117: Flipping Classic Cars to Create a Real Estate Empire

SHOW NOTES FOR EPISODE 117: FLIPPING CLASSIC CARS TO CREATE A REAL ESTATE EMPIRE

When you start off in real estate investing, you either need to have the cash, a source to borrow the cash or another way to generate the cash.  That’s why many people start out wholesaling or flipping houses.  In this episode,  you will meet someone who has a unique and quick way to generate cash — flipping cars!  Abhi Golthar, a successful real estate investor, shares how he first got started in real estate by flipping classic cars.

What You Will Learn

• The importance of vetting your mentor
• Four key things that EVERY real estate investor must do before spending one penny on real estate investment property
• How persistence pays off
• An important lesson he learned from Andrew Carnegie
• Why secondary markets are the place to be today
• How his love for classic cars helped him do wholesaling, note buying and eventually led to building housing developments and buying apartment communities

About Our Guest

Abhi Golhar

Abhi Golhar is the Host of Real Estate Deal Talk an independent source of original podcasts, videos, & articles discussing topics related to real estate investing; and a Managing Partner of Summit & Crowne, a real estate investment firm in Atlanta. He has been investing in real estate since 2002 and has always used a “value-add” approach to identify acquisitions.  Abhi enjoys working with investor groups to implement market-driven strategies which have the highest potential for success.  Also, he writes for Forbes, Inc, and Huffington Post.

More About Abhi

• 2002-2006 – Attended College in Ann Arbor, MI – getting engineering degree
• Felt something was missing in is life
• Started reading about real estate (Kiyosaki, Trump, etc.)
• Sought out local mentor
• Loved classic cars and bought and sought many (selling most overseas) to raise money to invest in real estate
• Started out wholesaling
• Saved up cash

First Real Estate Deals

• He was 19 years old
• Found 2 Detroit intercity deals – a SFR renovation and an SFR rental deal
• Driving back and forth between Ann Arbor and Detroit, going to classes, dealing with contractors was difficult
• Know he needed a good team
• Got a call one evening from a contractor saying “You need to get down to your property. I left a ShopVac for you.”
• Driving from Ann Arbor to Detroit in his little Honda DX and it starts to snow.
• When he got to property, saw the basement was flooded. Started walking around neighborhood, door-to-door (in inner-city Detroit) at 10:30pm, looking for help.  Found a neighbor who helped until 2-3 in morning.
• Stayed overnight, upstairs, freezing, curled up on the ground (with no mattress), not knowing what to do or who to trust
• Mentor was horrible, of no help
• Felt totally frustrated and defeated
• Ended up wholesaling the properties out, barely breaking even

Recovering

• Graduated school in 2006
• During down engineering job offers from tech companies on the west coast so he could move to Lincoln, NE with girlfriend
• Also, didn’t want to get stuck in corporate job
• Met real estate agent in Lincoln who helped him recover from Detroit real estate experience
• Started going door-to-door, trying to find homes for sale
• 2007 moved to St. Louis and then to Atlanta

New Start

• Started wholesaling again
• Also, found mortgage notes at a discount to sell to national note buyers
• Also, buying and selling classic cards
• Would try to reinvest 80% of his income
• Looking for a mentor/partner and found his current partner Walter Higgins who was very experienced
• Formed Summit & Crown with Higgins, April 2008

Summit & Crown

• Single family development
  • Building townhomes
• Purchase multifamily properties
  • Value add deals

Biggest Mistake

• The experience in Detroit
• What he learned:
  • Do your due diligence
  • Find the right people to work with
  • Get the right numbers before moving forward on a deal
  • Get the right capital and terms
• What’s important is that you learn from the mistakes and you get stronger and better as a result

Biggest Success

• Finding the right people to work with – his current partnership

Advice for Old Dawg’s Interested in Getting into Real Estate Investing

• Find something that can give you both cash flow and security
• Kiyosaki says in real estate, like no other asset class, you get:
  • Income
  • Depreciation
  • Equity
  • Appreciation
  • Leverage
• With real estate, it’s easy to win
• Find a good secondary market goes many primary markets are too expensive, profits limited
  • For example, in Atlanta, that’s places like Macon, Noonan, Alpharetta, Douglessville
• Buy single family rentals
  • Find properties that you’re your total project cost is less than or equal to 70% of your ARV (after repair value)
    • Gives you a good profit and a good buffer if the market declines
    • People that lost the most during market declines were those that sold – hold on to your properties!

What’s His Company’s Long-Term Strategy?

• Multifamily/Apartment acquisition, reposition and hold
• This will produce generational wealth
• Flips can generate quick, good cash but it’s a short term solution – a full-time job. Best to use cash generated to buy long-term multifamily properties
• Buying properties in states where they have teams (Dallas, Charlotte)
• Promising areas for future investment:
  • Jacksonville, FL

Rap it Up

• Favorite real estate book: ULI (Urban Land Institute) Guide – “Professional Real Estate Development”
• Favorite business book: The Psychology of Persuasion by Dr. Robert B. Cialdini
• Most valuable web site for success (other than your own): Udemy.com
• Favorite app: Instagram
• Favorite quote: “Do your duty, and a little more, and the future will take care of itself.” Andrew Carnegie
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? He would go back to flipping cars and immediately get back into wholesaling.

How You Can Reach Abhi

• RealEstateDealTalk.com
  • Radio show, Podcast, Resources and YouTube videos on real estate investing

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