The Real Estate Deal Filter: How Smart Investors Find Better Flips and Avoid Bad Deals

Pedro Paz (00:00)
Like, you know, I don’t want to visit. There’s certain parts of Maryland. I won’t call it any cities particular, but there’s certain parts that I don’t want to be at 10 o’clock by myself at night. So I’m kind of like pretty focused on.

The biggest opportunity is like when those deals come to your desk, like acting really fast. And that’s the hard part is like, you got to get an offer in and you got to be competitive.

Scott Bursey (01:55)
Welcome back to the Real Estate Pros Podcast. I’m your host, Scott Bursey. And on today’s show, we are focusing on acquiring motivated leads and scaling a successful house buying operation. We’re joined by Pedro Paz of Pedro Sosa-Paz, an exceptional operator who brings deep expertise from years of successfully implementing and growing high volume lead acquisition channels across various investment markets. Pedro, thanks for joining us today.

Pedro Paz (02:23)
Yes, thanks for having me, Scott. Excited to chat with you about my favorite topic.

Scott Bursey (02:25)
This is.

Awesome, awesome. And for those of our listeners who may not be familiar with your journey, please tell us how did your career begin and what’s your main focus now?

Pedro Paz (02:41)
So I started by accidentally inventing the house hack, or what I thought was accidentally invent, I thought I invented it. And years later, I found out that I did not. Many people have done it. But I bought a house in College Park in Maryland. Bought a house in College Park, Maryland, and rented out the basement, and kind of closed off my side, and we shared a kitchen, and it worked out really well. Got my, that house I bought for 267,000, and it was the, I,

Scott Bursey (02:53)
Yeah.

Pedro Paz (03:09)
basically paid $100 a month in my mortgage. in my mid-20s, before I met my wife, I was able to travel a bunch and save a bunch of money that way, which yeah, house hacking for young people, I think is an absolute game changer and allows you to get your foot in the door with like very low financial risk and cost in general. So it was my way to start.

And then after doing that, I lived there for a couple years and then I decided to, I read the Burr books and got into Bigger Pockets podcasts and started reading those, getting access into like understanding a little cheaper ways to get in the door. My idea of buying a rental property was always put 20 % down and then I was always like, well, how am I ever gonna do that? So we actually did that once with the house in College Park, which has been really successful.

But we realized very quickly that you only have $140,000 a couple times or one time before you completely empty all of your savings. So there had to be another way and there was, turns out there is. ⁓ So we did ⁓ our first burr here, closed our house and it was an absolute nightmare. We closed on it the week my second child was born. I was like, I probably did 30 % or so of the work. It was there daily, spent 12.

to 14 hours there a day. During the first month of my daughter’s life, it was absolutely stressful and put a lot of pressure on my wife. So slowly I’ve been stepping away from doing the work and more focusing on, I ended up becoming an agent myself. So that was a big, that was one of the big things that I changed. Then I slowly been stepping away from doing the work and hiring it all out. And I found that even putting like door handles on distracts me away from like trying to keep the business growing and see the big picture.

I’ve been slowly stepping away from doing the least amount physically as possible to doing like all acquisition and resale as a listing agent, focusing on marketing and getting that property sold so I can buy the next one and keep guys busy and keep my small economy generating money.

Scott Bursey (06:08)
Absolutely

Pedro and speaking of which what’s your strategy for scaling?

Pedro Paz (06:14)
For what?

Scott Bursey (06:15)
scaling for growing the organization as you see it Pedro.

Pedro Paz (06:17)
for scaling?

Yeah, so part of it is like keeping houses sold, right? That allows me if I can get those houses sold on the back end, then it allows me to go on to the next project. So even if right now I’m carrying two and I could carry a third and I’m going to be carrying a third soon. But if I can get that first one that is in the pipeline right now on the market, if I can get that one sold, then I can move on to the next one. So I

feel like scaling as much scaling is just as much as doing the work and getting everything done and buying the property. But you also you got to get sold and that that allows you to really keep the the machine turning. So, you know, that’s part of the tricky part of this business is you can’t come in and overspend on a property on the front end. If you do, you’re going to be stuck on the back end and then you’re going to be waiting two or three months to get that household. And then here you are just stopping your business. So it doesn’t allow to scale. So that’s one big piece of the puzzle.

Focusing on contractors being really really tight on timelines being clear about what you want done when And then being able to be the GC myself that’s been huge because I can say this like I need this done by this day And being really thoughtful about it on the front end So all of that is is and funding right you got to be funded so funding has been another big piece of the puzzle for me that that basically the more deals you do the more people want to lend to you and ⁓ that has allowed me to that

That’s been a huge piece of the puzzle, which is not something that I necessarily could have controlled anytime just doing more deals with not as great funding.

Scott Bursey (07:56)
Well, that’s some really good strategy and your passion really shows and I think that’s pretty key as well. Pedro, if someone’s listening to this and they’re thinking, this is someone I’d want to partner with or team with, what ⁓ do you want them to know first about your business?

Pedro Paz (08:14)
⁓ I mean, I’m professional. I feel like that’s that’s a big important piece of it. And, and I know, always say this that a clean, ⁓ soft pillow is a clean conscious, the softest pillow is a clean conscious. So I feel like for me, that’s that’s something I would say pretty, pretty upfront. ⁓ I am very keen on doing things the right way. And that’s important to me. So

I think part of the reason why my properties have sold and why people come in is that I can very confidently say that I’ve done the work and it looks good and it performs well. You’re not gonna have a plumbing issue in a week. You’re not gonna have issues with electrical. The roof is not gonna leak. We’re gonna go through and I’m gonna make sure that it gets done the right way. And I hire people that I get that same vibe from. So that’s a pretty important piece of the puzzle. Hey buddy.

Scott Bursey (08:54)
you

absolutely. Having the right people aid you in the overall goal and then you being ⁓ hands on is critical. And Pedro, no business is perfect. What’s one thing that you’re still trying to figure out?

Pedro Paz (09:25)
So as the listing agent, that’s something that I think is really challenging for me personally, because you’ve done all the work to, I mean, I’ve done a lot of work personally to get to where I’m at today ⁓ in terms of so many different ways. So you get to all of this and you put all of, I’m the investor as well, so I’m putting all the money up. I’m being the buyer’s agent. I’m doing all the paperwork on the front end. I’m ordering all the materials.

I’m doing all the work for the contracting and then you finally get all this property like perfect you get you get your listing set up you get your picture stick in you get all this set up and now everything is riding on you selling that property so that gets the part that I’m working on is just being really smart on the back end and like Detaching myself emotionally is which is really hard to do when there’s a lot of money on the line and There’s a lot of time and energy put into it. So ⁓ part of the realities of life is like learning to separate

⁓ your emotions from reality. that so on the back end getting things sold and being the listing agent. So that’s the part that I think is probably my biggest weakness right now to not see through rose colored lenses when you even though I’m doing really great work compared to other flips, I’ve seen many flips and I can assure you that I’ve not seen anyone come close to what I’m doing in the areas that I work, but

At the end of the day, the property is worth what it’s worth in that area and there’s only so much demand and as you know, demand has definitely been coming down generally, I would say across the country and certainly in our markets it’s been going down. So yeah, so you got to keep you got to kind of separate yourself from from the your emotions from reality and that’s really hard to do and you got to just be really straightforward like hey, it hasn’t sold in three weeks or four weeks or whatever. Like you might have to do a big price cut as much as it’s going to hurt.

Scott Bursey (11:54)
Well said. And Pedro, what markets are you tackling?

Pedro Paz (12:00)
Just Maryland in general, mostly Anne Arundel County and Queen Anne’s counties where I’ve done most of my work, a little bit in Prince George’s County, but I don’t really do too much there. I do mostly Anne Arundel and Queen Anne’s.

Scott Bursey (12:14)
Okay, and College Park,

I heard you say earlier?

Pedro Paz (12:17)
Yeah, that’s where I started. Yup.

Scott Bursey (12:19)
Awesome, awesome.

And what do you feel is your biggest opportunity right now? And this could be like a market shift or a new offering or just part of your business Pedro that you would like to double down on.

Pedro Paz (12:32)
Just focusing on the right areas. So when those deals come up, that’s the hard part too, is like most in the Maryland area, if you wanna buy in Baltimore city, there’s 150 properties I could show you right now that are currently for sale off market, but finding them in good areas is much, much harder. So ⁓ that’s where I’m at. I’m trying to buy in those better areas that I know are gonna perform and I know markets like.

properties that I’m willing to go to at night and check. mean, last night I was at a property checking on some work that I’m about to list next week and I wanted to go through and make sure that the things were on more on track and I was there at 930 at night.

Like, you know, I don’t want to visit. There’s certain parts of Maryland. I won’t call it any cities particular, but there’s certain parts that I don’t want to be at 10 o’clock by myself at night. So I’m kind of like pretty focused on.

The biggest opportunity is like when those deals come to your desk, like acting really fast. And that’s the hard part is like, you got to get an offer in and you got to be competitive.

And sometimes you’re like, wait, did I overpay? And so it’s really hard still to not question yourself. So you got to get really good at underwriting and you got to get really good at understanding markets very quickly. You don’t have time to sort of study a deal for a month. You’ve got to, soon as that good deal comes, you go look at it and you get it on a contract.

Scott Bursey (13:54)
absolutely. And Pedro, what’s the key to finding an investment in a good area?

Pedro Paz (14:02)
I wish I had that answer completely, I’ve been getting connected with wholesalers. That’s actually been really great for me. But also keeping my eyes out on them at last. So part of it just acting quick. So that’s to me is like you move fast. Like the one that I sold down in Southern Anne Arundel County, the guy, he sent it to me on a Saturday morning and said, hey, this deal, this property is vacant. ⁓

this price. Are you interested? And I looked at the pictures and I was like, man, I think I could do that and do it really great. So I told him I would go in the next two hours. He was like, okay, let me get you the code. So I actually was acted so fast that he didn’t even have access to the house yet. And then like an hour and a half later, he said, hey, here’s the code. Do you want to go still? I said, yeah, I’ll jump in my car right now. I go down. I sent him an offer that day because my financing is good. They have a great app that I can go in and

put everything that I need and they’ll print out like a prequel. So I sent him a prequel. We got it under contract. I mean, within like five or six hours of him reaching out to me. So ⁓ yeah, so I would say like, that’s the thing, right? Like I turned down probably, I mean, to not exaggerate, I’ll say 10 to 15, sometimes more deals per day that I know I’m not interested in driving three hours East or I know I don’t like that area or I know I don’t like the numbers is not enough.

too much work and not enough return, it’s gonna take me three months and my contractor’s gonna be super busy and I’m only gonna make a smaller amount of money. that’s part of that too is like opportunity is kind of like what your filter is. Your filter is really, really, really important.

Scott Bursey (16:22)
And it sounds like when you see that opportunity, you’re very proactive and acting quickly is key.

Pedro Paz (16:30)
Yeah, I mean, right in Maryland, I know I’ve spoken to guys in like, I know some people in St. Louis, I know some people that have done, I mean, Baltimore City, I know some people that work in Baltimore City. I mean, there’s certainly more time in most other areas, but around here, when you see that deal that you like, it has to be crazy fast or I mean, and even sometimes when you’re crazy fast, still wholesalers are getting, they’re pretty smart. A lot of times they’ll even

hold off on accepting your offer, even if you’re at ask, just to see if someone will offer over asking.

Scott Bursey (17:08)
Understood and Pedro any challenges you’re watching closely, know like market risks competition Access to deals or capital, you know that sort of thing

Pedro Paz (17:11)
five things first.

⁓ yeah, capital is good. Competition is always there. So that’s the reality. That’s why you got to act fast and you can’t really control that. But I mean, things that I’m certainly watching very closely is the market in general, just looking at how deals are like properties are starting to sit. Buyers are being picky. Even when they love the property, I’ve had multiple buyers come in absolutely in love with it. Just complimenting the absolute heck out of it. The agents complimenting it. And then you don’t hear from them.

So I think that they know that demand is not super high and that ends up taking a lot of pressure off the buyers and puts a lot of pressure on the sellers. So that alone has been cutting my resale value, which when you’re underwriting a property, you think, okay, I know this is what I think the property is worth, which it’s only worth what someone’s willing to pay for it. And if demand’s not high enough, you’re not gonna get that extra 20.

or 15 or sometimes 10k that you think you’re gonna get without getting some pressure and getting a lot of showings and people realizing that they gotta put an offer in or they’re gonna lose it.

Scott Bursey (18:29)
Interested to know what’s your game plan for the next 12 to 18 months in the in the Maryland market?

Pedro Paz (18:37)
I’m looking to just speed it up. That’s my goal is to do more deals. if I, I’m, I was talking about my filter earlier, my filter is getting better. if I can, if I can get more deals under contract using my same filter that I’ve been using, I know that I’ll have a successful year. So that’s what I’m trying to do. And I’m trying, and that’s part of it. Like the resale that we’re talking about, part of that has been like.

getting these deals off my books so that I can go on to carry another one and go to the next one. So that’s been the, that’s my next to 12, 18 months is just to stack up more deals. I mean, that’s just, I would say it’s like how you make more money, right? Like you look at inflation right now, you look at what it costs. We’re expecting our fourth kid in October. We’re gonna have four under five and everything is expensive. So ⁓ we realized that

The reality is you got to make more money. No one’s going to sell you something cheaper just because you’re nice. So that’s where we’re at. We’re just trying over the next 12, 18 months is just to grow our goose egg a little bit, our nest egg, stack up more deals.

Scott Bursey (19:48)
Absolutely, being aggressive and proactive, and that is a good recipe for success. Is there any takeaway that you’d to leave with our audience today regarding your operation?

Pedro Paz (20:01)
Yeah, I so, I don’t know, me particular, it’s been quite a journey to think back the last like three to four years. I was telling you before we started, like, it’s crazy how you don’t, I haven’t necessarily talked about it a bunch. is the first, this is the most I’ve ever talked about this. And this journey is definitely a little bit of a lone wolf journey. If you’re gonna get into flipping is definitely a, I mean, you can ask for resources, you can talk to people, but ultimately at the end of the day,

Scott Bursey (20:20)
Thank

Pedro Paz (20:30)
the buck stops with you. So I would say if you’re interested in doing it, you just you got to be ready. It’s that that Grant Cardone book 10x like he always talks about. I love that he says like you should your goal should be 10x but also it’s 10 times harder than you think it’s going to be. And that’s that’s the part that I would leave people with. is yeah you sure you can do a lot more but and you you got to be prepared to realize that like

at that 10 o’clock at night, got to go visit a property after dinner with your stepdad on his 70th birthday. No one else is going to go. That’s what happened to me last night.

Scott Bursey (21:10)
That’s what it takes. That’s what it takes, you know, those long hours, ⁓ those awkward situations where you have to leave the family and so forth.

Pedro Paz (21:22)
Yep, yep. One of my other favorite books is It Takes What It Takes. It’s a great book. was Russell Wilson’s personal mind coach, psychologist. Really, really great read. I wish I could remember his name, but it’s a phenomenal book. It takes what it takes. It’s no more, no less, you know?

Scott Bursey (21:42)
Absolutely. Well, thank you for those words. And they certainly resonate with our with our listeners. Pedro, we love fostering connections here at the Real Estate Pros. For our listeners who want to follow your journey or collaborate with you, what’s the best way for them to reach you?

Pedro Paz (21:59)
So yeah, I’m a real estate agent Maryland Pedro Sosa-Paz you can Google me You’ll find me a co-op banker. So that’s probably the easiest way to reach out to me I’m also on Instagram @pedro_pause P-A-U-S-E like pause little play on words there So yeah, those are probably the two easiest ways social media keeps this locked up, you know, Internet’s so great for that

Scott Bursey (22:25)
Absolutely. Pedro, everybody. Pedro, thank you so much for joining us today.

Pedro Paz (22:32)
Yes, thanks for having me, Scott. It’s great chatting with you.

Scott Bursey (22:34)
Absolutely. And for our listeners, we appreciate each and every one of you. If you got value out of today’s episode, please subscribe. We have more conversations coming up with exceptional operators, just like Pedro. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.