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Show Summary
In this conversation, Dalton Riggins shares insights on real estate investment strategies, the importance of networking, and innovative financing methods. He emphasizes the value of time and relationships in achieving success in business, while also discussing the challenges faced in the real estate market. Dalton’s experiences highlight the necessity of mentorship and collaboration in navigating the complexities of property investment.
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Investor Fuel Show Transcript:
Dalton (00:00)
So when you go to do a refinance or get an appraisal, they don’t base the value of the asset on what’s around them like you do when you buy your personal home. They base it on the cashflow of the business. Well, because of what I do, I can essentially double the revenue of what that building would normally do. And banks are then forced to listen to the appraiser who says, well, this is the business that’s going on in this commercial property. So as one simple example, I bought aI bought an eight unit last year for 1.15 million and today because of my business that’s in there, the appraisal, when I did my refinance appraised at 1.88 million.
Quentin (00:34)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. I’m y’all probably can know what I’m gonna say. I’m excited. Most of the time I’m always excited. And I’m excited again to be here today, excited about my guests. I’m gonna give you two words that I know we all like, cash flow. I think we love that word, cash flow. And this gentleman has found a way to make cash.
flow. And I’m hoping that we can get the chance and the privilege for him to tell us a little bit about it, tell us a little secret to his sauce. He’s, you know, he’s casually, naturally progressed within what he does, you know, crossing different assets classes. so asset classes, I’m super excited to introduce you guys to Mr. Dalton Riggins. Mr. Dalton, how you doing today,
Dalton (03:06)
I’m doing great, thanks for having me.Quentin (03:08)
man, thank you for being here, man. Thank you for just the opportunity, man, to talk to you, for you to give us things from your perspectives, from your lens. And I’ll be honest, man, I kind of want to dive right in and not waste any time. So if you could, man, tell us about ⁓ how you kind of, maybe a little bit about how you got started. Tell us what your main focus is these days. And also tell us what markets you’re operating in, Dalton.Dalton (03:22)
Mm-hmm.Sure, so I’m based here in St. Louis, Missouri and going back about five years, I had a good job. I making six figures, had a lot of autonomy. It was a great job. ⁓ But like a lot of people, you you want a little bit more, felt like you were kind of hitting the ceiling at the company and wasn’t exactly getting along with my boss. ⁓ And so, started looking for other opportunities and I didn’t know where it was gonna take me. You know, I looked at…
absentee, owner of franchise models, bunch of different things. And I had a great mentor who was getting in the mobile home ⁓ park space at the time. So I was actually looking for conferences and conventions and things to learn more about that. And I ended up stumbling across a YouTube video that talked about this concept called Airbnb arbitrage. And before anyone jumps to any conclusions, let me just say this was five years ago.
Airbnb arbitrage has certainly become more well known now, but still a lot of people haven’t heard of it. And really what the concept is, is you take a space that you don’t necessarily own. For example, you could go to a local mom and pop landlord, or you could potentially even, if you’re like me and get lucky, go to a big luxury complex and you can rent apartments, get the lease, and then turn around with permission and re-rent the space out on platforms like Airbnb and Verbo and so forth.
And so you’re just making the money on the margin, right? If I rent for a thousand and I rent it on Airbnb for 2000, then minus my utilities, I might
you know, seven, 800 bucks a door, something like that. Right. And what was so attractive to me about it was I was like a lot of new investors. I, I didn’t really have much money, not, not any real money to invest. And I didn’t know what I was doing or where to go. So
What I loved about the concept in Airbnb arbitrage was there was a super, super low barrier to entry. There’s no down payment. There’s no real credit check or background or, you know, large amounts of money needed. And so I was able to secure with just a $500 deposit and maybe a couple of grand in furniture. I was able to secure in my mind, a paper asset of a thousand dollar a month cashflow. And so.
to kind of speed it up. tested it for a couple months, went well, ended up pitching a luxury complex, got five apartments, ⁓ started making like six grand a month. And then while I was still, you know, in my six figure job. So, you know, it didn’t take very long for that to snowball. I did some other creative things. ⁓ I was able to negotiate upfront concessions where I didn’t pay two months of rent. So by month three of this quote unquote new business, I was already
break even and cash flow positive. So that was awesome. And so I scaled that to about 14 doors using the arbitrage model and then had a decision to make. I could either keep trying to do both or I could step out of my six figure job and really focus everything in my new business, which is what I ended up doing. That’s what happens when you and your boss don’t get along. And so scaled that a little more, brought in more systems.
brought in some staff so I could get my time back. My biggest, for me, the biggest thing that I wanted to accomplish was not necessarily being rich, but I wanted my time back. I didn’t want to trade my time for money. I had a great mentor who taught me not to do that. so that was what I built out was a system to get my life back for my son and my family. And then eventually after a couple of years came to a point of, all right,
Quentin (07:37)
Hmm. ⁓Dalton (08:05)
This is a little bit of a gravy train, you know, at some point regulation, you know, something’s going to come in here over saturation. Like something’s going to happen. I need to. And if and when that does, what do I really have? And the truth was I have a system. I have a process that I own. I don’t have an asset, you know? And so I wanted to start owning the asset. I wanted to start controlling the asset that I was making money off of, in this case, real estate. And soQuentin (08:22)
Hmm. Hmm.Dalton (08:33)
So I started just leveraging that money, that income that I had created and started buying assets. ⁓ I now own a seven, eight, nine unit and a couple of single families. And so I’ve got about 26 or so doors in total. I still have some arbitrage and some other doors that I manage. so do well, ⁓ done some flips and even started getting intoYou know, now that I’ve had some experience doing flips, I’ve even gotten into just lending, um, in some circles where I’ve learned I can make the same money that I would make doing a flip without having to deal with the project whatsoever. Uh, and so that’s been really, uh, a really cool journey as well. So, uh, in St. Louis and that’s the only place I invest. I just invest where I live and, you know, I still have a couple of those different operations, but that’s kind of been a quicker version of my story and how I’ve gotten here today.
Quentin (09:07)
Mmm.Dalton (09:32)
⁓ I guess one other quick thing I’ll add to that is what’s been, I mean, there’ve been several things that have been super powerful, but I think to me, one of the coolest, most powerful things is combining that first business, which what I really do is I try not to strictly do short-term. Anyone who’s done AirBMEs can tell you it eventually becomes a little bit of a headache. So I do what’s called midterm. In St. Louis, we have a couple of great big hospitals. They do a bunch of travel nurse contracts.Quentin (09:57)
Hmm.Dalton (10:36)
and they’ll come in town for 13 weeks and they’re the best tenants and they don’t have anywhere to go. can’t get a, they don’t want to live in a hotel and they can’t get an apartment. So I’m perfect for them. And so over like 80 % of my business is driven by travel nurses and midterm rentals stays over 30 days. And what’s been so powerful about that is for those that understand how the refinance process works in real estate, when you have a multifamily that’s five units or bigger, it’s considered a commercial property.Quentin (10:40)
Yeah.Dalton (11:06)
So when you go to do a refinance or get an appraisal, they don’t base the value of the asset on what’s around them like you do when you buy your personal home. They base it on the cashflow of the business. Well, because of what I do, I can essentially double the revenue of what that building would normally do. And banks are then forced to listen to the appraiser who says, well, this is the business that’s going on in this commercial property. So as one simple example, I bought aI bought an eight unit last year for 1.15 million and today because of my business that’s in there, the appraisal, when I did my refinance appraised at 1.88 million.
Quentin (11:40)
Mm.Dalton (11:49)
So it’s been a cool journey.Quentin (11:47)
Hmm.Y’all opened up saying two words, cash flow. This gentleman knows how to make cash flow, man. Thank you. Thank you so much, man, for taking us through that journey. Thank you for, oh man, just letting us know, just a little bit of secret ideas. I’m sure you probably helped a lot, but thank you so much, man. I know that is gonna get out of your’s, get there.
their wills turn and their wills thinking. So man, thank you so much for that. Thank you for letting us into your success. What I like to do when I have conversations like this, we show the people to success, but I also want to show people the process and the journey to success as well, right? ⁓ Because there’s moments when things get real, right? There’s moment when deals go sideways, moments when you have to pivot fast.
And Mr. Dawson, was wondering if you could share maybe one moment like that. Again, because we have people listening from all different walks. And maybe somebody may be stuck. Maybe somebody is facing something like, how do I get over this? I would just love for you to maybe give them a story so they know, it’s not always just easy peasy as it goes for it, you know?
Dalton (13:08)
Oh, I got stories. So I essentially have kind of three different businesses all kind of married within each other. so on the Airbnb side, right? If somebody goes that route, short-term, mid-term rentals, whatever, you’re gonna eventually come across issues with tenants, especially with short-term rentals, you might come across parties. And the short answer there is,Quentin (13:09)
Hahaha!Dalton (13:37)
you’re just gonna have to learn trial by fire. I could give you a laundry list to put this in your house rules and do this and do that. But people are just gonna be ⁓ poo pooey sometimes, right? They’re gonna be difficult to deal with. ⁓ So that’s part of life. As far as something a little more traditional with doing a flip, for example, you can do all the due diligence in the world. ⁓ Inevitably, you crack a wall open.and you find things that just were not possible beforehand. so classic cliche advice would just be, you know, don’t spread yourself thin and that goes for your money too. If your budget is 20 grand and you’ve got 20 grand, you might consider not doing the deal or bringing in on a partner because I can almost guarantee you, you’re gonna go above 20 grand, right? I had a flip that we did that was supposed to be a $20,000
renovation and it turned into $116,000 renovation. And a big part of that was we got into the walls and we had foundation issues in the basement. So now you tack on 60, you know, whatever grand there, what you don’t know and you learn is when you have to redo foundation walls, you got to take all the plumbing off the walls and you can’t just put it back up. So now you got to pretty much do all new plumbing.
When you do that, I mean, it’s a domino effect sometimes in
I don’t say that to hopefully scare anyone away, ⁓ but it’s the reality of what can happen. And depending on how you buy foreclosures, there’s a lot more risk, but there’s also lot more upside, right? And so picking your battles and understanding what are your risk reward ratios and you’ve got to be comfortable with that. ⁓ Don’t hold me to this quote.
I think it was a Warren Buffett quote, but I think his rule number one of investing is don’t lose money. Super simple. Don’t put yourself in a position where you’re going to lose money and more importantly, value your time. ⁓ I had a handful of deals a couple of years ago where I could have done the flip, let’s say, and I could have made 30 grand. What I looked at so simply, but so many people have told me this is amazing advice.
Quentin (16:15)
Hmm.Dalton (16:40)
As I said, okay, I think I’m gonna make 30 grand on this flip. The flip’s probably gonna take me five months, right, to be a conservative. Maybe it takes three and a half, but let’s call it five months. So if it’s gonna take me five months, I’m making six grand a month. And in those six months, until I get my 30 grand profit, I’m also out 80 grand, whatever the amount is, right, out of pocket.Conversely, if I buy it the right way, if I’m, you know, in this case, doing a foreclosure, I might be able to what I call whole tail it, ⁓ where I do own it, but I can just go sell it to another investor for maybe a 10 grand profit, but I could do that this month. And so in scenario A, I made six grand a month. In scenario B, I made 10 grand a month. And now I have not only the 10 grand,
Quentin (17:14)
Hold two of them.Yeah.
Mm.
Dalton (17:32)
but I still have the 80 grand to go deploy or whatever I was gonna be out of pocket, right? And so the time value of money became a concept that I really grabbed onto to say, my time is the most valuable thing I have, so how do I get the most money for it? And sometimes it’s actually not doing the big project, it’s finding a different avenue to make money in that same space. And so there’s so many ways.that you can make money in real estate. And depending on time, I’m happy to mention a few others, but I think, you know, the advice, since I’ve kind of gone off on a tangent here, ⁓ the advice would just be, you know, to value your time and understand the traditional pitfalls, understand the risk reward of what you’re willing and comfortable to do. And honestly, I wouldn’t be where I am today if I wouldn’t have done some of my first deals with a partner, with a friend.
Quentin (18:09)
YouDalton (18:28)
somebody that knew a little bit more than me, maybe I had the money, but they had the expertise. ⁓ Something like that is a great way to get your feet wet so that you can eventually feel confident to take down your first deal on your own.Quentin (18:42)
Yeah. Listen, Dalton, man, I love it. I’m with you. My mentor taught me and it really changed my psychology is my time is what I have to leverage. That’s what I’ve been leveraging. All of my work in life is my time. I go to work, go to work, go to work, get paid once. He was like, no, you want to work once, get paid, get paid, get paid, get paid. And so you’re absolutely right. Get your time back. That’s our most precious commodity that we have is our time. So thank you for highlighting that. I 100 % agree.Let me ask you this. What are you most focused on or scaling next? What’s the next real goal for you, Mr. Dalton?
Dalton (19:22)
So most recent projects ⁓ have been getting more into lending myself. ⁓ I use a few different tools ⁓ in terms of how I’ve kind of built my personal net worth. ⁓ One of them that I choose, I’m not saying it’s for everybody, but one of them that I choose is whole value, ⁓ sorry, permit, life insurance or whole life, ⁓ cash value life insurance. And I’ve leveraged that.⁓ Again, I’m always happy to explain it, but it certainly takes some time. But it’s a great vehicle for certain people if they can build it over time where you can really have your dollar working in two places at once. And what I’ve done using that and building my own personal assets ⁓ and cashflow machine through my first business is I’ve kind of put myself in a position to, for some people, be their bank.
I think this sounds terrible, I just think banks, along with a few other industries in our country, are some of the biggest scams on the planet. I always tell this joke to people when I have this conversation. say, if I go into a bank and I deposit $1,000 and they’re going to pay me 1%, and then you go in line behind me and you take out a loan for $1,000 and you’re paying 10%, how much is the bank making?
And the common sense answer that people say is, well, they’re making 9%. The answer is wrong. They’re making 100 % because it’s not their money, right? So in a crooked, twisted way, I think being a bank is great because you can just make money. And in my case with real estate, maybe not deal with the project headaches and stuff like that. And so I’ve…
Quentin (20:58)
Come on.Dalton (21:16)
kind of put myself in a circle of ⁓ other investors around the country that are active flippers, ⁓ know, whatever they might be doing with their projects, people that get into sub two, ⁓ all these different things. And for one reason or the other, whether they’re spread too thin, maybe their credit sucks, whatever, ⁓ you can get very attractive returns. And so I’ve just kind of been building and positioning myself to be in a place where, you know what, I don’t want to go.play with rusty pipes today. I’d rather just invest in someone who’s gonna go play with rusty pipes and I’ll make a little bit and I’ll have my peace of mind. So that’s kind of been my more recent, along with finishing up some projects. I just bought a nine unit ⁓ a couple of months ago and so I’ve been finishing that up and yeah, it’s been fun.
Quentin (22:08)
Ilove it, man. That bank analogy is gold, man. Thank you for sharing that. Look, that messes with a lot of us. A lot of us is like, they’re going to the truth. And then your mind just keep going and going. you’re just like, wait a minute, oh God. So no, that’s a great, great, beautiful analogy, man. Congratulations on just buying the nine units, man. I think I want to talk a little bit about relationships, man.
Dalton (22:22)
Right?Quentin (22:36)
You mentioned relationships and the network a little bit, but a lot of people, you know, there are different parts of their journey and I think they benefit hearing about relationships. So when it comes to building relationships and growing your network, what’s made the biggest difference for you?Dalton (22:53)
I mean, I think you surround yourself with people that you wanna be like. I’ve kind of two reference points on this. One is that, ⁓ I think it was Tony Robbins said, you are who you surround yourself with, right? You are your five closest friends. ⁓ Unfortunately, that’s one thing that is fortunate as I am to be where I’m at. I’m kind of a transplant in my city and working from home for myself.Quentin (23:05)
Mm-hmm. Yeah.Dalton (23:20)
It doesn’t necessarily on a daily basis put me in the circle that I want to be in. But for a long time, ⁓ previous company I used to work with, it was the most powerful thing was the relationships you had with those around you, growth mindset individuals, people that are always wanting to better themselves. And the second one was in that same vein is that you kind of want three relationships at all times that are very intentional. And that is the person above you that’s mentoring you.right, that you can go to and lean on. You want someone who’s on your level, peer, you know, that you might go back and forth. Maybe there’s some healthy competition there, but you know, there’s that camaraderie and we’re going through this thing together. And ideally, maybe not when you’re brand new, but eventually what is also great is having someone that you can kind of mentor. It doesn’t mean they call you their mentor. It doesn’t mean that, you know, it’s anything that you’re making money off. It just simply is something where
Hopefully you’re the type of person that you like to give back and especially if someone’s given into you that you return in kind, you know to the world call it karma call it whatever you want But I can also tell you as a coach I coach high school wrestling for fun that was one of the things I wanted to do once I got my time back was just do something like that and I can tell you that I became I became a better wrestler not because I get to beat up high school kids now, but because I coach because I teach
the techniques of how to do something and what I found in other jobs too is that when you just do it, you can kind of explain it, but when you’re required to teach it to somebody, especially when you care, it takes on a whole other level of your own personal understanding of how am I supposed to be doing X, Y, Z, right? And so I think those concepts are super important of surround yourself with.
the people you wanna be like, that you emulate, that you respect, that are going places and doing things that you wanna do. And ideally, have that mentor, that peer, and that mentee that you can leverage all those different angles of how do I wanna get better myself.
Quentin (25:29)
Yeah, no, I love it, man. I heard it loud and clear. I rolled it down the three relationships, tiers of relationships. Have someone above you, someone on higher level, someone that can keep you reaching and looking forward and looking for that north star and going towards. Have somebody like on your level, your peer. I love how you said that healthy competitiveness, you know, like that. I love that. And then someone that you can mentor, that you can give back to, someone that you can help.teach and like you said, like that kind of refines you when you have to teach what you know. And what I love about you, you’re talking about doing it on an authentic level, like, you know, not, you know, being shy, Steve or like punching down at nobody like, no, authentically, I want to help you be better. And so I love everything you talk about thoughts. And this has been absolutely, absolutely wonderful, man. Listen, before we wrap, if someone wanted to reach out to you.
connect with you, maybe collaborate and learn more about what you’re doing. How can they reach out to you,
Dalton (26:33)
⁓ I’m not the biggest social media guy Unfortunately, I know that’s the that’s the easy one. I mean you can find me on there I don’t know there’s way for you to post my name on there, but I am I do have an Instagram I do have a Facebook So we can certainly post that if that’s helpful If you want me to read it off I canQuentin (26:37)
Yeah.Got you.
Yep. Yeah. You can, if you don’t mind, read it off because I’m gonna let my tech go ahead and post it once they hear it. So if you don’t mind, go ahead if you can. Yeah.
Dalton (27:02)
Yeah, let me see if can find it. ⁓ This is how you know I’m getting old. So it’s just my name separated by a period Dalton D-A-L-T-O-N dot riggins R-I-G-G-I-N-S that’s on Instagram. So we’ll do that one.Quentin (27:04)
You sound like me, bro, I’m the same way. Absolutely.I love
it man. Well listen there he is Mr. Dalton Riggins. Sir thank you man. You have given us valuable valuable information. So I thank you for your time. I thank you for your story. Thank you for your perspective. It was a pleasure having you today sir.
Dalton (27:37)
My pleasure, thanks for having me.Quentin (27:38)
Absolutely. So listen, y’all got it. Y’all got the value. You’re here. So go ahead and subscribe. That way you get the alert and you know when these valuable conversations are happening. so, Dalton, I thank you man and to everyone else. We will see you on the next time.
