Flips That Pay You Forever: Damon Burgess’ 2-Flip-1-Hold Strategy for Building Real Estate Cashflow

Share via:

• Facebook
• X (Twitter)
• LinkedIn
• More

Subscribe via:

Show Summary

In this conversation, the speaker discusses the transformative journey in real estate, emphasizing the importance of building relationships with wholesalers and realtors. The speaker shares insights on how a shift in mindset can attract opportunities and how demonstrating the ability to close deals can lead to a more favorable position in the market. The conversation highlights the art of closing deals and leveraging past experiences for growth in the industry.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Damon Burgess on Facebook
    • Damon Burgess’ Phone Number: (502) 314-8600
    • Damon Burgess on LinkedIn

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Damon (00:00)
  The biggest thing is fear or lack of knowledge. ⁓ I had a little rule for every three properties. I would ⁓ pretty much fix and flip two and then I would keep one as a whole for long-term investment and for cashflow because I knew ⁓ that I definitely want to one day live off of retirement when it came to real estate.

  A lot of it, like I said, is fear. Most people fear being a landlord or what if I don’t have enough money to pay the mortgage if my property’s empty? That’s why I hit it both ways. I want to lump some money from fix and flips for emergency cases. Also to have repair money because you don’t want to be a slumlord and nobody wants to pay you rent when your properties are not fixed.

  Dylan Silver (02:15)
  Hey folks, welcome back to the show. Today’s guest, Damon Burgess, out of Tampa, Florida, with Sky Enterprises, LLC, which is from the Louisville, Kentucky area, but Damon is in beautiful Tampa, Florida. Damon is involved in a number of real estate segments, including single family, general contracting, as well as multi-family. Damon, welcome to the show.

  Damon (02:44)
  Thanks for having me. Glad to be here.

  Dylan Silver (02:47)
  I always like to start off at the top of this show by asking guests how they got started in real estate.

  Damon (02:55)
  Okay, very interesting

  My background is a little different than most. I started off with terrible credit, no knowledge in the game, and I was a loan officer. So here I am at the time. This is probably back in 2000. I’m helping people get loans so they can buy homes or refinance. And here I had terrible credit myself. ⁓

  a good friend of mine, guy by the name of Ashtron Hardin. He was a very good mentor at the time. the time, ⁓ I was maybe 28, 29, 30 years old, and I had never seen another African American male. He was in law school. He owned about 15 properties, and I admired his freedom, and he had came to me to refinance some of his properties while he was in school.

  And I was like, man, this guy’s about my age. We’re both African-American men. He’s into something that I’ve always wanted to get into, but my credit was holding me back. So I took him to lunch and picked his brain and he helped me get started. I eventually wrote a book on real estate investing and wholesaling and lease options. And I made him a big part of that book as helping me get started. So that was my key start. He actually introduced me to the world of

  I wanted financing and contract for deeds because as I stated, I didn’t have the credit to go the traditional bank way or mortgage company way. So I went that route, ⁓ sold a couple of properties, straightened out my credit, and then I was able to obtain bank financing, mortgage company financing. But it was a great tool to learn in the beginning because I wasn’t going to let my negative credit stop me from obtaining my dreams. And he showed me another way to get started. And I appreciate that man so much for that.

  Dylan Silver (04:53)
  Now, that connection, I mean, sounds like a huge, pivotal moment. I can point back to

  two connections in particular that have really been game changers for me. And funny enough, when I think about these connections, I was originally reaching out to these folks for something totally unrelated to what ended up really helping me in my path.

  you remember those first conversations that you had with him? Were they strictly about real estate? know, were you thinking like, hey, I’d like to own properties, you know, looking at the single family space? Or was it really more, you know, curiosity? Like, hey, this is someone, you know, who I can relate to. What are they doing differently than me?

  Damon (06:23)
  So it’s funny you said that our first conversation was just about life. I wanted to kind of get to know the person before I picked his brain on the business side. Because remember, I’m just meeting this guy and I don’t want to get too personal. So I took him to lunch a couple of times, picked his brain. We became good friends. He would invite me to some of his projects and I would go check him out. ⁓ And once he got to know me and got a good feel for me and felt I was an honest person just wanting to learn, he opened up a lot more. We talked more about

  how he got started, his business structure, certain banks he used, ⁓ the importance of networking and connection making with people and pretty much ⁓ relationship building.

  Dylan Silver (07:06)
  You know, when we talk about the importance of networking, it’s easy to gloss over just how critical it is. But I mean, imagine you had never made that one connection. I can think back to these connections that I made. There’s zero way I would be here talking to you if I hadn’t made these two connections. At what point in time did you start looking at, hey, let me get into the fix and flip space. Was it shortly thereafter?

  Or were you working on a number of other things before getting into single family fixing?

  Damon (07:41)
  So I always had a fascination with real estate due to another good friend of mine. His name was Edward White. Still we’re like best of friends. He’s always been the kind that would go out and do the research, go take all the classes, things of that nature. So he has sparked my brain into the world of real estate. I just happened to become a loan officer because I wanted to learn the terminology and how loans worked. I felt before I went out there and tried to buy a house fixing flip or fixing rent.

  I better learn how the lending institution works. So I went that route. ⁓ And it’s funny because yeah, I was a little intimidated. Like most people, when you buy your first house, you don’t want to mess up. Everybody wants their first time out of the gate to be a home run, right? Because if you do something wrong, it’s going to make you feel like, I maybe made the bad decision. This may not be for me. But I’ve always been a person that ⁓

  Not, maybe a little nervous. Maybe nervous would be the word, but not scared. Let me correct myself. I was a little nervous, not scared, but I was eager to get started because I had people around me that looked like me and around my age and I felt like, well, they’re no different than me. I mean, if they can do it, I can do it. And that was kind of my confidence builder. And then when I did my first couple of deals, I realized it was very addictive.

  I couldn’t believe how addictive it was. I yet hadn’t failed yet, so maybe that’s what made me more motivated. But at the time, I was just like, this is very addictive. I could see myself doing this full time. I never really wanted to work for anybody anyway. But yeah, I really enjoyed the success, the short success I had in the beginning. It was very addictive.

  Dylan Silver (09:34)
  Now when we talk about that beginning time period, how are you finding those deals? know, I’m imagining some degree of distress now in these properties that you’re acquiring. How are you finding these sellers?

  Damon (10:24)
  Okay, so back in those days, we’re talking 20, 22 years ago, wholesaling was really getting started. Well, I can say it’s getting started, but wasn’t as big as it is now. Now got all kinds of platforms and everybody’s got classes on how to wholesale. But back then, ⁓ it was all about, like I said, relationship building and networking. I got with the local wholesalers. I got with the local realtors. ⁓ And then I had to show them that I had an ability.

  to obtain a loan or just close with cash or close quickly. And what I started to find out, instead of me looking for the deals, the deals would come looking for me. Once you show wholesalers that you can close and you know what you’re doing, once you show realtors you can close, they’ll actually find you when you don’t have to find them. It’s funny how the universe works in reverse in your favor.

  Dylan Silver (11:12)
  I’ve never really let that sink in until right now because I’m thinking, know, especially as a realtor myself, how great it would be to have a captive buyer’s network, but it’s not like necessarily going out and putting some of them are, but not all of them are putting tons of effort into marketing, but they know, I’ve got these properties that I’ve bought in this area of the city. have this connection. The deals are going to find me.

  Damon (11:24)
  Exactly.

  So let me tell you this, this is the term that I don’t know if everybody uses, but maybe I made it up. There’s ugly houses and there are pretty houses. So let’s just say I met you back in the day and you were my realtor. know, once I’ve shown you that I can close quickly and have ability to close, you’re gonna kind of show me everything that you feel I can make money off of. Anything with equity, anything like that that you know as an investor I’d be interested in. So the reason why I use the term ugly and pretty houses,

  You’re going to have clients that want pretty houses. Those are your homeowners, not your investors. You want to sell them pretty houses. have people that you have to market to and get their attention so they can come to get your listings. With the ugly houses, you want a list of investors like myself because you know we can close. You know we have a relationship with the bank. We can close quickly. If you show us something we like and once you add us to your list of favorite buyers, investors, whatever you want to call us.

  and you kind of pick our brain into what we’re looking for. You know how much equity, what kind of loan value we want, what’s the after repair value we’re looking for and the location we’re looking for. You can, they basically say, with these group of guys and Damon’s one of these group of guys, I know he’s going to be interested in this list of properties that I have over here, ⁓ one through five. Well, five through 10 is for my pretty house people. So once you start building relationships like that with wholesalers and other realtors ⁓ or bird doggers, you know, whatever.

  they’re going to find you because they know it’s all commission based business. know, real estate, know, nothing’s guaranteed. It’s all commission based. You got to hustle to get out here and make it. So if you’re a realtor and you’re a commission and you know, me and several other people can definitely use your knowledge, your experience and your know how to go cipher through the MLS and look for exactly what we’re looking for. We’re going to be best friends. You know what I’m saying? It’s going to make your job easier. And my time.

  Dylan Silver (13:33)
  I ain’t right.

  Damon (13:36)
  It’s so important to me that I don’t really have time to go cipher through the MLS. So I need a guy like you or a wholesaler. And once they learn exactly what I’m looking for, they’re going to say, look, I know 80 to 90 % of the time if I bring Damon this deal, because I’ve done business with him before, this is what he likes, this is what he’s interested in, he’s going to buy it. And that could be three bedroom houses, that could be commercial. Everybody has a niche that they like to stay. It could be trailer homes, it could be condos.

  Once you learn my niche and what I like, ⁓ what my after repair value I’m looking for, what kind of equity status I can get, ⁓ your location. Obviously, location is huge in real estate. And then I also might turn around once I fix it and to flip it. Since you helped me find it, I’m probably going to have turn around and let you list it for me. So you’ll make money on the front end with me purchasing it. And you’ll make money on the back end because I’m going to show loyalty and be like, hey man, you helped me find this property.

  The least I can do is let you list it.

  Dylan Silver (14:36)
  Yeah, I mean, those relationships ⁓ will ultimately come back ⁓ tenfold. And when we talk about the fix and flip game to something that gets lost, and we were talking about this before hopping on here is

  the buy and hold space. There’s a lot of people that will do one or the other, but you built a ⁓ sizable ⁓ personal portfolio in the single family space while also doing the fixing and flipping.

  I’ve noticed that although you would think that that would be a no-brainer, it’s not as common as I had previously thought, especially after talking to guests of this show. What do you think it is that kind of gets people so locked into, hey, I’m just gonna do this?

  Damon (16:05)
  The biggest thing is fear or lack of knowledge. ⁓ I had a little rule for every three properties. I would ⁓ pretty much fix and flip two and then I would keep one as a whole for long-term investment and for cashflow because I knew ⁓ that I definitely want to one day live off of retirement when it came to real estate.

  A lot of it, like I said, is fear. Most people fear being a landlord or what if I don’t have enough money to pay the mortgage if my property’s empty? That’s why I hit it both ways. I want to lump some money from fix and flips for emergency cases. Also to have repair money because you don’t want to be a slumlord and nobody wants to pay you rent when your properties are not fixed.

  Excuse me. But then the rental properties because I want a steady income. I want a cashflow. I want it to show income.

  Dylan Silver (16:48)
  Yep.

  Damon (16:57)
  You know, not just large lump sums of money that I’m going to have to taxes on. You know, so I try to hit it in both ways. Go ahead.

  Dylan Silver (17:04)
  I want to, I

  want to pick a here, Damon, and ask you about ⁓ what I’m seeing happening in the real estate landscape all across the country. ⁓ Whether you’re in Tampa or Louisville or Texas, where I’m licensed, even the Northeast where I’m originally from, I’m seeing this movement into ground up construction, into multifamily. I’m seeing a lot of people looking at these deals, even if they’ve got experience

  as a single family fix and flipper or a buy and hold, Airbnb, what have you, are you looking at any of these multifamily deals, whether it’s smaller, multifamily or midsize?

  Damon (17:45)
  So I don’t ⁓

  any deal. If I can make money or if there’s equity, I look at anything. I don’t care if it’s a house, a commercial space, new or old construction, a trailer park or land. If there is money or income to be made, I’m at a stage where I look at everything. In the beginning, I did want to concentrate at one thing at a time to kind of master one thing before you try several things.

  That was my thing in the beginning because I was in a learning phase. Every day in real estate, you’re still learning, by the way. I don’t want to act like I know it all because every day you can learn something and the industry always changes. But no, I look at everything. If there’s a deal, I want to be involved on it.

  Dylan Silver (18:14)
  Yep.

  You mentioned something before we hopped on the show here, which I was totally unaware of. actually thought it might be the opposite. There’s a lot of foreclosures happening in the Tampa market. I was thinking there would be a lot of people coming into Tampa, but apparently there’s also a lot of people who are getting foreclosed on.

  Damon (18:53)
  Well, Tampa is very interesting because our cost of living here in Florida is high because everybody wants to live by the ocean, live by good weather, beaches, palm trees, the whole nine. So it’s funny, when I came here, I saw a big wave. This was like in 2021 when the rates were like 3%. So anybody with a pulse was getting a loan. Well, you got a lot of investors who lived in like big cities that were used to the cost of living here.

  like your Chicago’s, your New York’s, just California. So investors were coming out here and buying blocks of homes. What I mean by that, was buying like 5, 10, 15 properties at a time. ⁓ A lot of locals here didn’t like that because ⁓ they were buying them and they wanted to buy those homes and they had bigger pockets and they were outbidding people and winning the deals.

  As far as from an investment standpoint, that was wonderful for them because you can get a high rent in a beautiful environment and live very comfortably. Or let’s just say a million dollar home in California looks different from a million dollar home in Texas where you’re from or Kentucky where I’m from. So they would sell that million dollar home in California, for example, or a $2 million home and come here to Tampa and buy a $500,000 house and still have tons of money left over.

  Dylan Silver (19:53)
  Right.

  Yup.

  Damon (20:20)
  ⁓

  But if you’re from a smaller region like Kentucky or Dallas, you can’t do that. So it was kind of unfair, but hey, life is not fair. It’s all about how you roll your business and where you decide to live and the equity you decide to build from where you started, but it is what it is.

  Dylan Silver (20:31)
  pricing people.

  Yeah,

  yeah, you know, I think when we talk about

  rolling with the punches, so to speak. You you’ve been involved in multiple real estate segments, general contracting, single family, looking at multifamily deals ⁓ in multiple markets, right? And it’s really the

  of an effective real estate operator is being able to pivot and not being so locked down into one asset class that you can’t pivot. Because if you do,

  Damon (21:13)
  in that.

  Dylan Silver (21:15)
  Where are all the mortgage brokers that were in the business in like 2006 and 2007, right? Most of them are. And so, you I was talking to a lender on the show a couple months back and I said, you know, how come there’s not as many, you know, people who are super gung ho about, becoming lenders as you see about becoming realtors. He offered an interesting piece of feedback, which is, well, everyone who was involved in lending.

  Damon (21:23)
  Right.

  Dylan Silver (21:43)
  made a ton of money and then they lost a ton of money and that kind of soured. So you didn’t have you know as many see and I’m sure this happened in real estate too but you didn’t have as many seasoned people which I thought was interesting. ⁓ Interesting perspective we are coming up on time here though Damon. Where can folks go if either they’re in the Tampa area they’re in the Louisville area. Maybe they’ve got a deal for you to look at or they’d like to learn more about what you’re doing at Sky Enterprises.

  Damon (21:46)
  Right.

  Okay, so my social media is just my name, Damon Burgess. You can look me up there. ⁓ I’m not afraid to give out my direct number if you’re serious about wanting to buy or wanting to learn. I also teach, I’ve written a book on real estate investing for the beginner. So it’s a very easy subject. But let me start by giving you my phone number. It’s area code 502-314-8600.

  Again, that’s 502-314-8600. I’m also available for consulting if you ever want someone basically to hold your hand through a project if you’re new. I’ll do that. Obviously, there’s a cost involved, but education equals income. So you can never over-educate yourself because you want to make money. That’s the whole point of why we’re here. And again, my Facebook is Damon Burgess, and that’s spelled D-A-M-O-N Burgess, B as in boy.

  U R GESS.

  Dylan Silver (23:14)
  Damon, thank you so much for coming on the show here today.