How Real Estate Wholesaling Built a 120-Unit Rental Portfolio | Billy Fernandes

Billy Fernandes (00:00)

We don’t cold call at all. I don’t believe in it. I think it’s just

horrid and doesn’t produce good results. but there’s a lot of little tweaks around stuff. we don’t market the week of Christmas or the week after. It’s just they’re dead weeks. but we front load it heavier in that month and front load it and then backload it heavier afterwards. so there’s a lot of tweaks you learn of like what weeks do you drop marketing, what holidays impact your marketing response and your ability to do deals and

Typically around the big major holidays, Thanksgiving and Christmas, you want to skip those weeks because people are focused on family and getting places and traveling. They’re not focused on selling their dilapidated house that’s falling down, right?

Meghan Escobar (01:09)

Hello everyone, welcome back to Real Estate Pros Podcast. I am your host, Meghan Escobar, and today I have the pleasure of sitting down with an owner and operator that seen an opportunity five years ago and ran with it. And today him and his wife were able to leave corporate America and build a pretty significant portfolio. So Billy Fernandes, owner and operator of Sell to Bumble Bee and Lendama Lending. Welcome to the show.

Billy Fernandes (01:36)

Awesome. Thank you, Meghan. I’m so glad I could be here with you today. it’s an absolute pleasure.

Meghan Escobar (01:40)

Yeah. It is. Isn’t it nice to be able to have that freedom to be able to do things like this throughout your day where you’re not just clocking in, clocking out.

Billy Fernandes (01:48)

Yeah, absolutely. and that’s one of the things when my wife and I first started was that we did something called a dream life exercise, right? and I think everyone should do this no matter at what point of life you’re in. And what a dream life exercise is that you take time and you write down like what would your ideal day look like if money wasn’t an issue, time wasn’t an issue.

Like nothing was there. Like, what would your dream life look like? day in, day out, week in, week out, whatever. and we started with that. And it was like my slogan was like, I want to do what I want, where I want, with who I want, when I want. Right. and so right now I’m at our second home in Huntington Beach, California. our primary home is a ranch in Texas, and we split time between there. And I come here when the weather sucks in Texas, and I go to Texas when the weather’s good, right? So I do what I want to do when I want to do it with the people I want to do.

Meghan Escobar (02:34)

Brought that vision to your reality. Is that safe to say?

Billy Fernandes (02:38)

Yeah. and that was our biggest thing. and when we wrote that down, part of doing that is you itemize out all the things you want and what it’s gonna cost too, right? So on our dream life exercise five years ago that we did or six years ago that we did now, my wife does show jumping. She show jumps horses all over the US. I wanted a called a special car, an exotic car, like a very, very nice classic car.

We wanted to have a second home in California so we could escape the bad weather of Texas. we wanted to have a kid, and we wanted to be able to have the freedom and travel whenever we want and do what we wanted, right? fast forward six years. my wife has a horse that she goes jumping with and actually she just literally sold him this morning. we got the wire this morning from the sale, and so we’ll be flying to Germany in a couple months to.

pick out another horse to fly a horse back. A lot of people don’t know that, but you put horses on planes. we’ll be going to Germany to pick up another Yeah,

Meghan Escobar (03:26)

I did know that.

Billy Fernandes (03:28)

so we’ll be going to Germany. That’s where all these really good jumper horses come from. so we go to Germany to pick out a horse and pay them and fly the horse back here and she can we’ll continue showing. I’ve got my classic car that I love. I have a ’68 Bronco from Velocity Restorations. We have our condo here in Huntington Beach like a block from the water.

And we travel a ton. We go on a ton of trips. she’s at horse shows for about twelve to fourteen weeks out of the year. I have the freedom of travel to all her horse shows. And we have a little boy named Sawyer who’s 20 months old who’s an absolute riot. So

Meghan Escobar (04:01)

Congratulations.

Billy Fernandes (04:02)

we’re living that dream life that we set up six years ago through the businesses we built. The primary business we built starting out was Bumble Bee Properties. And Bumble Bee Properties,

Came to existence because we knew that we wanted to get out of the corporate rat race and we wanted to get into building our own future, our own wealth, generational wealth through real estate, right? And I just remember at the time, like me looking at hundreds of deals on Zillow and being like, nothing’s a freaking deal on here. Like every property is listed way, way too high. and then at that time we learned well, if you want to find good deals, you got to buy them directly from the seller. And we’re like, okay, how do you do that?

that’s when we got into direct mail marketing. we sent out our first batch of mail, got our first deal. I made $12,500 off of I think like fifteen or eighteen hundred dollars in mail spend at the time. And I was like, holy smokes, I just made what I make in a month at my corporate job. it was at that time my wife and I decided that we want to scale this and get this to the point that we could quit our corporate jobs. And we put some parameters there. I was like, we want to have a six-month emergency fund.

that if the business shut down, we can make our house payment or car payments, whatever else. and I was like, once we have that and a solid three months of consistency of the wholesale business making, I think we said 25k net a month, we’ll quit. Right. and we gave ourselves a year to do that and we did it in six months. we both walked into our offices at our house in Texas on the same exact day.

at the same exact time and called our bosses and resigned from our corporate jobs. and we had good corporate jobs. Like we were combined making a quarter million a year six years ago. Very good money.

Meghan Escobar (05:39)

what were you trading for that

Billy Fernandes (05:41)

I was trading the ability that I knew I could grow a business that would 10X that easily. So I knew that if I left that corporate life, that was not my focus. And I also believe that you should focus on one thing if you want that thing to be great. and so we left that to go all in on Bumble Bee. And so now fast forward Bumble Bee six years, we just crossed the thousand deal mark and Bumble Bee Properties of wholesaling deals and buying them ourselves.

We have a rental portfolio of about a 120 units now. that the net cash flow on that a month, our take home on it is about twenty thousand dollars a month in just net income.

Meghan Escobar (06:16)

So that’s a passive income that you wanted to create so

Billy Fernandes (06:18)

Yeah,

that’s our passive income that we want to create. Like hey, if something happened to either of us, we can now downsize our lifestyle, but live off of twenty grand a month is not that hard, right? You can eat, you can still travel a little bit, you have a nice home. that’s what we wanted to make sure we can do. So we’ve built that portfolio out. it’s a combination of single family and commercial Properties. and it does extremely well for us. and we love that we did that.

And now we’re at the point where Bumble Bee Properties. I have about 13 people on that team. I have a project manager for Flips and I have a property manager for our rental portfolio that’s in-house. And after doing all of that, and that runs on autopilot, all three of those businesses. You could say property management, project management for flips, and the wholesale business for getting deals.

I spend roughly 12 hours a week on those three businesses combined. we run on EOS, our level 10 meetings. So we have our level 10. I have a meeting with project management, I have a meeting with our real estate agent to go over our list of deals, our property manager. and then I have my one-on-ones with the two, the act manager and the dispo manager, every week from Bumble Bee. And that’s it. that’s all I do on those businesses to manage them and watch them be successful.

So brought us where we are today. And I learned that I can’t just build a business that I’m gonna be and walk away and be bored and slow from like and let it pay me. so we decided to start a lending company, which is Lendama, L-E-N-D-A-M-A. we have a cool logo of a llama. because who doesn’t like a llama, right? we go with the animal things, I guess the Bumble Bees, the llamas.

Meghan Escobar (08:29)

Yeah. Well, Bumble Bees are very important to the environment and llamas are I don’t know what their purpose in the environment is, but they’re just really cool.

Billy Fernandes (08:38)

Who doesn’t like a llama, right? So we’re all llama no drama, that’s our saying.

Meghan Escobar (08:42)

that’s a good one. Great marketing. Who came up with that? Was it you or the wife?

Billy Fernandes (08:46)

My wife, she’s the marketer. I actually came up with the name Lendama, but she’s done all the marketing behind all our website build and all that stuff. but in building that, we wanted to build that because we wanted to be investors lending for investors by investors. because we understand what investor needs on their side for their lending on their flip, right?

And why everything matters, hey, I want a lower down payment, okay with a little bit higher interest, or I want a lower interest, higher down payment. and we have many options. We’re able to help a borrower get into the right loan for them. and we just saw massive opportunity there. not only from just us being able to run a business, in my opinion, better than most people. it’s hard to run a business and it’s crazy how many businesses run so poorly but look like they’re doing good. and I know that we could do it absolutely kill it on the lending side.

Which is why we started it. and on top of that, our Rolodex of like a thousand buyers that have bought properties from us are email lists that we have of tens of thousands of buyers in DFW, connections, the network I have of people in DFW from other wholesalers, other flippers I know.

to be able to do deals with other, to be able to lend to them. So that’s been helping our business scale rapidly in DFW. And we will be shortly going almost nationwide. There’ll be some states that we won’t be lending in. But right now we’re primarily focused in DFW. and funding deals there for people.

Meghan Escobar (10:03)

Perfect. thank you for sharing that kind of journey and letting us know, there is a process to becoming successful. And it really all starts with a pen to paper, right? Like I love that you started your journey with the dream life exercise. And so you created that dream life to be your reality of what you wrote down on paper five years ago. And now that it sounds like you’ve kind of

hit all the goals that you wrote down five years ago. is there any talk about putting another dream life exercise in motion?

Billy Fernandes (10:34)

we literally are doing it with our entire team this December. and my wife we have a one-on-one every week for where it’s like, hey, this is business, we talk business and we make sure that we can get everything out that we need about business. but we spent time yesterday talking about

We’re gonna redo our dream life exercise because we’ve already hit everything in that dream life exercise that we wanted before. and really not a whole lot has changed. a lot of it’s very similar. and it’s just like there’s a lot more in that dream life exercise now about serving people, than it is more about us and hitting those monetary things, right? my wife has some big things she wants to do with, building a very nice barn and helping

Foster kids have a place to go to escape and work with horses.

So she loves doing that. I love just helping and coaching people for free. Like I don’t charge people to get coached or mentored or just ask questions. I have a free weekly coaching call I do that goes over wholesale and flipping. And it’s just how do you do it? And I let people just openly ask questions. I share KPIs that we have. We underwrite deals because that is where the number one thing people mess up is understanding the value of a deal and what it’s actually gonna take to do it.

So we love just a lot more on that dream life is now is more of like how do we give back to people and how do we help

Meghan Escobar (11:44)

I love that you brought that up because one thing that really stuck out to me during our conversation before we got on here was when I asked what’s the first thing that you would want someone to know about you and how you are as an operator? And I think it’s incredible what you said was that verbatim, you care more about people’s goals than you care about your own.

Billy Fernandes (12:40)

Yeah.

if you care about your team’s goals more than your own goals, they will then want to work on your goals for you because their goals are typically in a line with yours, right? just from naturally who you surround yourself with. So if their goals to hit a financial number, well, cool. In order to hit the financial number, you have to sell how many deals, which means you have to call how many buyers, you have to meet how many buyers, you have to go to lunch with how many buyers. Like what does that look like, right?

And we help them work that number backwards from their dream life exercise and their goals of, you want to make 250K this year as a dispo sales rep. This is how many deals you’re gonna have to sell this year. This is the average size of the deal. We know that you need to call 35 buyers to sell one deal. Like, how do you actually work all the numbers back from there and break it down into like daily habits that will get you there? and in turn, by them having those big, hairy, audacious goals.

They now turn around and help the business grow because their goals are aligned with our goals or their financial goals meet the financial goals of the business as well.

Meghan Escobar (13:36)

such an incredible perspective. So it’s almost like, you’re looking at the people on your team as they’re your partners. They’re not, people who work under you. they’re working alongside of you. And as they’re building your dreams and goals, they’re also building theirs.

Billy Fernandes (13:50)

Yeah. I believe like a lot of people are like, and I still say it all the time, like they’re my team members or like they are employees, but at the end of the day, like I care so much about these people and like their success. I have several people that have been with me about four years now.

Meghan Escobar (14:03)

Makes

such an incredible difference, just acknowledgement like that.

Billy Fernandes (14:06)

Yeah. and that’s where I think a lot of businesses fail is that like they don’t give a damn about their employees. and when they don’t, like those employees leave. And you can lose A-players very, very quickly just because you are a B-player leader. So A-players don’t work for B-players

Meghan Escobar (14:21)

Amen to that. All right. Well, we’ve been hearing all the good stuff, right? But now I want to dig into what are some things that you’ve had to overcome, some obstacles? Because again, Billy, I think you’ve built an incredible, incredible business and very, very fast. But I am sure along the way there were some pivotal points where both you and your wife either had to shift things really fast or just

overcome something. And I think it’s important to highlight some of those things as well as most of our listeners are either very early on in their journey or, just looking to level up.

Billy Fernandes (14:57)

Yeah. there’s a lot. we’ve been fortunate that our business has ran very, very well. but I’m not gonna sugarcoat it and say we’ve done everything perfect and nothing ever fell apart. we’ve been the day before closing, watched $75,000 deals fall apart. we’ve gotten our acquisition team to a point where we were gonna be scaling to doing six, seven million dollars a year and in a 40 day period had three acquisition managers quit.

for different reasons and nothing bad on the company. I still talked to two of the three, right? actually I talked to all three of them. one was just like over the acquisition thing, didn’t like doing it anymore. one was he retired. And then the other one was he went to go work for his father or stepfather in a position that he’s gonna take over the company. Like I couldn’t blame him for that, right?

So, they were all good departures. I still talked to them all, but that hurt the business so bad. we had one act guy, I had to step back in, start running appointments, knock the dust off, because I hadn’t done that in two years at that point. and step in and do what had to be done. and I think when I did that, the team saw as well like, Billy’s willing to do whatever it takes and doesn’t just expect us to do it. so I never asked the team to do something that I wouldn’t be willing to do on my own. Right. like I tell them, hey,

I’m not going to run an appointment at 9 p.m. on a Sunday. I’m with my family and I don’t expect you to do that either. Right. but if we have a hot lead and might be a Saturday, one o’clock in the afternoon appointment, I’m probably going to take that because I need to support my family. so being aligned with the team there has been really beneficial. but I would say the hardest parts is other downsides is we’ve gone through some months of we’ve spent roughly about $75,000 a month on

marketing, combination of direct mail, pay-per-click, meta-ads. and we’ve had some months where we spend 75 grand and only 150 grand comes in. you don’t make money at that point. we have to have about 175,000 come in a month to break even in the business because damn, like that month just lost us 25 grand. and then the next month, same thing, it like maybe lost 10 grand.

And then you get to a month where it makes 200K. but being able to get past those months and through those rough times and keep your team motivated because you see everyone get deflated very, very quickly. but I would say we have like one or two of those months almost every year, where like there’s two months that make like zero dollars or they lose 40 grand, but then you have a month three months later that makes 300k, right?

and you just have to tell yourself it’s just part of the wave that’s happening.

it’s not like the same month every year where we can be like November sucks, right? Like no, it’s every year. It’s like, well, last November was bad. Is this November gonna be bad? No, November’s good. Two years ago, January sucked. January this year absolutely killed it. And now it’s July that sucks, right? we can’t find any common.

Meghan Escobar (17:38)

The biggest influence of that is that what’s going on in political worlds in specific areas or in just real world.

Billy Fernandes (17:47)

there’s a lot of stuff that we’ve learned and little tweaks you do in your business with certain things going on. like back to school week always sucks to like spend a lot on marketing. we don’t drop mail like the week and a half before elections because mailboxes are stuffed with election paperwork. so there’s little things like that that we tweak around.

We don’t cold call at all. I don’t believe in it. I think it’s just

horrid and doesn’t produce good results. but there’s a lot of little tweaks around stuff. we don’t market the week of Christmas or the week after. It’s just they’re dead weeks. but we front load it heavier in that month and then backload it heavier afterwards. so there’s a lot of tweaks you learn of like what weeks do you drop marketing, what holidays impact your marketing response and your ability to do deals and

Typically around the big major holidays, Thanksgiving and Christmas, you want to skip those weeks because people are focused on family and getting places and traveling. They’re not focused on selling their dilapidated house that’s falling down, right?

Meghan Escobar (18:42)

Right, exactly.

Billy Fernandes (18:43)

Lots of different stuff that we tweak here and there to make sure we’re as efficient as possible with the marketing.

Meghan Escobar (18:48)

Makes sense. All right. Well, thank you for sharing that. I definitely appreciate you sharing some of the not so pretty sides, deals going sideways, things like that, knowing that no matter where you are in business and how well you prepare or you get your systems in place, there’s always gonna be a situation that you’re not fully prepared for.

And I just think that, that’s the kind of stuff people don’t talk about enough as operators and business owners. And what separates, folks who are in the game long term versus those who are just here to create a transaction. No, there’s gonna be ups and downs, but if done right and you’re showing up with good intention, it’ll always balance out.

Billy Fernandes (19:34)

Yeah.

Meghan Escobar (19:34)

Perfect. And what do you feel the next big biggest opportunity is for you? is that with the lending company or scaling the Bumble Bee? Like what do you think is the next biggest opportunity?

Billy Fernandes (19:47)

Yeah, for us right now, Bumble Bee’s at a place I really like it. it runs really well. We sit at a 4.5X ROAS the team size is very comfortable. Everyone knows their position there. and it prints money over there. So for me, Bumble Bee is where I want it. And so we recently shifted our focus, but because that team runs so well on its own, is that

Honestly, Tara and I were getting bored and we’re like, we’ve always talked about starting a lending company. and so the house always wins, right? so we wanted to start doing lending. And so in the past six months, we just kicked off lending and that’s been going really, really well for us there. so our big focus over the next year is the hard money lending side of things. we should be able to hit

75 million dollars in lending next year. and I have a five year vision for that company of doing a billion dollars a year in lending. So that’s where my all in is at, is on the lending business and growing that.

Meghan Escobar (20:43)

Beautiful. I’m excited to see the growth and thank you again for joining us and sharing your perspective. I definitely think our audience will gain some value from everything that you’ve shared with us today. And if somebody did want to reach out and connect with you, Billy, collab with you, or even join that free coaching call that you offer, what’s the best way to for them to do that? Are you, big with social media? Is it just a basic phone call

Billy Fernandes (21:08)

Yeah, I would say the best way to get a hold of me is through Instagram. And I’m sure you’ll drop my handle below or something, but it’s billy_ferns, F-E-R-N-S. and for the free weekly coaching call, there’s a link in there that takes you to school to join that course. so that’s probably the best way to get a hold of me.

And as far as getting holding me for loans, reach out to me on there as well. You there’s a link right to our website to Lendama, L-E-N-D-A-M-A. or you could just Google search it as well. It pulls up there. I think Lendama’s gonna be the talk of the town in a couple of years of one of the fastest growing hard money companies that people are seeing.

Meghan Escobar (21:40)

Go

calling it in. And you’re obviously a master manifestor. with what you’ve created in a five year period. So I think you might have some backing to that to be able to kind of say that out loud. Yeah. All right. Perfect. And yes, we will absolutely drop those links below. So thank you so much again for your time, your story, and more importantly, your perspective. I think it’s important to have people in this world today, building.

businesses the right way. So if you got any value from this tuning in, please be sure to hit like and subscribe. We’ve got more conversations coming in with just like Billy Fernandes here, who are building real businesses with real people in real time. We will see you on the next episode.

Billy Fernandes (22:26)

Awesome. Thanks, Meghan.