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Show Summary
In this episode of the Real Estate Pros Podcast, host Michelle Kesil interviews Chauncey Pham, a real estate investor specializing in fix and flips and turnkey services. Chauncey shares insights into his business model, the challenges of working with new investors, and the importance of understanding consumer needs in real estate. He discusses the shift in market dynamics, creative strategies for finding properties, and common mistakes investors make. The conversation emphasizes the significance of education, process engineering, and adapting to changing market conditions.
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Chauncey Pham (00:00)
Yeah, so I mean, the model was born out of the fact that the market conditions shifted. ⁓ It was born from the fact that market conditions shifted and the fact that we were on a television show ⁓ and the television show ⁓ kept asking for us to buy more and more and more houses for production. And toward the end of that show, we were so burned out from carrying 11, 12 houses at a time, we figured out that flipping really isn’tbuying a cheap house, doing a value add to it, and then selling it for profit. It really is about six or seven different businesses all in
Michelle Kesil (02:11)
Hey, everybody. Welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. And today I’m joined by someone I’m looking forward to chatting with, Chauncey Pham, who is a real estate investor specializing in fix and flips, as well as offering a turnkey service, managing operations for other investors. So excited to have you here today, Chauncey.Chauncey Pham (02:36)
Thanks so much for having me.Michelle Kesil (02:37)
Of course. So yeah, let’s dive in. So first off, for those who are not yet familiar with you and your work, can you share what your main focus is?Chauncey Pham (02:47)
Yeah, so I started out as a house flipper back in 2019 and have transitioned now to still flipping houses, but doing so in a manner where I’m more of an operator for anyone that has at least $125,000 to $150,000 liquid would like to get into the flipping game, but they have no resources. They have no know-how. They don’t know anything. And so we are basically a one-stop shop.turnkey service for them where we find the houses, we fund them, we fix them, furnish them, and ultimately flip.
Michelle Kesil (03:21)
Awesome. And do you do this across the US?Chauncey Pham (03:25)
No, as of right now, we are only doing this in Dallas, Fort Worth, but there’s a huge opportunity right now for us to expand across the US. And it’s a really cool model, really, really exciting right now.Michelle Kesil (03:36)
Yeah, can you expand more on like what this model looks like?Chauncey Pham (03:42)
Yeah, so I mean, the model was born out of the fact that the market conditions shifted. ⁓ It was born from the fact that market conditions shifted and the fact that we were on a television show ⁓ and the television show ⁓ kept asking for us to buy more and more and more houses for production. And toward the end of that show, we were so burned out from carrying 11, 12 houses at a time, we figured out that flipping really isn’tbuying a cheap house, doing a value add to it, and then selling it for profit. It really is about six or seven different businesses all in
So we figured if we can figure out how to set up all of these businesses, similarly to how production builders do. So you’ve got DR Horton, they’re building the house, they’ve got the mortgage company, they’ve got the title insurance, they’re buying the materials at scale, so then they can sell the product for a little bit cheaper.
than everyone else in the market because they’re making money from all of the verticals around building. If we could build something similar in the flipping world, then it could work. And that’s ultimately what we did. And so essentially people that are looking to increase their wealth by taking the capital that they have, so anywhere from 125 to
buying a house and then we are taking care of the entire process for them when the house sells, they get 100 % of the proceeds.
It allows us to leverage our expertise without having the financial exposure and it mitigates the risk of new flippers getting into the business and not having construction relationships, design knowledge, market knowledge, where to get a hard money loan, how to source their own deals, and instead we’re providing that service for them in full.
Michelle Kesil (06:20)
Awesome, that’s amazing. So it sounds like people just need to have the money to invest and everything else is taken care of, is that correct? Do you do like educational services as well where you like walk them through the process or it’s more passive?Chauncey Pham (06:29)
Correct. Correct.Yeah, all of the clients that we’ve had thus far are passive. We’ve had a couple that in the beginning were like, I wanna learn to do this. But then when they got a peek behind the curtains and we would involve them in the process, they’re like, this is a little too much for me. No, thank you. I’ll just get my check at the end. But absolutely, if they wanna be more involved in the process and learn, then they can do that as well.
Michelle Kesil (06:51)
Yeah.Awesome. And what have been some of the biggest challenges that you’ve experienced and overcome in this work?
Chauncey Pham (07:08)
You know, working with people that have no prior knowledge in the real estate industry is really the biggest hurdle because you are having to kind of ⁓ manage their emotions because investing is high risk, which means that it’s high emotions and it’s really scary sometimes and you have to make really quick decisions. ⁓ And that has been.challenging to manage, but if you’re bringing on the right clients then, you know, other than that it really is a cool, smooth process.
Michelle Kesil (07:41)
Awesome. And what do you feel have been some of the main keys that made the biggest difference in your business running smoothly and growing?Chauncey Pham (07:52)
So my husband and I are process engineers. ⁓ A lot of people get into business and when they get into business, they’re really just building a job for themselves. They’re not actually working on their business every day. They’re working in it instead. And we have built our business and our multiple businesses in a way that at any given moment we could hand it off to someone else. There are always SOPs. There are always duplicatable processes.and systems that are in place. And so I really attribute ⁓ the fact that, you know, we’re able to flip houses the way that we can and then now leverage our skillset in flipping houses and our system for other people because we are process engineers and that has made all the difference.
Michelle Kesil (08:38)
Yeah, definitely. And so what are you like most focusing on solving or scaling to next?Chauncey Pham (08:48)
So next I’m really, moving right now into the educational space and ⁓ it’s the educational space for top producing realtors that I’m teaching them to leverage vertical integration. So essentially you’ve got this whole group of realtors that are out there that just focus on selling more and more more houses. ⁓ And they’re making a ton of money, but they’re burned out. They have no time freedom.Their family hates them because the only way they know how to make money is to sell more houses. And if you take the same foundation and the same strategy that we’ve done when we’ve built out our turnkey business and apply it in retail real estate as a realtor, then these agents are able to make more money off of each transaction without having to constantly get more transactions. For example, right now I’m teaching agents how to take the LLC that they have.
go and set up an account to get a tax resale certificate with their particular state, find wholesale suppliers for materials like flooring, countertops, cabinetry. And when essentially they get a listing that needs those items in order to be refreshed to go on the market, instead of just getting the listing now, you’re able to sell them the materials that they need to get it ready for you to present it, right, to sell it.
So you’re able to make an additional three to $5,000.
just on that particular transaction and on a listing because you’ve vertically integrated and you’re kind of a one-stop shop for everything that your clients need. And so really leaning into the educational side where I’m teaching realtors how to vertically integrate like we have on the flipping side.
Michelle Kesil (10:57)
Awesome. And did you like do any real estate like as a realtor before?Chauncey Pham (11:04)
Yeah, so I was a realtor 2016, I’m still a licensed realtor. And I have a team of almost 300 realtors underneath me at my brokerage that I coach, train and mentor. And so because I was able to build out the residual income from the team that’s underneath me, that then gave me the freedom to start investing. so, yeah, I like to teach realtors to kind of travel a different path than what…most think because realtors ultimately, in my opinion, make the best investors because we understand the perspective from the consumer. We know what the consumer is looking for. We can tap into what the consumer wants at an emotional level instead of just looking at everything from a numbers aspect. And so, so yeah, I definitely leverage my experience as a realtor ⁓ now kind of as an investor and then educating realtors as well.
Michelle Kesil (11:54)
Yeah, that’s amazing. Is there any advice that you wish you had when you started your investing journey that you’d like to give to others?Chauncey Pham (12:05)
Yeah, I would say if you are investing and you don’t have any prior real estate knowledge, no one ever told me that being a realtor would assist me in being an investor, but it 100 % did. So if you don’t have that prior knowledge, I would say one piece of advice that I have is get your real estate license and at least work with one client.before you really start investing. And I only say that for one reason, and it’s because the consumer fuels all of our businesses, regardless of what type of exit strategy we’re engaged in with investing. If you don’t understand the consumer, then you’re not going to do well. And what we’re seeing right now is a rash of investors that are falling flat on their faces because they run their entire business based on a spreadsheet.
and based on numbers and their return on investment instead of understanding the consumer and creating a product and creating an environment for consumers that emotes some sort of or incites some sort of ⁓ emotional response. And so I really, really think that investors need to get more connected with the consumer and connected with the realtor who is ultimately the gateway to the consumer so that they are understanding how to build out the right products
They are building out products that, you know, create an emotional response from the consumer. Because as of right now, consumers don’t really like investors because investors don’t necessarily consider them and their needs and their wants. And so I would say that’s one piece of advice that I would give to investors. And then the second piece is if you are a fix and flip investor, if you don’t do anything else, learn how to source your own deals in this market right now.
⁓ getting deals from a second party or even a third party where multiple people have tacked on ⁓ fees on top of the ultimate direct to seller price. Margins are much too slim, labor is much too expensive, materials are much too expensive for you to actually go in and purchase a house and do everything the right way and create a good product if you are not going direct to seller. So those would be my two pieces of advice.
Michelle Kesil (14:23)
Definitely. And so how would people find those properties without the in-between? Is there any way that you could suggest?Chauncey Pham (14:33)
Yeah, mean, we just like we’re creative with our designs. ⁓ We’re creative with our Legion. And so, I mean, just a couple of like creative things that we’ve done and who we’re leaning on right now is we built lots of strategic partnerships with memory care and senior living facilities with the admissions directors because we’re in ⁓ a time period where the demographic is shifting and you have a lot of.folks that are moving out of their primary residences and into senior living facilities. And the number one objection that they’re seeing when someone goes and takes mama to tour property is we got to sell our house before we move her in here. Like this place is too expensive.
So if you can become the solution to the problem for those memory care facilities to get more admissions, so you’re taking your marketing collateral to them, you’re partnering up with them and saying, anyone that says they need to sell their house quickly, like send them my way and I can get their house bought.
and off their hands in seven days and they don’t have to do anything else. That’s a huge one for us that we’ve been leveraging for the last few years and it works very well. ⁓ And so, mean, there are tons. You can build out a ride share fleet. So leverage Uber and Lyft drivers to drive for dollars for you. You can build out relationships with ⁓ estate sale companies. We get quite a few from that. We get quite a few from Bell Bondsmen. So where people have
put up properties for Bell and then, you know, they ultimately need to offload the property quickly. Like we’re picking it up from all of those. So really right now it’s about getting creative. A lot of the spaces and channels that people were ⁓ looking to acquire properties, highly saturated with wholesalers and things like that. And so you’re really gonna have to tweak what you’re doing and get a lot more creative and the deals are there.
Michelle Kesil (17:04)
Yeah, amazing. I think that’s super helpful advice. Is there any sort of other maybe things that you would say investors are like missing in their creative process that you’re doing differently that could be supportive for them?Chauncey Pham (17:25)
No, I mean, they just need to designers if they’re not good at it. Understand that right now consumers have choices. Inventory is way up. So it’s not like it used to be where you could put anything on the market and people are gonna fight over it because it’s not enough houses. There’s a lot of inventory out there, which means people have choices. They’re not going to pay these really high prices and pay the really high interest rates on something that’s not a memorable product.And long gone are the days that gray and white is the thing. So I would definitely say if you’re not creative enough, then go on and hire a designer. And there are a lot of very affordable design ⁓ ideas out there or design services out there that you can hire that will give you a complete design. You can take that off your plate and not even worry about it. But I would definitely say like, you’ve got to get more creative with the product that you’re putting out there or else your house is just going to be forgotten.
Michelle Kesil (18:19)
Yeah, definitely. Is there anything like you’re seeing, opportunity-wise, in terms of how the market is shifting recently?Chauncey Pham (18:30)
You know, it’s always opportunities, right? Like everything is constantly changing. Right now for us, it’s very important because we went for so long with so much financial exposure with flipping so many properties every year. For us, ⁓ it’s kind of shifting with the consumer, which a lot of them are not selling because while they need to sell, interest rates are higher and they don’t wanna give up the low interest rates that they may be locked into from refinancing or purchasing during ⁓ COVID.And so a lot of them though are renovating and we are basically leveraging a skill and a service that we’ve mastered through flipping houses. And so I would say, the opportunity here is ⁓ to stop being led by your ego and thinking that the only way to make money and be relevant in this industry is to own everything.
⁓ And ultimately start leveraging the operator side of things. It can be highly profitable, protect your capital until the market kind of swings a different direction unless you are actually able to acquire the properties at a really, really low amount, which is right now going to take some skill on doing some direct to seller marketing. So I would definitely say that that’s the opportunity is to start thinking a little bit differently about being an operator versus an.
Michelle Kesil (19:58)
Yeah, definitely that’s a different perspective. When you say becoming an operator, that mean like more managing the flow of someone else’s investment or what does that look like?Chauncey Pham (20:09)
I mean,I have a friend that he specialized in purchasing trailer parks and RV parks, but he realized, ⁓ and he’s bought several of them, but then he realized that, you know what, there’s a huge opportunity and gap when I would buy these parks. I don’t have anyone to come set them up to build out all of the pads for them, make sure that the electricity and the utilities are run for each particular space.
Like it was a nightmare for him every time. So while he still owns trailer parks and RV parks, he’s now shifted toward setting them up. He has a whole entire service that he figured out through being an investor and purchasing them that this was a necessary service. And so now he provides that service and it makes him a ton of money because everyone that has them that owns an RV park or trailer home park, they have the same problem. ⁓ And so again,
Thinking a little bit differently and diversifying from just buying properties and trying to get an ROI on the appreciation of that property. ⁓ Looking at the opportunities within the industry in a vertically integrated way is a really, really smart move right now.
Michelle Kesil (21:29)
Yeah, absolutely. I don’t think so many people are talking about that as well.Awesome. And so what would you say is like the most maybe common mistake that you see investors making right now?
Chauncey Pham (21:50)
The most common mistake that I see investors making right now ⁓ is they’re not doing direct to seller marketing. They’re not sourcing their own deals. And because they’re not sourcing their own deals, the margins are very slim, which then it creates this trickle down effect where they have to cut corners on the renovations.They have to cut corners on whether or not it’s presented well with staging and photography. They have to cut corners on the type of realtor that they’re getting to list the property. Everything is just corners being cut and it all originates from the fact that they aren’t doing any direct to seller marketing.
Michelle Kesil (22:28)
Yeah, absolutely, that makes sense. Awesome, so before we begin to wrap up here, if someone wants to reach out, connect, and learn more about what you’re up to, where can people find you and connect with you?Chauncey Pham (22:42)
Yeah, absolutely. So I’m on Instagram and TikTok. Both have the same handle. So @the_ChaunceyShow, or you can skedaddle over to myrealestaterebel.com to take a look at ⁓ all of the events that I have coming and things like that.Michelle Kesil (22:58)
Okay, perfect. We’ll appreciate your time and your story. Thank you so much for being here. You’re welcome. And for the listeners that are tuning into our show, if you got value, make sure you have subscribed. We’ve got more conversations coming with operators who are building real businesses and we’ll see you on the next episode.Chauncey Pham (23:03)
Thanks so much.
