5 Innovative Strategies for Real Estate Success with David Barnett

Dylan Silver (00:01.29)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have David Barnett in Huntsville, Alabama. David, welcome to the show.

zb565mhxmg (00:13.908)
Yeah, thanks so much for having me man. I appreciate that

Dylan Silver (00:17.074)
Absolutely, absolutely. You’re in Huntsville, Alabama by way of Texas. I’m in Texas. I’m in DFW. So it’s always good to have people who’ve got some Texan in them on the show here. let’s start off at the top of the show here by talking about how you got into the real estate space.

zb565mhxmg (00:35.63)
Yeah, you know, I worked, I was in the military prior to real estate. I got a job working out at Redstone Arsenal here in Huntsville. And we were going to buy a house. My real estate agent was phenomenal, loved her. And yeah, I I saw her paycheck at the end of the day and I’m like, man, I’m working month or two.

before I met what she’s about to bring home, what I thought she was about to bring home, right? Didn’t know she had like the splits and stuff. Not sure how that works, but solid commission. And it inspired my wife to get a real estate license. so, man, I just jumped all in and after I saw the potential there, I put in my two week notice without even having a real estate license and went head first with no money in savings. And I don’t know, I just went for it, man. And then here we are.

10 years, 12 years later, 10 years later.

Dylan Silver (01:30.422)
So you saw this opportunity from buying a home. I think there’s a lot of people who actually, you’d be, maybe you’d be surprised, maybe not. I’ve had so many guests who became mortgage, you know, loan officers from seeing a loan officer when they were doing their own deal and the loan officer was their loan officer. And now I’ve got a real estate agent who became a real estate agent because they said, whoa, I was buying my house and I see them doing this. How do I get involved?

zb565mhxmg (02:00.631)
Yeah, exactly. Exactly. I, yeah, I mean, it was just, it was really that simple. wish I could tell you, you know, I had this passion for it and just jumped all in one day. But I mean, it was about, I got in for the money and then I stayed for the passion. It’s kind of, I think what, how that went about.

Dylan Silver (02:21.6)
Let’s talk about that first couple of months, talk about getting the real estate license and then your first couple of months as a real estate agent.

zb565mhxmg (02:31.405)
Sure, yeah, mean, it was a lot of work, but it was also probably a lot easier than I expected. I know that’s probably not most people, but I already kind of had a good system in place. We had already, I joined a real estate team actually, and I probably would recommend that to have that really, really close support, really small team of experienced agents. I mean, everybody on my team had like 15 years plus experience. I was the newbie there.

And so I was door knocking for sale by owners looking for listings. I mean, within my first week got a $400,000 listing, which in Huntsville, you know, at the time the average price point was about 200. And so got that $400,000 listing, sold it in eight days and just kept doing that and really hit for sale by owners real heavy.

Dylan Silver (03:23.67)
So you had a listing within eight days of being at your broker?

zb565mhxmg (03:29.293)
I think the listing was a little bit sooner than that, know, within a week or so and then sold it, put it under contract in eight days.

Dylan Silver (03:38.774)
Oh my gosh. So let’s talk about that for a minute here. you had immense amount of hustle when you got into this space. You get the license and within two weeks you move your first deal. $400,000 deal so you’re getting a percentage of that. What was that like?

zb565mhxmg (03:40.301)
Yeah, I was moving.

zb565mhxmg (04:02.221)
Yeah. Oh, that was amazing. I mean, made $21 an hour, my full-time job before. I mean, that was okay money back then, you know, but I made, you know, $12,000 commission on that listing. I took, actually I took a reduced commission there to land the listing from the for sale by owner. Often commission prices are the paying point for for sale by owners, right? And so it was 400,000. I’m like, yeah, I’m good with eight grand, two and a half, something like that.

Then I had the 50-50 split with my broker at the time. I I walked away with like four or five grand, which was more than I was making a month.

Dylan Silver (04:41.6)
So, I’m curious about that first deal. If the home was for sale by owner, right? It’s already out there. Was it just on Zillow? Was that where this was? Or was it on multiple services? And you were able to sell it within eight days. So was it just by getting it on the MLS?

zb565mhxmg (04:54.485)
Okay, so let me press my key and get to it.

zb565mhxmg (05:01.846)
think I lost you.

I did lose you.

zb565mhxmg (05:08.94)
I’m sorry, hey, I think I lost you. I think I heard your question and yes, it was just on Zillow. This was an anesthesiologist who already bought a home, who wasn’t even living in the home, terrible pictures. And honestly, I knew that good photos would go a long way with this house. So we went in there, we cleaned the property, took a lot of really good photos and featured a couple of things on there.

and put it on the MLS and that’s what really gave us the exposure.

Dylan Silver (05:40.64)
So what was it like? Are you returning and the broker is like, man, new agent has a home sold within two weeks. This is unheard of.

zb565mhxmg (05:48.875)
No, I mean, was just, I had that as an expectation. So really I was just fulfilling my own expectation, man. It wasn’t anything like that. Like I hit the lottery. It was like, aren’t onto the next, you know, if I can do this, I can do it again. The next couple proved a little harder, but, but, know, it’s a grind for sure. Especially when you first get in, you know, it turned into a referral business eventually, but it did take a couple of years to get there.

Dylan Silver (06:14.592)
So the first couple deals that you had was it through Dornock and FizzBos?

zb565mhxmg (06:18.156)
100%. Actually, it through necessarily door knocking. mean, it was door knocking, but it was also, I was doing a couple of different things. It was all centered around for sell by owners, but I was hosting free open houses for sell by owners, no listing agreements. I just was trying to drive activity to their listing. And I told them, hey, if I sell it, can pay me a buyer agent commission. Maybe I can get a buyer in here. And so I was posting door hangers throughout the neighborhood and

Dylan Silver (06:20.01)
Wow.

zb565mhxmg (06:45.951)
Facebook market, Facebook ads, it was before the marketplace, Facebook ads to try to promote that open house. you know, usually that first sale by owner would see the hustle of a listing agent and then would hire me after the open house, you know, and that was actually the whole point. yeah, that was the hustle.

Dylan Silver (07:06.166)
I’m admiring kind of the strategy here because I’m a real estate agent in Dallas. I’ve been doing this for two months. But really my passion is real estate investing and real estate wholesale. And I think a lot of people in the real estate wholesale space and real estate investing space have these really niche and unique strategies that just completely change.

zb565mhxmg (07:18.345)
Mine too.

zb565mhxmg (07:28.802)
It’s a that completely changed the business story. And for example, I would say a little creative deal, especially from your project to the company.

Dylan Silver (07:33.398)
the business really and like as an example right so all the creative deals the things that people hear about like subject to seller finance and so on and so forth and of course as a real estate agent you really can’t get into the weeds and a lot of those things due to regulations but there’s some things that real estate agents can be doing like you talk about hosting open houses at for sale by owner with like no promise no guarantee like they could just be like oh thanks for the buyer see you later you know what I mean

zb565mhxmg (07:44.386)
Yeah, absolutely.

Dylan Silver (08:03.156)
And you were like, well, I’ll roll the dice here. If I do enough of these, that might happen. I might get bit on one of these, but I’m brand new. So it’s either make no money or let me throw my hat in the ring. You know what I’m saying?

zb565mhxmg (08:16.266)
I was converting about one third of those open house listing or the open house sellers into listings and I was getting about 10 % of the buyers from those listings. So that’s really kind of what launched that. So man, just tracking those KPIs and it made it that easy, that much easier. My wife was an agent too. So we kind of doubled our efforts. So I would schedule two open houses and she’d do one and I’d do the other and you know, just kind of.

Dylan Silver (08:42.528)
Were you tracking KPIs then or was it kind of just, you know, off the cuff? Let me just run.

zb565mhxmg (08:49.798)
I was tracking them just because it was super easy, right? All my scripts and everything was text. And so I had all of the text data so I could literally go back and just track KPIs once a month if I needed to. And just when I needed to get the answers to things, I could go back and kind of retroactively track my KPIs. Now my business partner is an engineer and we track KPIs every day, religiously. yeah.

Dylan Silver (09:14.486)
I’m a big fan of KPI tracking. think a lot of people are maybe not as familiar with it or think that it might be kind of a very, very granular way to go about things. But I look at it like I’d rather have way too much information and have to cut it down. The only thing that sometimes I get a little bit like, I don’t know if I like doing this, is if it’s a lot of information and I have to put it in myself, then it can be a little bit tedious.

zb565mhxmg (09:31.911)
Yeah.

Dylan Silver (09:40.886)
But there’s so much going on right now where you don’t even have to even really touch it, like it tracks it for you. And so at that point it’s like, well, I would rather have more than nothing and not know where I’m either going right or going wrong.

zb565mhxmg (09:42.89)
Bye.

With a couple of AI tools that we have access to now, mean, it makes tracking KPIs super easy. you’re crazy if you’re not doing that to see what is working and what is not working. mean, for example, one of the things that we were doing was door hangers. That was taking up a ton of our time.

And I was putting those out on Thursday and I was hanging them myself before the open house. Like I had a process, you know? And I don’t know that I ever got anybody to come to the open house from the door hanger, but it was taking four and five, six hours to canvas a neighborhood for door hangers. And then of course the price of the door hangers, the marketing material. So I cut that and our numbers stayed the exact same. So that saved a whole day’s worth of work and the money and the marketing material.

to kind of pivot and get away from doing that. So if you’re not tracking KPIs, how do you know that, you know, you’re not wasting your money? Yeah.

Dylan Silver (10:48.116)
David, let’s talk about scaling and then where the business moved to. So starting out as an agent, at some point in time, did this become now you have a team or did this become I’m moving into investing? How did growth look like?

zb565mhxmg (11:05.481)
Yeah, honestly, was kind of a shiny object syndrome turned into a business, right? I was in a kind of like an isolated market outside of Huntsville that had like really strong buyers. And this was a buyer’s market. I didn’t come in in a seller’s market. So was a buyer’s market. You can get a flip property. I mean, this is post-2008, 2010 timeframe. You could buy a flip.

off of the MLS and have good numbers on it. And so I bought a house that I knew was going to be really good for that area. had looked in, let me rewind, I had looked into scaling a team and realized how much work was in scaling a team. So I became an independent agent with me and my wife and then started to get into the investment space, bought a house with no real knowledge or anything like that and just YouTube my way through.

my first flip in which I made no money. But learned, I always say, yeah, I made more on that than anything. Because yeah, I made no money, but the education that I got from that like two year terrible experience paved the way for my future and my career because I took that and immediately went into the next one. And with all those lessons, you know, turned a pretty good profit, you know, $40,000 flip profit.

And bought another house and I saw a sign, the Airbnb thing got real popular. I saw a for rent sign in my neighborhood called the property management company. Turns out he owned it. So I did an arbitrage, rent along that. Then that led to an Airbnb arbitrage business. So we had that going with, five or six Airbnb arbitrages right around us.

But one of my current business partner lived on the street of my Airbnb arbitrage and called me and we were talking about it and somehow we partnered up. I tell people all the time, if we weren’t business partners, we wouldn’t even be friends. We’re so different. And that’s actually what makes us such a strong team. He is an engineer and he does get into the weeds on the back end. And I’m more of a visionary creative and I get to do the things I like. He gets to do the things he likes.

zb565mhxmg (13:24.744)
But anyway, and that launched our wholesale business. About a year into wholesaling, we launched full into flipping because we were buying things with such good margins and flippers were buying from us. And this is in 2021, 2022. You didn’t have to work very hard to sell any house. You could put gray carpet throughout the thing and you didn’t have to paint it. You’d still have multiple offers. That was not our process.

That launched our flipping because we were wholesaling with good margins. We knew that if we flipped it, we would also capture those margins. And we had all the backing that we needed to and all the experience that we needed. And so that’s what launched the flipping side of our wholesale business.

Dylan Silver (14:10.902)
So today, where is the business at today? Is it heavy flipping today?

zb565mhxmg (14:16.968)
We flipped just under 60 homes last year in our market. Yeah, it was 56, right? It felt like a lot. We were pretty busy. we kind of scaled back a little bit. However, we’ve already done like 30 so far year to day. And so I would say, yeah, we’re heavy flips.

Dylan Silver (14:22.111)
a lot of flips.

Dylan Silver (14:39.264)
Yeah, you’re on pace for 60. Yeah.

zb565mhxmg (14:41.073)
But we’re doing a lot of, but we’re keeping a lot of them now. You know, we’re flipping them and putting new Roos HVAC stuff and almost using a BRRR model, except for we don’t really do long-term rent. We sell on wraps and owner financing, lease options, that kind of thing. So I don’t have any, well, we have like two long-term rent properties, but unless I buy that, unless my acquisitions method is like a subject to with a really low interest rate and I can cashflow immediately a couple of hundred dollars.

then I’m not keeping that as a long-term rent. I’m selling it on owner financing.

Dylan Silver (15:12.338)
did you keep- did you end up keeping the real estate license? Have you found that that’s helped you along the way?

zb565mhxmg (15:17.745)
Yeah, I actually have upgraded it. Funny enough, I took my broker’s license yesterday and I’m launching a property management company here in about three weeks.

Dylan Silver (15:25.558)
Yesterday. Congratulations. How’d that go? Was it super hard?

zb565mhxmg (15:27.246)
Yeah, yesterday morning. Thanks.

It was harder than I thought it was gonna be just because of the way that some of the questions were asked. I’ve always hated that, try to trip you up. Because what’s the point? The point of the test is to prove that I know what is and is not against the law essentially, you know? And so a question trying to trip me up to make me answer incorrectly I think is foolish. But either way I did pass and so it was hard but it was fine.

Dylan Silver (15:42.303)
Yeah.

Dylan Silver (15:59.882)
I tell people that that Texas, I’m in Texas, right? The Texas license exam was so hard. When they told me that I passed, I grabbed that paper and I said, I’m getting out of here before they told me that I didn’t pass. That thing was so hard. And I gained a lot of respect.

zb565mhxmg (16:12.519)
I’m a licensed person, I’m a licensed person for some reason. I have a mortgage loan officer’s license, NMLS number, because you can hold both a real estate and mortgage license in Alabama. I’m currently actually about to take a test to get my general contractor’s license so that I can pull all of our permits and launch a construction company. So I have a couple of different licenses that I hold for the benefits.

Dylan Silver (16:42.826)
Well, you know, I may follow in your footsteps here. I’m looking at potentially loan officer. I don’t know how I’m going to use all of them, but I think it’s nice to have. It’s nice to have, right? David, we are coming up on time here. Where can folks go to get a hold of you?

zb565mhxmg (16:51.364)
Yeah.

zb565mhxmg (16:55.75)
I mean, you can reach out to me on Facebook. It’s at David Barnett 90 is what my Facebook is. It’s actually how I found you guys was actually on Facebook. I’m not on a ton of other social media. Of course, you can just email me. That’s David at Y H home buyers.com. That’s for Yellow Hammer home buyers here in Huntsville. But yeah, I mean, those kind of methods will get me really quickly. I’m an email person.

Email me, man. Let’s do some stuff together.

Dylan Silver (17:27.594)
David, thank you so much for coming on the show here today.

zb565mhxmg (17:30.551)
Absolutely. Thanks for having me.