sometimes it takes a couple of days because we're working with other people's schedules, not just my own. So that's the hardest part about having some of these remote folks is you can't just be like, hey, Sally Jones is going be out there today. It's like, okay, well, Sally Jones, what does your schedule look like? Does this work for you?

Mike DeHaan: [21:11] Yeah.

Kyle Nelson: [21:11] And so that's probably the hardest part about the speed to lead side of things is we can't get someone out there immediately just because they're not within our company, they're not on our payroll, it's certainly not me. So it's working around other people's schedules.

Dylan Koch: [21:22] The logistics can be difficult, but I mean, again, you can kind of figure that stuff out. One of the questions that popped in my head with that $3,000 you're spending, are you hitting the traditional niche list inside of PropStream? Are you doing anything different outside of the standard list that everyone heads?

Kyle Nelson: [21:36] No, we're hitting the traditional list. And and honestly, again, our area, we're getting enough leads that if we did more than this, I mean, we would be overrun with with calls and and trying to keep up with everything. A good problem to have.

Mike DeHaan: [21:47] Yeah. And I will say too on the speed to lead piece, something that we have found with, like, a lot of the virtual marketing stuff that we've done is if you're in a smaller town or in you're in a more rural area, generally, you have a little bit more leeway on that versus, like, if you're in, you know, a super competitive market in Tampa. Right? You're in Austin. You're in, you know, the Northeast somewhere. The speed to lead is super important because there's also eight other people that are getting that same lead that day. And, honestly, whoever gets there first is probably gonna be the one that wins. But if you're in some of these more rural markets, which, honestly, I recommend people explore some of these rural areas, you don't have to go to where Kyle is. There's literally hundreds and hundreds of markets like this across The United States. You have a little more time because that's also the culture of the sellers. As you know, they're kinda like they want a handshake. They wanna be able to figure out their life. They are living in these rural areas because they're not trying to, you know, hustle and bustle their way to everything. And so you need to be able to match that.

Dylan Koch: [22:42] If they're older, they don't check their phone or if even have email for three days. So they care.

Mike DeHaan: [22:48] We have a deal right now that we just signed around in rural Idaho. It's a little story for you guys. This guy only checks his phone on Sundays and Thursdays. He has a house phone, a landline. That is what he's told us. He said that if we call him on Friday, he will get back to us on Sunday. If we call him on Monday, he will get back to us on Thursday. He does not have the Internet. That is what he does. Wow. So speed the lead there is not important at all, I can tell you. But, you know, he lives in Millenorway outside of Twin Falls, Idaho. And that's the social piece of his business tends to get so lost because people, they try to, like, they watch, like, Andy Elliott on Instagram. They're like, every business needs to look at this where I'm, like, getting all pumped up. But the rapport building piece is all about knowing what is the standard for your market. And I think probably, Kyle, being from there too, you probably know that pretty well. So being with your with your business, everything you're balancing, what do you think has been, like, the best system that you've integrated that's led to a lot of your success? You know? Or, like, what is, like, one of the big keys do you think? Is it, like, you're gotten so good at making offers?

Mike DeHaan: [23:50] Like, is it that, you know, this this virtual piece? What do you think has been, your big secret, I would say?

Kyle Nelson: [23:56] Honestly, I think the time commitment for me is dedicating that time at night to make sure that I'm doing something for the business to help push it forward, whether it's, you know, underwriting five deals or making sure that I submit five offers or, know, whatever the case might be, it's it's dedicating that time on my nights and weekends to make sure that I do something. Because if you're not doing anything, the business isn't going anywhere. You can put forth all the systems in the world, and unless there's action being taken, nothing's going to go forward. So for me, certainly working in different virtual markets or having a wider footprint, having those, you know, we'll just call them bird dogs or folks that go out and actually walk these houses has been a game changer for me because I'm not sitting in the car for three hours. Instead, I can take that three hours, you know, underwrite some deals, have some calls, spend some time with my family, maybe hit the golf course here and there. You know, certainly that has allowed this business to continue to push forward and actually we're getting a lot of success with that.

Mike DeHaan: [24:50] Do you mind just going over your general numbers? I know you've done these deals. What's your current projected revenue look like?

Kyle Nelson: [24:56] Yep. So so far right now, since we'll call it January 1, we're at $74,300. The total expenses that we spent between marketing and different platforms, programs, things like that, we're at $43,000 And then, you know, from that, we've got about a profit of $31,300

Mike DeHaan: [25:14] 31,000. And that's your realized, right? So what about with your flips? What are you projecting?

Kyle Nelson: [25:18] So with flips, we're gonna be projecting right now. The first flip will have about $47,000. That's after all holding costs and listing costs. And then depending on what we do with this next flip, we should be able to get around that 25 to $45,000 depending again how much we put into it and things like that.

Mike DeHaan: [25:35] So it's about what? 70,000? Am I right?

Kyle Nelson: [25:38] Yeah. So we'll be at if everything falls into place the way I hope it will, my goal for this year was $120,000 of revenue. We should be pretty darn close to that if not surpassing that. Yeah, awesome.

Mike DeHaan: [25:48] That's great. That's that's an awesome first start.

Dylan Koch: [25:51] That's money already spent too. So you'll have 140 ish k over that same ad that same spend.

Kyle Nelson: [25:56] It's pretty good.

Mike DeHaan: [25:57] Yeah. And that's and you still have your pipeline. And I guarantee you, if even if you stopped marketing right now, there's probably a deal per month that you could scrape out of the lease that you already have at least. So you're in a great spot.

Dylan Koch: [26:07] Oh, you have a 164. There's at least a couple deals in

Mike DeHaan: [26:10] At least. Yeah. Yeah. Statistically, if they're all male, I think it should be four. It's about 40 ish leads per deal. So right on, man. Very, very cool.

Dylan Koch: [26:19] That's not to include the equity and stuff you have in the nine unit.

Kyle Nelson: [26:22] Mhmm. Correct. Yep. Yep. Now, if you factor in, you know, the $80,000 down payment that we had on the nine unit, then we're still a little bit in the red, but we should pay on what we do the rest of this year. We should be able

Dylan Koch: [26:33] That's bought equity. It's not yeah. I wanna count that against your PNL.

Mike DeHaan: [26:36] Sweet, man. Awesome, dude. Well, it's awesome to see your success and and get the full story on that because I know we obviously see a lot in scale. This has honestly been the most fun thing for me about these shows is we get, like, an actual deep dive into what people are working on and not just, like, either the problems or the wins, which is what we we see in the group, which is great. But I always like to hear the logistics. Alright. We're gonna dive into our end of show questions here. So first question, Kyle, what is your craziest real estate story? Yeah. So let's

Kyle Nelson: [27:04] get into the first wholesale deal that we did, if you want to call it that. So we got a we found a five unit property that we had marketed to. They called in. We had negotiations. We got it locked in at, like, 74,000. We were thinking we could probably wholesale it for around 90. And so start reaching out to the buyers list. Really wasn't getting a whole lot. We had a few offers. They were all lowball offers and things like that. It's really a great opportunity for the right person. So I'm like, well, shoot. This isn't working. So, you know, we throw it up on investor lift and try and get a little bit of traction there. We have a lot of people that actually reach out about it. And this blast went out to a real estate agent up in the the Twin Cities Metro Area. So she sends it to her buyer and her buyer tries to go around us and reaches out directly to the seller. And so he didn't realize that we had this thing under contract. So he's sitting there firing off messages to the seller saying, Hey, I want to buy this property. And then she finds out that we put it up on investor lift. And so now she's mad. And so this is my first like, true wholesale opportunity. So I'm sitting here shitting my pants.

Dylan Koch: [28:12] Feed to the fire.

Mike DeHaan: [28:13] Yeah,

Kyle Nelson: [28:13] what do I do? So I remember I blasted you and Dan actually. I'm like, what do I even do with this situation? Because now she's like, I want to cancel the contract. I'm like, well, we're not canceling the contract. We're we're either going to buy this thing myself, or find out some way to get this thing wholesale and dispo. So I'm blasting you and Dan, and Dan finally reached out. We got up on a call. He's like, well, here's what I would do. I'd do this and this and this, and you could put cloud on title, things like that. And so what I did is I just had a message back and forth with her like, hey, here's the deal. We've got this thing under contract. We've got closing set up for end of May. I'd like to still do that. Let's go ahead and get this thing closed for you. And you can walk away with the money that you're promised. We'll get the property and continue to provide housing for this town and know, things like that. And she was like, nope. I wanna cancel the contract. So again, I'm sitting here, of course, my wife's out of town for a work convention. So I'm sitting here like, what in the hell do I do? So anyways, we have to go down the route of saying, hey, here's the deal. If you don't come to closing table or you can't come to an agreement, we will issue cloud on title and you will not be able to sell this property to anybody else. Come to agreement, she says, well, I still want you to cancel the contract. It's okay.

Kyle Nelson: [29:21] But here's the deal. I will cancel the contract for a $7,500 fee, which again, for us, that's money that'll help continue to fund the next marketing and keep the business rolling. And back and forth on this, we settled on $5,000 So my first wholesale deal was basically canceling a contract for a $5,000 fee.

Mike DeHaan: [29:39] Got paid for it.

Dylan Koch: [29:41] Yeah. That is a first. I don't think I've ever heard that before.

Mike DeHaan: [29:44] Yeah, that's funny. It's funny that you went through that too, because we actually took a lot of your lessons. This also knows anything about the scale community. A big reason that we've really focused on bringing good operators, we actually just did the same thing in a different deal, and we'd never done that before. And so we actually took a lot of lessons from working with you on that. We applied that to our team on a deal that we're closing what was supposed to close last Friday, we're gonna get paid for it on Wednesday from the seller. Exactly the same situation.

Dylan Koch: [30:08] The other end buyer end up buying the five unit?

Kyle Nelson: [30:11] So I don't know. I was gonna check and see on the records to see who ended up buying it, but I believe it went through. So we actually had him under contract. We just had an assignment to of $84,000. So we had a nice $10,000 spread there that we would have collected on. But at the end of the day, we walk away with $5, and, it helped fund our our marketing for the next month and kept on rolling. So

Dylan Koch: [30:31] A five unit for $90 still blows my mind.

Mike DeHaan: [30:33] But I know. Crazy. I can't buy anything here for that. That's what we sell empty lots for here. Like, seriously.

Dylan Koch: [30:40] So Kyle, follow-up with that, one other question for you is, if you could go back to the very beginning, what's one thing you would do differently?

Kyle Nelson: [30:46] I think honestly, I would have conversations early on. Just start meeting buyers, just go to meetups, just anything you can do to build out your network and advertise yourself as being an investor and offering deals or working just to build that network. Because the disposition side of this is a lot more difficult than people think if you don't have the connections already set up. And that's where I probably went wrong the first time was not having that buyers list out. But now that we've done more deals, we've built a name for ourselves, we've gone to communities, we've talked to folks, I've had lunch with, you know, a dozen different investors. So I know a lot of people where if I come across a deal, I could probably get at this point quickly. That's probably the base thing that I go back and and do differently.

Mike DeHaan: [31:27] Yeah. And I'll say that's the trade off for, like, those smaller markets where acquisitions is gonna be, quote, unquote, easier is your exit is gonna be harder. Right? It's gonna be just less people that are interested in the market versus if you're doing stuff in Austin, Texas. Right? You're gonna be able to find buyers all day. But nothing's perfect. Right? Now you gotta pick which challenge you want to try and figure out if you wanna do anything in this business. So makes sense? Alright, Kyle. Where can people find you, follow you, and reach out to you?

Kyle Nelson: [31:54] Yes. I'm on Instagram, mcnelly seven. If anybody wants to, you know, feel free to send me a, you know, request or if you got a question, feel free to. It's mcnely with a with one l. So m c n e l y seven. Otherwise, certainly you can reach out to me at kyle@triplerockhomebuyers.com. Happily, you know, happy to answer any questions or or reach out to anybody if that's helpful.

Mike DeHaan: [32:18] Cool. Right on. Well, guys, you guys are in the Minnesota market, anywhere down south, hit up Kyle. He is making ways over there. Probably knows buyers that wanna buy your deals out in bum fuck nowhere that you don't think you find buyers for because it sounds like he has mastered that. So, Kyle, man, thanks so much for coming on the show, and congratulations on your success, dude. It's really, really awesome. You're one of my one of my favorite success stories, especially because you started out so green, and to see things come full circle is really, really cool. Anything you wanna say before we finish out, Dylan?

Dylan Koch: [32:45] No. I was just gonna say the same thing. I know people have tried to get in real estate for five years that haven't done as much volume as Kyle has, and that's just because you decide to take action.

Mike DeHaan: [32:53] Yeah. And this is at like minimum scale. As you start to really boost that, you're gonna be slinging a lot of deals here very, very quickly. But awesome, guys. Well, don't be afraid to reach out to Kyle if you got any inspiration from him. And if you didn't, I don't tell you go. I don't know, right in your affirmation journal or some other bullshit. But thanks for listening everybody. And we'll talk to you guys next week.

Dylan Koch: [33:12] See you.