Mastering Real Estate Market Trends

Dylan Silver (00:00.642)
Hey folks, welcome back to the show. I’m your host Dylan Silver and today on the show I have Brock Holyoak. Brock is the founder and CEO of Oakmont Industries where they build home experiences without all the suck. He’s obsessed with delivering value to his clients by creating home building strategies for his clients to ensure their homes are an asset, not a liability. Brock, welcome to the show.

Brock Holyoak (00:25.178)
Hey, thanks Dylan. First off, thanks for you and your team for letting me come on the podcast. Hopefully I can share with you some information that’s worthwhile. If not, you’ll probably at least learn a few new cuss words that you’ve never probably heard before.

Dylan Silver (00:40.984)
Brock, thank you for being on the show here today. I like to start off at the top and we’re going to dive into Oakmont Industries. We’re going to talk about having your home as part of an LLC and some of the realities of real estate expenses. But I want to start off at the top of how did you get into the real estate space?

Brock Holyoak (01:01.16)
So I basically started out like 14 years old. I started out doing concrete construction through the summers. Got into it. Went to college for a while. Got into…

psychology was kind of my degree, went in through that and it’s just like, after about the first year I had all the credits I needed for my bachelor’s degree in psychology, but I still had four more years of prerequisite stuff to do. So talking about like the payment, pay structures and everything, it’s like, well, you know, after six years you can do your internship and go take a job as a licensed psychologist through it.

Dylan Silver (01:27.202)
Years.

Brock Holyoak (01:41.0)
therapeutic place for like 35 grand a year. And I’m like, this was like 1999, early 2000s. And it’s like, I can drive trash truck for $65,000 now and I need a $2,500 CDM. You know what I mean? So, so I went back into full-time like concrete construction, 2002, 2003, I got licensed to do concrete construction throughout Utah and Nevada.

Dylan Silver (01:56.044)
Yeah, you’re preaching to the choir, yeah.

Brock Holyoak (02:11.088)
just kind of blew that up, made quite a bit of money. It’s kind of funny because the first couple jobs that I took were five, $10,000 jobs and I’m like, man, my ass is on the line for like $10,000 that I don’t have of Disco South. And then six months later, we’re bidding two, $3 million jobs, like nothing. it’s kind of interesting how you can…

get used to things pretty quick, right? So we did concrete construction for quite a while. 2008 hit, that pretty much put a damper on everything building-wise. I think everybody kind of went to about zero through there, build it back up kind of through.

Dylan Silver (02:40.428)
Yeah, it becomes the new normal.

Brock Holyoak (03:00.008)
you know, 2013, 14. 14, I kind of made the shift on just going directly into home building. So I’ve been doing that since 2014. We’ve been kind of ramping up the last couple of years to grow and scale the home building side. But through that process, I’ve just kind of started buying income generating properties.

Dylan Silver (03:02.402)
Yep.

Brock Holyoak (03:27.406)
a little bit more to offset like capital gains taxes through the building company but what I found was it’s like I can go build the home at cost because I’m a contractor so I can go in and build the home at cost and then

I don’t have to come out of pocket with any other equities. Like I’ve already got the equities built in by not being taken my builder fee or anything like that. So I’m able to kind of roll enough to where we can more than one to one the rents into these homes without really having to come out of pocket with a lot of extra equities or cash.

Dylan Silver (04:06.582)
Now is that directly related to the business where you help folks own their own home or is that separate?

Brock Holyoak (04:12.892)
So that’s separate. So I have a couple LLCs that we run on the income generating property side. So I have three guys, well, me and two other guys that I’m partners with that buy properties in Indiana.

that’s set up through an LLC and then me and my wife own properties here in Utah going into Nevada probably in the next couple of years. So I think my play for probably the next 10 years is to add between two to five homes a year to single family homes here between Utah and Nevada over the next two to five homes a year for the next 10 years. And then we’ll see how that goes. Indiana is a great

Dylan Silver (04:55.318)
Now Indiana versus Utah. Yeah.

Brock Holyoak (04:59.368)
Indiana versus Utah, like I like both markets, but they are like completely different markets. Like they’re, two completely different animals, if that makes sense. So like Utah, it’s lower cap rates, lower cashflow, but like insanely higher appreciation values. So like the Utah, Nevada market in a 10 year period could double in value and like market value.

So here I’m kind of looking more like I like to build or buy new because new kind of puts me in the newer areas. You know, it gives me all new everything. So my maintenance is basically very minimal.

I can charge more for new, which means I get a better renter pool. So playing the long game with slim cash flow margins, new kind of puts me in like a better, more predictable position to be able to ride out like the 10 years without.

adding like a ton of unknown expenses. And then again, the fact that I’m like in the unique position to where I can build at cost and have enough equity in the deal that I don’t have to come out of pocket with any additional funds, like just makes it all that much better.

Dylan Silver (06:03.244)
Yeah.

Dylan Silver (06:17.846)
Now, I see a lot, I’m out here in DFW in Dallas. There’s a lot of people talking about it’s just difficult to do margins on fix and flips like you could previously and you have to underwrite these deals perfectly, feels like, and a lot of people are saying, we gotta start looking at new builds. New builds are the way to go.

Brock Holyoak (06:37.288)
Yeah, fix and flips, haven’t really, there was a time, I think if you could, if you timed it right in that 2008 to 2014 market, they did really well. Now I think you’re buying things at higher prices, mainly because existing homes with the interest rates being higher.

people are like, well, I have to get this out of it in order for me to make it make sense. And so what I’m finding right now is I’m having 10 year old homes listed at higher price points than what I can offer brand new homes at with warranties, with all new everything. We offer better incentives than what you can get through, you know, like a

a a homeowner that’s listed in a 10 year old home isn’t going to offer like Any kind of like closing costs or anything like that like we can offer they’re not going to offer any rate buy downs like builders can offer so I think Individual homeowners trying to sell versus like builders right now

I think they’re kind of a little bit of a disadvantage just because of the interest rates. But again, like it’s, still not a bad market to own. It’s just, you just got to know when to sell and it’s, it’s kind of.

time more than anything. So it’s like if you can’t get what you want out of your home, just wait because markets, you know, they go up and down, but eventually like over time, they always get more expensive as time goes by. So what I think a lot of people misinterpret is it’s like I can buy a home, wait my two years so I don’t have to pay my capital gains and double my profit. And it’s like, I really, really hope that that worked right. Like I really wish the world was like rainbow slenderman.

Brock Holyoak (08:33.45)
rainbow sunshine and blow jobs all the time, you know, but it’s not.

Dylan Silver (08:37.102)
Not that. There could be a very good chance that your home is worth the same two years from now that it’s worth today, depending on all the variety of circumstances in the market. Brock, I’m curious. I’ve spoken with builders and folks who build out subdivisions and then individual folks who do one build, right? And what it seems to me is that there’s a trend towards builders owning the subdivisions that they’re building out.

Brock Holyoak (09:05.36)
Yeah, that’s like the area that I’m in right now. It’s nice because we have the ability to just go in and pick and choose a few lots and a few different subdivisions. So it gives us a little bit of diversity. But it is getting a little tighter. We have companies like D.R. Horton coming in, Lennar. I think K.B. Holmes is kind of coming into the area. So.

It’s kind of putting a little bit of a strain on smaller builders to kind of ramp up and have to like do their own developments, which is kind of what we’re gearing up for is we’re like we’re kind of getting to that next level to where we can just go out and do like our

designated development that’s just exclusively ours.

Dylan Silver (09:48.822)
Right. I’d like to pivot a bit here, Brock. Let’s talk about owning your home inside of an LLC. We talked about this before hopping on the podcast here. As someone who has personally seen the incredible benefits of being able to write off your home as an office, that’s immediately what came to mind. Let’s walk through that on your end. How does your clients and how do your clients benefit from this type of ownership?

Brock Holyoak (09:52.637)
Yeah.

Brock Holyoak (10:17.032)
Well, so think you really have to understand that like, you kind of get diddly dick for tax deductions if you’re buying in your individual name. Whereas like, if I own a home that I rent out in a business entity, I can write off like way more stuff. And so it makes it more lucrative.

So I think something everyone kind of needs to understand and come to terms with. And I think the quicker you can do that, the quicker you can capitalize on it. the government doesn’t reward individuals, it rewards businesses. So look at all the tax incentives that are in place. They’re in place for business entities, not individuals.

So I think if you can understand that and like how to use that to your advantage, you will be like further ahead than like 99 % of everyone. So I think I believe like you can buy a home and make it a lucrative asset. You just have to do it right. And I think the way that you do that is just you have to structure it like from a business format. So

Dylan Silver (11:06.711)
Yeah, agreed.

Brock Holyoak (11:23.1)
Kind of the dumbed down version of like how you would do that is you would create an LLC, you would do a purchase contract with that LLC, you write a lease agreement from the LLC to yourself that is either equal or greater than like your PITI. And then my favorite way of financing is to like obtain financing through like a DSCR loan, which doesn’t attach to your personal credit. So I really like those loans. They are a little bit higher.

interest rates, like I think about a half a percent more than like your conventional loans, but they just, they allow you to do, like you could do a thousand a year if you had the cash to just roll them over and over and over again.

Dylan Silver (12:07.554)
DSCR loan to yourself is an interesting one.

Brock Holyoak (12:11.118)
Yeah, it is for sure. then so with that too, it’s like frontload all the expenses into the LLC, like throw your power, your water, your sewer, your gas, your cable, your internet, Netflix, like throw it all in as something that your LLC includes into the rents because

then you can deduct that. So you would have your CPA file a tax return at the end of the year for your LLC. You deduct the expenses, you deduct the property taxes, you deduct the insurance, and you deduct the interest paid through that LLC. And the cool part is you get to claim the depreciation, which you cannot do as an individual, but you can do as a business. So.

What ends up happening is you show a loss through that business entity, you’re gonna get a refund or a credit forward on your taxes, and then you’re essentially going to smile because you’ve just figured out how to essentially cut your payment in half.

Dylan Silver (13:12.728)
Yeah, that’s amazing. And I think the fact that most people can take advantage of this but are not is also terrific. Now this strategy that you’re talking about, you have to have a good accountant, right? And I think a lot of people, like I can say for myself, when I went to go do my taxes years ago and would use some of the big national brands, they’re not gonna be able to walk through these strategies with you. You kinda have to know in what you’re doing.

Brock Holyoak (13:35.816)
Yeah, I think you kind of have to go past, you know, the, I don’t know if I should say names on here, but your H &R Block, stuff like that, it’s great for W-2 employees, but like when you start getting into a little bit more elaborate taxes, you kind of need somebody that specializes in, or at least has some kind of an idea of like real estate, you know.

taxation and benefits and drawbacks that you can have from all of that. So, I mean, they don’t have to be like over the top $10,000 an hour accountants to do this. But I mean, you can, at the end of the day, can file, you can find somebody that can file a tax return for that LLC for 800 to a thousand bucks a year.

Dylan Silver (14:08.803)
Yeah.

Dylan Silver (14:28.566)
As someone in this space, Brock, I’ve seen two terms and forgive me, I’m a little bit ignorant of the vernacular in this space here. I’ve seen tax strategist, I’ve seen accountant, and are these terms interchangeable here? And I’ve actually personally gotten better use out of the tax strategist people than I have the accountant specifically. Is there any sense to this?

Brock Holyoak (14:51.942)
I think they all have their own value and I think when you get to a certain level, it’s probably good to have a tax accountant. It’s probably good to have a tax advisor. Definitely a good CPA and accountant. You might even want to have a tax attorney on your team, but mean, you’re talking…

multi-million dollar projects at that point to have three or four people on your team. But yeah, tax planning and tax strategy is definitely good. If you have somebody that can kind of lay that out for you, I think that that definitely helps. As an individual, just doing a home that you’re running from yourself to be able to capitalize like on what businesses can capitalize. I think you can go through the.

you know, local Google listings and find a CPA, talk to four or five of them and probably find one that’s competent enough to do a tax return for you.

Dylan Silver (15:47.458)
Now what would be the questions that I would ask without giving away all the gold here Brock. What would be the questions that I would ask if I’m talking to accountants in my area and seeing if they’re capable of or familiar with doing something like this.

Brock Holyoak (16:04.168)
I think probably ask them, just basically like, you familiar with any kind of like real estate taxation or have you worked with anybody in the real estate industry before that owns income generating properties or rental properties of any kind? That would probably be the number one question to ask.

Dylan Silver (16:24.398)
starting point.

Brock Holyoak (16:32.274)
kinda stumped on that one, I don’t know too much more.

Dylan Silver (16:34.382)
That’s OK. think when I as a side here, when I was looking for title companies that would do subject to deals, right, a lot of them would say, yeah, we’ll do it. We’ll do it. know, deal subject to the existing mortgage. And then you actually start breaking it down for them. And they’re like, whoa, whoa, whoa, whoa, whoa. But then I’ve since spoken with title attorneys and

people involved in the real estate space at the attorney level here in Texas. And you realize that at every title company, most of the people there, and I love title companies, I had a lot of friends at title companies, most of the people there really don’t know what’s going on in these contracts, right? They’re there to file paperwork, they’re there to perform a series of repeatable tasks, they’re there to make sure that everyone comes to the closing, right, or mobile notary phone and so forth. But as far as like,

Brock Holyoak (17:24.561)
The end.

Dylan Silver (17:28.486)
you know, asking them if they’ll facilitate a Subject 2 deal, if they know what that is, then they’re gonna say yes. If they’re like, yeah, we do all types of real estate closings here, and they haven’t specifically dealt with that before, then, you know, you might not want to go with…

a title company that doesn’t do that. I have experienced that and I could go down the line. I’ve experienced that with the subject to deal. I’ve experienced that with looking for brokers in the state of Texas saying, will you allow me to do deals subject to the existing mortgage? And I spoke with a real estate attorney here, Brock, and the guy was like, that’s 100 % legal in Texas. You have to do it through an attorney, but it’s legal.

So as long as you come to me an attorney or another attorney, you’re allowed to do it. And I had brokers, real estate brokers in Texas when I was getting my license telling me, we’re not going to be involved in anything like that. That’s shady, so on and so forth. And it’s really just a matter of a knowledge gap because it’s absolutely I spoke with attorneys and had this, you know, very clearly laid out for me. It’s absolutely legal. It’s absolutely permissible, but has to be done by an attorney.

Brock Holyoak (18:35.056)
Yeah, that’s kind of true. think with anything, I think there’s a limited knowledge with everybody. so it’s just, think, like I said, just ask them if they have any, you know, any other clients that they work with that has income generating properties is probably a good start. they have, they’re like, yeah, 90 % of our clients are investors that own real estate. Like that’s probably somebody that knows what they’re talking about.

A couple other questions you could ask is like, hey, do you know anything about like accelerated depreciation? Do you know anything about like mini cost sags? Because those are just questions that like allow you in year one to be able to write off more depreciation than what you normally can write off. And so I think if they like just if they have an answer to where, yeah, like we’ve done that before, that’s kind of a…

Dylan Silver (19:02.679)
Agreed.

Brock Holyoak (19:29.096)
higher level of like real estate investing that like if they even know what you’re talking about then they can probably get the job done for you.

Dylan Silver (19:37.518)
cost segregation when I had my first cost segregation specialist on this show and I was like, what is that? And now I just throw out that buzzword, yeah, like, yeah, we’ve got a cost set guy that I’ve had on the show here. It’s like, it’s not a big deal. It’s a big deal. But that’s one of those buzzwords, as you know. I want to pivot a bit here to talk about the reality of how expensive it is to be.

Brock Holyoak (19:42.973)
Yeah.

Brock Holyoak (19:49.326)
Hahaha

Dylan Silver (20:01.154)
an American who owns real estate, right? And I’m in Texas. I lived in New Jersey. I lived in Boston. And so I know how expensive things can be in Texas is a little bit less, but still, of course, you’re seeing, you know, markets double in five years.

Brock Holyoak (20:17.36)
Yeah, mean markets double expensive is like so it’s funny because like I was like this kind of just this kind of clicked a few days ago but I was like telling a friend of mine my plans of like we’re planning on doing like this larging housing development right and it’s like it’s kind of probably going to be one of the largest projects that I’ve ever taken on and we’re planning on doing it here within the next year.

And so he’s just like, man, he’s like, but today’s interest rates, the cost of labor, the cost of material, it just seems like super risky and like probably really too expensive to make sense. And then he just kind of kept going over things that were like wrong with the deal. And then it’s just like, as he’s sitting there telling me everything that’s wrong with this deal, I kind of zoned out for a minute.

And something just clicked in my head and I was like, you know, like 10 years ago costs were half of what they are today. And 20 years ago, they were half of what they were 10 years ago. But at all increments of time, it was always an expensive investment in the moment. So like sizable payoffs come with that uncertainty. So the second something is guaranteed, it loses value. But like, I think when you can zoom backwards in time and

Then fast forward to today, one common trait that you can notice is that everything always tends to get more expensive moving forward. So like the fact that because it’s expensive now is the very reason why you should buy now, because in 10 to 20 years, it’s going to seem like you got a huge deal. So like.

Opportunities and deals only look like opportunities and deals in retrospect, where today they just look like overpriced risk.

Dylan Silver (22:03.022)
The time to plant the tree was five years ago. The next best time is right now.

Brock Holyoak (22:09.218)
That’s pretty much it. it’s kinda like…

Any kind of business, any kind of like real estate, any anything that you’re doing, like I think you kind of got to have like you kind of to be a little crazy and a little bit fucked up in the head to do it because like it’s not as much about being smart as it is about being willing. And it’s like you have to be willing to go through like that discomfort to get the reward. And there’s just not like a lot of a lot of people are willing to subject themselves to that.

Dylan Silver (22:26.114)
You do?

Dylan Silver (22:43.266)
Was there a high point or you could say most uncomfortable point for you in your real estate journey where you were like, wow, this is one of the days that I’m going to look back on and be like, that was tough.

Brock Holyoak (22:53.768)
Okay.

I think every day, because we kind of just keep adding new challenges. like every day it’s like, okay, like right now I’m doing, you know, right now we’re doing a spec that’s going to be like an $800,000 spec. It’s like, typically we’re, you know, between 400 and 500,000 is where my general price point is for specs. And I’m like, man, I’m double that, you know? Like this isn’t something that I can just roll into a loan and like rent this out. Cause you know, that’s going to be a pretty hefty payment.

cover that mortgage or run it out for that, you know, so I’m doing, I’m doing that deal. We’ve got the subdivision that we’re looking to build out with some new homes. And it’s just like, think, I think you just up the bar, like every day you just increase, you know, I guess increase your uncomfortability.

Dylan Silver (23:43.715)
Yeah.

Brock Holyoak (23:43.866)
on a daily basis and what you got used to yesterday is just, okay, that was done. So if I see that problem like no big deal, I know how to deal with it, but let’s move to the next problem.

Dylan Silver (23:57.838)
had a skydive instructor turn real estate entrepreneur tell me that real estate is a lot like jumping out of a plane with a parachute. You know where the destination is and you probably are going to be okay but you’re still jumping out of a freaking plane. So there’s no real certainty when you’re doing this. It could go wrong. Brock we are coming up on time here. Where can folks go to get a hold of you?

Brock Holyoak (24:05.384)
you

Brock Holyoak (24:11.24)
you

Brock Holyoak (24:21.8)
We got our website you can catch us at Oakmont. I think it’s oakmontind.com you can you can go there we’ve got quite a bit of our stuff on there we should have some videos some testimonials a bunch of information we’ll have we’ve got our YouTube our Facebook our Instagrams Oakmont Industries you can find us there we’ve been putting out pretty fair amount of videos there some short videos just

Just some short little informational videos on our company, what we can offer you, the types of qualities of homes that we can offer you. If you are looking to partner with us, you can reach us and we would definitely be at some point looking to do a larger condo community, larger apartment complex that we would be definitely looking to partner with some other individuals to make that happen.

Like I said, the areas that I specialize in are the Utah, Nevada for home building. Utah, Nevada, Ohio, Indiana is where we’re at as far as the rental markets. We know certain markets really well. Certain markets we’re still a little bit unfamiliar with, but I try to stay in the markets that we know.

just makes it a lot easier. Especially back in Indiana, man, that’s like a whole other animal because it’s a long damn ways away. And it’s like, if you’ve already got your management, you’ve already got like your maintenance set up, it’s pretty easy to add to that. But it’s like when you got to go in there and add new, go find somebody new in maintenance, go find somebody new to manage and…

hope that they don’t screw you over and take advantage of you. Like you’ve either got to really be on top of it and spend a lot of time making sure that that happens to where you can get comfortable with them or you know just hire somebody that you really trust which is kind of hard not knowing them either.

Dylan Silver (26:27.892)
It can be terribly hard. Brock, thank you so much for coming on the show today.

Brock Holyoak (26:34.088)
Yeah, thank you. I appreciate you having me and hopefully we can do this again. It was pretty fun. Alright man, thank you. Have a good day.

Dylan Silver (26:39.864)
Yeah, let’s have you back. Thanks for coming on.