Real Estate Investing Lessons From Surviving the 2008 Housing Crash

David Corder (00:00)
Not necessarily. I mean, not necessarily. We keep some. So like if so like the at least in the Midwest here, the you know, Southeast Michigan, if you buy a, you know, if you buy a like a forty acre parcel, the the, if you split okay, vacant land, you split The fourth one is free. That’s where you make your money. So sort of the same thing with a, with, you know, with house with housing.

You know, you flip three of them. About the fourth one is a free one, so you don’t have debt on that. You know, you don’t have debt on that one. The fourth one. So you sell the three, you get one free, basically.

Michelle Kesil (02:15)
Hey everybody, welcome to the *Real Estate Pros Podcast*. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, David Corder, who is a real estate broker, property manager, and investor. So excited to have you here today, David.

David Corder (02:34)
Well, thank you. Yeah, I guess I’m excited to be here too.

Michelle Kesil (02:38)
Great. So let’s dive in. First off, for those new to your work, can you share what your main focus is?

David Corder (02:47)
Well, I’m a real estate broker. I’ve always been a real estate broker at heart. I’ve been a real estate broker since since like 1992 or 1993 and that’s that’s the main chunk of our business. But investing has slowly taken that over over I’ve been an investor since, you know, probably nineteen ninety-seven, I guess you could say. We were building houses, so I would buy farmland and we would split the farmland.

And then we would build a house on it and sell it as a package back in ninety-seven to about two thousand and three or something like that. we quit building in 2005 because of the market. We could tell days on market. We just got lucky. I mean, we got lucky in that aspect. We got very unlucky in other aspects, but we could tell the market was slowing down.

Because of days on the market, we had to cut the prices on the houses. We knew something was up anyway, but we just got lucky. and then then there was just too much risk building a spec house and hanging on to it. But we’ve been investing in single family houses for rentals and flips since like two thousand, somewhere right around two thousand. I know that’s a long time ago. You’re probably only twenty five or something, so but anyway.

Michelle Kesil (04:12)
And which markets are you investing in, like which areas?

David Corder (04:17)
Southeast Michigan. Yep, Southeast Michigan. you know, everybody, I’m sure everybody knows this real estate is hyper local. So our county is a rural county. and so, you know, if you go 20 minutes west, it’s a different market than it is where I’m at. And if you go 30, you know, miles northeast, it’s a completely different market. And if you you know, it’s just hyper local.

So anyway.

Michelle Kesil (04:49)
And what do you feel are some of the main keys that have allowed your business to be able to grow and run successfully?

David Corder (05:43)
Well having a having s first of all, having an accounting system, number one, boom. Have to have the accounting system, at least an Excel spreadsheet. That was we we started building.

You know, that’s the first thing, but you need you have to have that. and for for me personally, I’ve been very fortunate because I’ve had the same same assistant working with me for 20 years. So continuity in that aspect is huge because I went through a number of them before I met her. And it’s just huge. So the the and the other thing is this being able to delegate.

You have to delegate things if you want to grow it all, because you just can’t do it all.

Michelle Kesil (06:33)
Yeah, absolutely. And what have been some obstacles or challenges that you’ve had to overcome and learn from in this role?

David Corder (06:46)
Well, you know, this is this is sort of probably the worst part about it is and it’s always the worst part when you have to learn something and grow something because it means you’re gonna suffer some pain. So the biggest the biggest thing I ran into was when the market changed in six six ish, sevenish, eight ish, nine ish, that whole mess, you know. So I always hear in y people say, Boy, I wish it was two thousand and seven and eight, nine again.

So I can pick up these sweet deals, you know, like there were. There were plenty of deals if you had the cash. But I can tell you right now, you do not want to wish for that because you can’t get any money. You better have a boatload of money stashed away if you want to buy anything, because the commercial lines of credit get pulled. banks change hands and pull you know, pull lines of credit. Not only that, but they also

Commercial loans are on a very short term and they, you know, so like every three to four years, they, you know, they you know, they they they’re they they can call them due if they want to. and they can also call them due if they think the equity has dropped in them. They can reassess them with an appraisal, and then all of a sudden you’re trapped.

And so no, no, so anybody who says to me, Yeah, I want two thousand eight, nine, or ten, unless you have a boatload of cash somewhere. No, you don’t because you can’t get the money. And it’s not the same. Other, you know, if you’re an investor, there’s people that are you know, that had good jobs that are no longer working and can’t pay the rent. So now not only do you have the bank pressuring you, now these people can’t pay. You might have two or three places empty, you know, it you just don’t want that to happen. So

That’s probably the biggest thing I learned before is from before is be careful with the kinds of debt you have. Don’t take every penny out of every property. Do not do that. So those are some of the probably the hard lessons I’ve learned.

Michelle Kesil (09:00)
Absolutely. Thank you for sharing. And what advice do you wish that you had when you began investing?

David Corder (09:10)
Well, you know, I didn’t you know, so I listen, I don’t know if people remember this guy or not. Carlton Sheets had what was called like you know, Sunday morning podcast where he sit in the sun, he’d talk about investing and he talk about, hey, you don’t need money to buy investment real estate, stuff like that, you know. he had a like a I think it was a CD program back then. I hate to say that. Ages me, but anyway they

So I listened to that and I was really always interested in real estate investment, always in real estate investment. So so I sort of pushed myself into that in about, like I say, 2000, as far as investment properties. I had already, you know, split farmland in the past and and I bought some investment properties. so and I always learned a little bit. like I think there was a guy named Mark Garrison.

back in 2005. And I always listen to everybody’s opinion and and then you know after a while I formulate my own. And I read every book, almost every book that I could about real estate, at least chopping through it and picking up things. But learning how to do the math is very important. Learning how to do the math is very important. And understanding real estate values is very important. And knowing costs to renovate is very important.

Michelle Kesil (11:10)
Definitely. What are you most focused on solving or scaling to next?

David Corder (11:20)
Well, you know, cash is always something you need to have if you’re gonna be an investor. I know everybody says find somebody to hold the note, et cetera, et cetera, et cetera, you know. you have to be careful with that. I have a couple of properties I manage for people that do that. And of course they’re always stressed for cash because you know, you can’t stand any vacancies if you don’t buy it right. You know, you have to buy it right.

But so for me is staying focused on looking at the numbers, you know, when somebody offers me a situation,

Just focusing on that number, make sure it fits what I want to do. And also, you know, I I read this book. I think I think the guy’s name was Steve Schuerman. He was a real estate investor in San Diego. And one thing that popped out of that book, he says you can’t keep every deal. He says you just can’t keep every deal. And anyway, I always thought that that was probably the most important thing. And for me too, I like to try to keep every deal. You just can’t do it.

You just got to have some cash coming in. So that’s one thing I’m focusing on is cash flow, making sure, you know, the properties that that we have you know, that we buy that what we’re gonna do with them. And and I do cash for, you know, cash flow forecast out, you know, how far I think it’s gonna happen, you know, when we’re gonna buy the property, the the cost of keeping it and the cost of renovating it.

and timelines for that. And so keeping my eye on that is the most important thing that I do.

Michelle Kesil (13:03)
Yeah, absolutely. And are these properties that you are going after primarily fix and flips?

David Corder (13:11)
Not necessarily. I mean, not necessarily. We keep some. So like if so like the at least in the Midwest here, the you know, Southeast Michigan, if you buy a, you know, if you buy a like a forty acre parcel, the the, if you split okay, vacant land, you split The fourth one is free. That’s where you make your money. So sort of the same thing with a, with, you know, with house with housing.

You know, you flip three of them. About the fourth one is a free one, so you don’t have debt on that. You know, you don’t have debt on that one. The fourth one. So you sell the three, you get one free, basically.

same thing with vacant land. At least around here, that’s the way it seems to work. Now I can tell you I know people are gonna tune off on this right now, but there is very good to have some that don’t have any debt on it. I know nobody wants to hear that.

But it makes you helps you sleep at night, by the way. I just wanna let you know. We have some that we don’t have debt on and and not all of them, but we have some that we don’t have debt on and just makes it easier.

Michelle Kesil (14:25)
Definitely. And what’s your process for finding the right deals?

David Corder (15:13)
Yeah. Well, I don’t know, sometimes I think God puts them in my lap, but but

People people get referred to me. People get referred to me. People that I like out of the blue refer them to me sometimes. I don’t really have a good strategy for it. I wish I did. That’s where, you know, like you had asked me before, what’s one of my biggest gaps that I have that I could improve on? And it that would be one of them, having a system where I could roll over more of these. Just having a time block.

Okay, focus on finding these houses in this area that people want to flip or people want to get out of. And you know, in in in evaluating those opportunities. And like I had mentioned you earlier, there’s one thing that I do when I go see people that want to sell their house and sell it quickly since I’m a real estate broker. I always give them the option. I say, look, if we put it on the market, I can get you this much.

If I buy it from you, I’m gonna give you this much. And they’re you know, they’re not gonna be the same. So let them make the decision that.

Michelle Kesil (16:37)
Yeah, thank you for sharing. And what would what would be the number one advice you’d give to someone that’s wanting to get started with investing?

David Corder (16:51)
Well the the I think the most important and nobody’s gonna want to hear this either by the way, put a little cash aside for reserves. That’s number one. Put a little cash aside for emergency reserves. So every month what we have is, you know, so we have we have our rent come in and then we have a completely separate account for taxes. so part of it gets automatically placed into without us make writing the check or transferring it.

automatically gets put into taxes account, taxes account, insurance account, and then we have a a long-term repair account. So automatically we do that. That is huge. Now I can tell you I did that when I first got in the business and then somebody talked me out of that. And then that’s where where we started getting in a little bit of trouble. So that’s my suggestion is you you have emergency funds for your business.

And then you have separate accounts for taxes, insurance, and and then long-term repairs like roofs and stuff.

Michelle Kesil (18:00)
Yeah, absolutely. Thank you for sharing all of that. Before we wrap up here, if someone wants to reach out, connect and learn more, where can people find you?

David Corder (18:11)
well you can you can email me at David, the initial K, Corder, C-O-R-D-E-R, at Gmail dot com. [email protected]. I guess that’s probably the best way to get a hold of me. I wouldn’t know any any other way.

Michelle Kesil (18:30)
Okay, perfect. Well appreciate your time and your story. Thank you for being here.

David Corder (18:36)
Okay. Yeah, thank you. Have a good day.

Michelle Kesil (18:39)
Yeah, of course. And for the listeners tuning into the show, if you got value, make sure you’ve subscribed. We have more conversations with operators like David who are building real businesses. We’ll see you on the next episode.