Build Real-World Wealth One Smart Move at a Time with Mike Azzam

[0:00] Welcome back to the REI agent. My guest today is Mike Azam. He’s a team lead of the Azam group at Remax Haven Realty and founder of the Azam Turnkey in Cleveland, Ohio. Before real estate, Mike was a registered nurse and he brought the same systems thinking and attention to detail from healthcare into building one of the most productive real estate operations in the state. He was named Ohio Realtors number one individual sales producer in 2019, has completed over 500 flips through Azam Turnkey and now runs a team that services both retail buyers and sellers and out of state investors looking for turnkey cash flow. Mike, welcome to the REI agent podcast. Hey, Matthias. Thanks for having me on. Really appreciate it. Look forward to it.

[0:45] Yeah, man. You’re a perfect guest for us. I’m excited to talk to you about some of the stuff that we just went over. I mean, flipping, it sounds like, well, I don’t want to get into it too much yet because I want to hear first how you got into real estate. What took you from healthcare into real estate? It feels like ages ago on the healthcare side. When I hear the introduction now, it’s like, oh my God, I was. I can’t believe it. Maybe not the most unique story, but I got a job entry level. It’s like, it was like, it’s like a, you know, first year, first year associate at a firm working in the mailroom. Like I was, I got a job as a leasing agent for a startup management company and was showing some rentals and in like the inner city of Cleveland. And you know, just started really gravitating towards real estate then. And at a certain point, about a year or two into it, I’m like, I gotta, I gotta make the jump here. So just, I wanted the freedom and I think that was the most important thing and decided this was the path that fate had for me. So here we are.

[2:07] Yeah, man, I can relate with that a lot. We kind of always was seeking that freedom. The, the being my own boss, start doing my own thing, kind of always had my own ideas, little side hustles, whatever you will throughout, you know, my whole life. And then when I, I, when we bought our first house, you know, the agent made it seem to like so much fun. I was like, this is it. Yeah. And I had that aha moment where I really, it’s like, this is, this is what I want to do. So many of my colleagues, that’s how they started. It was, you know, they bought a house and they, you know, just gravitated towards the process. You know, they’re the way they’re, you know, just how the realtor handled things. And, you know, it’s like, oh, I can do this too.

[2:53] It’s commendable. You know, I think we all want freedom and life, right. Not just with income, but you know, it was like, you know, the money is great. Um, but I, I really, we do this for the freedom. I, that’s what I do it for. I just, I want to control my time, my, my schedule, my destiny, as cliche as it may sound. And that’s, what’s so important every day. I want to be able to just, you know, come and go as I please, even though we end up working more when we are self-employed, right. That’s what I was just going to say. It’s not like we’re sitting around, uh, we’ve made it, man. We were just, you know, drinking, uh, drinking, uh, cocktails on the beach all day. I know. I know. Get to choose what 16 hours a day you want to work. Um, so, so were you always interested in the investment side of things as well? Like did that, did that, I mean, coming from like seeing the rental side of things, I see some people maybe being a little bit scared off, uh, from, uh, some of the horror stories of, of the investment side of, of real estate, but did you always have that interest as well as, uh, getting into the

[3:55] sales end or what, what came first? No, it was the investor side. That’s what, that’s what catapulted everything. And because I was at a startup management company, um, you know, Cleveland’s always been a very, uh, investor driven market. Um, so that’s what I was exposed to. Um, and then at that time, this is back in like 2010, 2011, 2012, it was mostly international clients. So, um, you know, buying rentals in Cleveland. So, you know, it just started to grow from there. And that’s what was always so interesting more. So even then the, I honestly never really had a lot of desire to go and show forever homes and talk about floor plans and color schemes, you know, for Sally and Joe looking to upsize or downsize. I liked the aspect of scaling and that’s what the investor side allowed us to do. It allowed them to do. So, you know, investor, the growth with them was mutual growth with us. Um, and we just, you know, we really took off with it.

[5:01] Um, look, when you’re talking about investment properties, it’s just a different approach. You know, it’s more numbers driven, right? Um, you know, it’s more analytical. Um, you can, it’s more process oriented and that’s what allowed us to vertically integrate with a lot of our, and we can get into this later, but a lot of our other businesses as well. Um, and, and the scaling part though was so crucial, you know, Sally and Joe buy a house, Matthias, you know, you might not hear from them for another five, six years, right? I average first time home buyers in a house for, I think it was like statistically speaking around three years, fine. Three years, best case scenario, you’ll hear from them again. Uh, that investor is going to buy next week, maybe a couple of weeks later. And we, we built up pipeline out of investors, just scaling to 10, 15, 20 properties.

[5:49] And, um, you know, that was always so much more attractive in terms of a business model. So yeah, that just investor side seems so much more lucrative, uh, from the onset. Yeah. Especially I would say like, I mean, I think Cleveland would have, um, the, like the, the, what it takes really, you can really get a consistent, uh, buyer pool. Uh, I would imagine the cashflow numbers look a lot better. Um, and, you know, actually really, I heard here recently, uh, when I think it was somebody I was interviewing was talking about different markets and, you know, the, the, the stereotype is that the, the Midwest, uh, will cashflow better and the coasts will, um, appreciate better. Uh, but this person was saying, uh, that like the Cleveland market that they were investing in actually, uh, appreciated really well, um, and, and was, was kind of the best of both worlds. Uh, would that be true? I mean, are you still getting pretty good, uh, return, um, now I know that it’s a lot harder with both, uh, having seen appreciation and having, uh, obviously the, the higher interest rates.

[6:54] No, it, it’s been one of the biggest misconceptions of our market. Look, we’re not a coastal city. Those are the growth markets I’m aware. Um, but what we preach to our investor pool, I feel like I’m in a consultation call with one of, with the new investor here. Um, it’s, uh, what we preach and it’s not lip service as you’ve seen, you know, if you’ve found and seen, um, you know, we have, you get a little bit of everything, you get a little bit of cashflow. You get, you get the, obviously this, you know, stable, you know, you know, upper midsize market. And then you do get to capture some appreciation. We’ve had healthy growth over the last decade. Um, you know, we’ll run in pro formas two to 3% appreciation. I mean, we have outpaced that, you know, two X, three X in some of the markets around the Cleveland area that we’ve invested in. So yeah, that’s been really, uh, promising. Um, and it’s a nice little bonus for, for, for our, our own portfolio, for our investors. Um, you know, something that maybe wasn’t necessarily, you know, uh, anticipated, but, uh, I think one of the best things about our market is that we’ve been able to capture both.

[8:04] Sure. You know, uh, one of the approaches that I’ve heard of as well, and I’m wondering if this is kind of what, what, what you all do is, is looking at a property that you have an investor that wants to buy something, uh, just, just finding a property. I don’t know if it’s off market or on market, but I’m essentially, you know, saying like the, look, we’re gonna, we’re gonna put, we’re gonna buy this for X amount. The, the, this was, uh, I think, uh, agent I was talking to out of Pennsylvania somewhere and their numbers were just nuts. It’s like you buy the property for like $20,000, you put like $60,000 into it and then you can rent it for, um, you know, and this was, this was a few years ago, but, um, is that the type of flipping turnkey kind of rental operation you, you, you all are doing, you, you have the investor and you’re, you’re kind of getting the whole thing together for them, or are you out there like prospecting, finding things off market, renovating them, um, et cetera? A little bit of both, uh, to touch on that, that’s what the market was back in the, you know, 20 teens. Um, it’s wild. And like to think that we were putting in four

[9:11] times the value of the house in construction, um, or four times the purchase of the house in construction, a little side note, some of these cities were so hell bent on trying to stabilize the housing stock. They have the city inspections and they would be required escrow. Escrow would be is think of it like collateral. So if you were to buy the house, you had to take care of X violations and be pages because this is post crash. So the houses were distressed, uh, Cleveland, you know, most Midwest got hammered after the, you know, the, uh, the recession and the crash. So these cities would then impose these high escrow requirements. So you’d have a house that was, I kid you not, $20,000 and you’d have to put 80,000, 60 to 80,000 in rehab. And here’s the kicker. You’d also have to have another 50 to 60,000 in collateral held to ensure that you did the violations and you couldn’t touch it until it was released. So think about the cow capital intensive that was. And the house is 20 K 30 K like when it’s all said and done, just crazy numbers. So it’s where a lot of the international clients came in is because of that, you know, so heavy capital. Um, it’s, I mean,

[10:22] it is, but it’s also not insane. Like, I mean, like, so like if you’re, you know, like, I mean, it’s maybe not a typical, you hear $20,000 house. You don’t think you’re going to have to have, you know, that 130,000 or whatever, um, in it, but like, you know, 20% down of a lot of, uh, you know, investment properties, it’s not that much further away now. And, and, and I imagine they’re doing basically the Burr method then where they’re going to refinance, um, and get the capital back, right. So they could kind of, uh, rinse and repeat if they kept doing this with other properties. That’s the goal. And, you know, then it was a lot tougher to get lending on lower price properties when a loan value was low. So you’re, you’re talking about, again, a lot of cash. It was just tough to scale when you’re talking about needing 150 K in capital, but the objective as we’ve matured, as our markets improved and developed and grown, um, you know, the, the aspect of what our business model is, is also grown. So we go out and we prospect and we find these off market deals and we stabilize them and stabilize. I mean, that’s an understatement. We completely renovate them

[11:28] and then we’ll get tenants in place and we’ll hold onto them until a turnkey buyer comes along and we’ll present them numbers. And, you know, we’ll, uh, we’ll provide them a one-stop shop. We’ll have, we have management in place. I mean, everything they could think of all the resources ready to go at their fingertips. And we just streamline the process, but then we also get the investors that have a little more experience under their belt, um, or, you know, have gravitated from, you know, buying the turnkey model, so to speak, and want to get into forcing some appreciation, adding the value themselves. And we have an entire, that our, we have entire arm designed for that and we’ll help them find the property. So we’ll actually go with them, so to speak, and, you know, target specific properties on and off market, and then we’ll provide them quotes, you know, scopes of work. And we streamline that process for them after closing.

[12:17] So they’ll actually get in there. And I mean, you know, it’s crazy. They’ll be across the country and the house is getting rehabbed for them and then a tenant’s place for them. Uh, then it’s managed for them all the while they’re just, you know, sitting from there to the computer screen, clicking a button and, and then they refine the backend and they do it again. Right. So the difference being, uh, between those two models you just described is that you’re like kind of front loading the capital, uh, to get that job done. Whereas like somebody else would be kind of bringing the capital in from, and from, from square one, basically. Right. Exactly. We, we allow clients that have worked with us for, you know, X period of time to take that path. Uh, once, you know, once they’re, they have a little bit of experience under their belt, um, we want, and like, you can’t buy turnkey forever. You need to scale your portfolio. You need to be strategic when you’re scaling your portfolio. You need to scale your capital. You need to find ways to recycle it. Right. So, you know, we’re not, you know,

[13:14] we’re not shy to that and we have the entire, you know, entire system down. So we’ve helped countless investors over the years, take that same approach. Like, Hey, we have all the services and resources here. Oh, you want to buy this distressed asset? Sure. We’ll help you sell it. We’ll help manage it. We’ll help rehab it. And then here’s the kicker, Matthias. We’re going to sell it in the future when they’re ready to exit. So it’s just like we’re planting seeds and we have tens of thousands of seeds that we’ve planted in this decade plus doing it. So, you know, it’s, it’s like a good, it’s good longterm investment for our sales team as well. Yeah. That makes a ton of sense. Uh, now how much are you, are you keeping any of these, uh, properties as well as a company personally, et cetera?

[13:55] It’s hard not to, um, you just get to a point where it’s like, you, you don’t want to sell these so many of these that I almost like I looked at and I should, I just should have held onto it. We have over 70 properties that we’ve held onto. Um, our portfolio is over 10 mil now, uh, which is crazy to think in a market like Cleveland. Um, you know, just so many opportunities that we’ve looked at, stepped into and said, you know what, we’re going to hold onto this or we’re going to let the season a bit. Um, and we had one, we were on the markets for had a buyer at two 65. One of my agents walked in and said, Mike, you’re crazy. This place is beautiful. And we pivoted and said, all right, you know what? We released it and we just refinanced it and kept it. Um, you know, it’s, it’s hit a point where capital is not an issue for us. So it’s more long-term growth, you know, it’s wealth building. So if we can grow the portfolio, why not? Yeah. I think it’s such a, it’s just, if you get into the game of, of rehabs, et cetera, and I, you know, our markets is completely different than yours.

[15:00] It’s like, there’s that, this is not a really a system that we could replicate, uh, at scale like you, um, in our market. But you know, I do to a lot less of a volume gets, you know, opportunities to renovate properties. Um, and essentially, yeah, when there’s a one that comes up, that is, is one that I like, it’s in a location I like that I want to keep long term. Uh, yeah. I look at the burr method and it’s been harder. You know, I, the last one we did, we had to turn it into a midterm rental to make it a cashflow. Um, but that’s actually done really well. And so I can’t complain on it, but, um, are you seeing that it’s, it’s tougher now to, to make the numbers work pencil out with the, uh, with the interest rates where they’re at a little bit, you’re not cash flowing as high. I mean, you know, you just have to, you have to pivot with the market. Um, we’re, you know, we’re, we’re advising investors anticipate leaving, you know, 10 to 15 K in the deal. Um, you know, and, and sometimes we’re outperforming that, uh, recently we had an investor. I think he ended up pulling out the majority of his capital, but you know, we’d rather play conservative upfront our, our

[16:13] last refinance, which was, I think a month ago, we, we have about 11 K left in the deal, but ties for, uh, a house that is fully rehabbed and still cash flowing. And I have 10 K left in the deal and today’s market. Like that’s a no brainer home run. Um, you know, it’s just like anything, you know, I can’t buy houses for 30, 40 K anymore. I’m buying up for 140 now. And it’s just, that’s, that’s how the market shifts. You just have to shift with it. In 10 years, you’re going to be like, I’m not buying houses for 140,000 anymore. Yeah, exactly. Exactly. Or, or I’m not, you know, now I’m leaving 24 K left in the deal instead of 10 K left in the deal, 14 K left in the deal. And you’re looking at going, well, that’s how the market’s shifted. So, you know, you just, yeah.

[16:57] Hold the punches. It’s still awesome. Yeah. I mean, that’s, that’s a, that’s like, those numbers are still awesome to only have that much in a deal. It’s definitely not what anybody around here would expect for buying an investment property. They would be expecting, you know, 20 and 25% down, uh, closing costs, et cetera. And that would be a lot more. And, you know, when you look at it from a different perspective, um, if you look at, you know, if you’re, if you, if you have a nine to five job, um, and you, and you’re investing in a portfolio to, uh, you know, offset taxes to whatever, you’re probably, you know, investing a good amount of money, similar to that, maybe a higher percentage of your income depending, um, then, then what that would be. Um, but you get tax benefits as a real estate professional. Um, and you can depreciate this asset. Uh, if you want to, you can accelerate the depreciation, take the bonus depreciation. Um, and, and if you’re, and you can take advantage of that stuff now, like you can, you can sell that asset later. Um, you can sell that asset when you want to, you don’t have to wait until you’re 65, you get cashflow. You can start

[18:01] using that to offset your expenses. You can get to the point where you are actually, um, living, um, on your passive income, or you can, you can sustain your lifestyle with your passive income. And, and I think that’s the Holy grail of, of where I want REI agents to be is to, to get to a point where they are increasing their lifestyle with their passive income, not with just their sales income. Their sales income is, is like kind of bonus, um, and able to accelerate their, you know, investing, but that’s just like the iceberg, right? It’s the underneath the water part, right? You just build this big, massive thing and then you become a really unstoppable. And when there are shifts in the market, when there is seasonality, when they’re all that kind of stuff, when the perfect storms happen, um, you’re set, you’re, you’re golden.

[18:47] There are so, there are so many examples of that. And the issue is, and, and, and you’re right. It’s, that should be the primary focus. I sat on a panel a few years ago, and this is a local panel. And, and one of my, like, one of my main points to a bunch of our, my colleagues and agents in the area was in any other industry, the, the knowledge and insight you guys have and the, you know, and, and, and information in terms of just knowing what’s coming up, it’d be insider trading. Yeah. It’s legal. Like it’s in, you know, take advantage of it. You guys are letting all of these opportunities go to out of state investors, like take advantage of it. It’s, we’re like fortunate to have been grown up and worked in a market that has the opportunity that our market has. You know, if I was in Miami or New York with, you know, would I have a 70, you know, would I have that sort of portfolio? Would I have a 10 million plus flipping portfolio? I mean, it just like, it doesn’t, it doesn’t equate to those markets and it’s tough to scale there. Um, what I feel like is a big issue is, is there’s so much information around everything becomes like the hot and trendy new thing with

[19:55] investing. And these opportunities are looked at as, you know, just average and everyone’s looking for the home run. And, you know, this is, it doesn’t cashflow enough. So many of my opportunities, so many of, so many of the properties in my portfolio, you know, those are long-term plays, the tax benefits. Why are we not looking at tax savings as a reason for investing? Um, you know, why are we not taking advantage of some of those tax savings? You talked about bonus depreciation, cost segregations, like so much at your fingertips to pay less in taxes. And I’m, you know, you can still sell the asset later and you still have the, you still have the cashflow, you know, IRA. Exactly. And you know, you’re getting the benefit of the tenant, you know, potentially if it’s a, you know, if you have a tenant in place, they’re paying it down as well. And, you know, maybe some growth and upside in terms of appreciation, like there’s so much opportunity and we’re just so short-sighted because maybe it doesn’t hit a 10 or 12 or 15% ROI and it doesn’t cashflow what we want it to. And it’s just not worth it. You know, I, I like, I don’t understand that thought

[21:03] process. I don’t understand that ideology. Not everything needs to be a home run. You can hit singles and doubles, get in the game and start to scale from there. And you’ll find that there’s so many advantages to investing in real estate. Yeah. Yeah. That’s it. That’s it. Like I think with one of the things I talk about is if you’re not, um, if you don’t have tons of cash and, and you just outlined like a, an ability to invest with not tons of cash. I mean, depending on the strategy, you might have to have the cash upfront to, uh, you know, get the deal done before it’s refinanced out. But, um, if you just start with your own house and, you know, buy a house that you want to live in, that you can turn into a rental later, um, over time, that’s going to get equity, get a equity line of credit. You’ve just tapped into, you know, that, that can be 50, 60, 70, a hundred thousand dollars pretty quickly. Um, rents and repeat that a couple of times.

[21:54] Now you’re getting dangerous. You can get into, um, the, you know, $200,000, um, price point, all cash. You can, you know, flip a property. There’s a lot of opportunity if you do it, but the point is, is, is, you know, it’s not, yeah. Immediate home runs. If you take a, if you take a base hit, you know, every year that adds up, that adds up. And, and, and, you know, one of the things I talk about too is, is the syndications. Like if you don’t want to be, uh, you know, an active, uh, investor where your passive income’s kind of bullshit, uh, like it takes work, like you rentals take work. There’s, there’s things, even if you have a manager, like there’s still some decisions you have to make. It’s not all, um, passive and, and syndications, you need to be really careful and you need to like, make sure that you’re investing with the right people. But, you know, this turnkey option you’re talking about, this is a great opportunity for somebody to do something, um, that would be a lot easier than, you know, flipping a property themselves. And, uh, it’s just about, yeah, slowly building up.

[22:57] If you’re doing these base hits, getting these properties, um, over, you know, years, you can then, you know, have that million dollar net worth outside of your personal residence and invest in syndications if you choose to, but just, just more doors open. Um, the more that you’re, you’re doing this. It’s, it’s why we offer those services because, you know, you need to have, uh, opportunity and different routes. You know, I like, you know, an investor wants to come through and buy a turnkey property. Sure. But then what, um, you know, I’ve had investors that have invested in syndications and I, I’m not implying that that isn’t the right path, but, you know, if you’re looking for a way to still maintain some control, still have some involvement, right. Well, find an operator to work with like, like us, you know, where we can help kind of navigate you through it. Like your lifeguard, um, you know, syndication, you’re, you know, you’re, you’re literally a passive silent investor. Um, you know, they’ll update you, get you quarterly updates and, but you’re at the mercy of the operator. Um, you know, you find a good operator locally in a market that you’re comfortable

[24:06] with, you know, there’s, there’s ways and, you know, uh, opportunity for you to scale your portfolio in other ways where you can still retain that involvement because you’re right. You’re always going to have that passive is not easy. You’re always going to have involvement. Even if you have a manager, I, one of my favorite lines is you need to manage the manager. You’re still going to have that, but you know, you’re talking about front, you know, uh, you know, kind of front loading some of that stability, you know, getting in there, stabilizing the assets. Now it’s something a little bit easier for that manager, something a little bit easier for you in terms of maintaining that passive income. Um, you know, you just, you got to get your feet wet and, you know, getting in the game is the first step. And as long as you, you know, kind of take that approach methodically, um, you know, good things will happen. I’ve so, well, I hate to go on a, I hate to get on a soapbox here, but for years, one of the biggest, I guess, uh, misconceptions I hear from investors is just, you know, I want to get to 50 doors. I want to get to 10 K a month. I really the

[25:07] 50, get to 50 doors, 50 or a hundred doors. It’s like, let’s get to one first. Yeah. Okay. And it’s okay that you don’t have any yet. It’s okay. You know, I like, this is not anything that’s intended to be disparaging because you’re now just starting to invest, not by any means, but let’s start. We’ll worry about 50 to a hundred later. And that’s the issue is it’s, you know, they’re so focused on, okay, fast and I need to get home run so I can get to 50 to a hundred doors and they’re letting good opportunities kind of pass them by. They’re letting, you know, they’re, they’re letting the situation kind of overwhelm them. Okay. Because they only have that one objective on the backend and, you know, I like it’s, it’s, you know, go for gold. That’s fine. But, you know, let’s, let’s get some singles and doubles and all of a sudden you’ll score some runs and things will be working. Yeah. It’s funny if any agents listening to this right now that, uh, aren’t familiar with, or if they haven’t really been in the, in the investor circle as much the, the doors badge, like it’s almost like this, like they walk around with this badge of how many doors

[26:18] they have. And it, it like, it really is like an almost an arbitrary thing because like there, there can be, you know, people can have a bunch of like $30,000 a door, like properties or whatever, which is, and if somebody else has like 10, that’s, you know, worth like way more, like, you know, each one of those is worth like $400,000. I mean, the, the, the math is, is really different and, and, you know, there’s all sorts of different metrics, but it is funny how that’s this kind of like this, this badge that people seem to care about. And, and, you know, it’s good to set goals, but like you said, it’s, it’s good to, it’s better. It’s more important to kind of make progress and, uh, to continue and, and to agents listening, you know, you can still like focus on your sales, like, you know, still focus on your sales, but these are some options of ways you can build up that income, um, as you go and, and not have to be like, you know, obsessed with the investment part. You’re not in there, you know, doing drywall, um, in a flip or whatever you can do this stuff, um, passively. And the more access to capital you have, um, the, the better off you

[27:25] are, or the more hands off you can be. And it becomes, you do a burr one time and it’s kind of addicting because you’re like, this is like a magic trick. If you get a full burr, you’re like, I just got this property for free and it’s cash flowing really well. What is, what’s happening? Yeah. Tax free. I mean, literally a tax free, that cash out refi is tax free on top of it. Like that’s just, I mean, it is, it’s a cheat code and you’re in the industry. You know, I chat with investors that are engineers and firefighters and physicians that they’re, they have no concept of resources. You’re in the industry. You have resources, like you have the experience and exposure. So, you know, it’s almost a shame. It’s almost criminal that you’re not taking advantage of that, right? Finding the opportunity there. I mean, just find a local networking group and just meet up once a week just to get your feet wet at the very least, because it’s right there for you.

[28:22] And, and you have that opportunity. So I, yeah, I, I just, it’s something that I’ve been preaching for years. Every agent on my team, that’s one of the biggest objectives for them is they want to come on, learn that side of things and start investing. Every agent on my team invests. They have a couple of flips going, buy and hold. One of my agents just did his first Airbnb. You know, it’s not door count. You know, I stopped saying the door count to your point years ago. And when people ask, I’ll say, if you want to know, I’ll give you a kind of a volume valuation. My, my badge of honor is 35 K a month in net passive rental income. That’s my badge of honor. And that’s, what’s important. I couldn’t care if it was one door or a thousand doors that got me to that number. You can take that portfolio, drop it down to a door. As long as that number is not impacted. Couldn’t care less. Yeah. I mean, it’d be better, right? Yeah. I know less headaches, right. Less to manage. Oh, well, I mean, you’ve obviously built this like pretty awesome operation.

[29:27] You know, this, the sales team, the, this whole thing is, is this really interesting business that you’ve created that again, like I said, might be hard to replicate depending on the market you’re in. Um, what do you think is like the key to that success? What, where have you, have you figured out the operational kind of discipline, um, that makes the growth that you’ve seen durable? So long winded answer here. Um, and, and you’re right. Maybe it is difficult to replicate this specifically in other markets. Okay. You’re in Tampa, Florida. Okay. Um, you know, huge growth market, but there are ways that you can find opportunities to scale aspects of what we do. Okay. Um, you know, the construction arm, which we built out because we are doing so many investor rehabs.

[30:16] We have scaled that and, and, and, uh, move that into our retail sector or sector here. You know, we have an immense amount of local homeowners, Sally and Joe that need to sell their home, but need to get some things buttoned up. And what that’s done is it’s allowed us to capture additional revenue. And that’s been a huge part of our growth. It keeps our crews busy, keeps our contractors busy. Um, so there’s ways you can replicate functions of what we’ve done. Okay. And, and find, and from there you’ll start to vertically integrate other aspects as well. We have a cleaning arm, we have a cleaning business as well. Uh, we just bought our second trailer for haul offs for trash haul offs. Like we’ve, we’ve really scaled to almost every service aspect of this.

[31:05] Um, so you have a listing, you know, how valuable it is. What a, what a value proposition that would be for you to come with your folder and comparables and CMA and cute presentation, but also be able to leverage your resources and processes on the repair side. And that’s where it is extremely helpful. I have a listing appointment with one of my agents next week, uh, half million dollar listing in Cleveland. That’s a great listing by the way. Um, half million dollar listing guys relocating, um, to side North or South Carolina. What’s important is, is he has a couple of repairs that are needed at his home and he does not have the patience time or energy to go around on thumbtack and Angie’s list and start calling handyman. He loves that we can handle that for him. Not only can we, so we’re going to handle it for him, which is basically going to capture the listing and we’re going to get revenue off of those repairs. What a win, win. That’s awesome.

[32:08] What a win, win. I mean, it’s huge revenue on the repairs and the listing itself. So, you know, that’s, that’s, I think one of the biggest value propositions any agent can, can provide as those, you know, kind of, uh, vertically integrating those resources and, and, uh, and, and aspects of what we do in their day to day. So. And I, if I, if I may, like even, you know, to, to, to dial that back even further, like just having some experience and having some insight to what things will cost to like, think, no, like, you know, if you have a contractor that does a lot of work for you, that will be willing to jump and, and come in and, and, and do a job for you punch list. Um, you know, if you’re, if you’re showing a house to buyers and they want to, you know, they can’t imagine what, uh, something might cost or everybody throws out around here, like that’s going to be a hundred thousand dollars to fix. That’s not true at all. It’s a great point. Yeah. You’re, it’s a disservice to your clients. If you don’t have a cons, any concept of what things cost, you need to, you don’t even could have no intention of getting into the real estate investment, real estate space.

[33:16] That’s fine. But to work with clients, buying and selling homes, you’re in the business of buying and selling homes and you have no concept in what things cost. It’s unfathomable to be honest with you. You’re doing a disservice. How do you negotiate? How do you leverage any situation for your clients? How do you strategize? How do you, how do you negotiate with another agent when, you know, the ROC terms come back, you need to be able to help them understand what things will cost. What if they are in the planning stage of getting it listed and they don’t know what’s going to bring them the most ROI for, in terms of specific upgrades, and you don’t know what that stuff’s going to cost. And, you know, that’s, it’s lunacy. Uh, you, you need to familiarize yourself with that. Talk to contractors, you know, you know, research online, find, there’s so much available for you, you know, find opportunities to better educate yourself on construction costs. I’m not asking you guys to, you don’t need to know what exterior waterproofing excavation costs, but how much it costs to install vinyl plank flooring per square foot. I don’t think that’s unreasonable. Right.

[34:23] And I think, I think that was the, the benefit I didn’t foresee or didn’t really think about that when I got into, uh, investing, when I started doing some flips, when I started doing some burst, uh, I didn’t understand how much value, how much more value I was going to be able to give to my clients, um, from that knowledge, from the connections. Um, it, it, it really, uh, was huge. And, and just seeing the difference, like really seeing the difference, which you can do as just a listing agent, like, you know, having something painted, right. Like, you know, if, if a place is really drab and you get a fresh coat of paint on it, like the difference that, that the life that comes into that listing or that house is, is a huge difference, but, you know, going through a property that is like, you almost don’t want to walk in it. It’s so gross to like having it fully renovated.

[35:11] Um, there you kind of live through each of those stages and you, and you experience more, you have, you have more, uh, ammunition to kind of convince and to, to educate. And help your clients. And it’s, it’s, uh, it really does. It really can help your residential sales, um, to have this kind of experience for sure. It’s, it’s there to provide you value any of that. I mean, the title side, the lending side insurance, you know, we, we, you know, we either find ways to vertically integrate it or we find ways to monetize it. And I think that’s the name of the game as a real estate agent. And so, you know, providing the value to your client will help you monetize additional revenue. I’m telling you, uh, at the very least, we’ll give you a leg up to get that listing or work with that client. Because one thing about our team is, you know, they are experienced or at least have exposure in almost every facet of the industry. And it can tell you how title, what type, how title insurance works and the lending side and construction. They’re not experts, but they know just enough. And that’s what you should be able to, to have and possess as an agent.

[36:24] And then you’ll be able to monetize it all the way across somehow, some way. I, uh, down to, you know, just like, I, that’s, I could get on it again. I can get on a soapbox with this. You’re preaching to the choir. It’s, it was a great point. I like, you need to have that a little bit of construction exposure. Um, you know, I think it’s like, yeah, if you’re, if you’re a used car salesman and have some like, you know, uh, mechanical experience, like, uh, running, you know, like, you know, working on different cars, you might be able to give better advice. Like I’d stay away from this brand at this year or whatever it is. Um, and I think that’s what people really want, um, in good representation. Uh, I just want to quickly say if you, if you’re catching this, if you’re, if you’re listening to this and you’re on the road and you’re in your, you’re wanting to like take notes, but you can’t, uh, check out rei agent.com. You can get a sign up for the newsletter. Um, and you don’t feel like you have to, uh, you know, have everything right now. This will become a blog or this will be a blog,

[37:17] um, as well. So you can capture the highlights there. Um, and definitely there’ll be show notes, et cetera, with everybody’s, uh, with, with Mike’s, uh, contact information or his, you know, social website, that kind of stuff as well. So, um, definitely don’t feel like you need to get in a wreck to, to write some of these awesome, uh, tips here down. Uh, Mike quickly, can you talk a little bit about, uh, what the Cleveland market is looking like, looking like now we’ve, we talked about how things have changed a little bit, interest rates, appreciation, et cetera. And where are you finding some, uh, you know, some pockets of, of opportunities still for the people you serve? So, I mean, we’re, I love those like B and C class, working class neighborhoods where you get a mix of owner occupants, but still, you know, investor friendly.

[38:05] I want to have flexibility. And if you are looking in a market like ours, you want to maintain that flexibility. So when it comes to exiting, you have a bigger pool of buyers, investors, owner occupants. So a lot of those suburbs around the Cleveland area are typically where we’ve been hot and heavy. Um, you know, even as the markets improve, those areas have continued to still remain affordable. Um, you know, they still cashflow. Uh, you know, I, I, I don’t think right. Rising prices and rising interest rates means we need to get into the mega risky, you know, inner city areas that, you know, really take experience and, you know, thorough boots on the ground. You can still find good opportunities in some of these more stable, matured season pockets. Okay. Cool. Um, and for an agent doing about five or 50,000 to 150,000 GCI and who generally wants to double their production over the next 24 months without burning out, uh, can you think of a single highest leverage habit or system change that you’d point to them, uh, to, to succeed? Prospecting. It’s prospecting without a doubt. And, and, and prospecting is so heavily reliant on consistency every day. It’s a

[39:20] broken record in my office, to my team, to my agents prospecting. How many people did you touch today? How many people are you touching tomorrow? I have a couple of agents on my team. It’s not consistent. You know what they do? It’s in a vacuum twice a week. They’ll try to power dial. It doesn’t work. It’s, it’s, you know, I need to lose 10 pounds. I’m going to not eat for two days. Like it just doesn’t work. You need to find ways to maintain consistency with prospecting, email, text, call. You need to set up action plans. You need to make sure drip campaigns. You need to make sure you’re constantly touching and staying in front of your client base, your pipeline, manage your pipeline. Like it’s an investment, not a bunch of people in there with names and emails.

[40:01] It’s an investment and you need to nurture and manage that investment. It’s a, it’s a really good segue and a plug for the CRM that we have launched. We, I go through every morning. I go through my touch list. I’ve, I’ve only, I’m only doing about five a day. It’s not insane. It’s a consistency that adds up over time. Like you just said, and I am, but I’m going to, you know, my A’s and B’s I’m going and looking at their, you know, touching base with them in a meaningful way. We’re talking about their family. We’re talking about their occupation. This whole CRM is set up to be that Ford type relationship based marketing, prospecting thing. So then the next time that I reach out to this person again, I have all this data of their family, their occupation, their recreation, their dreams in there. And every time we update it, it gets stronger and smarter. And we have, we have prompts that will, that will come from that data. But I think it’s most important to, to be authentic. I think people can sense the fake AI messages, the things that are automated a little bit. There’s a place for things like, you know, your emails,

[41:20] et cetera. But I think when you’re looking at the relationship based marketing, talking to your sphere, they’re, they’re going to want to work with somebody that they know, like, and trust. And if they feel like it’s, they smell the fake AI, they’re probably not going to be as excited about it. But if you’re having a genuine conversation with the person, you’re asking them questions about things they care about their work, their family, et cetera. And then you remember things like their birthdays, all built into the CRM is where it becomes really powerful. And again, only five a day is all I’m really doing. And it, it is been awesome. So you can also check that out at the RAI agent.com. Mike, I wanted to ask you next about your golden nuggets for our listeners here. We, we’ve covered a ton already, but do you have any other specific golden nuggets for us?

[42:10] Building systems, you know, building systems so that you can, you know, vertically integrate, so you can help content, you know, build and sustain that volume. You know, the processes, the systems all the way across the board. Activity, not outcomes. We, a couple of years ago, we’re getting metrics in place for our agents and we were, you know, embarrassingly, I set more outcome oriented metrics and I scrapped it after a few months. And I realized like, as long as the activity is there, the outcome will follow like that. Good things will come. So, you know, maintaining that sort of consistency level from an activity standpoint, specifically, even with the prospecting, as I mentioned earlier, you know, that’s, what’s most important. Um, you know, yeah, I’d say, uh, the last thing is, is just don’t overcomplicate it. Uh, we tried out, you know, you know, obviously we run a robust, we have a robust operation, but it’s more of just everything we’ve been able to kind of consume, but each business that we run, you know, at its simplistic form is, is just that, you know, basic processes, uh, simple, you know, simple processes, simple follow-ups, um, you know,

[43:33] simple approaches, you know, there’s so much driven towards AI and there’s so much driven, you know, that there’s just like advanced technological, uh, CRMs and systems. And sometimes it can get a little bit overwhelming, um, and take away from what you’re good at and what you guys are trying to accomplish. So, um, you know, just maintaining simplicity, I think is very important and it’s a good way to also maintain good habits as well. Yeah. I think to your point, there’s a lot of shiny objects out there and, and, uh, you know, the dream of, of something taking care of stuff for you is, is always out there. But I think again, like, uh, in a relationship business, I think it’s really important to, to, you know, make sure that that relationship is, is maintained. Um, and yeah, we talked about AI, we, we were using it a bit and I mean, I, there’s another thing I’ve just, I, I’m not shy about scrapping something that’s not working. Um, it just seems so disingenuous, so forced. Um, I just didn’t see a lot of value being provided.

[44:35] So I scrapped the AI calls and texts and we went back to just, you know, fully, you know, my hope was that it could, you know, it could kind of, you know, help kind of fill in the gaps for where the agents are missing. I’d rather have a delayed response to be honest with you at this point. And it just felt like it was, there wasn’t any value it was providing, but shine it out. That’s interesting. Like I’ve thought about like having like a, you know, uh, a receptionist type thing where it’s an AI, but, but I wanted, I would want it to be, you know, honest where it’s like, you know, Hey, this is like an AI system. I’m going to help answer any questions I can. And I’m going to help set up an appointment with talking to a real person, like that kind of thing.

[45:14] Uh, but not pretending, you know what I mean? Not pretending to be like, this is Matthias Clymer, you know, like I’ve got 11 labs, um, set up, but I think I was most annoyed because it couldn’t say my last name correctly or how many ways I prompted it. The zoom group. That’s what it just kept saying. So we were already behind the eight ball at that point. Like there was just no way to fix it. You can’t fix the dialect with these things. So yeah, I don’t know. It would be, and these, these systems are going to get better, but, but you have to understand like the amount of noise in social media and all this stuff from, from AI now is so much that like, I think there’s just this bullshit sensor that like, as soon as you like sense that it’s not real, you’re like not interested anymore.

[45:57] And I think that’s what you have to be really careful about when you’re, when you’re experimenting with this kind of stuff is that like, it has to feel genuine. Like that’s what we want. We want genuine connection with people. Um, and I think that’s the thing that it’s not going to have. Would you ever have thought that the typical consumer would be relieved or it’d be refreshing to hear a call center in India as opposed to AI?

[46:22] That’s where we’re at right now. Yeah. Literally it’s to your point. You’re absolutely correct. Even in calls that aren’t AI, they’re just so on edge wondering, hold on, is this a computer that I’m chatting with? Yeah. I’ve heard it in some of our CRM calls with a couple of the agents and it’s like, Oh my God, there it’s like PTSD. No, we’ll go back. We’ll go to a call center in India and we’ll probably have better results like there. It’s just, it’s, it’s so scrutinized. Now there’s so much out there. It’s hard to decipher what’s legitimate. What’s not, um, you know, who’s actually, everybody’s an expert in it. Uh, you know, it’s there to use it, use it. It’s going to grow your business, but you don’t know where and how it’s just going to overwhelm you.

[47:04] Yeah. It can be really complicated. Um, some of these systems, um, Mike, what about a favorite book or a fundamental book that you think everybody should read? Um, like I’ve read a lot of the, you know, typical entrepreneurship books. Um, I started, I’ve been listening to a podcast on novations and so I got bored and I got, so I started reading zero to one. I think it’s like by Peter Feel, I’m probably a quarter of the way through. I really like it. Um, building a business, um, you know, kind of getting through some of the noise, honestly, some of it’s like getting through some of the technological noise as well. Um, you know, I, I highly recommend it if you’re, especially if you’re looking to start a business, have started it, you’re kind of at the infancy stage. Um, I think there’s a lot of value in terms of just, you know, helping, uh, understand what’s important and what’s really going to help you kind of scale, uh, replicating what works is a kind of a big theme in the book so far. So I’ve, uh, I’ve enjoyed it. Uh, next time we chat, I’ll let you know how, you know, how it feels. Yeah. That sounds, sounds, that sounds perfect.

[48:12] Um, and then if anybody is interested in, uh, you know, learning more about, uh, turnkey opportunities, whatever opportunities you provide social media, where can people find you? Uh, I mean, you can email me info at the azamgroup.com, uh, goes right to my inbox, but my, you know, my, uh, social media, azam Mike, um, you can see some of our content videos and you can just drop me a DM. Happy to chat. Awesome. Well, Mike, Hey, it’s been a pleasure talking to you today. Uh, this is, uh, this has been a great conversation. If you like this, um, definitely hit subscribe, uh, to this podcast, wherever you get it. Um, give us a review. If you have the time, as well, uh, we’re on YouTube, Spotify, Apple, every, uh, platform, pretty much that you can find it.

[48:57] Um, give, uh, Mike, uh, a follow over on his Instagram as well. Um, again, Mike, thanks so much. It’s been a pleasure. Uh, and I’m sure people got a lot of value out of this episode. I really appreciate it. Good to meet with you guys. Take care. Thanks for listening to the REI agent. If you enjoyed this episode, hit subscribe to catch new shows every week, visit REI agent.com for more content until next time. Keep building the life you want. All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.