The Raising Capital Show · 2025-08-13 · 21 min
Jake Ostrich shares three decades of real estate experience, from his start in 2000 with Carlton Sheets' infomercial-driven interest through becoming a full-time investor in 2008. He currently manages 45 single-family rentals across multiple counties and runs a fix-and-flip operation focused on efficient capital deployment rather than chasing top-of-market comps. His core philosophy centers on buying at 30-40 cents on the dollar, renovating conservatively to avoid pricing himself out of the market, and maintaining tight control over contractor spending through on-site monitoring. Ostrich emphasizes the critical mistake of allowing contractors to become over-leveraged - receiving 75-80% of project funds while only 50% complete - which he learned painfully when a contractor walked away mid-project. His advice for newcomers includes hiring experienced contractors or handymen to walk properties and gauge rehab budgets, managing change orders transparently, and most importantly, developing mentorship relationships to compress the learning curve. He positions joint ventures and mentorships as essential tools for scaling while minimizing the costly lessons that come from solo entrepreneurship.
Jake starts by checking Google Maps street view to assess neighborhood quality and whether it looks residential or like a rental area, then considers school districts and whether he'd want to live there; if those check out, he plugs numbers into his model to see if the math works.
Allowing contractors to become over-leveraged by paying them 75-80% of the budget while only 50% of work is complete; this flips control to the contractor, who then has leverage to slow down, add change orders, or walk away entirely.
The highest comp is often a one-time sale and may involve luck; chasing it requires extra capital spend and extended holding time, burning money on carrying costs and timing risks, especially during the November-December market slowdown.
Hire a skilled contractor or handyman to walk the property with you, discuss your vision, and provide a ballpark rehab estimate; after many deals, you'll develop the intuition to estimate accurately yourself.
Text Jake at 610-331-9173; he prefers texts over calls from unfamiliar area codes (which he assumes are scams), and he's open to joint ventures with partners bringing capital pools and a willingness to learn from 30+ years of real estate experience.
Computed from the transcript - who did the talking, and the words that came up most.
In this episode of the Capital Raising Show by Investor Attraction Academy, we sit down with Jake Ostrich, the founder of Lighthouse Capital, who's raised over $1M and built a 45-property rental portfolio - all while staying hands-on and self-managing flips. He reveals how he transitioned from general contracting to full-time investing, why he walked away from 45 properties in Philly, and what he looks for when flipping a house in today's saturated market. Whether you're a new investor or raising capital for your own deals, Jake drops real-world wisdom on contractor management, calculating risk vs. reward, and how to avoid getting burned by shady bids. This is an unfiltered look at what it really takes to grow in real estate - minus the fluff. For capital-raising systems that bring in investors every month: Also available on Spotify, Apple Podcasts, and all major streaming platforms. =====================================
Transcribed and scored by The B2B Podcast Index.
Speaker A: Foreign
Speaker B: M. Hey, guys, thanks for joining today with the Capital Raising show. I'm Nate Dodson. Today we are visited by a real estate entrepreneur and a guy that is out there getting things done.
Speaker A: Jake Ostrich.
Speaker B: Like the burger. Great to have you today. Uh, just so that everybody knows who they're listening to and why, could you give us a quick little background about your involvement with real estate and kind of your focuses?
Speaker A: Yeah, sure. So my real estate journey started in probably 1996. Uh, I'll kind of say the condensed version.
Speaker B: Yeah, we don't need to go year by year for the last 30 years. And my God, we were getting old. Faded right off. I still got the gray coming in the beard, but fortunately I'm going to die without a gray hair on my head so that I got going. Please.
Speaker A: It's good you have hair.
Speaker B: Yeah, I'll call any of it a win.
Speaker A: Exactly, Exactly. Uh, so 1996, there was actually an infomercial that. There was an older gentleman. His name is Carlton Sheets. I don't think he's with us anymore. He had a program and the infomercial just. It felt like it was on a loop. And I kept seeing it on the television. And, you know, I grew up in a general contracting business. So what, what I would see is, is, you know, these, these folks, they're buying a house, they're doing some repairs, and they're either selling it or renting it. They're making all this kind of money. And I'm looking at this, I'm saying something doesn't add up. Uh, there has to be something more. There's. It can't be this easy. So I actually bought the course, went through it, read it, and I stuck it on a shelf and it sat there for two years. I, I did nothing with it.
Speaker B: Right.
Speaker A: Probably in 1998, I joined a very local real estate group, you know, that met once a month. And for the next two years, I just networked and tried to absorb and learn. And I finally woke up one day in January of 2000. And that's when I bought my first rental property. January of 2000. And I bought, uh, probably 12 in a year. And, you know, we started a family and the kids were small, and I took a few years off. And again, fast forward a little bit. I went full time in 2008 and I just never stopped.
Speaker B: So you've been full time in real estate? I mean, a, uh, lifetime, considering the family, but full time for the last 18 years? Give or take?
Speaker A: Yes. Yes. Full time, yes.
Speaker B: That's so important for everybody to really understand. Building the credibility, building the track record while it's just getting in there and getting your, what is it, hands dirty, elbows, whatever that uh, sound maybe, but uh, definitely getting in there and making it happen. And now you've built quite the rental portfolio. How many houses do you manage?
Speaker A: We currently have 45. They're like single family houses are, you know, scattered throughout a couple different counties that are close to me. I did have 90 at one time, but we recently liquidated uh, 45 of those that you know, was in the city of Philadelphia. And it, it just over the years it just didn't become a good fit for me and, and the business. So down to, down to 45.
Speaker B: I mean let me just say congratulations. The pricing on real estate's getting a little softer. Great for buyers, not the best for sellers.
Speaker A: Yes.
Speaker B: Sounds like you got out at the perfect time and great timing.
Speaker A: Yes, it was, it was, it was definitely time to, time to exit.
Speaker B: Fair enough. All right, well, let me ask you kind of the, the next step along your journey is started out doing the rental portfolio, but I know that now you're really pretty heavy into more that fix and flip arena.
Speaker A: Yes.
Speaker B: Could you speak a little bit to what you're doing on that side of the fence?
Speaker A: It's, I mean it's pretty basic. It's not, I don't really do anything different than anybody else. You know, have a list of wholesalers that, that send us deals and some realtors that'll send us, you know, off market deals. They're helpful to get them m. Off market. Uh, we have bought some things off the mls. Uh, it is possible. There's not a lot of deals that make sense, but there are some and try to buy them 30 to 40 cents on the dollar if possible and you know, go in, fix them up. I don't try to fix them up to the level to where, you know, we try to like squeak every dollar out of it. Meaning, you know, we're fixing up to get the, the, the one highest comp that you see.
Speaker B: Right.
Speaker A: I don't try to reach the top, top of the market. And the reason being is it's just one comp. It's like a yes. Did they sell it for that? Did they get a little lucky? Maybe they got that number perhaps. That doesn't mean I'm going to do it right. So I don't push the numbers to the, to the yump degree. So we'll, we'll fix that up to a level that will get A little bit of a lower price. And, you know, we do that because ultimately you need to. You need to exit the deal, right? You can't hold onto this thing. You can't have multiple price drops, and you certainly can't price yourself out of the market, which leads to a whole other slew of issues down the road. So.
Speaker B: And I think you really nailed it with that. Uh, pricing yourself out of the market. There is efficient use of capital, and that's what I'm. I'm really hearing talk about. They put in a dollar, and can that be worth a dollar fifty, a dollar seventy, but that last dollar, and maybe it's only gaining a dollar ten.
Speaker A: Yeah, Nate, that's perfectly said. Unfortunately, when you lose money or not make so much money on deals, then you really learn that concept, you know, oh, maybe I shouldn't have finished the basement or I shouldn't have done something to the garage or whatever the case may be in the project. You know, did that extra dollar yield me any more money at the end of the day? Because, you know, we're trying to sell the house so high, we just. Our burn rate of the capital, we just blew three months. So what did we. We didn't get anything. We lost time, momentum. It's. Yes. You couldn't have said it better.
Speaker B: Well, let me ask you this, and I don't know if this would be a true statement or a false statement, so please correct me. Uh, risk and reward. If you're trying to hit that top number, you're also investing more money to try to hit that top number. It doesn't necessarily mean you're going to be more profitable, but if your goal is to sell it for as much as anybody else has sold it, great. It's possible. But risk and reward, you're just dumping more money into it.
Speaker A: I tend not to take that high of a risk. You know, like you said. Yes. Can you get lucky?
Speaker B: Yeah.
Speaker A: You can, sure. But it's just there's so many factors that go into this thing, and the clock ticks every second. The cost of capital is not cheap. Uh, holding costs and then kind of timing like in the season, so is a big thing. The real estate market's not very active. You know, once. Once like November hits it, people really slow down. November, December, you might as well just go to Florida for those two months if. If you're a flipper, because usually at. On average, IT sellers are not really out there. Look, looking for your property now, you'll have to wait till maybe the middle of January and Then, then things will start picking up again. So in between those times, it's winter, there's the heat's running. Cause, you know, it's winter time at, uh, uh, again, the cost of capital, the momentum, it's just, is. There's just a slew of factors that go into it. So I, I don't, to me personally, I don't tend to try to do
Speaker B: that in terms of the, these factors that you're talking about. You know, if you could kind of walk me through, you're looking at a deal. I don't care if it's mls, if it's off market, you got a deal that showed up in front of you, what are you really looking at and thinking about whether or not it's a good fix and flip opportunity.
Speaker A: Sure. So first thing, I'll usually copy and paste the address and I'll put it into Google Maps to check out like the street view, see what kind of street it is. Does it look like a residential street? Does it look like a rental property street? If it looks like a rental property street and I'm looking for a flip, then I don't even go any farther because that's just not what I'm looking for.
Speaker B: Does the term be like neighborhoods or more like streets?
Speaker A: Neighborhoods is. Is.
Speaker B: Is good.
Speaker A: Obviously school districts, is, is huge. Probably the biggest factors is, is. Is the neighborhoods and uh, and uh, definitely the street. Um, you know, I, I just kind of like what I want to live there. Is this project going to be worth what I'm hoping it's worth on this street? Or, or are you. The street look a little sketchy and you know, you could have a great house on a sketchy street. It would work for a rental property, but you know, you don't want a rental property at that. You know, you, you bought this to flip it. So there's a fair amount of factors that go into it. But if it looks great and the street looks great, then I'll start to plug the numbers in to see if, see if the math works.
Speaker B: Got it. And I'm guessing it's pretty easy for you to kind of figure out that capital budget, actual fixed budget. Given a lifetime in real estate. For anyone that doesn't have a lifetime in real estate, like, how do you learn? If I'm just, hey, I'm interested in getting in the business, what's the best way for me to become a pro like yourself?
Speaker A: You probably would have to become, or just hire a contractor or like a really skilled handy guy, like handyman and you know, you're going to have to, you know, pay him a fee and you're going to have to walk the house and ask questions and tell, you know, the contractor what your vision is for this place, what you want to do. He'll be able to 9 out of 10 times, give you like a ballpark rehab cost. And eventually when you do enough of the deals, you'll, you'll, you'll start to gauge yourself approximately what, what this is going to cost. Are there surprises? Of course there are. Uh, I don't think I've ever brought a house a project in exactly on a budget. Just doesn't happen. You get as close as possible is what you really strive for.
Speaker B: Let me ask you this kind of along those exact same lines. How do you deal with change orders or does that not really come up that often for you?
Speaker A: We'll say, hey, can we change this or can we add this? It's more about, as the project's going on, you're kind of seeing things in a different light and you're like, oh, I didn't notice this before. Or can we, let's add this or let, let's put a little nicer something in or nicer light fixtures. And the contractor, if that's not in the budget, then, you know, it's up to, it's up to the owner. It's up to me to say, hey, I, I understand it's going to be more money. You know, just give me a price, uh, on. That's how I like to operate. I mean, you have to just tackle it head on. It's just a simple conversation. It's not, you know, it's not rocket science and, and they want to work and they want to finish the project. Then it's just a matter of, you know, if it's going to, how much it's going to cost extra. That's, that's pretty easy.
Speaker B: I, I do want to point something out because what you said is different than a lot of the guys that I know that are just getting into it experience. And that is you talk about change orders in terms of, well, that's because I'm asking for something new. I'm changing it. Correct. I know what is just, uh, a, uh, virus on the industry and newer, less experienced people get caught in it. Is the contractor intentionally under bidding to get the work and then just surprise, here's a change order. Here's something else that, hey, we didn't, you should have known. But hey, we didn't expect or plan for this. And Just all of a sudden your $80,000 rehab costs $160,000.
Speaker A: Correct.
Speaker B: I'm kind of bringing these up for a big question for you that I, I actually didn't ask before.
Speaker A: I was part of that. I. It happened to me on a project and I, uh, you know, the contractor underbid it. You know, he eventually just walked away from the job. It was a massive learning experience for me. And you know, like the viewers could be looking at me saying, well, if you have all of this know how and experience how, how did that happen to you? And it did. I mean, there are, there are con artists that you would believe that they were Jesus if they told you were, uh, I mean, they're. What lesson I took from that is you have to either have some booths on the ground that can go to the project each day, or let's say every other day, or you have to go there yourself and you have to look to see what's done. And you always have to, you know what's done and what's not done, right. And you always have to gauge how far and how much money the contractor has to date. And you kind of hedge that. So, meaning the contractor, let's say he's 50% done the job, right? But he has like 75 or 80% of your money already. That's not a good position for you to be in. It's a great position for the contractor to be in because I'm going to use the word leverage, but not leverage in a cocky way, but you don't want someone else having leverage over you and control of the job. Because then they start to steer the ship instead of, you know, me steering the ship, because now they have more money and less work to be done. So they're kind of holding the candle, so to speak, there. So. And that takes time that just. You can't formulate that mindset on your first job. So, um, that might have been a long winded way, but, you know, I let this guy over leveraged me and eventually he walked. And I had a private lender and I'm going way back before I even had the experience to properly speak with people. I was a nervous wreck.
Speaker B: I mean, you've been in the business for 30 years, so, you know, it's
Speaker A: that saying, different levels, different devils. So, you know, I had to go to this lender and I had to tell him the story. And of course it's my responsibility because, you know, he just handled the financing, I handled getting the property to the finish line. And you know, luckily he was okay, and he provided the rest of the capital, get a whole new contractor, the whole process all over again. It was, I'll never forget that as
Speaker B: long as I live.
Speaker A: And it was a massive, massive learning experience. But I would never take that away from me. I would never take that experience away. I would never say, I wish I never been through that. I actually appreciate that adversity. Because those adversities, they have to happen to you personally. Otherwise you cannot scale and you cannot grow into the person you need to be to really have your vision come to fruition. You have to go through failures, you have to go lose money. You have to do it. Uh, otherwise you, you never become the person that, that you need to be to move up the ladder.
Speaker B: And I'm, uh, just going to throw this out because that, that is a pure mindset type of discussion. That's entrepreneurship. It's really amazing how much. And I'm not saying anything real estate or what you're doing, but if you're being an entrepreneur, you're trying to build systems, you're trying to scale your business, mistakes happen.
Speaker A: Yes.
Speaker B: Wow. If I didn't waste money on, you know, one too many software subscriptions that all of a sudden look back and like, oh, that ended up costing like four grand. Exactly. Like, it's just kind of par for the course.
Speaker A: It's sleep.
Speaker B: Exactly. But I did want to kind of get back to. That's the reason why anybody that is just getting into this business. I'm a huge fan of mentors.
Speaker A: Absolutely.
Speaker B: And working in teams and learning and leaning and growing with one another. I know that you're raising capital for you in your projects. If somebody is earlier but really interested in real estate, would you be open to joint venture with people that may have an interest in bringing, hey, I can bring a pool of capital kind of fund to fund style to the table. Would I learn grow themselves. Uh, along with getting more deals done.
Speaker A: I'd be honored to. Absolutely.
Speaker B: Going to throw this out to everybody and anybody that is listening. Part of a, uh, great reason why to bring on experienced real estate professionals, experienced entrepreneurs, is to not just learn a little bit, but if you really want to dive into that next level.
Speaker A: Correct.
Speaker B: Reach out to Jake, find out how y' all can work together, where that synergy is, how you can learn working with somebody that's been in the business for 30 plus years. And surprise, Jake, just to throw that out there because you do come to the table with so much knowledge that anybody, I mean, it's, it takes three Decades to get that level of knowledge and experience. So total kudos to you on that. But if somebody is really interested in learning more, partnering, finding out, hey, is there some synergy there? What's the best way for people to get a hold of you?
Speaker A: Sure. So probably the, the easiest way is just to send me a text and I could give you my cell phone number. It's 610-331-9173. Just shoot me a text. Uh, if you call me and it's a weird area code, I probably won't answer because I think it's scam. But, uh, you know, give me, give me, give me a text, we'll hop on a call. And I'm, I'm more than happy to help. You know, I know how important it is because I, I used to call before I bought my first rental property. Uh, there was a, you know, a guy in my life who was a little bit, you know, farther advanced than I was and I would, I would constantly call him. What do you think of this? And what do you think of that? Why can't I do this? And it just was an immense amount of help. It was an indescribable amount of help. So to say, you know, to go back what you're saying, Nate, when you're starting out, ask for help, you know, just, just the worst thing to do is not ask for help. No one is here, no one's going to make fun of you because you're asking a question. I mean, it's, it's just, I'm here to help.
Speaker B: Love it. And so Jake Ostrich of Lighthouse Capital, one more time, what was your Cell phone number?
Speaker A: 610-331-9173.
Speaker B: Absolutely love it. So I think the biggest takeaways are, hey, it takes a lot of experience to be your own real estate entrepreneur, to get your own deals done so you're not over leveraged. Higher risk than potential reward that it even makes sense. And it just comes from getting out there and doing it. But if you want to do it and minimize your risk, that's where learning, joint venturing, working with mentors, it just makes such a world of difference.
Speaker A: Worlds of different have the mindset that you know to welcome something that's not going to work out the way you thought it was going to work out. I hate the word failure, so I use the word lesson, you know, accept and want a, uh, lesson to happen to you. Like you said, it's part of life, it's part of the entrepreneurship journey. This thing doesn't work unless you do have lessons. And just use that as a fuel. It will help you farther, you know, get one step up the mountain. Love it.
Speaker B: Well, Jake, thank you for being here today.
Speaker A: Thank you, Nate.
Speaker B: Thank you. Really appreciate it. And for everybody else, if you do want to work with Jake, you got his contact. If you're looking to raise more capital, please feel free to reach out to us@findmoreinvestors.com and until then, talk soon.
Speaker A: Thank you, everyone. Thank you.
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