This episode documents the strategic pivot from volume-based deal sourcing to exclusively targeting experienced operators with $150K+ transactions. The $3M revenue plateau demanded fundamental strategy restructuring—every 3X growth requires complete operational reimagining, forcing the minimum deal size increase from $20K to $50K with preference for $500K+ deals.
Key Takeaways:
- Law of tripling requires strategy overhaul Each 3X revenue growth hits a wall demanding complete strategic restructuring—the tactics that built a $3M business actively prevent reaching $10M without fundamental changes.
- Volume churn versus operator quality Broader market approaches generate inconsistent deal flow from churning operators, while targeting sophisticated operators with horizontal development expertise and local knowledge enables concentrated execution on fewer, higher-value transactions.
- Two simultaneous success stories net neutral A $20K Tennessee buy sold for $60K and a $25K buy contracted at $105K (note sold at 20% discount) generated strong returns but insufficient business trajectory change—aggregate smaller wins cannot replace strategic repositioning.
The Louisiana subdivide sale over the next six months will provide capital for deploying into the new $500K-$4M institutional partnership range.
(Podcast transcript below)
Welcome to get serious recording this at the of a day, lot of meetings and back and forth, uh, some very exciting developments here. So, you know, something that I’ve kind of been mentioning in passing and you know, how we’re trying to break through a plateau within our business. Um,
and trying to go up market is just realizing, you know, we have to be going after bigger deals. We started building more of a track record with them and we’re not going to, you know, get to 10 million and beyond. if we just keep doing the same thing that, that we have been doing before, kind of regardless of the volume, because in terms of quality of deals, it doesn’t necessarily.
grow in conjunction with the volume of operators that we might be dealing with. In other words, it’s like there’s so much volatility in this industry and churn that even if our name is out there and we have a bigger audience and different folks might be bringing deals, the consistency is less.
in terms of getting kind of repeat deals coming in and just being in more of a down cycle market. know a lot of folks that, you know, aren’t even necessarily using, funding or working with other funders, like they’re just struggling to find deals anyway. So, it, just leads to more dead time within our business, to where, even though our brand is probably, you know, the most recognized.
It has been so far, that’s not necessarily translating to more substantial growth within the business because we have to kind of keep recycling more deals from, you know, just new operators coming in. So we’re just, having to acquire new clients every single time versus like building in some more repetition, basically. So,
I wanted to kind of combine the approach of going up market both for larger operators and just more incentivized realtors, higher quality realtors, as well as finding folks who just have more staying power within the industry as well. And generally they’re going to be going after larger deals on average. And so, you know, we’ve also realized like, it really worth us? You know, we already had a 20K minimum, but
preferred 50K buy prices. And we’ve had a number of success between that 20K to 50K band, including, you know, a couple this year that were like 20 to 25K buys that, you know, one of them, one 20K buy sold, or it’s just about to sell for 60. Another one was like a 25K buy that went under contract for one, 105.
I want to say, but you know, we sold it via owner financing. So we took 20 % cut to sell a note. So all back to us and out of closing costs, it was like maybe 75. So still like well over a two X, great deals. you know, but after the splits and so forth, like it does, it doesn’t. Dramatically change the outlook of our business. So it’s like, okay, well, I would rather.
have more opportunity and capital available for larger deals. And so we just adjusted all of our public messaging, email messaging to up our minimum now to 50K purchase price per deal with a preference for going 150K plus going forward. Cause when I’m really trying to sort out, how do we go from like a roughly $3 million business up to 10 plus.
Again, we know generally the kind of law of tripling business is that every time you 3X your business, you kind of hit another wall and you really have to change your whole strategy in order to get to that next 3X. And so we’re right at that moment now. So that’s just a lot of my time that I’m spending is trying to figure out how do we adjust.
our strategy to kind of push through to that next level at the same time. Yeah. The real estate cycle could be better in a lot of parts of the country, but it’s like, you know, people are still gonna be doing deals either way. It’s not like everything is completely paused. some people are gonna succeed. That may as well be us. You just have to adapt and be more agile. So that was a strategy that we were setting up today and almost
you know, kind of serendipitously is that a larger operator who had sent us something roughly a month ago and we didn’t fully understand the deal because we didn’t just didn’t have the context. you know, initially I didn’t think it was as good, but, you know, once he had sent over what the deal actually looked like, like, yeah, probably would have done this deal. And it was like, yeah, I don’t know, maybe at 320, 350 K.
purchase price deal selling for roughly double that minor subdivide. So I’m like, yeah, mea culpa. We should have got on a call earlier. I am that that’s, you know, sometimes my own detriment is we get so much volume coming in. Like I can’t be on the phone all the time in order for us to handle all these responsibilities. So I try to shift a lot to just text messages and email.
and having my assistant handle so that I can, you we can look at the deals prior to having any calls there. But you know, that’s the price of scaling and having a growing business. Sometimes you’re just going to miss some things that should have been handled more individually off the bat. But now, you know, a month later I was on a longer call with this individual and just like, they’re an under the radar operator, but are doing…
really significant business. Plus they had worked in SFR for a while, have their own development company too, so they can actually do horizontal development on various subdivides in the areas that they operate in. Really sophisticated operation with the type of deals that we like to do and work with other equity funders at splits that are appropriate for what we would look for on.
Some of those deals, you know north of 200 300 K Purchase prices in areas of the country that I would like to focus on more as well So Very very exciting and interesting conversations. It’s like okay, you know, I’ve been a bit more concerned with you know, having less Acquisition activity even as we’re coming into like our you know, most profitable month ever at the moment. It’s like well, I need a
You know, got to keep things moving along because even if profits are coming in here, if the inbound and potential deals is just slowing down, like that’s not a great sign for the business either. So this is exactly what I was hoping for is just to find, okay, can we more reliably find these 200, 300K buys?
over the coming few months and then you’re anticipating this Louisiana deal to sell over the next six months or so should have even much more significant capacity to invest in a lot more deals as well that are just with, you know, higher upfront cost for the deals and give us the opportunity to really expand our operations much more significantly. So
I’m really trying to again both be patient as well as Growth growth focused for You know the coming year and just ensuring that we can you know set up sustainable success over you know the coming 30 to 40 years And have a feeling that you know This current year will probably be relatively steady from a top line revenue, but you know really think we can get that you know 3x plus growth
heading into 2026 based on the strategic shifts that we’re making and the type of deals that we are pursuing. So just wanted to share that there. And in the meantime, sometimes it can be a little bit slow, but we also had another 70K deal actually in Tennessee. I know I’ve gotten killed in that state recently. It’s like, okay, you’re really gonna go back to that well, but at the same time, you have to be aware of.
Is this deal, you know, is the underlying data and market justify purchase? can’t necessarily be scared away just because, um, you know, a certain state didn’t work out for you, but it’s, different markets. It’s different opportunities, different risk factors. So we’re probably going to take that one down over the next couple of weeks or so, and then a larger transactional deal, almost like tuner K, um, kind of be rush service start of next week, you know, transactional, I’ll do those deals all day long. Um,
We handle them much more conservatively though, our paperwork’s probably a little bit more.
you know, tricky to kind of go through, at least for the title company, not really for the originator. It’s just, know, title companies are used to dealing with things that their way. It’s just, you know, we’re, try to keep our risk as close to 0 % as possible on transactional deals. So we just go through it a little bit different setup. So that one should be a nice little versus like, you know, you got, you got to pull revenue where you can in a market like this.
And so long as it’s not overly distracting from your main growth trajectory, if you can still put some of these deals together and book some more revenue, keep things churning and stay ahead of your overhead, that is the name of the game here. So just wanted to share that a little bit more strategic updates and the conversations we’ve been having where we’re trying to grow our new limits on.
the types of deals that we are going after now. Very, very exciting times. feeling, sometimes the nature of being an entrepreneur is like you can have one those, one conversation that just kind of shifts your mindset to be feeling even that much more optimistic. And I’m certainly feeling that today compared to even like the last three or four days. But anybody who’s been running a business for even a short period of time, it’s just.
you start to get used to the ups and downs here. It’s like, I thought one day there was just gonna be like just this full, not even a steady state, but just like riding high. I’m not really gonna be dealing with problems or, you know, down times. It’s just, it’s not realistic. So you just embrace it and try to solve things as they come up and feel good and productive during it. And that’s where we’re at today.
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