In this episode, I talk with Phillip Thai.
Phillip is a veteran and former software engineer who quit his job in 2021 to invest in real estate full time.
He has flipped and wholesaled over 130 properties.
Phillip also owns 13 single-family rentals and is a partner in a 41-unit multifamily property.
We discuss how he started investing in real estate part-time and eventually quit his job to invest full time.
He will share the right mindset needed to succeed.
Whether you’re a seasoned professional or a budding entrepreneur, this video offers invaluable insights into the world of real estate and the potential it holds for a successful career transition.
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Transcript:
Phillip Thai 00:00
Going past your own comfort zone definitely pushes you as an individual makes you grow in tremendous ways that you may not be able to see it today, but in the future, you can look back on it like well, I did all of that.
Chris Bounds 00:12
In this episode I talk with Phillip Thai dove is a veteran and former software engineer who quit his job in 2021 to invest in real estate full time, he’s flipped and wholesaled over 130 properties. He also owns 13 Single Family rentals, and is a partner in a 41 unit multifamily property, we discuss how he started investing in real estate part time, and eventually he was able to quit his job to invest in real estate full time, we dive deep into the mindset needed to succeed and the limitations that we put on ourselves. When we open up those limitations, were really able to grow. I hope you enjoy this episode. Now on to the show. How you doing Phillip?
Phillip Thai 00:55
Doing good, man, how are you, Chris?
Chris Bounds 00:57
Great, great. Happy Friday, thanks for coming on. Joy to chat with you a few weeks ago on on what you’re doing. So really excited to break down your business and some of your beginnings on this show. So thanks for coming on. And I want to really start this off, because your transition in real estate is a kind of a path that most people take, because it is a hard business unless you’re just going straight in and out of college or at school. And working for a company or being an agent or joining a team. It’s difficult to just jump in full time. You went the part where you’re working part time for a little while, and then you finally went full time. So I’m starting off take me back to where you were working this part time. What sparked real estate? In your in your background as a you’re like software, software engineering?
Phillip Thai 01:54
Yeah, that’s correct risk. So yeah, I’ll take you guys back to when the the inception moment happened. So I was getting out of the military and looking for new work and as a parachute rigger jump out of planes, very exciting stuff and pass parachutes. So it’s one time so I was in the Marine Corps, I said, when I got out, you know, that Job didn’t really transition very well to the civilian world. And so I went to a technical college ECPI. And like nothing special, I wanted to fast track my career to getting a paying job. So I’d studied software engineering, majored in that and while I was in college, I also got a internship to do all that stuff. And so once I graduated, that internship became to a full time position. And had a lot of fun in that job. It was never boring, because there’s always new problems to solve. So I really kind of enjoyed that aspect of that job.
But once I became full time, I kind of one morning, I was driving into work, I went to my my cubicle, and I had just an epiphany that hit me. Like, like a, like a, like a freight train. And what occurred to me was like, I didn’t want to be working for somebody else, the next 20 3040 years or however long that might be and solving their problems making them more of a wealthy individuals while I still still am doing the same thing, essentially, now there are things that you can do to climb the corporate ladder, I’m not saying against it, but for me, it just wasn’t what you know, drove me didn’t have like any passion in doing it after just realizing that. And so once I kind of got that epiphany, I sort of do a lot of Googling, like like every software engineer does out there solving the problem.
And so I found three different categories that are most likely recession proof in my mind, and those are like, you know, food, you know, we’re never gonna run out are never gonna run out because you only want to eat clothing, we all need to be warmth. Stay warm during the winters or whatever season you’re in. And real estate, we all need a place to stay. So I figured that I’m a horrible cook. So that was out the window for melons. horrible cook today still, and in fashion. I’m a horrible like, I guess I have a horrible I have design, so I’m not really good at making the clothes or even know where to start. And my, my mom, she’s a single mom. She actually has a couple of rental properties herself, but never did so well.
And then she would always tell me she would always lose money and whatnot every single year. Excuse me. And so I figured that would be a good place to start because I have some sort Word of, I guess, foundation, when it came to real estate, my mom kind of already did it already, so I can kind of leverage her knowledge. And so one thing led to another, I did a couple of Google searches. And I came across fortune builder at the time, me not knowing what Fortran builder was, I just when I go, I went ahead and went to their free seminars that are free seminar went to like $100 ticket, the next seminar, and then the next seminar was the upsell of like, you know, their their premier package of like, 30 to $40,000 of education.
Now, at the time, it was a very scary moment for me to put that much money into something that I had no idea that could or could not work. But after the day one seminar, my family and I went back, and we kind of discussed it, and I gave it a very good deep thought. And what came to my mind when making that purchase was I could be going down the same path that I’m currently doing now. And I could always wonder, Should I have bought that educational package? Yeah. Right. And it’s it failed. So what I can always go back to the same thing that I was that I’m currently doing now, no biggie. And if I did buy the package, what would my life look like? How would I grow? And what this actually helped me to my end goal?
Chris Bounds 06:24
So how old were you at this time?
Phillip Thai 06:27
I was 26 years old. Okay, okay. Yeah, I was I was young right now, I’m 33. And so that that whole, I guess, that decision tree, put my decision in a very clear perspective. And so I went ahead and bit the bullet. And I paid like, think like 35, or $40,000, for education course. But you sweat when you press that button, oh, I was actually sweating bullets, I actually didn’t have all that money in my account, I had to put a small down payment on like, like $1,000, and then put the rest on credit cards. So I was literally looking at a pretty large sum of debt on credit cards, which is probably not a wise thing to do. But if you do it correctly, I opened a new credit card, and I kind of did the zero interest for like, certain amount of months.
And then that way that gave me some breathing room to kind of work and then pay off and then also study at the same time. And then making those strives to become better and better every day. Fortune Builders in online course, with a very extensive amount of resource resources that explained the business from A to Z, more or less. And so that whole first year, it was a huge grind, I would go to work. And then after work, I would come back home and study. And then that that’s pretty much my whole week. But in between those study periods, if there were days that I could go to networking events, I would definitely go there like REI meetup groups, because that was part of the curriculum, they would tell us to go out meet network, to put yourself out there. And really just to build as much individual like minded people that you know, in your network, so you can create a business together.
Now, for me, I’m actually in an introvert, I never like go into networking groups, I kind of like I like I’m very fearful of them sometimes, because it’s just like a lot to take in. And so going past your own comfort zone definitely pushes you, as an individual makes you grow in tremendous ways that you may not be able to see it today. But in the future, you can look back on it like well, I did all of that, because of my, my why like bold and, and I believe that all of that your y will drive you like I’m sure everybody here knows, like, y will drive a lot of individuals to success and, and to thrive.
Chris Bounds 09:10
Yeah, yeah. And I was in a very similar situation. So in college, you know, I paid for my first Google recourse if you will. And I didn’t have a job. I didn’t have a credit card. Because you and your college and it was 1500 bucks. Which to me like, I mean, that’s it was like 30,000 Yeah, at that time in my life. And there was I wrestled with it but yeah, art and at that point, it was like, Oh, crap, I just gotta believe everything he says and go out there and grind and took three months. I finally got my first deal. paid off the card and then some so Well, that’s good. Yeah. And then I’ve done the 30,000 join multiple masterminds over the years, so pay well but 30,000 and so on.
It’s not that it’s a lot or it’s not allied ultimately, it’s what are you going to make out of it? And then, of course, just quick disclosure, like, do your due diligence on these organizations that you’re wanting to join. There’s, there’s, there’s many good ones. There’s also a lot of them out there that they’re okay taking your money, even if it’s not right for you, or if they’re not able to fulfill what they’re promising. But I think the point is, you were at a point in your life where you knew the current path you were on isn’t the path you wanted to continue on forever? So you had to find another way. And you you did find another way? At that point, it was, Okay. How do I get into this? And what do I need to do to start shifting tracks and get educated was the first thing? Yeah, that’s what you’re doing at that point, right?
Phillip Thai 10:55
Most definitely. Um, and it wasn’t as easy as it was, for you for three months, it took me a whole year to get my first deal. And there were nights that I was doubting my own decisions. And that’s like, where a lot of I mean, looking back on it now. It’s funny that your mind tells you so many stories that I wasn’t aware of seeing. So like, if I had to tell a person that started today or my own self, what to look out for is yourself, because you are your worst enemy. And you can sabotage those those thoughts that go through your head, if you’re not aware of those thoughts, those stories, they can rule your life. And so I would definitely
Chris Bounds 11:50
start you start to question the line of obsession or delusion. Yeah, exactly. Like, that blurry line, like, where does it? Where does one end? And the other began? Yeah, I know that.
Phillip Thai 12:04
Yeah. I think everybody has it as an entrepreneur. And also just, I mean, as humans too, as well. So like, kind of how I deal with it today. I write in, I write them down. I write these these, these fictitious stories down and I and I observed them I look at them, I’m like, is this real? Or is this fake? And if it’s fake, I just kind of laugh at it. Because like, you know, I had that thought in my head. And it was like, owning me.
Chris Bounds 12:31
It was that something you started doing? I remember reading something like that in a book. And it did recommend writing them down and also recommended saying it out loud. recording it and playing it back.
Phillip Thai 12:43
Oh, I don’t do it like that. I actually have a spreadsheet. I write down like, where it happened, like location, how it got triggered. So like, like, what caused it? What time? What, what I was doing pretty much and there’s your engineer blood coming out? Yeah. Yeah. And the actual story that it that I know, my brain facilitated. And I just take a look at it. And I’m just like, yeah, that’s not real. So it kind of dismisses it, and it all kind of advantages away.
Chris Bounds 13:17
Yeah, that’s, that’s good, I think was David Goggins who said, he plays it back. So you can hear and I could be wrong. It could be someone else. But he plays it back, just so you can hear the bullshit story that you try to sell it tell yourself because sometimes here because we all hear it from other people. Yeah. And then we’re like, Come on, man. Like, you can totally do this. Yeah, but for ourselves.
Phillip Thai 13:39
It’s harder. Yeah. Yeah, I think it is David Goggins. I think that you’re correct. On that one, I did read his new book. And that’s part of his whole little mantra, or his little ethos, which is just an amazing way to follow. I mean, honestly. So I that’s like, one of my biggest learning lessons as I gone through my entrepreneurial journey. And, I mean, people like higher levels, they, they harp on mindset, but like, I guess, as a person that’s starting, you don’t see how valuable the mindset is, for your success, because maybe you’re starting out and you all you’re worried about is like making income because that’s what you need to do for your family or for whatever. But the mindset is, I think, more important than that, because that sets you up to make the big money. It’s 100%
Chris Bounds 14:31
More important, it’s like you have a framework of knowledge. And that’s your limitation like that this as far as you’re gonna be able to grow. And only when you can expand, expand that framework. Do you begin to start breaking boundaries or previously self imposed boundaries? Tony Robbins kind of helped me or is continue to as I listen to him and go to events with some of those, but It’s It’s crazy how much you here’s a good quote. I forget where it came. I think Keith Cunningham said that video in case it was living hell would be getting the end of your life. And God saying, Hey, this is how you could have lived. But this is how you chose like, this is this is what I had envisioned for you. This is what’s happened. Like, like, you really want that conversation.
Phillip Thai 15:34
Yeah, I know.
Chris Bounds 15:37
So, what was the point where you decided, hey, it’s time to give this a full go like, we’re, we’re done with the Gob thing.
Phillip Thai 15:45
Yeah. So, um, so kind of fast forward. After the first year, like, I got my first deal. And then like, I went at five deals pretty much.
Chris Bounds 15:56
Actually. Yeah, let’s go back there. Yeah, it’s took a year right to get that first deal.
Phillip Thai 16:00
Took me a first year of just networking, grinding studying late nights.
Chris Bounds 16:06
I was impatient. Yeah, like, well, what marketing source?
Phillip Thai 16:10
That’s the thing like I was so scattered brain that I was like, doing half assed marketing. I was like, like sending mailers, they all fail, because I didn’t do multiple rounds of mailers. And I didn’t do follow up. I would the only the only marketing thing that I had was like Craigslist bandit signs and going to networking groups, because I was literally to spend my last like 40k pretty much and I’m trying to pay off this debt. So I was doing everything else that I could to generate leads. And what really got me my first deal was networking.
I networked with, you know, local meetup, Ria groups, my own fortune builder group that I actually bought into. And so a deal passed another sporting builder student sent me into that they didn’t want it was a full gut rehab. It’s probably not the first deal that I would recommend anybody because it was it was a vacant shell. It was built in 1900. It had no roof. It was a fire damaged property. Not not a good recommendation. That’s
Chris Bounds 17:23
quite a learning experience. Yeah.
Phillip Thai 17:27
I literally everything that happened to this property, like, like everything that could go wrong, went wrong on this property, and I barely made it out. I broke even because the market saved me.
Chris Bounds 17:40
So you broke even in a very risky, dangerous situation. But on the plus side, the knowledge that you gain that you can’t learn in books, like exactly, there’s, there’s just no way any mastermind program or a course or whatever can teach you what you just went through. That’s the that’s the street knowledge. So that is vastly more valuable than everything else you did before. Wow. risky and you do have to be careful, those kind of things. You came out broke even. But now going forward, how long did it take you to get deal number two.
Phillip Thai 18:16
So your number two came like, like, as soon as I got that deal, maybe a month later. So I was like, a year to get deal number 130 days getting your deal number two. And then another deal came after and another came after within within the span of like another three months? I got three more deals,
Chris Bounds 18:36
how much did that you attribute to confidence?
Phillip Thai 18:41
Um, I wouldn’t say well, confidence did contribute a little bit to it because of the knowledge that I spent day in and day out learning. But it was,
Chris Bounds 18:56
yeah, I mean, in your ability to analyze a deal and then also translate that into sales negotiation conversations.
Phillip Thai 19:03
Yeah. But all these deals were just were wholesale deals, too. Yeah, so these are these weren’t like deals that I’ve done direct seller to?
Chris Bounds 19:13
Did you feel like like before deal number one, were you pitching other deals? And you just didn’t get them? Or do you roll in on your pitching other deals? It’s just maybe you were being ultra conservative because you were scared.
Phillip Thai 19:29
That was part of it too, as well. But I think the major part of it was that I didn’t have good negotiation and scale us and skills with the seller and I was also very petrified to talk to any sellers, then. Yeah,
Chris Bounds 19:45
so um, you’re now you’re dealing with wholesalers, which, obviously a much different conversation. But I you know, until it’s the real estate agents to like when they get the first client or whether your first flip or wholesale deal, it’s just it does take longer to get that first one, but you always find the deal number to three or four, it comes much faster because now you got a little confidence, whether it’s obvious or not, that does permeate, but you also have the experienced transaction, you know a little bit about what’s going on. You’re not a pro yet, but you’re starting to get the hang of it. And that’s how a little poem, it’s funny how that works.
Phillip Thai 20:24
That’s very true, that you make a really good point. And that kind of like, like looking back on it. Now, that kind of was what’s happening, I’ve got a little more confidence to build up like it kind of snowball effect. And so, you know, at the, at the time, I had like five renovations going on one time.
Chris Bounds 20:45
I was saying for for new investors. Yeah, it’s
Phillip Thai 20:49
insane. In three of those out of the five are full guts, which I do not recommend. And then a full time job on top of that. So I was literally like a maniac at work. I was like, trying to get all my work done as a software engineer, and those are quality of sleep. And I was trying to maximize every break I had every everything that I had as far as timewise. And eventually, they got me fired.
Chris Bounds 21:20
Boss saw you slip. And I was like, hey, look, you gotta make a choice here. Or he’s like, now you’re out.
Phillip Thai 21:25
Yeah, he pretty much. My my current job I bought my first shot fired me. And so and a lot of people would freak out, right, but I had so many things in the fire that I didn’t have time to worry about getting another job. And so I went ahead and just finished the renovation, I think it was a blessing in disguise too. And then that helped me finish the other renovations, and then roughly about the third renovation, I started to look for another job.
And I learned another software engineering job at this quarry aggregation. They sell rocks for like gravel for roads, which is a huge industry that did not know about its luck companies. And they’re a billion dollar family company that’s been around for over 100 years, which is just here in Virginia and North Carolina and Georgia, roughly. And they make about $1.5 million a day just selling gravel, which is insane. Yeah, some rocks dirt. Yeah, rock. It’s insane.
Chris Bounds 22:42
Hey, kids, like not all business has to be sexy, like, you say exactly. Rocks and make a deal. Yeah.
Phillip Thai 22:48
I had a, I had a mind blowing epiphany or experience with like, just walking through their real estate and like just, they would have a in their headquarters, they would have like a TV saying how much money they make every hour is just insane. So I took a little break after those five renovation because a little bit burnt out. And then I kind of reassess my business at that time. And I found that, you know, like everybody else in the real estate industry deal flow, it was like my, my crux, like, where I have the most weakness and, and so, you know, that led me to Google again.
And so I ended up finding pace Morbi and the sub two group, and I went ahead and joined another mentorship. And the key lesson here is that even though you join one, you know, mentorship group, you shouldn’t stick, you shouldn’t always just be comfort or be you know, stagnant in that one group, you should always go out and, you know, continue to build your network and continue to grow as an individual and gain more knowledge because it helps you become a better entrepreneur becomes
Chris Bounds 24:06
typically have their own personality. And yeah, I mean, one, they can be very niche, they’re not all really niche, but they can be and regardless, they’re gonna have their own culture. So they’re gonna have their own conversation piece and the, if you will, so getting outside of that is going to help expand growth. At some point, you’ll almost always outgrow a certain organization, or at least, you’ll reap some type of some point of limited returns.
Phillip Thai 24:40
All right, for our group. You mostly will and not say anything bad about Fortune Builders, just like that group. It wasn’t a very cohesive, it wasn’t like a Go Giver group, per se. It’s kind of like all for your own kind of deal. I’m whereas paces group, I have experienced the totally opposite of that, where everybody’s all about helping each other and help each other grow and expand and pace more basis, the person that is always giving to his students, and I’ve never met a mentor like that, ever. And he’s still giving, he’s giving more value than what I gave him. So. So with that new mentorship group, I actually found my next business partner. And he took me from zero rentals to pretty much 15 rentals in a matter of over two years, growing my net worth two significantly more than what it was before.
Chris Bounds 25:41
Did you want rentals before that moment? Or is it something that he sparked in you like, hey, look, yeah, I mean, I started accumulating rentals.
Phillip Thai 25:52
No, actually, I’ve always wanted rentals, but I didn’t have the, the knowledge or the money capital to acquire them, or the actual other knowledge of like buying rentals subject to Yeah, which is assuming was more it’s
Chris Bounds 26:06
really is now not money, it’s knowledge is knowledge. And I really wanna stress this point, because when I was reading your profile, that made me smile, because you see a lot of wholesalers and flippers, like, they could do 100 200 500. And they don’t really own anything. And that’s no different from a real estate agent that has done 1000 transactions, and the only home that they own is their own personal residence, or Oregon a job.
And the only asset you own is your 401 K, nothing wrong with them, it’s just gonna be really, really slow and difficult to build wealth. And at the end, the day, once you stop working, your W job income stops, you stop working with clients, your commission goes to zero, you stop wholesaling, income, stop, stop flipping income stops, stop buying rentals, while you still kind of have all the other rentals you bought. It’s not it’s not like 100% passive, like, like some people sell it as, but it is wealth building. And that is on your balance sheet. And that doesn’t look good if you treat if you run your business. Right,
Phillip Thai 27:14
exactly. So that’s always been the goal because I’ve when I was 26, kind of circling back in that age, I set a very ambitious goal at the time that I thought I wanted to become financially free by 35, meaning I want the passive income that is coming in every single month to cover my expenses. So I don’t have to worry about finances. But furthermore, I wanted to start a family by 35. And so I get the spin the time that I never got remind for my family, my parents, onto my children.
So I actually want to spend all the moments I that I have with my with my children. So I can raise them so I can become a good father, the best friend or whatever they need me to be. So that was my my driving why? on why I even did all this in the beginning. So that I think that why I’m a firm believer of that, why would drive you through some of the darkest times of your entrepreneur career that you will face?
Chris Bounds 28:18
Well, 100% or percent? Yeah, homies. Yeah, the other day real estate’s fun, sexy, exciting.
Phillip Thai 28:26
But having budget
Chris Bounds 28:29
overruns on a gut house, there’s like $1,000 in the bank account, but you still owe another 30 And then you gotta wait 90 days to sell it or whatever. Yada yada yada pandemic evictions like you name it. Buyer cancellations, some other wholesalers since shanken, your deal? Offering an extra 1000 bucks, all kinds of stuff. That stress stressful. But the why a big enough why in my opinion, y cannot be money has to be what is the money represent? It has to be an emotional, like something really, really emotional to you. That gets you motivated and energized enough to wake up at 5am and start dealing with all these problems.
Phillip Thai 29:21
Yeah. So that that that’s one thing that I definitely recommend to people and so um, so just kind of fast forward along with my story. Once I joined sub 220 around 2021 2020 or 2020 to 2021 my new partner and I started just doing a bunch of fix and flip because that was the time to like literally fix and flip because the market was just exploding interest rates were just, you know, down down down because the recession and so right around this time, I was still a my full time job. lovestone And I was making great money, six figures, easy job. And I am doing flipping and fixing the side and after a few fix and flips, I see my bank account reflect my actual w two account. And after one flip on this one flip I made like $60,000 I was like, Yeah,
Chris Bounds 30:26
I was saying I was at the job.
Phillip Thai 30:29
Yeah, I was like, at this time was like, probably at least two to three years at this or probably, yeah, two years at this new job roughly a year and a half to two years. And I was looking at like, my net wages as a WT worker, I was like making like $40,000 At this time, like, Dude, what the hell am I doing? So after like, the next two flips, I put in my my resignations to the job. And the funny thing is, this wasn’t really what I wasn’t vision, envisioning what I was envisioning and how I quit my job was passive income will exceed my w two. But in this case, I had such a large lump sum of money in my account, that I was confident enough to have that lump sum build me enough runway of just income, up to where I could quit my job and work off that money and then still build off on that.
Chris Bounds 31:31
Yeah, that’s similar to my story. We had, um, I had a very comfortable job. Comfort is the enemy of goods, the enemy of great, comfortable as the enemy of being great and I was comfortable, unfortunately, for far too long worked at home online sales, which gave me the flexibility to do real estate on the side, that was a blessing. But when they cut my hat pay in half, oh, and and basically said, hey, look, you get a go all salary, which was low, or go 100% commission sales, which I had graduated from to get where I was at, I’m like, and then on the side, we just sold two rentals for six figures, a lot of them within a couple months of each other. And you start bouncing that, hey, this has been good, but I think I think I’m ready to go off on my own now. Did you get a little bit of enjoyment out of that? Or are you a little scared handing that in?
Phillip Thai 32:40
It was it was a an emotional rollercoaster, it was a bit of both. Right? It was like excitement, but also fear. Because like, this is all I’ve kind of ever known. Yes, kind of what I’ve always been taught get a job. I’m like, okay, but now I’m like, okay, but But it’s good to quit because I want this money. I can I can do both, you know, so
Chris Bounds 33:01
and you’ve got a good proof of concept, showing, hey, I’ve got the money. But I’ve also proven the ability to generate it. Yeah. So you got the ability to make more money party, you quit your job. And you have rentals at this point.
Phillip Thai 33:18
I do. So I quit my job. It was July 24 2021. And after that, it was just, you know, balls to the walls pretty much. We did about 20, probably 20 Plus flips that year, made a great amount of income. Then after that whole boom of interest rates, it shot back up, we started to switch our model into wholesaling virtually. And so we were just doing that with my team. And we were doing roughly about 15 All at the 30 deals a month in any given month, depending on what areas we’re targeting. We target Virginia, North Carolina, South Carolina, Georgia, Ohio, Pennsylvania, and then a little bit of Florida as well. So I mean, my journey is quite I guess interesting per se and now you know I own 15 rentals. Half of them are Airbnb ease. The other half are long term tenants. We own one commercial building. Well we have triple net lease, which is like the greatest thing on earth. I love the commercial side of things because you don’t have to deal with any toilets or any emotional problems.
Chris Bounds 34:44
Is it the 41 unit you mentioned?
Phillip Thai 34:46
No that’s actually a syndication am a part of that’s in Buxton, North Carolina. This this commercial unit is in where I reside in Richmond, Virginia. It’s a kind of a three unit kind of deal and the The tenant pays on time all the time. And he does all those are truly
Chris Bounds 35:03
passive, like rental properties. They’re sold as passive, but really, they’re just long term wealth building plays, like they’re amazing Wealth Generators. But for passive income, unless you got like, 100 of them, it’s, it’s not really passive, because not 100 $200 a month, it’s not going to Yeah, much for you. And that’s 100 to $200 a month, if you buy it, right, and you’re s going for vacancy repairs and CAPEX. So exactly. But yeah, triple net leases, like, yeah, that’s passive. Yeah. I have no experience in it. It’s very interesting. But yeah, it’s definitely passive when you just own the land. They’re renting everything from you.
Phillip Thai 35:46
It’s amazing. It truly is a blessing, we actually came across this particular commercial deal, where the funny enough it was a distressed seller from a different wholesaler that gave us the lead because they didn’t know how to deal with it, because they’re just dealing in residential. And we bought the property for $900,000. And the value of the seller. She didn’t change her value for like, I think, seven years. So she sold it at $900,000. And she is reselling and again, this like in the pandemic for $900,000. Or like do this as a steal.
Chris Bounds 36:25
Right, so she sold it to you for what she bought it for.
Phillip Thai 36:27
She sold so in the past she’s sorry, I didn’t really make this clear. In the past, she sold it to another buyer on a seller financing kind of structure, but the seller but the buyer kind of had to fell through because Okay, so
Chris Bounds 36:42
she took that took her back over and then she’s telling you the same valuation. Yes. By the markets obviously changed. Yeah. Yeah. Okay.
Phillip Thai 36:51
So we ended up buying it, we got a, you know, bank to finance it. And we found a tenant that does all the did all the renovations, and they are paying the taxes and they’re running their business. So super passive, we don’t get to do anything. They hardly call us. They didn’t call us at all, or anything. And they they pay on time. That gets amazing product. I recommend everybody that has an opportunity once they graduate from you know, residential look into commercial. It’s an amazing opportunity.
Chris Bounds 37:32
Yeah, yeah. And definitely get educated. It’s, it’s different. It is. Everything’s different. Financing is different management is different. I like it. Now I do more than the residential commercial, which from finding 10 standpoints commercial, but it’s still residential, and that’s what you call large multifamily. But it’s just the wholesaling single family market, you probably can relate to this, like you’re dealing with squirrels. Yeah, it’s a dirty business, like you got motivated sellers that like they don’t even know their opinion on on the weather at any given moment. And then wholesalers themselves are interesting characters and contractors and all that stuff. But you get into the commercial large multifamily. It’s very, very professional. It’s not that you can’t have snakes or squirrely people in that industry, but it’s a lot more straightforward. At least my experience so far. It is,
Phillip Thai 38:34
um, and, you know, like getting up to that commercial portion of it. I also started investing before buying that commercial building, I invested 30% of close to $40,000 of education, just learning that side of the business too, as well. And so,
Chris Bounds 38:50
it was that informal education, or did you go through like a mastermind program or I went to
Phillip Thai 38:54
I went through Sharif Medawar. He’s out in Puerto Rico, and he owns like, like, I would say, like half of Old San Juan.
Chris Bounds 39:03
Yeah, I want to share it since we’re on this. And I don’t usually do this on the show. Um, there’s,
Phillip Thai 39:09
there’s a couple different
Chris Bounds 39:12
which I have not taken these but I have looked into them, but I want to share this. So a lady shared both of these to me, and she was on one of the previous podcasts. 19 years of experience, land development. So Urban Land Institute. So you ally, and then Commercial Real Estate Development Association, not that long. So both of those being very good educational communities and platforms, where they have courses and stuff that you can tap into. And it’s very formalized and they may have certifications and stuff too but so folks that are looking into commercial might want to check those out. I’m not endorsing them, but she I did look into them and they look pretty sharp. She has her Albertine go through them. And I ran that through another guy who does retail strip centers and pad sites and like, your anchor locations and all that stuff. And he recognized those organizations. And there’s one other one that he recommended I forget what it is. But
Phillip Thai 40:20
yeah, get educated. Yeah. That’s the best investment you could probably make yourself. So how do you get started in transactional funding? Oh, transactional funding? So that’s a good question. So
Chris Bounds 40:32
and continue with that, but also also define what transactional funding is for folks who don’t quite know what that is.
Phillip Thai 40:40
Sure. So, transactional funding. Basically, if you have, I’ll just do an easy example, because I think everybody can relate to this. If you’re buying a house, you need to put some kind of earnest money deposit down to make sure that you as a buyer is very serious on buying this particular property. Now, as a wholesaler, you may not have or you may have the funds to do a earnest money deposit, however, you might have multiple deals in the fire. And that might take away from your marketing efforts or your overhead efforts. And so let’s say you’re in earnest money deposit is $5,000 to a property. And let’s say you don’t want to forget that up, which is totally fine. This is where I can help with that. So if you’re looking for earnest money deposit for property, I’m willing to fund that earnest money deposit as long as it’s refundable, as long as you have a steady period of sort of Monday.
So I know that I’m able to get my deposit back. And how I get paid is more of a profit sharing model with a joint venture. Since I’m coming up with the money, I use the command between one to $4,000 Return back when on top of that $5,000 Once you either assign the property to another in buyer as a wholesaler, or if you decided to take it down, then I would get paid at closing. Or if you’re looking to do a different kind of exit, like a hotel situation, then that would be kind of a different structure as far as repayment, but more or less the same concept here is I can spot you the earnest money in return of a return on my end, like either one to $4,000 depending on what we agree upon.
Chris Bounds 42:34
And since it’s not a at least doesn’t seem like a traditional loan with hard money loan because there’s profit sharing. So how do you set that up? Or are you just doing a separate JV agreement with their entity? Or are you having them carve out like addendum to their entity that they give you certain interest on the transaction? How does it work?
Phillip Thai 42:57
So basically, my partners and I, we just do a joint venture agreement between the two LLC s and then also we have a personal guarantee for that funds. With that joint venture agreement. On top of that, if it’s a earnest money deposit, we have a another document that we ended up sending them it’s like like an earnest, irrevocable earnest money document where they’re signing for the money that we are actually giving to escrow on their behalf so as to form the documents that’s just for the earnest money deposit now for gap funding is a little bit different, but more or less of the same joint venture we put a second lien on the property if it closes, if it if it does a double close then that lien will come off on the second close once everything is you know returned plus interest or whatever it may be. So depending on the situation will determine what kind of paperwork will be used on the on the transaction type. Yeah, okay.
Chris Bounds 44:09
Yeah, buddy of mine does the gap funding and I collaborate with him? But this is a multifamily large multifamily where you’ve got to raise 5 million maybe raise four but you need the other million to close and you’ll finish raising it post closing where come in loan the million and it’s it’s a, you know, a variation of interest origination and equity. Kind of depends on the situation. But I like that model is it definitely is a like you, I’ve done a lot of flips, and that money out is taxing on cash flow and cash flow or lack thereof is what kills businesses. So yeah, if you can minimize that to a certain point. Then it can definitely help operations or help you grow I’m
Phillip Thai 45:00
most definitely in I mean, like this type of lending, or I guess, joint venture I should say, kind of caters to smaller, I guess smaller deals because not a hard money lender or prime minister is going to spend their time to fund a $500 or $1,000 EMD, or find all the volume data, so it doesn’t make any sense for them. So this is where this would be a good opportunity for people like wholesalers to kind of leverage and most people, most lenders won’t go into second position, period. That’s just not how they operate. And so there is a caveat to that too, as
Chris Bounds 45:38
well. Yeah, love it. Well, then these next four questions I asked everyone closing out asking the same question. So we’re gonna start off with, if you could give advice to your 20 year old self, what would that be?
Phillip Thai 45:52
So the advice I would give my 20 year old self is that it can get multiple devices or it is just one,
Chris Bounds 45:59
okay, that’s your, your, your answer how you want.
Phillip Thai 46:02
All right. I would give, I was taught to be more aware of my thoughts on how I view certain things like be the observer of of who you are, in certain moments. I think a really good book that captures this idea is the Untethered Soul. Really good book, recommend that to anybody that’s on all walks of life for real estate advice. Follow when you’re first starting out network and always follow up with your your leads, because that’s where the money’s at. I didn’t really believe in the follow up until actually did the follow up. And that’s those are the advices that we give to my
Chris Bounds 46:54
you may have already answered this, but what book or books have greatly influenced your life.
Phillip Thai 46:57
So yeah, the the book that I just mentioned on the Untethered Soul, who not how is an amazing book? Yeah, I just noticed that when actually, well, it’s it’s an amazing book. Right now. I’m reading buyback your time. That’s also an amazing book. The Chris Voss never split the difference. Also an amazing book.
Chris Bounds 47:22
Did you read that? Or do an audible? Which one? The never split the difference?
Phillip Thai 47:29
I listened to the audio, the audiobook?
Chris Bounds 47:31
Yeah. Yeah. So anyone wanting to get that book, I highly recommend do the audible version or the audio version? It’s just you got to hear the tones?
Phillip Thai 47:39
Yeah, you definitely do. And I think that’s about it. Most of the books that were recommended most
Chris Bounds 47:49
in the last five years, what new belief behavior or habit has most influenced your life?
Phillip Thai 47:54
Or most improved? Yeah, good question. Um, so one belief that I has really impacted my life is the power of creation and manifestation. I come back around from like, you know, military like rah rah, like, you know, like masculinity and so when I was presented this idea I was very resistance and hesitant to it. And I firmly believe that the law of attraction the law of the creation and manifestation is something that’s real. I’ve seen it happen with my business partner he showed me so many different times and I was very in disbelief and want to happen and but then once I started to practice these these things, it actually propelled my own success because words do have power to them. Especially in your thoughts in your head. You have negative thoughts going through your head that affects it affects you can also create what you don’t want. The true is opposite to as well if you create things that will happen your life it will happen just gotta work hard or look for it long enough. So those are the things that have really impacted my life tremendously.
Chris Bounds 49:26
How can people reach out to you?
Phillip Thai 49:28
So I have an Instagram handle my first name Philip, bhi l li, P, H, Thi, middle initial and last name. You can reach out to me on my Facebook page too as well. Same, same thing Philip H thi you’ll find me at Facebook. And those are the only two sources that I have. No, if you give my number out here that totally fine. That’s up to you. Okay. You can reach me out at 804-366-3352 I’m in Richmond, Virginia, if you guys are in the area would love to hang out, talk to you see how we can do business together or just shoot some stuff on real estate. And that’s that’s how you can reach me.
Chris Bounds 50:11
Sounds good. Thanks for coming on. Really enjoyed this.
Phillip Thai 50:14
Yeah. Thanks a lot, Chris.
Chris Bounds 50:15
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