Gavin Timms and Don Costa, co-hosts of Coffee With Closers Live, are here with us today to talk about how Don got started in real estate investing, how he overcame a massive loss when the markets crashed in 2008, and how he rebuilt into one of the biggest investing businesses in the country.
For Don, the epiphany came when he hit rock bottom. He had to really take a hard look at how he was doing things, realize that there was a better way, and start over. He also realized that it was important to surround himself with like-minded people. Not only did they have valuable experience that he could learn from, but they helped keep him accountable and on track with his goals.
That’s what a good mastermind program should be. It should feel like a community, a place where you can bounce ideas off of people and get different perspectives on things. That’s why Gavin created the REI Network.
Gavin: Hey, guys, welcome to the REI network podcast with me, Gavin Timms. Hey, guys, how are you doing? Welcome back to the REI Network podcast today. I have an awesome guest. He's a good friend of mine. We actually co-host a podcast together as well, which we're going to talk about. So let me bring him over. Here he is, Don Costa!
Don: Yeah, I'm good. How are you, buddy?
Gavin: Yeah, good. I appreciate you doing this. You know, and we talk we do a show together every single week, like every Wednesday at 12:00 Eastern, 9:00 Pacific Central, 9:00 Pacific that we got is coffee with Closers live with me, you and David Dodge. We've been doing it now for, I don't know, maybe 15 weeks consistently that. Right.
Don: We got a quite a few and somewhere between 12 and 15, I would say. Yeah, I kind of lost count, but it's it's it's amazing how consistent we've been with it. So we weren't sure when we started it if it was gonna be something we're going to keep on doing. And I think we like doing it. So get to answer questions and interact with the audience. And now it's a podcast, so I enjoy it. Yeah, absolutely.
Gavin: Me too. So, guys, if you'll listen to us, if you watch this on YouTube, make sure you give us the like and subscribe. Every Wednesday we go live on my YouTube channel, same as Don's and David's. And also we have a Facebook group, Coffee with Closers Live. And then also a new podcast is just launched to make sure you can log in and check that out. And it's a lot of fun. It's all live. We bring guests on. We do a lot of content and a lot of questions live on. It is absolutely great. And we get to hang out. So but now. Before we jump in, let's talk about Don Costa. I mean, you are a beast in our industry. I've known you for a while now. We mastermind's together. But I want to take people back to you getting started a bit of experience because you are, I'd say, a veteran compared to me. At least you're a veteran, right?
Don: Yeah, I'm old. Say, yeah. I mean, I started in two thousand three. So we're talking about eighteen years in this business with a little hiatus of losing everything in the middle. But by eighteen years in this business and and I can still remember being scared of all the things that everybody is scared of, you know, not having enough money, not knowing what to do, not knowing whether or not it's a deal. I remember going out house hunting, looking for deals, you know, trying to identify something that was an opportunity and not knowing, not having the confidence to to really explain it to the people around me, I think, and pull the trigger and say, yeah, twenty three is when I actually put my feet to the fire and got going. Yeah.
Gavin: Now that's great. And then obviously you were successful, you were kind of on cloud nine, everything was going well and you just kind of mentioned it. Everything then went south and you lost everything. What happened? Why did that happen and what were the big changes you when you got back into the business and kind of started again? What did you do differently?
Don: So basically I started to believe in my own bull. For the most part. I believed my own story. And and that's part of the issue for for losing everything. And I think as entrepreneurs, a lot of us go through that. There are a lot of people right now that are that are having tremendous success in this market. And they're not realizing that success overall is it's market driven for the most part. And unless you are being smart about your business and running a real business, the market's going to guide your ability to succeed or fail in this industry. So not understanding that aspect of it being a bottleneck, my organization not being a good leader, not running a real company, all those things came to a head on. Twenty eight hit. Had I had I been a good leader and ran a real company and pivoted properly, I probably wouldn't lost everything. But what happened was I was so full of my own garbage and so intent on I'm doing things my way and not listening to any advice from anybody that when the market turned, ultimately at the end of the day, it was like a ship full of holes or like a rock that pulled me under. And my mindset went from, you know, I went from this strength mindset is full of myself mindset to grasping at straws. And I remember sitting on my shower for crying. I'm not really crying, but almost crying one morning in the shower, realizing that I couldn't make payroll, that I couldn't pay rent, that I was out of money, essentially. And there's something about going into survival mode where you just focus on little pebbles in front of you instead of the big obstacles you need to be focused on as a business owner. And I started focusing on the pebbles and it was just a downward spiral from there. There wasn't until essentially hitting rock bottom, you know, not being able to pay my mortgage or my light bill and not even be able to buy my family. Taco Bell, I want to talk about one time my credit card wouldn't clear. It wasn't until I hit rock bottom like that that I finally pulled my head out of my rear end and and realized that the only thing I was good at was real estate investing. And if I was going to really be successful the way I wanted to be, I had to get back in the game. And that took me almost four years to do by. Way to put my head on my butt. It was it was a very hard pull and it took a while. So I got back in the game in 2012, I met with an investor who I talked to in the back and we on a deal and we bought a house from an agent on off the MLS in 2012 and June 2012. And I renovated and resold it and I made 20 grand. I had to split it with the guy and I was back in the business. So, yeah, changes. You had changes in the question. Some of the changes that I made, just being grounded, being real, understanding the, you know, as an entrepreneur that this is a journey of education. Every next step. We don't have any experience it. Right. There's no college degree. There's nothing that that can teach us that. So every next step is is a slice, humility, an opportunity to grow, something to learn and and the possibility of failure. And so realizing that and realizing that I had to be around a good circle of people. That's one of the reasons why you're in my circle, because you've got to surround yourself with smart people and mastermind with these people on a regular basis. You've got to have a good team around you. You got to trust your team and not be a bottleneck, be a good leader and get out of their way. All those lessons I learned when the money's really, really good. It's not because I'm a genius and it's because opportunity, preparation and I just happen to get it right. Or for instance, right now, the market's on fire and being levelheaded about that I think is important. So a few takeaways, I guess, from these. Absolutely.
Gavin: And we're going to touch on some of these points you just made. What was before I do when you when you were being crazy? I'd say crazy. How many slips was he doing at once when it kind of when you were like top flight, like going on it.
Don: You mean this time around. The last time around.
Gavin: Last time around.
Don: OK, so we were doing really, really good. Last time around I had a but I had a real estate company, a property management company, a mortgage company. All were doing well and I was flipping houses. And back then I would say ten, fifteen a month was a good month for me. I wasn't like just balling crazy as a rehabber had multiple things going on. But rehabbing was was my core proposition.
Gavin: Yeah. But then even then, you've got it higher than that in the recent times.
Don: I've gotten it higher than that. But here's a thing. Back then it was around like a real business. It was thrown against the wall. We buy a house, we have a loose budget, we do a handshake deal with the contractor. They come in and basically throw paint on everything and we'd sell it and always took two to three times longer than was supposed to and cost me more. And I didn't care because the market would hit all those mistakes of running a bad business.
Gavin: So it was easier to be a rock star.
Don: It's like that again right now. You go in without a plan on a rehab, you're going to make more money than expected. And that was the way it was then. I was buying houses subject to so I was using my own money. I was leveraging investor capital through the rehabs. And then I wasn't even really I didn't have a property manager and was never checked on the rehabs. It was just basically always going to take longer and cost more. OK, well, now I'm going to make ten thousand dollars more than expected. Fifteen twenty thousand dollars weren't expected, so it was different. This time around we have systems and processes, accountability. We pay our contractors a certain way. They have to finish at a certain time. We need to be on budget. We're accounting for everything. Project managers are checking the properties on a regular basis. It's just different. It's a different animal, different beast, and we're accountable to the outcome this time around.
Gavin: Yeah, that's great. That's really, really good. I think that's it's important I think is I think is good. And I, I have a positive on it because I think that's the only way you grow and learn. Right. I think your experience, you are humbled. Right. You are humbled a lot. I didn't know you before then, but from what you said in the past, I think you were humbled. I think you probably agree that you may be a personality is different now to what it used to be because of the things that you've gone through. And I think that's good to to be able to guide others right in what we do as educators. You're like me. You have programs and people that we're going to talk about here that kind of follow you and look up to you. But you're just using your experience to say, don't do what I did. Right. And that's what the learning curve is about to be able to do that. And I still ask you, you know what? Your you do a lot more direct mail. We've had conversations, I, I do a lot of cold call and things like that. And when it comes to direct mail, I don't do a lot of it. So I go to my core group of people and we're going to get on to the importance of mastermind's being able to come to you and say, if you do that, what do you think? This is what I'm thinking. And you're going, that wouldn't do that because of this. This is what my experience is. And then I'm able to pick up on that and then adjust accordingly for my market. So then that's that's really important. So having them call people around is really important. You're probably one of the best networkers. I call this my company, r.i network, because that's what it is. Everything is about networking and you are probably one of the best in the business in terms of we're in a couple of mastermind's together and you're in more than the ME and I'm in your mastermind, which is incredible. And the next one is coming up here in November as we record this in Nashville. So that's going to be a fun time. And talk to me down a little bit about last. Let's jump. And obviously, you've. AMASS the rehab. You do things virtual, you can wholesale, you can do you've done subdues, you've done it all. And now I feel like you've got a new purpose right over the last year or two that you've set up a mastermind. And just explain to our viewers kind of what is a mastermind and what does it take? What does it look like? Was it do?
Don: So the mastermind done the right way is a community. It's having the right people around you that are fighting the same battle. You are going the same direction you are. The best way to describe it is you're alone in your business. They always say that, you know, crap rolls uphill in business, right? You don't go complaining to your employees. You handle all the issues, all the problems you're making, the decisions, the responsibility of your team is on you marketing. Whether or not you're profiting and carrying your family. You can always go home to your spouse and have a conversation with your spouse about your troubles. They don't understand it. And sometimes we don't want to put the weight of it on them as entrepreneurs or built built differently than most people around us. So it's an opportunity to get in a room of like minded people going the same direction, working on the same things, having the same challenges, having a community to understand you and your thought process, what you're going through. They may have tried something that you're thinking about trying and then they'll be able to share the results. You may be able to test something together on opposite sides of the country and so on and so forth. You may be able to save somebody yourself from making a bad decision. So it's a community and it's really about not just taking but but giving to it as well. And the idea behind it is to make sure that you have your board of advisors, your people or your trusted confidants, that you can go to it for advice. Like you called me up about some direct no questions. I gave you my experience. What you do for your business is your decision. But you had a sounding board for, well, this is what I've learned. This is what I've done. I've sent out almost two million postcards over a two year period. I don't know many people who've done that in a two year period. So I'm able to give you solid information. So that's what it's about, is making sure that you're in the right room with the right people. And other thing to talk about, like the education space and then real world experience, like how I would have been as an educator in 2004 and how I am as an educator now. I'm two different people. In twenty four. I had this optimistic naivete that anything was possible, nothing could go wrong, you know, and I would have I would have been hard to claim, but this high energy, high, high over overpromise individual right. And now I'm straightforward like you step here success. You step there your leg trian in a bear trap. Right. You know I'm the guy who can tell you that's going to cause a lawsuit. Sounds great. Yeah. And people are teaching it, but that's going to cause a lawsuit. Ask me how I know because I had been in them. So those are the people you want to be in the room was a mastermind is real business. People that are that have real world experience are going to be able to collaborate with you on that experience.
Gavin: Yeah, that's great. And the good thing is as well with Mastermind's is that that you have to apply, you have to be the right person. The right fit is not about the money. And I think that's what people miss. And I think there's probably some mastermind's out there that is in it for the money. But, you know, I know what you like and know what your personality is like. And you're very much are you going to fit in to this group? And I know as well that you I've got no problem with if someone does come in and they don't tell them, they will go in in the next week. Right. So I think that's important. So if if someone's listening right now and they want to go to the next level. Right. And they want to be you know, it's probably not them if they're doing business. You're exactly right. I keep my business completely separate to my wife. I make the comment. She'll know if I'm not having a good day and if I am, because it's probably on my face and in my personality what's coming across. But for the most part, we don't talk about it. And you're exactly right. I just think why stress everybody else? How if I'm stressed. Right, right.
Don: And it's not I don't want to job, but it's not that your wife's a bad person. I met your wife. She's an incredible person. You guys are obviously great people together. She's in a completely different field. Yeah. Her career is a completely different field than yours. And and I'm sure she doesn't want because while she wants to understand you and cares about what you do, I don't think she wants to learn your business.
Gavin: Not exactly right. So yeah. Yeah, it's good. When we do a mass mind interview, that's obviously Wednesday, you know, the wives come out and, you know, they do their thing. And we're left to do ours. Yeah. For that exact not exact reason because we're not on the way that we look at things would be different if we did have a conversation. It might have it from being a nurse and she'd probably have a different perspective, not as an entrepreneur. Right.
Don: And a company would come from the heart. She would care the advice she would give you. It would matter from her perspective. But it may not be the right advice for your business because her experience is different. And that's really the important part about being in the right room with the right people.
Gavin: Yeah, I love that so. Well, the obviously I know it's cold, but what is it called and. How do people, if they're watching this going, you know what, I want to go to the next level, I want to get into a group of people, you know, be around like minded people. How do they go about it? Have they inquired to see if they'll be a good fit?
Don: So it's called the inner circle elite. And the best way to to find out more information is going to Be In This Room, because that's the room you want to be in easy to remember BeInThisRoom.com. And there's an application process felt the application schedule, a strategy call, and we'll have a conversation with you. We'll make sure we're fit for you and you're fit for us, and then we'll take the next steps. So ultimately today, if we can't serve you, we want you to know that. And if you if you're not going to be able to collaborate with the community, then we want to know that. And so if you're a good person, if you're a giver and you're you're ready to consume and take advice from people and really just, I guess, be a decent human being, then you're probably going to fit. If you if you're if you're striving to build your business and make it better and you're doing things already. So but BeInThisRoom.com.
Gavin: Ok awesome, so you meet what? In person, four times a year, which helps with capability and and taking action and holding people to the fire as well. So, yeah, we have we have worked we have virtual meetings every month. We don't have a physical meeting. We have the physical meetings four times a year at different spots around the country. We have a Facebook community.
Don: We got a member whole portal, you know, with access to different training videos and things like that. I got a lot of things planned. One of the things I want to do, and I'll just mention it here, it's something that's in the works is we're building out my training segments, generic training segments for your team that you can just put your team in front of when you hire the certain positions and augment with your training. We're collaborating with different members to build that out. We're trying to do a lot of done for you opportunities with collaboration with with some incredible people in the group so that as members are growing their business, they don't have to reinvent the wheel and bang the head against the wall. So there's a lot of things going on behind the scenes. My job is to under promise and over deliver, and that's something that will be working really, really hard to do. Awesome.
Gavin: Love that. That's a challenge. Our guys. OK, so moving on then, let's talk about what advice would you give, like, to somebody in this crazy market? We talked about this market. And what I was feeling was, is that this market is hot right now and I think it can make people look good. And I think that's kind of what you were kind of getting at, right, is that we can take a rehab and anyone can make money right now because things are getting better. It has softened a little bit, in my opinion, across multiple states. It's not as crazy as it was, let's say, two months ago, but it is still crazy. So what do people need to watch for? And you've been through the crash, right? I am very open about that. I do believe the way that I invest, the way I run my business, that I am somewhat recession proof and the way that I do things. But again, that's my opinion. But what from what you see, what should people be aware of in this market if they are starting to invest?
Don: Well, first of all, I want to say that I think the market has softened a little bit right now because people are going back to school for real. And that does take a little bit of demand out of the market every every year around the end of July, beginning of August, the market does kind of soften a little bit. So that doesn't mean the market overall is going to come off what it's been doing, but it's something to watch, too. I started in two thousand, three, four and five, which were that was the uptick of the last market. I was still able to get good deals, great deals. I worked pre foreclosures and tax liens. So people that want to get started now, there's a lot of opportunities. There's still people that don't want to list their home that you're a solution for. So we're just getting started. Don't feel like it's a hot market. There's no deals. I started it in a hot market and did very, very, very well. So I want to put that in there. The other thing is there's a difference in investing and speculating. And the biggest mistake that most people made in two thousand, three, four and five, they start speculating. You're betting the market. You're playing it like it's the stock market and you can't do that. Markets have cycles, period in real estate. And you've got to always prepare for the worst, hope for the best. And what I mean by that is just running a good business. It doesn't mean, oh, the sky is falling every day. It just run a good business. It doesn't make sense business wise and a normal market, then it's probably not going to make sense now. So don't bet don't bet that like, for instance, we got a property, we locked it up eight months ago. We're just talking about this morning. It was a it was a situation where there was some things to work out, a title and the owner needed to identify a place to live and all kinds of stuff. It was a long, drawn out escrow. Eight months ago, we had an offer as a wholesale for eight grand in eight months. The company changed so much that we're saying that somewhere close to thirty thousand dollars. That is not because I'm a genius, but in twenty four and five I would have thought I was. That is simply because the market conditions are fluctuating and changing. How do I lock that property up thinking, oh, I'm going to hold this thing in escrow for three months so I can lock it up for thirty thousand dollars more, especially if you're rehabbed. Hopefully not so bad, but if you're rehabbing, that's that's a recipe for getting caught with your pants down at some point and nobody wants to get caught with their pants down. So just be smart. Don't believe the hype. Don't drink the Kool-Aid. People are out there promising all kinds of crazy stuff. There's some crazy, crazy stuff going on right now. This is about running a real business. This is about building the real future, and it's about building a legacy. And as long as you keep that in mind, every day you come in to do what you're going to do, you're going to be fine.
Gavin: Yeah. Now, I agree that there's a lot of influences out there, right? Gurus or influences. And that's what they're good at, is influence and building a following. And it can't it's not always good information. So I think everyone should. And if someone approaches me and they want to work with me and they don't know anything about me, the first thing I say is going to research me, go and watch me on YouTube and get familiar the way that I teach when I speak, the way I do things, and then make sure we're a good fit. Right. And that's what that's what I always say, because you should not be invested in someone that you know nothing about my personal opinion. So, yeah, I agree 100 percent with that. I think that's good advice. So let's talk real quick about we mentioned it before, but coffee with Close's again, just want to touch on base for people like me. Don and David Dodge are doing coffee with Close's every Wednesday life we have not missed Wednesday since we've started this. We're on week somewhere between 12 and 15. We should know, but we don't. And yeah, we have gas. Come on. It's live on my YouTube or Don's YouTube. And it is also we have a Facebook group, Coffee with Cleanseas live now. We have its own podcast. We're actually being released as a podcast. So make sure you go like and subscribe and check them out, because I think they're really good. We have a good time. We have a laugh, but we also answer questions. It's real and just no B.S., is there?
Don: No, there's not. And the cool thing about it is we come from different perspectives and different opinions. Like, you know, you'll have to take on something. It might take maybe different. We give Dave a bad time because he wants one hundred Reynold doors. And you and I, it's like drinking bleach, right? The idea of having one hundred doors. So we come from different perspectives. And and there are some things we completely agree on and there's some things that you'll get different takes on. And I think that's what's cool about it. And we're all good friends. We've all hung out together outside of events and different things like that. And so it's genuine conversation. And we care about the questions are being asked. We care about the people who are listening and making sure that the information is sound. So you left out coffee with closure's dotcom. There's some giveaways there. I don't want to necessarily throw one more thing for people to go do, but you can also sign up to get notified about the lives there as well. Yeah, and that's an opportunity for you to to get in touch. The cool thing about is, is the live show. And you can ask questions. We're answering questions. You ask. The important thing to understand is if you want to get your questions answered and you want to have different perspectives, that's where you go. And Gavin does more of a lifestyle business. I have an office and I run more of a larger scale business. Dave does a lot of the burger method, so it's different. We can we can answer any question you have. Yeah.
Gavin: And and it's good because we don't always agree. And that's when we have a good time and normally is with Dave. Right. But yeah, it's good. And the reason guys, if you again, if you're listening that I'm bringing this up, we have nothing to sell that is live and we're just trying to our reach as many people as possible. We'd love to get hundreds and hundreds of people watching us live and interacting because it's a lot of fun. And it all started with us just really getting together once a week to catch up. And then that evolved to, hey, we should make this a show and let people watch us. And then we started bringing guests on and uneven. We're thinking of potentially taking live calls at some points and getting people to actually come online to a lot of cool things in the works that we're working on. So make sure you check that out. I've done just before we got done. I appreciate your time. I know you are a busy man doing deals and running, running, running around one thing. What was one thing that you tell someone again just to finish on? If someone was looking, never done anything. I wanted to start getting involved in real estate, invest in. What would you tell them?
Don: You know, there's there's so much the first thing I would do is I would sit down and take an accounting of like what? What are your skill sets and what are you're not. And I'll try to make this quick, but do you need to burn the ships or do you need security? Answer that for yourself. I'm a burn the ships, OK? And if if you give me security, I'm never going to take action. So determined that because that will determine whether or not you're going to go take action to be successful. The second thing is, OK, well, am I accountable to myself or not? If you're somebody that can be accountable to yourself to take action, then there's Podcast's. Gavin has a great podcast. I have a podcast called Flip Talk. There's amazing podcasts out there, YouTube channels. There's so much information out there. Be careful where you get it from, but there's so much information out there. And even some of the sources that are probably questionable still there's still nuggets in there you can get and take action on it. If you're somebody that doesn't find a coach or mentor that you align with, then go ahead, do that. Yes, they cost money. Why? Because it's our time away from our family. It's our time invested. And we want to make sure that you are invested in your. So it costs money, but find a mentor that you align with and pay the money. People say all that costs money, but the reality is, how much did it cost you to make mistakes and trial and error and long how much longer is going to take you to get there by yourself where we can take a lot of that and just take what I take you a year and make it two or three months. And so we fast track you and there's a reason for that. And so find out how you learn. And I was a self starter for a long time, but there was a point in my business where I had to start getting mentorships and be part of the community. So some people, they need the mentorship up front and maybe they can take it on their own down the road. So sit down and take a accounting and then take action, take massive and perfect action because there is no such thing as perfect. It's never going to be perfect. I fail every single day and every single day. I'm happy to do it again because we learn.
Gavin: I think that's perfect advice. Again, couldn't agree more. And that's what that's what people need to do. I said it earlier, is that you need to research who you're working with and if you're interested, reach out. And also on the mastermind front, you're always growing. You go from doing deals to doing multiple deals and then you then need this time to elevate. And there's more things than just doing more deals again. Doug touched on. He has a much bigger business. He has an office. He has a lot of acquisition. He has a bigger budget for marketing and all the things that's just doesn't align with me personally. I like the lifestyle more. I like to travel a lot from all over the place and that's what works for me. So everyone is different and I think a in and then elevate it into the masterminds again. Check out Don's mastermind, BeInThisRoom.com, chat them out and come and join like minded people. And that is where you're then going to take it to new levels. And it's a place as well. I'm going to finish here where people get real. You actually leave the base at the door and you will I would never say anything. What goes on in these mastermind's in any of the ones. But you will see the things that you just did not realize happens that happens to people that are influences that are out there that you think have got proof that lives and that nothing can go wrong. And then when you actually dig deep and get them and get them vulnerable, you go, OK, that's just human, that's just normal. And it actually gives you a different perspective for me on business completely. So that's why I like it and done on that. No, I appreciate you, but thank you so much for joining us. And guys, if you're interested, I said working with me, reach out, support@REInetwork.com. and go to REInetwork.com/join.