Table of Contents - Navy Pilot and FT Real Estate Entrepreneur with Stu Grazier
Dave Debeau [00:00:09] Well, hey, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast. Today, zooming in from beautiful Parker, Colorado. We have Stu Grazier. And Stu is an interesting, very interesting real estate entrepreneur because of his background, because of his focus, because of his niche. So Stu is actually an active Navy pilot. Is that correct, Stu? Yes, sir. That is correct. Yeah. And you you've been a pilot, been in the Navy for 18 years, I believe. Is that correct as well?
Stu Grazier [00:00:43] Yeah, 18 years to go. And then I'll be retiring at 20 years of service.
Dave Debeau [00:00:48] My goodness, you military guys, look, you don't even have any gray hairs on your head and you're already going to be retiring in two years. Good for you. But what's really cool, that's all cool. But what's really cool is that Stu and his partner have been rocking and rolling with active real estate investing since twenty eighteen. But you've done an astounding number of deals in a relatively short period of time. I believe you're you're over 50 deals so far, is that correct?
Stu Grazier [00:01:17] Yeah. So I mean, David, my business partner, also active duty Navy. We were roommates together in college at the Naval Academy and we just had friends ever since. And each of us individually have been doing real estate on our own for quite some time. I actually started my first investment was right out of college, right when I was in flight school. That was my kind of first attempt at it. But so, you know, I've been doing all kinds of different real estate, learned a lot, lost a lot of money along the way, made some money along the way and a lot of good lessons to go about that. But yes, our business that we started together was in twenty eighteen and that's called Storehouse three 10 Ventures, which is a turnkey company.
Dave Debeau [00:01:56] Perfect. So what does Storehouse three stand for?
Stu Grazier [00:02:00] Yeah, so it came from a Bible verse. Malakai Three.
Dave Debeau [00:02:04] Ten and you'll have to get me up to speed my friend.
Stu Grazier [00:02:08] Yeah, no worries. So Malikai to ten it says bring a tithe to the storehouse and the Lord says, test me in this and see if I want to open up the floodgates of heaven for you. And so for our business model that we came up with was the first ten percent of our profits we're going to give to a charity organization that supports veteran causes. And we've partnered with a fantastic organization called Warriors Heart Foundation. And it's a healing center in Bandera, Texas, that helps that they bring in warriors, military veterans, first responders that have some type of chemical alcohol addiction. And they're going through suicidal ideations, PTSD, that kind of stuff, and they bring them in. It's a full blown healing center and we support that. David and I both have some close friends that have committed suicide. And so it's dear to us and on our hearts daily. So so, yeah, that's that's kind of the business model. Is that tithing to the storehouse?
Dave Debeau [00:03:03] Very good. Very good. All right. Well, thanks for explaining that. So, Stu. Talk to us a little bit about the type of real estate transactions that you guys focus on, that you and David focus on primary.
Stu Grazier [00:03:18] Yeah, so the turnkey model, if you will, is focused primarily on single family properties, mostly single family. But we do some duplexes as well every now and then if we can find them, if we can get a good deal on one. They're pretty popular in Milwaukee, but mostly single family, a few duplexes. And our model is, you know, we'll buy the house up front and typically they're in disrepair. So we go in, we fix them up, make sure they're really nice, do all the updates and upgrades and make sure all the major capital expenditure type items are upgraded. And then we turn it over to a property management company that we've partnered with. They'll get a renter in place and then we sell that asset to another investor who's looking for that single family home cash flowing asset that has property management in place and that has cash flow from day one. And now most of people that are buying the properties from us are out out of state. You know, they're gazetteer within our network, military veterans and not only just military veterans, but that's that's how our network is. And that's kind of it's referred to us for the most part. And they're living in California or Washington, D.C. and all those places where it doesn't really make sense from a cash flow perspective to buy rental properties. And so that's kind of who we who we target and who we help invest
Dave Debeau [00:04:36] in real estate. That is very, very cool. And so what market or markets do you guys typically buy your properties in?
Stu Grazier [00:04:45] So right now we're only in Milwaukee, Wisconsin, but
Dave Debeau [00:04:48] here in Colorado yourself. Yeah, that's a bit of a hike to get to Milwaukee from Colorado.
Stu Grazier [00:04:54] Yeah, yeah. And David, my David my business partners in Maryland. So he's he's stationed in Maryland. I'm in Colorado and our business is in Wisconsin. So go figure.
Dave Debeau [00:05:03] But so we can pick Wisconsin. How did you decide on that market?
Stu Grazier [00:05:07] Yeah. So I mean, it's a great cash flow and market. You know, the Midwest has great cash flow markets in general. It's very affordable to live, you know, so the price to rental index makes for those great cash flowing rental properties. So that's one. David, my business partner, his wife is from Wisconsin. And so they had initially purchased some property themselves for their own assets and they had purchased some in Milwaukee through a different turnkey company. And they had a really bad experience with the turnkey model that this
Dave Debeau [00:05:37] curlews nightmare stories about
Stu Grazier [00:05:39] that. Yeah, yes. They had a really bad experience with it. And similarly, kind of at the same time, I was buying some turnkey properties from a company down in Alabama and we started kind of comparing notes in his was way worse than mine, but mine wasn't great either. And so we just kind of compared how our experience was. And, you know, we had at the time lots of other people asking us what we're doing and how we're investing. And we finally just decided, hey, we both have experience in this. We know how to do it right. And what this process and, you know, it could look like and be right. And so we built our company and we looked at a bunch of different markets and we ended up going back to Milwaukee because, you know, the numbers made sense. He had already kind of established a team there because he really had it kind of out of necessity, make his own team, because the first go at it didn't go so well. And we liked a lot of the economic drivers that we saw on. And so it just made sense. And we we just started building on a team there. Been going strong ever since.
Dave Debeau [00:06:36] Interesting. Very, very interesting. So. What do each of you bring to the table as far as your business goes, you're in Colorado, your partners in Maryland? I believe you said, yeah, you got your profits, Wisconsin. So I'm trying to I'm having a hard time getting my head around how the business works. So if you don't mind, how does your business work?
Stu Grazier [00:06:58] Yeah. So, I mean, so David and I are the co-founders of the company and we're best friends, but we we really contradict each other, if you will, in the different personality styles and types. I'm an engineer by trade him a very analytical type person, and I love my graphs and charts and Excel spreadsheets and and so I'm kind of the guy behind the scenes, like running the numbers, doing the analysis on the properties, making sure we have the systems and processes in place. You know, I got my, like, lean Six Sigma certificate just because I thought it was cool and fun. So, you know, I'm the guy doing like the project management and make sure all those systems and processes are in place for our team. And then he is you know, he's like the English major. He's kind of the visionary of the team. I'm kind of more the the guy running the day to day operations. He's you know, he's talking to investors. He's kind of like the relationship guy and bringing in outside partners. And and then he's talking to our team on the ground, talking to our project manager every single day, talking to our contractors every day. So he's kind of like the relationship builder guy that's on the phone all day long. Right. And I'm behind the scenes. And then in Wisconsin, we have our project manager who's also like our realtor. You know, she's been there locally for a long time, been in the business for a long time. And then her husband is our general contractor who has three separate contracting crews that he manages. And then we just partnered with another third party property management company that we vetted and that we've become, you know, just had a really good relationship with. So that's kind of our team. You know, everyone besides just the owners are in Wisconsin themselves.
Dave Debeau [00:08:34] So is your real to the one that's bring you your deals? Are you finding off market deals or how does that work? How are you finding the properties? Yeah, a little of both.
Stu Grazier [00:08:42] I mean, so she's absolutely scouring the MLS daily, you know, looking at all the stuff that comes in this new to the market. But we've you know, we've created some great relationship with wholesalers. We're pretty much on every single buyers list for wholesalers we're on. You know, we're in all the like Facebook groups and the the local reanimating groups and stuff like that. And so we've we've just started building relationships with all the local investors. And they know that if they send us a deal that fits our criteria, we're going to buy it. And so, you know, we get quite a few off market deals. We don't do a whole lot of direct mail marketing or direct, you know, direct a seller type marketing. Yet we really haven't needed to because we've just gotten on everyone's buyers list and we've gotten some great deal flow that way.
Dave Debeau [00:09:30] Very, very nice. So bottom line, if I understand correctly and correct me if I'm wrong, do so. You guys find a deal usually. Probably a property. We need some probably sounds like fairly serious work to bring it up to speed. Your contractor goes in, fixes it all up, and then you get a tenant in the property and get the property under management and then you turn around and sell it as a package to an investor and coincidentally, not coincidentally, a very, very smart. You're focusing primarily on other military folks because that's your network. Plus, you know, they kind of probably have the idea they need turnkey, because if I'm not mistaken, most of your getting switched from one spot to another on a pretty darn regular basis. Yeah, I know. I had a niece. Her husband was in the US military as well. It seemed like every two years they're moving to a new city. So it's very, very hard to, you know, keep all your properties where you're living because you're moving all the time.
Stu Grazier [00:10:33] You're one hundred percent. That's exactly right. I mean, we're moving every two to three years. We're deploying now. You're gone four, six, nine, 12 months at a time. And so, you know, you need a team in place. You need a support system in place to help you with these investments. And that's that's kind of where we have created this this system of this model to help out. And, you know, and then a lot of the investors live in coastal markets, especially those that are in the Navy like we are there in San Diego. They're in
Dave Debeau [00:11:04] Washington. You're not buying a single family home. A guy in San Diego.
Stu Grazier [00:11:08] Exactly. Exactly. They're in Hawaii, you know, so all of these places don't make sense. And then for like Army and Air Force people, they live in these small towns where the only economic driver is the base itself. And, you know, although it could create some decent cash flow if you're in the middle Kansas or something like that. But at the same time, there's only one economic driver. And, you know, that's that's somewhat risky, you know. So we felt that it would be a really good idea to get into one of these mid-sized large cities in the Midwest. Where there are tons of different jobs, tons of different economic drivers, and where those numbers really make sense and build that team out to where we can have that support system for the military,
Dave Debeau [00:11:49] for the markets, right?
Stu Grazier [00:11:51] Yeah, yeah. And and not only for military. Right. It's just for the busy professional. You know, we have some doctors. We have, you know, people that have full time W-2 incomes that just don't have the time to go and, you know, create their own team or go and do that market research on their own. So, yeah.
Dave Debeau [00:12:08] So what do you so if you can pick, like, your typical military type customer, so to speak, what are they looking for? Because, again, you mentioned, you know, your 18 years in your career, two more years, you're going to retire, you're going to be on a on a pension. I imagine a lot of the people that are buying these turnkey properties for kind of in the same boat, what are they looking for as far as additional revenue typically once they retire?
Stu Grazier [00:12:37] Yeah. So, you know, there's lots of different strategies that you can kind of go down with this model. Most of our investors are very early investors, a lot of them. This is their first time that they're going to buy a rental property. And so, you know, we're trying to teach the model of long term buy and hold assets where over the long run is going to provide a solid cash on cash return and bringing that positive cash flow every single month. You know, so we're selling these houses from day one at a 10 percent cash on cash return. And our goal is to have at least two hundred dollars of positive income after all expenses. And we're very conservative. When we were on the performers and the rental analysis on these on these deals, you know, we're good. And vacancy, capital expenditure, savings, maintenance, property management, pitty all of those expenses. After all of that, you're going to have positive cash flow. And so what we're teaching is, hey, you buy one house, you cash flows, you buy two houses that cash flows. And you can kind of turn this into a little mini empire, if you will. And you're holding these properties, your tenants are paying off your mortgage for you. And while you're serving in the military, you can kind of build up your assets and over time you're paying off these houses and then it's just purely cash flow from then on. And it's just a supplement to your income. You know, if you decide to get out and retire or go get another job later on, all you're having is this passive income that these assets are producing for you.
Dave Debeau [00:14:01] So those are some of your your clients kind of thinking ahead and thinking, hey, you know what, I'd like to I'd like to build up a portfolio of, let's say, five of these properties. And then by the time I retire in 15 years or whatever, generate X amount. Yeah, absolutely. On top of my retirement.
Stu Grazier [00:14:18] Yeah, absolutely. I mean, we have guys that, you know, some will say like, hey, my goal is to replace my military income by the time I retire. And it's going to take 10 houses that are going to be cash on a thousand dollars a month in 20 years when they're all paid off. Right. So we have those people who just want to buy 10 houses, pay them off, and then just have that cash flow. Or we have other guys that are kind of like playing the Monopoly game. Right. You know, you buy four houses and turn it into a hotel. You know, you buy four houses, do a ten thirty one exchange and buy an apartment complex. And so we have those investors to that are going for bigger deals down the road.
Dave Debeau [00:14:52] Excellent. Very cool. So as we wrap things up here strong again, I'm just really curious about you guys are operating. So basically you're in in the flipping business right now. But what about you and Dave? Are you are you keeping some of these and adding them to your long term portfolio as well?
Stu Grazier [00:15:10] Yeah, absolutely. Yep. Yep. We're adding some to our own portfolios. So I did that the monopoly style type transaction where I had some single family houses that I owned and sold them off just recently and and then took the profits from that. And I went and bought a mobile home park. And so and then David has some single family houses and he did a ten thirty one exchange a while ago and he bought four houses. So and then now we're looking at some mobile home parks, we're looking at some commercial type properties and and then we'll pick up some single families as they come along to. So yeah, absolutely.
Dave Debeau [00:15:44] Very cool. So it's been a real pleasure. Thank you very much for sharing your unique and very interesting. I think it's a great model. So hats off to you for that. For the giving back portion of the whole thing. I think that's an amazing part of your business model, is giving back first tithing first, then the whole your whole philosophy, as well as the niche that you focus on again. So you guys being military guys and you're focusing on helping other military people create financial freedom. Right? That's awesome. So if people want to find out more about you and your company, what should they do?
Stu Grazier [00:16:20] Yeah, so go to our website. It's Storehouse three one zero turnkey dotcom Stonehouse 320 dot com and then go to the contact us page. We have a properties page where they can see all of our houses that we do and we run through a video analysis with all of our properties. We have a podcast. It's called. In the Storehouse podcast, and there's a link on there, so, yeah, so just go to our website and you can see all of our social channels and and get all the information you need right there.
Dave Debeau [00:16:46] Wonderful. Thank you very much. Thanks a lot, sir.
Stu Grazier [00:16:49] Thank you. Appreciate you having me on.
Dave Debeau [00:16:51] My pleasure. All right, everybody, on the next episode. Bye bye. Well, thanks very much for checking out the property profits podcast. And you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us the review. He very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.