Justin Udy on Real Estate Investing, Taking Action, and Building Wealth Over Time

Justin Udy (00:00)
Number one is just do it, take the first step and get it done, right? Number two is just remember if you’re ever worried about it, think about two rules, okay? If it has equity, great, but just make sure it has cashflow. Because as cashflow continues, equity may come and go. When the market tanked in like 2010, 2011 and property values, you know, went down 30, 40%, I didn’t care because I had cashflow coming from the properties and guess what happened?

Michelle Kesil (02:01)
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, Justin Udy, who is a real estate broker as well as a real estate investor. So excited to have you here today, Justin.

Justin Udy (02:19)
Hey, great to be here. Thanks so much.

Michelle Kesil (02:21)
Yeah, of course, let’s dive in. So first off, for those not yet familiar with you and your work, can you share what your main focus is?

Justin Udy (02:30)
Yeah, so in our business, my little team, we do a little over a hundred residential transactions a year, probably 90 % residential, 10 % commercial. And that provides the bulk of the cash. The way that my team is set up is we have a property management arm for not only my units, but also some clients units. And then we do development projects and then there’s some single family fix and flips.

Michelle Kesil (02:56)
them? In which markets do you operate in?

Justin Udy (02:59)
Yeah, so we’re in Salt Lake City, Utah. So we operate kind of Salt Lake County, Utah County, Davis County. They call it the Wasatch Front. We have some property up in Park City, which is, some people are aware of, could they ski up there, but ⁓ Summit County also. So we’re really kind of in that Salt Lake Metro, upper North Salt Lake area.

Michelle Kesil (03:19)
Awesome. And how did you get started in real estate?

Justin Udy (03:25)
You know, it’s funny, ⁓ have a degree in marketing from the University of Utah. ⁓ And then I went back actually and got a master’s in real estate development. But when I was finishing up my undergrad, I remember I was going to my last final. My friend called me and said, hey, we’re doing loans. You can make nothing or you can make as much as you want. I know you’re finishing school. Why don’t you come work with us?

And so I was so used to being on the phone because I worked for basically a call center during college that it was very easy for me. ⁓ anyway, I was closing a lot of loans and rather than buying things, I was buying properties and fixing them and renovating them. And the agent that I was working with after I had referred him, like my 15th kind of his client, he’s like, look, man, you, you understand the sticks and bricks. You’ve been renovating a ton of these properties. You know, you understand the lending.

He’s like, you should just get your license. And so I got my license that year. was rookie of the year and I just have continued on that side. So that’s how I got into it. But I have always said to be, have the investor mindset, right? Like be an investor first and then be an agent. So sometimes I say that because it’s really important for me to look at it from a perspective as an investment, as opposed to maybe the emotional side. It works very well for some people and some people they’re just like, no, I just.

I just want to get into something nice. just there’s always that play, you know, where, but thinking like an investor has always really helped me to progress on the real estate side, on the real estate sales side.

Michelle Kesil (05:47)
Yeah, can you expand on what that means and what that thought process looks like of thinking like an investor?

Justin Udy (05:54)
Yeah, I mean, so for example, this morning, ⁓ you know, there’s a project. So in fact, my very first client I ever worked with, I’ve helped him on probably a little over 20 transactions and he’s kind of progressed. you know, at the time I was helping him find projects to fix and flip. Now, like he was looking at a project that he has now developed into a 21 unit development. And now I have a buyer.

that I’m partnered with on another project that he’s wanting out early. And so now I’m able to paint the picture of all the numbers, all the details, you know, do a pro forma. So it’s very understandable. So rather than spending weeks or days evaluating it, they’re literally looking at the numbers, looking at the data. They know I know my information and they’re able to make a decision. This same partner, I partnered on a million dollar project. I sent him a pro forma five minutes later. They said, where do we send the money?

So really knowing your information and having the ability to interpret the data and be a source of somebody that they trust implicitly, because they know that you know your information at a very high level and you’re not cooking the books or changing the information just to do a sell, because typically I’m saying, let me partner with you. Like, let me invest in this project with you. Let me be a part of it.

And that just makes a difference. So, so I would just say, yes, I’m doing the sales side and I’m getting commissions. But truth be told is, like, I’m looking at it from an investment standpoint and providing it. And by having the information and details and data, it can help not only connect people, but frankly, if it makes sense, I’ve bought plenty of properties for my clients that are like, I just don’t know. And I’m like, and it’s okay. And if it’s okay, I want to buy it, you know, and, and

Sometimes it works and frankly, I have a gal that was one of my neighbors that bought a fourplex. They said the exact same thing to her. She was worried about these. She bought two fourplexes. It was a 1031 exchange and ⁓ sold her property in San Francisco, buying two properties in Salt Lake, two fourplexes. One she absolutely loved and adored and I’m like, it just doesn’t cash flow. And then there was this one that was kind of a, not a dog. It just, it needed a little bit of love. And I was like, get this one. Like get this one for sure. If you want to get that one, let’s do it.

Anyway, long story short, we’re getting ready to close. She’s saying, I just, don’t want it. It’s too much work. It’s not going to make sense. And I said, that’s okay. And if it’s okay, I’m going to buy it. She’s like, you’d really buy this? I’m like, yes, look at the numbers, look at the information. This is where it’s going to be this year, next year, the following year. She ended up buying it. Here we are three years later. Guess which property she loves, which one she hates. She loves the dog that we updated and renovated. It has crazy cashflow. It’s in a good location. It has continued to grow. The one she absolutely loved, always has problems.

always just doesn’t make any money and it’s just a problem. So it’s just sometimes that just happens, but by knowing your information and being a trusted source man, it just makes a big difference.

Michelle Kesil (08:58)
Yeah, absolutely. And what type of investment strategies do you normally use? it the single family, multifamily, a mix of everything?

Justin Udy (09:10)
Yeah, so I’m looking at rate of return on my money. That’s probably the number one, right? So the goal is to make at least a 10 % rate of return. So somebody calls on for a flicks and flip. I really wanna make at least a 10 % profit on that. If I’m looking at a multifamily property to keep and hold, I would really like to have close to six and a half and a seven and a half, 7.5 % cap rate.

⁓ I know many of your investors probably already know what that is, but basically we’re taking the net operating income divided by the price, right, to get the cap rate, the capitalization rate. And so in our markets closer to five, that’s why I’m looking for maybe a six or six and a half at a minimum. ⁓ And then on the development side, like I haven’t loved the development as far as like just due to labor and material prices and just some of the local things going on, but I am.

One of the strategies that I like to look at is a land play where I could keep and hold the land

then have it cash flow until it’s time where it makes sense. So for example, I have two duplexes on a half acre lot that can be developed into a little over 30 units that I’m partnered on. Okay, that’s a partnership. They actually brought me on and it cash flows very well, probably at a 7 % cap rate.

Property’s paid off in cash. Sometimes people are like, that’s so stupid. For us, it makes sense because when we want to develop, we want to make sure we can hit the ground running. So all those rents that come in, you know, a little over 4,000 bucks a month, they’re just going in the coffer. And that will be our development cash to develop the property. And, you know, I don’t know if we’ll do that in a year, three years or five years, but in the end, it’s a good property to keep in hold, but it has a higher and better use. So…

When you say, is my strategy, it’s cash on cash return and highest and best use. I just want to see what can the property be and how can we force equity into that.

Michelle Kesil (11:46)
Yeah, absolutely. And so how do you combine your brokerage career with the investing career? Like how do you merge these two?

Justin Udy (11:58)
I mean, I think you just have to have an amazing sales business to have an amazing investment business. Whether you have bulk cash from an investment cell or bulk cash from your business, it’s the same difference. it’s in the same world. so for me, I’ve always just said, and again, everything begins with how you start your day. And if you win your day and stack wins, wake up early, read from the best books, there’s something that can carry you with you, go through your goals.

have a strenuous workout, right? So you can make sure your mind’s straight. What you’re gonna find over time that when you’re looking at, okay, now how I’m gonna build my business, you are prepared for the day. And by winning that day and stacking that win, you’re gonna be prepared for anything that comes your way. So to answer your question, when you’re building yourself that way, when opportunities come, you will see them. But that’s just because you’ve built yourself and been prepared for that, because you’re at the frequency.

to be able to receive it, you know what I mean? And so whether it’s sales, marketing, whatever you do, as long as you’re just building that business and building your brand and creating opportunity and knowing that the extra cash is gonna go into investments that are gonna grow for you, I don’t think it really cares where the money comes from as long as it’s consistency, not by the week, not by the month, not by the year, by every single day focusing on what your business is gonna be, you know?

I think that’s just most important thing.

Michelle Kesil (13:27)
Yeah.

Yeah, absolutely. And what are some of the biggest obstacles or challenges that you’ve overcome in this real estate and investing journey?

Justin Udy (13:43)
I mean, I think the hardest part is that you just have to go through, you have to be consistent. You have to go through a lot of really bad deals before you find good ones. You go through some really kind of tough clients before you find good ones. You go through really tough markets. There’s always a season that you’re working through, but the key is you just, you can’t think, what am I gonna do this year?

You know, you can’t think what am I gonna do this month? You can’t think what I’m gonna do this week. It’s like, what am I gonna do today? And what am I gonna accomplish? And then it just helps you get through all those things. That’s why I mentioned to you like, stacking wins daily is so important. Like reading from the best books or something that is gonna be self ⁓ development. Because as things come your way, you need something to hold on to. Like, no, like this is…

This is my test. This is to see if I’m gonna level up. So whatever comes my way, whether it be a bad client, a bad deal, a bad opportunity, a bad market, interest rates, know, whatever, war. It’s like, no, no, no. Like, this is my opportunity to level up. Like, this is my calling. Like, what do I need to do different? How can I learn from this? So when you say, are the biggest obstacles, I think everything has massive obstacles. But if you prepare yourself every single day and just…

look at things from the opportunity

how can I learn from this, how can I grow, it’s going to make the biggest difference in how you succeed and how you supersede peers that really are going to get dragged down by that.

Michelle Kesil (15:58)
Yeah, definitely. It’s important to see them as opportunities and vehicles for growth.

And so what are you most focused on solving or scaling to next?

Justin Udy (16:12)
Yeah, so where we’re at now is, you know, I really want to kind of more step to the side so I can work on really bigger projects. I enjoy the bigger projects. They’re a lot of fun. They take a lot more time. But really my job is lead, motivate, keep people accountable and work on big deals, you know. So now we’re kind of in the process of getting another staff member that’s only full-time property management so we can scale that business.

Helping with some inside salespeople so that they can make additional calls including for some of the investment properties to assist us And then bringing on some additional agents to help with frankly the workflow ⁓ So that I don’t get sucked into a lot of that business and it creates opportunity for them You know, I like at this age kind of like working with a lot of folks I had you know, guys that I work with they’re young

You know, and so I tell them the same thing, like create this massive bulk money so that you can create opportunities for yourself. And so, you know, a guy in our business that’s 22 just bought his home, a guy that’s 23 is under contract closing on his next home. You know, a guy in my office that’s 30, like he has four investment properties, but it’s by just having that mindset, right? Like if there’s anything you can do, I’ll always say like drain your bank accounts, you keep working hard and just keep putting into things so that.

you’re always investing and then you’ll just see as it compounds over time, you just can’t believe what it does. Like at this age is the finally the first time after all these years of 15 years of owning properties that I’m like, my gosh, like this is what they mean, you know? And they’re like, never sell because you’re like, I can’t believe the amount of cashflow that’s coming in, but it didn’t happen in the first year or even the second or even the fifth. It happened literally over time.

And so I just say, the course, know, just be strong. Don’t a lot of people are going to be like, yeah, just get rid of it. my gosh, it’s such a problem, this and that. And I just say like, stick to it, you know, and maybe it is a bad deal. Maybe it is something you need to get out of. Like you have to be very methodical and strategic in your decision making, but just know if it’s just you kind of getting beat up and being like, it’s fine. It produces, it’s a good property.

You know, just know like, okay, maybe you just need to stay the course. You know, if it’s negative and it’s a bad deal, like yeah, you probably need to cut your losses and not, you know, ⁓ cause a problem for you and your family or your livelihood or even, you know, it’s dragging you down over your time. So just be strategic, bring in a third party, bring in somebody else, right? I do consulting work all the time for different people in our market where they’re like, look, my mom’s an agent, my dad’s an agent, my brother. I mean, they’re like, but they don’t know this. Like they just.

sell. Like, can I pay you to consult me? I don’t know what to look at. And so I’ll introduce ideas to help them evaluate. So I just say, if you have a problem project or something, like just bring in the right people to maybe have you think at it, look at it different, run some different numbers, you know. I went back to school and got that master’s in real estate development. Not because I had to. I was producing, closing a ton of properties. I had a ton of investment properties. It was really for me to be like, okay, what do need to do to level up?

Like how can I be even better? And doing that really forced me just additional information, better ways of evaluating things. And frankly, I’m now more valuable to people. And I thought I already had known that. I thought I knew that portion of the market. I realized I probably knew 70 % of it. So just bring in information. Always be a learner. Always be growing, reading, going to seminars. think getting coaching is one of the best things people can do.

There’s a couple guys that I coach just on different things just because they’re like, and they’re even like my peers and they just know because I’m gonna keep them accountable, you know? But I do the early morning wake up, which they have a hard time with. I do the workouts every day, which they typically don’t do. I try to read every single day and they’re like, I’m not really doing that. You know, I’m looking at my goals, you know, they’re, kind of got them on the roll. I’m saying build your business daily. They wanna try, but they’re not being held accountable. So just put it in front of you.

Work hard every day and man, you’ll just see so many crazy results that you just won’t.

Michelle Kesil (20:25)
Yeah, that’s amazing advice.

Justin Udy (20:28)
Ha

Michelle Kesil (20:30)
What would you suggest to someone that’s wanting to get started or is early on in their investing career?

Justin Udy (20:36)
I would just tell you the hardest thing is getting started. You’re always going to have people that are going to push you or naysay or tell you what a bad idea is. And every time you have a feeling, I don’t care whether it’s buy an investment property, buy something expensive, get a home, do something. I mean, even call somebody. Know there’s something inside of you saying, hey, there’s something that you need to do, right? That’s your call to level up. That’s your call to do something different.

And every single property I’ve purchased, every single one of them, okay? And we’re talking properties that were deals of a decade. I’ve always said, man, it’s just way too much. It is way too much. Every time you think that, just know like, well, yeah, it feels way too much because you’re buying at the current market. Don’t think about what you’re buying today. Think about what it can be. What is it highest and best use, you know? Are you forcing equity? So the first thing I would just tell you, just do it. That’s the hardest thing.

Number one is just do it, take the first step and get it done, right? Number two is just remember if you’re ever worried about it, think about two rules, okay? If it has equity, great, but just make sure it has cashflow. Because as cashflow continues, equity may come and go. When the market tanked in like 2010, 2011 and property values, you know, went down 30, 40%, I didn’t care because I had cashflow coming from the properties and guess what happened?

Sure enough, they went right back up. Had I not had that little duplex that went negative, I wouldn’t have been able to purchase the Apex. Had I not been able to have the Apex, I wouldn’t have been able to buy the commercial property. I could have quit. I could have been like, oh my gosh, sky’s falling, get rid of the properties, break even, whatever. Get started, get moving, save your money. Don’t go buy dumb, stupid things. When I was selling 100 homes a year, I was driving a car that was a 10-year-old car with 200,000 miles.

Okay, I was pulling up to million dollar properties, property going around the corner. Why? I was more focused on saving my cash so I can invest in real estate so that that investment could buy what I wanted. I drive a Range Rover now, every penny from that came from the investment account because I wanted my investments to pay for my toys, not my cash. So just work hard, be reasonable, know that it takes time.

sacrifice for just a season of your life so that you can, you know, learn in the next phase and surround yourself with winners. You know, people that like are going to cheer you on and are doing the same thing because they’re going to help you to know, maybe navigate it a little better, but take the first step, move forward, surround yourself with the best people.

Michelle Kesil (23:21)
Absolutely. That is super wise. Thank you so much for sharing your perspective.

Justin Udy (23:27)
You bet.

Michelle Kesil (23:29)
Well, 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?

Justin Udy (23:39)
Yeah, connect with me on Instagram, at Justin Udy, right? Justin, you can kind of see it there, I guess, Justin Udy. ⁓ So just connect with me on Instagram. If you follow my stories, you’ll see some of the projects I’m working on. I’ll walk through some of the investment properties. I’m kind of just documenting my day typically. So you can always message me. I’ll message you back always. ⁓ And yeah, I mean, I’m an open book. I I called a mentor a long time ago.

And it was right when I got in the business. I was really nervous to call him. And I remember he said to me, and I said, listen, I’m trying to give you, I know so-and-so, I’m kind of getting the investment business. I’m just wondering if I could pick your brain. And he says, and again, I was nervous thinking he’s just going to hang up on me. And he just said, you know, I’m like a dusty book on the shelf. He said, I’ve been waiting for somebody to call me. So just know, if you ever feel like that, just reach out to people. If you reach out to me and you need some help, I’m always here to

You know, so, but don’t be nervous to reach out to people. That’s one of the best opportunities about social media, these things, you can really connect with people and get the best help you can.

Michelle Kesil (24:48)
Perfect. Well, appreciate your time and your story. Thank you for being here.

Justin Udy (24:53)
Okay, appreciate you. Thank you so much. All right.

Michelle Kesil (24:55)
For those tuning

in, if you got value, make sure you have subscribed. We’ve got more conversations with operators like Justin who are building real businesses and we’ll see you on our next episode.