House Flipping: Jack Pinard On the 5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties
It’s a people business, not a real estate business! All of the clients that you speak with that are looking to sell their properties are important to your success. They are trying to solve problems in their lives or move on from the property. You need to understand what you can do to help them the most, and build a scenario that allows for both you and them to get what they need out of the transaction. The same applies for people who are purchasing properties you have renovated. I touched on an example of that in a reply above regarding the couple who was moving with the grandmother.
Shows like Flip or Flop and Fixer Upper with Chip and Joanna Gaines have really glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some amateurs have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the ‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing Jack Pinard.
Back in 1987, Jack Pinard began to buy and renovate neglected properties. He used his profits to pursue his first love — building a recording studio. Having retired from that career in 2017, he’s back full circle, operating the successful residential redevelopment company Summit Buys Houses in Massachusetts and is launching The Homeowner Journal blog and podcast.
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?
Back in 1987 I was hoping to build a recording studio, which at that time was a very capital-intensive project. (I needed to raise about $200,000 in startup capital which is ± $475,000 today.) After doing quite a bit of research, I found that investing in real estate by doing fix and flips would be a viable way to raise large chunks of capital relatively quickly. So, I began my real estate journey. After successfully building a house-flipping business and raising the money I needed, I transitioned into my recording and music pursuits. Fast forwarding to 2017 as I was retiring from that career, I decided to dust off my fix and flip skills and went back into real estate investing at that time. I am continuing today to successfully fix and flip as well as wholesale properties while I scale up to build a business I can leave as a legacy to my family.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
One of the more profitable properties I ever flipped was a lead that I had been pursuing for almost 3 years.
Initially I was doing a direct mail campaign and I got a reply from a woman who had a condo she wanted to sell. I met with her spent, a lot of time with her explaining how we worked and what we would do in purchasing from her. She said she was interested in selling but afterwards, each time I called her she continually said she wasn’t sure what she was going to do. So, I told her “No problem, let me know if we could be of help in the future” and put her into our follow up list.
I would occasionally send her a brief, hand-written note in the mail to find out if she was ready to sell. (I’ve always felt a hand-written note to be a more sincere way to connect personally with people.) I never did hear back from her. Eventually, I would send her a handwritten note by mail once every three months. One day — after not talking to her for over 2 ½ years — she called and said she wanted to sell. She was ready to move to Florida and she had kept my note on the refrigerator in anticipation of the day she would be ready to move. We made her an offer, she accepted immediately and we flipped this condo for a very tidy profit.
The lesson here is one that many people have told me over the years; “the fortune is in the follow up!” When I spoke to the woman and we finally bought her condo she said she had received all kinds of letters over the years but I was the only one who continued to stay in touch with her. As a result, I was the only one she was interested in selling her property to! It’s always worth keeping prospects on a follow up contact campaign because the fortune truly is in the follow up.
Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?
I’ve often heard Denzel Washington say, “If you fall down seven times, get up eight times.” This has always been a core idea for me, particularly when things are tough and progress is slow. It’s important to understand that “failure” is merely a part of the process that produces success and bouncing back after any setback is the surest way to create success in your life.
As far as how it relates to my life, everyone knows building any business is an up-and-down process. As I scale my real estate business now, there are times when progress towards the goals we’ve set seems nonexistent. (Particularly in light of the COVID pandemic) However, by reminding myself to get up once again and move towards my goals I am confident that I will arrive at a business that has reached the lofty goals I have set and allowed me to provide for the life my family and I desire.
Are you working on any exciting new projects now? How do you think that will help people?
We’re working on the launch of The Homeowner Journal blog and accompanying podcast. After buying, designing, renovating and selling so many projects we think we can give homeowners and aspiring investors solid insights into the world of DYI and building wealth through real estate. And with my expertise in the audio and video fields I think our podcast can provide feature-rich episodes that give people easy to understand information to expand their horizons.
What do you think makes your company stand out? Can you share a story?
I’ve met a lot of investors over the years who are doing fix-and-flips and/or wholesaling. Unfortunately, many of them look at it as a zero-sum game where they can only gain if other people lose. Having run 2 successful businesses for so many years has taught me that no matter what industry you’re in, people are at the core of your success. And it’s far easier to build a business and scale it when you’re creating win-win situations for the people you deal with. This applies to both the people in your business who help you run it and reach the goals you set as well as the clients that you deal with on a weekly basis.
As an example, we sold one of our renovated properties to a family who was going to have one of the grandmothers move into the property with them. The grandmother was disabled and would need some specific adjustments to the living arrangements in this ranch-style home. Prior to selling this couple the property, we met with them and took a great deal of time to understand what the grandmother would need. Although our renovation had been completed, we agreed to make those changes to the property prior to the sale in order for them to move in quickly and smoothly. They were so grateful for the time we spent and the accommodations we made! Just a few months later we got a call from someone who was looking to sell their property. They had gotten our company name from the couple that we had sold this renovated ranch too. We subsequently purchased this property and renovated it for a very healthy profit. So, by looking to build win-win relationships in all our contacts, our business continues to grow in a positive way.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I guess I would have to give my parents the credit for helping me achieve my goals. Their ideals were simple but had a profound long-term effect. They showed respect for every individual’s point of view and taught me that you can learn and grow more by listening than you ever will by talking! And that advice serves me every day. As I mentioned, we are in the people business and relating to folks effectively is the best way to grow a business. (and also enjoy life!)
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
Again, this is about being honest and approaching each situation with an eye towards being helpful — even when that means telling a prospect they should work with someone else, like a real estate agent for example.
I often tell prospective home sellers that if they see me walking down the street 6 months after I purchase their house, I don’t want them to cross the street to avoid me, but be glad to stop and say hello! And this has actually happened a few times. It happens virtually much more often, when folks leave 5-star Google reviews or Better Business Bureau reviews for us online.
A second trait I think is vital is persistence, i.e. “If you fall down 7 times, get up 8”. This business can be trying work at times and you never have success without working through the tough spots, and getting to the other side. Each time I fall down, after the smoke clears, I’ve learned to ask myself, “OK, how can we avoid that in the future? What part of our systems need to be tweaked? How can this problem make us a stronger company?”
Every single flip has at least 3 or 4 of these stories! Every time you open a wall, you’re probably looking at a new problem that wasn’t in the plans. So, I grow constantly by facing the problems, working through them and finding ways to grow from them.
Finally, I think you have to become skilled at setting effective goals. And I’ve learned that this is a very delicate balance. If you get up one morning and drink 8 cups of coffee and set a goal to grow your business 600% over the next 6 months you most likely will fall short.
On the other hand, you don’t want to set goals where the bar is too low. So, becoming skilled at setting goals that are lofty but certainly are exciting and attainable is a vital trait.
Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.
Well, I’ve touched on at least one of these already. I think the real estate industry is always exciting because you’re able to succeed and scale as far as you want. If you do the right things and create a systematic approach to your business there is really very little that you can’t accomplish.
Secondly, I think real estate is one of the few things where you can create and expand passive income. One of the end goals in our business is to buy existing real estate notes at above average returns between 10% and 14%. This creates a steady stream of passive income secured by solid residential real estate assets.
Finally, it’s well documented that buy and hold properties will allow for increasing equity over the years while rents and cash flow keep pace with inflation. Meanwhile, effective tax strategies can further accelerate the growth over the years. And the most exciting part is you can extend this cycle indefinitely! We plan to turn a portfolio of properties over to the younger members of our family in the future and provide a secure legacy, with solid skills and positive ethics for generations to come.
Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.
My first concern comes as the result of the explosion in accessible media. There is so much information and programming available about house flipping that it has become a common household word! When I began in 1987, you had to really dig for information and maybe even go to the library (remember those?) to find books on the subject. Because of that, I think most people who entered this space were more realistic and ready to do the hard work it takes to be successful.
By contrast, now there are the DYI, HGTV and 25,624 YouTube channels all covering this topic! And Chip and Joanna change some couple’s lives in a matter of 60 minutes by transforming a dumpy house into a palace! Not that this is all bad, but I believe it’s given the uneducated novice a very simplistic and not-so-realistic view of what it entails to be successful in this space.
My second concern is far bigger and infinitely more complicated. The residential housing markets in the US continues to boom because of limited supply and high demand. This leaves many people in lower economic brackets locked out of the American Dream of home ownership.
In 1949, my father bought the house I grew up in for $6,000. At that time, the median price of a single-family home was just 2.2 times the average yearly income. Today the median price of a single-family home is 6.32 times the average yearly income! So, it is far harder to afford a home now than it ever was. How we can make it a more attainable goal is wrapped in a huge number of economic factors that I can’t hope to change, but I do hope that as time goes on, we recognize those problems and find ways to address them so everyone who wants a home can realistically afford to buy one.
What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?
This is an easy one. As I mentioned above, any business is a people business. And by building win-win situations for the people who work with you, you ultimately can scale your business exponentially because their efforts are moving in the same direction as yours. We very much try to give our employees who have tenure a piece in our success so they are motivated to make the company as successful as possible. In the short term particularly as startup, this can seem expensive but that’s a very shortsighted approach. It is far more effective to invest in worthwhile, motivated employees in order to scale up consistently.
Ok, wonderful. Here is the main question of our interview. Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”? If you can, please give a story or an example for each?
First thing — it’s a people business, not a real estate business! All of the clients that you speak with that are looking to sell their properties are important to your success. They are trying to solve problems in their lives or move on from the property. You need to understand what you can do to help them the most, and build a scenario that allows for both you and them to get what they need out of the transaction. The same applies for people who are purchasing properties you have renovated. I touched on an example of that in a reply above regarding the couple who was moving with the grandmother.
Second, you need to constantly check yourself, look at your KPI’s and fine-tune your operations. Early on I was very focused on doing a renovation in a very specific way in the shortest amount of time. I found that I was turning down the purchase of some properties because they didn’t fit into this very specific idea I had for turning a profit on a property. It was only with experience and after seeing many renovations done, that we changed our approach, sharpened the way we created renovation budgets and found that we could purchase more properties that previously looked undesirable.
Third, you need to keep an open mind at all times, and realize that you can learn from all the people you come in contact with in your business. We have learned so much by working with quality contractors and designers and even the people in our company who suggest different ways of doing things that turn our company into a more efficient and more profitable operation.
Fourth, it’s a cliché but the fortune is honestly in the follow up. The most expensive and time-intensive part of this business is finding quality leads for properties to purchase. So many people send only one or two letters instead of 6 to 10. So many people stop following up with leads after 6 months or so. They are literally throwing money out the window. By consistently following all the leads you have, you will capitalize on more deals that others have left fallow at their doorstep.
Finally, you need to establish efficient systems for all the operations in your business. And make sure that all of the people who work for you understand those systems and work within them moving forward. This allows you to continually review your performance, understand where improvements can be made and revise those systems so you are constantly building a more profitable (and more importantly) scalable business.
What are the most common mistakes you have seen other people make when they try their own hand at house flipping? Can you share any stories?
No doubt in my mind the biggest mistake people make is trying to do everything themselves. I’ve seen so many novice investors try to do all of the renovations themselves. Admittedly this can save money — but only on that flip. So, it’s a very shortsighted approach. My father used to call it, “Bending over to pick up the pennies while the dollars fly over your head.” This means that while the novice in kneeling on the floor putting in tile or reframing a wall, they are not doing any marketing. They are not reaching out to new prospects and as a result their business stagnates. Unless they are truly magicians, they will never be able to grow their business while they’re working on every detail of a renovation. This is where having systems in place creates a synergy that allows for growth.
From your experience, what can be done to avoid those errors?
As early in the game as possible find quality contractors you can trust. Everybody’s got 100 stories about contractors who started out great and then didn’t showed up for weeks. And if you happen to be a contractor, then find people who can help you do effective marketing and outreach so that you’re not taking care of that piece of the business while you renovate a property. In short, try to make the fix and flip process a team effort where you can keep one eye on marketing and growth at all times so that the business does not stagnant.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
Wow we’re thinking really lofty goals here! I would have to say that I would inspire US industries to find ways to make renewable energy sources economically viable. This could create a whole new segment of the economy, boost growth and standards of living while helping us avoid what appears to be a truly catastrophic and unsolvable problem.
How can our readers further follow your work online?
I love hearing from new people and finding out what they are doing! I hope they will get in touch!
I can be reached directly at firstname.lastname@example.org
Web Site: https://www.summitbuyshouses.com
We are currently working on the launch of https://thehomeownerjournal.com and an accompanying podcast. Check the blog for coming announcements regarding the podcasts.
Thank you for your time, and your excellent insights! We wish you continued success.
Thanks so much for involving my company in such a worthwhile series. Your interview questions were truly inspiring and thought-provoking!