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Show Summary
In this episode of the Real Estate Pro Show, host Erika interviews Burton Newcomb, a successful real estate professional who shares his journey into the industry, his investment strategies, and the importance of partnerships and team management in real estate. Burton discusses his experiences with the BRRRR method, navigating the real estate market, and lessons learned from deals that didn’t go as planned. He emphasizes the need for equity, reserves, and a solid team to succeed in real estate investing.
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Investor Fuel Show Transcript:
Burton Newcomb (00:00)
Absolutely. mean, I think buying equity is the only way to do it. So I mean, the BRRRR method isn’t the way to just get started. It’s the way to continue growth. You know, still to this day, I have a pretty large portfolio, but I mean, without equity, have, you know, cashflow, but you can’t keep growing. So you have to be able to cross collateralize with equity, right? So you take equity out of one property, you put it into another property.Erika (01:58)
everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Burton Newcomb. He’s been crushing it in the real estate space. Burton, it’s awesome to have you here.Burton Newcomb (02:12)
Much appreciated, looking forward to it.Erika (02:15)
Yeah, so let’s jump on in for folks who don’t know your story Burton. Give us the rundown. How did you get started in the real estate world and what pulled you into this mix of, you know, brokerage, investing and lending?Burton Newcomb (02:31)
Yeah, so going back, you know, I was on a boat withBig Howl.
I mean this thing is a mansion and he’s really a real
relative of mine. He owns a of apartment complexes all across America. He’s got a jet and really lives the great life. And I remember
and
my dad.
You know
out, victim tenants and all that and I just saw it as an opportunity to grow.
And so I graduated high school, went to college, excelled in extracurricular activities, partying and stuff, making friends. But college classes, I did all right.
of what I was gonna do with it. so then I dropped.
couple years my buddy Steven then
It was really fun job. I shared an office with my…
We had a TV in our office.
And I always wanted to
sheet and etc. So he signed a piece of paper and still let me get a day off of work.
took a state test.
Then I got my real-
because I always wanted to work with investors, I got connected with.
through some foreclosures and then I got connected with
me and him are really.
him like
and I always saw working with investors is what I identified.
that I lived in.
and a guy across the street, he ⁓ had some bad health issues and he’s a super nice guy. I got to meet all my neighbors.
It’s all Camaro.
Then we worked out a deal, he gave me the keys, got inspections done and all that, but then I went to the bank, I had
I was lucky at the time because my cousin and his father were looking to buy us some real properties. Me and my cousin are pretty much the same age and then his aunt.
And so I was like, hey, I got this opportunity. I was like, you know, if y’all front the money, I was like, I’ll do a lot of the work. Me and his son did a lot of the work.
air conditioning we had to a roof on them, we had to redo the electrical and we bought the house.
Erika (09:34)
Wow, wow, that is quite a journey. And there’s so many different parts to it. Was there a specific moment for you that you knew this was going to be your path?Burton Newcomb (09:47)
⁓ you know, really, I got my real estate license because I just saw it as a way to build my own business.and then
and stuff and being a
different from where I started you know I still sell a pretty fair amount of real estate but I don’t really buy
that and you know you sell three four five hundred thousand dollar house you can make a lot of money but if you sell you know a lot of fifty two hundred thousand dollar houses to investors you can make more money investors are always buying and so when I really mixed into the real estate investors market that’s where I really kind of got my niche and I started managing real
Let’s go online.
major real estate investment company, which I’m working on starting a debt fund. I already have a syndication. I’m the second largest shareholder of. My other partner who I have, we have a lot of sharehold, we have a lot of rental properties. I met him through a restaurant deal. It was just by chance. I knew of another two quads on the same property, eight doors. We bought for 340, we bought it, we sold it a year and a half or so later for 600 grand with 1031 to all that. And me and him have really been
We started a syndication, me and him are the two largest shareholders. He’s a doctor and I’m a real estate broker so our income interests are very different. He’s backing me on a lot of deals and so having a great partnership can really make you or break you in this business. I still buy and sell real estate but ultimately my grand plan in life is to have a debt fund which I’m working on starting under my syndication.
cash flow, you need to own about 100 plus dollars and get started. Equity is the key. You have to have equity. So you want to buy your worst house, best neighborhood and use the forced equity strategy, like the BRRRR method or something like that to really get your portfolio off the ground and really getting started in real estate. The best way to get started if you have low cash.
You know, you can buy a duplex and house hack it or a triplex up to four units. You can house hack with an FHA, VA, USDA loan and get, you know, three and half percent financing down or a hundred percent, however you work it out. I’m getting started. House hacking is the best way to get started, but you always have to have equity in properties in my opinion.
Erika (13:27)
Yeah, absolutely. You, ⁓ you mentioned the BRRRR method for, you know, getting, getting started. Is that something that you still do a lot today or are you leaning into different strategies when opportunities pop up?Burton Newcomb (13:40)
Absolutely. mean, I think buying equity is the only way to do it. So I mean, the BRRRR method isn’t the way to just get started. It’s the way to continue growth. You know, still to this day, I have a pretty large portfolio, but I mean, without equity, have, you know, cashflow, but you can’t keep growing. So you have to be able to cross collateralize with equity, right? So you take equity out of one property, you put it into another property.And so no matter what, I’m not
most of my most recent purchase I bought right across from my office. I bought nine doors. Well, I bought a nine unit apartment complex like a mini apartment complex. It was 100 % vacant when I bought it and we bought it for 450 grand. 100 % vacant. Vacant at a price of $675. Once we get it at 100 % occupancy give or take, it’ll be worth about a million bucks give or take.
And so we’ll have half a million or so dollars sitting there. We’ll take that money out, we’ll refinance it, put it to another opportunity. So without using equity, you’re never
get stuck I think.
Erika (14:59)
Yeah, yeah. And, ⁓ you know, the, market that you’re now you’re operating, can be so dynamic. Can you share where you’re active and what makes those markets appealing for your business?Burton Newcomb (15:53)
Yeah, so I’m in Albany, Georgia, about three hours south of Atlanta. It’s where I grew up and I’m a part of several different mastermind groups like Action Academy, it’s a podcast. I’m a member on the back end of it and Aspire, you know, with Eddie Wilson and Andrew Corte, I got a private, I got a lot of jobs.I’m a private money broker as well through them and I did that really so could start brokering money to myself as well as other people. But I think masterminds and all that are…
you know, but I’m in South Georgia and I buy where I live. I got friends in Action Academy and other math.
matter
two lake houses an hour and half away from me ⁓ that I Airbnb and I
So we essentially got four units we rent out there because in-laws suites have their own doors their own kitchenettes their own bathroom So one bedroom one we got two one ones a three one three two we Airbnb those those are on Lake Ifala I bought those for 340 the house two doors over from us is around 675 on the market So a lot of equity there right and and that’s why I bought those but I don’t really buy
just because I know.
I
Best top.
Erika (17:35)
Yeah, absolutely. ⁓ you know, with all you have going on, all these deals, being a broker, a lender, an investor, how do you manage it all without dropping the ball?Burton Newcomb (17:48)
You have to have a team of people. I got an assistant in the office who manages my phone calls, the emails, and we use a system called Billdium for tenants. The tenants can pay through there online.with us. So she handles that end of it and then she comes to me when there’s issues and then we got subcontractors you know basically they’re subs but they pretty much work solely for us in a sense because we have a lot of work orders come in because we manage several hundred doors so every day I mean a toilet seat will break that’s an issue today your toilet will be running
So you have to go fix the flap or the fill valves or whatever. So you really have to have a team of people. You have to have air conditioning people. You just have to have a team of people. That’s why having a, once you get around seven, eight, 10 doors, you need a property manager really.
Real estate is a passive income-ish in a sense, but you really need somebody to manage it for you. The properties I manage for people, they don’t really know when there’s an issue unless there’s a major issue. Gonna cost more than $400. I don’t have to pick up a phone call because I’m allotted in the contracts with them to do repairs under $300, $400. And they won’t know until they get a statement between the first to the fifth of each month and we ACH them the money.
and it’s really extremely passive for them. But you gotta have a lot of doors to make that make sense. But you just gotta have a team of people. So I stay real busy. I also got three laundromats. So that’s my favorite job actually. But it takes me about an hour a day to deal with three laundromats. But I get up every day at four, leave my house at about 4.45, and I’m done with my laundromats by six. So give or
Erika (19:45)
Man, you have a lot of years in the game and you’ve done many deals, even just in the past year. So I’m sure you’ve seen it all burden. Can you share a moment when a deal went sideways or you had to pivot fast? What happened and what did you learn from it?Burton Newcomb (20:04)
Yeah, so I bought a duplex, I lived in a duplex, a house hack bit, and I like to buy properties close to other properties. so, I bought up, there was a house kind of.in a really key area. I like buying properties in great areas. Worst house, the best neighborhood, like I said before. And so, I found out through just doing research online that this property had multiple years of pass-through taxes. for anybody who’s not familiar, tax auctions are a great strategy. Every state’s different. In the state of Georgia, go for tax auction normally once a year, give or take, depending on the county and location, whatever, right?
You can make, so if the property goes to tax auction, you buy it tax auction. So say that you $1,000, you started $1,000 at the tax amount, you bid it up from there, right? Well, this property didn’t go for tax auction the next year. And I was like, what the heck? Why is it not on the list? mean, this thing had like 15 or so years, give or take. can’t remember the exact number. was several years ago when I bought it. But I was like, why?
commissioner and I was like why is this probably not on the list? They were like well we don’t consider it likely to sell because it went up for two years then auction so we pulled it from our auction list and I was like well I want it back on the auction list. So I had to jump through lot of hurdles I had to go through the the land bank basically is a kind of a back loophole to do this and essentially it had
the taxes were more than I thought it was worth. Had like $30,000 worth of back taxes. But through the land bank, I was able to work out a deal where I bought it for half that, right? So I had to fill out this paperwork, had to show them that at the cash, et cetera. I bought it from the land bank and instead of having a normal tax auction,
it’s more like a private tax auction. It’s still publicized in the newspaper, but instead of having thousands or hundreds or whatever, all the properties that are in bulk at one auction, it’s just this one property, right? And so I had a deal worked out with the land bank to buy it for 15 grand, but the land bank had to assume the other debt on it, And so it
Nobody showed up to bid against it. If somebody would have showed up to bid against it, where I had it locked in for 15, they would have had to start out at the entire tax amount. So let’s say the entire tax amount, it was 30, they would have had to start out at $30,000 and one dollar, give or take, whatever, right, to bid it up from there to pay for it. But I was locked in at 15. So then the land bank got possession of…
six months or so for them to do all their paperwork on it. And then you go to a closing with the city, the land bank, however it works out, right? So I bought it from the land bank slash city of Albany for 15 grand. then now the people were living in this house, really nice people, but they were living in this house. Now before, you don’t get to go to these houses.
inspection well ⁓
So replacing the roof, I’ve done it tons of times, no big deal, right? I was like, you put a new roof on, no big deal. I measured it out from
send you guys over there after I bought it. had to give people 60 days notice to vacate, had to get possession of the property. Well, so I bought it for 15, I was gonna be all in for another 15. That’s 30 grand, right? Sounds great. Well, throw me sideways because we got a mile.
I sent the roofers over there and my buddy calls me and he goes, hey man, this house
So what does the tarp up there? I mean, whole about quarter of the roof was just completely gone, right?
Well, so we had to rebuild about a quarter of the roof. Then we had to, in your attic, what’s in your attic? Your electrical. So we had to rewire the whole house. So so we, it took a fourth, it took a, I think it was like five or $6,000 roof turned into about a $10,000 roof. Then we had to rewire it. That was $12,000. Then the house didn’t have any electricity for like however many years, anyway taxes or whatever. let’s call it 10 or 15 years or whatever, right?
Erika (24:54)
andyou
Burton Newcomb (25:13)
So didn’t have electricity, didn’t have air conditioning, so we had to replace the roof. was, you know, what…Then we had to put a new air conditioner in, that was like 8,500. Then we had to do the rest of the work, right? So we had to redo a bunch of plumbing on it. We put LVP in all our rental.
So that was about, I think $6,000 to put new LVP in it. We put butcher block in all rentals because tenants will set hot pans on for mic or whatever, burn it. If you do it on butcher block, you can sand it out and restain it. So doesn’t have that problem really. So we had to put butcher block in, it’s about the same price. So just call that another grand. We had to repaint it. Inside that was about two grand.
two does caught five or six. We’re all
thousand dollars then we got it reappraised at 149
I think it was 149.9 reappraised for and we paid for it all in cash. So we ended up being able to pull 80 % of that money out.
You’d think it’s gonna be 30 grand all in.
70, 80 grand all in and really throws you through four curves. So you gotta have a lot of cash set aside for unexpected repairs.
Erika (27:10)
Yeah, yeah, absolutely. And from that experience, what advice would you give to people in real estate?Burton Newcomb (27:20)
You know, I mean, don’t ever expect to be able to be all in for, you know, a certain dollar figure because, I mean, it happens all the time. mean, things rarely ever go to plan. I mean, you always need to have additional reserves built up in your bank, in your LLC or however you incorporate account.For additional expenses because other things are going to come up no matter what and that’s having a partner who you know backs it You know, it’s so key, you know because you may not be flush, but they are that’s why having ⁓ a like a financial partner and you need to have a partner who does the work and Overseas everything and then you need to have a financial partner who’s there to handle the expenses and throw more money in
partnership can make or break it and sink a ship.
Erika (28:18)
Yeah, absolutely. Well, Burton, this has been gold. If someone wants to reach out, connect with you, maybe collaborate, what’s the best way for them to get in touch?Burton Newcomb (28:29)
Yeah, they can find…So I just started up my own podcast called The River of money podcast
But it kind talks about real estate strategies, small businesses, things like that.
Erika (28:53)
I love that. Well, how exciting that you have a podcast too. It’s it’s fun having a podcast. Burton, thank you so much for dropping all this knowledge today.Burton Newcomb (29:04)
Absolutely, it’s a pleasure.Erika (29:06)
And for our listeners, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pro Show. We’ve got more episodes lined up with heavy hitters like Burton who are out there building incredible real estate empires. We’ll see you on the next episode.
