Flipping Houses: The Path to Wealth Building Through General Contracting & Real Estate

Stephen S. (00:03.865)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs. It’s your host, Stephen Schmidt, and I am here today with Justin Dawson. Justin has been flipping houses for over 25 years. He’s been a general contractor for 10 years out of those last 25. And we’re going to talk about his wealth experience within both spaces here and why he thinks every general contractor should be flipping houses for long-term wealth building. So, Justin, we’re excited to have you here today.

Just keep in mind everyone that an investor fuel we help real estate investors service providers and real estate entrepreneurs 2 to 5 X their businesses to allow them to build the businesses and always wanted to allow them to live the lives They’ve always dreamed of Justin with all that being said welcome to the show. Glad to have you here so So we didn’t have a ton of time to chat before the show So I’m really excited to have a conversation with you about everything that you have going on So you’ve been flipping houses for 25 years. Why’s this general contractor?

Justin RK Dawson (00:45.78)
Thank Thank you. Thank you.

Stephen S. (01:01.347)
Just for all of our sake here, tell us a little bit about your background, what got you into it and what’s gotten you to where you’re at today.

Justin RK Dawson (01:08.922)
So what got me into it was definitely my mother. When we were growing up, after she got, well, because they bought their first, my mother and my stepfather bought their first house with a VA loan from the Vietnam War in the early eighties. They got divorced a couple of years later, but my mother would literally buy a house. Like, we’d move every two years. So she’d buy a house. We’d live there for two, years, and then she’d sell it. She’d always do the basement.

And, know, after the two years, then you don’t pay the taxes for like a single person. I just was always from a probably is I think my first real estate memory, I was probably five years old. So I’ve just always kind of my, my mother exposed me to it. It’s just kind of what I know, you know, it’s just almost like second nature. Really.

Stephen S. (02:00.653)
Yeah, wow. So you got involved with it when you were a little kid.

Justin RK Dawson (02:05.645)
Yeah. I mean, I would just watch my mother and I was always around it, you know, and she, you know, and my mother, you know, she like taught me how to balance a checkbook. She taught me about houses. She taught me about construction. You know, she showed me a lot about just this business, maybe not like, Hey, I’m going to show you the business so you can do it, but just expose me to it. And then I just kind of gravitated towards it. I was actually a cook first for like 14 years and I went to culinary school and everything. And then I started buying real estate.

in my early twenties and I still cooked up until my late twenties. And then I just kind of got more into real estate and, I was a licensed realtor for 14 years and I’ve been a licensed general contractor for 10 years. so yeah, I mean, it just kind of morphed. I just, I just kind of morphed into it, you know, it’s kind of morphed into it really.

Stephen S. (02:57.965)
What, how’d you go off and go to culinary school, become a chef? Like, how did that happen?

Justin RK Dawson (03:05.803)
Um, Oh, I can tell you exactly how that happened. Okay. So, so, I mean, so like this was, and if I talk too much and just let me know, but this was actually back in about 19, I was, uh, 13 years old. So this was 1986. Um, and like back then you could get it because you, mean, because you had to be 16 to get a job, but then like back then there was, and there wasn’t all the digital stuff. So you had your paper birth certificate. So what I did is I.

had the old typewriter and I want, and I use whiteout and I changed the date from 1973 to 1971. So I was two or three years older. And then I went, I made a copy of it on a Xerox machine with the, you know, with the type date. And then I got my first job working in restaurants when I was 13 and it was a Barnaby steak and ale. Yeah. And I mean, so like, so like, this was a Barnaby steak and ale.

Stephen S. (03:57.337)
kidding.

Justin RK Dawson (04:02.939)
It was just like a diner. This was in Seattle because I grew up in Seattle. and so like, and so I got a job as a busser and then one night I can, and I can like, remember it just like as clear as day. saw the guys on the stove and they’re wearing their fancy chef uniforms and they were flipping the pan with fire. And I was like 13 and I was like, that’s what I want to do. And then I pursued cooking and for the next five or 10 years, you know, and that’s just what I thought I wanted to do.

Stephen S. (04:08.089)
Mm-hmm.

Stephen S. (04:33.817)
Did the company that you work for ever find out that you literally forged your own birth certificate?

Justin RK Dawson (04:39.773)
No. No.

Stephen S. (04:45.207)
That is incredible. We just admitted to a federal crime here on the real estate pros podcast. my goodness. Yeah, right. Yeah, exactly. That’s amazing. my goodness. That just goes to show you that you’ve got a spirit of doing whatever it takes to win.

Justin RK Dawson (04:52.096)
But when I was like 13, I was a miner. I was actually a miner, so doesn’t count.

Justin RK Dawson (05:08.911)
or just to survive really, but yeah, and I’ve got to win to survive, but yeah, I mean, just to survive really, you know, I got to keep it moving, you know.

Stephen S. (05:16.825)
Why was that just to survive when you were 13? Tell me about that.

Justin RK Dawson (05:22.182)
it wasn’t like, and I think that’s more my adult life because I didn’t really want anything when I was a kid, you know, like my, like I had a job. I started working when I was 10, you know, always had my own money, you know, I had my little allowance. Like we weren’t rich by any means, but I never wanted for anything as a little kid. You know, I think more. It’s kind of become more survival mode as you get older. Like once you kind of hit that, well, I started having kids like really early.

Stephen S. (05:30.008)
Yeah.

Justin RK Dawson (05:51.916)
But I mean, once you kind of hit that mid that mid twenties or that 27 and you have a kid or two, you’re like in survival mode for the rest of your life. And that’s almost how you have to work, you know, because you have a lot of people that are counting on you. And it’s just like, you have to work in survival mode. I almost think you’re more productive. So even if it’s not that critical, you should make it that critical.

Stephen S. (05:53.458)
really?

Stephen S. (06:14.093)
having some form of pressure.

Justin RK Dawson (06:16.043)
Yeah. Yeah.

Stephen S. (06:18.849)
Hmm. That makes a ton of sense. now, now what, so when you left cooking, what made you start dabbling in real estate when you were still working as a cook, doing that? What really sparked you doing that? Was that just growing up around it? Was that your mom’s influence or how’d you get back into it?

Justin RK Dawson (06:36.293)
Uh, I mean, so what happened is that I had bought, uh, cause I got married when I was 23 and we bought our first house. They were not that expensive. They’re like 115,000 or something. And we both had full time, you know, $10 an hour jobs, which, you know, and like, and like, w which was enough. And so we bought our first house and then I was refinancing it and the notary.

came, came, you know, like they got the traveling notaries, you know? And so the loan officer was kind of a shark and I got pissed off at him because the situation didn’t seem right. Like even though I didn’t really know a whole bunch, just didn’t, and like it didn’t seem, it seemed right. So, I mean, so like then we got done signing and the, and the loan officer left and the notary stayed and his name was Jack Laboe. I still talk to him to this day and that was probably 30 some years ago. So he’s

So he’s packing up his bag all slow. And I’m like, why is this guy still here? Like he’s just sitting here, you know? And then he’s like, and he was actually a real estate broker. And I’m like 24. And he’s like, Justin, you ever thought about getting into real estate? And I’m like, what do you mean? He’s like, getting your license. And I’m like, I mean, not really. And he said, so this is what you have to do. So then long story short, I think three months later, I called my mom down to wash the kids for a week.

And they had a real estate school that was 40 hours in one week. And then you went and you passed your tests and you got your license. So I took a week off from work. My mother came and watched the kids and I went to real estate school for a week and I got my license probably three or four months later. And then I just bought a house and then I had some money and I bought another house and sold a house and bought a house and sold a house. And that’s just what I was doing, you know? And then I actually worked in the restaurants and I.

had the real estate license and I just started buying real estate. And then I got fired in New Year’s Eve of 2000. And I, and I got fired from my waiting job and I had my fifth kid on the way. I was 27 years old and that job was all my medical benefits because by that time I was actually had stopped cooking and I was waiting tables at the holiday end. I had to wait tables there for like five years. So I got fired New Year’s Eve and I had my fifth kid on the way. had

Justin RK Dawson (08:55.996)
just got my real estate license about seven months previous. And I think I had bought another house by then. And so at that point, it was just like, you’re in survival mode. That’s what I said. You got five kids, you got a wife, you got a house. You don’t have a nine to five anymore, but you got a real estate license and you know enough about construction to maybe build a house. And that’s what I knew. And that’s what I worked on. You know, so it’s just kind of situations.

Stephen S. (09:21.901)
Wow. Man.

Justin RK Dawson (09:25.632)
You just morph into situations. But then the cool thing about it is that then I stopped selling real estate in 2013 and I had sold more and I’d flipped most of my, my, my, my houses. was doing. And so I wanted to get my contractor license because I wasn’t selling real estate anymore. I was able to use my experience and my permits because the state of California, they have a four out, they have, and you have to be working in the trades for four years, or you have to have, or you have to have.

proving that you built 12,000 square feet is basically 3,000 square feet a year, or like 3,000 square feet equals like one year of work. And so had to prove that I’d built 12,000 square feet. So on my permits, for the sake of selling real estate, just because the square footage is always wrong, my broker said, you know, always make sure you got the right square footage. That’s the number one reason that real estate agents get sued. And so on my building, so on my building,

And I took that to heat on every single permit. put 1200 square feet, 800 square feet, just like whatever it was. So then when I stopped selling real estate, I found that and I had more than enough square footage to get my contractor’s license. So I just took what I had learned and got a contractor’s license like, and then I got my contractor license two years later, you know? So now I’m working as like a general contractor. So it’s just like everything just kind of morphs and

comes together in a weird sort of way, kind of the more that life kind of goes, it just kind of, you don’t even know what you’re doing half, you don’t even know what you’re doing for half the time, but the dots always connect themselves, you know? It’s like life’s amazing.

Stephen S. (11:05.837)
Yeah, 100%. You know, and it’s interesting because like, you know, from your experience and maybe you think differently, you know, I think of like realtors as real estate, realtors aren’t really in real estate. They’re selling other people’s real estate, right? So, you know, they’re in it to an extent, you know what I mean? But like, what made you decide to get out of like selling other people’s houses and like actually get into it for yourself and doing your own properties, flipping your own properties, et cetera? What was that?

Justin RK Dawson (11:19.035)
Right, right.

Stephen S. (11:34.837)
When was that point where you were like, man, I’m going to, I’m going to have a better career doing this portion of this niche versus like just selling other people’s stuff.

Justin RK Dawson (11:45.305)
well, like, I mean, like real estate, I always did real estate and flipped houses kind of at like the same time. So I kind of needed them both. Yeah. So actually, and like, and like, and like back, back in the day, and I put my construction sign and my listing sign in the, in the window. So I’d be the general contractor and the contractor with two different company signs in the window, but it was both me, you know,

Stephen S. (11:54.99)
really?

Justin RK Dawson (12:12.17)
So I actually did that for a long time. then due to some extenuating circumstances, and I had to give up my license in April of 2013 or 2014. And then at that point I said, let me get my contract license. And that’s what I did.

Stephen S. (12:13.198)
Yeah.

Stephen S. (12:35.641)
Wow, so adapting and overcoming.

Justin RK Dawson (12:38.854)
Yeah, you just constantly adapt, know, and you just have to stick and move, you know, stick and move, stick and move and you’re to get knocked down a couple of times. know.

Stephen S. (12:50.297)
So what are some of the types, what are your favorite types of projects to get into now?

Justin RK Dawson (12:50.377)
Get back up.

Justin RK Dawson (12:56.203)
well, I’m well, just kind of discovered this kind of, but I actually, cause I’m working on four flips right now. and very little client jobs just cause things kind of shift. So I’m, I was more in client jobs a year ago and less than my own flips. Now I’m more in flips and less than client jobs, but, the last two deals that I found, which are turning out to be really good deals were deals with code compliance issues and red tags and.

issues with the city of Oakland because nobody wants to deal with that. Well, this is the city of Oakland, but just kind of those hard paperwork building because nobody wants to deal with that. And I’ve gotten some really good deals on both of them. It’s a lot of work to fix, like, but that’s another skill I’ve learned like over the years is doing paperwork and getting the permit and getting the permit. So that stuff doesn’t scare me. So like, for instance, on the one I got for, but one of them is actually went into contract last week, but I bought that one December.

31st of 2024, so New Year’s Eve basically. And it was on the market for like more than a year. And this is the Bay area. So property sell quick, you know, but, but, but, but, I mean, but they had red tags and co-compliance and city of Oakland and nobody wanted to deal with it. So they want like 900. I offered them like 750 for it. And then I ended up getting, and then I ended up getting it for just under eight. Um, so I bought it this December 31st. just put it.

back on the market. got the whole building done in like 11 weeks. It cost me like $200,000, but I got the whole job done in like 11 weeks. And I cleared the permits and did everything I’m supposed to do. It just went into contract five days ago after five days on the market. And that went on the contract for 1.3. And it’s to close in 14 days, whether it will or whether it won’t. if it does, that’s 120 days and $250,000.

that I’ll probably make after I close escrow, you know? And then the other one that I bought was the exact same situation, but it was worth it because a lot of investors, they don’t want to deal with foundations. They don’t want to deal with structural. They don’t want to deal with paperwork. So this building that I bought actually was up on blocks for 10 years. It was actually almost falling off the blocks because the house was getting so, so, so heavy and the blocks were getting ready to crumble. This whole house was going to, it was, and it was going to fall down the hill, but it was the same situation.

Stephen S. (14:52.665)
Wow.

Justin RK Dawson (15:18.844)
this property to be on the market for more than a year. And this is like a nice part of Oakland. This is like really nice. Like it’s, this was like, it’s like high in property. So it had been market for, I think they wanted 850 and I was like, I’ll give you 454. You know, and this was a bank. I’m like, they don’t care anyway, but they came back and we agreed at 500. But like on that one,

I’m working on it now, but I spent 500 on the purchase. I’ll spend 500 on the remodel. got the permits. The permits cost me $25,000, but I got the permits. That place I’ll have done in June. Hopefully I’ll have done in June, but that place is probably comping out at 1.8 to 2.3. So off that one flip that nobody else wanted, because they don’t want to deal with the foundation. They don’t want to deal with the paperwork. They don’t want to deal with all the hard stuff. I’m probably going to make…

I’m going to say at least a half a million dollars off that property if not more, but I’m being conservative. So like in short, my favorite properties are like the ones that nobody wants, you know, because they don’t want to do the work. know, people want to put lipstick on a pig type flips, you know, and be out of there in a week, which is great, you know, but you can make more money off the more challenging ones if that’s something that you’re willing to do, you know, but that’s not for everybody. So those are my favorite flips.

Stephen S. (16:25.847)
Yeah, for sure.

Stephen S. (16:36.185)
Right. Well, especially people that don’t have that experience, like there’s just so much there that you being able to have it in house as well and not be paying a 40 % profit upcharge compared to Pivotally, you’re actually able to cut out quite a bit of the…

Justin RK Dawson (16:42.113)
Mm-hmm.

Justin RK Dawson (16:47.482)
Mm-hmm.

Stephen S. (16:55.511)
the risk to yourself there because you’re doing it all yourself, right? So that’s really interesting. Wow. So do you typically try to do larger projects like that and do less of them? Or do you, about how many deals do you generally get into in like a year’s time?

Justin RK Dawson (16:59.0)
Right.

Justin RK Dawson (17:12.73)
I mean, I’m honestly the last four years I’ve kind of been more on the general contracting side and I’ve been doing like maybe one. I think I did two last year. I think I had two of the year before. So I’ve only been doing about one or two up until this year where I think I’m going to probably get four done this year. Um, I’d like to maybe, I don’t know. And I think I might want to do like a big development or something. I think I’m definitely leaning.

More tours, more towards the side of new construction, because I really think that new construction, can really control your costs better. And I think that you can get them done quicker. And I think new construction is where it’s at. And plus like I know in Oakland, but probably in lots of places, uh, uh, uh, uh, uh, uh, and like across the country, like these houses are pushing a hundred years old, you know, and I know they’re built well, but it’s like, by the time you fix a lot of this stuff with these old houses, it’s just almost becomes.

your minds will build new, you know, so, and it’s, you can, and you can control the costs. Cause with those old, with those old, with those old houses, once you open up the walls, it’s like open up a Christmas present, man. You never know what’s behind those things, you know, you can never know. mean, even on this last flip that I got done in like 11 weeks, like we opened up the back wall to take the decks off and the whole back wall was rotten. That was behind three layers of siding. So, you know, and that added,

month to the project. You know, so new construction for time and cost management is definitely the direction that I think I want to go on after I get these four flips done that I’m working on now. And I don’t have to spend as much time on the job either.

Stephen S. (18:56.025)
Yeah, none of that makes sense.

Sure, totally. Well, it’s got you wanting to flip more properties this year than the past few years.

Justin RK Dawson (19:04.716)
it got really slow on the construction side and I had some money, from these other jobs that I was able to put together and I was able to just, buy these three houses real quick because I knew my, my jobs were getting basically dry and up to nothing. They’re picking back up now, but I’m waiting for permits on like a lot of stuff. And, know, there’s always like, there’s like all the others, like always the delay. So basically it just kind of. It’s the same thing. Like life is kind of morphs, you know, I mean,

I’ve been wanting to just do what I’m doing now for the last five years. Like really just go back to working on my own houses because that’s what I did initially. And like, and like the house flipping is like what’s and like house flipping and I always hope to make some money, but like the house flipping is like freedom. Like it’s like, I, like, it’s so much, I just feel like complete when I’m flipping a house, you know, I don’t have to.

You know, doing it for other people is cool and I love my clients and I appreciate them and everything. But it’s like, I don’t have, I’m the only one that’s making decisions and I can get them done as quickly as I want. I don’t have to wait. Like I can just flow, you know, I just feel so much pure joy when I’m flipping houses. It’s almost like addictive. It’s almost like an adrenaline rush. Honestly, it’s almost like an adrenaline rush.

Stephen S. (20:19.993)
For sure. Yeah, I mean that is one of the things that gets us hooked, doesn’t it? If you were in an ideal world, how many would you do every year? Would you just do that or would you still do contracting? Do you like contracting enough to keep doing it?

Justin RK Dawson (20:36.282)
No, that’s a big fat no. No, I know I don’t. mean, and you know, really, like, I never wanted to be a general contractor. It was just circumstance that I had to get my general contracting license because that’s what I was qualified to do, you know? I mean, and the the only reason that I kind of became my own general contractor was because the contractors that I hired when I first started would always rip my head off. And like, they talked bad about contractors, they talked bad about attorneys, but

Stephen S. (20:40.557)
Really.

Stephen S. (20:51.587)
Sure.

Justin RK Dawson (21:04.987)
Stuff to talk about contractors, like even though I am, and like even though I am, even though I am, am one, like it’s, true. There’s a lot of sharks out here, man. And then it’s just like, I didn’t want to be that shark, you know? So I’m like, you know, I guess I could be a general contractor. I just won’t be like everybody else. Cause I didn’t like general contractors before I came one, honestly.

Stephen S. (21:30.553)
for sure. Well, Justin, thanks so much for being here today. If people want to learn more about you or they would like to go and see how they could connect for more, what’s the best place to find you?

Justin RK Dawson (21:42.089)
so my Instagram is probably the best one. That’s Dawson family farms. And that’s the same as my tick tock and my, Facebook is just Justin Dawson. I don’t really post there too much, but just Instagram is probably where I post the most Dawson family farms. All, all, all one word, all lowercase.

Stephen S. (22:01.658)
And if you had to give just one last piece of advice for anybody that’s maybe getting started or thinking about doing this What would that be if you were to give one last piece of advice?

Justin RK Dawson (22:10.086)
It’s like you mean like as bars flipping houses?

Stephen S. (22:16.005)
Yeah, as far as like flipping houses, maybe they’re considering getting their general contractors license to do that in tandem to it. What would you tell somebody that’s just getting started?

Justin RK Dawson (22:25.585)
I would say, I’d probably say try to flip a house first if you could because that was my training ground for general contracting.

So I would definitely say buy a piece of real estate and.

Fix it and be involved. That’s a lot of things that I see a lot of people that just start flipping houses or doing different types of business. definitely, if you’re going to get into the construction side, be involved. You can hire people, but be there every day and ask questions and really make an effort to learn about construction or you’re never going to make any money house flipping. So that’s my piece of advice.

Stephen S. (23:14.041)
Well, thanks again so much for being here and everybody go go connect more with Justin Dawson family farms on Instagram We appreciate you being here today, and I hope that all of you enjoyed the show. We’ll see you on the next episode

Justin RK Dawson (23:27.603)
All right, thank you.