From Flips to Rentals: Thomas Mestas’ Proven Wealth Formula

Thomas Mestas (00:00)
you gotta ask questions, and you gotta be humble because you’re gonna fall on your face multiple times, right? And that’s the key, it’s like you gotta do that. And if you don’t, if you’re afraid to it, this is not your sport, this is not your game. Because you’re playing it safe, and if you wanna play it safe, there’s jobs out there to play it safe, and you get a check Monday through Friday. There is no check guaranteed in this business.

Well, but that’s the great thing about this business being in real estate is there is no cap, but there’s no guarantee. And that’s the scary part. It’s for sure.

Quentin (02:00)
Hello everyone, welcome to the Real Estate Pros podcast. I’m your host Q Edmonds. Seemed excited to be with you today. Got somebody who’s, listen, this guy’s been around 23 plus years, man. He has a lot of valuable information that he’s going to give. his lens, love his perspective. I could tease you with what he’s involved in, but I’m going to let him go in and let you guys know everything that he’s involved in. But I am so excited to bring to the stage Mr. Thomas.

Mestas. How you doing today,

Thomas Mestas (02:30)
Hey, how are you, sir?

Quentin (02:31)
Listen, I believe in putting respect on people’s name. You know, he was coaching me up before guys are off stage. So I’m just glad I was able to get it out. Let it roll off my tongue the way it’s supposed to. But like I said, Mr. Thomas, I’m excited to have you. I think our listeners are really going to get a great take away from your lens and your unique.

Thomas Mestas (02:41)
Thank

Quentin (02:51)
perspective when it comes, you know what? I was about to do it. I don’t even want to let them know what you do. I want you to tell them. So if you don’t mind, listen, I want to dive in, take people into your world that may not be familiar with you. Tell us what’s your main focus these days and what markets you operate.

Thomas Mestas (03:08)
Perfect. Yeah. Thank you so much. Thanks for having me on the show. I really appreciate that Right now is we’re going into our 23rd year in the real estate business. So 23 years ago I got a funny story 23 years ago. My wife was pregnant with our first daughter and I Had said I need to get into real estate like that was one of the things I knew I needed to do somehow and I called a buddy of mine and I said hey I got some land that I want to buy I want you to help me with it. So he shows up. He shows me the land

And I always kind of joke because he’s a really dear friend. ⁓ He’s a very successful commercial broker in our state, in fact, in multiple states. But at that time, he was still starting out. And he said, dude, you don’t need me. Why don’t you go get your real estate license? Why don’t you start your, you know, get your qualifying broker’s license and start your own company? And that was the seed that I needed planted because at that point, at that very young age of me, I was 27 at the time, you know, I was trying to figure out what do I want to do? But I knew I wanted to go in this direction, but I just didn’t know how.

and that seed is all it needed. So I looked into it and I’m so excited. get, my wife gets home that day from work and she’s pregnant now. And I said, honey, I’m gonna get into real estate and I’m gonna start getting my qualifying broker’s license, whatever that is. And I’m gonna start my own real estate company. And she’s like, she looks at me and she’s like, I want nothing to do with that. Like she’s just like, I have no idea what you’re doing, but I don’t want you to do with it at this time because you know.

They support you, but they also think you’re like, you know, maybe you need to put some thought into this. And there was literally no thought. My motto has always been commit first and figure out later. So that’s really how I work. And so what’s funny is, you know, that was the start of it. And now we fast forward 23 years later and we’ve got a real estate brokerage. We’ve got a property management. We’ve got multiple offices here in New Mexico. We’re running about 35 brokers in our brokerage.

And from our property management division and our short-term rentals, we are fixing flips, we’re into land development, we own apartment complexes, and we really have gotten into a lot of stuff. And one of the things that I love about the real estate business is all the different facets that can actually happen in real estate business. ⁓ that’s what’s exciting about the real estate business. So I can get into other things, crazy shit that I do. crazy stuff that I do. But. ⁓

Quentin (06:09)
Are you fine? You’re fine.

Thomas Mestas (06:13)
You know, I live by that philosophy is you need to do, you need to do more. Like you can do more, you can handle more. And once you realize that you’re stronger, more capable, then you can add some more shit to your plate, right? You can add more stuff, more verticals, you can do things. But the reality is, is you can’t do it alone. So you’ve got to bring on a team. And I think that’s the biggest thing is you bring on a team of quality people.

that have strengths in areas that you don’t. I’ve got a high pain threshold. I can do stuff that most people will keep people awake and maybe give a heart attack to. And my team actually puts it together and I can say, is what the big vision is. And my team says, okay, well, this is the big vision. This is how we’re gonna get there. They lay out the steps and they start doing the things. And I just go out and they’re like, leave Tom alone. He’s in La La Land. Let him go do his thing. So, that’s always great.

Quentin (07:05)
Absolutely. Listen, guys, we don’t want to, I don’t want to tip the hat too soon, but this guy told me he has it on podcast and I can tell he’s a host because he’s trying to do my job, right? He set me up. Like literally the next question I’m about to flow into, this guy just naturally goes there, But no, but I love, I’m just joking. I mean, I love it. The story that he told y’all, he didn’t even tell me. He dropping gems and hidden secrets. And I’m like, ⁓ man.

Why didn’t I hear about that yet? But no, I love it, man. And I love it how you just said, listen, y’all just do everything real estate. Like y’all do so much stuff, y’all do everything real estate. And my question was, and you kind of alluded to it because you were talking about the people around you. And so of course, brokerage, STRs, you’re flipping houses. So I know all of that stuff can’t be easy to do in this climate. So what’s been the key to keeping that machine running smooth?

Thomas Mestas (08:00)
Definitely automate delegate. That’s clearly the system. And in our world today, obviously there’s a lot more ways to automate, but you go back 23 years ago and when I got in this business and my automation was something called a phone book. didn’t even exist. So maybe, maybe a lot of people that are going to have no idea what I said, but a phone book is a big book, thick with phone numbers, business, business listings, all that stuff. And

When I got started, I went dialing for dollars because I didn’t know what I was doing. And what I did is I learned the art of really building a relationship. So I started calling people and inviting people out to lunch because I knew how to do that. I knew how to eat. I knew I loved to eat and I knew I wanted to be successful in real estate. And so what I did is I opened up the phone book and I opened up, I didn’t know to call the real estate companies, but I did call mortgage companies. And I started going down the list and

The reason for my early success was because of the relationships that I built early on, taking these people out to lunch. And I literally was honest with them. said, I don’t know anything about what I’m doing. I literally started a company because back then they allowed the licensing to work that way that I just had to pass the test. became a qualifying broker and I literally started my own company. I never worked for anyone. So I had zero experience and I remember having a lunch with a title lady one time and I said, I said, I don’t know anything.

I have zero clients right now, but I said, if you help me, I can promise you this. I will send you everybody that I come in contact with to you. And she was the sweetest lady. She, Carrie Payne, dear, dear friend. ⁓ she, she walks out of that lunch meeting. She actually bought lunch, which was really nice. She walks out of that lunch and she tells a story. She’s like, my God, get a load of this guy. Like good luck sucker. You know, she’s like, but when you have, when you have passion.

and you have a dream, it doesn’t matter. The facts don’t matter. Like that’s the thing is like most people that are getting into real estate, I just tell people you gotta commit, man. You gotta jump because if you don’t, you’re just gonna be analyzing, analyzing. You’re gonna be, be, you’re gonna be, you know, just kinda stuck because all you’re doing is analyzing, analyzing. The only way that you learn the real estate business is you gotta get dirty. You gotta get in it and you gotta get dirty and you gotta figure it out.

and

you gotta ask questions, and you gotta be humble because you’re gonna fall on your face multiple times, right? And that’s the key, it’s like you gotta do that. And if you don’t, if you’re afraid to it, this is not your sport, this is not your game. Because you’re playing it safe, and if you wanna play it safe, there’s jobs out there to play it safe, and you get a check Monday through Friday. There is no check guaranteed in this business. That’s the great thing.

Quentin (11:08)
Nah, man, I,

bro, yeah. No, please continue. I ain’t trying to cut you off. Continue,

Thomas Mestas (11:13)
Well, but that’s the great thing about this business being in real estate is there is no cap, but there’s no guarantee. And that’s the scary part. It’s for sure.

Quentin (11:21)
I

love it. I love you talk about no guarantees, getting your hand dirty, ⁓ you know, not being scared or even doing it scared, right? Just putting the one foot in front of the other. And so you have multiple lenses from this approach when it comes to real estate. So I would love to hear this from you, you know, no operator. I know. know, well, I’ll say it like this. There’s moments when things get real, right?

Thomas Mestas (11:48)
for-

Quentin (11:48)
Maybe

Adele went sideways or Tom, you had to fast. Thomas, you mind sharing one of those stories for the people who understand that this is not gonna always be a smooth ride in this industry. Can you mind sharing a story like that?

Thomas Mestas (12:00)
Well, it’s never a smooth ride. If I make it ever sound like that, am 100 % apologetic. And the thing about this business is you never learn shit from the easy deals. You only learn from the struggle. The hard stuff is what teaches you the lessons that will keep you in this business. It’ll either get you out of it or it’ll keep you in it, right? And those are lessons when you’re later on that you can teach other people about. But man, I have had more sleepless nights than I care to admit. In fact, ⁓

I still have them, right? Because there’s so many things that are outside of our control. We have zero control over what’s going on with mortgage rates, with any of these things. And you have to figure it out and you gotta navigate, you gotta figure these things out. it’s, guess at the end of the day, you have to realize it’s not necessarily life or death, but it is financial life or death. It could be, right? If you’re not smart enough to navigate those things. And that’s the scary part. if you have to walk away from a deal,

I mean, yeah, it sucks losing some earnest money or losing some money, but at the end of the day, it might be the best thing. Now, with that said, I’ve only walked away from two deals in my entire career. ⁓ Most of the time when I commit to someone, like I said, commit first, it out later, is when I commit, that’s a done deal. I’m gonna do everything in my power to make sure that that commitment is fulfilled.

And I think that’s the big thing in this business is your word is your worth and your worth is your word. And that is number one, right? So whether you’re working with wholesalers or other realtors or other deals, anybody that’s doing another side of the deal, they need to know that the deal that you’re attached to can get to the finish line and they can get over the finish line and get to the next one, right? And so if you’re over committing to things that you know you can’t do or don’t have the experience to do, don’t do it.

Get with a mentor get with somebody and I know that you had alluded to earlier is like what groups do you belong to masterminds and thing and I really believe you know doing it alone for the longest time and then most recently in the last few years is being part of a bigger group mastermind is it gives you the ability not only to think bigger but it gives you an ability to kind of tap into that network and kind of start seeing what this what the pitfalls are of this real estate business right and that’s super important is you got a

be able to identify them before they happen and not while they’re happening. Because if they’re all doing it while they’re happening, you already missed it for sure.

Quentin (15:01)
I love it, man. You said you only walk away from two, 23 years ago and that you only walked away from two deals because your mindset is commit to it and figure it out. And that’s the kind of stuff people don’t talk about enough. And honestly, that’s for separated folks who dabble from the ones who’s in it long-terms. In 23 years, it’s sure that you’re in this game for the long-term. And so I appreciate your perspective on that,

Thomas Mestas (15:23)
Thank you.

Quentin (15:26)
Let me ask you this, what are you most focused on solving or scaling next? What’s the next real goal for you?

Thomas Mestas (15:32)
Well, we talk about this a little bit, but you know, with technology moving at the pace that it’s at, I know obviously everyone’s talking about AI, AI, AI. In fact, my kids are like, don’t talk about AI anymore, Dad. We don’t, on TikTok, don’t even, if it has AI, we don’t watch it. So our generation is gonna show it. And I said, that’s fantastic. But the reality is, is companies that have a lot more invested in than you in your time.

have put a ton of money into these things and billions and trillions of dollars are gonna go into AI development, it’s not going away. And I hate to tell you this because I know that a lot of people think that they’re like, it’s a fad or whatever. It’s not. When we first encountered the internet back in the 90s, same thing. It’s like, we didn’t know it was gonna be as big as is. And I don’t know your age. I’m 50 years old now. And so, it’s…

Quentin (16:19)
244.

Thomas Mestas (16:20)
In the 90s, I was in high school and we were just learning the internet thing, right? And nobody knew where I was gonna go. And whether you loved it or hated it, it’s here. We are on it. We are a society that is connected. And for you to say this AI thing’s not gonna happen, you’re living in a cave. But with that said,

The number one thing that we need to look at is we need to look at longevity in this business. So if you’re in this business, if you’re a fix and flipper, or if ⁓ you’re ⁓ just going after and going out and having to kill every single time to make money, and that’s what a real estate brokerage does, is every single time you need to make money, you gotta go out and you gotta kill again, kill again, kill again, and bring it back and you continue doing that. Well, that’s a cycle that gets old. And it has a finite amount of time left in it.

And I really believe that if you’re listening to this podcast, you really need to focus on building a portfolio of rental properties that are performing that can give you passive income because I think that’s really where it’s going. So as a fix and flipper, my recommendation and my suggestion would be keep at least one, you know, one deal. doesn’t matter how many deals you’re doing, but anywhere from one to five deals extra a year.

put that in your portfolio, figure it out. If you’re like saying, hey Thomas, I don’t have that kind of money, I can’t be liquid, you know what? Banks are willing to lend right now. There is less deals going on and the banks, the only way they make money is lending you their money. That’s how they make money. So whether it’s a DSCR, whether it’s, stay away from hard money, can enter a property with hard money, but don’t make that a long-term play because you’re gonna get cropped. But DSCR,

⁓ If you’re able to do traditional financing, that’s great. what I love about DSCR, for those of you that don’t know what DSCR is, that debt service coverage ratio type loans. And what that does is the bank is underwriting the property and its performance versus you as the guarantor. And most of these are going to be ⁓ recourse type loans. So there’s going to be a, you’re going to be a guarantor on it. ⁓ You don’t necessarily need the financials, but you do need at least a minimum credit score and some equity in the property.

and then they’ll underwrite it on that and that’s a good exit strategy. And most of these DSCR loans are commercial based loans, so they’re not gonna show up on your credit report. So when they’re pulling a standard credit report on you, you could have one, you could have a hundred and they’re not gonna show up on your report, which is really good to

So buy more, get more properties. That’s the exit strategy, right? As we get older.

Quentin (18:44)
Yeah, man, Mr.

Yes, sir. Man, he’s dropping nuggets, man. You know, he talked about, you know, building that portfolio. Man, he let them know he keep one to five of those properties for yourself, but you hit him with the DSCR loans. man, like, you are really showing people how to make moves, I love it because you make the moves yourself. And we know that the next move, can even compound things or create total chaos, depending on how you play it.

But I think I heard you say earlier, you take from the chaos and you pull out the beauty. You might not say it exactly that way, but I know you’re no stranger to chaos. You dive into the chaos and you figure things out. That’s what you said. I’m going to commit and I’m going to figure things out. And so I just love your approach to things, man. I really do. And so, yeah.

Thomas Mestas (19:26)
you

Well, what’s interesting and it’s so funny because

later in life, I’ll just say I had a midlife crisis eight years ago and I got into kind of fitness things. And I really think that that taught me a lot in my business and how it correlates so much is no one’s gonna do the work for you, right? You gotta go out and you put the work. You gotta be consistent.

And in that area, consistency and putting the work in, that is the key to success. And I can tell everybody on here, if everybody wants to know the secret to success, stay listening, plug in, I’m tell you everything you need to do. But here’s the thing, I can tell everybody what they need to do and I guarantee you that most of them will never do it. Because why? Because everybody wants the shortcut, they want the easy, they want the microwave version of everything. how do I, how can I?

We came from a time, you remember when there was a song on the radio and we wanted to listen to our favorite song and we’d have to wait till it came on, we’d request it and we had to hit play and record and at the same time so we could get it. That’s how we were streaming music back then, right? Like I think that generation, it taught you that nothing comes easy and yes, when it did come easy, you’re like, ⁓ wait a minute, you gotta still put the work in, right? And.

I think that’s the problem is most people are afraid of that. it’s like, work is not a four letter dirty word. It is something that you need to do in order to be successful. And I have a broker call every single day. We’ve done this now for over five years. I do a daily zoom with my team every day. I’ve been on vacation in the middle of the Alaskan ocean up north. ⁓ And I made sure I had internet because I logged into that. And the commitment that I made to my team was I will be here for you no matter what.

So although my family sometimes says, you know, what are you doing? I made a commitment and I hold my commitments to be true. So I went and did that. And one of the things that I tell people, and sometimes some of the brokers are like, Tom, don’t tell everybody what you’re doing. I’m like, I could tell you the secrets because I know they’re not gonna do it. And if they do, more power to them. Like that’s okay. But ⁓ that’s the reality.

Quentin (21:31)
I love it. I see your special guest making that special appearance. hear it. But no, but listen, I want to ask you this because you hit it. Talk about your commitment to your people. I want to ask, know, is people listening to early in their journey, they’re looking to level up. And I think they’re benefit hearing this when it comes to building relationships and growing your network. What’s made the biggest difference for you?

Thomas Mestas (21:35)
Yeah, I think.

loyalty. Loyalty to people on I think in this in the real estate business everyone’s loyal to themselves and I’ll kind of elaborate on that a little bit. In the real estate brokerage business you have real estate agents and real estate brokers and they start using one mortgage person and that mortgage person either does a great job but what the realtor is doing is they’re hoping that that mortgage person refers deals to them right.

Quentin (21:55)
Mmm! Mmm.

Thomas Mestas (22:20)
And I think the value proposition that people bring is their commitment to excellence. So if you find a great mortgage person, their value proposition has to be, I know if I send them a client, they have the ability to get it to the finish line. They have the ability to do it. They’re gonna do everything in their power. They’re smart, they’re intelligent, they’re gonna do the speed, they’re gonna be committed to you. They’re gonna do all that. That’s the only value that they need to bring.

They don’t need to bring a client to you because you are too lazy to go get your own client, right? They have that and that’s where I learned early on in the real estate business. I had to title people and I can name on basically I’ve used two people for 99 % of my deals over the years and that was Kerry Payne, one that first came to me and kind of laughed at me early on and said that it was gonna be like good luck sucker.

Quentin (23:10)
Yeah

Thomas Mestas (23:12)
But I sent every deal to her and I made a commitment to Carrie and the crazy thing about this commitment is I said, Carrie, you help me, I promise you, I don’t have a client today, but I promise you I will bring you everybody. And there was a time she called me one day, she’s like, we were doing the stats and buyer, lead generation to the title company. They said I was number one, that I actually had the ability to bring every deal in fact.

early on in my offers and my counter offers, I’d have literally the last counter offer could be the last point in the counter offer was ⁓ Kerry Payne Fidelity National Title. That was a deal breaker. If they didn’t choose it, if they didn’t accept it, we’d go find someone else. And that was the commitment that I had. And I could tell you early on my first flip business, and the reason this is important, this is a very good story.

Early on, I had bought a property under contract as a redemption sale. I had back, this was back in the day when loans were easy. It was a stated income, stated asset loan back in the day. And the bank, we’d gone through the process. We were approaching the last day of 30 day redemption period. The bank had not wired the funds to the title company to go ahead and do this. It was Friday afternoon.

We had to get it in FedEx to get it over to fund the deal. And at that point, no money had come in. And she knew that I had already committed to this. I put some money into it. And so she ended up doing this. she’s no longer in the business. She’s not gonna get in trouble. But what she did is she actually got a from her escrow account. And it was $154,000. She wrote a check and she FedExed it to the attorney’s office.

Quentin (24:42)
Yeah.

Thomas Mestas (24:52)
for me to redeem that property with no guarantee that money was coming. Long story short, there was a lot of stuff that went into this, but ultimately we got this property and we ended up closing on it. But that was my very first flip. And because of the loyalty that I had to her and the loyalty she had to me, she was willing to make that bet. And that bet now, 22 years later,

has still paid off because of that relationship. So loyalty is the number one thing that you can build in this business. And if you don’t have it, I suggest you look deep inside you and you start figuring out what it’s gonna take for you to be a loyal person because the value on the other person is not them giving you anything. It’s them being the best that they can be in the area or arena that they’re in is to be the best they can be. And that’s the key.

Quentin (25:38)
Listen, so we give a shout out right now to Ms. Payne. Shout out to you right now, because I’m sitting here talking to Thomas. It all worked out. And so we think, listen, you can’t fake that. Loyalty and relationships are everything in space, and you can’t fake that. Listen, man, we coming up on time. So listen, before we wrap, if someone wanted to reach out to you, connect with you, or maybe collaborate with you, or learn more about what you’re doing, Mr. Thomas, what’s the best way for me to get in contact with you,

Thomas Mestas (25:45)
Thank

Well, there’s a lot of ways to get in contact with me you can hit me up on Instagram at Thomas underscore Mestas is at Instagram ⁓ On Facebook we do a lot of stuff on there ⁓ Most recently in the last year and a half. We started a podcast called ultra everything So you can check us out a ultra everything podcasts and you can find us on Apple podcast on Spotify And of course on on YouTube like everywhere that you get your podcasts ⁓

So yeah, those are easy ways. If you want to do it the old fashioned way, can open up a phone book and I’m sure you can still find my number or you can Google me.

Quentin (26:38)
And y’all again, phone books are those things that have COVID on it, bacteria, germs, and you know, people actually lick their fingers and actually flip the page. Those are the things that we’re talking about. They still exist if you want to use them. I mean, you know, go right ahead.

Thomas Mestas (26:43)
Yeah, yeah.

Thank

Quentin (26:52)
We’re done!

Yeah. No, man. Thank you, Thomas Mestas. Thank you, sir. Thank you for your storytelling. Incredible storytelling, man. Thank you for your time. Thank you for your perspective. Incredible perspective and lens. Thank you for all the nuggets that you dropped. You know, we need more people like you in this space that’s doing it the right way. So again, thank you for being here.

Thomas Mestas (27:10)
Yeah, thank you so much.

Quentin (27:11)
Absolutely. And to everyone else, listen, I know you got value from this, so go ahead and subscribe. What are we waiting for? You got to subscribe because you do not want to miss out on these incredible conversations. So again, thank you to Mr. Thomas and everyone else. We will see you on the next episode.