Why We WANT to Lose Money in 1 Out of 50 Houses | Chad Klaman

Chad Klamen's family has been in real estate for over 100 years. Great-grandfather, grandfather, father — all house flippers. Nobody pushed him into it. His dad barely mentioned it at the dinner table. So Chad went and got a corporate job, made $70,000 with a company car, decided he'd made it — and got fired. He traveled Southeast Asia, came home, and asked his dad for a job. His dad said no: you know nothing about real estate, you know nothing about St. Louis, you just got fired and then traveled the world. Go figure it out and bring something to the company. So he did. He cold-called the richest real estate guys in St. Louis, landed with one of them, and spent two years walking into shopping centers and nail salons in a suit in the middle of summer getting told to get out. Today he closes 75 houses a year and is on pace for 100. This one is the whole operation, out loud. The buy box. The 56-day cash conversion cycle. Why 25% gets wholesaled, 50% gets whole-tailed and only 25% gets a full rehab. Why $100,000 houses have $100,000 problems. Why they cap rehabs at $75,000. And the line most investors will never say on camera: they WANT to lose money on one out of every fifty houses, because if they never lose one they aren't being aggressive enough on the buy. It's also three brothers and a father in one business, and the consultant they hired to teach them how to talk to each other. Pat gets into what working with family cost him — and why cutting his own business from $40 million a year to $20 million made him better at all of it. If you want to know what the flipping business actually looks like from the inside, this is it.