Episode #245 – Massive Success Across Multiple Businesses with Todd Pigott, Part 1

You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett

0:40 All right. Hello, and welcome to this week's episode of the REI marketing nerds podcast. As always, this is Daniel Barrett here from AdWords nerds.com. And look, you know where to go. If you need more leads and deals online, you go to AdWords nerds.com. My team will help you put together an online marketing strategy for your market. Alright. Wow, this week. Hey. So I've got a conversation this week with Todd Piggott, he is from zinc investing.com and zinc financial, you can look those up. Look, I've interviewed some very successful very influential investors on this show pretty much who's to I gotta say, you know, I've been doing this for several years now, folks are many hundreds of episodes in Rei, marketing nerds, which is wild when I think about it, but I've been doing this for a while.

But I gotta say that Todd's story is one of the most dramatic, you will hear in real estate. It truly is a story of wild success. Coming from very humble beginnings in situations. I mean, we're talking about you'll hear this in the interview, but we're talking about a moment where Todd is sitting in a truck with literally only $17 to his name, and then we follow him to doing $100 million in real estate deals, doing over a billion dollars in lending through zing financial, I mean, truly, a absolutely wild story. And I gotta say, Todd shares a lot I, you know, like I do a lot of these interviews, I immediately start bugging him about how did you do this? How do you hire How do you build a team? How do you build company culture? We have an incredible conversation. I cannot wait for you to hear my conversation with Todd Piggott from Zynga. investing.com. So without any further ado, let's get into the interview. Todd, welcome to the show. Man. Thank you so much for being here. Hey, thank you for taking the time to have me present today. It's a joy to be here. And I'm hoping to have a great conversation with you and add value to your listeners. Thank you for having me on.

2:57 Yeah, well, I am super pumped to have you here, mostly just because we were talking a little bit before we hit record. And I think kind of the scale of stuff you've done in this industry is just all over the place, I think people are gonna be really fascinated. So as our kind of way of getting into that, because there's a lot going on, I want to talk about kind of your two, well, not just these two, but the kind of two primary sort of places that you're touching the industry right now, which are zinc investing.com. You've also got zinc financial.com. And I want you to break down for listeners, if they're not familiar with you what those two sort of arms of your business are and how they relate to real estate investing and kind of what you were doing today. So it makes sense.

3:41 Sure, sure. So I think I would start I would start with this with a little bit more elaborate explanation. Yeah, zinc investing.com, or zinc Income Fund, which you say is our mortgage fund. It's our mortgage fund with a summary, fully registered with the Securities and Exchange Commission. And it's publicly audited as well. Our fund is for high net worth individuals who want to passively invest in real estate. It's fully secured, minimal losses, minimal losses, and it's just an excellent way for people to invest in real estate with having to not be in the act of management of that. Now, how this works is obviously I'm the president of zinc financial, zinc financial is a licensed lender, we have the same licensing as major banks. The only difference is that we get our money from our fund. And this allows us some flexibility on what we lend on. That would be prohibitive for, say, banks or credit unions.

And what that is we loan money to real estate investors. That's all we loan money to. We're business purpose private money lender, and we have three programs, construction loans, DSCR, or rental loans, and then finally, our fix and flip or bridge loan. We've done a billion dollars of this. We've been a business for nearly 20 years, and we're crossed about 45 states in the country, so real estate investors, real estate investors who find distressed properties that they want to fix up and repair resell are kind of left with two options. Number one, they can pick cash for that property. Or number two, if they want leverage, they're probably going to have to find a lender like zinc. Why? Because we don't care about the distressed asset. See banks and credit unions or other consumer mortgage outfits out there do care about the condition. Generally speaking, if they get their money from the FDIC or the Fed window, most banks are regulated, and they're prevented from doing loans on distressed properties.

If anybody's ever sold a house, you know, they know they're going to the smoke alarm working and the GFCI outlet fix that can't you know, self enclosure on the pool gate needs to be there, everybody has sold a house. And so we don't require that. Why? Because we get our money from our mortgage fund. And that enables us to loan on distressed properties that real estate investors pick up at a discount with the intent of rehabbing those properties and then reselling for profit. So zinc is zinc is our lending arm that is a licensed lender, same as major banks, that we loan money to business entrepreneurs and business, real estate investors who are on their way up that have good credit that has some liquidity, they just need to leverage that liquidity with a lender like us, they can go out there and take advantage of more deals. And so where we get our money is from the fund it's think investing.com or zinc Income Fund, and high net worth people invest in our fund.

It's a passive investment, they get a cash distribution every single month, our fund returns about 8% a year. Now with that all distributions are taxed at about 80%. And those we get a 20% tax deduction. We'll talk how does that happen? We'll tell you how that happens. We have a REIT built within our fund, President Trump signed into law in 2017, some excellent tax benefits, we were able to realize that as for the Security and Exchange Commission, and so those tax benefits enable us to only be taxed at 20%, I'm sorry, 80% of the income. And number two, if they live in a state without favorable tax treatment, they're taxed in the state they reside even though the income is actually out in California.

That's another tax benefit number two, and then finally, the IRAs, IRAs that invest in our fund, there is no longer a ubit tax or Yuba tax or such separate tax return. So these are three laws the Trump put into Congress, it was signed in 2017. And with that, we have some excellent tax advantaged sore, sore funds for people to invest in earning 8%. Approximately, we have a 20% tax deduction on income. And then we take that money we loaned out to good credit worthy good borrowers, that that are buying properties with the intent of fixing, flipping and reselling, and whites. I'm excited about my business. I'm passionate to be here. I really like it. And it's just done very well over the last 18 years of operation. Well, I mean, so and I want to I mean, first of all, that was a great explanation. I want to go back to something you said at the beginning. You sort of mentioned it in passing, but I want to underline it where you said as a billion dollars in million dollars in lifetime lending we've sink Financial has lent far in excess of a billion dollars in lending.

8:10 And I happen to know from our conversation before we started, you've also done $100 billion in fix and flip yourself is that the correct? Yes, I have fixed ellipses that yeah, since 1996. I have I have bought, repaired and rehabilitated over $100 million of real estate. And we have then become a lender and now we've lent over a billion in our lifetime. Obviously not all one time. So we're, we're pretty known in this space. We've done a lot of lending for real estate investors. Yeah, and we have fixed and flipped a lot of properties ourselves. I've done this myself personally done it myself. I I gotta tell you, I'm pretty. I've done it all. I mean, I've been shot at properties. I've had properties vandalized, I've had properties burned down. I've had to squatters that I've had to evict drug houses, you name it. I've seen it all but we have navigated a whole lot of those situations.

You know, I know about plumbing issues, roofing issues, facial issues, pest reports, HVAC, you name it, we did it. So yes, we've done a lot of fixing and flipping properties are super enjoyable, by the way. You know, I'm gonna play if there's one thing I like, man, it's it's taken a look. Taking a house. That's the worst on the street, right? It's got overgrown weeds. It's got an engine in the front yard, and it's got Christmas lights. They've been hanging over the front door for the last five years in the middle of summer. That's that house. We all know it. And so that house is a dog.

It's got some squatters in it or some druggies in it or bad just a bad situation. Being able to take that out. It's a win win, win win scenario, being able to take that property and got it usually down to drywall, and then completely rehabilitate that with new flooring, new lighting, new paint better baseboard. A new new cabinetry and some new appliances, we stick in clean steel. What's that? Well, it's fake stainless steel looks the same. It's only about 70% less. So stick in some cleaned clean steel appliances, and boy, you got yourself a new home. It looks fabulous. And here's what happens. The neighbors come over, they're excited. They haven't liked that house for the last two years. People in it were druggies, they're bad people parking on the grass, the neighbors are so we get cookies brought to us. Gosh, you you fixed up this house is amazing.

So the neighborhood has been improved. Now the real estate investor has or US or the real estate investors made some money, our average investor makes between 20 and $70,000 per flip. So he's made a few bucks, then that first time homebuyer that was not able to get a home has now got the chance to own a home. So they're into an entry level home in a great neighborhood with a completely rehabilitated house. So we improve neighborhoods, for society reasons, we help out the neighbors, we help the in the real estate investor earn a few dollars, somebody gets a new home. And then on top of that, our investors, our investors in sync Income Fund, earn a favorable return, fully secured.

First position deed of trust on these properties. And our investors restore investors when passive income of 8% tax deduction. Our borrowers win, because they make 50 grand on a flip, we win because we do the loan. And then the person buying the house wins because they got a nice new fresh house. And this is typically their first home. The investor wins he made 50 grand and the neighbors wait and they got a nice new house in that neighborhood has increased in value. So I really liked this because there's no downside. And so yes, I fixed and flipped myself about 100 million all throughout California. And we've led we've led to over a billion and pretty pretty excited about this track record and we're looking to expand it. Wow. Okay, so

11:56 take me back to 96. Yeah. So there's you. It's funny, because it's like, it's so it's so interesting to talk to someone like you because you've had all this experience in all these different parts of the industry, right? So you've been in different roles and sort of different levels. But you had to start somewhere there was a point at which you'd never done a flip before, I'm assuming. So like, what was your entry point into real estate investing or maybe even just real estate generally like what got you into the industry in

12:27 the first place? Well, that's that's a little bit of a longer story. I'll try to keep it short. So I was born in Montebello, and that's down there in LA. And then I grew up in Anaheim, about four blocks over from Disneyland. And so then we moved to Fresno in the late 70s. My dad was a vice president of a large financial institution, Newport Beach. And unfortunately, when we moved to Fresno, we went through a rocky period. And then I ended up on welfare with my mom at that time. And it was a very, very, very, very difficult period. We never did anything fun. We never went anywhere. We never took a vacation, are our Christmas presents were by the church. That's who donated so it was really a a, a life at this time of just existence. Getting to the next week was painful. And I did not enjoy that period of being completely broke. Truly having nothing. So what happened was is that I worked at a pizza parlor, and then I got a job. I won't give the name but I got a job at a sporting goods store.

13:31 And how old are you at this point? I am I am now 18 years old, okay, water polo and swimming out of high school. And so I got this job at a sporting goods store. And at this time, it's a national chain. At this time you'd wear literally a shirt and a tie and slacks at the sporting goods store. And I only had one tie one shirt. And Martine was the manager. And he came in one day says you're wearing the same shirt at the same time every single day. I need you I suppose Martine I make 325 An hour and after taxes to 61 an hour. I'm making the it's funny man because it was around the time that I got my first job and that's how I am like whenever I hear like entry level job in my head, it's like $5.03 to $5 an hour is like $5 $4 $3 not $25 to make a living that's a whole nother show let's find motivated seller leads online but don't know where to start. Download our FREE motivated seller keyword report today. AdWords nerds have spent over $5 million this year researching the most profitable keywords for finding motivated seller leads and you can grab these exact keywords when you download our report at www dot AdWords nerds.com/keywords.

14:51 So I said I want to I want to I think I want to resign. I was in my first semester at Fresno State first semester at that time you could actually start school without paying the tuition or books, so I'm three weeks into Fresno State. I have no money and I just quit my job at a sporting store. My mom is broke. She's on welfare. I go out there and I sit in my 1972 Ford courier pickup truck. I have $17 to my name, and I owe $800 to Fresno State. I was sat in a truck for five hours going, what am I going to do? I don't have any money. I don't have a job. And at Fresno State. I knew this. I played water polo swimming in a big outdoors guy and I really enjoyed construction. I liked construction. So I knew that that was a path to prosperity. I did not want to live broke poor on welfare any longer. So I took the $17 in my pocket.

I drove to Fresno State after quitting my job at the sporting goods store I withdrew. And I got a call about five days later asking why withdrew, and I says I don't have the money for tuition or books. They said we found you a scholarship. We found you a scholarship that pays for the first year tuition and books. Well, I went back and re enrolled the school every one of the classes like Where have you been for three weeks? Well, I withdrew and then I got back in. I declared my degree as construction management. I knew that I wanted to be outside I knew that I liked construction and real estate and finance. I probably 19 years old. And I I I declared that. So I took the $17 at that time, and I went home and I borrowed my mom's vacuum and I borrowed a trash bag out of the garage and I went knocking door to door.

See at that time waterpolo at Fresno State and different times of the evening, five, six or seven o'clock PM, there was there was no schedule is whatever the watercooler Crosstrek so I needed something to earn money that was available to me outside of hours that I could make my own hours, right, I picked up my mom's vacuum, I borrowed it, and I picked up a trash bag out of the garage and I went knocking door to door and I wanted to clean buildings because I knew that I could do those in the evening after college. And after we had a water polo which ended at five, six or seven hour this the coach felt. And so I picked up Pat Rogers and Associates for $63. Then I picked up WD produce and another $63. And then my third client in a period of two months was spinning enterprises at $210. My first month, I made almost $500 cleaning these buildings borrowing my mom's vacuum this trash I had her bag in the vacuum was disposable.

So like I actually pulled the lint out of a disposable bag and throw the dumpster because I didn't have the money to go get a disposable bag. So here's what happens. I stay at Fresno State. And I continue on with my education getting that degree in construction management the same time I started cleaning these buildings. And so I built that business over 17 years to one of the largest facility maintenance Companies in California to other neighboring states. Wow. Why we had 500 employees 500 employees and we had another 52 subcontractors that did another 500 employees. We did about 1000 employees. We did target Mervyn's and Alberta Smart and Final PetSmart. You name it, we did it. We did parking lot sweeping striping pressure washing graffiti removal.

So I took that company. And I got my degree in construction management and I and what happened was I was in an accident, I rolled a utility vehicle. And I decided at that time I didn't want to do that business. Like you just rolled the whole thing rolled it and I end up at the hospital, a trauma unit. And that's that's another topic for another podcast. But what I decided when I laid there half dead as I said, you know, I don't want to do facilities maintenance or clean buildings anymore. What I really am passionate about is construction and real estate and finance. Back in 96. While I ran that cleaning facilities maintenance company, I bought my first four Plex. And it was a junker and I fixed it up myself, I painted myself, I had no idea what I was doing. I bought it for $110,000. I scraped together nine grand, and then I had a seller carry a second on it, I cleaned it, I painted it, I put that thing up, and then I rented it up and then I sold it made a few bucks, sold about three more four plexes.

And then I bought a five Plex. And next thing you know, I'm doing what I enjoy doing, which is construction and real estate. And so I bought these things, I rehabilitated them. And then I started selling them. And then I started doing more and then I started doing more and then I got to the My a very very important part in everybody's life as it started going to the auction very dangerous, you really have to know what you're doing. But I finally built up my income and built up my cash reserves, where I went down with a half million dollars in cash every day and then we started buying at the trustee sales with cash. And then I took those properties and started rehabilitating them and and flipping them and making money. And so then I started to create my wealth $1 at a time buying properties and fixing them and doing what I enjoyed. It was in 2006 is gosh darn I'm fixing and flipping a lot of properties.

I have three Full Time crews, we're doing a lot of this, you know, I think I can loan money to other investors and help them be successful. So that's when zinc financial was born was in 2006. And so then we started loaning money to investors to go out and fix and flip, just like myself. And then they became successful and made a few extra dollars and improved neighbors. Well, then I had other people coming to me wanting to invest with me, saying, Todd, we like what you're doing, you don't lose money, it's super safe, can we give you money to loan out? And so I started working my friends and my family. And next thing, you know, I had 10s of millions of dollars of capital that I was placing in loans for them. So then my real estate investors, making a few bucks, my friends and family 10s of billions of dollars are making some money lending. And by the way, I'm fixing and flipping properties.

And so then I says, you know, the mortgage fund has tax benefits, and it's easier for him from a management standpoint as well as a tracking standpoint. Gosh, darn it, we developed our mortgage bank got it approved by the SEC went live with it. It's fully audited by the largest accounting firm in the country for mortgage fund auditing called Speedo. It's watched by the SEC, it's registered at the state level law firm is djerassi law out of Irvine de watchovers. And very vast who manages our compliance stuff in Oregon. So we have three great partners make sure that fund operates at an optimal level. So I tell you what, so So from early years of being on welfare, and trying to figure out what am I going to do from $17 to a multi million dollar facility maintenance company rolling that into the into fixing and flipping and then rolling that into a lending company for other entrepreneurs to be able to borrow from us and then rolling that cash. There's so many people that trusted me with into our mortgage fund is kind of where we're at today. But it's a such an awesome story, dude.

Hey guys, hope you enjoyed part one of this episode is just too good limits one show. Join us next week to hear the rest

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