From Trial Attorney to Six-Figure House Flipper: How Hercules Pappas Gets Multiple Offers in 24 Hours

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Show Summary

In this conversation, Hercules Pappas shares his extensive experience in real estate investing, discussing his journey from being a litigation attorney to a successful real estate investor. He highlights the importance of negotiation, understanding market dynamics, and the mindset of attorneys in real estate. Hercules also delves into the challenges of property development, the significance of comfort zones in investment decisions, and the strategies that have led to his success 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
    • Hercules Pappas’ Phone Number: (609) 923-2233

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Hercules Pappas (00:00)
  If the numbers work, I tell everybody this. When somebody tries to bring me a deal and says, oh, you know, I think this is good, I said, look, it’s all in the numbers, right? And that’s cliche, but it’s true, right? You look at the deal, you turn it upside down all different ways and see what you can make of it. And if the math doesn’t work, it’s not for you. You have to be able to move on. And I have, keep my fingers crossed,

  never done a deal where I didn’t make six figures. And I think that’s pretty awesome to be able to say, Right, and every one of my deals has had either had multiple offers in 24 hours or sold in 24 hours. So that’s another thing that I’m pretty proud of.

  Dylan Silver (00:28)
  Yeah, that’s as a flipper especially.

  Hey folks, welcome back to the show. Today’s guest, Hercules Pappas, is an investor out of New Jersey with a background as a criminal defense attorney. Hercules, welcome to the show.

  Hercules Pappas (02:29)
  Thank you.

  Dylan Silver (02:30)
  I always like to start off at the top of this show by asking guests really how they got started in the real estate space. How’d you get started?

  Hercules Pappas (02:38)
  So I got started back when I was in my 20s. I just started practicing law. I left my firm in Philadelphia, started my own practice and bought my first condo. So that was the first place I lived in South Jersey, a town called Mount Laurel. I negotiated the deal myself, of course. I had some experience doing that for other clients and I managed to negotiate the best deal on that condo in that development ever. And I was pretty happy with myself.

  Dylan Silver (03:02)
  you

  Hercules Pappas (03:04)
  So I did that, I lived in it, I fixed it up while I lived there. Didn’t know much about fixing houses, but I learned YouTube videos, you books. And I made it really, really nice to the point where everybody who came over said, wow, this is gorgeous. I didn’t expect it to look like this inside, right? So when I was ready to move on and get a real place, I listed it and I negotiated the highest sales price ever in that development. So I got the lowest and then I sold it the highest.

  That empowered me to say, wait a minute, real estate is a great thing to do. Buy some properties, make them look good, market them properly, and take your profit.

  Dylan Silver (03:44)
  That’ll do it. I want to ask you specifically about that negotiation process. You mentioned buying it right and then selling it best as you possibly could and surprising everyone.

  Do most attorneys have this ability to negotiate, like for instance a real estate transaction, or is this a separate skill?

  Hercules Pappas (04:04)
  I think it depends on the type of attorney we discussed before. There are trial attorneys, litigation attorneys, and there are transactional attorneys. Transactional attorneys may do negotiation, but maybe not. Trial attorneys, litigation attorneys, always, every day. That’s what they do, right? That’s the kind of law that I practiced. And so I was seasoned in that. And really, in addition to that, I was a court-approved mediator, which is someone who helps to resolve cases.

  So almost not like a judge, you don’t make a decision, but you get the parties to come together. So you get to root of the problems, you take it apart, you put them in separate rooms, because a lot of times there’s animosity and some problems that got them to the place where they are, right? They’re just deadlocked. So you peel back the layers and you get them both to understand each other’s sides by going back and forth and then make that settlement happen, right? It’s not necessarily great for either side, but it’s good for both of them.

  And I took that skill into real estate. So a lot of times it’s not just, and what’s the number, everybody wants the most they can get, right? But you peel that back and say, okay, what’s important to this buyer or seller, right? What is really going on here under the skin? And you start to peel that back and you can maybe create a deal that makes sense for them. That’s not necessarily the best in terms of the money figure, but overall deal, right? And I think that’s what I used a lot.

  Dylan Silver (05:26)
  Right.

  Hercules Pappas (06:18)
  In terms of getting properties cheap for myself, it’s really just going at it, saying, look, your price is fair. Never, ever oppose somebody like this, right? That’s the worst way to start. Come in like what they call a pit bull, right? Which is what some people say, I a pit bull lawyer, right? I think that’s the worst strategy, right? Just turns people off. They run the other way. So you come in saying, hey, look, I like your place. It’s great. I think your price is fair. Let me tell you about some of my personal issues that I need help with to make this deal happen, right?

  Dylan Silver (06:28)
  Hmm. Yeah, yeah.

  Hercules Pappas (06:47)
  People can understand that. People can look at you and say, hey, now I relate to you, right? Because I’ve got some issues too. Let’s talk about all of that, right? And again, once you peel back those layers and you find out what that person’s really looking for, they understand you and what you’re looking for, you make it relatable. They get into your shoes and like, if I were on his side, I’d be saying the same thing, right? I get it. And then you meet in the middle and you make it happen.

  Dylan Silver (07:10)
  When

  we talk about finding these deals, I come from a background where I was licensed and am licensed in Texas of distressed single family. So we would be looking for high days on market. We would be looking for foreclosures, signs of distress. We’d also, you know, put signs in the ground, need to sell your home quickly, this type of thing. And so we would be at the intersection of crisis in many cases. So with that, they were highly motivated.

  to sell. When you were looking at deals in the early days, in your first couple deals, were you looking for distress? Were you looking on market? Was it a mix of both?

  Hercules Pappas (07:50)
  A mix of all of those things, everything you mentioned obviously are good factors, right? And they all come into play. But you may not have all of that. You may not even have one. But if it’s the right deal for you, for example, if it’s something that I’m really interested in, regardless of any of those things, I’m gonna try and get it, right? So I’ll look at that deal and again, I’ll talk to that person. I’ll really get to the core of the issue, what they’re trying to accomplish and see if I can come to some type of middle ground where it makes sense for both of us.

  Sometimes it’s a matter of just finding out what they’re doing next. Let’s say for example that they want to relocate, right? Like, look, I just want to be out of here. I need the most money I can to go to Florida, right? Oh, where are you going in Florida? I’m going to Fort Lauderdale. I happen to know a realtor there. And in fact, I happen know some investors there. Are you handy? Sure, I’ll get something cheap and fix it up. Great. I know some people selling some worthwhile properties that would be perfect for you.

  If I could put that together for you, can we see eye eye in this deal for me? Again, you’re doing something for them, they’re doing something for you. Of course it would. You make that happen, right? And then now all of a sudden, they’ve gotten value on the other side of that deal that maybe they don’t need, but they thought they needed on this side.

  Dylan Silver (09:06)
  And that’s how these deals come together. It’s a give and a take. think too many times investors will come in with a take it or leave it attitude. I think that’s probably the norm. And that’s not leading it to feel like it’s a team effort. Even though you’re buying their property, it should feel like they have some say in a sense. I want to pivot a bit here and ask you about eventually going full time with

  with real estate. I think a lot of people listening to this may say, okay, experienced trial attorney, how does one go from that to going full time in real estate? It seems like two totally different areas. How did that come about for you?

  Hercules Pappas (09:49)
  Well, so as I said, while I was practicing, I was doing a deal here and there. I sold that first condo. I used that money to buy another property. That property I was going to use for our office. And then the township turned down the variance. So was in one of those areas that’s sort of on the border, right? There’s some professional, there’s some residential. So we figured another professional, they’ll approve, no problem. So I purchased the building. We went to the board. said, we don’t like the plan, right?

  Even though I went to them prior to purchasing it and said, can you give me your preliminary thumbs up or just say this is never gonna happen, right? I’d at least appreciate that before making the purchase. They said, yeah, I mean, we see other professionals there as long as you do everything that we tell you to do. You have the right square footage. You get an engineer, basically spend a lot of money. ⁓ We don’t see any reason why that wouldn’t be approved. Did all that stuff, spent a lot of money and they said no.

  Dylan Silver (11:18)
  Mmm.

  Hercules Pappas (11:19)
  Very unhappy with that situation, however, still worked out. So we ended up selling the property and ⁓ made six figures on it and selling it just because of the improvements. somebody actually ended up purchasing it for a different reason, but they had all the studies that we already purchased and they were able to use those and get some value from that. So still worked out. And again, like I said, one, deal two, they’re all good, right? Then I go to deal three where I bought a teardown.

  house that had a lot of land available for development. It was in a very nice area with a lot of nice homes. So I saw that, purchased that, didn’t even care about the house, marketed to a bunch of builders in the area and said, you have six potential lots here and a nice little development. And this area down here, Mount Laurel, that was a town, very booming at the time. Not a lot of ground, so if you had it, it was valuable. And a lot of these builders wanted to build wherever they could.

  you know, the tiniest footprint that they could build on, they would build. And so I marketed that and did extremely well, five times my money on that one. And I just kept going forward. So time was the issue, right? I’m working my butt off as a litigation attorney, 60, 70 yards a week sometimes, but I still love that real estate deal, right? You know, getting that hit every one or two years felt good. And it was nice for the bank account, you know, to get some reserves.

  Dylan Silver (12:31)
  Right.

  Damn.

  Hercules Pappas (12:46)
  So I guess the final transition is all about you just have to make a decision. I’m going to jump in. Now, my brother rode on my coattails for a little bit, ended up losing his job in the 2008 crisis. He was a mortgage guy, lost any chance of employment because nobody was doing mortgages then. And he said, you know, that real estate’s worked out for you. I think I’m going to take a crack at it. So I taught him everything. I sent him an angel investor who gave him 10 million to start with, which was great.

  Dylan Silver (13:04)
  Yep.

  Yeah.

  Hercules Pappas (13:15)
  And

  he just really took off. So I watched him really, really build wealth over the years in real estate to the point where he set at 40 years old and he doesn’t have to work anymore. So I said, that’s what I want. I need to stop working. I need to just have to take the plunge, right? At some point you make that decision that you’re going to take a risk and it’s nice and safe to have a career, especially a professional career that you can count on and always get employment or work for yourself, which is what I did for most of it.

  but you’ll never make it. There are only a certain number of hours in a day. So you’re trading time for money, right? My time is worth X amount. My time could never be worth enough to reach the level of wealth that my brother had reached in that period of time. So I said, in order to make this happen for me, I have to cut ties with my full-time career, which is what I did. So I didn’t, you know, I still maintain my New York license just to send referrals to people. But other than that, I don’t practice at all.

  and this real estate has been now three years. I love it. I will never look back.

  Dylan Silver (14:19)
  I want to ask you, we were mentioning, I was talking about this before hopping on here with you. It seems to me like it’s such a natural thing for…

  attorneys to at least be passively involved in real estate investing because they have all the information that they need to better understand contracts than anyone else. But I’ve spoken to so many attorneys and either they don’t have time or they view it as a risky investment. Is that common where maybe they’re sitting from the sidelines and just never get an opportunity to hop in as an investor?

  Hercules Pappas (14:54)
  Couple of things, number one, you mentioned time and risk. Those are probably 90 % of lawyers that won’t do it. Time, we’re all busy. Everybody thinks lawyers are on the golf course all the time, we’re not. We’re busy working nonstop, know, our cell phones never stop, our email never stops, text messages never stop. It’s a tough job. ⁓ So time is the thing, you can’t get enough time to go and run these projects and still practice full time. Number two, risk factor. Most lawyers,

  Again, litigators are sort of the small percentage of the field, right? Even though everybody thinks that’s what we all do. That’s not true, right? It’s about 10 % of lawyers are actual litigators, full-time litigators. We’re the risk takers, right? That’s the personality that we have. So for us, I think it’s a no-brainer to just dive in and say, hey, what could go wrong, right? But most other lawyers, transactional lawyers, they’re the safety nuts, right? They know what they know and they’re happy with what they know. They don’t want to put anything on the line. They don’t want to lose anything.

  They’re not gamblers, right? It’s a different mindset. So I think that’s what stops a lot of them in going through it. As far as the other thing you mentioned about contracts, well, you know all that. That actually doesn’t matter. So what a lot of people don’t realize in the law, there is no black and white. It does not exist. The whole thing is gray, right? So there’s nothing, somebody comes in and says, I need a legal opinion. Here are the facts. What’s the answer? Well, it could be this, right? Or it could be this, or it could be.

  completely be something else, right, over here. You don’t know, you don’t know, it’s a people-based business, right? You don’t know how other lawyers are gonna react, you don’t know how other litigants are gonna react, and you don’t know how judges are gonna react, or a jury, for that matter. You could have the same case in front of five different juries and get five different results. You don’t know. So, contract law is the same way, real estate in particular. I tell all my real estate clients, this contract that you just filled out and signed at the end means nothing.

  At the end of the day, if the other side wants out of the deal, if you want out of the deal, you’re getting out. That’s it. That’s the bottom line, right? Nobody’s going to go through the hassle of litigation, not to mention in real estate law, specific performance would be making them go through with the contract. That’s the legal term for it, Doesn’t exist. Most states don’t even recognize it. And the states that do will say that you have to have extreme circumstances to get that kind of relief. Otherwise, you just sue for money.

  Dylan Silver (16:57)
  out.

  Bye, here.

  Hercules Pappas (17:21)
  and you’re spinning your wheels. How much did you lose by not taking that deal and going with another deal, right? Couple thousand bucks, not worth a lawsuit. So that’s the cold hard reality is most people don’t sue. I sued on one case over a real estate contract for a specific performance. Again, almost never happens. We went to trial and I won. It was written up in the law journal. I was so proud of myself. I was like, I can’t believe I won that, right? But it was a specific house that was very unique. know, it took him, was on the market for

  Dylan Silver (17:29)
  Yeah.

  Hahaha

  Hercules Pappas (17:51)
  two years to get a buyer because it was a wacky house, right? It was just put together, had like geodesic domes all over and like geometric squares. It was a weird house. I wouldn’t want it. I don’t know who would, but somebody did, right? But it took him two years to find that buyer. And once that guy said, and he really had no good reason for canceling contract, just wanted out. And he figured, like I just said, it’s easy to get a real estate contract. Who cares? Nobody’s gonna sue me. My guy did sue, right? Because he knows.

  Dylan Silver (18:14)
  Right.

  Hercules Pappas (18:18)
  It’s another two years until I find the next guy that wants this weird house. So because of those particular details, the judge said, look, in most situations, I would not do this. However, I understand this particular lawsuit, right? This is so unique of a house that maybe one out of a thousand lookers might want it. So he’s not gonna be able to sell it to anybody else. And because you don’t have a good reason to get out of this contract, I’m gonna enforce it. It was fantastic. But that is one in a million, one in a million. Yeah.

  Dylan Silver (18:22)
  Yeah.

  Wow, that is a win right there. I wanna

  pivot and ask you about the development space, getting land shovel ready, looking for ⁓ developers, builders to buy these deals. When we talk about vacant land, you’re in New Jersey. There’s not as much vacant land in New Jersey as there is in Texas where I’m licensed, but nonetheless, development seems to be huge everywhere.

  Even if people may have lost money buying into syndications from 2020 and then holding onto it until today and needing to exit, you’re seeing a lot of distress in multifamily. Nonetheless, it still seems like development is happening everywhere. Do you have any feedback or guidance for folks who may be looking at moving from the single-family space into development or working more alongside developers?

  Hercules Pappas (19:39)
  So here where I live, as you indicated, there’s not a lot of development. There’s just no ground, right? So if someone finds a lot that has an old house, they’ll knock the house down, they’ll put it up, but there’s no new ground available, at least in this area. There are places in New Jersey still in the sticks, so to speak, know, middle of the woods, there is land available, but then again, you don’t have the buyer market for that because nobody wants to be there, right? But all the desirable spaces in most of the state,

  there’s no land available. So I haven’t had much development opportunity. Like I said, when I saw it, I seized it, right? I knew that that was a rare find and I marketed to a bunch of builders and everybody was bidding on it because it’s so rare here. So unfortunately, I don’t have that experience. I did it that one time and it was great, but I haven’t developed real estate other than that one time, simply for the lack that it’s not here, right? If I find it again, I’ll do the same thing, but I haven’t been able to.

  Dylan Silver (20:27)
  Yeah.

  the land.

  What’s your perspective on folks who are investing across state lines? Like you mentioned, not

  lot of or any vacant land in most parts of New Jersey. So for folks who may be looking at new construction as a strategy and maybe think, well, I’ll buy some land in Texas or I’ll buy some land in Alabama or Oklahoma or wherever. But I live in New Jersey. I’ve done fix and flipping over here, but I want to get started in development. I’ve spoken to some people like this. said, that sounds like risk. So my hat goes off to you if you can do it. Do you think that investing across state lines in that type of fashion is

  Hercules Pappas (21:04)
  Sure.

  Dylan Silver (21:12)
  feasible for folks who haven’t done it before? Do you really want to be where you’re at if you’re going to be breaking ground for the first time?

  Hercules Pappas (21:21)
  So it’s all about comfort zone, right? Risk. My comfort zone is here. So I go within an hour of where I live. I know everything here. I’m comfortable with everything here. I don’t have to look up values. I know them already, right? I see them every day. I think that that’s a nice comfort zone. I’m not saying don’t be a pioneer and go somewhere else where you think there’s a good deal, right? If you think you have that risk tolerance and you can go out of state and you can fly back and forth and still be comfortable.

  only having your boots on the ground for a small period of time, know, in small chunks of time, go for it, right?

  If the numbers work, I tell everybody this. When somebody tries to bring me a deal and says, oh, you know, I think this is good, I said, look, it’s all in the numbers, right? And that’s cliche, but it’s true, right? You look at the deal, you turn it upside down all different ways and see what you can make of it. And if the math doesn’t work, it’s not for you. You have to be able to move on. And I have, keep my fingers crossed,

  never done a deal where I didn’t make six figures. And I think that’s pretty awesome to be able to say, Right, and every one of my deals has had either had multiple offers in 24 hours or sold in 24 hours. So that’s another thing that I’m pretty proud of.

  Dylan Silver (22:24)
  Yeah, that’s as a flipper especially.

  Hercules Pappas (22:38)
  But, everybody has their different strategies, right? So I mentioned my brother does real estate. He’s more of a high volume guy, right? So he’s not kind of

  really pay as much attention to the finished levels and the quality as much as I need to get this thing done in a certain period of time and get it out. I’d rather make less money and do 100 homes than have them sit, right? And that’s a good mentality to make money, right? It’s a good business strategy. Mine is a little bit different. They’re both just different business models. Mine is I’m making quality homes that I would live in, right? So I make sure the finished levels are perfect. I might spend another 20 grand.

  but it makes me feel good, right? And as a result, I think turning that around into a business model and turning into cash, which is what you wanna do, I think I may not get as much back as I put in, right? So let’s say I spend 20 grand, I might not get 40 grand back, so I just doubled my investment. I may get 25 grand back on the top side of what it already was worth, right? However, my house will sell in a day. And to me that has value.

  Dylan Silver (23:18)
  Yeah.

  Hercules Pappas (23:46)
  Because when you put my house against everybody else’s, they’re gonna say, okay, yeah, I’m not gonna pay 100 grand more for his house, I’ll pay 25 grand more and I’ll buy it right now. Because they want that house versus everything else they’ve seen. So.

  Dylan Silver (24:00)
  Without giving away

  the gold, how are you getting offers in such a short period of time? That is incredible.

  Hercules Pappas (24:08)
  That’s exactly why my houses look like they’re ready for a magazine. So when I’m finished, you know, and I look at that stuff all the time. I look at ⁓ publications and I go on, you know, how’s the app, right? Where you get all these different design ideas and I look at what’s trending and what looks good. And I pick the best finished levels and I put everything together nicely where, like I said, you walk in and you think you’re on a show on television, right? And you’re looking at this incredible rehab or you think you just saw this in a magazine.

  This is incredible, right? That’s what I love to hear when people walk in the door I go to a lot of my open houses just to get that satisfaction. Hey, I made something great and because of that level of product because I compare that with Everybody else’s old busted home, right? They’re like well I could change this and I need to change those cabinets and people are thinking about that and it’s it’s really weighing on them that I’m gonna pay 800 a million for this house and I still have to do 200 doesn’t work and deal with contractors and

  Dylan Silver (25:03)
  I gotta change this.

  Hercules Pappas (25:06)
  and worry about stuff and aggravation, have my house disrupted. Whereas they walk into mine say, I can move in tomorrow and I’m good, right? That has value. I think that, yeah, I think that adds to them. Mine are like new construction, you know? ⁓ And I think that’s good. It was long and tangential answer to your out of state question, but same thing going back to that. Go with what makes you comfortable, right? If you want to explore and you want to be in another state.

  Dylan Silver (25:14)
  Wow. Dad.

  Hercules Pappas (25:35)
  I have a property in Philadelphia, which is not far from me. It’s 45 minutes. I hate it. I hate going there. I hate dealing with it. I just don’t want to, you know, so it’s everybody’s comfort level. If you like that, if you’re an explorer and you want to go to that particular, you want to go to Texas and hang out and see what it’s like, maybe move there in the future, maybe retire there. That’s a great time to make an investment and see what it’s like, but risk level, tolerance level, and how much cash can you lose if the deal goes bad? You have to factor all that in.

  Dylan Silver (25:39)
  Yep.

  Mm-hmm, mm-hmm. All that comes into play and there’s no sure thing with flips especially. So congrats on being able to see a good profit and quick turn on all of those deals. That’s impressive. We are coming up on time here though, Hercules. Where can folks go to reach out to you? Maybe they’re in New Jersey, they have a deal they’d like you to look at. How can folks learn more about what you have going on?

  Hercules Pappas (26:30)
  So I will tell you it’s funny because when I signed up for this it asked a bunch of questions, know, headshot your social media, your website. I have none of that. So I do have a Facebook account. I don’t really use it. And I’ll tell you why. Because when I was practicing law, I had 300 text messages day, 300 phone calls, 300 emails. I had my website that people came through. I had so many ways to contact me and so much media out there.

  that I got burnt out. And I said, you know what? I’m gonna be peaceful. I’m gonna sit in a house and manage contractors and maybe work on some things myself and just be quiet in my mind. So I don’t really have any of that. I do welcome anybody to call me. I give my cell phone number to anybody. I don’t know if you want me to say it if you wanna put it. ⁓ Yeah, sure, 609-923-2233. That’s one thing I will do. I’ll talk to anybody or text message. I will not.

  Dylan Silver (27:19)
  Either one,

  Hercules Pappas (27:29)
  I don’t check email even, unless somebody says, I tell everybody if you send me an email, text me or call me first, tell me you sent it so I can look for it, because they get buried in two hours, right? But yeah, I’ve left that behind me. I know it’s not very today of me, but because of 25 years of it, I’ve earned it. Yeah.

  Dylan Silver (27:38)
  Yeah.

  it’ll burn anybody out. mean, months

  of it would, I understand where you’re coming from with that. Hercules, thank you so much for coming on the show here today. ⁓

  Hercules Pappas (27:57)
  great, thank you for having me. This was fantastic.