Dave Short has been working in the real estate industry for 45 years and is one of the top agents in Indianapolis, Indiana. Over the last 5 years he has flipped 200 houses in central Indiana. He is a graduate of Indiana University and a member of the Central Indiana Real Estate Investors Association, where he holds a monthly meetup called “Dinner & Deals with Dave.” In his spare time, he plays golf and is a semi-professional tournament poker player.
Please tell us a little about who you are and what you did before getting into real estate investing:
I graduated from Indiana University in 1971 and took a job in quality control at a factory in Indianapolis. After being passed over for several promotions, a family friend convinced me to get into the real estate business, which I did in June, 1973. I soon became passionate about real estate and never looked back. I started out selling houses in and became one of the top agents in Indianapolis. I was a partner in several agencies over the years, and got creative about how we sold houses. In the early 80’s, when fixed FHA rates were 15-18%, we used other strategies to sell house; i.e. seller financing, lease option, and land contracts.
Where is your current market and what is your focus:
My current focus is flipping houses in central Indiana. In the last five years, we have flipped approximately 200 houses. When I say flipping, I take in all areas, such as wholesaling, creating, buying and selling notes (particularly rehab) and sell full rehab homes. Every flip I purchase has at least three exit strategies for profit.
Describe a typical work week:
Typically, I work about 50-60 hours a week in the business. Work is really the wrong word because it is still fun, and I love chasing the next deal! My wife, Marty, is very active in the business and says I am addicted to buying houses.
How long have you been investing in real estate?
I started to pull out of selling houses in the late 80’s & early 90’s and turned my focus to purchasing and turning them into lease-options. We built an inventory up to 100 single family units by 2006. We enjoyed a cash flow of $12,000 a month and began flipping a few houses along the way. We thought that would be our retirement. Things changed between 2007 and 2011; several of our lease-options went sideways and we quickly sold off most of our units and came very close to going broke. We, as several others in our space, struggled to make our way because nothing seemed to work. Several investors decided to take a BK (bankruptcy). My wife and I decided that would not be in our best interest long-term. We had several investors at the time, plus a couple of banks. No one had ever lost money, and I didn’t want that to change that. At our lowest point, we owed around $1.5 million dollars. Our goal was to get everyone paid back, so we worked out payment plans, and thanks to God’s guidance, work ethic, and new business strategies, we have almost got everyone paid back. We now only owe our bank around $180,000 which we hope to have paid back in the next 3 years. Our philosophy is that our investors didn’t loan our business money, they personally loaned us the money.
How do you fund your investments?
Our transactions are normally funded by private money. We fund our deals one of two ways: (1) The investor is a joint venture partner where they fund 100% of the deal and they receive 10-12% annual interest rate paid monthly, or they fund the deal 100% and they recover 30-50% of the profit of the deal. In both cases, the investor is guaranteed 100% of their investment back, even if the deal goes sideways, which has only happened 3-4 times.
What projects are you working on:
We have anywhere between 12-16 projects going on at any given time. This year we are pushing for 45 houses, and to close around 33 houses and take about 10 houses into 2019.
How much time do you put into your education:
I read, or listen to podcasts (my new favorite thing) 7-8 hours per week. My favorite podcasts are The Bigger Pocket Podcasts. If you want to learn my story, it is in podcast #174 on Bigger Pockets titled “Lessons Learned from 2000+ Transactions over 44 years”. It has had over 80,000 views.
Has coaching or mentoring played a part in your success:
Most of my mentors have been the books I have read, and I have tried to model those individuals such as Napoleon Hill, Tony Robbins, Tom Hopkins, and Zig Ziglar. I now do some coaching and mentoring. I try and make time for newbies, especially when I feel they are serious about the business. I have an education platform to help students get started in flipping houses. I try and give back several hours a week for investors interested in real estate. I also have a meetup once a month called “Dinner & Deals with Dave” as part of my commitment to our local REIA, called CIREIA.
What are your current and future goals:
My flipping business will change in the next year. We decided to bring in a project manager to work in our flipping business. He will free up time for my wife and I to start a business that we have been working on the past 6 months. We want to start an Assisted Residential Living Facility. In a nutshell, this is a mini-nursing home that has 8-10 residents. It is in a remodeled residential home. I will create a home-like environment that the elderly residents actually desire, instead of moving to a big box nursing home. In addition, one of the things I have always done is reinventing myself every 5-7 years to keep from getting burnt out.
What has been your top struggle:
In the flipping world, it has been creating a team of contractors. This world is tough to manage and keep prices in line in order to be profitable. Our economy has been very positive, and the growth in this area has kept several flippers in the business that would have struggled with profitability.
What do you like most of what you do:
I love chasing the deal! I also love the creative aspect of the deal and the end result of the home when we are finished. Changing a house into a home is very rewarding and helps fuel my drive in this business.
Do you have tip or advice that you would pass along to other investors:
In simple terms, stay in your lane. By this, I mean concentrate on what you do best. Develop an area of expertise that you enjoy. If you are in an area of investing that you don’t enjoy, then get out because you won’t be very good at it. When I owned 100 single family lease-options, I hated the business, so we got out. My wife was miserable managing the houses. Guess what? I understood early on the old axiom “happy wife, happy life!”
How important is joining a local REIA to a new investor:
It is the most important thing a new investor can do. It gives you exposure to meet and talk with other investors and to help you establish what area of real estate interests you most. I would never consider coaching or mentoring people unless they have made the commitment to belong to our local REIA.
What is favorite self-help or business book:
My favorite books are “Think and Grow Rich” by Napoleon Hill and it’s expansion, “Secrets of Success.” I also like Tony Robbins’ “Awaken the Giant Within” and “The One Thing” by Gary Keller.
Do you have any interesting hobbies or something unique that you like to do:
I am active in my church and I am currently rehabbing a home for a non-profit called Grit into Grace, which is a halfway house to help get women out of the exploitation business. It is very rewarding. Giving back is a large portion of me and my wife’s DNA.
My favorite hobby is golf and I play semi-professional tournament poker. However my three grandkids are a special joy in our life!
