Daniel is a real estate agent and investor in Fayetteville, NC. He initially wanted to develop an app for community service members but decided to pivot once he realized the upfront capital was too much for his comfort. He now works with Five Pillars Realty team purchasing properties for investments and he shares some of the processes he learned from Amway and Keller Williams that he uses to grow his investor list.
Daniel Kidd Real Estate Background:
- Real estate agent and investor
- Works with the Five Pillars Realty team purchasing properties for investments
- Based in Fayetteville, NC
- Say hi to him at danielkiddATfivepillarsrealty.com
Best Ever Tweet:
“Instead of me driving for dollars, I like to find all the wholesalers that are in a given area, reach out to them and offer to help push their listings.” – Daniel Kidd
TRANSCRIPTION
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Daniel Kidd. How are you doing, Daniel?
Daniel Kidd: Hey. I’m doing alright, man.
Joe Fairless: Well, I’m glad to hear that, and looking forward to our conversation. A little bit about Daniel – he’s a real estate agent and an investor. He works with Five Pillars Realty team, purchasing properties for investors, as well as he purchases his own properties. Based in Fayetteville, North Carolina. With that being said, Daniel, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Daniel Kidd: Yes. After I got out of college I went through about five years in the army here. That’s how I ended up in Fayetteville, near Fort Bragg. I started doing a little bit of investing before I got out of the army; I wasn’t really planning to get out at the time, but then my agent, Shelby Osborne, she invited me to join her team, so that’s when I decided to make the transition out.
Pretty much from there, I got my license right away; I had a few properties under my belt, and then I started helping other people do what I was doing. Then I switched over and started doing a couple partnerships with other people on the team – Shelby, and my brother a few times, just buying up small bits of turnkey multi. And I guess that’s about where I’m at right now. If you want me to dive a little deeper into any of that or anything, just let me know.
Joe Fairless: I would. And first, thanks for helping us all be safe during the time you were in the army. And second, you were investing while in the army…
Daniel Kidd: Yes.
Joe Fairless: What gave you that idea to invest while being in the army?
Daniel Kidd: Really, if I had to track it back, I was hanging out with some friends that I grew up with, and they were talking about something that I didn’t understand, and I really felt outclassed in that moment by — I mean, when you come back for holidays and you meet your old friends… And it sparked something in me where I knew I had to evolve and start doing something a little bit different.
Joe Fairless: So your friends outside the army were investing when you connected with them, they had already gotten started? Did I hear that right?
Daniel Kidd: Yes. They were investing, and also they were just in much higher-paying jobs. They were just pulling in figures that were above where I really thought that — and I didn’t realize that I thought this way before, but they were above where I thought I ever deserved to be… So I never even actually envisioned myself making a quarter-million dollars a year, or something; and when I heard my friend I grew up with since I was 3-4 was doing that, it really just [unintelligible [00:03:25].07] something where I was like “I can do this, too. I’ve just gotta figure out how.”
So I just started digging into books, and after a few failed attempts that weren’t real estate, I really got hooked on real estate.
Joe Fairless: What did you do that wasn’t real estate, that didn’t work?
Daniel Kidd: The first I did was I tried to build an app with my sister, and I found out very quickly that I didn’t know much about apps, or anything like that. It got to be much more expensive than I thought it would be going in. I thought I could get a simple little thing going and prove as I went, and it just did not turn out to be my thing.
Joe Fairless: What was the idea for the app and how much in total did you put into it?
Daniel Kidd: I buried about 7k in it and walked away from about 7k that I put into the project, and I was trying to come up with a way to connect people that needed community service and people that needed community service hours, so they would have an app that would track it; so you could have your hours tracked, and all of that stuff via this app.
It was kind of like a [unintelligible [00:04:20].25] or an Angie’s List or something, except without money involved… A little closer to what I was going for.
Joe Fairless: At what point did you identify “I’ve gotta cut bait and run, get out of this”?
Daniel Kidd: I thought originally I could produce the app across both phone systems for about 20k to 40k, and then it turned out that it would be [unintelligible [00:04:40].05] platform once it really got down to what I wanted.
Joe Fairless: 80k per platform?
Daniel Kidd: And again, some apps are much more simpler; they don’t have GPS, they don’t have this, or that, or the other, so they can be a lot cheaper. But this one, with everything that it would need, it would have been about that.
So yeah, as soon as I heard the figure, 80k for each, and 160k all-in, I was like…
Joe Fairless: [laughs] That’s a lot of years in the army that you’d be working off…
Daniel Kidd: Exactly, exactly what you’ve just said, because I looked at my pay [unintelligible [00:05:09].04] And then it would take me 50 years to pay that. [laughter] So yes… That’s when I decided to get away from it.
Joe Fairless: And what was the other thing?
Daniel Kidd: Amway.
Joe Fairless: Amway, okay. I obviously heard of it; is that insurance, Amway?
Daniel Kidd: It’s network marketing.
Joe Fairless: Yeah, I know it’s network marketing, but what is the network selling through their marketing?
Daniel Kidd: So I guess there’s two things they’re selling. One, they’re kind of set up like most real estate firms, where you have profit share; you’re trying to really build people underneath of you and get the profit-sharing going on. And then other than that, they just have the XS energy drinks, and all of Amway products… So as long as you buy their products, you get x amount back from the product, type of a thing. Great idea, they just need to get Coke, and Fritos, and stuff people buy, and I think they would really take off. The concept is there, it’s just —
Joe Fairless: The product… It’s tough to sell the product. Got it. Alright, so you dipped your toe in the water on a couple of things, and that didn’t work out… What did you learn from those experiences that you have applied to your first deal?
Daniel Kidd: So the biggest things I took – with the app, I’ve figured out how to buy a domain name, set up an email account that matches the domain name… Just a lot of business things, and also crowdsourcing things, and a little bit about Facebook ads and how to do Kickstarter. So I picked up a lot of little tips and tricks that I’ve been able to carry over into different ventures, so 100% I don’t even look at that as a failure, so much as just yet another learning period in my life. And it was cheaper than half a semester at college, if you really think about it.
And then the other one with Amway – Amway has one of the best reading lists out there. Even if you don’t wanna do Amway, definitely check out their initial startup emailing list. And then if you’re not in any type of a sales system – you know, KW is gonna have one, or CarMax, or any type of dealer is gonna have these exact same 30/60/90 systems… But you can check out those systems and they work for any type of a sales industry. So all of the tools that I learned there are 100% legit. I loved the people, there was a lot of energy, but it just wasn’t my thing; that’s really what it boiled down to.
Joe Fairless: With the systems – I find that really interesting… Will you elaborate more on how the systems from Amway have helped you with your real estate endeavors?
Daniel Kidd: Yes. So it put in my head before I got to real estate – so it really got in there deeper when I saw the exact same system at KW, which is the…
Joe Fairless: Keller Williams.
Daniel Kidd: Keller Williams, yes, which was the first firm we were at. So they really had the exact same things – you come in and you kind of touch all of the people that you know, and you touch all the people that are on your Instagram, Facebook, social media, anything like that… And then it’s about consistently repeating these things across periods of time, and meeting these checkpoints; on your first 30 days you reach out to 30 people a day, in order to produce 10 leads, and then maybe you close one… That type of a thing. So it really helped with structuring the idea of funneling people into a system that you would be able to then convert into actual transactions.
Joe Fairless: Hm. That is interesting. I totally see the direct correlation there… Okay, so first is touch people you know and who are connected with you on social media. Second is consistently repeating that over time, so reach out to 30 or 50 people per day, and then you’ll start getting some leads… Are there any tips within that reaching out to people consistently that would be helpful to share? Like the approach you take, or how you reach out to them, the language you use, messaging, that sort of thing.
Daniel Kidd: Yes. So I’m 100% a fan of scripts. There’s scripts everywhere, so feel free to download the scripts. The second piece of advice with a script – do not make you script perfect before you dial the phone. Dial the phone first, figure out where you screwed up and move on to the next one.
So really a script is something that’s gonna evolve as you go. Sometimes I’ll sit down and I’ll realize that — this was earlier on, and I was a little bit scared to dial; I wasn’t sure–
Joe Fairless: Oh, yeah…
Daniel Kidd: [unintelligible [00:09:15].23] words that would come out of my mouth… So what I would do is punch in the number and hit Send; then I’d just wait. If somebody shows up on the phone, you have to start talking… And you do. You just kind of start feeling out the best ways to approach people, the best things to say upfront, and then the key pieces of information you need to walk away with at the end of that call for it really to counts as a lead if they are interested. So those would be the biggest things. You have to have some way to reach back out… Especially with real estate, it’s nice if you can set up a time to meet them at the property if they are interested.
Joe Fairless: Got it. So don’t have everything written down verbatim, but have an outline for how the conversation should flow, and always make sure that you’ve got some action item agreed upon to follow up with them, or meet them somewhere, or send them something, whatever the objective is.
Daniel Kidd: Exactly. And down the road you may have a verbatim script that you’ve come up with, but again, don’t wait till you have a perfect script to dial that first number. Really just use the first 10, 20, 30, 40 calls to figure out “Do you say hello? Do you say hi?”, what really flows with you, and make sure that you’re doing something that you’re actually gonna say. Because a lot of these scripts – when you read them, you’re like “Oh yeah, that sounds good”, and then you go to say it… “This is not how I would ever say this. This feels very weird coming out of my mouth”, and I’m sure they can hear it, too.
Joe Fairless: What dynamic are you using that type of script now? In what situation, rather, are you using that type of script right now for the things you’re currently doing?
Daniel Kidd: That was a little earlier on. I’m not so much doing the cold calls as I used to.
Joe Fairless: Why not?
Daniel Kidd: I realized that I was better at hunting for the property than I was at hunting for the person. I have certain ways that I reach out and I find pools of properties that I can then turn around and pass over to buyers without ever actually having to negotiate. So that’s where I really try to find myself, is in the middle of groups. So I’ve got my buyer group, I’ve got my seller group, and I try as much as I can to make sure they’re [unintelligible [00:11:15].17] it’s less of a competition going on there. And then I just try to link them up and see if there’s enough room for me in the middle.
Joe Fairless: If you were to look at it as objectively as you could, and you were to look at yourself and your skillset versus someone else and their skillset, and they aren’t finding as many properties as you are, what would you say that you’re doing differently to accomplish those objectives more so than the other person?
Daniel Kidd: I work smarter, not harder. I see a lot of people, they’ll go out there and they’re obviously working hard, they’re grinding, they might even be driving for dollars or something like that, and that’s really where I like to use the leverage of the people that are doing that… Because a lot of wholesalers – they’ll get something under contract and they don’t listen to the advice of most podcasts, where you need your buyers list before you ever get one under contract… Because otherwise you’re just sitting there, holding a property and you have no idea how to offload it. That’s where I really like to come in and help.
So instead of me driving for dollars, I like to find all of the wholesalers that are in a given area that I might be working in, reach out to them and just offer to help try to push their listings, and it’s just been really effective for me. So if you could have 10-20 people and we’re able to tie up one to two properties a month, 50% to 25% of those are something that your buyers are interested in, and you can get paid by your buyer and you can sell it for the wholesaler – everybody walks away happy. I really haven’t had to do that much. The biggest thing that I do is I try to hit as many meetups in my area as I can, and just talk to everybody.
Joe Fairless: So going back to what you mentioned earlier, you’re go-between you need to make sure you have the leads coming in, ideally through wholesaler connections, and then you can deliver on matching up those leads with a buyer, so you’re making sure that you have built your buyers list as well.
Daniel Kidd: Exactly. And really Shelby helped me out with that more than anything, just because of the nature of her presence on social media, and part of the team, and stuff. It pulls in investor buyers all of the time, which is really great; so I don’t have to source that. The biggest thing that I have to source is the properties, and then I just push them to all of these buyers. And whatever they want, they can pretty much have off of that list.
And I still run MLS drips and listing cars and stuff for people as well, straight off of the MLS, but the off-market deals are the ones that I tend to grab the bigger majority of.
Joe Fairless: And can you recall a recent transaction where you worked with a wholesaler, and just the numbers on a recent transaction?
Daniel Kidd: Yes. We’ve actually just closed one… It was pretty funny, one of my friends was coming up here – he’s still in the army, and he’s starting a course here at Bragg… And the first day he came up, I was like “Dude, you have to come see this property.” He’s like “Alright, whatever, man. I’m not buying it.”
Joe Fairless: [laughs]
Daniel Kidd: And we go out there and I’m like “Check this out, man. It’s a 3/3, 48k.” And he’s like “No way.” I was like, “Yeah, it’s 48k, if you want it.” He’s like, “Yeah, I’ll take that.” [laughter] Anyway, the wholesaler had pushed it out at — I believe it was 44k-45k, somewhere in there… So I added about 3k-4k to it, I don’t recall… But that’s usually where I stay, is somewhere around 4k per transaction.
Then it took about 20-30 days, close in cash, and it was pretty much turnkey. We have to get a contractor in there to redo the floors and maybe replace the backsliding door, but other than that it’s ready to put a renter in there at about $1,100/month. So that’s probably one of the best ones that I’ve started in 2019.
Joe Fairless: And when you say “We have to put a contractor in there” – are you still involved in that process? Or when you sell it, then you connect them with the property manager, or they have their own and they run with it.
Daniel Kidd: So just because, for one, he’s my friend, and I know he’s super-busy with the course, I’m helping him out with that out with that one. In general though – no, the client would take the reins and run with that.
Joe Fairless: Okay, cool. I was wondering if you all had a property management arm of your company, but you don’t have that, right?
Daniel Kidd: No, but we do have a property manager that we work very closely with here, and he also works very closely with contractors that we work with here. So anytime that someone chooses to use the same property management, it does make it a little easier for us to kind of ask for favors, move keys around a little bit easier… Just because I’m always meeting with them and the contractors, so I can pass them a key, pass them a check, pass them a lockbox, whatever it may be; I can do the same thing with other property managers and stuff like that, it’s just that it’s not as natural throughout my work schedule to meet up with them.
Joe Fairless: How many deals have you bought for your own portfolio?
Daniel Kidd: I have done 42 including partnerships, and then if I divide my percentages out of that, I own 19 of those.
Joe Fairless: Wow. Nice. And I’ll ask both sides of this question, by the way, but which deal have you lost the most money on?
Daniel Kidd: I don’t know. It’s not so much that I really have one that I lost a lot of money on, it’s just that I realized that you really shouldn’t be looking to use the income from a property in year one. I had an HVAC go out on one, I had the ceilings in one of mine go out because of the air handler up in the ceiling… The water was supposed to run out a different valve, and it collected, and all that moisture came down to one of the bedrooms… So those are some of the things we’ve had to deal with.
All the properties still cash-flowed in that given year, it was just pretty small… And now they’re operating really well, once you can kind of control it. The only thing that’s really hurt me was just with tenants that I didn’t place, so when you inherit a tenant. Those have really been my only bad ones, which is why I do love my current property management, because they tend to put in pretty good tenants… But yeah, those first couple of tenants that I had inherited – I don’t know if they talk to each other, but I had two of them, they both left in the night and they both took the front door and threw it in the yard.
Joe Fairless: [laughs]
Daniel Kidd: I was like, “I don’t even know what to do with that.”
Joe Fairless: That’s too much of a coincidence. How far away are the properties from each other?
Daniel Kidd: Oh, it was a quad, so it was the same–
Joe Fairless: Oh, yeah…
Daniel Kidd: [unintelligible [00:17:16].07] I don’t know.
Joe Fairless: Yeah, they definitely collaborated on that exercise. Huh… Oh, that’s great.
Daniel Kidd: It wasn’t a big deal… We just went and screwed it back in and it was fine, but… Yeah, I just thought it was funny.
Joe Fairless: [laughs] There’s some symbolism there, too. If I was trained in psychology a little bit more — I’m sure there’s something a little bit deeper there for them throwing the front door into the front yard.
Well, when you take a look at your portfolio, what’s the best-performing property that you’ve got?
Daniel Kidd: The one that I bought with my brother up in Virginia is probably the best-performing. It kind of has all of the advantages, and some of them you don’t realize until you’re going into other deals… But we were able to get a seller finance deal on six units up there, and then we were able to immediately raise the rents by about $100/door. So what was already cash-flowing just went up… And the only issue we had with it was that one ceiling repair we had to do in that bedroom.
So that one actually has done very well for me… And then another one that’s close at its heels – and that’s just because I mixed short and long-term renters, so in that quad, in the unit that I was no longer living in, I started to Airbnb it out, and that really took what was an okay return and really boosted it. That unit out-performs any of the other two units, and almost the other three.
Joe Fairless: You said seller financing… Is that something that you proposed, or were they already offering that?
Daniel Kidd: No, he was already offering that. He was also an attorney and a real estate investor himself. It actually saved us a lot on closing costs. He is one of the few — well, actually I should say the only attorney that’s ever read every word of every document to me. It was the longest closing I’ve ever had in my life.
Joe Fairless: What? He read every word of every document at the closing table?
Daniel Kidd: Yes, he did. It was funny. [laughter] This is either the worst or the best thing ever… Because I was pretty new to the game, and I was like “Okay, so he’s kind of explaining things as we go.” I thought he’d more or less hit the high points. Oh, no. Oh, no…
Joe Fairless: [laughs] How long did that take? There’s a lot of pages…
Daniel Kidd: About 2,5 hours, yeah…
Joe Fairless: [laughs] Oh my god, I’ve never heard of that.
Daniel Kidd: I had been to a closing earlier that day. So the first property I ever bought, I bought it that morning in North Carolina. I bought a duplex down there. I used a POA to sign for him. And then I drove up to Virginia to sign with him; I thought it would go pretty quick. We go out to dinner, I got there at maybe like [5:30]… It was like [8:15] or something when we left, and we were just like “Let’s just go home.” [laughter] It took forever.
Joe Fairless: Oh, my gosh… With that seller financing, what are the terms of the financing?
Daniel Kidd: 6%, 30-year am, but with a 3-year balloon, so we’re gonna plan to refi out of that sometime in the next year.
Joe Fairless: What did you buy it for?
Daniel Kidd: 450k, and we had to put about 50k down.
Joe Fairless: Okay. What do you think it’s worth now, now that you’ve raised the rents?
Daniel Kidd: I’d actually have to run the numbers on that one again. My brother kind of takes care of most of the books and properties up in Virginia, whereas I’m kind of more in the weeds on the ones down here in North Carolina.
Joe Fairless: Okay, fair enough.
Daniel Kidd: So we’re not sure if we’re going to refinance them individually, so it would be two residentials, with the quad and a duplex, or whether we’re going to put them together in a commercial refi. The commercial refi – we could probably actually pull a little money out, with how high the rents are… Because we’re right around $900 for the smaller units and $1,100 for the larger units, somewhere in that realm… So that really should put us somewhere closer to the $600,000 range if we do it commercial.
Joe Fairless: Going back to the way you approach the buyers and the wholesalers – or you have a buyers list and you have a wholesaler list – why not instead go find your own listings and make more money per deal and do less deals by making your commission?
Daniel Kidd: I think it’s just all about the system that I have. With the transaction coordinator, the biggest piece that I do is get a meeting of the minds. After the meeting of the minds, I can kind of leverage that piece of it over, until if we do an inspection, if there’s any type of retrading going on, or anything like that, I step back in. But other than that, the deal at that point should pretty much go on to close, and I can focus on the other deal, focus on gathering these bunches, as opposed to seeking out an individual property to go ahead and try to negotiate it.
Now, I’m not knocking that, and if I move cities, I think in lieu of getting a real estate license, I will likely start wholesaling. And I’ll still use the same tactic of helping other people push their listings, and stuff like that, which most of them actually love, and in fact I’d say all of them love it, especially if you’re able to provide a transaction coordinator, just because a lot of wholesalers don’t actually know a lot of the things to do, or even the attorneys that they need to go to in order to make the deal happen and allow themselves to get paid from the deal.
So I try to bring all of that… I really don’t have a great reason for not coming out and trying to find my own wholsale listings, or just listing in general, which — I do standard real estate listings when they do come up, but again, the biggest thing is just finding that group, find a way to systemize and monetize it, and then move on from there.
Joe Fairless: We’re gonna do a lightning round, but first I’ve gotta ask you the question “What is the best real estate investing advice ever?”
Daniel Kidd: Best real estate investing advice ever… Man.
Joe Fairless: Or something that you’ve learned on a recent transaction, that you tucked away and you’re like “Oh, okay. I’m gonna make sure I do that again” or “Noted.”
Daniel Kidd: One of the biggest things I would avoid at this point would be fire properties. Those caused me some of the bigger headaches. We still were able to close a number of them, but just looking back, trying to get insurance on a fire property prior to the close has been one of the more difficult struggles of actually getting a property to close.
The only other thing would be – and this is just for those people who have analysis paralysis and they wanna overdo everything before they ever do their first deal… After you’ve read three notable real estate books that are out there, you pretty much know the ins and outs of what it takes to get a deal done… So at that point you really need to start diving in and actually taking some actions. Don’t wait till you read 20, 30, 40, 50 books and listen to every podcast ever done before you actually do a deal.
Joe Fairless: Now we’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Daniel Kidd: Yes.
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Break: [00:23:58].23] to [00:24:43].13]
Joe Fairless: Best ever resource that you use that you couldn’t live without?
Daniel Kidd: I wanna say, I might be screwing up this question; I’m sorry.
Joe Fairless: Well, just like a website that you always reference, or…
Daniel Kidd: Oh, I’m sorry. Okay, yeah.
Joe Fairless: A resource, an app that you — you’re an army guy, so maybe you’re thinking like water or food or something. No, I’m talking about apps on your phone, or something else…
Daniel Kidd: Yes, so one of the big ones that a lot of the wholesalers are using is the Deal Machine. That helps me out, because they’re actually able to push certain listings over to me as well. And I actually just love the Zillow app. It probably has one of the worst reps out there as far as Zillow. Don’t use Zestimate; everybody kind of makes fun of Zestimate… But it does show what has sold and how much it sold for in a given area, and then it also gives you tax information, and it’ll give you usually a lot of really good information. So Zillow is probably one of the biggest ones I use.
And probably one of the more obscure ones that I use would be called Karl’s Mortgage Calculator. That’s my favorite one if I need to come up with, on the fly, what a monthly payment or something would be, if I’m not using the real quick “multiply by 6” rule, and I want a real number… Then I use Karl’s Mortgage Calculator.
Joe Fairless: Best ever book you’ve recently read?
Daniel Kidd: That would definitely be the BRRRR Book by Bigger Pockets. I really enjoyed that book. Of course, I got the shirt, but that book was really great.
Joe Fairless: What’s the best ever way you like to give back to the community?
Daniel Kidd: I really like to offer what I know to anybody that’s trying to get into this game. One of the ways that I do that is I came up with a list of action steps, and it’s one of the first resources that I try to give anybody who wants to be an agent, a wholesaler, an investor, or anything like that. It really kind of travels across all realms, much like the 30/60/90 does for sales businesses. The action steps will get anybody set up and ready to invest in a 60-day period.
Joe Fairless: And how can the best ever listeners learn more about what you’re doing?
Daniel Kidd: The easiest way would be to probably just follow Five Pillars Realty on Instagram. There’s a lot of posting that we do there. And they could also reach out to me, and especially if they’re here, I’m more than happy to meet with anybody.
Joe Fairless: Daniel, I enjoyed our conversation. I think it’s really smart the way you’re working with wholesalers. They’re already doing a lot of the work, a lot of the marketing — and you’re doing work too, I’m not trivializing that, but you have a lot of people out there working to get their own deals, and then you help them connect the dots and add value to their life, so you’re eliminating a big part of the process through those partnerships. As you said, it’s working smarter, not harder.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.
Daniel Kidd: Awesome. Thanks for having me, Joe.
