Paul Mielke of Apollo Group on Visionary Leadership, Overcoming Financial Setbacks, and Transforming Undervalued Real Estate

Shows like Flip or Flop and Fixer Upper with Chip and Joanna Gaines have really glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some amateurs have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the ‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing Paul Mielke.

Paul Mielke co-stars on Flipping Down South and is a partner with Flip Apollo in Birmingham, AL. Flipping Down South, which airs on the A&E Network, follows Paul and his team as they buy and flip extremely run down houses rejected by the average buyer. Buying many of their flips for under $10,000, they turn eyesores into dream homes. Paul is the visionary of the team who spearheads all of the design work and loves the challenges of balancing creativity and budget.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

I’ve been a serial entrepreneur my whole life and after a few failed business ventures and financial setbacks, I found myself working in bars. One day I looked around and had a realization that I was off my “entrepreneurial path” and it was time to get back to it. So, I did what everyone else who doesn’t know what they want to do does: I got my real estate license.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

Two years ago I was coming out of a bad business relationship. I was getting pressure from my lenders to get my last and only house that I exited the relationship with to market. It came down to the wire and I had to sell my ’97 Honda Accord to put appliances in. Eventually, the house sold and we got back on track, but I spent a good bit of time walking and thinking about the kind of business I wanted to build.

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

“Time is the great revealer of truth.” In my life, people have said things about me and about my business and I have never fought with them. I have never felt the need to push back on these claims because I know that over time the truth will come out. As we have built Apollo, people have constantly told us that marrying the investment world and the sales world was a bad idea and that it could never be done well. Time has shown that this is not true and we are growing a business that is changing people’s lives. Time reveals all and time has been an ally to us.

Are you working on any exciting new projects now? How do you think that will help people?

Absolutely! We are working with local nonprofits to create housing for people with disabilities and housing for the homeless. Both are in the early stages, but we are very excited about the projects!

What do you think makes your company stand out? Can you share a story?

Apollo is a special place. My business partner, Cody J. Cummings, and I are driven by our passions and our commitment to leaving this place better than we found it. In the meantime, that means focusing on creating good, affordable family housing for working class people.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Cody J. Cummings is definitely a pivotal character in my life, along with being my best friend. I was exiting a bad business partnership when we met and a lot of people were keeping their distance. Cody believed in my vision and character and we have been able to create something special.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Vision. When you know where you are going and who you are, everything that happens to you is just a learning experience. A solid vision keeps you on the path to success. If you believe in it enough then nothing can pull you from that path.

Perseverance. This can only be achieved if you believe in the vision and the vision is worthy of your suffering. When that happens, it becomes easy to persevere through anything.

Service. Removing the ego and becoming a servant to your people, to the vision of the company, and to your commitments will take you a long way. If serving the vision isn’t your top goal, then your company is just a reflection of your ego. At the end of the day, that is not a business that I would want to own.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

Wealth building. I think it’s exciting that normal people can build wealth through real estate. Access to capital for starting businesses and investing in other things can be challenging, but real estate is fairly straightforward and simple

PLACE Inc. PLACE is a startup that is shaking up the traditional models of real estate and providing a standard level of service so that people can trust their agent again.

Sustainable communities. I am so excited to see the emergence of tiny homes and other new housing trends that focus on sustainable housing. It’s my dream to design a sustainable community and I’m so excited to watch the evolution of this trend.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

I only have one concern and it is institutional money. Institutional money is buying so many homes with cash that the dream of home ownership is at serious risk. Regular buyers can’t compete with cash and we are watching middle and lower class people get priced out. It’s not a crazy thought that one day home ownership will be a privilege of the rich unless legislation comes in to change that. I highly recommend everyone buy as many houses in their community as possible. It’s important. Equity equals a seat at the table when decisions are being made and we must protect our seat at the table

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

A fantastic work space is a space where everyone is always learning. It’s a place that encourages and rewards curiosity and inspires hard work and loyalty. Loyalty is a value proposition that is won everyday and it’s important for employers to remember that. You owe it to your people to continually challenge them as humans and as employees. You MUST create a noble cause that inspires them to want to contribute.

Ok, wonderful. Here is the main question of our interview. Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”? If you can, please give a story or an example for each?

5 pieces of advice for anyone looking to get into the business:

1. BUY CHEAP. It sounds cliche, but all the money is made on the buy side. You’ll need good relationships with agents and wholesalers to get good deals or you’ll need how to identify and contact owners directly. A good agent will also help you sell the product at the end!

2. Find a mentor and forget about making money at first. Money is a by-product of the value you can bring to people and at first it’s going to be very little since you have zero experience.

3. GET BANKABLE. Most fix and flip loans are HIGH interest. A low interest loan will allow for more margin of error while you’re learning.

4. Understand that the buyer’s experience starts in the driveway! So do the inspectors, the appraisers, the agents, and everyone else. Curb appeal is HUGE and sets the tone. This is something I picked up from Subway when I was making sandwiches and has carried with me through the years.

5. If you’re going to flip at scale you’ll need to create a minimal viable product. That means you’ll need to have a set of standards that you hold ALL of your flips too. This way, when people see one of your flips, they can buy with the confidence that comes with knowing the product. Not having a MVP is a mistake that we made a lot in our first couple years and are just now getting past.

What are the most common mistakes you have seen other people make when they try their own hand at house flipping? Can you share any stories?

Buying the project for too much and running out of money! I see so many flips that were SO close to being good flips, but it’s obvious the seller ran out of cash or got taken by a contractor who didn’t come back to “button things up.” Oftentimes, people aren’t accounting for overages and they get “nickel and dimed” until they don’t make any cash. They try to save money in the final steps and it shows.

From your experience, what can be done to avoid those errors?

To avoid this, ALWAYS add a 15 percent contingency into the rehab bid. Also, don’t be scared to make a bunch of offers on houses until you get one for the right price. Better safe than sorry during your first flip!

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I hope that I can inspire people to live a life of purpose. To find something bigger than them and to build a business that can create a life worth celebrating for them and their people. Hopefully, that same business will help move the world in the right direction as well.

How can our readers further follow your work online?

You can catch Flipping Down South on the A&E Network. You can also follow me on Instagram and Twitter! Both are @HOUSESBYPAUL

Thank you so much for sharing your time and your excellent insights! We wish you continued success.