March 13, 2024

JF3478: ‘Anything Is Possible’ — How to Get the Best Financing Terms by Building Relationships with Banks ft. JD Gray




JD Gray, president of Cadon Ridge Advisors, joins host Joe Cornwell on the Best Ever Show. In this episode, JD shares how he got started in real estate, including the importance of finding a great mentor and cutting his teeth on a value-add self-storage deal. He also discusses using debt and equity to scale into bigger projects, his direct-to-seller strategy for finding off-market deals, and building relationships with banks to get favorable financing terms.

JD Gray | Real Estate Background

  • President of Cadron Ridge Advisors LLC
  • Portfolio:
    • 400 single and multi-family rental units, storage units, recreational and residential land development.
  • Based in:  Conway, Arkansas
  • Say hi to him at: 
  • Best Ever Book: Traction by Gino Wickman

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Joe Cornwell (00:03.254)
Best ever listeners. Welcome to the best real estate investing advice ever show. I'm your host Joe Cornwell. And today I'm joined by JD Gray. JD is the president of Caden Ridge Advisors LLC. They are a flipping company, buy and hold. They do some land development, uh, kind of run the gamut on experience here. It's his first time on the show. So JD, welcome. And thank you so much for being with us today.

JD Gray (00:29.367)
Thank you, Joe. I appreciate being on here. It's been a great learning experience and enjoyed listening to the show. And it's just a great opportunity to be able to share just a little bit of what I've learned from the show and learned in life and learned through real estate.

Joe Cornwell (00:44.938)
Yeah, like I said, I mean, your bio here, you get a lot of experience doing a lot of different things in the real estate business. So I definitely wanna dive into all of that, but let's start with your background. What were you doing before you got into real estate? And then how did you get into real estate initially?

JD Gray (01:02.059)
Yeah, Joe. So right after college, didn't really know what I wanted to do. Didn't want to. I knew that it wanted to be something around like sports and, you know, potentially be an athletic director for college someday. So went to after graduated undergrad and went to get my master's in sports administration.

And just learned real quick that between that and then a job with the St. Louis Cardinals doing sales that to do to grow in that field we were going to have to move around quite a bit a lot of long hours and not necessarily a good return on investment for time. And so at the next job that I had there was a member of the board of the institution that I worked at that he had a lot of experience in real estate.

And so he was gracious enough to meet me multiple times at six in the morning to let me pick his brain and then eventually partner with me on my first deal with him. And that was in 2015. And so then bought our first house in 2017. And we just started with a little bit of money and a lot of grit and a lot of hands-on manual labor.

And so that was really how we got started and coming from the eight to five world and just wanted to find a way to get some financial freedom to be able to not do that and to provide income in different ways. So that's really the shortened version of how we started and where we came from and where we are today.

Joe Cornwell (02:50.358)
You know, it's funny, obviously on this show, I get to talk to a lot of investors and, you know, just my years in the business, I've networked with a lot of investors and you hear this common theme over and over and over. You know, a lot of people weren't happy in their career, didn't see a long-term future in it or didn't want to be doing that in 20 or 30 years. Same story that I have as my, you know, as my background. And that motivated them to kind of find something or look for something out there to hopefully change their life, obviously.

It sounds like that's the path you took and you know the journey that you're on. Take me back to that first deal. I know you said you found a mentor that ultimately became a partner. What was that first deal? What did you guys do?

JD Gray (03:34.599)
So that was a value add self storage facility. It was very low density around 60, 70 units, just a little bit outside of town. So where we both live. And so that one, we bought it. And then we added some, I believe two buildings there and then changed. There was a shop on site too. We turned that into climate controlled units.

And I got to cut my teeth on that. I was running the project and then with the builder and then also doing managing it. And that was really the value that I wanted to create with the mentor because I essentially just told him like, hey, let me use your balance sheet and then I'll go to work. I'll cut my teeth. I'll do everything.

You just let me use your balance sheet and pick up your phone if I've got any questions, but I'll do everything else because I want to learn and learn how to scale that. And so that was a great learning experience for me. And I would highly recommend anybody to, before you go do a deal to find a good mentor that has done it a lot, and then also to ask, ask the partner on a deal to where you can learn from them. Because like we, I still learn stuff every day, all day. And you know, if I don't, you don't know what you don't know. And it really helps to have somebody else who's done it before that can guide you along the way.

Joe Cornwell (05:03.39)
Yeah, and that's another great point. And it sounds like we have very similar backgrounds and journeys. So in my business, I'm still basically active as the kind of operational project manager, so to speak, on some of our large value add projects we do. And we focus on multifamily, but same thing with the people I've partnered with on joint ventures, predominantly they were capital partners who were helping raise the money for down payments and helping get secure loans and then I was the boots on the ground, so to speak.

So I totally resonate with that aspect of it and learning by doing and being the active role in the investment. Now with all of your experience, I mentioned in the intro, you have over 400 units you're still holding. I think I failed to mention you are investing primarily in Arkansas across the state. But what was your journey from that first deal with self storage?

How did you scale into doing multiple flips per year, large numbers, and continuing to buy and hold different assets?

JD Gray (06:07.303)
Yeah, so that first storage facility, I learned how to use debt and use equity off of projects to then scale and roll that in to use that to acquire more. So with that one, we had a little bit of equity and then I had a little bit of cash that I had just saved up and so started to look around at single-family homes and then to try to figure out like, okay, I know the worst place to be is on the sidelines. So let's go figure out the first one that we can find. And so I had a business partner with that entity. And so I still do on that, but on that first house, I saw it online. And then I actually happened to know the guy that was selling it. It was a for sale by owner called him. And I had actually done a little bit of working with him in my previous job.

And so he was like, hey, yeah, I'll sell this house. And then so I asked him to carry the, to owner finance the down payment portion of it. And so we went to the bank, borrowed 80% of it, and then he financed the remaining 20% over five years. And so we were able to cash flow it at that point. And so then after seeing that, cause that was in 2016, 2017, when we were looking at in structuring deals like that.

Back then the banks were a little less strict and more open to that type of financing. And so we ended up adding a couple more homes like that, and then also added a couple storage facilities like that to where the seller would carry a good chunk of the portion of the sales price and then the bank would take a first mortgage. So really in that time from going from one storage to, I would say we had five or six after probably a year or two. And then we scaled up. I think the single family really scaled up the slowest because it was kind of slow going and one or two at a time. And then we found, we shifted our mindset to saying, hey, we can, well, we live here. We're just gonna do something 10 minutes down the road.

Well, that's a very populous area. We have three colleges in that town. And so, well, are there other areas throughout the state that also have good job growth, that have colleges, that have pretty decent industry, have good median incomes? And so we looked at some other areas that were within a driving distance of that. And so we found one town about an hour away and then ended up putting together a good team of remodelers.

And we were closing on three or four a month. We would go in, fix them up, sell, or excuse me, rent them out and just kept on doing that for a period of probably in 2019, 2020. And then that's whenever we really started scaling up on that. And in turn, we ended up selling some of those and doing some 1031 exchanges into asset classes that we really wanted because we wanted in the residential space to have brick slab homes that were all built in 2000 or later.

And so we found places that we could get equity from in different markets and then held those, let that appreciate a little bit, sold those, did 1031 exchanges to really get the end asset class that we wanted. And then throughout that, we have our land development operation up in North Central Arkansas. It's around a pretty populous river area and that a lot of people go hiking and kayaking, canoeing, all that and there's a lot of investment going on around that area and so what we do there is we'll buy a big track of land and then you know a driveway up there isn't what you would imagine a driveway in a city it's a dirt road and people buy 10 acre tracks to go put cabins on and so 
we were pretty successful at that and that really created some of the capital that we reinvested in to grow the housing because we knew that was going to be one hit wonder money coming in and out and we wanted to invest that in something that created long-term cash flow.

Joe Cornwell (10:38.878)
All right. So there's a lot of things I want to pick apart there. Okay. So let's, let's go back to how you were finding these off market deals. Cause it sounds like you were buying a lot of these direct to seller. Is that correct?

JD Gray (10:50.183)
Yeah, we were buying a lot direct from seller and then we had, we just found a great team and we still work with them today that were, they were on boots on the ground in that area. And anytime that they heard a mumble of anybody wanting to sell, I, we would jump on it real quick and had, had good debt lined up to back that up.

Joe Cornwell (11:14.958)
Okay. So what channels are you using for the direct to seller?

JD Gray (11:22.679)
So that was, I know this sounds crazy, that was purely, we just had a couple that grew up in that town, knew everybody in that town, they were in real estate. One of them was a home inspector, the other one worked at the local college and knew everybody that had any type of real estate. And so what I would do would just, cause I feel like the power of the ask is very undervalued in today's day and time, because literally all you have to do is to call them and say, Hey, if you ever want to sell, I'm interested.

And find the asset class that you want. And then I feel like people will respond to that a little bit better than a, you know, than a postcard or an email or something like that. And so they were really good at that. And then I really handled the financing side of our business when we were growing that quickly. And so being able to have great relationships with bankers being able to have that financing set in place to be able to hit deadlines was very important on the back end of it. So then a reputation gets built to where, hey, they're buying this type of product and then we have people calling us wanting to sell.

Joe Cornwell (12:35.398)
Okay. So it sounds like it was mostly word of mouth and direct referrals, you know, from people who had relationships with potential sellers, um, which is an interesting strategy, you know, with the scale you've grown to, obviously that's, you know, um, challenging to have that many leads just from word of mouth and referrals. But so that's, that's really interesting. Um, so I want to, I want to go back to the bank thing here in a second, but

You mentioned a couple of times here, you had partners on certain deals and even, sounds like you kind of created ancillary businesses within your real estate, overall strategy. So tell me a little bit about the partners. Like how are you finding these partners? What, what makes a good partnership for you? Let's talk about that for a second.

JD Gray (13:20.595)
Yeah, so in the beginning I had one partner that we were just 50-50 on all the rental properties and then the rehabbing and all that and still are 50-50 on the vast majority of the portfolio. And so for him, we just had a, I had worked with him prior and so had a good relationship with him. And so we had similar mindsets, similar work ethic.

And that was something that kind of drew us together. I think as there's a big difference between, you know, having partners on passive investments versus having partners on active businesses. And I know it may sound a little different, but like if you're just gonna go have 10 rental properties and then you put cash in, they put cash in, boom. Like that's pretty simple. You make a little, a few hands-off decisions, but, as you scale a business, you need to have somebody that's got some business acumen behind that to it. And, um, and I know later on we'll talk about favorite books, but the, the visionary and integrator that's very critical, uh, in my opinion of, um, you know, from, uh, rocket fuel, my Gino Wickman, that you need to have those pieces of the pod.

And so for, for rental properties, um, that I've got partners on, that was really just a, hey, a good partner for me is that if you have some capital you want to deploy. And so I've got a project here. We're currently working on a deal right now. It's 42 houses all in one neighborhood and I'm working on a little creative seller financing on that. And so I've got some investors lined up on that. That is purely like, hey, you're going to get a statement every month, that type of investment put money in. We'll give you some updates on that.

But so that's what makes a good partner for that. From the flipping aspect and the other land development, I do have some of those projects that have passive investors like that, if you will. But from the actual nuts and bolts of the flipping, I've got a business partner that's got, he's got a big commercial painting company, has a lot of vendors that and subcontractors that he works with.

So that's the critical piece of the flipping operation is the quality control, the ability to have vendors, the ability to have subcontractors to show up because we all know that's a tough challenge that everybody's facing right now. And then to have the painting, the drywall, all that in-house and controllable, and then to have other vendors that works with that. That's the key to success on our business of the flipping is the finding the deal flow, getting good debt and then being able to turn those quickly and put out the best product in the marketplace.

Joe Cornwell (16:13.63)
Okay, and when you talked about seller financing, and yeah, I think you said as far back as 2016, you were doing seller financing deals. The market we're in today, seller financing, is back kind of the forefront of being a hot topic and I think through the last three or four years, it kind of went away for a while when rates were three, four percent, right? So tell me a little bit about why...

Are you having success with sellers? What is the motivation that you're seeing with sellers back then and today? Tell us a little bit about what you're finding on those types of deals that make it work.

JD Gray (16:55.335)
Yeah, so on this particular deal that I mentioned, the 42 houses that we're working on, I believe this seller, he had bought them a few years ago, like right before the market really started taking off. And so it's the weird spot that sellers are in to where the value is there, but the debt doesn't match the value. And so that's where we all have to go to the drawing board to figure out like, hey, how can we structure this deal to where...

The seller doesn't feel like they're leaving that much money on the table, but we also have something that can cashflow without having to inject 40 to 50% capital. And so that, that's where, um, that, that particular deal, you know, he's, he's providing a 0% interest rate, but we just back ended it with the, with the price being up and then, uh, matched what some of our, it would be a blend of some, uh, bank debt and then also with him carrying that. So we matched that to where.

We wanted our payment to be at and just said, hey, we went to the seller and said, hey, this is where we need to be at. So if we can make up this margin here, then we have a deal, but if not, then it's not gonna work.

Joe Cornwell (18:06.89)
Yeah. Yeah, that's a great point. I mean, I've done some seller financing, both as a seller and as a buyer. And it's, especially with when you have potential sellers who maybe aren't really in the business, you know, maybe they've owned a rental or two or inherited a rental or two and it's, they don't really understand it. You know, so a lot of times you get pushback because they really, they get confused, right? And when people are confused, they get scared. And when they're scared, they don't want to do the deal.

So, a lot of it as an investor is educating them on some of the upsides, some of the pros, some of the cons, why it's important to do it. Like you mentioned, hey, I can give you your price, but I need these terms. That's kind of a strategy I've used. You're going to get one or the other. When rates are 8%, you're probably not going to get all the price you want and all the terms you want because we got to try to make numbers work with 7%, 8% interest rates. That's a really good strategy there.

And then my last question on the things that we've discussed so far, how were you building relationships with banks? I know you mentioned that was one of your key roles in your partnerships, setting up relationships, getting good financing terms. Tell us a little bit about how you did that and why that's important.

JD Gray (19:21.543)
Yes, so really I did not jump fully full time, if you will, into real estate until the first part of 2022. And so I was working at a local title company for I believe around two, two and a half years. And then prior to that, I was at the local business college doing fundraising and business development in our community.

So I was interacting with bankers and business leaders of our community the whole time. And then I really scaled up the relationships with the title company, because my role, I was the manager. So I was responsible and was accountable for growth and to develop relationships with other realtors, lenders, anybody who was a customer of our title company. And so, and then, so that's how I was really able to grow my relationships with bankers. And then for them to see the product that we were delivering, see that we were doing what we were saying we were gonna do. And then also I had a reason to talk to them because they had a reason to answer my phone call.

And then we, the title company helped me open up extra doors to grow that portfolio because when we were scaling, we were probably borrowing from seven or eight different banks at one time and just throughout different deals just because whenever it's like, hey, we've got enough going on this bucket or that bucket. And so we would just, I'd work to figure out what the sweet spot of each bank was, get to know them and get to know that lender and then say, hey, well, we can give you X amount of volume at this.

And then I said, just tell me whenever y'all have had enough or when the loan committee says, hey, we need to slow down on that. And then I would just go to the next relationship that I had. And so some of those are still some of my best friends. And that was the other piece of it that was gained from that was not only friendships but also just the business acumen that because some lenders I don't think really understand. I think that their job is to underwrite and to loan money. But others, there's been two or three that I've worked with that I still consider some of my closest confidants that I think actually understand what we do and understand more than like, oh, hey, is this a one, two, five debt service? Sure, let's loan money on it. Like that's that they're actually giving some analytics and looking at our global cashflow and looking at yield and looking at interest rate risk and just looking at all those additional things. And I feel like I sometimes have an in-house financial advisor without having to cough up a salary for one at times.

Joe Cornwell (22:29.586)
Yeah, man, you made so many good points there that I want to talk about. But the key thing I want the audience to take from this is that you can do almost anything with the right bank relationship. And what I mean by that is, and what I mean by that is you can literally call a bank and say, I want to do this type of loan on this type of asset with this type of terms. And if you have the right relationship.

JD Gray (22:45.429)
100 percent.

Joe Cornwell (22:58.806)
You have the right balance sheet or like you said, access to a mentor or partner with one that could bring you in on a deal or you bring them in on a deal. The sky's the limit. I mean, really as creative as you can get mentally, if it makes sense to the bank and it's not outside of their risk profile, they can make it happen. So I just want people to understand that, that all this stuff you hear about on most podcasts or networking groups is like conventional loans, Fannie Freddie, maybe portfolio loans, or maybe commercial loan where they get a little creative or do construction lines of credits and things like that. But it's like there's a whole other world of loan types, loan options, creativity, lines of credit, unsecured lines of credit, all that stuff. But again, it all comes back to being reputable, building a relationship, building a track record, and really almost creating partnerships with the bank.

Because some of the high-level investors that I know, they can make one phone call and get a five, 10, $20 million deal or loan written on a deal, literally on a phone call. But that takes a lot of years of practice and building relationships to make that happen. But anyway, I want the audience to understand that is possible if you put in the effort and the time and build that track record.

JD Gray (24:19.667)
Yeah, I can't echo what you said enough that anything is possible if you have the great relationships with bankers and lenders. I mean, that's, and like you said, you have to have that and a yes to you may be a no to somebody else just because of who you are and what you've done in the relationship.

Joe Cornwell (24:41.57)
Yep. Okay. So my last question or last topic in your business, I want to spend some time on is how did you scale to, I think it was 30 or 40 flips a year or could have been higher than that. Did you tell me how many flips are you doing the last couple of years and how did you scale to that?

JD Gray (25:01.171)
Yeah, so this, if you had to sum all this up, I would say this literally started on a spam email that I got. And so I got some email about like, hey, here's a list of 65 houses in Arkansas. And this was, I'm wanting to say 20, either I think it was late or mid to late 2021. And I got this spam email and it had just all these houses. And so I started looking at it and I was like, okay, man, there's some spread, but these were all over the state. At that point, we had only been in one area, like right in our backyard, and then another area about an hour away. So we hadn't really spread out. And we're in central Arkansas, so we can get pretty much to all four corners within two and a half hours. So these were all over the state.

And so after I was looking, I found 10 of them that I thought, okay, we've got some decent enough spread on these. If we wanted to sell them, if we wanted to rent them, like we would not get hurt. So and they were all in the Western part of the state. So my business partner and I, we were like, hey, yeah, let's go look at them. And so I contacted the guy that had sent those to me and I just, I was expecting it to be just a bunch of mess.

And so I I called him and got it set up to go look at all of them and come to find out they were all USDA foreclosures that this hedge fund had bought and they were just marking them all up. So it was legit. And so anyways, we went and looked at all those and I was like, man, I think we got some opportunity here and my business partner and I agreed. And so I called our lender that we use quite a bit or one of them, and he said that, hey, that's a little bit out of our arena. So here's a bank that we have a good relationship in that area, so called him, got all those financed, got those closed. And so we put together a team and a system to go, we had one employee that all he did was go put scopes of work, go get utilities on, and then schedule subcontractors to go in.

JD Gray (27:21.631)
And so he was boots on the ground, went in and did all that and got it prepped for work. So we flew through those 10 pretty quick and we're like, okay, this is a scalable business because now we've got the boots on the ground that can do that. And now we just need consistent deal flow. And then I circumvented the hedge fund and got the contact at USDA and developed a good relationship with that contact and they had a consistent volume coming in and out of there and still do. And so that's where we get a good chunk of volume today. And so really it was just finding the volume and then finding the system and then implementing the system.

Then we're constantly refining that system. I do those now with a different partner with a different backend, but like that's, we are just constantly figuring out and refining like, okay, this is the type of home that sells better in this market. And then, so we recently have one now that we just finished up and it's a sub 1000 square foot home and it sold in four days. We had some pretty good spread on it, but there's a neighborhood of those. So I've got a group of local realtors that do cold calling for us and so I reached out to one of those and I said, hey, we just got one in this neighborhood. Can you go scrape that whole neighborhood for, either LLC owners or really any owners to see if anybody wants to sell? And so tomorrow I'm going to look at two more in that neighborhood. So we got a blend of buying from USDA, a blend of buying from banks. And then also I've got some folks that cold call on that.

So to scale up from 10 to however many, I believe around 80 or 90, probably in the last two or three years. And that has went from, we have to have good systems in place, have to have good quality control and to have the deal flow, but also to really just make sure that, because we have to hit on the inspection piece of it, because a lot, like all this stuff, it is as is, is as is gets. So typically that is something that I will go look at before we purchase, but I've recently started to do a little delegation on that to go look at that before we close.

And that's been pretty fruitful just from a time saving to try to delegate and elevate to scale up, because that's been 
that's been one little bit of a hiccup. It's like, well, how do I find time to go over here and be more efficient with my time? And so I've got a vendor that I've trained and took on multiple trips to say, hey, this is what we look for. These are the big ticket things. And if you intake lots of pictures, send us and videos and all that. And so, cause that's a good ROI on my time. And that's also good for them too. So with that, we're trying to use that to scale up even more.

Joe Cornwell (30:41.514)
Well, that's incredible, man. You've had great success the last 10 years or so. Wealth and knowledge of a lot of various types of real estate investing. So I know we talked in the intro a little bit. You are planning to attend the best server conference this year, correct?

JD Gray (31:02.039)
Yes, yeah, we're making plans to attend that for the first time. Some fellow real estate investors in town have attended before and spoke very highly of that, so we're excited about making that.

Joe Cornwell (31:13.63)
Awesome, well, I can't wait to see you there as well. You know, when you do real estate meetups, networking, any other conferences you may have been to, I mean, give me some of your thoughts on the benefits for you, what's your motivation for doing those things.

JD Gray (31:31.635)
Yeah, so we've been to a couple of them. One of them is we went to an Atlanta, I think it's from Disrupt Equity. And so that was great because we had a local group of us, I think there were around seven or eight of us that went. And so it was a good local bonding time for us to go, but also to just learn about what other people are doing. And so I think that's extremely valuable and not only to do it through the podcast of listening, but also to meet people in person.

And then to be able to have that contact with them, the face to the name, to be able to call up and say, hey, oh, this is what you're doing. Can you give me a little piece of advice on how to replicate that here? Because I think that some people on the outside looking in may say, oh, well, this is a competition. You're competing against me. And it's like, man, we're all in this together. And there are plenty of deals to go around for everybody, especially throughout the United States.

So I'm always happy to help others. And I think that's share with what little I do know. And I feel like that that's information that's gleaned from also going to those conferences and having those meetups. Because at the end of the day, I just want to grow and learn from other people and then figure out bits and pieces that other people may be doing in their business that we could set up in our business and implement to make us better.

Joe Cornwell (33:00.158)
Yeah, I couldn't agree more. You know, I've been to a lot of meetups and conferences. And for me, it's always the networking. That's my favorite part. I love getting to meet new people. Obviously, the selfish part of that is it certainly has helped me make millions of dollars and will continue to help me make millions of dollars in the years to come. And I couldn't have done that without meeting the right people in the right time. So for anyone who has not bought their ticket yet, Best Ever Conference is in Salt Lake City this year, April 9th through the 12th. You can get tickets at best ever and we also have a coupon right now 15% off if you use the code connect that's CONNECT and you can get your tickets today I know there's still a handful left so I hope to see the rest of the audience there and you as well.

Joe Cornwell (33:50.695)
Are you ready to transition to the best ever lighting round?

JD Gray (33:53.399)
Yeah, let's do it.

Joe Cornwell (33:55.486)
All right, give me your best ever book recommendation.

JD Gray (33:59.243)
So I alluded a little bit to it earlier, but both Attraction and Rocket Fuel by Gino Wickman, we, in this past year, we had hired a business coach to go through our business with us. And the focus of that was traction. And so we went through that weekly. And so it was very helpful to figure out what parts of our business work, what other ancillary businesses do we need to cut.

And what do we need to spend most of our time on that provides the highest ROI for us? And then what are the things that we need to delegate out to others? And how can we empower our employees to take on their job, to take that off of us and empower them to do their job better? And so those two books, and then with rocket fuel, I think it's critical to have, if you're a visionary, to have a great integrator on the back end, because you have to have implementation, you have to have quality control, you have to have oversight of that, especially in the flipping, uh, game.

And then also repair, repairing, maintenance on your rentals. And that type of stuff can eat your lunch. If you don't have a good pulse on that and you don't, um, watch that. So, uh, just in any type of real estate, I would say that if you have a partner, you need to make sure you're lined up adequately on that and that you have the same goals and that they're in the right seat on the bus and not in the wrong seat on the bus.

Joe Cornwell (35:30.434)
Give me your best ever way you like to give back.

JD Gray (35:33.555)
Yeah, so we attend a local church here in Conway. And so we like giving back through that. And then also from the real estate side of things, I've got quite a few younger investors that we have sold property to. We've owned our finance too to help them get started because I feel like that's the best way through the real estate channel to give back because that's in a way how I got started. And that's that seems to make the most sense for us, but also for them to get an opportunity to get started. And I enjoy helping others in any way that I can. And that's, I think the financial freedom, but also just the life that we've created for hopefully my family and many generations to come in our family has, I see what real states have done for that for me through that and that's something that I hope others will take that opportunity if it's presented to them.

Joe Cornwell (36:42.062)
And give me a mistake you made from one of your deals and the lesson you learned from it.

JD Gray (36:47.111)
Yeah, so the one that is apparent to me that we made a mistake on was a house with basements or a basement. So we don't typically have a lot of those in Arkansas and there's a lot of things that can go wrong with those. And there was one house that we sold that I remember one time we were going to look at it and hadn't been there in a little bit and came and looked at and there was two feet of water in the basement and you're like, how did that get there? And so I guess the end result of that lesson was, find a box and stay in your box. Don't get out of your box unless you've got somebody that has significant knowledge of being outside of your box. And so that's our box of houses that we flip and buy don't include basements anymore, so.

Joe Cornwell (37:42.454)
Makes sense. And yeah, it's interesting that a lot of parts of the country don't have basements, you know, here in Cincinnati, Ohio, it's like every house has a basement. So it's pretty, or 90% of them anyway. So yeah, it's pretty interesting how that changes throughout the country. So on that deal, did you lose money, break even, make less than you thought? How did it go?

JD Gray (38:01.303)
So that one we actually broke even on, I'm a firm, firm believer that you make your money on the buy. All of us, yeah, we make it rehab something faster or do it cheaper or use a cheaper product, but like you make your money on the purchase and even if you have the cheapest labor on the backend, that doesn't always, that's not where you make your money. So I...

On the front end of all of our deals, I really try to negotiate to get us the best price to shield us from having the opportunities that where even if the worst thing happens, then we still don't, if we do take a loss, it's a very minimal loss if we do. So I don't know that we've had but maybe one or two of those in nine years, but it's diligence and then trying to, as time has went along to whittle down that box and then to make sure that we don't really deviate outside of that box.

Joe Cornwell (39:06.094)
Makes sense. And where can people connect with you and learn more about what you're up to?

JD Gray (39:11.283)
Yeah, so I'm on LinkedIn and then also on Facebook. I don't really have any Instagram or any TikToks or anything, but just feel free to shoot me a message on either one of those, and I'd be glad to visit with anybody about anything. So.

Joe Cornwell (39:27.278)
Well, JD, I really appreciate you joining us today. Like I said, you've been a wealth of knowledge kind of running the gambit of every type of residential real estate. So I appreciate you sharing all of that with us and coming on the show today.

JD Gray (39:38.923)
All right, thanks, Joe. Appreciate it. It's been a pleasure being on here and thank you for having me and I really appreciate it.

Joe Cornwell (39:46.05)
Best ever listeners, thank you so much for tuning in. If you enjoyed this episode, be sure to leave us a five star review and share this episode with someone who may benefit from it. Remember to follow and subscribe to our podcast so you don't miss anything and have a best ever day.

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