Building 5 Star RE Companies

John Harcar (00:00.936)
All right, hey guys, welcome back to the show. I’m your host, John Harkar. We’re here with Caleb Christopher, and we’re going to talk about building more companies in real estate. And remember, guys, with Investor Fuel, we help real estate entrepreneurs, investors, service providers. I really, most people 2 to 5x their business. And by doing that, we help give the tools and resources to build that business you want to build, to live the life you want to live. Caleb, welcome to our show.

Caleb Christopher (00:28.386)
Thank you for having me.

John Harcar (00:29.656)
Yeah, I’m excited to talk about this. I was talking about building more businesses and kind of diversifying and getting more income. But before we get into the weeds on all this, tell the audience a little bit about yourself, how you got into real estate, what you’re doing now, or basically how you got here.

Caleb Christopher (00:44.524)
I mean, I think my story is not too uncommon. read Rich Dad Poor Dad, you know, and I was like, my goodness. So I mean, I became an accidental landlord, which for those who don’t know, that’s when you can’t sell your house and you just decide to rent it out because you couldn’t sell it. And when that happened, was weeks or maybe a month or two afterward when I read Rich Dad Poor and I was like, thank God I didn’t sell that house. Like that’s the beginning of my future, you know?

John Harcar (01:11.054)
Hmm.

Caleb Christopher (01:11.808)
So that was pretty fantastic. And then I just started consuming bigger pockets and all the other resources and learning. just drink from a fire hose, whatever I’m interested in. I consume. so real estate is still, there’s just a lot of room to expand. And so that’s how I got started in real estate and I learned it and I loved it. And I just started getting involved by doing my first flip, finding creative finance community to join. And I really love that.

John Harcar (01:21.91)
Mm-hmm.

John Harcar (01:36.428)
Before you read Rich Dad Poor Dad, what were you doing? mean, was your job?

Caleb Christopher (01:42.228)
IT consultant, cybersecurity consultant. I had a bachelor’s in cybersecurity and risk management. so whether it’s physical security, which is my previous job was working at a prison. So I’ve got physical security. I’ve got, and risk management all the way through cybersecurity and risk management.

John Harcar (01:44.718)
Okay.

John Harcar (01:53.254)
wow.

John Harcar (01:57.314)
Did you feel that maybe that path wasn’t as lucrative or kind of pumped you up more?

Caleb Christopher (02:01.666)
I would say, honest, if I’m honest, I would probably have made more money staying in cybersecurity over the last four years than I have now. But entrepreneurship is hard. You make mistakes. Like last year, I made $120,000 mistake. That could have just been salary if I went with another job. But it’s rewarding. I enjoy what I do. I actually help people live in the dream, I guess. I enjoy it though.

John Harcar (02:10.243)
Mmm.

John Harcar (02:17.994)
Ouch. Yeah.

John Harcar (02:27.136)
Yeah, no, awesome. What were some of the bigger challenges that you had when you got into real estate? Right? Because obviously you just read Rich Dad, poor dad, you did a lot of research.

Caleb Christopher (02:34.743)
Yeah.

Well, you can only do so much learning before you have to do do the doing right. You got to get started. And so it’s like with parenting, you can only read so many parenting books. You can only be so ready until you just have kids and it’s going to be messy and you got to get in and just do stuff. So same thing with real estate. Buy my first flip, screw stuff up. I used to work construction. So, I mean, I my way around the house and tools and things like that. But you know, you make all sorts of relationships, mistakes, expensive stuff, but

John Harcar (02:40.59)
to the action.

John Harcar (02:46.198)
Yeah.

Caleb Christopher (03:04.511)
That’s a college course in and of itself. And so if you have the right mindset as you go through, losing money, you can think of it as spending money on education. I mean, if you constantly do that, then there’s a separate problem. Yeah.

John Harcar (03:06.488)
Mm-hmm.

John Harcar (03:17.09)
True, right, you’re consuming a lot more than you’re actually doing. How long did it take you to get your first deal?

Caleb Christopher (03:24.642)
I had $5,000 saved up for my down payment. used private money to purchase that first house. my first deal is the accidental landlord piece, but then buying my flip was, I mean, six months later.

John Harcar (03:37.102)
Okay. Did you continue to do flips or did you transition into wholesaling? Did you transition?

Caleb Christopher (03:41.056)
Nope. No, I probably can get the award for world’s world’s slowest flip. So that’s not, that’s not my style. Well, I was planning on the company I was working for at the time, shutting down. They told us they couldn’t bring in enough business. And so I was like, okay, well, I, so I did my budgeting lesson learned by the way, I did my budgeting for me doing the work. Cause I can, but when the full-time job picked up some more contracts and kept me on board.

John Harcar (03:46.126)
Why do you say that?

John Harcar (04:03.63)
Because you can,

Caleb Christopher (04:10.302)
Now I’ve got split focus, but I didn’t budget and borrow enough to hire contractors to do the work. And so it just dragged out and I’m trying to run two things at once. Got kids. It’s 30 minutes away. What a nightmare.

John Harcar (04:21.812)
Mm-hmm. Yeah. So when did you make that full-time switch into nothing but real estate?

Caleb Christopher (04:28.589)
middle of 2022. I used to have a sign on my wall that said that had a date on it and that was my drop dead date. quitting my W2 honor before this date and that I did that by starting Creative TC, the current company I run as transaction consulting.

John Harcar (04:41.838)
Mm-hmm.

John Harcar (04:45.208)
Let’s talk about that. what, cause I know you mentioned before we got on here, there was a need, right? What, what happened for you to, or maybe something didn’t, maybe an instance did that kind of said, Hey, look, I gotta do this.

Caleb Christopher (04:59.254)
Yeah. Well, so my first couple of deals, creative finance deals, subject to in particular, there’s that’s, that can be a pretty hairy meatball, like rolled under the fridge with a lot of sauce and comes back out. Those deals can get pretty crazy. So my first couple of deals, you know, we’ve got general guidance and instruction from online mentorships and, and other people who’ve done deals, but their guidance is only this deep. And when I get into the real life thick of it,

John Harcar (05:09.102)
In a hoarder house.

Caleb Christopher (05:28.256)
I’m like, who’s driving this thing? Who’s in charge here? And the title company is not in charge and the seller doesn’t know what to do. And I’ve just got copies of paperwork that I’m supposed to use, but I can’t answer detailed questions. And I’m like, this is wrong on so many levels. It can’t be this way. And I had looked for support. I just couldn’t find any that was willing to help on my deal, whether by JV or by flat fee. There was a transaction coordinator service available, but they had.

John Harcar (05:40.12)
Mm-hmm.

John Harcar (05:51.278)
Mm-hmm.

Caleb Christopher (05:56.224)
a high price and no availability. Literally, you couldn’t get ahold of anyone. And so I’m like, this, this is a major problem. How many dozens of deals per month or hundreds of deals per month are going on where there’s no guidance and experience to help people understand what they’re doing and make informed decisions. And so somebody’s got to do this. It’s going to be me.

John Harcar (06:00.526)
Hmm.

John Harcar (06:15.768)
What kind of mistakes you think people were making or maybe even still are making when they’re trying to do this on the realm without hiring a service like yours or someone like yourself?

Caleb Christopher (06:25.546)
And I’ll differentiate my service is not just coordination. Coordination is included, but that’s an administrative assistant. A coordinator is an administrative assistant and they’re very, they’re just more familiar with that line of activities than you maybe. We actively consult on deals. And so we got checked for underwriting for the state you’re in, the loan type. That’s our job. And so TC for my company stands for consultants. What, and what we bring to the table is helping people understand what their options are. And, and one of the things I train my team is.

John Harcar (06:47.736)
Got it, okay.

Caleb Christopher (06:55.404)
We are influencers, not controllers. We don’t have authority. We can advocate, but we don’t have the authority to make anyone in this transaction do anything. And so we have to be very strategic with our communications and we have to be outcomes oriented. What needs to happen? Does it matter which path we take to get there? And when that’s not the case, then we talk to our client and say, you have five options to do. This one includes this risk and that one includes that risk. And here’s the benefits and rewards. We can help you restructure the transaction.

John Harcar (07:03.598)
huh.

Caleb Christopher (07:22.686)
I see this risk because I’ve seen this before. This may come back to haunt you. Like that’s a flaky looking buyer to me. He’s got all the flags and signals that I’ve seen that that’s a flaky buyer. And so you might go get a backup buyer and just the fact of having a backup buyer and telling your current buyer, I’ve got a backup buyer in case you feel like backing out, let me know just ahead of time. That can be a very peaceful conversation, but if I’m not helping them do that on the front end, then it hits them like a truck when it goes wrong.

John Harcar (07:30.316)
Hmm.

John Harcar (07:42.508)
Bye.

John Harcar (07:51.898)
What are some of the common mistakes people are making when they’re bringing you a file?

Caleb Christopher (08:01.162)
One of the, I’ll tell you the story of somebody called me yesterday and I, after dinner, I just talked to him on the phone for a little while. They had a buyer not bring EMD in time, but it did clear and they don’t, they kind of want to get out of the contract. They’ve assigned it to somebody, but they don’t think that person is, is being genuine. But technically they’re in contract. Technically EMD missed the deadline, but their contract doesn’t specify that the contract automatically expires. That’s something like.

John Harcar (08:25.634)
Mm-hmm.

Caleb Christopher (08:30.794)
I like paperwork. literally read laws and stuff for fun. But in my, in my assignment contract, something I added was I’ve got 72 hours from the date of latest signature. It is the assignee, the person taking the deal. It’s their responsibility to clear funds in which accounts for a weekend, right? But if funds are not cleared in within 72 hours, this, this assignment contract automatically expires without notice. That way I don’t ever have to debate with somebody.

John Harcar (08:32.215)
Right?

You

John Harcar (08:41.955)
Mm.

John Harcar (08:50.2)
Right.

John Harcar (08:54.146)
Miss Voight.

Caleb Christopher (08:58.196)
It’s not my problem if you can’t get funds in, if you send a check, that’s your problem. If your wire bounces back, that’s not my problem. If I have backup buyers, because the person, the wholesaler who’s got a deal, they’re under a lot of pressure to get that thing locked up for sure. They’ve made promises to a seller that they need to uphold. They’ve got friends and family and other people and business partners. need to honor the terms and conditions they’ve set up there and they need a solid buyer. so having an automatic expiration, that’s a huge piece for wholesalers. Just add that in.

John Harcar (09:11.67)
Yeah.

John Harcar (09:26.136)
Mm-hmm.

Caleb Christopher (09:26.538)
It gives you the room to be gracious. Even if that, so if it takes 74 hours or who cares what technically this is expired, but I’m to go ahead and extend it for you. Cause I don’t really have a problem.

John Harcar (09:37.59)
And if there’s not that date, you know, they think they can just do it whenever and you’re not.

Caleb Christopher (09:41.27)
Yeah, and technically they can because I’ve read court cases where the failure to deliver earnest money is not grounds to cancel a contract. And so, yep. Yeah, it’s kind of like tall fences make good neighbors and an armed society is a polite society. And when you look at contracts, having some pretty solid terms and conditions in there forces you to be polite and understand your rights and remedies.

John Harcar (09:47.702)
Right? So it holds them to the fire a little bit more too, which is a good thing.

John Harcar (10:05.518)
What are you seeing as like trends? I know, you there’s a big trend in sub two and all that growing and all, you know, those types of transactions. I mean, where do you see anything trending now? I mean, is it still kind of that same way? Are we seeing traditional really go down? I mean, what are you seeing?

Caleb Christopher (10:20.64)
No, I think traditional is going to continue its thing. I my company works exclusively creative finance transactions. So I see a lot of that 50 transactions a month sometimes. And I think that’s going to continue for a while. As long as interest rates are up, creative finance is going to be up. And that’s going to continue being there. The quality of, of transaction. Now, the longer we get away from those good interest rates, the more equity those sellers have. And so it gets harder to do those transactions without.

John Harcar (10:37.88)
Yeah.

Caleb Christopher (10:50.174)
Also including a big chunk of seller finance. And so by the time you add seller finance and you’ve got the first mortgage and a seller finance chunk, the monthly payments pretty stinking big. so over the next two years, these deals are not going to cashflow and you’ve got to be able to bankroll it or even lose a little bit of cashflow for the sake of the long-term. Hey, I’ve got a 30 year mortgage at 4%.

John Harcar (10:52.71)
huh.

John Harcar (10:59.31)
Yeah.

John Harcar (11:12.694)
Right. When someone brings you a deal that you know just isn’t a deal, mean, do you just, hey, sorry, man, we can’t do anything. Or do you, do you, and I think you mentioned it, do you strategize with them how to make it a deal or how to maybe renegotiate?

Caleb Christopher (11:27.042)
We will both, both. So first we want to make sure that we understand the transaction and what the person’s intentions are. We get a lot of new people who are like, I need guidance. And my, my objective is to provide JV quality guidance without having to take 50 % of your deal. I’ll take a flat fee and we’re, we’re in and out and it’s your deal for life. Um, but when we see red flags, we’re going to try to gut check that deal on the front end and make sure, Hey, did you have.

John Harcar (11:37.358)
Mm-hmm.

John Harcar (11:47.714)
That’s awesome, that’s good.

Caleb Christopher (11:55.702)
Did you account, for example, if you’re bringing me a sub two of a VA loan in the state of Texas, you might see where I’m going with this, but I’ve done enough transactions where a new person thinks that the mortgage statement shows what they’re going to be paying pretty close month to month after. But a VA loan means that that’s a veteran who took that out. And in Texas, there’s practically actually zero property tax for veterans. Meaning when I buy that property, it’s going to go up to a thousand dollars a month, plus or minus $400 for taxes.

John Harcar (12:03.07)
John Harcar (12:09.453)
Yeah.

John Harcar (12:17.602)
minutes.

John Harcar (12:24.259)
Right.

Caleb Christopher (12:25.12)
So that mortgage statement does not represent what I’m going to pay. And so if my underwriting is based on that, and so when somebody brings me a deal, we see stuff like that. And we’re like, before, before you give us any money, I just want to make sure that you, you understand what you’re looking at and that you’re okay with this outcome. And so I don’t even want as a business owner, I don’t want a negative experience associated with my company name, whether it’s my fault or not. And so I would rather help somebody for free.

John Harcar (12:41.432)
Mm.

John Harcar (12:50.434)
Yeah.

Caleb Christopher (12:53.856)
dodge a deal or go do a deal somewhere else, then take on a transaction that I feel could go wrong and leave a bad taste in your mouth associated with my company name.

John Harcar (13:05.122)
Yeah. What do you suggest when people run into situations like that? I mean, in just that instance in Texas, mean, are they going to have to go find out, hey, this is what it’s going to cost after I buy it? This is what the normal taxes are? Yeah. OK. Yeah. mean, yeah.

Caleb Christopher (13:20.012)
They should. Yeah, they should. And you can do that. Most of the time you can look at the county tax rolls and whether you’re actually doing the due diligence yourself or using chat GPT or something like that to help you out. You can get a pretty quick round number about what is actually going to cost afterwards.

John Harcar (13:36.002)
what other mistakes are people making in some of the deals you’re seeing that they’re bringing to you.

Caleb Christopher (13:41.046)
They, particularly wholesalers are just stating that it’s going to be a sub two and they’re not reserving the option to close in a trust and other things like that. They don’t think about that stuff and it’s not a problem until it is. Everything works until it doesn’t. And so we’ve seen the problems. so the, language in the contract is pretty important to include certain terms that give the flexibility to the buyer. One of the things I train people on is your entry determines your exit. And so if I’m a wholesaler.

John Harcar (13:53.464)
Right. Yep.

John Harcar (14:08.461)
Mm-hmm.

Caleb Christopher (14:10.538)
And I’m going to sell this. need to make structure the deal on the front end so that it’s as marketable as possible to as many options as possible. And that means a wrap is going to be pretty complex. I’m going to have to make certain promises or reserve certain options to myself as the buyer so that that’s worth selling to somebody who wants to buy it and then turn around and sell it to a family that can’t get bank financing. And you just can’t do that with certain deals if you don’t structure them the right way.

John Harcar (14:17.294)
Yeah.

John Harcar (14:31.886)
huh.

Caleb Christopher (14:36.374)
and certain loan types are pretty tough as well. So understanding what type of loan, the implications, can you handle due on sale? Having those discussions is pretty important. Again, that’s what my team does though, as you work with us, we’re having those discussions to make sure that everybody’s making informed decisions.

John Harcar (14:36.589)
Right.

John Harcar (14:45.794)
Yeah. Okay.

John Harcar (14:53.262)
Okay, what type of resources would you say that might be out there for folks that, let’s say they don’t have the money to pay somebody, right? And they want to try to do this on their own. mean, are there any resources they can use to guide them through some of this stuff?

Caleb Christopher (15:08.288)
I think you’re just going to have to JV with somebody who’s willing to give you the guidance for a cut of the deal.

John Harcar (15:12.942)
OK, why not just use YouTube U?

Caleb Christopher (15:16.224)
Yeah, well, that’s what got me where I got where I was like, who’s driving this thing? And like, it’s all chaos. And as a business owner, I have found personally that I have the best clients are the ones that are willing to pay upfront for me for multiple reasons. one of those being they’re very sure of their deal, which means my team isn’t kind of dragged along through the mud while they try to repair and restructure a deal every which way under the sun. And it becomes this whole urgent thing right before closing.

John Harcar (15:19.254)
Yeah. Yeah.

John Harcar (15:36.013)
Mm-hmm.

John Harcar (15:45.911)
Yeah.

Caleb Christopher (15:46.26)
And so I like to apply a little bit of pressure because it’s good, healthy pressure to make sure that the deal actually is a deal. And you can come in. I have a virtual office. You visit creative tc.io and click a button and you’re in my live zoom with a receptionist. And we’ve got all of our team on there. You can ask questions for free because that helped. That’s one way I can help you make sure you’ve got a good deal before you start throwing money at it.

John Harcar (16:03.205)
awesome.

John Harcar (16:08.224)
Mm-hmm. Wow, that’s awesome. That’s pretty cool. Guys, write that down. What did you say it was? Creativetc.io? Creativetc.io. Yeah, awesome.

Caleb Christopher (16:15.084)
That’s correct. It helps both of us. Helps you make sure you got a good deal and it helps me prevent bad experiences. Again, it’s, don’t want bad experiences associated with, with my name.

John Harcar (16:24.846)
The topic of this was building companies in this market. Let’s talk a bit more about that. Obviously you have Creative TC. What else are you working on or what else are you doing?

Caleb Christopher (16:36.258)
So I just made an offer on a title company. I’ve evaluated five over the last year and I’ve got a couple of real estate brokers who believe that they can drive enough transaction volume that we can just get off the ground. And so we’re pretty well resolved to start a title company. but I’d like to buy one that’s got some existing brand name and employees and things like that. So I just got back from a trip doing that and I’m looking forward to, I don’t know, this month, probably April getting started with that. And, so that

That’s exciting for me. That’ll be my next six to eight months actively super focused on that.

John Harcar (17:09.548)
Why a title company? Are there deficiencies that you’re seeing in other ones you’ve been using?

Caleb Christopher (17:17.034)
industry standards are here. My standards are here. I’m, maybe I’m a jerk. I’m a bad customer. Who knows? But I think there’s a lot of room for excellence and that’s what I want to deliver. And so I want to be able to offer my standards to people consistently in a whole series of industries or, or service companies.

John Harcar (17:36.718)
What differs your standards versus what the industry standards are? I’m just curious, like what level do you think that the industry is not performing at that you’re trying to make us an industry standard?

Caleb Christopher (17:52.118)
the title industry agents, real estate agents, and most people involved in, in real estate transactions as service providers, they’re focused on closing day. And they’re like, next, you know, sign, sign all these disclosures and acknowledgements and be on your way. Don’t call me. Right. That’s the, that’s the model. And I’m not okay with that. I think it should be set up for, make sure people, again, it goes back to that consulting, make sure people understand what they’re getting into.

And set them up for long-term success. Now there’s going to be a fine line to go between like providing advice as a third party independent service provider. I can’t be giving advice into a transaction, but I can at least make resources available where they can self study and connect with creative TC or other companies or options where they, make sure they’ve got this fully informed transaction and they’re very happy with it. Not just at closing day, but also long-term.

John Harcar (18:43.107)
Yep.

John Harcar (18:47.522)
Yeah, that’s awesome because a lot of it is just transactional and so like you said, wipe my hands clean and not really having that communication and that’s kind of where lot of these deficiencies are coming through. Yeah. Yeah.

Caleb Christopher (18:59.138)
And as for active deficiencies, communication, the single most important thing, just pick up the phone and call somebody. Be available and call somebody. Don’t overload yourself. that, and I understand for me, that means my profit margins are going to be limited because I will not overload my people. We’re going to stick to where we can deliver a five-star service every single time.

John Harcar (19:14.12)
huh.

John Harcar (19:18.634)
And that’s better, right? And that would make everybody in the whole scheme of it all happier. Anything else you want to share? Anything else you think our audience should know about you, your business, your industry, whatever?

Caleb Christopher (19:31.07)
I am looking for a personal business coach. So somebody has a recommendation. I think that would benefit me a lot. I I’ve got squirrel, you know, I’ve got a lot of ideas and I need somebody to, whack me on the head with the newspaper every once in a while and give me some of that guidance so that I can be a better business leader for my people. But I’m all about, I’m on a mission to, to provide a comfortable living wage to a hundred people by building companies that are known for excellence in what they do. so the number one was creative TC. Number two is this title company.

I also created a DOS guard, which is due on sale guard. And I’m wrapping that into creative TC to offer that service as kind of a due on sale warranty for the sub two transactions. And we’re going to start some real estate training. I’ve got a couple of people I’m working with to build some real estate training courses. So that’s, that’s what I’m all about. All those different things, but my super focus is going to be that title company for the next six to eight months.

John Harcar (20:04.686)
Mm-hmm.

John Harcar (20:11.01)
Sweet.

John Harcar (20:19.534)
Awesome.

Awesome. I love that. Caleb, I appreciate you sharing all this stuff with us today. So folks can get a hold of you. Maybe they want to use your services or whatnot. What’s the best way to reach out and connect with you?

Caleb Christopher (20:36.426)
Easiest way, the fastest way to get in touch with anybody is going to be at creative TC.io. I’m usually working projects. And so you can walk in, you can walk in our virtual front door, just pop in the zoom and say, Hey, I’ve got a creative finance question or Hey, can I talk to Caleb? And they’ll, they’ll find a way to get you to me or Caleb at creative TC.io.

John Harcar (20:44.49)
Okay, perfect.

John Harcar (20:52.91)
That’s really cool. Perfect. All right. And we’ll put all that stuff down in the show notes. Guys, I hope you guys got some good nuggets today. If you guys have any questions that would pertain to transaction coordination, mean, heck, if it’s a good deal, reach out and find out and let them help you. So Caleb, thank you again. And guys, I hope you enjoyed the show. See you on the next one.