Making 7 Figure Profits By Subdividing Land with Damon Amato

Speaker 1: [0:02] Welcome to the Collecting Keys Real Estate Investing Podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [0:26] On this episode of the collecting keys real estate investing podcast, we have Damon Amato who is, like, kind of the he's has a crazy, crazy investing story. Basically He's got a great background. He's got a great background, but he started out as, a strength trainer and then was a, like, I guess, compulsive online gambler and, like, built up a little

Dan Austin: [0:47] I wouldn't call compulsive. I would say he was a professional online gambler.

Mike DeHaan: [0:51] A professional. Yeah. I actually did say he doesn't really like gambling that much, but he did some online poker playing, built up a nest egg, and then proceeded to jump into real estate and lost a $100,000 on his first deal, but then kept with it and now is doing huge sort of, like, land developments. You know, he's on he's been on TV shows or at least his property has been on TV shows. He's building an app. And all in, like, a five year time period. This all this all the same thing happened, like,

Dan Austin: [1:16] And by it's with him too in particular because he has done a lot of, like, adaptations from, like, where he started until now. But it was, like, wasn't without hard work. And what I love about him too is is, like, his first deal, he lost a $100 and almost went bankrupt. Yeah. It wasn't like this huge win and that he was set for life. It was like that. And then just slowly kinda chipped away and found niches where, like, he talks a lot about zoning, which is really interesting, especially as we get towards the end the podcast where he talks about how much and how he was able to take pieces of land and then basically do all the zoning and then wholesale them.

Mike DeHaan: [1:48] Think things like that. Like, you don't even think about that. Like, literally doing the work to create the opportunity, but never closing on the property and assigning that to a builder. You know, he gets into some next level stuff. And then I also love getting an inside look into what those houseweeper shows are really like.

Dan Austin: [2:03] I know. That was so cool. Those are great stories.

Mike DeHaan: [2:05] Some great stories at the end. So super awesome episode here. Anyways, guys, if you like the podcast, even if you don't, but you just, like, kinda wanna do us a favor and you think that we're, you know, somewhat nice guys, go ahead and subscribe to the show and leave us a five star review and a rating wherever you listen to your podcast. Another thing you can do if you really wanna be a Next Level fan, just go and download every episode. Then get, like, your spouse's phone and download every episode on her phone too. You know, you can delete them afterwards, but that really boosts up in the rankings. And if you wanna jump right in and start getting off market leads just like Dan and I do every single month and where we buy pretty much all of our properties, go to collectingkeyspodcast.com/free, and you can get our free five step guide, start generating off market leads, which can get you going in as little as two weeks. So thanks so much, everybody, and enjoy the show. Damon, welcome. We're glad to have you, and, love to hear about how you've done what you've done.

Damon Amato: [2:57] Oh, thanks for having me. Yeah. It's great to be on your podcast.

Mike DeHaan: [3:00] A little bit about your background first. I know you said that you started with kind of a traditional sort of job like so many of us do. You were a strength trainer and a nutrition coach, which I feel like is funny. I feel like that's a very common starting point for a lot of people that do real estate as well. I'm not really sure what that is.

Dan Austin: [3:18] That's where you started,

Mike DeHaan: [3:19] Mike. It kinda, yeah.

Damon Amato: [3:21] So I've been the head athletic trainer for the largest public high school in Massachusetts for eighteen years. Wow. So I started real estate in 2015, think for real. I actually built my own house in 2008 also, but I wasn't, I just actually did that from online poker money.

Mike DeHaan: [3:43] Really? Really?

Damon Amato: [3:46] I didn't mention that before. I actually used to play a whole lot of online poker and I was able to make enough money to buy my wife a car, pay off her college debt and also buy a lot to build our house that we're in right

Mike DeHaan: [3:58] You mean like like, legit money on that. So is that just luck, or were you actually making fat bets and, you know, just sort of compounding that?

Damon Amato: [4:06] So I played mostly back in the in the heyday of online poker, which is, like, 2001 to like 2006 maybe. And back in those days, so many people wanted to play poker and everybody was awful. It was, you did not have to be a very good poker player to make a lot of

Mike DeHaan: [4:29] play. And

Damon Amato: [4:31] I I got in with a group of other friends who were actually legitimately really good at poker and learned from them and did my own education and grew that to be able to play mostly online cash games. Got up to mostly playing $5.10 no limit, which is a thousand dollar buy in. And you can online, you can play 10 or 12 tables at a time. Yeah. So it was pretty easy to win or lose 7 or $10,000 in a day.

Mike DeHaan: [5:02] Yeah. Right. That's crazy.

Dan Austin: [5:03] You got a regular old Dan here, whatever his name is.

Mike DeHaan: [5:08] Dan Oh, That's very good.

Dan Austin: [5:10] Damon, Dan Bazarian. Jay Scott was also a poker player.

Mike DeHaan: [5:14] He was. Yeah.

Damon Amato: [5:15] Yeah. Actually, I I didn't even realize I had a really good conversation with another go bro, Pasha Esfandiari in Atlanta. And I never put it together because they spell their names differently. But his brother is Antonio Esfandiari who's one of the best poker players in the world.

Mike DeHaan: [5:34] Oh, really? That's funny. Yeah. And

Damon Amato: [5:37] I I didn't realize it because they spell their names differently. So it was interesting to get together. So we we had a very long conversation about all the mutual people we know in poker.

Mike DeHaan: [5:48] That's amazing. That's funny. There's there's certain things that always seem to come up with real estate stuff a lot. I don't know why. So you see a lot of people that were like engineers that went into real estate. So a lot of people that were like, you know, fitness professionals of some kind that get into real estate. And then a lot of real estate professionals are always into gambling. Like, I I used to work I worked for a hard money company here for a while kind of as we were we're scaling up our business. And those guys, like, they have, a putting green, like, the hallway. And they would walk down and they'd be like, alright. $100. I'm gonna hit this putt right now. Like, just all day, they would do that. They loved it. You know? It's it's that was interesting.

Damon Amato: [6:24] I'm actually not a huge gambler to be honest. It's kinda weird to say that as a poker player. But in a casino, like, I think I've played a slot machine exactly one time.

Mike DeHaan: [6:35] Yeah. But I mean, that's like suckers gambling though. Like that's not like poker

Damon Amato: [6:38] I've is a played blackjack and craps, but you know, just for fun for like an hour or so, like not trying to really, put too much in it. But yeah, we do things like that. I actually remember when I was 22 or 23, we were in the Bellagio Poker Room, which was at the time one of the bigger poker rooms in Vegas. And there's like 10 of us that went and hung out for a week. And one of my friends actually did look quite a bit like, I'm dating myself, but a chunk from The Goonies.

Mike DeHaan: [7:14] Okay. And we all threw

Damon Amato: [7:16] him a $5 chip if he would stand up and do the truffle shuffle for thirty seconds.

Mike DeHaan: [7:20] And do the truffle shuffle. Oh my goodness. That is

Damon Amato: [7:23] But he did that in the middle of the Bellagio poker. It was like, I would pay him a $100.

Mike DeHaan: [7:28] Right. It's it's so funny, I mean, you're in Vegas. They just like, you know, when they're about to die, they're just like, get out of here, asshole. Like, you're you're doing, you know, for your men's weekend or whatever. That's super funny. Yeah. I mean, yeah, the gambling. Even with our our Christmas party last year, we took our local staff out to the casino and went to the steak house for a Christmas party. And we we gave them their bonuses in cash so they could go play in the casino. And I mean, they were very responsible. They could have definitely been, you know, a little bit ham, but I think you were the irresponsible one, though, Dan.

Dan Austin: [7:57] They worked for their bonus. Oh, I'm I'm definitely irresponsible in a casino. Yeah. I I love it.

Damon Amato: [8:03] I just

Dan Austin: [8:03] love the rush of winning. Losing not so much, but I tend to lose.

Mike DeHaan: [8:06] So Yeah. Yeah. But no. That that's cool. So you're doing that while you were being a strength coach at the high school. Yeah. And then they use that money to was that kind of seed funded your real estate investing career? Were you kind of dabbling all through that period of time?

Damon Amato: [8:22] No, basically what happened was, at the time I was an employee for a physical therapy clinic. So I had a four zero one ks with an employer match, wasn't getting paid very well, but I maxed out my match. My wife was a nurse at the time. She was doing the same thing. She was actually the breadwinner at the time. And quarterly you get these statements from social security administration to say like, in thirty years when you retire, like this is what your likely payment is gonna be, which is So I got that and I took that to my four zero one ks and I was like, okay, well, if I keep getting paid this and I get a raise here and there and the market does this, like this is what I'm gonna end up with. This is what my monthly income is gonna be. When we retire, was like, okay, well it's gonna be like $4,500 $4,600 a month. And then I did another search to see like, okay, well in thirty years, inflation, cost of living, if we wanna live the lifestyle that we like, how much income do we need to be able to do that? And it was like $11,000 So I was like, well, that doesn't work. So I've got to find a new way to do this. And so I actually joined Fortune Builders, which is a real estate education company. They teach you how to flip houses without any of your own money, which not totally true, especially in the beginning. It is now for me, but that's because I have plenty of experience. But that's how I kind of got into real estate, wanted to do that so that I could make a better living for myself and my family, be able to travel and do the things that we wanna do.

Damon Amato: [10:09] So it was more about a freedom of time thing more than anything else.

Mike DeHaan: [10:12] Right. Yeah. Absolutely. I know. I'm I'm glad you brought that up. People always plug that now. Like, this is how you can get started investing in real estate with no money. And it's the biggest farce. Like, you know, realistically, if you are not in a position where you can put any money into a real estate business, a I mean, my AI is, like, really should not be accepting money from anyone else at that point. Right? You're gonna go on, like, what? Especially everyone's always like, yeah. I got my grandma to take out a HELOC. Right. I'm gonna go use that to flip houses. You know? You should you should do that. And then b, I mean, you gotta figure out your own life first and get into a position where you can actually make some money to even know how to begin to operate a business. Yep. Like, learning how to make money is a skill, and you can't expect to just, like, suddenly have that. You have to sort of go through the process of making, like, a little bit, and then you can make more, then can make more. And I don't know. But I guess it's it's sells courses to people.

Dan Austin: [11:04] Right.

Mike DeHaan: [11:04] Right? You know, it sells gurus can sell education and products by spouting nonsense to people. So, hey.

Dan Austin: [11:10] It is Right. Yeah. Or it's like you're teaching to an audience that can't actually take action. Right? And so if you don't have money here, here's how you get in real estate without money, but then here's all the ways to make money in real estate if you have money. It doesn't really align with with reality, and we

Mike DeHaan: [11:23] all know that. Once you're in

Dan Austin: [11:24] the business for a while, I guess you could, in an edge case, make money in real estate with no money, but, like, it's really hard. Gotta have something. You gotta have something. Yeah.

Mike DeHaan: [11:34] Yeah. Exactly. But cool. So so that sort of set the path for you. And then what did you originally start with as you got into investing?

Damon Amato: [11:43] So the first deal I ever did came very close to going bankrupt. Oh, shit. Yeah, I was all set up with my entity, I did all the education with Fortune Builders, I was like, okay, I'm ready to go. My now business partner actually had a deal that he was to spread them for. So he was gonna assign it to somebody and it was a five unit condo conversion on a beach, two different buildings, didn't scare me because the numbers are the numbers. It was, I think I bought it for $8.65 maybe and I had a budget to renovate of 300,000 and then I was gonna sell out all five units together for like 1.7, right? It's a good deal. And I got into it, it was my first deal so I had get a hard money loan and it was a big deal. So I had to bring a significant down payment. I actually borrowed the maximum from mine and my wife's $40.01 ks to do this, which I'm not recommending that by the way for everybody.

Dan Austin: [12:46] We've all been there.

Damon Amato: [12:47] To be clear. Yeah. But I was all in on it, right? I wanted to make it work and I was like, I'm gonna make it work. And so my hard money loan was twelve percent and five points and I didn't realize until a week before the closing that one of the buildings was below the floodplain. So my first payment holding costs for interest on the loan, taxes and flood insurance was $31,000

Mike DeHaan: [13:19] my gosh. Yeah,

Damon Amato: [13:22] I had $26,000 in my checking account.

Mike DeHaan: [13:27] Holy shit.

Damon Amato: [13:28] So yeah, you can imagine. So the first like three or four draws I got from the lender were used to pay him back with his own money. Man. And during the process I actually wholesaled three properties. So I was working nonstop. I wholesaled three properties to make my payments.

Dan Austin: [13:51] Yeah, that's amazing.

Damon Amato: [13:52] And I never missed a bit.

Mike DeHaan: [13:53] That's amazing. Really?

Damon Amato: [13:54] Never missed a single thing. That's insane. I did the renovation, the most expensive unit I finished first and actually it was an estate sale and one of the kids in the estate actually wanted to buy it. So that was my first sale and that cut my interest payment in half right there. So I was able to survive after that but I had other problems above that. My contractor lied about several things. One of the buildings was an old three unit building that was 100 years old which means to not trigger FEMA to bring the entire building up to code, you have to get an appraisal on the building and you're only allowed to use up to 50% of the appraised value of the building to renovate that building. Otherwise you were required to bring it up to today's code. And to today's code, I would have had to put the building on pilings and lose a unit.

Dan Austin: [14:47] Oh, no.

Damon Amato: [14:47] Oh, man. So I definitely would have been bankrupt if I had to do that. But the problem was my contractor didn't know that and saw like, oh, this wall over here has a little bit of mold. Let me take that wall out. And this wall is kind of destroyed already. Let me take that wall out. And when you take out more than 50% of the drywall in the building, you have to gut the building.

Dan Austin: [15:11] Wow.

Damon Amato: [15:12] And so the building inspector who didn't wanna deal with FEMA, thank God told me I need a budget for this building that shows that you're spending, the appraised value of the building was $2.20. So I had $110,000 for a budget to tell him I was going to gut renovate a three unit condo building. Wow. So I sent him that budget. That was not the real budget. The real budget was not $110,000 The real budget was about $330,000

Dan Austin: [15:43] Just for the one building.

Damon Amato: [15:46] Just for that one building. Are you still friends with the

Mike DeHaan: [15:48] guy that brought you this deal? Because he threw you under the bus, bro, for sure.

Damon Amato: [15:52] Well, guy who brought me that deal is my business partner.

Mike DeHaan: [15:55] He is now Mike.

Dan Austin: [15:56] Mike, like, you know, throwing me a few shitty deals. Right?

Damon Amato: [15:59] I mean, that that wasn't I mean, that certainly wasn't his fault. That was my contractor's fault. Gotcha. Gotcha. Okay. So, you know, at the end of the day, yeah, I think I lost somewhere a little bit more than a $100,000.

Dan Austin: [16:12] On the whole deal. All said

Damon Amato: [16:14] and done. Yeah. You know, after that or even during that, a lot of people would just give up, go back to their W-two, say this isn't for me, me figure out a way to pay out all my debt. And for me, I was like, oh my God, I have to find two or three more deals to do to make up for this loss. And that's what I did. I wholesaled more houses. My business partner asked me to do a fix and flip with him in a similar area. We did that. He saw that I was wholesaling a few properties right from MLS, which is as you guys know, it's not the easiest And thing to he went to architecture school at Wentworth in Boston. So he's extremely talented with rendering zoning code, modeling floor plans, all that kinds of So like we found a wholesale deal where it was definitely a good deal but it was hard even for an investor to really see what the end product could look like and what the value would be at the end. So I got the deal under agreement. My partner did a three d rendering of the house. He did floor plans, he did a budget. We laid it up perfectly and we sold that deal and we're like, wow, this is like, we made some good money on that. Let's keep doing this. And it went from there to building a spec house, to building more spec houses, to doing land development. So it's just kind of grown organically from there.

Dan Austin: [17:45] Wow, that's a fascinating story because it's like a little start, like a little bug, and then it grew into which the first start sounds like it was so terrible. I don't know that I've heard too many people coming back from that, but it was just like this little bug that started slowly, and now you're talking about develop being a real estate developer. That's pretty incredible. And then what was the span of time? Is that like you said twenty fifteen. Is that like when you actually the first year you lost money on this deal? Was that when that happened? Wow. Right. Seven years. Yeah. It's a pretty short time period as well.

Mike DeHaan: [18:16] Yeah.

Damon Amato: [18:17] Yeah. And I tell that story often mostly because a lot of people just think that this is just you. You just do a deal and tons and tons of money just flows in. It's easy as that. And I do that because in fortune builders, very few people really dive in and continue doing it and actually do well. And I mentioned that because a lot of times one of the first questions people ask me is like, advice would you give to someone who's starting out, wants to get into this, wants to do it, but they don't know what they don't know. And I say, if you're not financially, emotionally and mentally prepared for a $50,000 loss on a single project, then don't bother. Yeah. Because that can happen. And that can happen kind of easily.

Mike DeHaan: [19:07] Yeah. Like like much easier than you think. Right? And the problem is, you know, recently, especially the last couple of years, people have been able to make money by doing anything because the market was going up so fast, but that's not the reality.

Damon Amato: [19:19] Well, right. That's, you know, part of the problem since, you know, basically 2012 up until now, you know, if you're alive six months later, you made money.

Dan Austin: [19:30] And a half is big growth. Yep.

Mike DeHaan: [19:31] Yeah. Yeah. You're not wrong. I mean, you're completely right, though. Just taking action is so important. And I mean, that's something that we always tell new investors as well and that we really push on people that are, like, in our our instant investor program. We have a coaching program. And so many people, they, like, tread right on the line, and they're like, well, I'm not, like, ready to do this. I don't know how to do this. It's like, you just gotta get after it and, like, figure it out. Like, the first house that I ever flipped, you know, I had a money partner on it. I met the local meetup, and you're splitting it fifty fifty. So I did, like, a lot of the hustle organizing contractors, like, just doing all the BS. Took me, like, five months from when we bought it to when we sold it, and I made $4,200. And I was stoked because I was certain I was gonna lose my ass halfway through it, especially when, like, we bought it and we hadn't, like, done the full inspections. And the place had been abandoned for three years, and we turned on the water and all of the pipes exploded in the entire house. There was literally water cascading down the stairs. And I was like, what what does this mean? I didn't even know that that could happen because I was so unversed of real estate. Crazy.

Dan Austin: [20:33] But I think the commonality is, like, the stick with it at ness. Right? You just stuck with it because that was not a good deal. You've had several deals for you, Mike, that weren't like the home runs, and you just stuck with it. And one thing I do wanna mention about Damon too, which I found incredible, is why you were getting your ass handed to you on that project. You were still doing other things. You said you did three wholesale deals, and that's how you were paying your debt servicing. Yeah. It's so easy and very common, especially for newer investors to get sucked in. They get a deal, and that's all they focus on. They don't they stop marketing. They they stop doing looking for other projects. Whatever their other side hustles are, they're just done. They're only on that project as and there's, like, the sunk cost bias, like, for their time. Like, I just gotta if I give it more time, I'll make money. It's like, well, that's not the case. And you were able to keep yourself afloat by doing that. And I, you know, I I always think about a friend of mine that I know, he gets a house under contract. He does all the work. He flips it a 100%. He doesn't even look for another deal until he's got that one on the MLS. It's like, well, that's, like, the worst time to be looking for another deal. Mhmm. You need be doing that consistently and always have your eye out So I think that was also probably attributed a lot to your success was being able to keep other operations running.

Damon Amato: [21:42] Yeah, right. Since 2016, I actually have not spent a dime on marketing.

Mike DeHaan: [21:49] Wow, really.

Damon Amato: [21:49] So a lot of our deals are kind of call ourselves ambulance chasers because we tend to look at zoning board meetings or planning board meetings and see these developments that guides are trying to permit. And they're not that good at doing the permitting. We're really good at doing the permitting. And when they fail and they lose their contract then we kind of jump into it with the seller with a better price because it just failed. And we show them that we can get it done. And we've never had a permitting deal where we didn't get something that was worth buying. So a lot of the stuff that we find is stuff that's actually pretty stale on MLS or we have a lot of realtors that bring us off market or pre market properties because they just, they know we can execute, we can close on it.

Mike DeHaan: [22:40] Yeah, no, I mean, that's a great way to go, especially you can build those connections. So even when you were going through that initial one and you're learning, you're doing all the wholesale stuff, how did you learn how to do that? Was like that knowledge from your business partner at the time? Were you did you have like a mentor? Did you just talk to other investors?

Damon Amato: [23:00] No. I've actually I have not had any true mentor in real estate, which I kind of wish I did, probably would have helped me quite a bit. But I treat every person who's more experienced than I am as a mentor because everybody I talk to has some kind of tidbit of information that is something that either I didn't know or I could do better. Because certainly, one of the things I think you have to be true to yourself about is that I am not perfect. I am not the best at this. I can always be better. One thing that my mother actually instilled in me at all times is that, cause I played, high school I played football, basketball and baseball. In college I played football and baseball. And she always reminded me, no matter how good you are, someone else is better.

Mike DeHaan: [23:54] Yeah. Yeah. I mean, that's that's very true in in everything. You know? And even if they're not better at, like even if you are, like, the best at the I don't know. The one thing that you do, like, I don't know. Maybe use this same example yesterday. Like, Jeff Bezos, he's super good at business. Right? Like, whether or not he needs a business coach or anything, I don't know. But if he wants to be good at fitness, right, he definitely needs to go find, like, a fitness coach. He's not gonna be like the guy that can, you know Right. Be that himself.

Damon Amato: [24:21] Right. And so it's not necessarily Bezos, but I think Grant Cardone actually is a motivator for me. I don't really like him very much for multiple But he always tells this story. The first deal he ever did was he bought like a 10 unit building in California. He had to put like $350 down. So already I'm like, okay, well you started with $350. You already started like way better than everybody else. And he ended up exiting like two years later and made like over 1,000,000.5 from that deal. And so reminds me well, okay, so you started your first deal, you made a million and 0.5, my first deal, I lost a $100,000 If I started where you were, yeah, I'd be doing pretty good too.

Mike DeHaan: [25:11] Right. Yeah. But I mean, the education though has its own piece. And but I mean, at some point though, I don't what was your first big win, I guess? Because, you you have your big loss, but typically to start scaling, you know, you kinda have to go through, like, the small wins or the educational less and lots of stuff until you find that first win, which will ultimately come just from putting yourself in those positions. Right? And, like, you know, even looking back at Dan and I can pinpoint when we were able to start scaling because we had our first super successful month. And then from there, we're able to set up our second month that was even bigger. That was, like, three or four months later. And then from there, it was, like, exponential growth. And I imagine you probably had something similar or was it all just like grinding through and just, you know, stacking up opportunities?

Damon Amato: [25:57] I would say I had two tiers of that happening, if you will. So the first one was the first big deal that we did that was land development as a wholesale. So there was a restaurant under an overpass, highway overpass in a town that my partner lives in and it had failed at the board several times. In fact, the mayor of the town tried to permit it and she couldn't get anything done. That's pretty bad. And we looked at it and it was a, if you looked at the site with just grass on it, you would say, you couldn't build a shed on this thing. Well, we got two condos permitted on it. Nice. And we brought the value up to the point where we sold the contract to another builder and made, I wanna say somewhere between 200 and $250 on Wow, dang. And we never owned the property. That's awesome. So all we did was we did, I mean, it costs us like $30 in permitting for engineering and architectural plans, but we did all the board meetings, we did all the negotiating. We do most of our own board meetings ourselves because we just happen to be better than most engineers and attorneys. Anyway, we only bring attorneys if we really need them to bring the hammer down on somebody fighting us. Yeah, right. But that was the first like huge win that we had and we're like, oh my God, we got to do more of these things. Yes.

Mike DeHaan: [27:25] And that was under an overpass? Correct. Dang. So people build condos underneath, like, a freeway, and they they were able to sell those.

Damon Amato: [27:35] It was also across the street from the harbor. So Popular spot.

Mike DeHaan: [27:38] Yeah. Yeah. Yeah.

Damon Amato: [27:39] Besides the actual overpass issue, it was in a good area.

Mike DeHaan: [27:42] Got it. We have, like, a fully renovated house on, like, a not really busy road, but, like, a slight arterial. And everyone's like, no. Can't do it. Can't do it. I guess the East Coast versus

Damon Amato: [27:54] the West Coast. Most towns around us, we wouldn't even consider that but this particular town was it just, it worked for us. So that was, I think the first tier where we were like, we have to focus on this kind of thing because to us it was very minimal risk because of everything that we did and such a high reward. And like I said, we never even owned the property. Yeah, that's awesome.

Dan Austin: [28:19] Is there something unique within the Boston area or something unique that you guys are doing that would make it so that I mean, what I'm hearing is a big value add is your ability to get these zoning changes. What's the difference that maybe I'm not maybe I'm missing something here, but it sounds like that's an incredible skill of yours and like, how do you do that for many of our listeners? They probably don't even know what you're talking about.

Damon Amato: [28:42] Right. So I think it is unique to maybe Massachusetts and New Hampshire because places like Florida, Texas, you get five acres of land, you put together some plans and send it to the town and they say, okay, and that's basically it. And it is extremely difficult in Massachusetts to get through. I mean, we're permitting a site right now across the pond from where I live and actually that's where I'm going to build my next house and three single family lots, A and R lots. That's a Massachusetts term for approval not required, but this is gonna take us two years.

Mike DeHaan: [29:24] Really? Wow.

Damon Amato: [29:25] And probably a $100,000.

Dan Austin: [29:26] Really? That's crazy.

Damon Amato: [29:28] And so that's certainly not for everybody, but it's not just that, it's a site that was incredibly difficult. We got a lot of pushback because the town that we're in for that, if it doesn't meet exact zoning code, don't bother asking for anything else. And even though it's actually a site where there's eight or nine small cottages and about tons of trash, there's a PT Cruiser with a tree in it. Nice. I mean, just a cleanup of the site is, could be $200,000

Dan Austin: [29:58] Yeah, and they wanna fight you all the way on it, even though you're gonna make it nice.

Damon Amato: [30:01] And they're fighting us the whole way on it. They, you know, because we go in and most board members are like, well, they're developers, they're gonna make $10,000,000 on this deal if they So get we're gonna impose all these restrictions and covenants and extra stuff that you need to do. And it's just, it is really absurd and detrimental to the town, but you know, that's conversation for another time, I guess. Another day, yeah.

Mike DeHaan: [30:28] Right.

Damon Amato: [30:29] But yeah, well, I mean, we had actually the subdivision that we permitted a few years ago is where my business partner lives now. So that was probably the most complicated one that we've done because there were six single family house lots on 10 acres used to be a farm and we only wanted to buy four of the lots because we wanted to make a little niche community and it was farmland. So you have to go through this process called 61A which turns agricultural land into residential land. And at any time they're in the process, the town where the land is can jump you and say, no, we want to buy them. And so you could spend $150,000 in engineering and at the last second they can say, no, that's we're taking Wow. So we actually, we went through the process. We actually got a letter from the town ahead of time saying they would not do that. But that took a year and a half. And then towards the end, the town actually came to us and said, well, you've got 13 houses here, two of them are affordable. We'd like you to buy the last two lots from the seller. And they were $200,000 each. And we said, well, we don't really, we don't need them and we don't really want them. And the town said, we really want you to get them. And we said, well, we'll buy one of them but you have to give us two extra houses and you have to buy the other lot. And they did.

Damon Amato: [32:01] Really? So at the closing, had a tri party agreement. At the closing, we bought five of the six lots and the town bought one of the lots for

Mike DeHaan: [32:11] us. Wow, that's awesome.

Damon Amato: [32:13] And then we turned it into an OSRD which stands for open space residential development. So we actually created the zone and we created the zone so that in the 10 acres, you actually have to donate a portion of the lot back to the town to leave as So open the zoning that we created said that you have to donate 80% of the land back to the town as open space. Of course, we didn't, we left out the part that 80% of the land was actually wetlands and we couldn't build on it anyway. So it didn't really matter to us. So we put 15 houses in two acres.

Mike DeHaan: [32:56] 15. Oh, wow. In two acres? Yeah. Man, those are You're two acres. Shaking hands with your neighbors, sticking out the window and those would be real But

Damon Amato: [33:05] you know what? When we started it, we thought the houses would be worth $708,100,000 maybe. And they're not that big. They were like between 1,802,500 square feet. And when we closed on it, we sold it. We got a really good wholesale fee. My business partner was able to keep his lot for free. And then he built his house for less than 500,000 and he just redid his HELOC and he got his appraisal was like 1.06

Dan Austin: [33:37] yeah, nice deal.

Mike DeHaan: [33:38] That's amazing. And so you said you you got a good wholesale fee. So you did all that without actually buying it, but you basically partnered with a developer and did

Damon Amato: [33:46] No. Because at the this was in 2019. So at the time, we were definitely not really set up to do things like a town road with all that kind of infrastructure with street lights and hydrants and sidewalks. And we just, we weren't set up for that at the time. So we actually wholesaled it to a bigger builder who did extremely well.

Dan Austin: [34:05] So do you put that under contract and then do all that or are you just partnering up with the previous owner?

Damon Amato: [34:10] So our contracts generally state that it's based on the approvals that we want to get. Gotcha. Before we close. So of course, if we're not going to get it, then you can't buy a million dollar lot and end up being able to build two houses on it. It doesn't work. So we never close on any of our properties until we actually have a building permit.

Dan Austin: [34:34] That makes sense.

Mike DeHaan: [34:35] Yeah. Smart. So Domain Sharon, what do you typically make on a deal like that? Like versus like how much of your money goes into it? How much do you actually end up making at the end of like, what's your total ROI?

Damon Amato: [34:46] That one, I think we made maybe 150 or so but that was kind of our fault. We probably could have made more but at the time it was like, most of our deals it's like, oh, we'll try to wholesale it. If we don't, we'll just close on it and do it. But this one, we weren't set up for that. So we're like, well, we kind of have to sell this one. So in some ways took what we could get. We have another one. We actually sold it to the same builder that we got two single family house lots in by a mountain in New Hampshire. And we had that under agreement for $2.65. It costs us about $30 to do the permitting because again, we just paid the engineer, we did all the meetings and we were able to get 12 townhouses and a single family house on those two single family house lots. So we were into it for about 300,000 total. We sold it to a builder for 9.

Dan Austin: [35:46] Okay. Wow. So really great margin there.

Mike DeHaan: [35:48] That's huge. Yeah. Not and

Damon Amato: [35:50] not only did we sell it for 9, but my business partner is keeping one of the townhouses. Wow. That's awesome.

Mike DeHaan: [35:55] That's very, very cool. Man, those those are like, again, like how did you learn to do all this? I guess you just just like trial and error.

Damon Amato: [36:03] Well, I mean, my partner started after he graduated, he actually worked for an architecture firm in Cambridge where his job was basically builders would come and say, I just bought 20 acres in this town, tell me what I can do with it. So he just quickly learned how to decipher zoning code really, really well. And he knows that stuff like the back of his hand to the point where actually just yesterday we have a project in Boston right now where the architect was awful, absolutely awful and was giving us a really evil kind of smirk. Like he had us dead to rights on these two issues with setbacks. And my partner went in and we went above his head to his boss and his boss brought him and the architect in and my business partner, shall we say very animatedly explained what the issue was. And the big boss had to agree with my partner because he was right. Yeah. So the actual architect was in some deep shit because he cost us a good bit of money.

Mike DeHaan: [37:12] Really?

Damon Amato: [37:12] And at the end, we told him, my partner actually legitimately told him, I don't want to hear anything from you except for yes, sir. And if I give you something that needs to change, the answer is yes, sir. I want it that day. And he's like, and before he left, he stared at the guy until he said, yes, sir. My God, I love it.

Dan Austin: [37:33] That is amazing. Mike, from now on, all I want you to do is trust me as sir.

Mike DeHaan: [37:37] Me? Oh, no. We don't have that kind of relationship.

Damon Amato: [37:40] You know, it's funny. I both of us have have separately had a few of our properties on TV shows before.

Dan Austin: [37:47] Oh, really?

Mike DeHaan: [37:48] Oh, really?

Damon Amato: [37:48] Yeah. Yeah, there used to be a show local to us called Flipping Boston. And my partner had one of his properties on it. One of my actually the first deal I did one of those condos was on beachfront bargain hunt. And that's how we know they're all completely fake.

Dan Austin: [38:04] Oh, really? Really? Wow.

Damon Amato: [38:06] Oh yeah, the mine in fact, they didn't film it until six months after they bought it. And these people, this particular unit, we had it under agreement kind of early on. So they picked like the countertops and the lighting and stuff like that. And I'm watching the show with my family and I got really heated because they called the development something different. They just made it up. The purchase price was wrong. The other two houses that they looked at just happened to be on MLS at the time. They had no, obviously no intention. And then they come through, my property was the last one and they came through and they were like, the wife was like, this one is beautiful. Like we love it. Like, I love how they set up the staging with the furniture. Look how nice that couch is. And I'm like screaming at my TV. I'm like, that's your couch. That's a lot.

Dan Austin: [39:01] This is great inside information here. I did not know this. This is

Mike DeHaan: [39:05] oh my god. That's couch.

Damon Amato: [39:08] Yeah. That was Oh my god. Yeah. It's just it's kinda funny.

Mike DeHaan: [39:12] That's that's hilarious, man. Oh my god. That's that's awesome. So, I mean, you could come up doing some complex stuff in a short period of time. Like, do you keep a lot of stuff too? Or, like, what does your total portfolio look like right now?

Damon Amato: [39:25] We have portfolio of like four to 10 unit buildings.

Mike DeHaan: [39:31] Okay.

Damon Amato: [39:31] Maybe maybe 40 units total or so. And then oh, I was gonna get to the tier two of our kind of leveling ourselves up.

Mike DeHaan: [39:40] Yeah.

Damon Amato: [39:40] We had a project in Newton outside of Boston and a realtor called me because he wanted to list it even though I already had an agent. And he asked me, well, what else are you looking for? And I said, big multi families. And he said, okay, well off market I have this 47 unit building in Worcester which is about 25 miles west of Boston. And we looked at it, it looked like a decent deal. He wanted 5,500,000. I said, it's worth more like 4,800,000. So we didn't do it. And three months later, President Biden said, this is when President Biden said, I might be getting rid of ten thirty one exchanges.

Mike DeHaan: [40:18] Oh yeah.

Damon Amato: [40:18] Yeah, if you remember that. So that day he cold called me and said, If you can close in three weeks, then we'll do 4.8. Beautiful. So I had to call a hard money lender, a friend of mine, and I said, I need $4,000,000 in three weeks. And he said, Send it, let's do it. So we actually bought that in three weeks.

Mike DeHaan: [40:38] Wow, that's amazing.

Damon Amato: [40:39] And we are still finishing the renovation there in the process of actually potentially exiting that one. So the funny thing was, so we got that, I immediately walked into a lot of equity in that one. And during the inspection of that property, the same realtor said, Hey, do you guys wanna buy an 11 unit building in Rochester, New Hampshire, which is Upstate New Hampshire. And we said, yeah, we already have buildings there. How much does he want? And he showed us the text messages of the seller that said, I'd like to list it for $7.95, but I would take as low as $7.20. So partner and I at the same time said, we'll do $7.20.

Mike DeHaan: [41:20] Yeah. And

Damon Amato: [41:22] we got under agreement at the inspection of the Worcester building. That was the easiest deal we've ever done in our lives. That's crazy. And between those two buildings, we walked into over a million dollars in activity. Amazing.

Dan Austin: [41:36] That is really cool.

Mike DeHaan: [41:37] Yeah. But having those good connections and then putting yourself out there to even be in those situations, right? Like that is

Damon Amato: [41:42] So that was kind of like the second tier of leveling up. And that was the first one that Worcester building that was 47 units. Two months later we bought an 11 unit mixed unit building. And then right after that we did two other syndications, 107 unit portfolio by the Lakes Region in New Hampshire, 90 units in Fitchburg, which is like Central Massachusetts and also another big 36 unit building. All of that happened within about a year and a half.

Mike DeHaan: [42:19] Wow, that's really quick.

Damon Amato: [42:21] That's

Dan Austin: [42:21] a So huge period

Damon Amato: [42:22] we grew exponentially in a very short period of time. So it was obviously, bring that up because obviously that's not the easiest thing to just figure out how that scales appropriately.

Dan Austin: [42:40] Oh, it's challenging.

Damon Amato: [42:41] I mean, we're handling it, but it's obviously it's been pretty challenging and you deal with other ancillary issues, tenant issues, contractor issues, things like that, but we're handling it and we're actually growing even more since then. So we were able to tackle that without too much of an issue. And that's because of the partners that we have. In each of those properties, there's more but mainly five general partners and each of us five general partners each had our own, like we have an operations associate. My other partner has a full time assistant plus a full time bookkeeper plus a full time contractor. Two months later we hired a project manager. So we were all kind of growing at the same time to the point where now we have a really good backend team for operations. So now we're kind of scaling to the point where now we need to figure out, okay, well I've gone from me and my business partner to, kind of like you guys, like just figuring out a little bit, making a bunch of money but not having the look of like a corporate entity, I guess. And so now we're, I'm trying to learn how to be more of like a CEO type of person. Because I've got to learn how to manage people more so than I have in the past.

Damon Amato: [44:11] It's things like this where it's like, could I take an exam on quantum mechanics? No, but if you give me six months to study it, I'd probably still fail that. Yeah, right.

Mike DeHaan: [44:24] Yeah, of course.

Damon Amato: [44:26] Like being a business leader, if all that takes is me educating myself how to do it the right way and learn from other people who are doing it the right way, like I can do that.

Dan Austin: [44:36] Yeah, just copy other people, right?

Damon Amato: [44:39] Right, if it's a question of effort, like, to me, that's like a no brainer. Like, okay. Well, to my mind, it's already done. Mhmm. Because I know I can do that.

Mike DeHaan: [44:47] Yeah. Yeah. And it's just the power of momentum too. And, like, sort of as you get better experience and better practice with everything, I think it makes it more possible to do that. Awesome. Well well, awesome, Dan. You've done incredible amount of stuff. It comes so quickly. That's super cool. So we have a couple questions you always finish with. One of them you already answered where you said the tip you give to somebody that was starting up, you know, just taking action. I think that's super, super relevant. So let's jump into the second question, which is always the crowd favorite, which is what is your craziest real estate investing story? And this can be a big win. This can be a crazy loss. A guy the other day told us about how he found a body in, like, a porta potty, like whatever you got, your craziest real estate investing story.

Damon Amato: [45:31] Wow. No dead bodies. Good for you. Yeah, just a few. I don't know. A lot of our actually, I brought up I I was thinking about the being on TV thing because a while ago, I can't remember if it was Bravo or HGTV wanted to film people building a modern farmhouse in our area. And that's what we build is mostly modern farmhouses for spec builds. And I had a producer talk to me for a while and they actually told us we had, they thought we had too much drama for TV. And I was like, all you guys do is edit for more drama that's not even there. Yeah. And you're telling us we have too much.

Dan Austin: [46:15] They wanted the Chip and Joanna Gaines, you know, effect.

Mike DeHaan: [46:17] Yeah. They don't they don't want you there yelling at the contractor saying, no. You only call me sir. That just makes people uncomfortable. I

Damon Amato: [46:26] will tell you that I have many stories similar to that. Yeah, can imagine. Which is kind of funny because if you ever meet my business partner, nicest guy in the world, you would never think he would ever even have the ability to raise his voice. And I can't tell you how many people now are so afraid of him because not only is he right, the vast majority of the time, he will let you know when you're wrong.

Mike DeHaan: [46:58] That's funny.

Dan Austin: [46:58] Well, if you're having to deal with the government that pisses everybody off.

Mike DeHaan: [47:01] Oh God, know.

Damon Amato: [47:03] I mean, it's not just the government, but we've had, you know, I've actually been sued by, you know, some of those ambulance chaser lawyers, like I don't want to name them now, but you've seen the commercial, they're all the same kind And of it almost like brings me joy because I can't wait to call these guys back and put them

Mike DeHaan: [47:22] in their place. Yeah, right. And

Damon Amato: [47:25] I've done that several times, several times. So guys who just like, I think it's funny when a lot of guys try to kind of big time us like, my shit don't stink and I'm gonna make you like bow down to me. And it just does not go down like that.

Mike DeHaan: [47:43] Yeah, that's awesome.

Damon Amato: [47:44] Because we've had several like celebrities. I mean, we've actually sold a house to an NHL player. We've had people try to big timeless about, we're actually building a real estate app right now, which would be kind of a off market marketplace for wholesale deals with education, deal analyzers, rehab estimators, a really good product for a fix and flip and buy and hold investors. And we're in the process of that.

Mike DeHaan: [48:11] What's that gonna be called?

Damon Amato: [48:13] The name of it's Flip Trader. Flip Trader.

Mike DeHaan: [48:16] Okay, Flip Trader.

Damon Amato: [48:17] So we're in the process. I actually partnered up with another GoBundance member who's going to help us develop it.

Dan Austin: [48:23] Oh, that's great.

Damon Amato: [48:24] So it's been a brainchild for a few years now because we had some roadblocks with two previous developers who just weren't cutting it for us. And I think we're finally in a place where we're gonna be able to get it to market and it's gonna be, obviously we're biased but we think it's gonna be a game changer in the world of real estate investment. Because there's a lot of other companies like PropStream and Opendoor or not Opendoor. There's a bunch that all do kind of one, two, maybe three facets of what is helpful but nobody does everything that we're gonna be doing. And I really think it's gonna be a game changer in the world of being a real, not just for current investors, but people who are just on that edge, who like have been members of bigger pockets for years, but still have never done a deal. You know, those kind of people, it's it'll be a really good education and benefit to them. Awesome, man.

Dan Austin: [49:24] Look forward to seeing that thing.

Mike DeHaan: [49:25] Yeah, you're doing it all. I get from from poker player to, you know, massive losses to now doing luxury spec bills, now doing, you know, application development. You got your fingers in everything, man. You're getting after it.

Dan Austin: [49:37] You've got the hustle. I'm a true entrepreneur.

Mike DeHaan: [49:40] Yeah. Well,

Damon Amato: [49:41] like, it's there's a there's a lot of hours in the day.

Mike DeHaan: [49:43] Yeah. That's true. That's true. Cool. So where can people find you or follow you if you want people to do that? If you don't want anyone to follow you either, that's fine. But maybe if people did.

Damon Amato: [49:55] Our main company is Downeast Residential. So it's downeastresidential.com. So you can just find, you know, general information, see pictures of a lot of the houses that we've built in the past so that you can kind of get a sense for what we do. We also tend to, I gotta get better at putting our current deals on that website so people know like what land development deals we're in the process of doing in case they wanna potentially buy one off of us. And then I actually also have, we have a Facebook group for Flip Trader actually, if you just search for Flip Trader that should come up. There's like, I think there's like 26,000 people in that group now at this point. And then we also have a smaller local Facebook group for real estate investors called a recap investment group. Because I used to actually host a live real estate investment meetup before the pandemic. So I'd like to get back into that at some point when I have some time. But those are the main groups that I interact in. There's plenty of contact info on our website to kind of find us and see what we do and always putting together deals and raising money for deals. That's part of what I'm focusing on right now.

Mike DeHaan: [51:15] Perfect. I love it, man. So awesome, Damon. You're definitely an inspiration on what's possible if you get down and start taking some risks. So we appreciate you hopping on. And, guys, if you wanna reach out to Damon, give you a bunch of ways you can do so. We're definitely gonna be keeping track, especially of this Flip Trader application that you're building. Aside from that, guys, thanks so much for listening, and we'll talk to y'all next week.

Dan Austin: [51:36] Thanks, David.

Damon Amato: [51:36] Thanks, guys.

Mike DeHaan: [51:38] Thanks for listening, everybody. Please make sure you subscribe and leave us a five star review wherever you listen to your podcast. Also, please make sure you go and you share this with other people within your network. We are really trying to grow this thing, and the best way for us to do so is by you telling other people to come check us out. You can also follow us on Instagram. I am at Mike underscore Invest. Dan is at investor man Dan. You can follow the podcast at collecting keys podcast. Thanks for listening everybody, and talk to you next week.

Speaker 1: [52:06] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.