How to Build a Fix and Flip Machine Using SOPs, Systems & Automation

Justin Pickering (00:00)
two things come to my mind here and and they may not be in order, but I’m gonna say them. That’s okay. first would be when you first start a business, you’re typically by yourself or with just a couple operators, but typically it’s you’re usually starting out by yourself. Here’s what I’d recommend every newbie do. Pay for Loom. It’s a it’s a great program. A lot of the things you do on your computer, you’re having to do it anyway.

Loom will allow you to record it. It’ll then what I’ll do the first time I do anything is I’ll record myself doing it and I’ll talk it out as I’m doing it. So Loom will then build a transcript, right? Then you can take that transcript, throw into AI and say, make this into an SOP. I’m talking about everything.

Michelle Tack (02:14)
hi, I’m Michelle Tack. I am the podcast leader for Real Estate Pros. Thank you for joining us today. We’ve got a great operator, Justin Pickering, that has joined us today in preparing for our

meeting today in our podcast, Justin shared some interesting things about his business that I I think are interesting to go into. one is that Justin is doing fix and flips and he has done them pretty quickly in terms of the volume after he got out of the military and is going, you know, doing about

Start out doing nine and maybe at fifteen pretty quickly here. but the thing that I really think that’s of value that Justin brings and can talk to is also having really tight SOPs, standards of operating procedures. And in fact, has written a book that is a mindset around being deliberate about having that discipline.

So I will turn it over to you, Justin, but could you, for those that may not come from the fix and flip world, explain what you do and the markets that you serve.

Justin Pickering (03:30)
Yeah, so we started out. Our first deal was actually a a BRRRR and that’s how we began. And we were doing one or two a year until I decided to retire and do this full time, and that’s when we we went all in on the flips. Now, for every four flips, we try to keep one. because bottom line is you know, long-term assets is the real game. We use flips as that short-term capital to give us fuel to do the actual investment strategy, which is our long-term rentals.

we buy properties off market through wholesalers, sometimes direct to seller. And lately we’ve been buying a lot of of MLS, which hadn’t been a thing for two or three years, but it’s kind of coming back because the market’s been saturated with listings that have been setting for a while, which has opened up some opportunity opportunities for us to make you know lower offers. I’ll tell you right now, I don’t use the word low ball. I can’t stand it.

it’s it it it’s not fair. It’s not fair to say because if I showed you the numbers, this is a very expensive and risky game. And that’s what it costs to you know to play the game, right? So we provide opportunities for for distressed sellers to not have to get their house market ready. I I don’t think people realize how much stress it is, whether it’s a family member passing and

And they live in another state and don’t know anything about the property and can’t deal with it. We can step in and help. but a lot of the times we deal with distressed sellers who are going through some kind of you know, depression episode, which is near and dear to my heart. Something again that I talk about in my book. but we w what happens is these people are not bad people. They’re actually really, really good people who fell on a hard time in life. Like they weren’t born hoarders, right? Usually

Ninety nine percent of the time, some key event in their life has happened, usually a death in the family. And when I say family, I mean a a a very close relative, brother, mother, son, daughter, you know, somewhere, you know, a a really close death in the family. They go into depression and they s they stop living. And then all of a sudden, two or three years later, when they’re coming out of it and starting to recover, they look around and see this mess and don’t know what to do. So we’ll come in and handle all that for them. We’ll clean the mess for them.

all they have to do is is walk away. one of the unique things we do is we provide three options. So we can buy as is ready to go, you know, close in seven days. we offer the ability to assign it to another investor or list it with one of our realtors on our team. So the seller always has the options. Nobody’s trying to take advantage of them.

In fact, it’s the opposite. We provide three options and then let them make the decision what they think is best based off of what their bottom line is going to be, tied to how long it’s going to take and how inconvenient how inconvenient it’s going to be for them with between the three methods. And we try to lay that out for them and then let them make the make the d best decision for them.

Michelle Tack (07:18)
I appreciate that. What geographic markets do you serve?

Justin Pickering (07:21)
So right now we are in Northwest Florida, specifically Escambia County, Santa Rosa County, Okaloosa County, and then we recently started working in Bay County. yeah, that’s a very recent, maybe the last thirty days. So that that that’s a new market for us.

Michelle Tack (07:37)
Thank you. What I was really impressed as I mentioned previously when we talked was you really highlighted that you’ve got a standard operating procedure for every element of your business to make it run as smoothly as it can in a and generally a not a gr not always a smooth real estate market, right? there’s a lot of variables that happen that are some are in your control and some aren’t. Can you talk about, you know, how you develop those and

why they’re key to running the business efficiently. Yeah.

Justin Pickering (08:09)
Yeah.

two things come to my mind here and and they may not be in order, but I’m gonna say them. That’s okay. first would be when you first start a business, you’re typically by yourself or with just a couple operators, but typically it’s you’re usually starting out by yourself. Here’s what I’d recommend every newbie do. Pay for Loom. It’s a it’s a great program. A lot of the things you do on your computer, you’re having to do it anyway.

Loom will allow you to record it. It’ll then what I’ll do the first time I do anything is I’ll record myself doing it and I’ll talk it out as I’m doing it. So Loom will then build a transcript, right? Then you can take that transcript, throw into AI and say, make this into an SOP. I’m talking about everything.

Simple stuff like you need to start the electric and water for this upcoming flip. We close on Friday.

So I’ll go and I’ll file all the paperwork for that and I’ll record myself doing it, create a transcript, throw it into AI, it builds an SOP for me. It’s no extra work for me. It’s a couple copy and paste extra, right? I’m already doing it. We’re just recording it. So now let’s say someday you hire an assistant. You already have a Loom video so they can visually watch it. You have a and a written SOP. So depending on how they learn best, they have both options. Because what I see happen is people start hiring people.

And then they try to build SOPs with the person they hired. And the person they hired is frustrated because they’re like, I’m building these SOPs for this person. He’s like, This isn’t a real business. Or the owner maintains all that knowledge in their head and nobody else knows it. so my way around that, loom videos, talk out what you’re doing so it built a transcript so you can copy and paste it into AI to build you a written

Michelle Tack (10:23)
Let me ask you a question of of the SOPs that you’ve developed, what one or two are the most important to you in terms of the most effective in running your business?

Justin Pickering (10:33)
communication. Any SOP that r revolves around communication will be your most important. I also teach leadership. you know, I I ten ninety nine contract for a company called Summit Point. And one of the things we talk about is ninety percent of workplace issues are actually tied to communication. so any SOP that that can fix that. and and while we’re on this SOP train, a lot of people will try to build the perfect SOP. And I would urge you

To have a SOP and perfect it as you go, or you’ll never get started. I’ll give a quick example of a communication. When we first started, we used text message. I would text my foreman, right? Which when we had one project, that was no big deal. But when we had two and three projects, you know, he started saying stuff like, Which house is this for? ⁓ I put the wrong tile in this house. And that actually happened. So we used

Michelle Tack (11:25)
Yeah.

Justin Pickering (11:27)
Yeah, we we used we use, you know, a a backsplash tile. We started putting it in the master shower. Well, that backsplash a little more expensive because you only buy, you know, eighteen square feet. So you can go a little fancier with that. Well, they started putting the master, so we ended up having to buy the fancy, you know, the twelve dollar tile for that master bath. It cost me some money with that communication and that’s where it hit me, like, okay, hey, we need to advance our system. So then we moved to Slack.

And we started creating channels per project, right? So then he could go to that specific address and see the channel, right? And and then that built into we tied that to Google Drive, right? And in our Google Drive, we had a design plan. And the design plan had all the items per room that we were using with hyperlinks to you know to go throw it in the cart. So when we go to order it, it’s it’s simple to create the cart. Again, as we build everything.

We have in mind how can I hand this off to somebody? Because I don’t want to do this forever. As the CEO, I cannot be this guy forever. so we keep that in mind with everything we do and and and that’s how we build our SOPs.

Michelle Tack (12:35)
Let’s talk about your opportunities that you’re looking at in the next year or two, the things that you’re really excited about. Can you talk about that, Justin, for folks that are listening?

Justin Pickering (12:46)
Yeah, so I I I flip homes. However, because we do direct a seller, there’s opportunities that come up that maybe this home doesn’t fit our flip criteria. And instead of just walking away from it, we’ve decided we can start to assign these properties or put them in touch with the realtor on our team, you know, to to and let them decide how to handle either an assignment contract or a a listing contract.

Here’s why I see the opportunity. This is wholesaling’s not new. What is new is you’re starting to see a many states ban it. I think there’s seven to nine, something like that. States have banned it. And this is an issue because this is a real market and it’s needed. So I want to be clear wholesalers are needed, just like realtors are needed. Two different markets. and and wholesalers unfortunately are untrained and unethical, and they’re ruining this market.

And I’m not saying all of them, I’m just saying in general, the that’s happening, right? So my actual opportunity here is I’ve looked at this problem set and said, Hey, if I can come in and bring ethics and professionalism to wholesaling and we do it right, there’s an entire market that needs to be filled correctly. Not some guy who watched an episode of YouTube and then went got a an illegal contract and he doesn’t even know half the time it’s illegal, by the way. Like

And and the seller doesn’t either. If the distressed sellers turn these people in, these people will be getting in trouble because they’re doing illegal things. And I don’t think either party knows because none of them are educated, right? So bringing professionalism, education, and ethics to that market, man, I I I really think there’s some opportunity there.

Michelle Tack (15:03)
Understood. Every operator that I know that continues to grow and expand, and you are doing that quickly, has had a a time, you sort of alluded to one situation already, but where a deal started going south and they had to pivot really quickly to either resurrect the deal or e if they weren’t able to resurrect it, it was something that was pivotal in their career that helped them grow. Can you talk about a situation where

You know, things sort of went south on you, but you were able to either resurrect it or implement new SOP or what have you that you learned from.

Justin Pickering (15:39)
I’m gonna be honest with you, Michelle. I don’t think we’ve done one flip or we didn’t add something to the SOP after. wow. I think that’s in I I think that’s important for people to hear is like even people who know what they’re doing are still getting better. Yep. So quit beating yourself up for not being that good because the only way to do it is to do it, right? And and I don’t mean irresponsibly, and I’m not, you know, advocating, you need to lose some money on some deals to get good. I never said any of that. I’m saying you just need it.

the information’s there, right? People have the the training how to do this. and I coach people on this, right? You have to you but you have to start. you know the the example I just gave was I started with text messaging. It was the worst system possible, but I started. And and did we lose some money? you know we probably lost eight hundred dollars in in that communication error.

But it built something bigger, right? To where we’re at now. We actually use company cam now. So we went from Slack to now we’re at Company Cam. So we just kind of continue to modify our SOP. So I you know, when not one specific story sticks out. It’s every flip we’ve done. There’s been one little tweak, right? you know, how we do our checklist at rough end, how we do our checklist at at finish, and then how we do our punch out list, you know.

We’ll add one thing here or there to all those. So even our our initial walkthrough inspection, every time we go, we add something, you know. you know, my original inspection checklist said, you know, it had windows on there, replace or good, right? Just like two check blocks for the for the agent to walk through. Well, now we’ve changed it to replace, good, or fogged, because some of them you don’t need to fully replace, you just need to change the

the the the panels out. I know that, but my agents who do the walkthroughs for me may not know that, right? So it it helps them see, okay, yes, this is a fogg window. And then they can write, you know, the actually the first time we did it was just a check box and they would check it and I’d well, how many? And they say, I don’t know. So now I have a space there that says number. So they can write in eight, right? So I’m telling you, we’re always making it better. It’s it’s it it’s always getting better.

Michelle Tack (17:54)
That’s excellent. in term last question I have for you is about your network. How do you have a network that you’ve grown that you rely on or that has, you know, that you meet with on a regular basis? Can you just talk about your network a little bit in terms of that area to help out?

Justin Pickering (18:12)
Yeah, I’ll tell you the biggest growth I’ve had in the last two years is me talking about my business. So not to dive too deep into it, but again, I was in special forces for 20 years and quiet professional is our motto. So I never told anybody about our business. I kept it quiet. I didn’t start talking about our business until October 2024 and it was life changing. So I would encourage everybody talk about your business everywhere you go.

I started posting online about my business. So our network really started to grow in October 2024. I did join an investors group, great experience, met a lot of great people. but in real estate in general, you know, when I got my realtor’s license in 2022, I didn’t think I didn’t realize I even had a network until I got my license. And then at my first year I did

I did 12 transactions, which is pretty good for a first year realtor. And it was all from people in the community that I’d worked with. So I would tell you if you want to be involved in real estate, you should be involved in the community because real estate and community go hand to hand. like like I coach youth football. I’m working for the the economic development board here in this local town. Like just be involved in your community. and you’ll start to.

to network and meet the right people. Plus, you should be involved in your community. That’s what that’s you know. That’s why it’s called

Michelle Tack (19:32)
community, right?

Well, you’ve been wonderful. I want to give you an opportunity to share your information with the folks that have tuned in today so that you know maybe they want to invest with you in a fix and flip, maybe they need some coaching and maybe they just wanna, you know, level up their game. So do you mind providing your information as well as spelling out your website, what have you?

Justin Pickering (19:58)
Yeah, so I think the best way to find me is actually through my coaching website. it’s got my book and public speaking in there too. It’s called thedeliberateblueprint.com. So T-H-E D-E-L-I-B-E-R-A-T-E B-L-U-E-P-R-I-N-T.C-O-M. And then my personal for the real estate side and my my email to reach me at is [email protected]. So [email protected]

Michelle Tack (20:38)
That’s awesome. Justin, we really appreciate it. I love the whole discussion around continuous improvement, sort of the 1%, you know, Japanese continuing to improve, as well as a British cycling team, right? as an example of you know becoming winners. Coach. Yeah, that’s right. That’s right. David’s fair reference. That’s right, it is. It is indeed. So it is a great book. So

Justin Pickering (20:55)
James.

Habits is a great book.

Michelle Tack (21:04)
Thank you so so very much. for those that are listening that are our subscribers, please continue to check in. We’ve got great content as exemplified from today. We hope you enjoyed it. And for those that have not subscribed yet, we encourage you to do so. Again, thank you so much, Justin.

Justin Pickering (21:19)
Yes, man. Thank you.