Trust Brings The Money: Raising Private Capital, Winning Auctions & Flipping Burnouts In New Jersey

Tabatha Forgue (00:00)

Yeah, that’s one of the biggest things. In real estate world, ⁓ when they say it’s not what you know, it’s who you know. It kinda is. You have to really get to know, like, and trust the people that you’re gonna do business with. Once that’s there, then you can get business done in a heartbeat. Like, I’ve literally talked to somebody and I was just joking when I came across a townhouse that I wanted to flip.

And I was like, oh, was joking and I says, oh, and I went on their shoulder and I was like, yeah, I need 125,000 to flip this property. He goes, okay, let’s do it tomorrow. That fast. Or you make a phone call and I was like, I need 100,000 and they’re like, well, I got 96, I’ll wire it now. I’m like, okay. So yeah, it’s when you get to know, like and trust the people in this field, then you can get a lot done.

Dylan Silver (02:43)

Hey folks, welcome back to the show. Today’s guest, Tabatha Forgue, is in New Jersey. She’s a New Jersey based investor who’s done flips, rentals, modular builds, and Airbnb hosting. She also has an investment club to guide members towards long-term wealth. Tabatha, welcome to the show.

Tabatha Forgue (03:04)

Thanks for having me.

Dylan Silver (03:06)

It’s great to have you on here Tabatha. I always like to start off at the top of this show by asking guests how they got into real estate.

Tabatha Forgue (03:18)

So it I’m gonna be honest it was a late-night infomercial called Carlton sheets Yeah, I’ll date back to it was on cassette tapes when I got it the first time And we were actually we got it because we wanted to learn how to buy a house for ourselves But then we were like, oh, wait a minute, you know, this is kind of intriguing. So

Dylan Silver (03:25)

Carlton Sheets here.

Tabatha Forgue (03:43)

Let’s see what happened. So we were in Florida at the time and we started looking around at places and then Hurricane Andrew came and we said the heck with this. We out. We’re going back to Jersey. So yeah, I mean that was a bad one. We lived through it. So we sold everything and came back. ⁓ So once we got back here, I started calling banks back in the day and you could actually buy them right from the bank. Like literally.

Dylan Silver (03:56)

That’ll do it.

Yeah, real estate owned.

Tabatha Forgue (04:14)

Yeah, right. So we were, missed a couple of them by a few days. And then ⁓ we were like, all right, well, we got to figure out how to do this. Cause a few of our friends were out of work and you know, money is running out when you have no unemployment coming in after a bit. So we took us about a year and then we found the first one and we employed a few of our friends and we’ve been loving it since. And that was back in 2009.

Dylan Silver (04:43)

Now, that time period you’re looking at lot of foreclosures in the single family space. So are you then taking advantage of the auctions as well? Are you going to the auctions? Are you looking at acquiring things before they get to the auction?

Tabatha Forgue (04:57)

So acquiring him before ⁓ we do go to auctions. I do know people that ⁓ run auctions. We can get loans from people to do auctions because like they say we do other people’s money. ⁓ We use ours in case you know something happens

then we take ours and get our investors money out so that that way we could always reuse it to make our money back. But we when I first started I was like go to auctions.

They’re kind of scary when you’re just getting started, especially when you’re the only woman in the room. Like, I am not kidding. The only woman in the room. And it got even a little scarier because they really become intimidating because I’m like a small person. I mean, these guys are big guys too, so.

Dylan Silver (06:27)

Yeah.

Maybe using some

physical stature to bully around. I want to talk about the the setup of the auction. So I’m a Texas license drilter. Right. So whenever I think of the auction I’m thinking of outside of a county courthouse rattling off you know different addresses but also you might have what seems like maybe an attorney or someone representing the. ⁓

person who has the debt, you know, even on the side maybe just rattling off a quick auction for that specific property. What’s the format like in New Jersey? Is it in front of a courthouse? Is it a bunch of people? Is it multiple different areas?

Tabatha Forgue (07:26)

It’s quite a few different ones. All right, so you can go to like, like I’ve done Middlesex, Monmouth, Ocean, Somerset. I’ve gone to quite a few around my counties around here. ⁓ There you can do them at the sheriff’s department. They have some where you sit there. They have some that are at a hotel, just like you said. They’ll be upfront. There’ll be somebody that’s representing the bank. ⁓ We have somebody that I guess they represent the… ⁓

Realtors because they have ⁓ their license and they buy them back for the bank Then they have the guys that are bidding on them then we’ve gone to Where they say? Courthouse steps they’ve actually held them at properties So we were on the steps of the property So you got to tour the property before you put your bids in from the sheriff sales and you have them there

Dylan Silver (08:09)

Right.

Tabatha Forgue (08:20)

And there some of them, they’ve auctioned off maybe five different properties or so at that address. Like they’ll be at the address, they’ll auction off the one, but they’ll do four others that are locally around that area. Those are always fun. I like those. ⁓

Dylan Silver (08:37)

Right, right. It sounds like

a little bit of a different format, but there’s some similarities. I do want to pivot and ask you about that time period, though. So you’re talking about peak financial crisis mayhem, right? At the time you were getting in, were you aware that this was such a great time, but were you also aware that, hey, this isn’t going to last forever as far as distressed property acquisition?

Tabatha Forgue (08:52)

you

No, we’re we’re brand spanking new. We basically were just starting investing and said hey, you know, our friends are out of work Let’s just do this. Let’s make a business out of You know hanging out with friends and doing something that we like and it’s so funny because one was a HVAC One did plumbing and a track and the other was a handyman He was great and we still work till today together on different projects and the other is electrician so it kind of

you know, and they’ve the one was actually in our wedding and we’re married 35 years now. So that’s how long we’ve been together and work together with the one. ⁓

Dylan Silver (09:45)

Hey, that’s a good that’s a good ⁓ partner

to have when you need to get some maintenance done. I want to ask you about the Airbnb space because I think especially outside looking in Airbnb seems like a great way to host people to make some extra money and then also to have ⁓ your design influences, you know, put out into the world. It can be a great thing. But also there’s, you know, a lot of tricky aspects that come with

Airbnb and then some things that people might not

even think about.

Tabatha Forgue (10:52)

So ours was, we just started ours like the year before, actually not even the year before, basically the year before, but October I think, a little bit before that maybe, before COVID. So we were in, it happens to be that a friend of mine is actually a flight attendant, so we were actually starting it as Airbnb for just women.

But then we started getting like the second, third month, we started getting more inquiries from men than we did women due to the decor, I guess, that we had. had, it was like an industrial style, because we were in Elizabeth, New Jersey, eight minutes from the airport. So, because that’s what we were doing the crash pad. So crash pad is where the flight attendant can show their badge at the ring and we let them in automatically from our phones.

Dylan Silver (11:39)

Yeah.

Tabatha Forgue (11:49)

and they just drop ⁓ Venmo, pay like, I think it was like 30 or 40 bucks for the night, they would come in. But then we had girls from around the world coming and then COVID hit. Just as we were picking up and filling up all the beds. We had 12 beds in one apartment with like, you know, it was a big three bedroom apartment with two full bathrooms. So one, we started.

After COVID, we had to start taking some men because you have to pivot more. ⁓ So COVID came and then we ended up with all flight attendants in all three because they were flying everybody out of the country. And then once everybody was gone and it’s winding down, now I still have to pay the insurance. I still have to pay for the rent because I was doing that arbitrage thing.

Dylan Silver (12:22)

Yep.

Yeah.

Tabatha Forgue (12:43)

and you still have to make the electric, the gas, the water, the cables, know, all those bills still coming in, even though you have nobody coming from other countries or coming to stay at the Airbnb. Then I grabbed the traveling nurses. I was like, so I’m paying everything, but pivoted three times during that whole thing, which it was absolutely great. I clean and then no cleaning people during that time either. You have to keep.

Dylan Silver (13:11)

That’s true.

Tabatha Forgue (13:12)

everything clean so I had no other choice but to put the supplies, grab the bleach, grab the Lysol wipes, grab the buckets, grab the mop and off to the Airbnb’s was cleaning it.

Dylan Silver (13:23)

How far was this, you mentioned Elizabeth Airbnb, was this relatively close to you?

Tabatha Forgue (13:29)

Yes, it’s Newark Airport, the EWR, or I think that’s what it’s called, the Newark Airport. It’s literally right next to Elizabeth. it’s, so we were, like I said, the airport was coming in, so we had the international airport there. So we, and it’s about 20 minutes from my house, especially when COVID was, cause there was nobody on the New Jersey turnpike.

Dylan Silver (13:37)

Okay.

Yeah, that was

an interesting, I wasn’t there then, but I can say how different it was being in places like New Jersey versus where I was in Texas. I want to ask you specifically about…

Tabatha Forgue (13:58)

Okay.

Dylan Silver (14:03)

the process involved in Airbnb arbitrage. You mentioned it briefly there that you were paying rent on this. for folks who aren’t aware, Airbnb arbitrage, you have a lease agreement, you’re renting out the ⁓ place to somebody who is then putting it on Airbnb. And in that case, you were that person. How did you find that ⁓ landlord who would allow you to do the arbitrage? And then what was the negotiation like?

Tabatha Forgue (14:33)

⁓ Well, we actually went ⁓ and answered an ad that she wanted renting and we went and we sat down and kind of broke bread with the couple. So we sat with them and explained to them, showed them the contracts, showed them how they were protected and that this is what the insurance is all is going to cover everything. And we were like, you know, this is, you know, one of the best ways that we know that you can get

higher rental because we gave her a bit more than what she was charging the rent for. So I think it was like 15 or 18, $1,800 for the three bedrooms.

So we gave her the 2000. So she got a couple hundred dollars more in her pocket. So she was more than willing. And because we showed her the contracts right there, that gave a little bit more of a peace of mind, like, look, we’re not playing games. We’re not going to do anything. Here’s the contracts.

that we’re going to be held responsible, know, that we’re renting it in an LLC. So this is what’s covered and that’s how you’re protected. So, and they were more than willing.

Dylan Silver (16:20)

So

that.

Interaction there’s elements there where people might miss so broke bread came up with or showed the contract Showed that hey, this is how you’re protected We’re going to be giving you a little bit more than you were asking based on you know, what market rents are But then also, you know factoring in to play. Hey when we’re showing up We’re showing up so that this person can see our whole business get to know us a little bit so they feel comfortable

I think very often people show up and they don’t take into account, hey, this person has to get to know me.

Tabatha Forgue (16:59)

Yeah, that’s one of the biggest things. In real estate world, ⁓ when they say it’s not what you know, it’s who you know. It kinda is. You have to really get to know, like, and trust the people that you’re gonna do business with. Once that’s there, then you can get business done in a heartbeat. Like, I’ve literally talked to somebody and I was just joking when I came across a townhouse that I wanted to flip.

And I was like, oh, was joking and I says, oh, and I went on their shoulder and I was like, yeah, I need 125,000 to flip this property. He goes, okay, let’s do it tomorrow. That fast. Or you make a phone call and I was like, I need 100,000 and they’re like, well, I got 96, I’ll wire it now. I’m like, okay. So yeah, it’s when you get to know, like and trust the people in this field, then you can get a lot done.

Dylan Silver (17:53)

Some of the other deals that you’ve been involved in, you’ve done full remodels, flips, properties that are heavily distressed, fire damage. When you’re looking at some of these more heavily distressed properties, even fire damage, for instance, it’s a different approach than when you’re looking at a light cosmetic rehab and better finishings.

Tabatha Forgue (18:19)

Yes,

that actually the the first burnout was We went from a 2,800 square foot to 48 because the person we found out was a hoarder back then They had so much compacted in the house and the whole upstairs Wasn’t in sync. So in other words, there was like five different like levels basically throughout the house where you had to go up

up above the cape that was the original part and she added on five different times, but never making it a complete one floor. There was like, you went up one set of steps, you went up another set of steps, you went up another set of steps. It was crazy, I know, trust me. And that, when I looked at that and my friend came with her drone and she went up and I looked at it and I was like, what the heck did I just get myself into?

because you have to completely engulf everything in the house when it comes to fire damage with the ⁓ kills so that it gets rid of the smell, but majority of it doesn’t go away. We literally had to gut like the whole thing was gutted, then you kills on the inside and we took off the whole top layer so that we can actually sink it together like a one floor. ⁓ So that’s one of the things when it comes to like the fire damage.

Dylan Silver (19:46)

Yeah.

Tabatha Forgue (19:47)

And

if you happen to have, I just want to tell you this quick story. if you have gas, I actually called the PSE and G and I said, there’s smells like there’s gas coming out of the pipes, but it’s supposed to be turned off. Can you double check that you turned this off to this address? It happened to be a linger in there, but the fire guys came. had four fire trucks, three PSE and G’s, four sets of cops and two detectives to this address.

And then I couldn’t get them to leave because they were intrigued at what we have done at that point where all the fire damage was done and we had a floor on and they were watching everything get worked on. So make sure when you call PSE &J.

Dylan Silver (20:30)

the whole scene.

Hey,

that’s tax dollars at work, I’ll take it.

Tabatha Forgue (20:37)

You’re ready for a party.

Dylan Silver (20:40)

Now when we talk about you know the degree of these these flips right so you’ll have varying degrees whether you’re going for you know rental grade people refer to rental grade when you think of Airbnb I think of it’s really got to be HGTV level in many cases. Do you have a ⁓ set template if you will when you’re looking at flips is each one different.

Tabatha Forgue (21:08)

⁓ Yes, and the areas too. So like New Jersey you’ll have ⁓ like the middle class areas so you want to you know put the we put everything up to up to standards up to you know above builders grade because we create homes for people. It’s just that in the less ⁓ salary wise we give them the same quality. ⁓

but it’s a little bit more reasonable priced. So when we go to like Princeton, cause I know a lot of people know Princeton area, which is where that big fire damage property was, a little bit upgrade. So it’s the same, but not, if you understand. And when we’re doing like the rehabs, we’ll look at the middle-class, I’ll be like, all right, it’s a 1500 square foot house for somebody like me, the construction worker that comes in.

Dylan Silver (21:57)

Yeah.

Tabatha Forgue (22:08)

I want a nice home that’s safe to live in. if it’s say a full gut job, I know how to calculate it by like say 55 to 70 per square foot, you know, through the whole inside. And I know that’s what I’ll be able to buy at. Then when I go to the bigger one, I have to put maybe a nicer chandeliers in, nicer lighting, maybe a little bit more higher quality flooring type thing, but still hardwood to hardwood.

but same but different basically.

Dylan Silver (22:41)

little bit

of ⁓ differences, but maybe some of the same overall flow. I want to pivot and ask you about the community that you have as well. So you have a ⁓ investing community for folks who are looking at building long-term wealth in real estate out there in New Jersey. Tell me how that ⁓ community got started.

Tabatha Forgue (22:47)

Yes.

Wow, we started going to all the different ⁓ I’d say real estate clubs in the area. We got to know pretty much everybody. I was what they call the go-to girl. I knew pretty much everybody around the area what they do because first thing I always ask is what’s your name and what do you do and how can I help you? So I kind of got to know what everybody was doing and looking for and what they needed and I

kept introducing people to other people so that they could do business together. So I was like, well, all right, well, then my husband, he was at all the same things. And there was an opportunity with another real estate group where we were doing a subgroup for them in our area. Long story short, things happened. We told them that we can no longer do this with you guys. And we decided, well, he decided, I got thrown into it.

He decided he wanted to start up a group and it happened to be a meetup. There was one that was being sold and it had like 147 members and that was it. And it was online members. So he bought it and then we ended up deciding to keep the club going the same night in the same location because it happened to be a friend of ours was the manager of the place at the time.

So we kept the room and kept the same thing, but changed the name and Central New Jersey Real Estate Investment Group was born.

Dylan Silver (24:41)

These investment groups are tremendous. I got started in real estate wholesaling and the first ⁓ group that I had went to was through a Texas RIA event, Phil Grove, who you know, I believe. And ⁓ it’s funny because so many people will have differing opinions, you know, but.

Tabatha Forgue (24:57)

Yeah. Yep.

Dylan Silver (25:06)

I loved it. My perspective is anytime you’re getting real estate people or even people who are aspiring to be real estate people in a room together, you just kind of start looking around at people and you say, this person wants to do something that I’m doing. There’s something here and you just start to make these connections. And it’s funny because when we talked a couple of weeks ago or whenever it was, we were actually in the same.

conference about two years ago and we didn’t even know it. It was in Addison, Texas at the Quorum and it was ⁓ a big event there and it was through, you know, networks of networks that we were at that event together.

Tabatha Forgue (25:43)

I know that’s like when they say the world is small, it’s really small because I’m over here in Jersey and I met you in Texas. Some of our members now we met at an ultimate partnering event out in Phoenix and they were actually 15 minutes from our group. So they come to our meetings now and I met had to go all the way out to Phoenix to meet her. And yeah, it’s it’s really

really getting tinier.

Dylan Silver (26:15)

We are coming up on time here at Tabatha. Where can folks go to learn more about what you’re involved in? Maybe they’re interested in the community. Maybe they have a deal they’d like you to look at. How can folks reach out to you?

Tabatha Forgue (26:27)

You can Google me you can find me everywhere. you can Google my name you can go to CNJREIG .com you can message us through there you could go on to our Facebook page CNJREIG.com on Facebook you go to and if you spell it out, it’s central NJ We RE IG or What is it? real estate investment group

So we’re on Facebook, LinkedIn, ⁓ Instagram. You can find us there. ⁓ Our personal company, because we do flips to veterans here in New Jersey, it’s the easiest because it’s Diamond in the Rough Properties. You can find us. And it’s a little black with a gold diamond. You’ll know it’s us.

Dylan Silver (27:17)

Tabatha, thank you again for coming on the show today.