Making $175K in Instant Equity on Her First Real Estate Deal

Summary

This BiggerPockets podcast features new real estate investor Lacy, who despite high prices and low inventory in her expensive resort area market, made a smart first investment deal. With the help of her agent Sam, an Elite BiggerPockets agent, Lacy purchased land to custom build a large short-term rental home. Although it won't cash flow initially, Lacy enters the deal with substantial equity and knows the area needs more housing. This creative strategy allowed Lacy to invest locally by leveraging her skills, network, and research. She offers advice to new investors about starting small and finding trustworthy partners.

Takeaways

• 😊 Lacy was able to make her first real estate deal work in an expensive market with low inventory by being creative and building new construction.
• 😃 Sam helped connect Lacy to a builder, banker, and develop an investment strategy tailored to her goals and market.
• 🏠 The goal is to build a 2500-2800 sq ft, 4 bed 3 bath home for $750K-$850K on a $75K lot.
• 💰 The expected value upon completion is $1.1M-$1.2M, creating about $175K in instant equity.
• 💡 Rather than give up when existing homes didn't cash flow, Lacy pivoted strategies to new construction.
• 👷‍♂️ Ensuring the builder is trustworthy and understands investor goals is critical in new construction.
• 💸 Although it won't cash flow initially, Lacy is focused on long term wealth and equity growth.
• 🤝 Networking and surrounding yourself with experienced professionals is invaluable as a new investor.
• 📈 Lacy started small to build confidence before taking on a larger new construction project.
• 😊 Transparency about goals and finances helps agents like Sam develop an optimal investment strategy.

Q & A

What was Lacy's main goal or priority when starting her real estate investing journey?

Lacy's main priority was to educate herself through books, websites, and finding a knowledgeable agent who could provide advice and mentor her as a new investor. She wanted to leverage the equity in her current home to purchase investment properties.

Why did Lacy and Sam decide that buying existing property would not work for Lacy's goals?

After analyzing potential deals, they realized that with rising interest rates, none of the existing property deals would cash flow positively for Lacy. The rents would not cover the financing unless she put 50% or more down payment.

How did Lacy and Sam decide to pivot to purchasing land and constructing a new build?

Since the existing home deals would not work, they got creative and decided to leverage the ample land inventory available in the area, especially smaller lots. Combined with bringing in an experienced builder relocating to the area, new construction could make sense financially.

What are some of the risks or challenges with new construction that Lacy had to consider?

Some risks of new construction are longer timelines, more upfront costs, securing reliable contractors, supply chain issues, and the inability to work on the home in winter due to heavy snow. However, Lacy felt the risks were worth the potential reward.

What were the final deal terms for the purchase of the land?

The land was originally listed for $89,900 but Lacy negotiated the price down to $75,000 for a 0.6 acre lot. This gave her extra budget to construct the 2,500-2,800 sq ft single family home.

What is the plan for the new construction home once it is completed - sell or rent?

The initial plan is to rent out the home for short and mid-term stays. The large 4 bedroom design will accommodate families and vacationers well. Eventually Lacy may also sell it if needed.

How is Lacy financing the construction of this new home?

She is working with a local bank contact of Sam's to secure a commercial construction loan which will convert to a traditional 30-year fixed mortgage once the home is completed.

Does Lacy expect the property to cash flow or is it more of an appreciation play?

Lacy is not expecting the property to cash flow significantly. Her main goal is to build equity and appreciation over time as the market continues to strengthening in the resort area.

What has been the biggest challenge so far in pursuing this new construction deal?

The biggest challenge has been finding reliable partners - from locating the land, to securing financing, to vetting potential builders. Lacy credits the BiggerPockets agent marketplace with connecting her to the right local experts like Sam.

What has been the most valuable lesson Lacy has learned through this process so far?

Lacy's biggest takeaway is that you have to build relationships and trust with your partners. Taking care of people, being transparent, and focusing on win-win outcomes is what sets up successful deals.

Outlines

00:00

🎤 Introducing the real estate investing journey of Lacy and Sam

Henry introduces co-hosts Lacy and Sam, who are embarking on a real estate investing journey together in an expensive resort area market. Lacy explains her goals of educating herself, finding a mentor, and leveraging equity from an existing property. Sam provides context on the very high home prices in the area and the lack of inventory and cashflow potential that led them to pursue a creative land development deal.

05:01

🏡 Deciding to pivot from existing homes to new construction

Lacy and Sam discuss their original plan to buy an existing property with Lacy's equity, but rising interest rates and lack of cashflow led them to reconsider. With Sam's guidance, they decide to pivot to buying land and constructing a new build, bringing in builder Dylan to execute an optimal deal for all parties.

10:03

👷‍♂️ Assembling the right team for new construction success

Sam explains the importance of building rapport, trust and transparency with partners when embarking on a new construction project. He details finding builder Dylan through networking and vetting him on smaller projects first. Lacy also emphasizes starting small as a new investor and taking a slow, careful approach aligned to your risk tolerance.

15:04

💰 Financing and projected value of the new construction

Lacy shares the numbers on their land purchase price, construction budget, and projected appraisal. She explains they are financing with a local bank that Sam connected them to, with a construction loan converting to a fixed rate mortgage. Though it likely won't cashflow, Lacy sees it as an appreciation play while renting out her existing property.

20:05

⏳ Current status and timeline for the development project

Due to long winter conditions, Lacy explains they are hoping to break ground on constructing the new home this summer, with completion targeted for the following summer. Sam also notes the challenges of the short building season window before winter in their area.

25:07

💡 Key lessons learned about real estate investing

Lacy attributes her success to the BiggerPockets community for connecting her to Sam and other partners. She emphasizes the importance of transparency, rapport, and win-win relationships. Sam advises new investors to fully disclose their goals and finances when working with an agent.

Keywords

💡Appreciation

Appreciation refers to the increase in a property's value over time. Lacy notes that while her new construction home may not cash flow well, she is counting on strong appreciation in the market to build equity and wealth. As prices for homes continue to climb in the area, the $175K in instant equity could grow much higher in coming years.

💡Inventory

Inventory refers to the current supply of homes on the market. Sam and Lacy both note that inventory is very low in the area, making it hard to find affordable deals that cash flow. The shortage of available homes supports price growth.

💡New Construction

Since existing home prices were too high to cash flow, Lacy decided to pursue new construction by purchasing land and hiring a builder. While more complex, new construction allowed her to add value and tap into strong market demand.

💡Equity

Equity is the percentage of the property value that the owner owns outright. By constructing below market value, Lacy gains instant equity of $175K that she can leverage for future deals.

💡Cash flow

Cash flow refers to the rental income minus expenses. Lacy's deal likely won't cash flow well or at all initially, but she is focused on equity gains.

💡Short-term rental

A short-term rental is where a property is rented out for less than 30 days at a time, often via sites like Airbnb. Lacy may furnish the home and utilize it as a short-term rental to maximize income.

💡Portfolio Lender

A portfolio lender is a bank that keeps the loans they originate on their own books rather than selling them. This allows more flexibility on rates and terms.

💡Construction Loan

A construction loan provides financing to build a new home. It converts to a traditional mortgage after the building is completed, allowing investors to access funding.

💡Investor-friendly agent

An investor-friendly real estate agent understands investment goals and strategies. Lacy found agent Sam via BiggerPockets to help craft a creative investing strategy.

💡Network

Lacy notes that expanding her network was the key step that made her deal work. From finding an agent to a builder and banker, networking opened doors.

Highlights

Lacy saw a need for more housing in her expensive resort area market

Sam helped educate Lacy on market conditions and creative strategies

Building new construction can cash flow better than buying existing in a hot market

It's important to know your financials and goals when working with an agent

Lacy leveraged equity from an existing remodel to help finance this deal

The lot was purchased for $75,000 with plans to build a 2,500-2,800 sq ft home

The estimated value after construction is $1.1-$1.2 million

The goal is to rent short-term until more properties are acquired

US Bank is providing construction financing that will convert to a mortgage

Appreciation, not cash flow, is the main driver for this deal

Tax benefits help make non-cash flowing deals worthwhile

Having a trusted builder is critical when undertaking new construction

The lot purchase closed last September, groundbreaking expected this summer

Lacy credits BiggerPockets for connecting her to her team

Transparency about goals and finances helps agents craft the best strategy

Transcripts

what's going on everybody Welcome to the

Bigger Pockets real estate Show episode

898 I am Henry Washington and I'll be

your host today as we dive into a very

special episode focused around just one

deal today we're going to hear from Lacy

Russell Lacy is new to investing but she

was able to make her first deal a really

smart deal even in a crazy expensive

Market with low inventory and when I say

expensive I mean expensive we'll also

hear from one of the heroes of this deal

Lacy's real estate agent Sam Sam is one

of our Elite agents here at Bigger

Pockets so if you are looking for an

investor-friendly real estate agent who

understands investors and the goals

investors have then go to bigger

pockets.com aent finder today Lacy can

you give us some context on your

investment priorities and what are you

hoping to achieve with this deal yeah

this was after buying you know a merried

amount of books that you guys have you

know wealth without cash right bur

investment books You Know Rich Dad Port

that I I I'd gone through like the first

phase of just trying to educate myself

and then I went through uh the website

to try and find an agent and what I was

hoping to find when I was looking for an

agent was somebody that could also be in

a way a mentor or somebody that would

have advice in terms of real estate

Investments right cuz I was incredibly

green myself okay and fortunately when I

met Sam he just he was all of those

things he was a sounding board he was

somebody who had great ideas and he knew

our market and he knew right like how

how much potential there was in the

current market even though inventories

were low and everything that we were

looking at initially was kind of like H

well you know with interest rates going

up maybe buying something that's already

built doesn't make sense maybe we go and

build I want to make sure I understand

kind of your uh kind of order our

operations and your logic as you were

thinking through this because there's a

lot of people who are in your shoes or

in a similar position where they live in

a market they think they see some

opportunity you said that that that kind

of struck my attention you said I saw

the opportunity in the need for

investment and so that's what sparked

you to want to look into it so from that

perspective were you seeing the need for

housing like what what is it that you

were seeing yeah no I appreciate that

that's a great question so um we live

near a very high Resort town and a lot

of the folks who work in this Resort

Town can't afford to live there and so a

lot of them commute from The Valley in

which where we live and the inventory is

just incredibly low even if it was

affordable say say it was 10 years ago

right now we can get two three four five

properties at 2 and a half to 3% the

inventory I believe would still be low

okay so your step one was you identified

that there was some opportunity in your

Market this is my opportunity I'm going

to jump in here I'm going to try to

invest and solve this problem where we

need housing for the people who are

working in this area now I just need

some help and you jumped on the Bigger

Pockets agent finder and found Sam so

Sam talk to us a little bit about kind

of what that approach was like from Lacy

and then kind of what you see within

that real estate market yeah to add some

context to to both markets and why we

have such low inventory um the average

sales price in in Jackson Wyoming is

like 5 million bucks 5.2 million um down

south of jackon average home sale price

is 5 million 5 million yep as of

2023 wow y so then you go you go to Star

Valley which is south of uh Jackson and

you're at

$685,000 average sales price in 2023 um

and both days on markets have have

increased from you know just a few weeks

during covid because we had all this uh

demand coming to our area when

international travel was restricted and

people wanted to Vacation still

domestically so now we're at like 120

days or so 3 to four months for both

markets it's slowed down a little bit

but prices haven't moved much so um you

still you do the math on some of these

existing deals and you just realize that

rents are not going to cover the

financing unless you're putting 50 or

more percent down so we ran all these

numbers through the the Bigger Pockets

investment property calculators and

otherwise and just just napkin math is

pretty blatantly obvious that you're not

going to be able to make these deals

cash flow and uh so that's when we just

said okay instead of stopping our search

there let's just get a little more

creative what can we do and luckily

there's a good amount of inventory on

land uh especially some of these smaller

lots and um as long as we could put a

couple different pieces together and use

some creativity including bringing in a

a builder that is actually relocating to

the area uh it can make a lot of sense

because the spread between building

prices and retail prices there's still a

good amount of money or a good amount of

uh profit margin in there for a builder

to come in and be successful yeah I mean

I think you're you're you're singing the

song of a lot of people in expensive

markets right they they know that

there's a need but are trying to figure

out how do I Supply housing um and and

buy it at a price point where um I can

afford to make money while while solving

that problem

uh and and and so I I understand kind of

like the logic that got you to look at

the land is that something that kind of

happened pretty quickly or did you guys

start looking at existing homes and

touring properties before you kind of

made that that decision or transition

yeah and so maybe I'll back up so when

Sam and I met for the first time for

lunch um and we talked about strategy if

you will I I moved up at the height of

Co um right before prices skyrocketed so

I wanted to Leverage

some of the equity that I have in the

current home that we're we we've flipped

to a point where it's almost done um and

so that will eventually become a Buy and

Hold and we'll rent that out uh if we

don't take the equity it would cash flow

beautifully I mean to the tune of maybe

like $500 to $1,000 per month um we'll

probably take the equity out and roll it

into the new property

but initially we did think about looking

at that equity and buying existing

property within maybe know 20 to 30 mile

radius and everything that we looked

at while it was great and and Sam is

correct in saying that none of it would

have cash flowed I guess I just got to

the point where I thought if it's not

going to cash flow right it should be an

appreciation play and there's another

home um it's where we bought the lot is

on a golf course and there's another

home that I heard another realator say

that it's on the golf course and it's

rented out 365 days a year and I thought

well if anything were to ever happen

with my W2 job where I had to relocate I

know that if we leave this residence it

would be fine in terms of a midterm or

short-term rental okay so to recap you

decided that the numbers weren't working

you weren't finding anything or seeing

anything that was going to meet your

financial needs but you didn't just quit

you didn't just say oh well I can't

invest here uh you decided to start

looking at land how did Sam how did you

help uh in that decision process or was

that Lacy's idea like how did you guys

come to that decision because it's a

it's a pretty big shift from an

Investor's perspective there's a lot

that goes into building new construction

that is what people would consider risky

um it could be expensive on the front

side and so a lot of new investors tend

to want to stay away from this so how

did you guys like come together in that

decision process yeah I think I think

it's uh starting from you got to get to

know each other because there's a lot of

intimate Financial details you need to

go through to get a full picture of what

someone is trying to achieve in their

investment career and unless you know

all the different um tools you have in

your toolbox and dials and levers you

can pull um to make something creative

happen and improve someone's uh

portfolio um it's tough so you you

basically just we got to know each other

first and then we said all right you got

these existing properties you've got you

know other business ideas we've talked a

lot about side hustles and things so a

full Financial picture helps to to start

and you just have to build rapport and

do that and that's great um and then of

course yeah there's there's a lot of

brain damage that goes into building a

house and there's a longer timeline and

phenomenal way to put it yeah it's not

easy but um Lacy's Lacy's uh energetic

and uh you know there both of them were

like Hey we're willing to take this

project uh um on and make this happen

for a more optimal result and so there

are trade-offs and any kind of uh

strategy you decide to to go with but um

I one say I I use is for any deal even

though of course I'm in sales and I want

to I want to sell existing inventory

with high prices and stuff it still has

to make sense for you and uh I say you

got to keep the rubber down and the pain

up it's basically that you don't want to

be upside down on any deal no matter how

much you love the area and how much you

think it's going to appreciate you got

to make a fundamentally sound decision

based on income or your ability to Flo

it I love that and the only other color

I'd add to that would be

that the inventory in the

market aging right and with that comes a

whole slew of problem problems

potentially and I just also had it in my

mind well if I'm going to invest the

money I I don't know what might pop up

down the road so I could potentially

spend the same amount of money on

repairs and remodels I know this from

experience based on what I've done in

current remodel that if I just kind of

take a little bit of that money that I

know potentially might be needed for

some of those uh expenses and just

invested up front and know that it will

be taken care of by somebody I trust

then it made sense to me to do it like

that and Sam had you had any previous

experience with helping investors on new

construction projects yeah so the

trickiest part I think is matchmaking I

say that your network is your net worth

and you better have a really trusted

Builder Network so Dylan was one of the

first people that I've really put

through a couple tests if you will like

smaller renovation projects and

additions and just making sure that he

had good communication and uh was

reliable and that would be he would

actually be up for this project and was

a good guy and um I think that's

important so I had sold a lot of other

pieces of land but um had not found

comfort with a builder um because a lot

of them are just in it for the money and

they're like we're just going to go

build spec homes or retail stuff and

make the most amount of money but

luckily Dylan was a good fit because he

is trying to build his business in the

valley and is new so he's willing to you

know he's willing to not go all the way

to retail prices make sure it's a

win-win for for both his client and him

what I enjoy about this this story and

this deal so far

is you are finding a way to invest where

you live a lot of people think it's too

expensive and I just can't do it and

instead of of being discouraged when you

couldn't make the numbers work on

something that was existing you pivoted

to a strategy where you feel like you

can make the numbers work and and that

does bring in Risk but I think bringing

in Partners like Sam and the builders

that you brought in who have the

experience that you can lean on allows

you to be able to ease into new Ventures

like this and I I commend you for for

kind of how you've gone about this

process because I tell people all the

time you can absolutely invest in any

Market there is a way to invest in

almost any Market but you've got to be

an expert in your Market or work with an

expert in your market and partner with

people who have the experience that you

la and so I uh uh congratulations all

right so you've now decided you're going

to do this new construction project tell

us about this project what are the

numbers the lot was originally listed

for

$89,900 it was reduced in price to

$80,900 and then we were able to

negotiate $5,900 off for a closing price

of $75,000 okay bought a piece of land

for 75,000 how big of a piece of land is

this 6 Acres just shy of that the plan

is to develop a roughly 2500 to 2800

foot home uh four bedroom three bath

approximately with a a goal of spending

somewhere between 750 to $850,000

MH based on what we're seeing in the

market already um I noticed a few

properties just around the corner that

were of a similar size uh and they were

remodeled you know a little gussied up

if you will but not completely gutted

not I mean no new kitchens no new

bathrooms just some paint and trim and

those I think already appreciated 100 to

200,000 okay so is the goal to build

this new construction single family and

sell it or build it and rent it the goal

will be longterm to do short-term and

Midterm rental um as we continue to roll

over and and invest maybe in one to two

to three more properties okay yeah I was

I was wondering because you said 25 to

2,800 square feet and most people when

they're going to build a single family

as a rental typically go for something

three bed two bath, 1500 footish so was

the logic in doing a bigger home there

because you're going to do a short-term

rental and wanted to be able to provide

more bedrooms and sleep more people

people yeah exactly that um if it came

down to a long-term rental the family

size I would say in our area tends to be

on the larger side um I don't know if

you disagree with that Sam so it's just

the it's the nature of the folks that

live where we live and I I think it

would be fair to say it could rent out a

larger size family no problem if

anything I think we've got an inventory

shortage on larger homes that are

available for rent okay so you're all in

it looks like let's say if you take the

worst case scenario you build for 850

you paid 75 grand for the lot you're all

in at 925,000 what's the expectation of

the value of that property once the

construction is complete yeah yeah we've

seen similar square footage um give or

take on the lot size you know a half

acre bigger or so but at 1.1 to 1.2

million 1.1 to 1.2 million and that's

just once it's complete that's not

having to wait for any appreciation

right and that's the magical part about

where we live is it's close enough to

those high-end areas that the folks that

can't afford it would happily do so and

happily move there to be only 30 to 45

minutes away from a really nice ski

resort yeah that's I mean $175,000 worth

of equity right out of the gate is

pretty darn good pretty darn good and so

what's the uh well I guess let me lead

into it this way how did you finance

this project so Sam also introduced me

to a aner that he knows I think meeting

Sam has helped me really really build my

network in so many ways with regards to

a builder an amazing real estate you

know agent and adviser and as well as a

banker so yeah that we're just going at

a traditional route through uh through

that contact is it a construction loan I

would assume a commercial construction

loan yep that will convert so the land

Piece Will convert to a construction and

then we'll convert to a mortgage once

it's complete all right so yeah so for

those of you who are unfamiliar you can

I would assume this is a local Regional

Bank to the area they're based out of

Idaho but um US bank so I think it's

pretty pretty well okay that's pretty

pretty big bank right so for those who

don't know you can go to a a bank when

you're doing new construction you can

get a commercial loan and that

commercial loan will cover the

construction and then typically it will

convert over to a principal and interest

loan once the construction period is

complete oh and Henry if I can add to

just that this uh lender keeps their own

keeps or paper so they're offering rates

you know lower like a you know one point

lower than the average and that's kind

of a beautiful thing as well as working

directly with a bank um they can do lot

loan to construction loan to traditional

30-year fixed all in one house instead

of transitioning lenders over the course

of that process absolutely so what Sam

is saying is these lenders that uh he's

speaking of typically are called

portfolio lenders not because they do

portfolio loans but because they keep

the loans in their in-house port

portfolio so they don't go sell these

mortgages that allows them to have some

Freedom sometimes with the rates and the

terms because all of these loans t uh

stay within uh within the bank's

portfolio so you've got the loan and

it'll convert over to a principal in

interest what's your expectations on

cash flow for this property will it cash

flow or is this more of an appreciation

play I think this is all appreciation um

I've been fortunate enough in my career

in my W2 job that I can

cover any necessary bills and expenses

and I've planned for that right

contingency funds but I do think it's a

it's an appreciation play for quite a

while throughout the whole process I my

expectation was actually that Lacy is

going to fall in love with the home that

she designs and builds and then she's

going to move into it and then she has

this great this great existing house

that she could rent out and it will cash

flow really nicely so I think she's has

some options but if you go linear with

this particular deal I don't think the

numbers look super good on cash flow but

she always has the opportunity to move

into it and then have her other property

cash flow great yeah that's fantastic

and this is a great conversation to have

because a lot of people will choose not

to buy a property specifically just

because it doesn't cash flow but I think

what you're highlighting here is there

are other benefits to owning property

and cash flow is really just one of the

ways that a deal pays you because you're

walking into

$175,000 worth of equity I I'm sure Sam

has some idea of what that Equity can

grow to year-over-year in that area so

that's just your Equity year one but

your Equity year 2 three and four may

continue to go up especially as interest

rates go down and then one of the things

that we haven't talked about at all is

the tax benefit that you'll get for

owning this home which will actually

help you keep more of the money that you

make at your W2 in your pocket so this

there it's just because a deal doesn't

cash flow doesn't mean you shouldn't buy

it I just think we have to be careful

and always walk into equity which it

seems like you're doing yeah no I I

appreciate that um that's a a

conversation I was having this morning

with our SCP who also does some real

estate investing in you know on her

properties right it's not about cash

flow either but it is about that

depreciation play so it's just one

Avenue um I think I've learned that I

need to Pivot I have Investments on the

personal side I have 401ks I have all

the traditional Investments right and

this is just another piece in my life

that hopefully sets my family up for a

nice little retirement yeah that's a

that's a great perspective there's

everybody has a different reason for

investing in real estate or I should say

a different goal if your goal is to

purely generate cash flow so you can

quit your job then this probably isn't

the type of deal that you need to do but

if your goal is to build long-term

wealth and have Equity that you can

either leverage to do something else or

uh build your net worth then this is a

really good investment from that

perspective because you're you're you're

getting something brand new you're

deferring the maintenance for years and

uh and so I think that you

know I I don't want people to put

investing all in one bucket like I have

to get cash flow or I have to get this

you really have to have your goals and

then see what strategy meets your goals

and helps you get there and it looks

like this is exactly the kind of deal

that that supports your financial

situation the only thing I'd love to say

there um for anybody who is younger

especially in a younger female um I know

it sounds like they're big numbers but I

started small right I originally had a

condo in Dallas that sat on for a few

years and built Equity there and I got

lucky when we first moved to the part of

Wyoming that we're in and I fortunately

built Equity there um you you just hear

a lot about build your portfolio 607 70

100 plus Investments and it can feel

overwhelming and I would just say to

anybody I would encourage them to just

just start and start small and start

what makes sense to you and what you're

comfortable with right because everybody

has a different risk tolerance I I tend

to be a little bit conservative I mean

I'm financed by trade so I do a lot of

risk modeling and to me I'm taking a

slower I wouldn't say simpler strategy

but more of a a cautioned approach if

you will yeah I wouldn't defin I

definitely wouldn't call new

construction simpler uh but feel like

that if you've got the right team and it

sounds like you you've done really well

at bringing in the right people so to to

piggyback on bringing in the right

people Sam you hinted about it earlier

about finding a builder or contractor um

that kind of um can meet the needs of

your client base and build at a price

point that really creates this win-win

talk to me a little bit more about like

that Dynamic how you found that

contractor and how you how you guys all

created that win-win situation yeah so I

met Dylan on Instagram of all places and

uh to most Boomers or older people they

go no way this is a reliable source for

for a builder but Lacy and I met on

Bigger Pockets and that's how the world

works these days so um yeah I know a lot

of local Builders and if you're if

you've been around the market for a

while you've seen this giant runup we've

had in this area but in the United

States in a larger sense prices

basically doubled in our area and so and

material prices did go up a lot too as

Supply chains went up but they they

settled down plywood Lumber all these

things they did come down a bit and so

this big spread exists and the guys that

have been building for a long time just

said well we're just we'll build you

something but we'll build at retail

prices and make $500,000 in profit on

each deal on a on a million dollar house

or a $2 million house and so um looking

for someone like me and like lacy

someone that was eager had a lot of

energy and was uh looking to take on new

a new project to develop their business

and make a name for themselves in this

market um was important because he

recognizes that he could make a bunch of

money doing spec homes but it's also

risky for him to float all that cash so

by having a client lined up he's he's

got you know guaranteed cash draws from

this construction loan and he's willing

he wants to make uh a business in our

area and also develop friends and

relationships and that's kind of uh the

Mantra behind my relationship with Lacy

too it's like I just want to work with

friends and uh and Dylan does too so you

know we we went and ate Cajun food

together and uh had some beers and it

was a good time and uh just working with

someone that you really trust and you

know isn't in it just for the money is

really refreshing so to touch on the cun

thing you're you're from Arkansas my

wife is from New Orleans and after we

kind of closed some deals I took these

guys to a cinjun food truck and had

crawfish in Wyoming it was quite to

watch to watch two grown men try to eat

crawfish for the first time it was

it was amazing hey I I went and had

seafood boil last night for dinner right

here in the middle of Arkansas you can

do anything anywhere now H you can do

anything any for a different price but

yes for yes you will pay more for it

when you're landlocked but it's

delicious it's wonderful okay so talk to

us about this project where is it

currently when is it scheduled to break

ground like what's it where you at this

in the process of it all so we closed

last September another tricky thing

about where we live is it snows six

months of the year um so we can't break

ground until the spring like you

literally can't break it because it's

frozen yeah it's a rock and it's

frozen and you have to hustle like hell

to break ground in the summer because it

it could be a short summer right and you

want to be able to get the frame up so

you can work inside through the winter

but the the goal would be to break

around this summer God willing um and

then

hopefully be completed by the following

summer knock on one I love that I think

you guys are a phenomenal example of

what new investors can accomplish when

they put the right people around

themselves and they are willing to uh

not just give up when the first thing

that they think of doesn't work on that

note I want to ask you each one question

that hopefully can help some of the

people listening

so

can you give us you've gone through this

process you're now about to break ground

hopefully soon here what would you say

is the one thing that you did in this

process that really helped make it all

easier for you the one thing that I did

well I mean without the Bigger Pockets

website that was the greatest tool that

could have ever been available to me um

it was the pathway to meeting Sam it was

the pathway to meeting Dylan an amazing

Banker so I'm forever grateful right and

I think network is everything and people

are everything to me and as long as you

know you're honest you take care of the

people that you care about um and you're

transparent then I just feel like sorry

I'm all about good energy and people

just treating each other right so I just

think that when you put good out in the

universe and you want other to others to

succeed like I want the world for Sam

and I want the world for Dylan then I

think you naturally succeed on your own

and My Success will look completely

different than anyone else's success

right to me success is a couple of

properties and a comfortable retirement

for my wife and my family um but yeah

that's absolutely true and you're

speaking my language I I often say I

don't always make the best business

decision but I darn sure make the best

people decision and if that business if

that people decision cost me money I'm

okay with that um but but obviously yes

I think having an an investor-friendly

real estate agent who is in your corner

can truly be a GameChanger for any

investor but especially for new

investors and you found that in Sam so

Sam talk to us a little bit about how

should new

investors uh approach uh

investor-friendly real estate agents

like yourself how can they add value to

investor friendly real estate agents and

and and how can you best how does how do

they best work with you

let's see I think the best way at least

initially to work with an

investor-friendly agent is just be

really transparent about what your goals

are and what your finances look like

because there's nothing more frustrating

than starting to look at properties and

starting to develop this great strategy

that sounds amazing on paper and then we

peel back the layers of the financial

onion and it's like oh man we can't

afford this you know or we can't we

can't really go down this road because

you don't know what goes into a build

process or you don't know what it would

actually take to finance this project or

whatever so I think transparency is is

really important and um Lacy was really

transparent with me and um I learned a

lot from her as well like we have

similar interests um I got a good

recommendation for where to work on my

classic car in the valley and I think uh

there's a lot of uh things that I can

learn from my clients as well so develop

that Rapport and that relationship first

and foremost hold off on looking at

properties trying to make the sale as an

agent and just get to know each other

first I love that I love that yeah cuz I

mean I I can't say enough how much I

speak the world of Sam and and I I know

this is one small step to a really long

and prosperous future together but word

of mouth is everything right and I speak

his name anywhere I can in the belly so

thanks Lacy wonderful I love this this

is amazing I love hearing your story I

love hearing about your success I love

how you take care of people and I love

how you didn't quit when things got

tough these are the things that make

successful Real Estate Investors

successful there's no secret sauce with

this business it's been around for

decades people have been making money in

real estate for a long time and they'll

be making money a long time after we are

gone in this industry the only thing

that set sex apart the successful people

are you can't give up if you don't quit

it's going to pay off eventually and you

guys are just doing fantastic so thank

you so much for coming on the show and

sharing your story and sharing the the

the winds and the and the tribulations

along the way and we wish you nothing

but the best of success moving forward

thanks Henry appreciate it thanks Henry

it was a pleasure to be here all right

thank you so much for listening

everybody once again if you want to

learn more information about Sam Lacy or

myself you can find that information in

the show notes and if you want to find

amazing investor friendly real estate

agents in your Market you can head over

to biggerpockets.com aent finder thank

you thank so much for tuning in we'll

see you on the next episode of the

Bigger Pockets

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podcast