Investing with Purpose: Having Real Intentions in Real Estate With Donovan Ruffin

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If you want people to work with you, you need to be leading with value. Don’t make every meeting you have a business transaction. You need to actually want to help people so that they will work with you. You can’t grow your business if no one wants to work with you. This is exactly what Donovan Ruffin did when he founded Equity Cash Offer. He’s only 28, yet he buys and sells houses all over Texas while also going into new markets. He does this because he’s actually doing the work and grinding it out. Join Tim Herriage as he talks to Donovan about how he grew his business, Equity Cash Offer, especially at a time when interest rates are rising. Listen in for some great advice on how to get started in real estate.

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Investing with Purpose: Having Real Intentions in Real Estate With Donovan Ruffin

Welcome back to the show. I’m here with an all-star, Donovan Ruffin. Donovan, thanks for coming by.

Thanks for having me.

You are the CEO of Equity Cash Offer. Why don’t you take a second and tell everybody a little bit about yourself, who you are and what you do?

I live here in Dallas-Fort Worth McKinney, Texas. I own a company called Equity Cash Offer. We buy and sell houses. We do mostly wholesale. We do fix and flips, buy and holds and a little bit of commercial. We do business all over Texas. We’re going to enter some new markets in Florida, Atlanta, North Carolina and South Carolina. We’re growing.

I’m super impressed with you. You remind me of myself when I was young, except you do a lot more than me. The first thing we do is the BLUF, the Bottom Line Up Front. The Bottom Line Up Front is when I was in the Marine Corps, we’d briefed generals. They always told us, “You never bury the lead because the general may have to get up and leave. You may start getting mortar or fire. You need the general to know the most important thing.” In that context, I want you to tell the reader about the real estate market, trends you’re seeing, things you’re thinking about and things that people should be focused on or watched out for. It is two minutes of the state of the market according to Donovan Ruffin.

The real estate market is very interesting. You have interest rates rising. Prices of real estate are a lot different than what it was years ago before Corona. I did market research. In Dallas-Fort Worth alone, houses are selling for about $178 a square foot on average. Before Corona, it was about $118 or $119. If you look at the dynamics of it, when you’re getting into real estate, you want to be careful about the exit strategies and your intention.

Going into the real estate market, we’re focused heavily on if we’re going to buy it and put work into the house, we’re looking to keep it forever. If you look at history, 100 years ago, houses were a lot different than what it is because of inflation. Time has changed and things of that nature. You can’t lose if you have intentions of buying properties to keep them forever. That’s what we’ve been focused on. There are tons of advantages to that. You have tax cost segregation with rentals and cashflow with rental properties. With that, you have leverage because you can dabble and have more bankability.

Most importantly, it’s a legacy for your family too. You’re not getting paid once off a wholesale or flip because you put all this work into getting a property, acquiring it and selling it or fixing it up and then selling it. You’re fixing it up, putting a stable tenant in there and then keeping it forever. That’s what our main intention is with the market, especially with interest rates rising. We aren’t focused on, “Is the market going to crash?” We’re excited about prices going from $178 a square foot to a lot lower because of what they used to be. That’s my take on the real estate market. You can still make a lot of money wholesaling or fixing and flipping but you get paid once versus paid forever.

There’s a lot to unpack in that legacy. Your Instagram has become one of my favorites. Mainly because I was about your age when I had my first kid. You do post about your house stuff but it has 80% of the little knocks on there. That legacy means so much more. It’s not about the money, watches, cars or houses. It’s like, “Let’s level our kids up.”

I learned a lot being in this business for years. I humbled myself a couple of years because the IRS wants their money. You can make a lot of money but you still have to pay taxes. I was the type that was like, “$300 of cashflow isn’t that inspiring.” Now, I don’t need the money from a fix and flip. I’d rather keep it, maintain that property and keep it and my family forever.

You were talking about houses and what they used to cost. I’m working on a project in Downtown Rockwall. It’s a historic house. When it was originally built in 1885, it was 1.5 acres. The cost, when it was first sold in 1905, was $5,000. That’s for a 2,500-square-foot house on 1.5 acres in Downtown Rockwall. Now, it has been parceled up and it’s about 3-quarters of an acre. We bought it for $550,000 and it was appraised for $1.25 million.

When you talk about forever, it’s exciting stuff. You pencil that in on a $100,000 house. From the wholesale, fix and flip, rentals, commercial or multiple markets, what is it that is challenging you? Is it personnel management, cost of money or not enough inventory? What are some business challenges you’re dealing with?

There are basic day-to-day challenges. Getting into bigger deal sizes is a little challenging because it’s a lot different. If you’re going from $200,000 houses to $2 million properties, it’s a change in mindset where it does get challenging because it’s a whole new ballgame. We started in commercial and there’s a whole different set of terminology in terms of math that’s all new. That’s the cool thing about growing. Once we figure it out, we’re here to stay.

As a business owner of multiple businesses, how important is it to continue to force yourself to grow?

It’s by far the most important. People want to grow. That’s human nature. , As a business owner, especially when you employ people, they’re with you because of the opportunity that you have. It’s not what’s here now but what’s not here yet. It’s important to have that vision and those intentions to grow because that’s what keeps the ball moving. It keeps the adrenaline going.

The ones that you want around are there for the opportunity. The ones you don’t want around are the ones that are there for a paycheck. How in your business have you found a way to differentiate that?

You always have chiefs and Indians or sheep and lions. Every business needs Indians but every business also needs chiefs. Once you put them all together, the chiefs are going to rise. The leaders are going to start paying attention and they’re going to start asking questions and start doing things that you didn’t expect of them. It’s super important to understand that there is a difference between the two but you need both of them.

Even at our lending business, we have an intake team. We call them the lead development specialists. It’s been interesting to watch how many of them come in and like the company and the culture but then, they want to be a loan officer or go to processing or underwriting. One wanted to go to legal. It’s fun to watch. Some want to stay in that role. You can let them if they’re happy and if they’re doing a good job.

Everybody’s got to do the job, first and foremost. It’s not all the time that when you hire somebody that they’re in the right seat. Sometimes, there’s a whole different seat that they’re a lot better at. You don’t even know until they’re there or they feel more of a desire to go there. Times change. People change. That’s how life works.

One of the things that I got impressed with that you did in 2021 is you had a big team dinner. I saw it on social media. You gave everybody Rolexes. Tell me about that and then tell me why that’s important to you.

Money is one thing. Bonuses are another thing. When it comes to people that go above and beyond in your business, it’s super important to separate that and highlight that in front of everybody because it’s a level of appreciation. We have a thing in our company, depending on the division, that you are in a bonus to a Rolex. We all get together and have dinner every quarter regardless but when people hit their bonus, they are gifted a Rolex. That’s pretty cool because I’ve worked for companies before. I know for a fact when people feel appreciated, they work harder. Most importantly, it is a level of intuition where it’s like, “Your hard work didn’t go on notice. I know for a fact you work hard.” It’s a gift of appreciation.

You mentioned earlier going into more markets and even different states. Yell me why you’re going into things that may either worry you or some of the challenges you’ve had in contemplating that business expansion.

It works twofold. We’ve been in Texas pretty much since we got started. It’s awesome because our brand is here. Brand recognition is awesome. People know who we are. We’re doing business with the same people but then, it saturates a little bit where we start getting less meat on the bones. There are only so many people we can talk to.

Once you grow to a certain point, there’s only so much distress in the market. Going into new markets, we enjoy that because we can enter into more distress where there’s more profitability and growth as far as our brand. Challenges are going into a new market because the brand recognition isn’t there yet but it’ll come tenfold once we start working at them.

You’ve dealt with a lot of investors either as the buyer or the person selling to them. Let’s start with someone that you’re wholesaling a house to as an investor. What are some tips that people can use in this market to help their offer rise to the top or even make that salesperson want to work with them?

I don’t get that question a lot. What’s important to make very clear is your ability to deliver. Especially in this market with interest rates rising, things going all over the place and people overpaying for property, you can go a lot further when you’re making offers when people know for a fact you can deliver. What I mean by that is you have proof of funds and the highest earnest money deposits.

We’ve accepted offers where it is a little bit less than another offer because the earnest money deposit is a lot higher. What that tells us is, “This person’s serious about it. They know for a fact they can deliver. They don’t have an issue depositing this money because if they don’t close, then it’s forfeited.” What can help you get established, especially when you’re making offers, is an earnest money deposit.

The second thing is developing that relationship where if you’re using a lender, you have a lender’s letter, something with pre-approval or something of that nature. At the end of the day, people want to feel special about it. They want to be able to work with you, not just now but in the future too. It is letting them know that you’re in business not for this one deal but in future deals too. People appreciate repeat business and that goes a long way.

Too many people get too transactional too quickly. Number one, there are a lot of people who need to be taught how to smile and shake a hand. Sitting down with someone, a sales rep or a buyer’s rep, being personable, likable and conveying some confidence with your setup and organization goes a long way. Distress in the market was a little key phrase you said that stuck out to me. Talk about what you mean there. Let’s pick Tampa. What are you looking for there?

Our marketing strategy is having cold calling, PPC and things of that nature. We’re looking for markets with equity but we’re looking for ways where we can help people. In Texas, when we buy lists and stuff like that, we’re looking for high equity because there are a lot of opportunities to negotiate. We’re then pairing it with some other types of distress like bad credit, old age, absentee, low income, empty houses, empty nesters or things of that nature. That’s what we’re looking for when we enter into markets.

We also look at the growth of the market too because if we have grown in a market where people are constantly moving into that market, we know there’s opportunity there. We know there’s an opportunity for growth, which a lot of times when you’re talking to people with distress and you’re helping them, they don’t necessarily see that type of opportunity. You can get in there and take advantage of that.

If I told you that you pick your people and markets the same way, would that be a shock to you?

No, it’s very similar.

What have been some things that have helped you set Equity Cash Offer apart from the other players in the market?

I don’t think it’s a secret. We’re loud. I’m doing a show. I do them pretty frequently to get our brand out there. We lead with value, throw events, host events and sponsor other people’s events. We like to collaborate with our competitors even if we can help them or not because there’s always an opportunity to do business with somebody.

We’re going out and leading from the sense of, “I want to help you intentionally,” versus, “I want to help you because I want to do business with you.” When you lead with value, people gain a level of respect for you and that’s what we’ve done at Equity Cash Offer. Going out of our way throwing big events for free, not charging people anything to connect people, doing podcasts, masterminds and sponsoring events go a long way with brand recognition.

I could not agree with anything you’ve said more than that. If you’re reading this, please go back and read it again. How many times a week does someone offer to pick your brain or take you to lunch?

Probably 3 or 4 times a day.

You look like someone that has lunch money. It’s one of my biggest frustrations because I do like to help. If the course of my family was to the left, we are going high to the right. Thanks to this industry. I love to share it with people and help people but when someone selfishly reaches out to me and says, “I’ve got some questions. Can I take you to lunch,” sometimes, I’ll reply a little snarky and say, “Sure if we’re going to Nick & Sam’s and I’m getting a wagyu fillet. This is going to be a couple of hundred dollars lunch.” I don’t even want to go to that because I have to get dressed and drive there.

I’m going to go over this segment because it’s so important to me. Let’s say there’s a young, aspiring wholesaler out there that doesn’t have the money to sponsor events and doesn’t have the reputation to do a podcast. What are some things they can do to lead with value when they’re trying to establish relationships in this industry?

It’s very simple. It’s deal flow. If they’re working in the business, they’re going to come across deals with equity. If you bring that to the table, that shows a lot. I made a post where it was like, “I appreciate you guys reaching out to buy lunch and coffee but I can’t do it for everybody. I’d be fat. I’d be high on life with all this coffee. Bring me a deal and then you can buy me lunch.” It got to a point where people were bringing me so many deals. I couldn’t even agree to that anymore. I had to change it up.

It helps to have a team where our team is able to go out and do that networking aspect too, especially with people that they’re doing business with. It’s important. When people get started, they don’t necessarily know how to approach people when they want to learn information. I’ve always learned that if I can find a way to bring value to somebody and give somebody something that they need versus anything else, I can get my foot in the door a lot easier. That’s how I worked for the past couple of years. Regardless if you’re a celebrity, not a celebrity or an investor, I’ve always found a way to bring value to somebody so they can pay attention to me and help me.

The next part of this show is my favorite part. It is the Money Minute. Imagine there’s a young Donovan Ruffin out there thinking about getting into real estate, an entrepreneur that’s struggling or even a real estate investor that’s a little nervous about what’s going on in the industry. This is the only advice they’re going to get all month. Do you know what you’re going to say?

What’s important, especially if you’re young and ambitious and you haven’t got a deal yet or you’re looking to get started in real estate, is to do the work first. A lot of times, people would try to go out and clout chase, especially when you’re young. Most importantly, instant gratification doesn’t necessarily exist. When you have real intentions and goals by winning in this industry of real estate, there are a lot of avenues you can go about winning.

There are over 80 different ways you can get paid in real estate. You have to find your niche and what you enjoy doing where you can comprehend consistently doing it so you can be consistent in doing it. What I mean by that is whatever way you can add value to the marketplace is how you’re going to make your income. If you’re a wholesaler, you want to go out and find deals, find real deals with real equity. Bring those deals to the table and you can produce income. It’s not overly complicated. There are a bunch of videos, podcasts and stuff out there that can teach you how to do it but do the simple work, grind your face off and you will win.

I tell my sons all the time, “You don’t want to be me. You want to be me now. You don’t want to be Tim Herriage out of the Marine Corps that had no idea how to manage his money. His Sprint cell phone will get shut off, had to go sit outside of the store and count change to go get and turn it back on. You don’t want to be me that was selling life insurance that would be so far out in the boondocks and doing the math because I didn’t have enough gas to get home.” That fire in the belly or grind your face off mentality, I don’t mean to sound like the old man in the room but there’s a lot of this generation that doesn’t get that.

There are a lot of different reasons why people don’t have that fire and desire in them. Most of the reason is the way people are raised. No offense. You probably spoiled your kids. You built a successful business in your life and you wanted to give them the best of everything. With this technology, you have TikTok. People see a fifteen-second video and think they can be billionaires. You have crypto. The grass is always greener on the other side but what people don’t realize is it takes time, dedication and consistency to achieve success at a high level. Anybody can be successful but keeping the success is the biggest flex ever.

I did spoil my kids. There’s no doubt. I want them to go get degrees and be super educated in finance where they can help me level up in a way that maybe doesn’t require the kind of grinding I had to do. That’s my hope. I’ll tell you this. They’ll never work for me and I hope they’re not in real estate.

It goes twofold too. My siblings and I all grew up in the same house. They all work hard but the desire is a little bit different for people. I don’t know if it comes naturally or if it’s God-given.

If you had to pick, PPC or cold calling in this market, which would you pick?

Probably a cold call.

If you had to pick bigger houses to flip or bigger commercial projects to flip, which would you pick?

Commercial.

If you had to pick one market in the United States and imaginarily had to shut down your business and reopen somewhere other than Dallas, where would you open?

Fort Worth.

For interest rates, what was the normal hard money rate when you started your career?

It’s crazy. I’ve always been paying the same in hard money. I’ve always been paying 10% or 12%. Dealing with RCN, I get 7.5% so it is pretty cool.

Do you remember what the homeowner purchase interest rate was then?

I started in 2015 so I’ve seen it at 5% before. The market was still crazy.

In 2018, it was 6%.

I didn’t see a difference in the market, especially in Dallas-Fort Worth but I’ve seen 5% and 6% before. I’ve also seen 2%.

In 2021 when the investor paper hit below 3.5%, I didn’t have a big enough megaphone but I was screaming from the mountains, “Everybody, get your money now.” Think about it. The interest rate on the investor paper is more than double what I was refi-ing it. There’s value in that paper with the house, equity and everything.

The “fed” printed all this money and they’re getting the money back. That’s how I see it.

I read that the collected taxes in the last quarter of 2021 were the highest ever. We raised everybody’s income and then get the money back via taxes. I want to talk about people. You’re as popular as you are on social media. You’re on some reality show. I have to be honest. I don’t even know what it was. I don’t watch reality TV. Ignoring the level of success you’ve had as a wholesaler, real estate investor and entrepreneur in the DFW area, you always get some haters. Other than saying, “F the haters,” what are ways that you’ve dealt with the noise that comes from success?

It’s inevitable. Especially when you’re loud in branding and marketing, it’s going to happen. If you look at Beyoncé’s comments on Instagram, there are disgusting people in this world. They come from fake pages and catfishes. How are you going to be mean to Beyoncé? What did she do to you? It happens. I love haters because it’s not like, “F the haters.” It’s like, “You’re paying attention to what I’m doing. That’s success to me.”

I try to teach young people all the time, “You don’t shoot with someone that’s on the ground. When you’re flying high, you’re going to get shot at. Running your race is always important.” Do you have any parting thoughts or shots for us?

This business can seem very complicated from the outside looking in but from the inside looking in, especially when you have gained experience, it’s a lot simpler than what it seems. Pick your niche in real estate. If you want to be a lender, be a lender. If you want to be an investor, be an investor. Get good at something that produces income and then dabble into different fields where you can afford to take risks. That’s super important.

When I got started in real estate, I had a whole different marketing company. I didn’t go full-time in real estate for four years. It took a long time for me to build to that point where it’s not just confidence but I could afford to take a risk on a bigger scale. A lot of people look at instant gratification and money that’s possible and they want it immediately. It’s okay to have your race, take time, do the right thing and go into a deal with little to no risk than a high risk, high reward.

Grant Cardone said it best. “One deal could make or break you.” A lot of people say, “What’s the worst that can happen? If you lose on a deal, then you lose.” That’s not how it works. I’ve seen people come and go in this industry. They can’t pay lenders back. They get upside down. They don’t have cash reserves. It’s okay to be safe. There’s nothing wrong with being safe. Do it safely and right. Do the right thing by people and by all means, win by any means. That’s my take on it.

You’re an amazing guest. If somebody is reading that want to connect with you or do business with your companies, where do we send them?

Go to my Instagram. It’s @TheDonovanRuffin on Instagram. My Facebook is Donovan Ruffin. My company’s website is EquityCashOffer.com. Reach out. If you need help, I’m here to help.

You’re holding some private workshops in your kicking office. Those look nice. That can also be found on your Instagram. That’s it for this episode. Thanks for stopping by. We’ll see you in the next episode. Remember, your network is your net worth. You’ve been growing both. We’ll see you soon.

Important Links

• Equity Cash Offer
• @TheDonovanRuffin – Instagram
• Donovan Ruffin – Facebook

The following podcast program is furnished by RCN Capital LLC.  The information provided is for general educational purposes only and does not constitute any legal, tax, financial, investment or other professional advice. The views, thoughts, and opinions expressed of any speaker are the speaker’s own opinion and do not represent the views, thoughts, and opinions of RCN Capital LLC.   No information contained in this episode should be construed as financial, investment or legal advice from RCN or any individual, author, host or guest. You should always consult a financial advisor before investing.

• Do The Work
• Equity Cash Offer
• Giving Appreciation
• Leading With Value
• Market Distress
• Real Estate Business