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She's a successful real estate investor. She's the VP of Asset Management here at Upright. She's an incredible mom of three, and a proud Canadian citizen living in Cleveland, OH: This week's guest is Val Moses!
Tune into this week's episode of the podcast and catch up with Brendan, David, and Val as they talk about finding your way in the world of REI, working with your partner/spouse, and how Val's job impacts our borrowers and investors.
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Brenden: welcome back to another episode of Real Estate Investing unscripted. I'm your co-host, Brendan Bennett, VP of Revenue at Fund That Flip and with me is your always entertaining co-host, David Dugan. What's going on, David?
David: Uh, everything and anything is going on. And, and glad to be back in studio here, uh, excited about today. got an awesome guest today. I'll, I'll let you bring her in, but, she's one of my favorites. you know, we, we go back to her day one at ftf. and kind of her entry into this world.
Um, but she's got an awesome story to share. So, Brendan, I, I'll let you go ahead and bring in our esteemed guest today.
Brenden: Sure thing. Yeah. We've had a ton of success with people within the walls of Fund that flip, that just have a real diverse background of experience in real estate and. being an investing and also at Fund that flip. so without further ado, our guest today is a mom, our local real estate investor in Cleveland, and also our VP of Asset Management here at Fund That Flip, Val Moses. Val, what's going on?
Val: Hey guys. Thanks so much for having me. Super excited to be here today.
Brenden: Sure thing, Val. Thanks for joining us. Uh, before we get too far into. what you do as an investor, what you do for fun. That flip, if you just wanna give the listeners a quick rundown on who is Val, where are you from, uh, what do you like to do?
Val: Sure. Um, my name's Val. I'm. Canadian, proud Canadian citizen, uh, living in America out here, the American dream. I'm a mom of three kids. I've got a four year old, a three year old, and a six month old. Uh, huge fan of money in general come from oil and gas. Got hooked into the money in real estate when that busted and, kind of been.
Living that dream ever since, started working out fun that flip through our friend David here. my partner and I were shopping hard money at the time and looked at, fun that flip and ended up working there now. So it's kind of how I got to fund that flip.
David: Yeah, it was awesome. The, the first time I met Val, she rolled into the coffee shop. She wrote a boost there straight from Canada. She had a bottle of maple syrup with her. That was her, her gift for me. And, uh, we talked hockey for a little bit. I'm sorry, I, I'll stop with the Canada jokes. No, it was, uh, it was awesome meeting Val.
I had worked with her, her partner a little bit, and we had discussed real estate deals here in Cleveland. He had been doing some deals and, Val had reached out to me and she said, Hey, she said, my, my guy Donnie, he, he said, I should chat with you. And so I sat down with her and she wanted to talk about a, uh, one of our real estate analyst jobs, and we had got talking about it, and I'm like, Val, you have all of these huge degrees.
You've got all these awesome accomplishments. Like you should, you should be like next to Matt Rodak running the company. And she's just like, no, I just think it'd be a cool job. I'd like to come on board. And sure enough she did. And you know, oh, it's worked out so.
far, so.
Val: I think. I think that's a little much. I, I mean, truth, truth be told. Oil busted at Corona and I was like, you know what I'm gonna do is watch a lot of YouTube and decide I'll be a real estate guru and be a stay-at-home mom. Uh, my daughter was born, my second daughter was born in April of 2020, so peak of Covid.
And I was like, let's find the cheapest market we can, you know, go Cleveland and, uh, we roll up there. I stayed home with my kids for like all of. Three months and was pulling my hair out opened Indeed. And lo and behold, the very first job was real estate analyst on there and said, fund that flip. And I was like, isn't that that Panera dude, we just met.
And uh, it was, uh, but turns out, after talking to Dugan, found out that you got, you guys were paying people to do stuff I was doing for free, so it sounded like a good fit.
Brenden: Val, take us, take us back a little bit. So if, if I remember correctly, your entry into real estate, was somewhat accidental with a property that you had purchased, I think you said, in your early twenties up in Canada. And give us the rundown on that story. I think that's a really interesting, uh, case study.
Val: Yeah. Of the worst investor ever to start, I, uh, Accidentally became a real estate investor, but I bought a a two bed, one bath, like 700 square foot. Non insulated cottage, um, in a cottage district in a neighborhood in the greater Toronto area for $75,000 Canadian. And I was renting it and my landlord's like, you should buy this.
I'm divorcing my wife, I need to get rid of it. And I was like, I should buy this. And so I did. And just cuz it was cheaper than rent at the time and ended up moving out west and getting on the oil train and rented it out for some years and, The market boomed. And I was like, look at me, this big fad real estate investor getting rich off this sale years later accidentally.
And then it boomed about three more times since then. And I kick myself every day for selling it at the price that I did, cuz it's worth about seven times that amount now. but I learned pretty quickly that like you can do stuff like that on purpose. Um, and I learned a lot about kind of not just.
Active investing, but the amount of reward that's available in like cyclical industries like both oil and gas and real estate investing. So learned about that. Got kind of hooked on it. Went to, you know, self-proclaimed YouTube University about real estate investing and
kind of figured it out from there.
Brenden: So, This first deal was the catalyst that kind of got you interested. What did you do immediately after this first deal?
Did you then move to the states and start investing or was there some time between where you were doing some more deals in Canada?
Val: Yeah, I was, I was actually started then after that in Buffalo, so Canada was already like out of my price range at that time. So like, and just for context, like. Toronto now, like that market now is in the millions of like, what was $75,000, you know, 13, 14, 15 years ago. So like big difference in some of these little pockets.
I grew up in like a little tiny town, uh, with like 20,000 people, but it was like a lake town. A lot of people, a lot of Americans had summer houses there cause it's on Lake Erie and like those houses for all of my life were in the same type of one 50 to 300 price range. All of 'em are multimillion dollar houses now.
Same houses, right? Like, no, nothing has changed, nothing different other than, the market in Toronto got saturated and it moved further out in different directions. So I started learning about, like, started watching kind of the economics of. Either industry changes or lack of space in some of these major metro areas and taking a look at that.
My parents and some friends of mine had been investing in Buffalo for many, many years and started looking at that type of stuff when I was like, oh, wait a minute. You can buy a duplex here for like 35 grand still, stuff like that, and started figuring that stuff out in different lending internationally and navigating that world.
And then, Buffalo, same thing started to happen where some of the markets I was most interested in started getting kind of price out of where I wanted to be. So I definitely like went in and out a few different times where I was either actively investing or kinda licking my wounds or couldn't afford it or different stuff throughout my life.
And now that I'm in Cleveland, it's super interesting to see like what I'll say looks nearly exactly like Buffalo did 15 years ago. So super cool to see it kinda like. Similar in different metros here.
David: One of the things I'm fascinated about, With you and, and, and really any other, you know, client of ours or, or somebody that I run into, uh, in my day-to-day that has invested both here in the states as well as internationally is kind of the, the similarities and differences. And obviously that depends where internationally you've invested your experiences in Canada, did most of that experience translate here to the states and, and you know, if, so like what maybe what were some of the major differences that you've had to.
Adapt to when starting here in the States versus what you were doing in Canada.
Val: So when I first started, I, I learned quickly that like, credit history doesn't follow you. I don't know if you know this, but like you could build it. An entire credit history here. And if you moved to Canada, it's like you never had a credit card in your life and you're 18 years old and needed somebody to co-sign for you all over again.
Like when I moved here, I had a credit score of the number four, like literally just four. Um, cause I had nothing, right? And I was like, I'd been an American citizen all my life, but never had any credit here. So like, had to learn. kind of by need about business credit super quickly, so that I could understand like, okay, if it's gonna take me, you know, 6, 9, 12, 18 months to build a personal credit score up, I don't wanna wait that long to like get in the market here, especially during C V I D when there was a ton of opportunity here.
And I was like, let me, let me figure out business credit. Let me figure out how I can leverage what I do have, which is, you know, a lot of tenacity, I'll call it, and like effort and willingness, um, to see what I can do to get what I want. And I think that's probably the most common thing that's existed in my career.
but both like professionally and investing is like a couple of things that have done me really well, which is like say yes every time. Every time you get an opportunity, say yes. Even if you're scared, especially when you're scared, say yes and like what whatever you want. Like you can get and you can tell yourself whatever you want of like what's in the way of that.
But like all of those things are excuses. There's a way, yeah, every single time. Whether it's worth it or not, I don't know, but like there's a way it's never, cuz you can't.
David: Well, I would say, Val, you are a, uh, a bold personality, right? I think Brendan and I can both say that about you, and that's what we love about you. I think it takes a certain amount of guts to be able to say yes to every opportunity, right? I, I, I think about analysis paralysis a lot is something that I've dealt with in, in getting started in my own real estate career of just like, well, too scared.
I'm gonna make a lot of excuses, right? Because I have my own mortgage and. A couple, you know, kids, couple miles to feet at home. Right? And, you know, there, there's always a, uh, an excuse along the way. I, I think your boldness has allowed you to succeed in, uh, In an industry that is, uh, you know, a lot of people can fail in, right?
And so I think, uh, that's what Brendan and I wanted to chat with you a a lot about today is, is how you were able to create that success and how you, how you value or evaluate rather, risk when looking at these opportunities. Because I'm sure when you're saying yes to an opportunity, it's not blindly, right?
You are assessing what the risk. Is involved in that opportunity, what the potential risk reward race show is. And, uh, each opportunity looks a little bit different. So I would love for you to chat a little bit more about that. Maybe we can get a little bit more pointed on, on some of the specific opportunities that you've come across.
Val: I was just talking to somebody about this earlier today. I was cracking jokes, so I, I grew up, I'll say pre these dating app worlds.
But they were telling me about, you know, all these dating apps. And I think of it the same thing, right? Like if you wanna date somebody, you're not just gonna go on a date with anyone who wants to go on a date with you.
Same goes with like real estate. You got some criteria that you gotta meet, right? So like you Dugan, you don't wanna end up on at Panera with some like, you know, Not attractive lady who's got 14 kids, like no job in her life and like grade three education, right? That like, that's maybe not on your list or maybe it is, but whatever the scenario, like you gotta know what that is.
And like sa, same with like, I, I think of it as, you know, the rules. So the best lessons I've learned are ones I've learned through failing, not through success. So like, number one, however smart I think I am, I'm not smarter than data. Like for sure. So like whatever I think the ARV is, if I can't comp out that ARV with more than one comp, it's not real.
So like that's number one. No matter what I do to the property, no matter how cool I make it, or how different I think it is, than every other opportunity. I am not smarter than Zillow. I'm not smarter than all these people with all this money who tell us, here's the recipe for success, which is like find a minimum of two comps in the same block group as your property and comp it at that and in this kind of market like.
Just pay attention to what's going on and like hedge for 10%. Hedge for 10% just in case something happens. And like if you can't make those numbers work on your total cost of ownership. And by that I do not mean just your budget and the purchase price cuz that's not the actual cost. But like look at it.
Holistically, look at what the interest is that it's gonna take for you to carry that property. Look at your insurance, your utilities, your whatever. Anything goes wrong. Budget your contingencies. If you can't make those numbers work, that's a bad deal. You are not better than every other investor out here.
And like, I think, I think learning to humble yourself and know what it is to be successful means that like not having that scarcity mindset of like, this is the best deal ever and I better do it right now. Like, cuz it there, it's not. Like, I'm not that lucky or smarter or different than what anyone else.
And like the answer is do a deal that makes sense. Know what makes sense and like don't do dumb shit. And if you do dumb shit, you're gonna end up, you know, you might end up with something sweet sometimes, but like probably not. Most of the time, you're not gonna end up with that and you're gonna end up talking to me for a different reason.
Right. So like that's, that, that's the whole point to me is like, you gotta somewhat like get your teeth kicked in of like, oh yeah, that's a bad idea. But like, or, oh, this guy's definitely gonna know this is a vacant home and I'm gonna end up like, blowing up my closing if I avoid all the inspections I need to and everything else.
Like, you're gonna learn that stuff. Um, but I think like, Part of that, the time in the seat is what makes it worth it to me too, right? Like I, I think of
the things that have defined me and the stuff that I value a lot in my life professionally and personally are all stuff that was hard. None of it was easy and just came to me.
So it's kinda the way I choose to look at it.
Brenden: Val, I'll bring, I'll bring a follow up question back to what you just said, but before I want to tee it up with, can you give people a quick understanding of your investing history here in the Cleveland area? So obviously you did it in Canada to Buffalo, and I know recently, uh, you and Donnie have been pretty active in the Cleveland market.
So can you give people a quick summary of what that's looked like?
Val: Yeah, so we're rental investors really residential rentals. So like one to four family properties. We flip houses to generate capital to buy rentals, not because we like it. we got greedy there, got burned a few times over. Watched too many YouTube videos and decided we could be builders, and that didn't work out great either.
but we've kind of tried a bunch of different stuff. The real real dream we have is like to leave a certain number of properties mortgage free to our children that are revenue generating. That's been the dream and still is the dream, and we've kind of, you know, got some other dreams along the way, but we try not to lose sight of like what we're doing and why.
I, I kind of said in the beginning, I love money. Is what I like. I like money, I like freedom. the vehicle I choose to seek that in is real estate. And I try not to get lost in that of like, I don't, I I do a lot of real estate work as you guys are aware of. remember that like my actual life that I choose to spend is with my kids, with my family.
And that balance is, is hard, but yeah.
Brenden: So you've done quite a few properties under your belt. Full-time in your career. Uh, a ton recently in the Cleveland area. So oftentimes a podcast people are talking about, Hey, this is how smart I am, this is how great my portfolios performed, given what you said a few minutes back about, you know, Hey, don't do dumb shit.
And when you do acknowledge it and learn from it. What, what was your biggest, I guess, scab that you've gotten from your real estate investing career? Could be in Canada, could be in the States. Uh, what's a good, good story to share with, with the listeners?
Val: I, I've got some doozies. I. Probably the most expensive ones I've had, I'll, I'll kind of couple them of like most painful emotionally, um, or to my ego versus like most painfully financially. yeah, so for me, cost wise has always been like,
This is actually really funny. We were so dumb at first. We like didn't think about profit properly, so we would like just look at like, okay, here's our budget according to QuickBooks versus actuals.
Here's our purchase price, and like, here's what we sold it for. And like high five, we made a hundred grand. We're like, woo. And then I'm like, oh shit. Eventually we were like, Oh, there's some commissions here and closing costs and interest and utilities. And we had our own kind of capital fund and we were paying ourselves to kind of use it to try to increase that capital fund.
And we're like, oh yeah, we weren't thinking about that. And like all of a sudden that a hundred grand looked more like 14, we're like, we just wasted so much time doing this for like $14,000. And so that that lesson of like really doing the math for real and not just like what you wanted it to be. But what it really is and, and you know, if you take longer and suck at finding contractors or managing contractors or managing conflict, whatever that extension fee was and whatever, you know, so on and so forth, it's that stuff.
It's the death by a thousand cuts of like, here's your overage and you wanted this sweet tile and you wanted this other guy to do your trim work because he's better than this guy you were mad at or whate all that stuff. All the stuff that I was looking at. Also like somewhat in a vacuum, um, did a huge financial disservice to our business.
Um, that was a big thing for me. I think learning how to manage tenant turnover and identify our risk tolerance level was also a really interesting, I say growth activity and painful lessons were learned there for sure around like. I had a huge fear of eviction when we started doing this, of like what would happen and how hard is that gonna be and everything on TV or whatever I was afraid of.
And kind of going through that and experiencing that and learning about the importance of process, the importance of understanding our responsibilities as landlords, what we should expect of our tenants, how to find good tenants, where to spend my time. Time is to me, like the most important resource that I have, uh, by a long shot.
So like, I used to go and meet tenants and show them every property, like prospective tenants.
And I would sometimes be, we would maybe sometimes have like, You know, up to 10 units that were marketing a month on top of my full-time job, on top of whatever flipping on top of the, all these tribe of children I have and whatever else.
And I'm like, that's not gonna work out. Right? Wasn't, I was like losing my mind and I wanted to find more deals and all this other stuff. And I was like, you know what I'm gonna do is like,
Listen to somebody who knows more than me. And so I found, I found this girl that I would listen to a lot and she had a podcast called Lazy Girl, r e i.
Um, but she would talk about this, talk about like valuing time and she started doing open houses. I was like, that's one simple change I can make in my process. That saved me, I dunno, probably a hundred hours last year of my time and like that, that stuff like, I think the constant. Not only desire, but like need to optimize is, is the way that I
demonstrate by action, like the lessons that I've learned that have cost me money.
I think learning how to source contractors, how to agree on scopes, how to be explicit on scopes, how to identify gates to get out of those contracts when you want to, if stuff's not working, how to build schedules, how to expect, how long things should take. All of that stuff. Is critical. If you're trying to scale something, if you're not doing a one deal at a time, you gotta learn how to roll with contractors if you're not doing it yourself, especially if you don't know how like that.
That's super critical, I think, to like not wasting tons and tons of money.
David: Hmm. Pivoting a little bit off that in, in all of the learnings that you've had to. Learn essentially yourself, right? You didn't, you didn't go the education route, you didn't go the mastermind route. Not that there's anything wrong with that, but you decided like, hey, I'm gonna, I'm gonna grind it out and figure this out on my own right.
Which, um, that could be a terrifying thing. Was there any ever a point throughout all of these learnings, or potentially, Deals that didn't pan out the way you had hoped, uh, where you said, Hey, maybe this isn't for me, right? Maybe I bit off more than I could chew, or hey man, maybe, maybe I really lost my ass on this deal and I'm gonna go back and, you know, do the nine to five regular thing and not do real estate.
So was there ever that walk away moment.
Val: So this is interesting. I've never had that moment. I have had plenty of like,
fuck real estate and fuck all these people and whoever, what, you know, whatever, like once a week probably. but never have I ever thought like, I don't want any more money.
Therefore, never have I thought like, I'll walk away.
I've thought a lot about what I should do differently. I try never to forget that whatever's wrong is my fault, which is true.
Whatever I'm mad at somebody else for is because I didn't set that expectation or manage that expectation or identify the right reason or whatever. I think that personal accountability is critical to,
I'll say like maintaining the type of attitude it takes, cuz you're gonna get knocked down
a hundred times before you get your first off market deal.
To accept your offer, they're gonna hang up on you.
Maybe even a hundred times, you might get 99 hangups before someone will talk to you. So like you gotta be able to like have some thick skin and like, where it's not that thick. I've always had a partner who I think really helps me or reminds me like to get out of whatever pity party I'm having that day and like h help me know like I can be better and I am better and I should be accountable for what I'm trying to do.
David: Was there anything that you would do differently though, right. From um,
Val: Oh my
David: not knowing what you know now. Sure. Right. But like you had to learn all that stuff. So what would you go back and do differently now that you know what you know? Right.
Um, To make your life easier, right? Because you had to learn all that stuff anyway.
But like, would it be, you know, hire, hire the right assistance, right? Change your processes, stuff that you could have figured out along the
way.
Val: I would've never sold that first house. That's. I, and I know that sounds ridiculous cuz I couldn't predict it, but do you know what I've never said is I regret keeping this house. I've regretted selling
Brenden: what's that house worth today, Val? Do you
Val: Probably 1.7. 1.617. Oh yeah. I was so dumb. And I've, I think I sold it for like three 40 and I was like, damn, look at me.
I was like, but I didn't know, I didn't understand. That like I actually don't know if I know anyone who says, I so deeply regret keeping this Property, Real estate is not a short game. It's a long game and I think, you know, flipping houses is good, but I think flipping houses as either a business strategy, which makes a ton of sense and can be super lucrative if you're doing that at volume or custom or some other stuff that I'm not doing. Um, but what I am doing is like using it to generate capital, and I cannot lose sight of like that, that that's what I've learned is like to not get distracted, to be more focused to even when I, you know, whatever. And we did, we've had some painful financial lessons, I'll say of like, you know, oops, we scaled and then the market went down completely and like, oh.
Our backup rental plan is now like negative cash flow because we built this sweet custom house. So like no one's gonna pay more than 1500 bucks a month to rent. Like all of a sudden we gotta like figure out like, oh, how do we do that? And like that's the thing to me is like, you're not screwed almost ever.
There are times where you are, but like almost never is that actually true. A lot of times it's like you gotta keep your eye on the long game. That's
the key is like, cuz it might be painful for a while. But you'll figure it out.
Brenden: Vale question I have for you before we transition into more like your role from that flip and how you're investing, uh, kind of bleeds into your role at ftf. So you mentioned a couple times that, your partner Donnie and you invest together. And I wanna ask you a question, Chris. It was something that you actually brought to my attention, like, hey, a lot of, uh, men or women that I meet that invest in real estate.
Their partner or their significant other is often, you know, a real estate agent, a title, uh, company agent, whatever it might be, interior designer, right? My girlfriend's an interior designer, so that happens a lot. And I've met, I've met couples who really, that fuels their business in the most beneficial way possible, right?
Because they're passionate, what they do, they work really well with their, with their spouse. I've also seen it go not so good, right? Where you have work commingled with relationship a little bit too much, and it's hard to separate. not to turn this into a Dr. Phil podcast, but I'm curious, like, how do you, how do you like, make that an effective relationship both for business and for relationships together?
Val: Oh, that's an interesting one. So I crack jokes about this a lot to Brendan around. I think every real estate investor I know has a partner who's like some fringe real estate career. Um, generally not also an investor, but like some other. Related career. I, which makes sense, right? If you're a smart investor, the first thing you're gonna do when you meet a partner is like, try to find somebody who's gonna save you money.
That makes sense. Like either make them somebody who's gonna do that or like find one that already will, right? So like, save on commission, save on something. Um, but like, that's what I think happens a lot. Um, Donny and I met in like the lamest meet, cute story of all time on like a phone game. So like nothing cool.
Um, I think we both just both liked money and like both are very driven people. Like I. Big over the top style. Um, but we have this like we, we do like a standup every day. Um, and we also retro our projects together. So we retro them and we like criticize each other of whatever we think the other one should do better or different.
And it's healthy for us. Cuz I think we both know that A, we're both like financially. Invested to see the other person succeed and like we've got all these kids who like also we share a dream for, right? So like I think that that type of like shared interest makes it better. And I think we, we are both the type of people who.
Do. We'll do something else. If it's not this. What I'm never gonna do is like hang out and watch tv. I'm gonna be doing some other business or some other something and so is he. So like we're both already like that. We just happen to find something we both can do together.
Brenden: while it sounds a little bit cliche potentially, like you guys also have very open communication, you're not afraid to say, Hey, Donny, on the last project, this, this, or this could have been tightened up.
And like you, you take accountability for your, your side too, right? So it sounds like. That's, that's half the battle right there is just having the transparent conversation. You should do that, whether they're your significant other or just a business partner in general, or you know, your real estate agent that you hired for help, whoever might be.
I think that's very simple, but not easy every time of just having that very open
Val: Wow. Oh
Brenden: that are in your sphere.
Val: I'll say this. We both say it. The other one rejects that feedback. And then on the next project we implemented anyway, but this is our pattern. It's like I do not do any of those things. Deny and then still, still really listen. Um, but we've gotta like figure it out. I think, you know, ultimately I greatly respect and I need a partner who I know will go as hard as I will.
Like I, I'm not about having some dude who's gonna be what, playing video games on the weekends. Like that's, you know, it's just, it's just what it is. And I think you attract people who are trying to get the same things out of life that you are.
David: You guys make it work. And I think it's cool cuz it doesn't for everybody. Like, and I could speak to that, you know, my wife's great also. Val, shout out to the Vals. What's up? you know, like she's, uh, Mildly interested in like real estate, but she likes the, you know, HGTV version, right? Not like the real life version.
She's just like, I, I trust you to, you know, that's a career path you wanna take or like an investment path you wanna take. I trust you to do it. But like, I can't imagine the warning standups with my wife, like, okay, what's the plan today for our real estate business? She would kill me.
Val: You know what it's, it's our whole lives. So we don't just do real estate, but it will be more of like, okay, we've got an appraisal at this house, an inspection at this house. This kid has dance. Who's doing daycare? Drop off. What are we having for dinner? It's our whole lives, right? We don't we, but we must have.
That type of planning and organization, at least at like a basic level for our household to function. So, and I think like that, I, I believe in like reciprocity in, in any type of partnership, whether like romantic relationship or not. And it's not 50 50, it's never 50 50. And if you're looking for 50 50, I don't think it'll make any kind of relationship or partnership work.
But if, if you recognize like we both have different stuff we can bring to the table or different stuff going on today, that, that's what I think is like what, what gets you to the next year. Like that's what it is. It's, it's not perfect. It'll never be perfect, but it works.
David: Wise words and a glimpse into the life of a parent who is also a corporate professional and real estate professional. A lot of balls in the air, which I guess that that brings us to our next topic, which, you know, Brendan and I, I, I still want to dig more. Val, I'll be transparent with you. I. I'm not a hundred percent what you do here.
Like, I kind of know I, you've had a lot of different titles. You kind of, you kind of moved up quickly. tell us about the FTF side of what you do.
Val: Yeah, so I can tell you what I do now. Um, maybe I'll tell you how, what I used to do, cuz this might help. I've had about five jobs at this point at fdf. I started as an underwriter, became an operations manager. So, Then the leader of the operations department, and then I took over strategy and rental.
Uh, and now I run asset management. So asset management is essentially all risk functions that happen after a loan becomes a real loan. So once it's originated, the risk side of our business lives with me. So that's managing construction. It's getting our money back when people don't wanna give it back to us.
It's, you know, helping people sort out the foreclosure world. It's all of that stuff. Um, all the risk things that can and do happen in, in real estate is my role.
David: You help keep us in business.
Val: Yep.
Keep the lights on from the, keep the lights on Crew. You guys are
on
the, get another floor. Yeah.
Brenden: Thank you. Thank you for that, Val. Uh, Val, I, I'm very curious because when most people hear asset management, they, they probably have the same reaction if they hear the word like underwriter, right? They just assume it's this black box where something goes in and something that is not desirable comes out.
Whether it's a loan structure, whether in your case in asset management, it's like, man from that flip's gonna try to take this property back and, and. You know, hurt me in the process. I think what I've learned a lot, especially with working closely with you, um, between sales and asset management, is you're truly working for the best outcome for both parties.
And I, again, I know sounds cliche, I'm sure every asset management in, uh, department within every lending company aspires to do this. But I think what you do really well is you say, Hey, this loan's going not as well as we would've hoped. However, the only route is not foreclosure. There's, there's a list of 30 opportunities before foreclosure that we can pursue that gets the borrower a better exit and unscathed and from that flip in our investors the same positive outcome.
So if you could put a little more detail into that, cuz that was eye-opening for me. Um, e even working at the company before you were in the role, I was like, man, asset management, that sounds scary. I don't wanna, I don't ever wanna end up there and you shouldn't want to, but I think. The way that you've operationalized the role is eyeopening.
So
Val: Yeah, I appreciate that optimistic view of what I do. It's not, not quite it, but I like that it's, it's seen that way. I'll try to explain it the way I look at it. I look at bottom line. And ultimately the way I go about that. So my customer are the investors in our fund. That's who I am responsible and accountable to is getting that money back.
That's my job. Now, in order to do that, I need to understand how to mobilize our borrower to execute the project. And I need to understand what's the best way to do that. Cuz you're right about the mutually aligned interests. I think a lot of people don't understand that, especially investors when they're, you know, mid shit storm are, are not thinking I should be as transparent as quickly with this person who's calling me and saying, you owe me money.
I think that's a big mistake. Often we are, uh, nearly completely aligned of like what needs to be done and how, uh, the big thing for me is like what I do is look at our money like it's mine. Like it's my tenant who's refusing to pay me rent. I can evict. That's a real option. Often it's an expensive one.
So I'm looking at what are all the options on the table? Can I work with this person and work something out? Can I look at this other option? Can we make an agreement where they leave on good terms and not gonna blow up their, another agreement with another lender for them on their VM or whatever. But like most importantly, I need to understand the real problem so that whatever exit is actually viable for them.
So like that, that's the way I look at it is like, what does that mean? It means I need to be empathetic for the people that borrow money from us in order to serve the people I'm accountable to, which is get the people who give us the money to lend other people, right? It's like that's what I'm doing out here and is building those relationships, understanding the project, understanding the problems to get our money back and, and I think there's a way to do that where you help people maintain dignity and you show people, I think empathy because good investors have bad deals.
And, and I, I don't think that those things are like, you know, necessarily negate the other in any type of way. So I think the, the culture that I try to build on my team of like how we communicate with people, how we look at deals, how we, I think strive towards transparency and empathy to both of the customer bases we have with both like active and passive investors.
That. That I think comes from like my time in the seed in those shit storms more than it does my time in the seed in at fun. That flip.
David: So I'm gonna, with my very simple brain, I'm gonna boil that down into two very simple things that I, I think is important because,
You just articulated a whole story in, in a whole premise that many of our, our client base, both on the borrower side and investor side aren't aware of, and it's, it's kind of the internal structure to keep both parties safe.
So
part one, if you're an investor, you should feel pretty good knowing that like you have Val on your side and a team that works under her on your side, that is working to keep your money safe and you know, Retrieve your money when things go awry as a, a borrower, somebody borrowing our money. Val just said it.
There are good investors who get into bad deals and that happens. You should feel good knowing that again, there is a vow in a team under her that, uh, is there to. Show you some empathy, understand your situation, and try and come to the best possible solution to get you out of the deal to keep everybody happy.
Right? So there's, there's a lot of, uh, that work that goes on behind the scenes that I think is, is unbeknownst to a lot of the people that we work with.
Brenden: I think one additional thing to add here, we, we've talked about it on previous episodes where a lot of the employee base that fund that flip are investors themselves and how that serves us well, right. In the underwriting team, it's helpful because they're able to see through the borrower story understand what, how they're getting their value.
On the sales side, it's that empathy, it's a relatability. I can't really think of a better position, the company to have someone who's very seasoned. Personally on the investing side than an asset management, right? When, when the story gets the hairiest, if you have someone there that has already, you know, executed on several handfuls of projects individually, the level of empathy and the ability to step into that investor's shoes is much higher than that.
If someone who has potentially never had an investment property, Hit a snag or hit a bump. And now I think you've been, you know, fortunate enough to not have anything go completely sideways. But had you not been a good operator, I'm sure there was a couple hiccups in some of your projects that, you know, could have taken it down a u-turn that wouldn't have been, um, you know, as positive you would hope.
But you having that perspective, I think helps a lot when you're on the phone or meeting with our customers that find themselves in these tough positions as well.
Val: Yeah, I, I think it's definitely,
These guys have helped me learn a lot too. Um, it is certainly not like one sided. Um, I think the more exposed I get to what a lot of those these guys are going through, once I have built that relationship and they realize, you know, I'm, I'm not the police out here and they can just tell me what's going on.
I find that super, super helpful for me to, uh, To learn too about like, you know, mistakes I don't necessarily have to make myself, but can avoid. lot, lot of those lessons are, are mutual.
David: Of the deals that end up in your world, do you notice? Is there any I. Common theme. Right? Is there any, you know, one or two things that you see most common that went wrong in those deals and that's why they ended up in your world?
Val: Yeah, definitely. I think they're not that different than my personal experience. You know, there's GE generally, like a few things. If you boil 'em up, like number one, you went over budget and you screwed yourself like one way or another. Whether that's like you didn't count your carrying costs, right?
You took too long, you know, whatever that means. If it's a money thing, it's like that's one. Number two, your RV was off. So again, like the. Either I'm smarter or the market changed, or whatever happened. Your ARVs off and it's not realizing the value you thought it would often that risk. Is not just at the end.
So I'll say that. So like what happens sometimes if you're doing these kind of complex projects where you need to exit mid-project and go to, you know, either a different lender or the same lender for refinance to start your construction if you're doing a new construction loan. If, if you were off on your mid-construction value and like did your math wrong and didn't plan to bring cash to close mid-project, that can jam me up real quick.
that's the thing. I think the other thing is like, You, you don't know how to manage construction. Like that's, that's ultimately the, th the third, the fourth stuff is all like weird shit that doesn't happen to normal people. There's another bucket of like, random stuff, but like the majority of what I see is like, my contractor screwed me.
I don't know. What, you know, whatever, like stories of this, of like, I'm gonna sue this contractor. They didn't do what they said they were gonna do, or so on and so forth. That show me like inexperience there. the money thing I'll say like,
80 plus percent of that money thing is like from two problems, either number one, they were laser focused on their cash to close and try to optimize for that, to get the deal with that scarcity mindset and like didn't plan to carry it in any kind of way.
So like that problem happens a lot. The other problem that I see is like they took too long cuz again, they don't know how to manage construction and that costs money. So like the ultimately like 95% boils up to those things.
Brenden: Val, you talk about the people that are most likely to get into a scenario where they're hitting your desk. What I'm curious about is, again, some good operators can find themselves in bad deals. I'm assuming that those good operators, you have the most success of working with them to get a really good solution for both parties.
What borrower characteristics or traits do you find most common amongst the ones that hit your desk but end the happiest path possible?
Val: what's the bird? That berries Its head of the sand. Is that Ostrich's? Is that right?
David: I, I think so.
Val: They're not, They're they're not, That, that's, that's what I'll say is like, se seasoned guys know that it, it's gonna come. They know that like this, something didn't work out and they're not like just, you know, head in the sand hoping one day, like it'll figure itself out.
Cause like again, time is the time is money in hard money, right? Like it's literally costing you money to like, Ignore the problem and you should not do that. So, like, whoever is doing that to me shows signals of either inexperience or, or a lack of awareness of that, of like, my option pool is closing. The longer I drag this out.
Brenden: of,
Val: There's that. I think that accountability is a big thing. You know, I think what I'm not gonna do is save you,
right? There's gonna, there's gonna. I don't offer free money. I offer money that costs money, and I can help you do that math and, and, and help you figure out like, is this gonna make sense for both of us, which I want it to.
Um, but, but ultimately, like that decision, I want them to go into with eyes wide open of like, if, if you want a small return with no risk, real estate's not your game. This is not the place to play. If, if you wanna save money for 25 years and go do your own hard money loan with no risk and no person like me, you ever have to talk to do that.
But you're gonna lose out on making millions in the meantime because of your fear, right? So like that, those are calculated decisions you have to be able to make. And if you choose to make them, the best thing you can do when something goes wrong is like raise your hand immediately because. We're not the police.
We're not trying to scare you or get you in trouble. We want this to work out. I want it to work. It's cheaper for me if it works out right. That's the way I'm looking at it. It's cheaper for me. If it works out. Let me help you with what I know, who I know how we can go about this. And that's the, what I'd say is like most common denominator in success is that willingness and like that understanding of that long game.
Again, short-term pain, long-term gain, right? Like, Hey, I can live to fight another day. Even if I lose 10 grand on this deal and don't realize that profit I thought I'd make.
Brenden: I think one thing that's especially interesting with that, Val, is from the, the handful of situations that I've been involved in. There's been some of those operators who don't have their, their head buried in the sand that reach out to us before we even know there's a problem, right?
So before they've missed an interest payment, before they've gone past maturity, before the lien gets placed on the house, whatever the bad thing that's coming, they're like, oh shit, this is about to happen to me. I need to reach out to my partners that fund that flip because. The more information we have, the earlier we have it, the more options that are on the table.
Right? The longer they wait, the longer they try to hide it. It's like keeping a secret from mom and dad, right? It's, it's always worse when you tell 'em later. You tell 'em up front, you're good, you're, you're, you're not getting in trouble. It's the same thing. And I, I've seen that a lot with some of our clients that I would assume that you would put on that, you know, head above water, very aware and, and looking for a good, uh, outcome from both parties.
Val: I, I think too, it's like the attitude, right? Because that, that's what I'll say is like, don't tell me too soon. You better have maxed out your own line of credit before you come, before you come and like ask me for. For more money
I feel like a lot of people are listening to too many BiggerPockets podcasts out here around like, oh, get a deed in Lu and that's gonna solve your problems. Cuz like, guess what? That's not real. Don't forget I can take your house and car even if I don't want to.
Um, I, I think like, tell me about it after you've maxed out your resources to fix it. Cuz like, I'm gonna check if you did and like that that's the thing to me, right? Is like a lot of people, I think. Are mistaken and look at F I C O in in lending as like the be all, end all of here's how we know if this is gonna be a risky loan or not.
And it's a piece of that puzzle, don't get me wrong, but like I'd way rather have a guy at Max do debt utilization who's willing to do that before he asks me for money or a short payoff than a guy who won't or doesn't have access to it and has a perfect fi ico with a $600 credit access like that. I'm, I'm looking for the guy who's been in the game is willing to put his own skin in the game when it goes south, not just mine.
Cuz I, I think that that's the thing to me is like, you better be. Shoveling this crap out with me and not just asking me to do it for you.
Brenden: that's a great point. They gotta have a line incentive. Uh, it can't be, Hey, this is your problem from that flip, it's our problem, right? And, and in some cases it's, it's not our problem, it's theirs and we're gonna do what we can to support them to, to be able to navigate it. But I think that's just a really good perspective that you provide, Val, cuz it's not all the.
Bad deal, bad borrower, bad intention, which I think is what a lot of people assume when they hear the word asset management, cuz it sounds scary, but not always the case.
Val: Yeah, definitely not.
David: I've got one more for you, Val, and then I think we can wrap it from there. you know, in, in, in my end of the front end of the business, right, working with people to get into our loans, our, our role I would say is to, for many people to help them scale, right? Get from doing odd deal at a time or a couple deals at a time to double, triple, quadruple that.
When you do that, you go through growing pains. I think any growing company does. Right. We've seen it, uh, with, with ftf. Any company that scales that quickly is gonna face those growing pains. What advice would you have for those people that are dead set on scaling? They're going to use us to scale and, and they're going to grow their real estate business.
What advice do you have for them and, and maybe what, uh, pitfalls should they avoid?
Val: There's two that kind of come immediately to my mind. One of 'em is, do your math right. in terms of like aggregate math, so one of, one of the hard things I think with both rentals or like flipping houses, whatever, you know, you're like, oh, here's my percent of either reserves or contingency that I need available in case something goes wrong.
And I think that sometimes people. Forget about the other deal that they have or the other two, or three, or four, or five or six, and keep counting that same set of reserves or that same contingency dollar account they have and, and deplete themselves by like putting themselves across, spreading too thin across the amount of deals that they have for stuff that goes wrong.
Cuz they will, it's like, that's one. The other one I'd say is like, with respect to working with contractors, you better get the recipe right, not the person. He's like, the last thing you wanna do is be relying on some guy you like to also scale his own contracting business. For you to be successful, you need to know how to source contractors, how to determine scopes, how to know if a bid is legit, how to know if a guy's a weirdo, how to do all that stuff really quickly.
How to have difficult conversations with any type of contractor you wanna work with, not with, you know, Jeff and Bill, only because like Jeff and Bill can't work on eight or nine houses. Jeff and Bill can work on one or two. It's like you wanna go beyond that. You need to know how to do that with more than Jeff and Bill
David: Love it. Great advice. What do you think, Brendan? You wanna wrap this thing?
Brenden: Val, appreciate you joining and, and walking David and I and all the listeners through the, the asset management side of the house. I think your experience is really interesting and how it's led you up to this point, the different deals that you've looked at, um, and also your experience within Fund That Flip, just kind of those four or five different roles that you've had, probably giving you a lot of perspective on the company.
So, uh, we appreciate you joining us and, and walking everyone through it. And before we, we get you off here, if people wanna learn more about Val Moses and, and get in touch with you and learn about your projects, what's the best way for those guys to do that?
Val: I'm not one of these cool social media people. Really? I ha I have an Instagram. I don't even know what it is. Um, but uh, I got a LinkedIn. You can try that. Um, but yeah, I don't know. I'm, I'm around find that, flip my email's on there, I think somewhere. So reach out.
Brenden: Awesome.
David: Val, you've been awesome. seriously, this was, uh, this was a fun podcast and, uh, Look forward to seeing you around the office. Until then, I'll go ahead and get us all signed off here. So for Val Moses. For Brennan Bennett, I'm David Dugan. This is Real Estate Investing unscripted. Thanks for tuning in
Val: Thanks guys.
