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Show Summary
In this episode of the Real Estate Pros Podcast, host Pedro Pereira speaks with Rod Spratley, a seasoned real estate investor and general contractor. Rod shares insights into his journey in the real estate market, including his focus on the Eastern part of Virginia, the importance of family in business, and the lessons learned from market challenges. He emphasizes the significance of building relationships within the industry and his commitment to helping others succeed in real estate. Rod also discusses his future goals, which include educating others about real estate investing and providing quality housing for families.
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Investor Fuel Show Transcript:
Rod Spratley (00:00)
got hit with the 2007, 2008were building houses, we were buying and renting
and things were going really, really well. Profits were really high.
We just didn’t anticipate it would change that quickly.
banks calling us saying, hey, ⁓ we need you to pay off
we can’t hold them.
all the profits and proceeds that we had gained over seven years dwindle quickly to try to salvage everything, it was tough. And we had to pivot. And, ⁓ you know, the pivot for us was, you know, as we scaled back, sold off everything that we could, ⁓ you know,
Unfortunately, even a couple we had to just tell the bank, you know, we got to, we’re gonna have to give it back to you because we can’t, we can’t handle it. It was a tough, tough time. But the pivot for us during that time and the lesson learned was, ⁓ you know, exit strategy. You know, at the time we did not have, we didn’t spend enough time on proper exit strategies. ⁓ So we changed that. We don’t do that. You know, that was one of the greatest lessons we learned.
Pedro Pereira (02:37)
Hello everyone, welcome to the Real Estate Pros Podcast. My name is Pedro Pereira and I’m your host today, joined by someone who we’ve been looking very forward to chatting with, Rod Spratley, who’s making some serious moves in the real estate investment ⁓ space and also looking to grow into some possibly hospitality gigs. Very exciting stuff, Rod, welcome.Rod Spratley (02:59)
Thank you, Pedro. Glad to be here.Pedro Pereira (03:02)
Thanks my friend. I think our listeners are really going to take something away about how you’re approaching the real estate market with all the experience you have and the joint business that you share with your wife as well being so well-rounded and full of experience. ⁓ Let’s just dive in right away. ⁓ So first off…Rod Spratley (03:19)
Let’s do it.Pedro Pereira (03:21)
for people who may not be familiar with your world. Give us a short version, the elevator pitch of, well, you know, what’s your main focus these days? What markets are you operating in?Rod Spratley (03:33)
Well, we do mostly the Eastern part of the country. We’ve worked a lot of different markets in the United States. ⁓ We found a sweet spot here in the Eastern part of Virginia. ⁓ Very, very good market. We’ve got ⁓ seven military bases in this area. We’ve got a ⁓ really good ⁓ rental inventory of houses and properties to look to do investing. And we’ve got great ⁓rental clients here. we’ve been all up and down the East Coast, but we found a nice spot here. So we’ve kind of been focused in this area. We’ve got properties between Florida all the way up to Virginia. ⁓ this has been proven to be over the last seven years, the hub of where we’ve been looking to invest. And it’s a great market. Part of what we like to invest in, we’ve got our strategy as a combination of we still do single family. A lot of folks.
you know, kind of gravitating away from it. But we like single family. We have multifamily. We have commercial ⁓ and we have a blend of the three of those. We have some short term rentals ⁓ as well. We are general contractors, so we do build and develop some land and build probably four to seven houses a year that we’ll actually sell. So that’s kind of where we are right now in the market. ⁓ It’s been good for us. The last five to seven years has been
very profitable, we’ve done very well in this particular market that we’re in right now.
Pedro Pereira (05:54)
Wonderful. that’s great to hear. It seems like you definitely have your hand in the market there You’re very well rounded within it and come with a lot of experience What really caught my attention ⁓ was how you were able to take that experience, you know transferring from before working in more of the General contractor space and then you know transferring into the to the investor ⁓you know, portion of the the industry and and that’s not easy, especially in this climate, you know, if I could ask, you know, what’s the key to, you know, keeping this machine running so smoothly, working with your wife and family? I’d love to hear a bit of that.
Rod Spratley (06:29)
Yeah. Yeah. Well,you know, I mean, we are family business. My wife is actually a real estate broker. We and we own a real estate brokerage as well. So, you know, we blended almost a little over 25 years ago. We’ve been together 27 years and about 27 years ago as a little backstory. When I met my wife, I was a general contractor working in the Washington, D.C. area ⁓ doing, you know, new construction, some commercial residential, just a blend of things.
and met my wife, she was in the real estate business. And of course, a couple of years later, we got married and right out the gate, you know, we started discussing how we use this experience that we jointly have to start really building a portfolio for ourselves. And, you know, I’ve done a lot of work for other investors over the years. I mean, we had built hotels, I’d done some restaurants and commercial space, a lot of residential properties.
and including some multifamily stuff that we had done for some other investors. So it gave me like an idea of kind of, you know, what was happening, what was going on, and how nice and lucrative it was for some of these other folks that I was working for. So we just took a lot of that, really dove in and started to do some research on different markets. And we just started purchasing. just a quick story, one of our first purchases,
was we bought from an auction was a condo in Arlington, Virginia, of all places, which is a very lucrative market. And we purchased this condo for 17 grand and went in and was able to renovate it. My wife and I, did, of course, being a contractor did all the work. And in about a short period of a month and a half, we actually flipped this thing, put it on the market, sold it.
Pedro Pereira (08:01)
Okay. Yes.Rod Spratley (08:20)
and quadrupled our money. So, you know, which was just a small taste, but it was, got, it got, it put a fire under us, you know? So from that point to this point, you know, we’ve never looked back. We’ve kind of, we’ve stayed at it and we rode the market up and down too with some of the changes in 2007, 2008 and, you know, took some hits, you know, but, but, but it’s been really, really good to us and my family, this real estate investing. So, you know.Pedro Pereira (08:25)
That’s incredible.Yeah.
Mm-hmm.
Rod Spratley (08:49)
plan to do it until this, I can’t do it anymore, you know.Pedro Pereira (08:53)
Wonderful, it’s great to hear. Honestly, it’s a big example to set to be working together with family and doing it so well. Not only is it good to spend time with the ones you love, if you’re working and making money with them, that’s even better.Rod Spratley (09:04)
for sure.Pedro Pereira (09:06)
So speaking into a little bit, you touched upon some points that were some rough patches, you know, with the market changes in 2007, 2008. And I know that every operator, you know, has had a moment when things got real, maybe a deal that went sideways or a time that they had to pivot fast challenges came up. Do you mind sharing one of those moments with us? The listeners, I believe, would get a lot of experience from it.Rod Spratley (09:27)
Yeah, I mean, forthose of us that have been around for a while doing this, I mean, think
got hit with the 2007, 2008
thing. And, you know, it was, we had come off of a seven year run of just doing phenomenal. I mean, it was, it was, you know, as you might know, and many know that leading up to that, the market was just brisk. was just,
were building houses, we were buying and renting
and
You know,
and things were going really, really well. Profits were really high.
And, you know, we got caught like everyone else.
We just didn’t anticipate it would change that quickly.
And I think at the time we were holding four or five lots, we were doing 700, $800,000 houses. ⁓ So, you know, we got, I got, we got caught out there. We had
banks calling us saying, hey, ⁓ we need you to pay off
these notes. We can’t,
we can’t hold them.
So, know, it was a trying and a very difficult time for us as a family because we had done so well. And then to see
all the profits and proceeds that we had gained over seven years dwindle quickly to try to salvage everything, it was tough. And we had to pivot. And, ⁓ you know, the pivot for us was, you know, as we scaled back, sold off everything that we could, ⁓ you know,
Unfortunately, even a couple we had to just tell the bank, you know, we got to, we’re gonna have to give it back to you because we can’t, we can’t handle it. It was a tough, tough time. But the pivot for us during that time and the lesson learned was, ⁓ you know, exit strategy. You know, at the time we did not have, we didn’t spend enough time on proper exit strategies. ⁓ So we changed that. We don’t do that. You know, that was one of the greatest lessons we learned.
And
We changed our models, we changed how we purchased, what type of deals we did, how many of a certain type of deal we do at the same time. So we changed a lot of things, learned a lot of things, and only became better for it. And we’re successfully able to rebuild our portfolio and we’re still at it. So we’re still here. Now 32 plus years in business, we’re still at it.
Pedro Pereira (12:23)
That’s incredible, it’s incredible. And it’s honestly the kind of stuff that people just don’t talk about enough. know, everyone loves to complain about the issues, you know, presenting an actual solution or mentioning how you pivot and coming forward is, is honestly what I believe is what separates folks that just sort of dabble in the industry from those who really just stay in the game longterm, you know? So congrats to you on that. Let me ask you this then. ⁓ Looking forward to the future, what, ⁓Rod Spratley (12:40)
yeah, for sure, for sure, it does.Pedro Pereira (12:51)
What is it that you are most focused on solving or scaling next? What’s the next real goal for you and your company?Rod Spratley (12:57)
Well, we have a couple actually, and it’s kind of twofold. One is, you know, we ⁓ have a passion for people, for families, ⁓ for generational wealth, legacy. You know, it’s something that’s important to me and my family. one of the first, especially in an African American family, being one of the first individuals in my family to go to college, to graduate, ⁓ to do business, to run a business as long as I have, ⁓ you know, I’m a first at a lot of things in my family, and so is my wife.So one of our give backs is, you we really love helping people. We’d like to see people, the real estate ⁓ game, the investing game, if you want to call it, or the real estate business, to me is, you you hear a lot of things about it, but it’s a great, great business if you do it right. And so one of the things that we’re passionate about is helping to educate folks. You know, I mean, because if you get into it, you got to know.
Pedro Pereira (13:46)
Yeah.Rod Spratley (13:55)
the do’s and don’ts and you need to start out properly. you don’t do it the right way, you can hurt yourself and set yourself back. And you hear those stories about a lot of people, I don’t want to do it, I don’t want to do real estate, you I lost money. But a lot of times though, if you really leaned in and owned up to that, you lost because you didn’t prepare. And preparing, what we’ve learned is preparing is often getting a coach or a mentor, doing some research.Pedro Pereira (14:18)
Understand.Rod Spratley (14:25)
taking some time, know, don’t just jump in and get a great team. You know, so for us, our next goals are really just to help the market. There’s still a shortage of housing in so many markets in the country. ⁓ Good housing. I’m not going to say necessarily, it depends on what people think affordable is, but we consider that to be housing that’s, ⁓ you know, based moderately priced within the communities therein.but you offer a great product. So we like offering great products, great rentals for families and those that are need ⁓ at a market rate price. You know, it’s not always going to be the cheapest, but it’s definitely one of our goals is to provide some of the nicest. And so that’s how we look to build. And we’re still looking to do that and continue to grow our portfolio. And we’ve been doing that successfully. We have great tenants. You know, our tenants come, they stay a long time. They love our properties.
Pedro Pereira (14:57)
thing.Rod Spratley (16:05)
And you know, so we’ve created a model that just works well.Pedro Pereira (16:09)
That’s big, that’s…It’s fantastic to hear, you know, building relationships, not only with people within the industry, but also with the tenants that you’re working with is the ideal goal to make a business thrive as everyone’s happy in all ends, then things are going well. ⁓ So I know that a lot of people here listening are either very early in their journey or sort of looking to level up. And I think they really benefit from hearing this. You didn’t touch upon it a little bit when it comes to building relationships and growing your network within the real estate market here. What’s the biggest difference that
that you know what what made the biggest difference for you joining this with relationships that you’ve built.
Rod Spratley (16:46)
Well, I think for me and ⁓ my wife both, we’re social, we’re people people, you know, we like people. ⁓ Almost every other business and vendor and the people that we work with, we have really great relationships. I mean, we build, you know, bonds, you know, we build friendships. Even though we do work together and we contract and it is business, ⁓ you know, we know a lot of the people that we work with, we know their families.⁓ We know many of the owners of the companies that we work with. So we’re personal enough that we build relationships that last because there’s a lot of companies that don’t value that. A lot of people don’t value that. So we think that building great relationships with our vendors, with our ⁓ contractors and subcontractors, ⁓ even with the city governments. mean, most of the cities that we work in and the jurisdictions that we work in.
We know the city managers, we know ⁓ the director of public works. We make it a point, we go and meet these people. We sit down, we ask, we come by? ⁓ Sometime when it’s appropriate, we’ll bang some coffee and bagels or something. But we get to know people and it still works really well. Because when people know you, they respond well. And if you have a problem, you can sit down and you can work it out. And ⁓ I’ve had problems with city governments that I had to go.
Pedro Pereira (17:58)
YouYeah.
Yeah
Rod Spratley (18:14)
and sitdown and work out ⁓ issues even with city governments where we had projects and stuff we’re doing. So I think it’s an important strategy to build good teams, good relationships, good communication, and don’t be afraid to talk to people even if it’s a problem. I mean, I’ve had some pretty major issues with some projects over the years that we were able to get around because good communication.
talk and sit down and work it out.
Pedro Pereira (18:47)
And that’s great to honestly, you can’t fake that. Relationships are everything in this space. So being able to work out problems and speak to people through them is honestly how you can move forward and keep your business afloat. So this has been great. But before we wrap, I wanted to give you a chance if someone wanted to reach out, connect with you, or maybe collaborate in any way, learn about what you’re doing, what’s the best way for them to reach you?Rod Spratley (18:59)
Absolutely. Absolutely.Well, we’ve got a kind of all inclusive site and it’s rod, R-O-D, and A-N-D, Jen, J-E-N, Spratley, at 360.com. So it’s rodandjenspratleyat360.com. You go there, you’ll get all of my contacts. You’ll get our emails and all the rest of it. And it gives you a little bio and it tells you a lot about us and what we do. You’ll see some videos and testimonials on there. ⁓
We’re on YouTube as well, put out a lot of free content. ⁓ And that’s Rod and Jen Spradley on YouTube. So if you Google any of those or put us in, we’ll pop up. ⁓ we love helping people, love helping new investors, even seasoned investors. We’ve got some people that we’ve tied in and we work with that have actually been doing certain niche markets and came in and kind of collaborated and.
Pedro Pereira (19:50)
Wonderful.Rod Spratley (20:06)
So we work with a lot of different folks. I got some commercial folks that came in with us that had never done short-term rentals. So you got people kind of crossing over for tax benefits. So we get a lot of folks from the commercial side that kind of haven’t really done any of residential single-family short-term rental stuff. And we’ve got a good handle on that. We’ve been doing it for a lot of years now. And there’s a lot of great tax benefits. So one of the things that we’ve…really just been very fortunate about over the last few years is we’ve connected with some great tax professionals and we’ve really leveraged all the great things about real estate to offset all those other things that you might be W-2 wages, whether you got retirement income coming in and or auxiliary small business income on top of your W-2, real estate’s the answer.
So it’s just a great thing to have in your portfolio.
Pedro Pereira (21:05)
Yep.That’s perfect. Well, Rod, I want to thank you so much for your time today. We appreciate your time, your story, your perspective. We definitely need more people in the space that are doing it the right way. And you are one of them, my friend. Thanks again for being here. For those of you tuning in, if you got some value from this, make sure you are subscribed. We’ve got more conversations coming up with operators just like Rod here who are out there building real businesses. We’ll see you on the next episode. Thanks, Rod. ⁓
Rod Spratley (21:19)
sure. Yeah.All right, bye. Thanks, Pedro.
