Building HUGE Equity With 100% Hands-Off Investing

House flipping can make you wealthy. Everyone has seen the TV shows, podcast interviews, and the high-priced renovations, even in their own neighborhoods. But what if where you live is WAY too expensive to flip houses? The home costs are high, the labor costs are high, and underpriced, outdated homes are hard to find. Thankfully, you’re not out of luck. Today, we’re teaching you how to flip housesFlipping 12 houses at a time while living 2000 miles away. It sounds impossible, but today’s guest is doing it right now. She’s going to tell us how she got there after starting with just a single property she bought for less than a hundred thousand. What’s up everyone? Welcome to the BiggerPockets podcast where we teach you how to achieve financial freedom through real estate. I’m Dave Meyer, head of real estate investing here at BiggerPockets. Our guest on the show today is Dominique Gunderson, an investor who focuses on flips in New Orleans but lives a location flexible lifestyle, traveling around the country in an rv. Dominique was previously on the BiggerPockets podcast back in 2022. It was episode 5 87 and at that time she was about three years into her flipping career and was already doing five or six projects at once. Super impressive at that point. But today we’re going to hear about how she’s scaled up even further. She’s doubled that volume of flips even while managing her business from across the country. We’ll also talk to her about why she’s added a rental property portfolio in addition to her already successful flipping business. This is a very fun conversation. I think you’re going to learn a lot. So let’s bring on Dominique. Dominique, welcome to the BiggerPockets podcast. Thanks so much for being here again. Appreciate it.Yeah, thanks so much for having me back. I’m really looking forward to diving into some fun topics today.Yeah, you have such a cool story and approach to investing. Can you just give us a little bit of background for those who haven’t heard your previous appearances on any of the BiggerPockets podcasts?Yeah, absolutely. So I got into real estate super young right out of high school. I graduated at 17 and just knew that this was what I wanted to do and so jumped right in out of high school, got my real estate license and started learning some of the basics of just sales and marketing. From there, I jumped into the investing side and did wholesaling for a little bit to get started and build some capital, and then jumped into running my own investment company in 2019. So I have been running that since then in the New Orleans market and I don’t and have never lived in that market. So my main focus is out of state flipping own some rentals out there as well, but have pretty much just been growing in scaling since 2019Out of state. Flipping is just a term we don’t hear very often, so I am really eager to talk to you about that because I know a lot of people who want to get into flipping are interested in doing it passively or in a less expensive market than where they live. So what led you to going from what you were doing, which was wholesaling agent to wanting to be more active of an investor, primarily focusing on flips now,I think for me, going into getting my license and starting doing the wholesaling, that was always a means to an end for me. That was to just really learn the game and build capital. But even just from a young age, being in high school and getting interested in real estate, I always knew that I wanted to run my own company. I wanted to flip houses. I wanted to own rental properties instead of just being a middleman, whether that be an agent or a wholesaler. So for me that was just a great way to get started and to learn, but the goal of that was always to fund my future operation and vision.So tell us how you started long distance or out of state flipping, because it almost sounds like an oxypro, not something that you could actually do.So for me, it honestly combines the best of both worlds. I love that you can pursue an active strategy where you can make a lot of quick cash and really build your overall equity and wealth, but doing it in a more passive way where you don’t have to be on the job site every day. So that’s something that I’ve learned over time after doing it and have come to really love. But honestly, it all started just almost out of necessity. I was 21 back in 2019 when I first started my own company
And I had all my experience in Los Angeles area, southern California. So it only made sense that I would just start flipping here where I had all my contacts, but it was so expensive and just felt so out of reach for me being so young knowing that I would have to be all into a deal for minimum three or 400,000 on the low end. I didn’t have that much cash saved up, and so it just felt a little overwhelming and so it was almost a necessity for me. I had to start looking what market could I afford? What market would this be feasible for me? And New Orleans was one of the only markets that I had really good trusted contacts in. Not that they were in real estate, but my dad and his wife lived in New Orleans, and so that was just the one outstate market that I said, you know what? Even though I don’t know anybody in the game out there, I know someone. I know someone who has probably called a plumber to their house or maybe knows a person down the street that’s a real estate agent or something like that. I had some little bit of edge on the building the team side just from knowing people in the area.That’s awesome. So when we talked a couple years ago and when you were on the show, you were doing a lot like five or six flips at a time, right?Yes, correct. How didYou pull that off? Is it just all networking where you just have so many GCs and contractors that you can do that kind of volume?So there’s a couple different avenues to that. I mean, one is the deal finding side, right? Keeping a good steady stream of deals coming in. Then it’s also what you mentioned, the management side, having a team to actually execute those deals. So there’s a lot of components to that. A couple years ago when we chatted, I was doing probably five or six flips at a time. We’re running 12 flips right now, and so scaled up even more and something really cool happens when you start to scale, which it sounds kind of crazy, but it actually gets easier in a lot of ways because you’re in this whole different boat of it’s not just a side hustle or a hobby, it’s a full-time business. And so in every area you have to put in full-time effort. And so let’s just say on the deal finding side, you’re going to be making connections with people who know that every time they have a deal available, you will buy it.
You are always looking for deals. You have to feed your pipeline just to keep the business going. Where if you’re only doing a couple flips a year, it’s a timing thing. You can make great networking connections, but if you’re not in that time slot of a couple months, a year where you’re looking for a new deal, you’re going to have to say no. And so your contacts aren’t as strong. They can’t be because you’re not as reliable. And same with your team members. I have multiple crews, they’re always working, always working just on my jobs and I can keep them busy. And so you build that loyalty and you can create really strong teams of people that are trusted and can do your jobs over and over again and you start creating systems and processes. And so in a lot of ways, scaling up can make things a little easier as far as the systems and teams go, but obviously it takes a lot more management and there’s a lot more headaches and problems that come up. So it’s a balancing scaleFor sure. Yeah, that’s amazing. Honestly, I’m so impressed that you said that becomes easier. It sounds so difficult to me. I want to learn more about your systems, but I think that there’s probably a lot of people listening to this right now who are really interested in this idea of out of state flipping. I’m personally interested in it. If I could figure out how to do this in a reasonable way, I’d be interested. So maybe we can actually go back a little bit and just talk about what were the first steps you took and maybe you could just provide some advice for people who would consider this strategy.Sure. Yeah. I think the absolute biggest thing, whether you’re doing one flip out of state or 10 is your team, your team on the ground because you aren’t going to be there for practically any of it. You may check in every other month or something, but you have to know in every aspect between real estate agents, contractors, project managers, lenders, everything has to be in place to make sure that the process is flowing just as well when you’re there or not there. And so that was some of the first steps for me is, okay, how can I build a team of people? Who do I need on my team and how can I find them that I can trust without me being there all the time? And that is much easier said than done it sounds like. Okay, sure. Just go start networking with people and it’ll happen, which is kind of true, but it truly is.
Looking back now from where I started, it’s such a trial and error thing. You just have to know that going in that you’re not going to just find the perfect team and everything be the same from day one and you’ll just move forward seamlessly and always work with the same people. It’s just not going to happen. You always have to be networking. You always have to be looking to build and expand your team because people will maybe be good for a couple deals and then they’ll fall off or have a personal issue come up and they can’t work with you as consistently anymore. So the networking I think was one of the big places that I started attending any sort of networking groups, whether they be digital or in person that I could and just start meeting other investors, other people in the space that I could ask for referrals or I could just meet contractors. I could meet people that I’d need to work with in person at some of these networking groups. So just thinking about who I needed and how I could find them was definitely the biggest first place I had to start.And so how did you find them? Because for me, I can understand and sort of wrap my head around how to network with agents. We have tools in BiggerPockets for that or even network with other investors. I’ve done some out of state brewers where I’ve networked with some contractors, but those were smaller in scale and I felt that the project scope was very clear and I knew that this contractors working with had this expertise. But how do you even go about networking with GCs in another city? Were you going to New Orleans frequently?Yeah, it’s funny to say, but I think it can be simpler than you may think. It’s obviously easy in your own market because you can just meet people randomly like you said. But
I always had somewhat of a presence in New Orleans. I mean today I go there at least once every other month for five days to a week just to kind of check in and meet people face to face. So there’s always opportunities when you’re there in person, but there’s so many online groups even that you can join today. For me, I mean the Facebook groups in the local New Orleans market are really a big thing. There’s a lot of great investing groups and like you mentioned too, BiggerPockets stuff, there’s always different groups that you can kind of join and get in to just get the conversation started with people. You may not necessarily meet the contractor that you’re looking for, but you might meet someone who’s one step away from getting you to introduction. But I mean, I’ve met some of my contractors super randomly. Some of them have literally just been working at a job across the street from my property, and you just go over there and start talking to them and ask if they’re looking for more work, if you get kind of a sense of their quality of work since they’re on another job site.
I’ve had contractors literally just walk up to me and introduce themselves to me at meetup groups. It’s been just random interactions that seem to come more and more frequently. The more you open yourself up. My team is not closed. I am not one and done set. I’m always looking to network with more people.Yeah. Alright, we ought to take a quick break and then we’ll be back with more of my conversation with Dominique Gunderson. We’re back talking with Dominique Gunderson on the BiggerPockets Real Estate podcast. Maybe you could just tell us Dominique, a little bit more about your first deal and how you pulled that off that might help me and maybe some other people extrapolate how you did this once and then now how you’ve sort of achieved this amazing, very impressive scale of doing it, like 12 of these at a time.Yeah, absolutely. I wouldn’t say my first deal was perfect by any means. It was far from it, but a lot of people will say it’s your first deal and it’s the best one because you got started, you made the mistakes and now it leads you to go do a hundred more. So my first deal I bought on the MLS, nothing crazy or fancy about the strategy to find it paid 51,000 for the house and ended up putting in about, I think about 45,000. We were all in just under a hundred thousand for the house and only sold it for 115,000. So after realtor fees, closing costs, stuff like that. I mean hardly made anything, made a little bit of profit but not much on the deal. But again, learned invaluable lessons that I can’t put a price tag on from just getting started and doing a deal and meeting people even. I called and talked to so many different people just on the contracting side just to give me bidsAndJust learn about numbers and how people are projecting scopes of work out there. And even though I didn’t use all of them, that already gave me a bunch of different sets of numbers of how to analyze rehab costs and what things are going to cost. And funny enough, even one of the contractors who gave me a bid on that first house that didn’t do the job I reconnected with later down the line and he did probably 30 flips for me thereafter.Wow.So you get started somewhere, you have an actual property where you’re actually doing something with it and that’s your in to start making a lot of these connections. You have something you can talk to people about that you’re actually working on. You have a property you can ask different agents to come walk and what can I list this for? You’re making relationships and same on the contracting side. So that was my first flip again so far from perfect, but it’s such a great starting point.That point about having something tangible to center your conversations around is so important. I’ve stumbled into that as well. Just talking to a contractor about some theoretical property or do you want to work together? I was like, yeah, of course I want to work together but not having something to point to, can you do X job? Can you do this job by this date? It really adds a sense of urgency and tangibility to a conversation that I think makes the relationship move a lot faster. So I think that’s great advice. That deal seems great, relatively cheap, buying it for 50, 60,000. Now fast forward to today when you’re doing 12 of these, can you tell us a little bit about what your average deal in this kind of market looks likeToday? I’m kind of buying in two different buckets. One would be the more entry level price point, which is more similar to that deal I just described to you my first deal. And that would be anything that’s worth when it’s done 200,000 or less. And so those are a lot of the deals that I keep for rentals and do the burr strategy on because they have good cashflow numbers at that price point. Sometimes I’ll flip them if it has a really good spread. And then the other bucket of deals I’m buying are the ones that I’m more so fixing and flipping, and those are the slightly higher end ones. Some of them have a 300 K ish resale value, but more so they’re in the four to 500 K resale value where you’re purchasing it between 202 50 and putting in 80 to a hundred. So those higher end ones are more so what I’m flipping right now,What’s your average margin then on these kinds of deals?So the target is always 15% return on investment, so 15% of what I put into the property. Obviously sometimes you make 10, sometimes you make 2025, but target for me is always15. Okay, that’s quite good. And how long are these deals taking you?That’s super dependent on the market right now. I have some that still sell in your average 30 to 45 day timeline, and we’re all into the deal from start to finish in five or six months. And I have some deals right now that the market’s slow and it’s just taking several months on the market just to get an offerReally.And so some of those deals are taking more like eight to nine months start to finish to be done and sold.And has that changed your approach, I assume if you’re continuing to do them that they’re still profitable enough to the point where you’re taking on the same volume of deals as you were maybe a year or two ago, or are you trying to scale up more?I like this range. It’s a good enough scale to where you’re doing a lot of volume. You’re able to keep your teams busy and keep people loyal to you. But it’s not so big that I’m trying to do a hundred deals a year and it’s just super unmanageable and I have to make a bunch of partnerships and have W2 employees and stuff like that. So my goal isn’t to necessarily get that big, but right around this range of having 12 to 15 projects at a time, mostly on the fix and flip side and kind of keeping the best ones for long-term rental properties.Awesome. Wow, and that’s incredible. Congratulations on all the progress you’ve made in just a couple of years. I’m actually curious though, you said that you’re holding some rental properties. What led to that shift?I think that’s something that’s always been a goal of mine from the beginning as well, and it was more a capital and experience thing. The more deals that you’re doing and you don’t necessarily need to flip so many per year in order to just pay your bills and live off of the income, you can kind of start thinking about holding some of the better ones for longer term rentals. And so buy properties and let the tenant pay down your mortgage for 30 years, and I’m still pretty young, so for me that’s a decent strategy to be mid fifties to 60 and have a bunch of properties that are now paid off and that can be something that I retire on.How are you choosing which ones you’re flipping versus holding onto if you’re, it sounds like going through somewhat of a similar process, at least on the front end of the deal.I pretty much will hold any deal that does pencil as a rental. So in my market there’s a lot of deals that pencil as flips because you may not have quite enough margin in the deal to pull out all of your capital and make it a perfect burr,
But you still have a really nice profit margin for a fix and flip opportunity. Or it might be in that slightly higher end price point that I mentioned before where even if it was a perfect burr, you could pull all your cash out, it just wouldn’t rent for enough to cashflow and make any positive cash flow. So for me, any property that is in a price point where I can realistically pull out almost all of my cash or all of my cash with a cash out refinance and it’s still cash flows at least a couple hundred dollars a month, I will always keep it as a rental.And how are you sort of managing the capital side of that then? Is it just making it more complicated for you in terms of getting different loans and managing your inflows and outflows of cash? Because I would imagine that it’s just adding a whole layer of complexity in another sort of business line.Definitely. It’s different and has different components for sure. On the fix and flip side and even the bur side a little bit upfront, when I’m buying the properties for and renovating with cash, I pretty much exclusively use private money. So these have just been people that I’ve connected with over the years that have cash and want to invest passively. They act just like a bank, just like a normal lender, but they’re just an private individual. So I’ll use those types of loans to purchase the properties and renovate them. Then if it’s going to become a rental and hold it long-term, we put long-term financing with a 30 year mortgage, that would be the cash out refinance. Once the property is fully stabilized and rented out, we’ll put that long-term financing on the property and use the money that you get from the cash out refinance to pay off the private lender, so that way it’s just me left on the mortgage and you’re dealing more with just a institutionalized bank or lender that you’re making the mortgage payments to every month for a 30 year mortgage.Dominique, I want to ask you more about how you are able to scale this business with a bigger team and more systems in place. But first we need to take another quick break. Thanks for sticking with us. Here’s more of me and Dominique talking about scaling an out-of-state fix and flip business. I want to get back to some of the stuff that you talked about earlier with achieving this level of scale. You obviously talked about systems, you talked about teams, but could you tell us a little bit about the order of operations because I am curious, you can’t do everything at once. What are some of the first steps when you said I want to go from five or six deals at a time to 12 that you’re doing now, who are the people you brought on and what systems, what software, what other tools did you need to bring on in order to ramp up each subsequent deal?I will warn you with this question, I am a very simple person. I’m not one that has all the fancy softwares and systems put together and built out all these different apps and stuff that we’re using. I’m pretty simple. I keep a lot of things on spreadsheets and just simple easy tools that anybody can build and do. But from an operation standpoint, what it looks like, and this is a big mind shift that I had to make from going from five to six to 10 to 12, is you have to build out your teams. So when you’re doing maybe like five at a time, it’s actually probably more beneficial to find one great team, one great set of everything, and just feed them as much business as you can. Keep them loyal. You can probably have a contractor. The projects are going to be at different stages that can handle that much volume. Same with the real estate agent, same with the lenders, everything. You can probably find one great team and really keep them loyal and hone in on them,
But when you scale up, you just can’t. It becomes way too much and too overwhelming for just one great set of people. So you really have to shift to that mindset of like, okay, my team is built, everything’s closed to what we were talking earlier where you’re always looking to build new teams, you’re always looking to improve, who else can I start working with and how can I make my teams better? You have multiple open slots for every position, and so there’s just more opportunity to there refine and really work with the best of the best. So for me, what that looks like is I have a couple of GCs who run all my projects, so I don’t work directly with any subs, I just work with a couple of GCs who are managing everything on the ground, and that just keeps things a lot more streamlined too.
Even just on the accounting and invoicing side, I’m just getting one to three bills throughout the projects, pretty much larger chunks. They’re keeping track of receipts and buying materials and things like that. So it just keeps things really streamlined. I just have one point of contact that I can keep in touch with daily or every other day to get updates on the jobs. And each of those GCs are managing three to five different projects all the time. And then I have a project manager role at times. I’ve had two people in this role, but I think even with a larger scale, you can probably just keep one person in this role, but this is somebody who is kind of like a third party to all of the other roles. They’re not just your contractor, just your agent. They’re not specialized in one thing, they’re just doing any and all tasks that might come up on a day-to-day basis. So it might be making deliveries, it might be putting up a lockbox, it might be turning on utilities, like anything. It could be just I’m sending you to the property to get me update photos and videos so that I can keep a tab on what’s going on or clean up if it’s a vacant house that’s been listed a couple weeks, like sweep the floors and stuff like that. So it could be anything.Does that person work exclusively for you?No, I’ve had a few different people in this role and it’s usually been kind of part-time.SoI’ve typically worked with people that are within the real estate space doing something else within the space, and they’re just looking for some side part-time work.So I guess that role seems super crucial to me because you always have a contractor who they’re on your team, but they also, they won’t run their own business. And so I feel like it’s kind of essential to have sort of a neutral party in there who works for you and can report back on the real state of things. And not that people are being dishonest, but it’s helpful to have someone who is looking at every deal through your perspective, not just hearing it filtered through the lens of an agent or a contractor who are probably trying to do the right thing, but just have their own perspective and biases.Absolutely. And yeah, just having more eyes on things is always helpful because people see different things and it’s just like a checks and balance system for keeping tabs on things. Like you said, I can’t tell you how many times we’ve done a final walkthrough with the contractor, the project’s done, it’s ready for photos, and then I send my project manager through and I get 10 more pictures of touchup things that need to be done.Right. Yeah.So just having the extra set of eyes is super, super important.So how has this changed your role in your own business?Yeah, absolutely. I think it’s in a lot of ways doing this out of state will do this to you, but as you scale up, it’ll also do this to you. You have to force yourself to be more hands off and to delegate. Even if I was on the ground, I don’t think I would spend my time doing the project manager role, for example. Those are all things I could easily do if I was on the ground, but it’s not the best use of my time. And so whether I’m on the ground or not, it’s a great role to delegate. And same with general contractors. I could, if I was on the ground, run my own projects and save money, but even if I was, I don’t think that would be the best use of my time because I have to do all these other things to keep the operation growing and scaling.
So it really helps you put into perspective just being out of state what things are really important to delegate and what things are really important for you to do. So for me, the acquisitions, that’s probably the most important, super important in any fix and flip operation where you’re making your money or if you make a mistake, it’s probably made there once you bought the do for a certain price, if you were wrong about anything, you can’t fix it. I spend a lot of my time overseeing the acquisition side of things and making sure that we’re not overlooking anything on the rehab scope projections, a RV projections, and ultimately just making the final decisions on what we’re buying. And I spend a lot of time on the capital raising part as well, making those connections with individuals who are going to lend me funds. I always have funds available to be buying more and more houses. Those are two things that I would say are really important for me to make that connection for people to know me and my face and my name to continue sending me deals and continue giving me capital.And do you like it? It sounds just such a big shift. You’ve had to sort of almost reinvent your own business and you’re doing so much different stuff. At least in my career, I’ve found times where that happens. I just do it out of necessity and then you kind of come back and figure out like, oh, I actually should be doing something. I enjoy more. Do you feel like you’re in a place with your business that’s sustainable and that you’re enjoying?It’s such a great question. And I toy with this a lot too because on one hand I love that I can be fully remote and running this business. That’s the greatest gift to be able to have built something that I can travel, I can do whatever I want to do all the time, be my own boss at this age, what a gift to have been able to do that. And so I love that aspect of it. But at the same time, when I do get to spend time in New Orleans and I go to the ground and I’m present, I’m like, wow, this is so cool to be here.Yeah, it’s funTo walk my own jobs and to see what’s going on. You really feel like you’re actually a part of it instead of just kind running this remote thing from somewhere else and not hands-on seeing it. But ultimately, I think for me, it makes my business better, I think for me to not be there, to beHonest. Interesting. Yeah,It does. The part that has forced me to delegate and to bring on really strong team members that are great in each individual role, I think has made my business better instead of me trying to do things that I’m ultimately not best at and then just be kind of mediocre across the board.I resonate so much with what you said. I understand the feeling of it making you better. When I moved abroad, I had sort of the same experience, just this forcing function where you recognize what you’re good at, you are forced to become more efficient, it does make you better. But having just moved back to the us, I love being at properties. I’m so happy being able to go check out my deals and go even deals. I’m not necessarily going to buy, just going to open houses or looking at being with other investor friends who are doing deals. It is fun to be a part of it. So Dominique, in two years, you’ve made incredible progress. Again, congratulations. What’s next for you? You’ve scaled up, you’ve doubled your volume. Are you just going to keep going or what’s next?For the foreseeable future, I see myself really trying to stack up and build more rental properties and just keep the flipping operation decently stable as far as the current volume that we’re doing. And hopefully just continuing to build relationships to getting better, more consistent deal flow, continuing to make sure that we’re on top of the renovations and we’re refining, making better design decisions so that we sell faster and how can we cut our rental budgets back. So efficiency is the overall goal, I think right now.Well, that’s awesome. Congratulations on scaling and we’d love to have you back in a year or two or whatever just to hear what you’re up to. This is such a cool, unique part of real estate investing that we don’t hear about very often, but you’re doing it so well. So thank you so much for coming and sharing your insights and your story with us, Dominique.Yeah, absolutely. Thanks so much for having me,And thank you all so much for joining us here on the BiggerPockets Podcast. We’ll see you again soon.