From West Point to Running a Highly Successful Real Estate Business

My guest today is a fellow real estate investor Frank Scappaticci. Frank is a Westpoint graduate who is on a mission to become a premier buyer and seller, as well as a thought leader, in markets around the United States while placing a high priority on integrity. Together with his partner, John Plumstead, Frank founded Gray Line Investments in 2020. They are a real estate solutions and investment firm that specializes in helping homeowners get rid of burdensome houses quickly. Their goal is to help people improve their lives through real estate investing, education, mentorship, and giving back to veterans.

Our conversion started with Frank’s backstory. His background, for most of his adult life, has been in financial services. Prior to moving full-time into real estate, he worked at JP Morgan, and prior to that, he was an army officer. Frank says that he was not interested in real estate until he hit the age of 30, after buying his primary residence in Westchester. During that time, he fell in love with the house search process. In February 2020, John Plumstead, who had been investing in real estate for five years, reached out to him and they started their company Gray Line Investments.

After learning about Frank’s background, we move on to talking about the concept of tired landlords. This strategy has helped Frank and his partner close four deals in 45 days in the Oklahoma market. Frank explains their process of finding tired landlords by using the PropStream app to filter high equity and years of ownership into property searches. They would then pull that list, put it into CSV, and upload it to Lead Sherpa, an SMS texting platform. By doing this, they were able to get an enormous number of leads.

We then talk about the conversation that Frank had with his wife, after realizing that real estate was the way to go. Frank shares that the conversation about starting real estate wasn’t particularly difficult. The difficult part for him was explaining to his wife that he wanted to completely quit his full-time job. He wanted at least three months of operating expenses in the bank account for the company and a consistent deal flow before quitting his job.

Our next topic of conversation was the structure of Frank’s company. Their business model is wholesaling and fix-and-flip. In percentage, it is 80% wholesale and 20% fix-and-flip from a volume perspective and 30% revenue from flipping and 70% revenue from wholesaling. They operate in over 10 cities, but they only have really strong contractors in a handful of those cities and Frank recognizes how important it is to have a good contractor when it comes to flipping.

We also walk through the structure of Frank’s company, from a personnel standpoint. They have an acquisition manager, who manages the lead specialists. Lead specialists screen the sellers and notify the acquisition manager when a seller is ready for an appointment. Frank then shares his systems when it comes to wholesaling and flipping remotely across the country.

Lastly, we talk about Frank’s vision for 2021. Frank shares with us that his company is getting incredible buyer demand lately in their wholesaling operation. Their goal for the first quarter is to sustain a pace where they're closing three deals per week, for an overall 150-200 deals in 2021. They are also looking at other ways to expand their brand at this point.

Don’t miss this episode of the Just Start Real Estate Podcast with the super inspiring Frank Scappaticci! As a relative newbie in the world of investing, Frank shares some great insight and attitude with our listeners!

Notable Quotes:

“People who try to get their entire business automated and systemized are the ones who never get off the ground because they're always preparing to prepare.”

Mike Simmons

“I want to play offense as much as possible. Once you have a really good offense, play some defense to defend the business you have.”

Frank Scappaticci

“You need to play defense, but you never stop playing offense. If offense becomes backseat to defense, your business will start sliding downhill.”

Mike Simmons

“It’s not cheap to wholesale, especially once you scale.”

Frank Scappaticci

“I don't nickel and dime my contractors at the beginning. If I find a trustworthy person, I don't try to knock them down on their pricing.”

Frank Scappaticci

“I try to treat them as a consultant and then good contractors feel valued. They're doing it to make money but it doesn't hurt to have them psychologically invested in the project.”

Frank Scappaticci

“I don't think real estate needs to be crazy and creative. You need to be good at blocking and tackling the fundamentals, and then you'll do just fine, you'll scale up.”