Today's episode is a very special one. You see a handful of deals that happen each year with our company are Joint Venture, equity sharing deals. My guest today was a partner that we did a deal with, Mr. William Tusa. Will was not a normal guest, his profession has afforded him the ability to understand projects like this at a whole different level than the majority of any of us deal with. You see Will is on the industrial side of the things that go on heavy highway, heavy civil work, power plants, you know, big mega projects, He testify's as an expert witness on, matters of delay matters of disruption, productivity, the loss of efficiency, things of that nature. Listen in to hear how we rated a 90% on everything through the whole experience from the toughest person possible and at the end of the day both side were happy and walked away with a healthy profit. When you're ready, head on over to... https://easysell411.com https://billyalvaro.com https://billyssecrets.com Who knows maybe you will be our next partner? To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
Today's episode is a very special one. You see a handful of deals that happen each year with our company are Joint Venture, equity sharing deals.
My guest today was a partner that we did a deal with, Mr. William Tusa.
Will was not a normal guest, his profession has afforded him the ability to understand projects like this at a whole different level than the majority of any of us deal with.
You see Will is on the industrial side of the things that go on heavy highway, heavy civil work, power plants, you know, big mega projects, He testify's as an expert witness on, matters of delay matters of disruption, productivity, the loss of efficiency, things of that nature.
Listen in to hear how we rated a 90% on everything through the whole experience from the toughest person possible and at the end of the day both side were happy and walked away with a healthy profit.
When you're ready, head on over to...
Who knows maybe you will be our next partner?
To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
SUMMARY KEYWORDS
sister, business, people, property, dan, contract, number, agreed, house, pandemic, project, deal, seller, construction, home, costs, matter, partnership, important, initially
SPEAKERS
Will, Billy
Billy 00:00
So the reason I wanted to get you on is I love having case studies and case studies like this where the sellers have really no situation you mean you had a property that it was inherited within your family for quite some time. And I think just by you and I having just a brief conversation 10 minutes a very frank conversation of your experiences with my company easy sell property solutions on when I think it was Dan Collins when he initially spoke with your sister, how that conversation went, how initially our cash offer was substantially lower than what you wanted, and how we came up with this creative offer, which we do maybe about six to eight times a year, the equity lift program. And I know you're going to be a perfect case study because you're an astute seller. So you are somebody that you know this business inside and out because I want you to explain what you do for a living but like you're an educated, super educated individual when it comes down to this. So dealing with us on that level. I know you're going to hold us to a highest regard than somebody who's a layman or really doesn't The Standard Process you drilled us you were very specific, you were very detail oriented. I mean, you put us through the wringer. So let's just start from the beginning in regards to the property, your sister, what the situation was why you wanted to sell. And we'll just, we'll have a frank conversation, we'll take it from there
Will 10:15
Sure. Okay. So our, my sister and I purchased the house back in the 80s. So we've owned it for 35 years now. But it was time to do something with it. And she's I don't I don't live there anymore. But my sister does. And my niece lives across the street in the house that my sister and I grew up in. So there were a lot of things that were important to us. One was the quality of the house and two was the quality of the people who were going to move in because they were going to be, you know, neighbors, and hopefully long time long term neighbors for the area. So we weren't interested in just selling the home as is we were interested and engaged in doing something to not only increase its value for us, but increase the value of the neighborhood and the neighbors around that we've known for years. So sure, that was our overall objective. We kind of knew where we wanted to be. It was, it was really a fluke that, you know, we started talking early on when I think his name was Dan, that my sister spoke with. And then it kind of grew some legs to it got some traction. And you and I ended up talking and as we were talking and developing our, you know, very unique relationship here. I think you and I understood where this was going. And, you know, maybe how we could make this come together. And I know I credit you for the vision and the and the way that you handled it from the very beginning where you saw, you know, something that you could you can make work?
Billy 12:08
Yeah, we're always looking to problem solve. And we're always looking to put the seller in the absolute best position. And I think when Dan came in initially spoke to you says that what's your sister's name, by the way? Roseanne? Roseanne? Yeah. So when he initially spoke to Roseanne, and then Roseanne, I guess it was deferring everything to you. Because you're the business person in the family, you had a certain number, dollar number that you wanted to achieve. Right. And so generally, when we come in the first week, when we go in, generally, sellers just want to put their hands up and say, Look, I just want to make this fast and easy and hassle free. And I want top dollar fair offer, but I want cash and I want to be out. And that cash offer is generally lower than if you would take the property, put it in the open market, if the house is in good condition. In your case, the House did need some love. It was an older home, great neighborhood. But it did need to be updated with with renovating. And so the first pass cash offer when Dan went over it with the sales manager, Justin, it was substantially lower. I think that a tune and I could be mistaken, but I think it was 30 $35,000 lower than what you initially wanted. And I think that number initially was like around 250 Isn't that what you wanted to get is somewhat of an accurate statement, because I'm not 100% with my memory, it's been
Will 13:23
I think the number came in at 217. And we wanted 250 Right. And in the end, we figured out how we how we could do things. So I mean, that's, that took a while to you know, establish getting contracts and and I think you're spot on when you say that a regular client you might have is not going to have the resources or the knowledge that I have in terms of getting a construction contract done getting all these parts and pieces in place so that we can actually conduct business at arm's length and, and make this work for everybody so that everybody felt comfortable moving forward. I think, you know, that's, that's where I think the big difference is with with me, and with you we understood as business people what we could do and how we would get there.
Billy 14:17
And I think you given testimony to this is going to help a lot of I'm going to call them layman people who don't really understand this business. Because you did put us through the wringer. You vetted us you did backgrounds. You tore apart the contracts, you asked detailed questions. And once it came to fruition where we agreed, you and I were both 100% on the same page, everything was documented on responsibilities and roles. I want to get into what the problem was how we solve this situation. So so we have a program and it's not a good fit for everybody. If somebody's living in the house. It's not going to work because we're going to come in and renovate. So instead of us coming in buying the property for all cash and having you move on. This works when a home is either inherited, or it's not on rock or it was As you know, an investment property that the people moved on, and the tenants move that you want to get most value. And so what we did is we analyze the whole property with my team. And we said, You know what, we could probably come up and meet the objective of giving Will and his family, the $250,000 that they're looking for. If in fact, we come in, and we do what's called an equity joint venture partnership, what does that mean? It means that instead of us buying the property outright from you, where we'll have our own buying costs and holding costs and selling cost, you and I almost go into a partnership, where the house remains in your name. And in some cases, it goes into a trust, depending on if there's judgments and a bunch of other underlying issues. But in essence, we do a partnership on the property, we don't have any equitable, right, meaning we can't throw you out, take your property, it's 100%, aboveboard, we come up with a certain number that you're gonna get, no matter what the house sells for, you're gonna get that number of guarantee to use. So that's your hedge, you know, you're walking away with least that. But we also want it to be where the sellers have upside. And so with this situation, we came in, we analyze the property, we said, we can give you the 250 Because we're not going to bind costs or holding costs, that's going to be on you will take care of 100%, the renovation and we'll fund all the money for the renovation. And then from there, we get our renovation costs back, we get a small profit that we agree upon upfront, and then anything after that number we split as the partnership 5050. Right. So so let's go through, first off before we talk numbers and what the outcome was, let's just speak about your your interaction with the whole team. My my staff, Justin, Dan, I don't know if you had interaction with Haiti, the bookkeeper. But I know you had interaction with Dan our attorney, myself and the construction team did everything we said we were going to do, because this is important for people to hear. Did we follow through and actually execute almost exactly there's always little issues that happened. But what we agreed upon both verbally and in writing, what was your experience? Did we follow through?
Will 17:05
Okay, so you want me to be absolutely candid. And the reason I'm saying that is because I have a much deeper perspective on things when it comes to contract standard of care. You know, you and I have had conversations about things that didn't necessarily look right. Because elevations of windows were not, you know, some of there were certain inconsistencies or small things that that did occur. And it's just like any other project, for the most part, and I will say that everything did come out in the end. And I think that overall, we were successful, even in this pandemic matter a fact. I think the pandemic actually helped. Yeah, I agree. We were somewhat concerned back in March when it happened. And like, oh, well, yeah. Now, but overall, that that did happen. With respect to everything, did everything go? Right? I think 90 something percent of everything went right. You know, I had my brother in law there every night. So he's he was taking pictures, the things that didn't happen, he kind of, you know, took care of in the end. And, you know, I felt that that was kind of the ebb and flow of what was going on.
Billy 18:33
So this is important for people to know. So just your background, quick, two minutes, what do you what do you do? What is your profession, because it's important for people on the stand, the level of scrutiny that you put us through is different from any other seller that we've dealt with, you're at a much higher level than the normal people we deal with.
Will 18:52
Okay, so my background is, you know, I'm a senior managing director at FTI consulting, in the construction solutions practice.
Billy 19:00
So you're in this business, you get this at a much higher level, you're on the commercial end of this,
Will 19:05
I am on the industrial side of the things that go on heavy highway, heavy civil work, power plants, you know, big mega projects, I testify as an expert witness on you know, matters of delay matters of disruption, productivity, the loss of efficiency, you know, things of that nature. You know, I look at so I scrutinize workforces, I scrutinize leadership and, you know, project management oversight and how all of that all of how all of that operates on some very large projects. When you bring it down to this scale though it's it's kind of like, you can point to a person or, you know, a certain entity and it's not as complicated Just kind of stands out. But yes, that's, that's what I do. I mean, in my, in my field, I've been doing this for nearly 25-27 years now been a testifying expert for 20 of those years, and have a lot of success, a lot of success at it.
Billy 20:21
So well, I think that's extremely important for the listeners to hear, because you are an absolute expert, you do expert testimony on the on the stand. And so for somebody in a man of your stature that's in this business that holds the absolute highest regard highest standards in the industry, and you hold your people accountable for you to say, on our end, that small construction company out of New York In New Jersey, that we we got over a 90% I would say that that's a pretty good compliment coming from you. Because you do hold the highest standards that people when it comes down to construction, and following through and project management and making things happen.
Will 21:00
Now, you know that your crews took care of business? They they did what they set out to do. You know, I can I can pick on a lots of things here and there. But overall, you know, even if they made mistakes, they went in there and they ended up fixing them. Sure. Could they do better? Sure. I mean, everybody could do better, but at what cost? Right? I mean, our contract said we would have a superintendent there. And, you know, day to day, that didn't necessarily happen. The guys were there doing their work. And for the most part, it probably wasn't necessary for that property that size. Right, right, exactly what what's going to stand around and watch them work all day long. I mean, you set them up, you tell them what to do, they go do their job, at the end of the day, they clean up and they go home. So it's not it's one thing to have it in the contract. But in the contract, to me, it means that ultimately, you're going to be responsible for the things that go on, because one way or another, you have to instruct them and control the workforce and how the work is being done. That happened that by all accounts, even when we saw things, Wayne was responsive, the guys came in and they took care of things. There were you know, very little instances, instances of, of issues that that we even had to talk about. I mean, even if my sister and my brother in law brought it to my attention, for the most part, I would just say just let it ride for a little while, and let's see how they react to it. And then if we have a list of things that we want to kind of talk about and work through, then we will. Like I said, the only critical thing that ever came up was the one that you and I spoke about, and that was the elevation of the windows. And other than that it was smooth sailing things. Things happened. You know, the kitchen came out. Very nice. I mean, there's, there's a couple of things in there, that wouldn't be to my liking. But in the end, I'm not living there. So Right.
Billy 23:17
Yeah, one of the things I learned is, I can't always put my personal taste inside a home, because some people aren't going to like, you know, my personal personal tastes. So let's talk now numbers. So we initially set out to, to have you and your family walk away with $250,000. Let's just walk through the numbers piece and, and show you know what the end result actually was in your experience.
Will 23:39
So in my experience, when we were negotiating the overall contract, you know, we got to a point where we were setting the price, we were working on the numbers. And in the beginning, this is where we kind of zero or flatline that we set a number of 385,000 as a sale price, which meant that to get me the 250, you had an element of risk in there to make all of everything else work.
Billy 24:12
And just to touch point on that, if it sold for less than two 385, you were still guaranteed your 250 that's just about everybody.
Will 24:19
That's the element of risk you have to perform to those numbers,
Billy 24:24
which means that we had to really do our due diligence to ensure that everything we were getting ourselves into that we looked at the risk factors and said you know what, this is something we dialed in a numbers, we're going to make a return on this and if the market should shift slightly was still covered, and will is 100% It'll guarantee will and his family that $250,000 So it was a vetting process and a risk factor process on both our ends. And we both needed to be comfortable. And so to that point.
Will 24:51
Well, to that point, we you and I worked out the numbers we worked out. You know what the cap would be on the prop bid for your side with respect to, you know, the construction cost, and all the other costs so that in the end, it was we knew where we were starting from, we had a beat the 385 number, we both knew that otherwise, we both knew what we were getting at 385. So there was, you know, a certainty, you took the risk, we shifted the risk to you, which was important to my sister and I, and we just felt that this was the best way to move forward, where there was enough money in this whole thing. 385 for everyone to, you know, walk away happy, right? Yeah, for sure. So in the end, you know, the house sold for 455,000, which provided significant uplift to profit on your side and my side where we had plenty of equity to share. And that made the deal even sweeter, there was icing on the cake, which both my sister and I are very appreciative of and are thankful for, for you and your team, they did a great job in that region, in everything. The one thing I commented to my sister was, uh, you know, we really didn't have to lift a finger, because they had everything covered, they staged the house that, you know, I wasn't really expecting you to put appliances in the house or refrigerator, and all the other things on what, but when I, originally when I looked at the estimate, I didn't see any of those things in there. So it kind of took me by surprise, because that expectation was above and beyond what I thought you were going to do. So to hear this, so that's, you know, those types of things, were all added value to the sale of the home. And into what, you know, when when we met Chandler and Jamie at the closing and what my sister did, you know, they were very excited, they were extremely excited about the home, you know, the fact that it was all new inside, and you know, they got to meet my sister and the people who owned it. And there was a connection there between her and, and Jamie and they have a cute little girl in the backyard has got already has play toys, and you know, a slide and other things there. So we still get to see a lot of that or my sister does anyway, a lot of that because my niece lives across the street, which is the, you know, was the ultimate goal was, you know, to bring that kind of element back to the neighborhood because now my niece has someone that maybe eventually she can have a friendship with. Yeah, they're both the same age.
Billy 27:53
Yeah, it turned out just, you know, even an RN will like we, when when I found out your position and the level you are at in life, because again, I respect a lot of different individuals that have a certain caliber, where they're bringing value. When I had that first conversation with you, I realized I was talking with somebody who was at a substantially different level. And when we agreed, and then, we inked it, we signed everything, I was extremely happy. And I told the team look, come hell or high water, we're going to beat the expectations that we set forth. And I was nervous with the pandemic. And I have to tell you, I was I was trembling a little bit because I thought this thing was going to go sideways. And I was locked in. And I said however this turns out whether we make money or not, we're following through and we're going to ensure that we take care of this. But just as you were appreciative. I was appreciative that you that you trusted us your family trusted us with helping you out. And that you put that trust in us. I know you were you had people there watching it. But for somebody like you to trust us with your asset that house to make it happen. Again, I want to thank you, I want to thank your sister, I want to my whole team. They all wish they were on this phone call with us. Because, you know, it was a good deal for everybody. And we have right now three of these joint equity partnerships that are going on between New York and New Jersey. And you know, this video testimonial, when somebody is on the fence, we're gonna give it to them, we're going to show them because look, things could go wrong. The bottom line is you were hedged. You knew what you were gonna get out no matter what. But we came in and we absorbed a lot of that risk to ensure that you and your family could walk away with a certain number. And if we win, we all went together. And the bottom line was we all want we all came out with a lot of icing on the cake.
Will 29:34
Right? I mean, that's the beauty of the deal that, you know, in constructing that relationship. You know, my sister was like, Are you sure? And I said, Well, you know, our initial conversations are, are heading in that direction. She was a bit like, why would they do that? I said, Well, he has a vision that many people don't. He has a vision of how he can accomplish something and that's something that, you know, I, when I approached Dan, I said, Well, maybe we can do this as a joint venture and you know, and then you said, Yeah, that sounds like a good idea. I mean, the wheels started turning with us.
Billy 30:12
Yeah, well, we've done, successfully prior to you. We do about three to six of these a year. But with very slick clients, you know, it has to be the right client. And we did another with another gentleman who owned a an electrical company guy was worth 10s of millions. Why he did this with us. It's just because you know, he and he, again, business owner, crossed his T's dotted his eyes that live in the property put us through the wringer. But I just appreciate when I can do business with somebody that really vets us and then still decides to go through with it because it says a lot about us. And equally, it says a lot about the people we get in business with. So I appreciate you. I appreciate your time today, we'll I hope we stay in touch. I mean, you are a great individual. And if there's anything I could do for you, if you even want to consider I know you're in Texas, but if you ever want to invest your money into projects that we have, whether it be small, single families or long term apartment complexes, you and I should definitely talk offline.
Will 31:09
Well, we can certainly do that. And we're not when I'm up in New York or something. We'll see if we can't get to sit down and have dinner. I would love that to chat about things and bring this relationship a bit, maybe to the forefront and see where it goes.
Billy 31:25
Awesome. Thanks again for your time. Well appreciate you.
Will 31:27
Okay, Billy, take care. Bye. Bye.
Billy 31:32
Good. That was it. Well, you were great, man. Thank you so much. You're welcome, buddy. Thank you. Yeah, thank you again, have a great day, but to enjoy your time in Puerto Rico. Thank you. Bye bye.