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Show Summary
In this conversation, Brian Durham, a real estate broker and coach, shares insights into the Twin Cities real estate market, discussing average home prices, the investor community, and the impact of AI on real estate investing. He emphasizes the importance of understanding local markets and adapting strategies for success in a changing economic landscape.
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Investor Fuel Show Transcript:
Brian Durham (00:00)
But it’s all around AI. If you’re not using AI right now, you’re missing out. And this goes down to even the small mom and pop investor, right? That’s on my down list of penciled in items.There’s some things I want to do for the smaller investors through AI too, because what it’s going to do is it allows you to crunch that data so much faster that you can make moves quicker. Now you have to be careful to not let it either, you know, bias confirmation of what your ego says, you know, so you’re jumping and maybe making the wrong moves, but it can crunch that data so much quicker that I think that’s going to be huge for the investor going forward. And if you’re not using it now,
you will be using it in the future.
Dylan Silver (02:15)
Hey folks, welcome back to the show. Today’s guest, Brian Durham is a real estate broker, coach, and entrepreneur who believes great results comes from clarity, strategy, and genuinely putting people first. He’s built and scaled high performing teams by blending smart systems, strong culture, and a deep understanding of how real estate markets actually move. You can find him at wegorealestate.com or across social media, including Facebook, LinkedIn, and TikTok. Thanks for taking the time today, Brian.Brian Durham (02:42)
Yeah,thanks for having me. I appreciate it.
Dylan Silver (02:43)
Now, when we talk about twin cities, Minnesota, right? This is an area of the country and an area of real estate that I think doesn’t get enough shine, but I think a lot of people are looking at what I would call secondary or tertiary markets. For our audience, including myself, who’s unfamiliar with what the market is like out there, walk us through maybe what’s the typical price of a starter home if it’s a new building.Brian Durham (03:10)
Sure, so our average price point across kind of all homes is about $375,000 to $400,000 here in the metro area. Now, Minnesota is very large state, so you get out to some of the more rural areas, it’ll be a little bit less. You can still get down into that $300,000 price point. But we also have some very nice lake homes in areas that, know, certain lakes, you’re not even going to be able to look at a house on the lake for less than a million dollars.So it’s a very wide and ranging market here, which makes it a lot of fun actually to do business here.
Dylan Silver (03:48)
Yeah, and one of the things that I think is specifically interesting from the perspective of a real estate agent is that when you have markets where there is a little bit of a lower cost to entry, you’re gonna see people who are more able and capable of buying, at least from my vantage point, but also you’re gonna see interest from investors, not just investors in state, but out of state as well. And this is really coming from my Texas lens. Are you seeing…out of state investors, you know, looking at the twin cities or surrounding areas.
Brian Durham (04:18)
Youknow, that’s really how I kind of cut my teeth in this business. Well, 13 years ago now was I got into this side of real estate coming from the mortgage side, being there for almost a decade simply because I got introduced to at that time the largest institutional investor. And, you know, they were they were buying houses as fast as they could here all cash. Now, you know, we still have a very robust
local investor market. We do see some out of state money that comes in, but I think we’re much more a localized investor community here.
Dylan Silver (04:54)
for folks who are looking at getting into real estate investing, is there a mom and pop real estate investor community? I know that when that exists, that’s a great thing, and it’s typically a good sign, because it’s almost like the Robin Hood effect of real estate that if you are working, that you could potentially diversify your wealth building portfolio out of just indexed mutual funds into real estate. Are you seeing mom and pop investors out there as well?Brian Durham (05:21)
forsure. I mean, I think that’s really the biggest amount of investors that are out there now here locally anyway, are the people that own the onesie twosies or they’re just getting started. And that’s the great thing. That’s what I love. I’ve worked with everybody from the brand new investor who’s just starting out all the way up to the largest hedge fund in the world. Right. So, you know, there’s
There’s a wide variety and that’s a really cool thing with the investor niche is there’s something there for everybody. It’s really just a matter of finding out what works for you and what’s your goal, right?
Dylan Silver (05:54)
Yeah.Yeah. I mean, when we talk about working with investors, it’s interesting because I’m a newly licensed agent. got licensed. Well, I shouldn’t say maybe newly at this point. It was April of last year. And as I was going through, you know, the coursework and then my first couple of months in the business, I realized there’s almost this division, at least in Texas there is, between agents who work with investors and who understand that, you know, lingo versus
agents who are strictly working with residential buyers. And I almost think that, you know, when your residential buyers could one day be investors themselves, that maybe we’ll see more overlap between those two spaces. Is that true in places like Minnesota?
Brian Durham (07:24)
⁓ yeah, I mean, I think that’s true across the industry as a whole, right? It’s there’s so many niches that you can work within this industry. You know, do you want to work with first time home buyers, move up buyers, the downsizers? You know, there’s there’s just so many different things, luxury or investors. You know, I personally I love working with investors because for me it’s a it’s a lingo, right? Like you talked about that.What’s the return on that? What’s the cash on cash return? What are we looking at? You know, it doesn’t make sense. It’s kind of a widget that way. When you’re working with the traditional home buyer, it’s different. I don’t, not different in a bad way by any means, but it is, it’s different when it’s a business transaction versus it’s going to be your home that you’re planning on living in and raising kids in or, you know, just living in yourself, right? Your home is a different, it’s a whole different animal when you’re dealing with that.
than when you’re dealing with, you know, something along the lines of, of, you know, working with an investor that’s trying to make money off of that property, whether that be through a flip or rental property or, you know, whatever they’re trying to do. I find a lot of the investors that I end up working with actually are our first time home buyers because they
Dylan Silver (08:42)
Yeah.Brian Durham (08:42)
you know, you start talking to them and it’s like, well, I’m to have this person live with me and I’m thinking about doing that. And during that initial consultation, we start chatting and it’s almost like, well, have you thought about buying a duplex and renting out the other half or, using, using an FHA loan and buying up to that quadplex if you can afford it, you know, there’s just so many different ways to go about it. And that’s one of the beautiful things of real estate. I also have a lot of those first time home buyers that I worked with thatYou know, right now we talked about that single family home being almost $400,000 here, right? That’s, that can be out of some people’s budgets. Well, you have to sit down and have a conversation and maybe the best thing to do is buy that townhouse or the condo. And then you can live in that for a few years, you build some equity, you pull the equity out or whatever you want to do, or maybe you want to keep it in cash flows. You know, I’ve, I have a lot of those right now. You know, the people that I worked with in 2000, 2001 that are coming back to me going,
Dylan Silver (09:48)
Right.Brian Durham (10:13)
you know, Brian, we want to get a different house, but we don’t know what to do because we have this 3 % or, you know, some of my clients at that time were getting sub 3 % mortgages, right? Well, that’s like almost free money, you know?Dylan Silver (10:25)
huge. Yeah.I mean, at that point in time, it changed people’s perspective. I mean, especially if we’re talking about, you know, 2020 timeframe 2019. Like that is now and I think it’s changing now because people realize that that’s not the case. But that was people’s new norm for a time period. And it created a little bit of unrealistic expectations, not just, you know, from sellers and buyers, but also from real estate investors themselves who were
looking for that type of continued success. And with flippers specifically, folks involved in fix and flip, that became a very difficult strategy when you’re having materials increase and then you’re seeing more competition and then there was so much new construction that it was really harder to get flips to pencil.
Brian Durham (11:12)
Right, and that’s still even now. mean, you know, it used to be, I don’t want to say easy, but it was much more readily available to find those flips, right? Now you’re really digging. You’re digging hard to find something that makes, you know, a good return that most of them want to make.Dylan Silver (11:30)
Italso made a lot of people think that they were killing it and they probably were at the time, but there were deals and I’ve spoken with investors who, you you could buy it wrong and then you could still sell it and for a win. And this was happening in single family. This was even happening in multifamily with, you know, syndicators and fund managers. And those groups really got hit pretty hard because when you take out variable rate debt, know, economies of scale,
And then, know, in places, you know, like Texas where there was just so much multifamily construction that then has a deflationary effect on rents, right? Because you’ve got a surplus.
Brian Durham (12:07)
Right,we’ve started to see that a little bit here. ⁓ The amount of multifamily that has been built, it seems like every time you turn it around. even it affected me personally, the office building that I had my office in for eight years, they ended up, they sold it and they tore it down and they’re in the process of building apartment building there now. So, ⁓ I was a little bit salty about losing my office space, but.
Dylan Silver (12:31)
Wow.Thanks
Brian Durham (12:35)
You know, we have several others across the Twin Cities, but that was my own personal office space. you know, there is there’s a lot of that that’s going on. And I think some of them now, you you start seeing there for a while. It was as fast as they could build them. They were filling them. Now you’re starting to see that kind of lagging effect of overbuild. And now you’re seeing a price reduce, price, reduce, price, reduce. Right. So, you know, that that’s something that you want to be very cognizant about of making sure that you aremaking the right move because you you mentioned it. There was, there’s been times I’ve known people that they kind of dumb luck their way into something and then they think it’s going to be that way every time. And then, you know, the next one, you have one little hiccup that happens and they didn’t build in the right contingencies. And now they’re upside down quick on it, right?
Dylan Silver (13:24)
Yeah, then you got holding costs and you know, especially if these properties were sitting, people having to figure out what to do, right? And it does certainly make things a little bit more challenging when you have these, you know, black swan events, you know, maybe, you know,coming together and really just making it tough for people, whether it’s rates, whether it’s rents, whether it’s the cost of materials, everything coming together, COVID, right? And so that just made it very, very challenging for a time period. And I think we’re still coming out of that. I would like to pivot a bit here though, Brian, and ask you specifically about acquisition strategies that you’ve seen, or maybe that you are particularly bullish on in the Twin Cities area.
When working with investors, are you seeing investors have great success with you know off-market foreclosure? Is on-market a good resource? Seller finance? Do you have any one preferred acquisition strategy that you’ve seen investors be successful with?
Brian Durham (14:19)
I think the biggest ones where I’ve seen the success and help people with is the off market stuff, right? It’s the, it’s the networking and it’s, it’s building that network over time of agents that bring you things, right? Like I, I worked with some developers and you know, had an agent call me yesterday and he said, Hey, I got this deal. It’s, you know, X number of acres. It’s in this town. He’s like, does, you know, does it make sense for your investor? And I sat down and, know, put pencil to paper andit doesn’t make sense for this one, but for somebody else, it might, right? So now I’m taking that around and I’m helping him by shopping it around to some different investors and some different developers to see who it would potentially work for. Because that’s one of the other things that I really like is it might not work for this person’s business model, but it will work for this person’s. You just have to find the right business model that it works for. So, you know, I think the off market is a great strategy. You know, when it comes to things like
Dylan Silver (15:10)
Yeah.Brian Durham (15:17)
the on-market deals, they’re there to be had, but then you’re fighting with potentially four or five, six other people. So they’re a little bit more difficult to put pencil to paper and make the numbers work for most people.Dylan Silver (16:11)
What do you think about some of these ways where folks are finding these off-market properties? come, before I was a realtor, I come from a background as a wholesaler. And so I’ve seen everything from direct mail to you know pound in the pavement, knocking doors to, Texas, we’ve got, you probably have something similar up there, a list of who’s heading to foreclosure the following month. And so then you’ll be able to reach out to those people in some capacity. But then you’ve also got probate, death, divorce.Do you have any one preferred stream? And then also to one way of marketing to those people that you’ve seen be highly successful.
Brian Durham (16:48)
Well, just I think it really depends, right? We this is a little bit different market here when it comes to foreclosures. You know, our foreclosure inventory is minuscule still percentage wise. And I think a lot of that has to do with the the home buyers that we work with here. They’re much more conservative. So I come from a background of finance.Dylan Silver (17:02)
Hmm.Brian Durham (17:13)
almost a decade before I got into this side of real estate, right? And so I did thousands of mortgages before I came over here. And ⁓there’s still times even to this day that I’ll be working with my lender and we’re having a conversation with people of like, you don’t have to put 20 % down. Here’s another option, you could put less down to a one-time PMI buyout and things like that to where you can rearrange some of the money and make things still work and get potentially even a lower payment, right? So, and it depends on what that person wants to do. Are they?
Dylan Silver (17:45)
Yeah.Brian Durham (17:48)
Do they want the security of making sure I’ve got 20 % equity or do they want a lower monthly payment? So they thought they had to put that down or is it still a matter of their parents just instilled in them that whole time that they were growing up? You got to put 20 % down to buy a house, right? Like it’s just it doesn’t have to happen that way. But because of that, we are as Minnesotans, my experience is they’re very it’s a very fiscally conservative area. SoWe have very, very few, very, very few foreclosures that go through here. Even in the downturn in 08 and 09, the Twin Cities as a whole, we’ve bared very, very well compared to the rest of the country when it came to that kind of.
Dylan Silver (18:34)
That’s incredible.That’s really incredible. I don’t know if, you know, most people are aware of that. think the people, especially, you know, from from some of the sunbelt states where you may see a lot of foreclosure and, you know, just distressed homeownership in general, that it’s good to hear that there’s some markets where people really aren’t losing their homes that they’re coming, you know, 20 % down. If you got 20 % down, that would work if you’re an investor, right. And so if you’re coming into that with your homestead,
That’s really a good testament to the mentality of the buyers and sellers up there. We are coming up on time here though, Brian. Any new projects that you’re working on and then as well, what’s the best way for folks to get in contact with you or your team?
Brian Durham (19:16)
Sure.So things that I’m working on, I got a lot going on right now. A lot of it is around compliance and things for brokerages and mortgage lenders.
But it’s all around AI. If you’re not using AI right now, you’re missing out. And this goes down to even the small mom and pop investor, right? That’s on my down list of penciled in items.
There’s some things I want to do for the smaller investors through AI too, because what it’s going to do is it allows you to crunch that data so much faster that you can make moves quicker. Now you have to be careful to not let it either, you know, bias confirmation of what your ego says, you know, so you’re jumping and maybe making the wrong moves, but it can crunch that data so much quicker that I think that’s going to be huge for the investor going forward. And if you’re not using it now,
you will be using it in the future.
Then it’s going to be a matter of where you’re getting that technology, right? So, ⁓ you know how to contact me again. You mentioned it. wegorealestate.com is my website. You know, you can find me at pretty much all the social media is Brian Durham Realtor. You know, I’m pretty easy to find. And you know, I just wanted to touch real quick to on the sunbelt thing. You’re exactly right. Like I used to, you know, I’ve been licensed in Florida and I’ve got
Dylan Silver (20:16)
Yeah.Brian Durham (20:39)
clients in Florida and people that I work with in Texas and Arizona, California as well. They say real estate is local for a very, very good reason. Each one of those markets, even within a state, you have very different markets, right? So this is why it’s really important to get with someone that knows those local markets as an investor that you can work with and build that relationship with someone that you trust and you know is going to put your interest first. And then that’s how you build long-term.wealth and that network within the industry.
Dylan Silver (21:14)
Absolutely, absolutely.Brian, thank you so much for coming on the show. Thanks for your time today.
Brian Durham (21:18)
Yeah, thanksfor having me, Dylan. It was great talking to
