123: House Flipping to $30 Million a Year with Kelton Todd

Today, I’m joined by Kelton Todd, a real estate investor, professional mentor, and the creator of Women’s Real Estate Investors Network, a real estate education program that has worked with more than 100,000 students.

After watching his dad fix and flip houses growing up, Kelton took an interest in real estate, focusing on different paths to profitability within single-family residential homes. Soon, he started helping his friends and peers, eventually growing that from a simple network into a multi-8-figure education company with more than 50 employees.

Whether you’re interested in real estate investing, building an education business, or both, Kelton covers it in this episode. You’ll hear about his favorite pockets to invest in real estate right now, creative strategies that can lead to $500K tax-free home sales, and how to grow a word-of-mouth network to an international 8-figure company.

Inspiring Quotes

• “The more specialized knowledge, education, training, and skill sets you have, the more you can help everybody in the journey win.” – Kelton Todd

• “Anybody who’s ever owned a home knows it’s usually one of the best investments you’ll ever make in your life.” – Kelton Todd

• “The tax code was written by the wealthy for the wealthy.”

• “Don’t wish you were better, become better.” – Kelton Todd

• “Bad partners can not only make a deal go bad, but can also suck your energy and drain you pretty quickly.” – Kelton Todd

• Who is Kelton Todd?
• Starting in real estate from zero
• Why competition is unnecessary
• How real estate valuations are misunderstood
• Creative real estate financing
• The pros and cons of sub-to mortgages
• What real estate does Kelton like right now?
• Tax advantages and real estate strategies
• Building a 100,000-member education company
• Kelton’s worst business and RE mistakes

Brad Weimert: Kelton Todd, I appreciate you carving out some time to talk, man.

Kelton Todd: Absolutely. Excited to be here, brother, and excited to hear a little bit more about what you got going on as well.

Brad Weimert: Love it. So, we met at a mastermind. Now, it’s years ago, I think. I think it was pre-COVID. And COVID has completely distorted my timeline for the last five years entirely.

Kelton Todd: Goes quick.

Brad Weimert: Yes, it does. Yes, it does. I think I want to hear kind of some of the backdrop, but some highlights for people that don’t know you, you’ve got a huge real estate investing background. And that ultimately is a significant passion for you. You like doing deals we were talking about a little bit before we kicked off the recording here. But you also built a multi-eight-figure education company inside of the real estate investment space. So, I want to dig into kind of both of those veins. And I definitely want to talk about building the educational company. And I also want to talk about real estate investment because it’s something that’s close to my heart. But as a starting point, well, how did you get started in business?

Kelton Todd: I went an unconventional path at first, and then that led me down to a pretty conventional path that I found out was conventional for this industry. But yeah, I went to college, went to corporate America. That was the American dream that my kind of parents sold me on, first generation bachelors, and got into corporate America. And after a couple of years, I realized, this was somebody’s dream. This might be the American dream, but this was far from my dream. So, interestingly enough, I was actually chasing after a girl that I’d been after for a while and she was studying abroad at the time, went and spent a couple of weeks over there, and came back to find out that I wasn’t allowed to go on a vacation again for an entire year until I built up more vacation time.

And for me, that was kind of the final point where I was like, “You know what? Again, I’d already accepted the fact that this is not my definition of a dream life.” But that was enough for me to say, “You know what? This is not for me.” So, I started researching and looking and figuring out what else, what other type of career paths there were. I’d always had this itch to be an entrepreneur, but I think like most people, there’s no degree for that. I actually started college out with a business degree. And after my, I don’t know, what felt like seventh accounting class, I was like, “This is not teaching me how to run a business. This is teaching me how to work for somebody who runs a business.” And that wasn’t my goal. So, I swapped it to economics.

But long story short, that was my breaking point. And so, I started doing research, eventually found real estate investing, that was something that could be done by the average person. I didn’t know about that. I watched enough YouTube videos to convince me of such, so I quit my job and started pursuing real estate full time. I went six months without doing a deal and without making a buck, and I was actually working on brushing up my resume to go back to getting a job because it didn’t work out so well for me.

And my brother dragged me to a live event, three-day event, somebody coming through down, putting on an event. I went to the event and ended up instead of going and getting a job, maxing out a credit card, hiring a coach, and getting some mentoring on how to actually do real estate the right way and got obsessed with it, found some success right out the gate, went on to do 100 deals in the next two years. And the rest has kind of been history and like I said, started out a little more unconventional, just quitting my job and trying to do it on my own and didn’t work.

But long path down the road, I realized and found out at least for me and all of the peers I know that actually the more common journey is finding somebody that’s already done it before that’s willing to show you how to do it. And so, that’s really what led me into the whole industry as a whole and I got obsessed with it once I started getting some success. I was like, “Well, that was the smartest thing I ever did. So, I should do that again.” So, I went and hired another coach and another coach and another coach and every time I would learn a new strategy, we’d be able to go and apply that and have more success and do more deals and get more creative and help more people and make more money at the same time.

So, I went down a rabbit hole doing that for quite some time and yeah, that kind of sucked me into the education side at the same time because I was getting asked to speak on different stages and coach different groups and it started out sharing your testimonial and that turned out into doing a little coaching calls here and there and then that turned into a full full-fledged speaking and then selling and after a while of that, I was like, “Well, if I’m going to be on the road and I’m going to do this, I might as well just do it for myself.” So, that’s kind of what turned into the education company.

Brad Weimert: Wait, so just actually doing what works worked for you.

Kelton Todd: It actually did, yeah. That’s probably the most unconventional part once you truly get into just the education space, but yeah, and I think that’s a topic that I always like to talk about, just because I think it is unfortunately rare in this time where there’s so many influencers and everything in between that are telling you how to make a buck online. From the mindset of all you have to know, I think they say is, be a couple chapters ahead of the person that you’re teaching. And that’s not really my belief. I think it’s difficult to teach something that you haven’t done, you haven’t done it right, and you haven’t done it wrong, and you haven’t learned the hard way. But that’s just my belief system, so yeah.

Brad Weimert: Yeah, the current sort of creator or economy is missing, I think, several elements. And I think, fundamentally, this notion of making a bunch of money by selling information, the fundamentals mirror the mentorship and the apprenticeship programs that have existed for hundreds of years, but they are one to many. And those programs historically were one to one with an apprentice or one to a few, learning from an expert. And that’s how people got educated for hundreds of years, hey, this is how you do this thing. And you learn it from somebody that’s great. And the better the person is, probably the better that their apprentice is going to be.

Unfortunately, when we got into the more recent era, where you have exposure to hundreds, thousands, millions of people, it’s easy to make a little bit of money or a good chunk of money. It’s hard to sustain that reputation over time if you’re not great. But it’s a super interesting model. And we’ve got hundreds or thousands of clients that sell information of some sort inside of the walls of Easy Pay Direct or I mean, virtual walls here. But I want to hear about the real estate and what you learned because it sounds like you went through several courses, or you said you went through several courses, all kinds of different verticals, learning a different skill set. What was the first type of real estate investing that you did that grew that foundation for you?

Kelton Todd: Yeah, it was just basic wholesaling and flipping. I think I was your typical watched a bunch of HGTV and was like, “Man, this is cool. I like real estate. I like making things pretty. And I could do that.” So, growing up, my dad was always kind of in one house and out of the next. I live with my mom, but we’d go see my dad in the summer. And he would always be in a different house or be remodeling a different part of the house or something. He was always just kind of improving it and tinkering and selling it and buying something new. And so, I think that probably kind of spurred an interest in me from a younger age.

So, between that and HGTV, I liked the idea of flipping. My first mentor was really just teaching me how to wholesale because that’s the easiest thing to teach, really. And so, I started out just wholesaling. But by a desire, I kind of started flipping, and then I was like, “Well, maybe I should get someone to show me how to do this flipping thing.” Like, someone showed me how to do that wholesaling thing. And I did and that worked out well. And so, after a few flips and a few wholesales, I was like, “Well, what else is out there?” And so, that kind of led me down a creative financing path and started getting obsessed with what it was that people that were really having success in the real estate education space were actually doing and started going down that rabbit hole and come to find out that rabbit hole never ends, you have to take yourself off of that hamster wheel.

Brad Weimert: Well, I think that principle applies to just a tremendous number of things in both business and investing. Why did you choose to seek new skill sets instead of just doing more of the thing that was actually working for you?

Kelton Todd: Yeah, first, it was because I really had a passion for houses and for fixing things up and wanted to do that. So, that’s probably the only reason I went from wholesaling to flipping. And then if I’m just going to honestly answer your question, it’s just because it’s my personality. As we were sharing a little bit before hopping on this call, I’m a challenge seeker. I’m kind of a risk seeker. I like new things. And so, for me, once I’ve done something 20, 30 times, it’s like, “Alright, I’ve done this.” I could sit back and do it again and again and again. But to me, that’s not a very adventurous life. Again, as we were also speaking about before we hopped on here or before we started this recording here, I mean, you realize really quickly, it’s not all about the money. I mean, once you make 10 grand in one day or 30 grand on one deal several different times, yeah, you could try to scale that and you could do that over and over. But for me, it just wasn’t very challenging. So, that was my move into the flipping side of things.

And then once I had those two skill sets, I learned really quickly that I like to actually serve the community that we were helping, the motivated and distressed sellers. A lot of people look at real estate investors and think that we take advantage of people. And the irony is, we’re actually doing the opposite. We’re keeping those foreclosures down and helping people and great people in a tough situation. And for me, it was actually one of the reasons that really led to it was I knew some people that did it, and they were able to help people a lot better than I was. I can only help people if they didn’t know too much on their house, they didn’t need too much for their house.

And so, I got started down this kind of creative financing thing. And then I got obsessed with it. And I started figuring out how can we solve every person’s problem. And we started buying houses for more than what they were worth, 100% of value, and found a way to do that in a win-win way that was helping the homeowner while helping us. And so, it was a combination of all of those things that led to it. But most honestly, it was probably just an itch to do something new, itch for the next thing.

Brad Weimert: Yep, I am very familiar with this itch. I think a lot of people are. Well, I think that it’s a noteworthy point. Most people, I have sort of an aspiration to be tremendously deliberate about everything that I do in my life and follow a plan, have it be premeditated, despite the fact that I like variety and adventure. Yeah, I find tremendous satisfaction and sort of solace in having the stable plan as we go through life. But life and business are complicated, and they’re messy, and they’re fast, and a million things are going on. And it’s okay to make a new choice to scratch that itch. And you can also be tremendously successful doing it, I don’t think there’s one right way to do things. So, your example is a good one for the masses that look at things and think maybe adding the skill set is the next path. So, I like that.

The other thing that I like that you said is that nobody has to lose in the equation. And people have this paradigm that real estate investors are taking advantage of people. And to be clear, there are plenty of them that do also, same thing with business, right? Also, the big highlight is, the better you get at something, the more control you have over the ability to create or find the win-win for all parties involved.

Kelton Todd: 100%. Yep, that’s actually what we teach for a living. And that is a real estate investor job is to create a win-win. Like you said, there’s a lot who didn’t, and I’ll be honest, a lot of the reason for that is it was a, we call it a good old boys’ industry. And that’s what it was for a long time. And unfortunately, the good old boys weren’t really good old boys, they were taking advantage of people. And I think it’s hard. It’s been a hard last 10 years in the industry. But I feel like the industry as a whole is breaking away from it, which is really cool.

There’s a lot of negativity that comes from this era of social media and all of that, but there are some positive things. And I think, honesty, transparency, visualization into a lot of things has helped in a lot of ways. So, it is cool to see it kind of transitioning. And that’s how we view the whole industry is a win-win. The more education and knowledge you have, the more skills you have, the more you can allow, not just yourself to win, but the other party involved or the other partners involved, or whatever it is to actually make it to where everybody can come out on top.

And I think you nailed it. I think people think of it as a zero-sum game, like, one person’s winning, one person’s losing, that’s business. Especially, I seem to find this the most with is non-business owners, like just your typical everyday employee seems to think that business owners as a whole are all in this competition against each other. And it’s like the zero-sum game. It’s almost like they’re in competition with you as like an employee versus this business owner. And it’s like, man, all we want to do as business owners is add value to people including you, like if I can employ you and that’s what you like, great. If I can serve you as a mentor and help you get started on your own, great, but it’s not competition. It’s how much value can we add to each other. And it’s a crazy concept because it’s something that I think you and I and a lot of entrepreneurs start to see as they advance, but it’s something I didn’t understand coming into. I was one of them. I was a typical employee. I didn’t see it that way at all. I couldn’t figure out why my first mentor was even willing to mentor me, because I thought I was going to be taking money out of his pocket. That’s the viewpoint.

So, I can speak so passionately about them, because I was them. It’s not that I’m better or anything else. It’s just that I’m different than who I was. That’s where I came from. I’ve gone through this journey and realize, like, man, business is exactly that. It’s a win-win. And the more specialized knowledge you have, and education and training and skill sets you have, the more you can help everybody in the journey win.

Brad Weimert: Yeah, I think my general framework for that is that I feel very grateful that I grew up in commission-only sales, because in commission-only sales, you don’t have much choice but to take full ownership of the outcome if you’re going to last, right? Either you sold the sh*t or you didn’t, and if you didn’t, sorry, it’s on you. Or you quit, right? But for me, that allowed me to very quickly associate ownership with personal growth and development and skill set growth and development. And that broke the frame for me of it’s somebody else’s fault very early in my life. Even if somebody else did something that wasn’t ideal or that was negative to your outcome, it’s still up to you. It’s still on you.

And in the entrepreneurial space, obviously, there are varying levels of this, but it’s more common to find a business owner with that mentality than an employee with that mentality because the business works or it doesn’t. So, I totally agree with you on that. Tell me about the different real estate investment strategies because I want to go into kind of the launch of info and how you landed there, but when you live in…

Kelton Todd: Actually, real quick, I was going to add a note to the topic there. There’s a parable, and I’ll destroy it. So, I don’t even want to try to get it right. But long story short, what I took out of it is this term, “maybe,” and that’s what I live by, right? So, someone says, like, “Oh, man, I got some good news and some bad news.” And I’m like, “Yeah, maybe.” Let’s talk about it or oh, my gosh, if something really bad happened, we got to have a meeting, we got to figure out. There’s this huge fire. And I’m like, “Yeah, well, maybe.” That’s the mindset that we have around here.

And I kind of force everybody to have it. It’s like, no matter how bad it is, oftentimes, whenever something really bad happens, what we really learn from it is like, hey, we were doing something wrong. And we should stop doing that. And the problem was just bringing it to our attention. And so, we could look at it like, oh my gosh, it’s horrible, because it’s going to cost this business or it’s going to cause somebody to be unhappy with this. Or we could just say, hey, let’s do what we can to remedy that situation. But more importantly, look in the mirror and realize, yeah, it’s not a bad thing. It’s a good thing, because now we get to fix the problem that we were doing wrong. And so, yeah, to your point, I just use the term “maybe.”

And some people, it drives them nuts. And they’re like, “We know Kelton maybe, but this is bad.” And I’m like, “Well, okay, maybe.” I mean, it might take 10 years before we find out but hindsight, we might look back and go, that’s the time of my life that I changed the way I believe about something because something bad happened to me. And so, until it’s all unfolded, we don’t know. So, I just practice the art of maybe.

Brad Weimert: Yeah, I’m a big fan of that. And a parallel in real estate is people talk about, is it a good price or not? And that’s a ridiculous question, unless you add the context of over what time horizon.

Kelton Todd: Yeah, I love it. I love it. Yeah.

Brad Weimert: Great. Did you overpay? Well, how long are you going to hold it?

Kelton Todd: Exactly. No such thing. Yeah, exactly.

Brad Weimert: Over a 20-year time horizon or 50 or 100 or 200 wasn’t an expensive purchase.

Kelton Todd: Yep. I love that. We try to open people’s eyes up to that. I have three cardinal rules in buying holds and one of them is to allow yourself the luxury of time. If you allow yourself the luxury of time, it doesn’t matter which mistake you make in real estate. As long as you’re not over-leveraged doing it from a place that you can’t sustain, then you can’t make a mistake.

Brad Weimert: Yep, I’m a big fan. I rarely talk to the people next to me on planes because it drives me crazy. I don’t want to be trapped in the conversation I don’t want. But I was talking to this guy next to me on a flight. And he was a massive hotel developer. And one of the things that I love about real estate is the wild variety of asset classes, investment strategies, financial strategies around it. And we were talking about that specifically in land acquisition. And I was talking about kind of aggregating a few pieces of land to potentially build a hotel.

And one of the pieces was 100 grand, they wanted 100 grand more, 200 grand more, 300 grand more, which is like a million-dollar piece of land. So, it’s 20% or 30% increase on what the actual value is. And his response was, “Dude, any number of things that you do during the development could accidentally cost you that. It doesn’t matter at all.” He was like, “Relative to the acquisition of this, it doesn’t matter at all. If the scope of project, if you overpaid on every piece of land by 30%, it’s still probably fine.”

Kelton Todd: Yeah, that’s interesting.

Brad Weimert: Well, I like that because people get stuck in their head on this idea of the market value is the right value. And the answer is not always the market value is the right value. It’s what’s the value relative to the project that you’re involved in, right? Do the numbers work with the project that you’re involved in?

Kelton Todd: Yeah. No, that’s interesting. And actually, probably, I would agree 1000% with you, like I said, sometimes even probably find myself teaching it, but ironically, also find myself on the other end of it as well, because you just use a great word “market value.” I’m obsessed with paying less than market value today. But to your point, like why? I mean, what– and again, it depends on which end of the spectrum I’m on. When it comes to buy and hold, I agree 1000%. But to your point, I mean, I could probably apply it more broadly, in general. But yeah, I mean, a saying we use around here a lot is it’s not what it costs you, it’s what it makes you. So, so many people focus on what does it cost, what does it cost, and that’s the consumer mindset.

That’s how I was raised. I mean, I was taught if you wanted to buy something, go home, sleep on it. If three days later, you still want to buy it, then you can go back and buy it, that’s how I was raised. What does it cost? What does it cost? So, it’s very difficult to adapt that new mindset, but at the end of the day, you’re 100% right. It doesn’t matter what the current value is based off of what you think it might be worth. At the end of the day, what’s it going to make you and if it’s going to make you money, then that’s the end of the spectrum that you should focus on.

Brad Weimert: That’s also how you create these big win-wins is that if you have somebody that’s trying to sell a property, if you have the ability to pay them 20% more than anybody else in the market because you’re going to develop something bigger or you have some additional value that’s going to come out of it, that’s a big win-win, right? Then the seller makes a bunch more money. You might spend more, but you also know you’re going to make it on the back end. So, I love that.

Kelton Todd: And that’s where you can start adding what we call creative financing, right? That’s where you can start saying, like, “Hey, I’ll scratch your back, you scratch mine. Let’s figure out a way where we can get more money in your pocket.” Like, get less money out of my pocket to get into the deal. And that’s where the fun happens.

Brad Weimert: So, let’s talk about that for a second. So, you started in, for people that aren’t heavily entrenched in real estate, the language goes right by them and it’s understandable, because…

Kelton Todd: 100%, yeah. I would have been there with them. Yep.

Brad Weimert: Yep, a million acronyms. And even inside of one type of real estate investing, there’s a lot. So, you started in wholesaling, which is basically finding houses. You kind of market to find houses, and then you sell, you write a contract to have an option to buy the house, and you sell that contract to somebody that actually wants to rehab it or do something with it. And then you make a few grand to 10, 20 grand, maybe, on a residential property. And that’s kind of the idea of wholesaling.

Flipping is finding the house that you actually want to lock up and rehab and renovate and then sell it to somebody else, or hold it and rent it, but usually sell it to somebody else to make a bigger chunk of money. But you have to control the property and usually have more money to do the wholesaling.

Kelton Todd: To do the flipping.

Brad Weimert: To do the flipping. Thank you, thank you. And then you moved into creative financing and that could mean literally a thousand things. So, when you talk about creative financing, what did that real estate investing model look like for you?

Kelton Todd: Yeah, so you know that it’s 100 different things, so I thought that it was like, oh, I’m going to take a course on creative financing. I’m going to hire a coach on creative financing and come to find out seven courses later and seven coaches later, there’s more than one way to skin a cat, and so, it’s a wide array. It starts from– for us, one goal right out the gate was we wanted to flip more houses at a time and larger houses, and people always get confused by this, like, I thought you were making all this money. We were running a business. Business has expenses. But we were making good money, but in order to flip 10 houses at a time that are all relatively expensive, and in terms of normal access to capital that most of us have, it was necessary for us to start getting creative with that.

And so, our first patent on creative financing was actually just getting creative with people that weren’t real estate investors that wanted to get in on some of these deals without having any knowledge or experience, but just having some money. So, we started out getting creative on that front, where we would do equity partnership deals, where instead of getting a hard money loan or a private money loan, we would just find somebody to fund the whole project, which was a lot easier, because now we’re in cash, we’re not in this high interest rate environment. And come to find out, people were actually happier earning 10% on their money when they felt like it was a partnership, and they were just actually making 30 grand profit, as opposed to me just saying, “Hey, I’ll give you 10% on your money,” because then they would the next day, want to earn 12, and then find someone else to give them 13, versus when you’re partnering with them, they were thrilled because you would have some decent sized singles, and then every now and then, you’d have a triple or a home run, and then every now and then a grand slam, and they would make 50% on their money and then they’re never leaving you, right?

So, that was the first world of creative financing was just finding other people that were interested in what we were doing and making a small chunk of the pie with using their money. Then it got into working with the homeowner, so homeowner seller financing it to us, so they would just seller financed the home to us. We would then fix it up, sell it, and then pay them off after we flipped the house. So, that was reducing the amount of cash needed up front significantly. So, now, all of a sudden, like your percent of return was much larger, your return on investment. Then it turned into okay, but not that many people have their house paid off, they can actually do that.

So, now, what happens if they have a loan on the house? So, then we went down this road of taking over payments, buying houses subject to the financing that was already in place instead of going and getting new financing, which is kind of a controversial topic in some ways in the industry. Some people think that it’s more difficult than it is. Some people think that it’s not, even though you can do it, you shouldn’t do it. And so, had to go down that rabbit hole of figuring out the best way to do it by a good trusted source that was doing it the right way. And yeah, ultimately loved that strategy, so learned it from a loan assumption.

Brad Weimert: Let me highlight this a little bit because the seller financing alone is one of these things that if you don’t do real estate investing, even though to a real estate investor, seller financing seems pretty straightforward in terms of language we’re using, what you highlighted was you were, and this is all through the lens of flipping, right? So, you’re in some way controlling a property, which means that you might own it or you might have an option to own it. And then you’re going to rehab it and sell it for more money, which is going to give you a chunk of cash.

And the seller financing, you were looking for people originally that own the house free and clear. And they said, “Hey, look, we’re going to let you come in and rehab the house and do the whole thing. And you can just pay us some amount every month while you’re doing it until you sell it. And then you will give us more money when you sell it and pay off the property when you sell it.” Is that the fundamentals of seller financing for you?

Kelton Todd: Yeah, 100%. And we break it down and just explain it to people just in terms of a traditional loan. I mean, if you’re familiar with like a term called the balloon note, it’s not uncommon for someone to lend you money and then say, “But you have to have it all paid off in five years,” or “You have to have it all paid off in seven years.” Very common in commercial, but we would just do the same thing. We’d buy a house from a homeowner and just agree to pay it all off in a year, right? So, they didn’t even really care what we were doing with the house, flipping it or not, as long as in the agreement, they either got the home back with the downpayment that we put down or they got paid at the rate that we agreed to, which is a year later.

And for them, they always took more money a little bit later. Not always but oftentimes, they would, especially people that have their homes paid off, they’re on more of a fixed income, versus for us, it was a no-brainer, because like I said, back to the whole idea of not having to go raise capital for it. So, yeah, I think that’s a great way to explain it. And like you mentioned, that works with people that have their home paid off, but now somebody doesn’t have their home paid off and come to find out you can do the same thing, right? They already got a loan. It was from the bank. So, just keep making those payments to the bank on their behalf. And again, pay them a little bit more money to allow you to do that.

And it goes back to creating win-wins, right? I was fascinated the first time somebody let me buy their house and leave their financing in place because I was willing to pay them an extra five grand. And what I learned is we all apply our thinking and our current situation to other people. But most of the people that we were working with, with that strategy, never in their life had they had the opportunity to just have an extra $5,000 or $10,000. Like, to us, we don’t think much of that, but once you reach a level of success in business, but the average American just doesn’t have an extra 10 grand dropped in their lap very often. And so, for them to leave a financing in place that they already have, it makes perfect sense sometimes, not always, but sometimes. And so, especially if you are going to agree to pay that thing off in a matter of years anyways, they love the idea of it. And once I realized that it opened up a whole new world because it was like, wow, we can help pretty much everybody now.

So, it doesn’t matter if they are in a distressed situation or motivated to sell quickly. Or if they’re just in a situation where they’re opportunist that wants to make a little extra money whenever they sell their house. That allowed us to start creating a lot more win-wins.

Brad Weimert: Just because you wouldn’t do it personally, doesn’t mean that a lot of other people don’t want to do it.

Kelton Todd: 100%.

Brad Weimert: Tell me about the good and bad points and legalities around “subject to,” which is the idea that the person you’re buying the house from has a mortgage in place, and you are assuming the mortgage, or you’re just making the payments on the mortgage. You mentioned that this is a controversial topic and there’s a right way to do it and a wrong way to do it. What do you not want to do? And what do you want to do if you’re trying to do that?

Kelton Todd: Yeah, what I’ve learned is– you actually even used a funny word right there. So, what I’ve learned is, the older somebody is, the less they like the strategy of “sub to.” The younger somebody is, the more they like it. So, before 2007, 2008, their loan assumption was a very common strategy. Nobody had any controversy around it. It was a very easy black and white strategy, hey, you don’t want your house anymore, but you’ve been making payments on it for 10 years, I want to buy your house, but I don’t want to start making payments on it all over again, because I’m going to start paying all the interest upfront again. You’ve already done that. You’re towards the back end of the note where it’s starting to become like mainly principal payments. I want to just take over the payments that you already had in place. And pre-‘07, ‘08…

Brad Weimert: Hold on, because this is one of these things. Just for any of the non-real estate investors, taking over the note, note is synonymous with mortgage. And mortgages are usually over 15 or 30 years and they’re amortized, and the way that– and it’s really like a gangster model that maybe shouldn’t be allowed at all.

Kelton Todd: Agreed, 100%. Yep.

Brad Weimert: If your interest rate on a mortgage is 2%, 3%, 4%, 5%, 7%, 8% these days, on the front end of a 30-year mortgage, the first seven years, if your payment is $1,000 a month, the first seven years, almost all of that 1,000 is just interest that’s getting paid to the bank, and almost none of it is paying off the actual amount that you owe on the mortgage. And so, when you say, “Hey, we’re going to take over somebody’s payments,” if they’ve been paying for 25 years, every single payment after 25 years is mostly just going right to the bottom line of what they owed on the house. I had to highlight that because that thing, if you don’t invest in real estate, people don’t know that, don’t get it. And it’s a huge, huge, huge deal.

Kelton Todd: Yeah, I need to bring you into our training, so you can just stop me and do that exact narration throughout all of our trainings because even though you don’t mean to, you don’t realize it, but you’re taking it for granted that you’ve discovered these things. And the reality is, there’s a lot of people out there who do know these things because they’ve owned a few homes and stuff. But sometimes, even just calling it out, like you just did, is a perfect way of really reminding somebody. So, I love that. Couldn’t agree more. I think you nailed it.

Yeah, so before ‘07 and ‘08, it was not really controversial. It’s black and white. It’s called a loan assumption. And you would actually go down to the bank, and the bank would actually transfer the payments over to your name, and then they would free up the original buyer to where they weren’t responsible for the payments anymore. And that was a very common strategy. There was one challenge with it, and that was that you had to get approved to do that. Some people say, “Well, yeah, if you’re going to buy someone’s house, you should get approved.” And it’s like, “Yeah, but I want to buy 20 people’s houses this month.” And so, it’s kind of hard to get approved to buy 15, 20 different houses, even this year, for instance, right? And so, again, as a real estate investor, that was somewhat challenging, but that was the way to do it.

Well, after ‘07 and ‘08, they passed, because of the financial crisis that came from subprime lending and people were getting mortgages and then selling them off and doing a lot of creative things that caused a market crash, they had a lot of regulation came out and basically, made it very difficult to do a loan assumption. You had to get fully approved. And even then, the banks were so scrutinized that they were better off just not approving them. And all you did is now gave the bank permission to do something they didn’t want to do anyways. And so, it made it very, very difficult to do a loan assumption. So, that’s when the “sub to” thing really took off. It was a thing before but not as common.

So, before, then I understood why the older generation investors were not a big fan of “sub to” because it’s like, that’s kind of the shady way of doing it, just go to the bank and do it the proper way. Well, now, that’s not really an option. So, the way that it’s done now is you don’t go to the bank, you quite literally just don’t tell the bank. You just come up with an agreement with the homeowner that you’re going to make their payments, you put it into an agreement, and you do this with a title company, and attorneys are involved. And it’s as legitimate as it can be. You’re using Fidelity National title, Alamo National title, I mean, these are legitimate transactions.

But the difference is, the mortgage doesn’t get put in your name, it stays in the seller’s name. And so, if you’re not an ethical person and you’re not doing things the right way, say all of a sudden, you just stop making the mortgage payment, but you have a tenant in there and you keep collecting the rent payment and putting it in your pocket, that’s ruining the original seller’s credit. And it’s just a bad situation for everybody. And ultimately, that’s the risk that the seller is taking when they choose to go down this route of “sub to.”

The reason that it can be an unethical practice is people aren’t transparent about that. We actually have a disclosure drawn up, highlighted, bold, underlined, not tucked in behind 27 other disclosures, but an actual disclosure getting the homeowner to acknowledge and agree that I’ve been made aware that it’ll be more difficult for me to get another mortgage until this one’s paid off. I may– all of the things that could happen, but I am aware and willing to take that risk upon for an additional $5,000, an additional $10,000 in my pocket. And that really comes down to being a good communicator and being an honest business owner where you’re reputable. They can kind of trust you. And over time, you build a reputation where you can give them references, and they start to realize that it’s not a high-risk-type structure to do with somebody who’s actually legitimate.

And to be honest, most people that I know nowadays are doing them the correct way. There’s always going to be a bad apple that’s going to kind of ruin it for everybody. There’s always that horror story of, well, I heard about this deal. And it’s like, well, there was a shady person involved in that deal. And there’s shady stories about every strategy that exists when there’s shady people involved. But like I said, that’s why we’re making a conscious effort to not only try to do things ethically and on the up and up, but teach our students to do the same and really try to encourage the entire industry as a whole to start doing the same.

Brad Weimert: Cool. Well, I appreciate the breakdown. I think that’s super helpful. And in a world where there is endless information, the value is in curation and simplicity.

Kelton Todd: 100%, yep.

Brad Weimert: So, being able to cleanly articulate kind of the different real estate investing models and where they fit in, I think, is super valuable for everybody. I mean, sh*t, I have dozens of high performing entrepreneur friends that I talk to a lot that just don’t do any real estate investing, and they don’t know how it works. They don’t understand the language. And they certainly have the resources to do it, but when they do it or if they do it, they’re usually not doing it in the optimal way. It’s like, oh, yeah, I bought another property or I bought a thing. So, I think it starts with the language and being able to understand some of those basics.

Kelton Todd: Oh, it does. And I’m a huge– I mean, I’m passionate about real estate. Anybody that’s listening to this, I mean, I think every single person should own real estate. I think there’s going to be a time in our lifetime, where it will not be normal to be sitting around talking about buying rental properties and buying properties. I mean, you go to places like California and it’s not typical for the average person out of college to get married and get a job as a school teacher and buy a home. And there’s so many places in America where that’s actually still a thing. And I think we are sitting on a goldmine that if you’re not taking advantage of this opportunity to get your hands on real estate, then you’re going to look back one day and go, “What was I thinking?” Because inflation is real, they are printing money faster than they possibly can. And what that does is just drives the valuation of real assets up and you can leverage into real estate really well. So, I love anytime I can talk about it and help people. If nothing else, just plant the seed of go out there and just try, just get your hands on one or two properties, even if it’s your own home.

I always like to ask people, “Do you own a home?” They’re like, “Yeah,” I’m like, “Has that been a good investment?” They’re like, “Oh my gosh, yes, best investment I’ve ever made.” I’m like, “Really? That’s awesome. So, what are the kinds of investments do you do?” And they rattle off, “All these other investments.” And I’m like, “Well, you just told me the best one you’ve ever done is your home. Have you ever considered doing that again?” “No.” And it’s like, man, it’s not a crazy concept. Anybody who’s ever owned a home knows, it’s usually one of the best investments you’ll ever make in your life. I just like to tell people consider doing it again, like, consider doing it. The thing that works for you really well, consider trying that a couple more times over. Just a crazy thought.

Brad Weimert: Well, yeah, I know. I know. And it’s actually how we started too, because I said, “If this one thing was working for you, why didn’t you just keep doing more of it instead of other things you’ve done?”

Kelton Todd: Exactly.

Brad Weimert: So, today, I have intentions of asking you about the Women’s Real Estate Investors Network, which is this big community that you and your family have built to teach women how to invest in real estate. And it’s a huge, huge educational institution at this point. But we’re on investing, so I want to stay there for a minute.

Kelton Todd: Go for it.

Brad Weimert: Now, you’re way down the path, many years down the path, and you’ve got a multi-eight-figure company teaching this stuff, which has to spit off cash because those are high-margin businesses in general. The money has to go somewhere. Presumably, it’s going back into real estate. What type of real estate do you like to invest in now? And why?

Kelton Todd: I’ll tell you, when it comes to real estate, I am as bullish and it gets on just single-family residential homes. It might be a weakness of mine, it might just be a passion of mine. But like you said, whenever I’ve done something that’s worked really well, I like to just double down and do that thing over and over and kind of perfect it and see how great I can get at doing that particular thing, for instance, single-family real estate. And so, we’ve dabbled in some multifamily, some commercial, we own some, nothing wrong with it. In fact, I would probably honestly admit that it might be a better asset class for someone to take a large sum of money and put into a lot easier, a lot less headache, you can just let somebody else do it for you. So, if you got a lot of money, then there’s nothing wrong with that.

We serve and help people that started out like we did that have absolutely nothing. And for those people, I believe single-family residential real estate is the way to go because you can leverage it. I mean, there’s banks on every corner that are willing to give you loans for it without having to have a very successful business and accredited investor and all this money down and all of that. And so, we are actually still really, really into single-family residential. That’s what we like to do.

Having said that, we do get creative, we do some short-term rentals. We like really large properties for some of our portfolio for different things that we do. But for the most part, it’s reinvesting it. But I’ve also kind of become this little bit of a serial entrepreneur. And so, I like to invest money into other things outside of real estate as well. I think we try to diversify, but I don’t think it’s for the sake of diversifying. I think it’s for the sake of scratching that itch of the next thing.

Brad Weimert: Keeping yourself entertained.

Kelton Todd: That’s it. 100%, yeah. So, for me, it’s businesses.

Brad Weimert: Yeah, I get it. Well, let’s talk about the single-family home and the investments there because even inside of that one asset class, there are still a number of different methods that we’ve already hit on, right? It’s wholesaling, it’s flipping, it’s buying things with creative financing, it’s long-term holds, or it’s short-term rentals. What do you tend to do with single-family homes today if you’re investing in them? Do you want to do the short-term rental thing and put it on Airbnb? Or do you want to buy something, put a long-term renter in there? And why do you go one direction or the other?

Kelton Todd: Yeah, it’s a good question. I think it depends on what market you’re in and what your long-term goals are. If you’re relying on cash flow, a lot of people sell real estate is like this cash flow game and you’re going to have all this extra cash flow at the end of every month. A decade in, we’ve never really found that to be the case, like it’s sold on the posters, if you will. So, if you’re really after cash flow and you’re really wanting to seek like that replacing your income and all of that, then I think short-term rentals is one of the best ways to do it. They have some of the best cash flow that you can get.

We were big on appreciation. So, we like properties that are going to double in value. And we really like properties that are expensive that are going to double in value. So, it just depends on what your particular strategy is there. But yeah, I mean, traditional rentals are going to be the gateway into the industry, like, if you can buy some traditional rentals that just make enough at the end of the month to cover all your bills and you own the asset, I think you’re going to look back in 5 to 10 years and the home is going to double in value and you’re going to say, “Holy cow, that’s awesome,” because not only did the home double in value, but the little money I put into it 10x in value. So, that’s a great strategy.

We still are big into fix and flips. We love to buy small homes and make them big homes. So, we do major renovations. We’ll buy a little 2,000-square-foot homes and make them 5,000, 6,000-square-foot homes and raise the ceiling heights and make them big, nice homes. And that’s a strategy we love to do because it takes some time to do it, which allows us to take advantage of some other tax advantages along the way. And so, we may do a short-term rental or rent it out for 6 to 12 months at the end of that project just to take advantage of some of the other opportunities that exist out there.

Brad Weimert: And it’s fun to build cool sh*t.

Kelton Todd: It’s really fun to build cool sh*t, yeah.

Brad Weimert: 100%. So, actually, some people don’t care. I have a business partner that I own a couple buildings with, and he couldn’t care less. He’s like, “Does it make money?” And he’s happy to produce mediocre product to have a better ROI. And I can’t do it. I just want to build cool stuff.

Kelton Todd: 100%. Yeah, 100%.

Brad Weimert: So, you mentioned tax advantages there and hold periods. What are you talking about specifically?

Kelton Todd: Yeah, there’s a lot of different ways you can do it, like the classic one is, if you can just hold it for longer than two years, then you’re getting into some capital gains and getting rid of some traditional taxes, so just tax advantages that are created for basically real estate investors that hold properties for longer than a year or two. That’s probably your more traditional route, then a little bit more unconventional. There’s a lot of different just ways to depreciate the property right off the property. So, cost segregation depreciation has been a big one. I know that’s a long fancy name. And it doesn’t really matter what it stands for, but it means there’s a great way to write off some taxes. And so, the cool thing about making money in real estate is then you can use real estate to write off as much of the profits as you can. That’s a cool way to do it.

One unique strategy that we teach that I don’t know if many people teaching or any for that matter is, we’ll do some of those big projects, like we just explained, and then we’ll actually move into them. And so, if you live in them for a couple of years, then the first half a million is tax free, whenever you sell the house. And so, it’s a really cool way to live in a really expensive house for a really inexpensive price point. And then when you sell it, you can make half a million dollars tax free. So, I’ve done that strategy numerous times over and it works out great. I’ve just got to convince my wife to move every three or four years, but that’s a deal.

Brad Weimert: And that’s specifically if it’s your homestead property.

Kelton Todd: That’s correct, yeah. That’s why we’ll move into it, homestead it for a couple of years. So, yeah, there’s all different kinds of ways, but I think those would probably be the larger primary ways.

Brad Weimert: Dig it. Yeah, we’ve talked about cost segs several times on the show because for me, well, if you are a real estate professional, which by the letter of the IRS means that your number one time commitment as far as money making goes is real estate investing, and you spend at least 750 hours a year doing it. If that’s the case, cost segregations are this huge tool to wipe out your tax liability. And it involves holding property for a little bit longer than two years, but it’s a huge, huge asset or opportunity in terms of investing.

Kelton Todd: Yeah, and you don’t always have to hold it for longer than two years. I mean, you can roll it into 1031 and go to the next one. And I always like to tell people, the tax code was written by the wealthy for the wealthy. And as Andrew Carnegie once said, “90% of millionaires became so through owning real estate.” And so, if you put those two together, you realize that the tax code was written for people who own real estate. It’s almost impossible to get truly wealthy without owning some form of real estate in one way, shape, form, or fashion when we start talking about long-term wealth. And yeah, I mean, the tax code is pretty stupid when it comes to real estate and the advantages that it provides.

Brad Weimert: Yeah, well, I’ll also say that one of the conversations that I have routinely and that comes up, well, I’ll use cost segregation as an example. So, there has been an IRS code for quite a while with bonus depreciation for cost segregation, which allowed real estate investors, has allowed them to accelerate more of the depreciation into the first year. So, you can write off a huge chunk of this bonus depreciation, and it was 100% of this value. And now, it’s 80, and then it’s going down to 60 and supposedly 40, and then going away. And this is a huge deal. And so, I know a bunch of investors that are kind of panicking around it, but what you just said is the highlight, which is the tax code is made for wealthy people to pay less in taxes. And so, you better believe that something is going to replace that as it goes away. And you just need to be good enough to find it or connect it enough to talk about it and figure out what that thing is.

Kelton Todd: Yeah, I don’t want to go too off topic or taboo here. But I mean, you take a look at every politician, I don’t care which side of the aisle they’re on, and you look at their income, which is public information, making $179,000 a year for the most part on the high end, and they live in $10 million homes. Like, one plus two is three, not 12 million. So, how does that happen? That’s a great example. I can assure you that they are not going to stop that from happening because they’re the same people that are benefiting from it. So. yeah, whether it goes away and/or is replaced with somebody else and/or a pause, one that probably more people are familiar with is the bonus depreciation on cars. They did the same thing after COVID, 100% bonus depreciation.

If you’re a business owner listening to this and you own a car that you’re not writing off 100% of right now, you’re missing out, it’s no different. But think about it, what’s one of the qualifications for that? 6,000 pounds. What kind of cars weigh 6,000 pounds? Well, I can tell you, I have a few of them, Range Rover, G-Wagen. I don’t have an Escalade, but an Escalade, I mean, those aren’t cars that the average person drives. Those happen to be the same cars that these politicians, if you will, happen to drive every single day. And so, it’s like, again, yeah, that wasn’t written to take care and help the average person be a little more average and get by that was written by the wealthy people that drive these kinds of cars to help wealthy people continue to get wealthier. And some people hear that and get mad. And I say, “Well, no, just hear that and learn and do the same thing.” And that’s ultimately what we’re talking about right here.

Brad Weimert: Yeah. You have given me two things to think about. One is whether or not I should buy a Range Rover. And two, I live downtown, it’s just a lot of car for downtown. It is.

Kelton Todd: You can get the Sport. I don’t know if that’s actually 6,000 pounds.

Brad Weimert: And then two is don’t get mad about things. Think about what you can learn from that.

Kelton Todd: 100%.

Brad Weimert: And that goes back to this general thing that we’ve been, the throughline here, which is ownership of outcome and just being better, learning to be better.

Kelton Todd: Yep. I would never claim to improve or even change a quote, but one of my favorite quotes by Jim Rohn was don’t wish it was easier, wish you were better. And I would like to add a little tagline on the end of it, don’t wish you were better, become better. I mean, to me, that’s like a signature throughline right there. Like, don’t sit back and wish things were different. Don’t get mad because you don’t like the way it is. Odds are if you’re willing to just play by the same rules and learn the rules, you’ll actually find out that it’s in your favor the way that it’s done. It just takes work, takes a little bit of research, takes a little bit of not complaining and doing. And it’s crazy what’s on the other end of that.

Brad Weimert: Yeah, couldn’t agree more. Well, look, I’ve tied up your time talking about real estate investing, which is important to me.

Kelton Todd: Yeah, I love it.

Brad Weimert: Yeah. I’m going to spend the later half of this day dealing with a property that I bought earlier this week.

Kelton Todd: That’ll be fun.

Brad Weimert: I’m deliberately pushing it off to later in the day because I want to make sure I get other things done first. But tell me, before we do that, you went down this path of investing. Ultimately, you rolled a lot of your information that you had learned into building an education company. And then you put a lot of time and energy into that to build that into this multi-eight-figure entity that now has 55,000 paying members all over the country or world, potentially. How much of your time goes into that? And how much goes into investing? And how do you decide that? Or how did you decide that?

Kelton Todd: Yeah, so your viewers will love this answer and get a kick out of this. My mom decides that for me, I think. So, long story short, we actually didn’t start what we thought was an education company. We just started helping our friends and peers invest in real estate and wanted to get paid for our time. And so, we started the network and realized that we could get deal flow, and it was just a win-win for everybody. And so, we had a network where we taught local people here in Dallas how to invest in real estate, and we really ended up partnering with a lot of them and stuff. And that’s where it all began.

And yeah, so what we found, people loved it when we took all of the information we had learned from all these different mentors, bundled it all together and put it in one place for them. And then they wanted coaching on it. So, we provided coaching on it by ourselves, as well as some of our other either coaches, which eventually ended up mainly just being students that just did literally exactly what we showed them to do.

And then COVID happened, and when COVID happened, it shut us down because it was all in-person events. So, we go into hotel rooms twice a month, written out conference in rooms, and have big meetups and all of that. And so, we had to shut everything down in COVID. And my brother and I’s goal was to completely shut the education side down because it had become an education company and less of a network. And so, we were having to spend more time educating and coaching and really running a business and marketing and hiring employees than we were actually getting to do real estate.

But my mom came to us and said, “People need us more now than ever. People are sitting at home. They’re in a bind financially.” And we had helped her start this women’s network at the same time, but we would all meet up in the same room. There was just this little subgroup of women involved. And long story short, we agreed and promised to help her grow this Women’s Real Estate Investors Network online, simultaneously. But we said, “Hey, you know what? We don’t have to be the coaches, we don’t have to be the face of it anymore,” because I was literally running an entire company doing the marketing, speaking, coaching, selling, I mean, you name it, while investing in real estate. It was just too much.

So, we agreed, not knowing what it would turn into. But when we went online, as we were discussing, I think maybe before recording, if not at the beginning of this call, it kind of blew up. I mean, we had a lot of success out the gate. And we went from just this little kind of small mom-and-pop company with five or six employees that were just working here locally in Texas to having hundreds of women every single month all across the nation joining our network. And that turned into thousands and that grew. And we’ve now had over 100,000 women paid to go through our, what we call our masterclass. It’s like a week-long course, which is only like 17 bucks. But still, I mean to have 100,000 women sign up for that and go through that, that’s pretty cool.

Yeah, so it really kind of exploded. And the deal sounded good on the front end because we didn’t have 30, 40, 50 employees, but we got up to over 50 employees. As anybody can imagine, that’s a full-time babysitting job. And so, we’re also full-time babysitters, as well as full-time marketers, which is what it takes to be able to sustain growth and be able to provide the service that we can. And yeah, we kind of sit down this path and mission to be the largest and greatest women’s real estate network in the nation. And I believe we certainly accomplish that.

We’ve had a couple of record setting events. We had over 3,000 women investors in one room a couple of years ago, and then we had our advanced students only last year, and that was still over 1,000, should be a little over 2,000 this year. So, yeah, it’s turned into where it really is a full-time job. And unfortunately, our full-time job in real estate is kind of become our part-time job. But I say unfortunate, as we talked about earlier, maybe, we’ll see. What’s cool about that is that’s forced us to both change the way we invest. So, we do a lot more passive investing and a lot less active, so a lot less of our time.

But also, it’s really kind of opened up this itch for me to now, I’m obsessed with businesses and growing businesses. And I think flipping businesses is my next endeavor that I’m going down, and so, I think it’s kind of cool. It’s come full circle, but at the same time I don’t think running an education company for the rest of my life is in my cards. So, it’s just navigating what that looks like, and we’re trying to build out the right C-suite team right now and get people in place to be able to give us our time back and allow us to truly do what we do, but it’s cool. We serve a lot. We reach a lot of people. We help a lot of people, and the testimonials are just cool, hearing people’s lives that are changed. And so, as much as I say that, all it takes is one testimonial to get me to agree to put on another event or give another weekend to another training or whatever it is.

Brad Weimert: Right. You get a success story from somebody that you taught and it fuels you.

Kelton Todd: Yeah, I mean, one of my favorites is like, we’ll get them from time to time, like, pictures of them picking their kids up from school, and I pick my kid up from school every day now because real estate’s given me the freedom and time to do this, and it’s like, man, I mean, I see one of those and I can put my head down and go to work for another year. Like, that’s pretty cool, because I know what it did for my family. So, when you see it changed people’s lives like that, you’re like, “All right, maybe this is my call. Maybe this is what I’m supposed to do.” But like we said, it’s not as simple as it always sounds.

Brad Weimert: What do you think the worst mistake is that you’ve made through your journey in both real estate investing and building the company, or one or the other?

Kelton Todd: Oh, man. Probably, pretty typical, I think we were like a lot of people that had success during an up-marketing, kind of thought we were inevitable or invincible, I mean, and instead, the inevitable happened, and we had a market change and a market shift. And we went from almost 60 employees to being in a situation where, with the interest rates and the news and the economic environment, it didn’t make sense. People think that now’s not the best time to get started investing in real estate. Unfortunately, they get some bad news coming when they try to do it any later than now.

But the reality is, is yeah, like anybody we grew too fast, grew not preparing for a down market. And so, when that happened, we were never over-leveraged as far as like financially, but overcommitted in terms of too many projects going on, too many large-scale projects going on out of our cookie-cutter niche that we usually do because it was easier to just do bigger ones instead of stick to our model that we teach. We started doing even the larger scale projects and different things in addition to just being stuck in a position where we had to do layoffs, which I never really fathomed and didn’t like that experience.

And hindsight looking back, I could have prevented it if we had planned a little bit better in advance and not been quiet. So, bullish on, you have win after win after win, and you think all that’s in the cards is wins. And then, so just running into that face first and trying to navigate kind of what we talked about earlier, right? You’ve got commitments out to people and employees and to a network and to a community as well as business partners and deals and not hold up your end of the deal. But when you structure those deals or when you set up those deals, they were just in different environment.

And so, that’s probably my biggest learning lesson is we’re regrouping and trying to put ourselves in a different situation and build out things a little more sustainable. We were relying largely on one traffic source. For a multi-eight-figure business, relying on one traffic source can be very dangerous. And we now realize that we’ve got to diversify and get a little bit more recession proof and build it out in a way that’s a little bit more sustainable. So, that’s overall my answer.

In real estate, it’s very simple. It’s partnering with people that I knew, or I could tell right out the gate that I wouldn’t have wanted to go have a dinner and a beer with. So, that’s my new rule. If I don’t want to have a beer with you, then I don’t want to invest with you. And it’s a pretty simple rule to follow because come to find out, there’s a lot of people that you don’t want to have a cold beer with. And so, that’s kind of my new rule. So, that’s the only time we’ve ever “lost” money in real estate was had a couple of partners that one freaked out and got cold feet and wanted to sell in the middle of a project for no apparent reason.

Another one just started doubting us because the market was slightly changing and somehow, we were supposed to know exactly what that was going to happen and calling it in advance. And the irony is, at the same time, we had other partners that wrote it out with us and ended up making more money and we actually made more money in real estate during COVID than any other time. But bad partners can not only just make a deal go bad but can time suck you and suck your energy out of you and drain you pretty quickly. So, those are some of the biggest, biggest mistakes.

Brad Weimert: That’s awesome. So, in business, safeguard against potential negative situations. And in your case, one of the things you highlighted was one traffic source. And for those of you that don’t do paid advertising, that probably means all of your ads run on Facebook, which is Facebook and Instagram now, or all of them run through Google, and making sure that you figured out how to run ads and get them to work and convert on multiple platforms is what safeguards you if one of those platforms changes their algorithm or whatever. And we see that all the time. And we also, obviously, Easy Pay Direct, a huge tenet for us is, if you have one mechanism to accept payments and you lose the ability to accept payments with them, it’s the same situation, you’re screwed. And there are a million reasons that that might happen. But if you have a single point of failure in your business, period, it’s worth assessing and looking at how you can add some redundancy there.

Kelton Todd: 100%, yep. No, I agree. And I think it’s easy to hear that and be like, “Oh, well, we all should have predicted, blah, blah, blah, blah.” It’s not about predicting, it’s just about being in a place to where it’s like, hey, from time to time, you may have to let people go. That’s part of business and that’s part of life. But doing it from a place of more preparation and knowing, like, okay, we’re doing this while this is working versus building out big large-scale company that’s all dependent on one traffic source or to your point, one payment processor or merchant, I don’t know the correct terminology in your industry, but yeah, so.

Brad Weimert: You got it. Payment processor, merchant account provider, those are the words.

Kelton Todd: Gotcha.

Brad Weimert: Well, the other one that I want to highlight before we wrap here is in real estate, and I think you mentioned a couple of different versions of this, but one of the things that I do when I’m investing is run the numbers and figure out if my investment thesis or my strategy, the specific model that I put in place, I’ll run the numbers on it and say, “Does this work?” And obviously, I’m only going to buy it if it works. But then I’ll also run two or three other strategies and say, “Okay, well, if this one doesn’t work for some reason or if the economy changes,” so let’s say, I buy it as a long-term rental, I also want to run the numbers as a short-term rental and say, “Hey, well, what if I have to short-term run it?” Or what if this could be a commercial property? And I could put somebody in it from a commercial perspective because when I’m buying downtown, which is often where I am, that is one of the options. But I want to look at it a couple of different ways. And so, during COVID, for example, none of us knew– well, I think that none of us knew that COVID was going to happen.

Kelton Todd: I know where you’re going.

Brad Weimert: We’ll leave the conspiracy theory out of this. But I did realize that we were potentially coming towards a peak in the market. And that had been a fear for several years, right? We had a hell of a run in real estate that just up, up, up, up, up. So, knowing that we had been in an up-market for so long, I looked at, okay, so if this market shifts, what am I going to do at that point, right? What if I have to hold this a little longer than I wanted to? And premeditating that saved my ass in a couple of different real estate projects during that time.

Kelton Todd: Yep. And we didn’t do that for just because, I don’t know, I mean, we just had a lot of success over and over and over, and success kind of goes through our head, and then we would have some crazy bad experience, we would turn it into like the biggest win ever. And it was like, “No, we’re experts at creating win-wins. We’ll make anything a win.” And then it’s like, “Okay, but you can’t be a dumbass. You can make a win-win out of a winning situation.” But at the end of the day, yeah, it takes a little bit of humility to be able to prepare like that.

Brad Weimert: For sure. Cool. Well, Kelton Todd, I appreciate you carving out time, man. I don’t want to keep you any longer than our allotted slot here. So, if people want to find out more about you, where do you want to point them?

Kelton Todd: Yeah. Right now, I like to live under the radar as much as possible on my own stuff just because I’m in a transitioning phase on a lot of different areas. But I mean, you can definitely find me at Kelton Todd on social media. Relatively unique name. I don’t think there’s too many. You should find me pretty quick. Just Kelton Todd, mainly Facebook, Instagram. And then…

Brad Weimert: Kelton with a K, Todd with two Ds.

Kelton Todd: That’s it, yep. And then if you happen to be a female interested in investing in real estate, my mom is the face of the Women’s Real Estate Investors Network. That’s a family business that we run and own and help women get started investing in real estate. So, if you are one or know of one, I believe it’s a great cause. It’s helping a lot of ladies change their life and changing the entire makeup of the industry at the same time. So, it’s a cool thing we got going on there as well.

Brad Weimert: That’s awesome. Thanks so much for carving out time.

Kelton Todd: I appreciate it, Brad.