4 Principles to Source Capital from High Net-Worth Individuals and Find Off-Market Deals

In February 2017, we hosted the first annual Best Ever Conference in Denver, CO. To kick off the conference, I gave a keynote address (to watch my address, click here).

 

The conference was unique in that I asked each attendee to submit the answer to the following question: What are current obstacles you are trying to overcome in your real estate business? Rather than create a conference the way I wanted to, I created it around the personal obstacles of each individual attendee.

 

After read over one hundred submissions, the common thread I found between everyone’s obstacle was two-fold: raising more money and finding more off-market deals.

 

In keeping with the personalized theme of the conference, I formed my keynote address so that at its conclusion, all attendees would have practical takeaways for how to raise money and find off-market deals.

 

Here are the four tactics I provided:

 

1 – Build Your Network

 

When I interviewed Robert Kiyosaki (listen to the full interview here), he said, “the richest people in the world build networks. Everyone else looks for work.”

 

The most important thing that we can do to play the long game in real estate investing is to build a network. I have found that the best way to build a network and what I attribute to the majority of my success is to create a thought leadership platform.

 

A thought leadership platform can come to life in one of four ways: 1) a podcast, 2) a YouTube channel, 3) a blog, and 4) an in-person event.

 

The keys to having a successful thought leadership platform or network are:

 

Consistency – For example, I host the world’s longest running daily real estate investing podcast.

 

Identify what your unique angle will be – I have two clients with military background. One was in the Army and the other was in the Air Force. They created a lease-option business and YouTube channel called “Joint Ops.” Due to launching this brand, they now raise over $200,000 a month in private money.

 

Start within Your Sphere of Influence – When you are starting a thought leadership platform, you are not going to get instant results from people who don’t know you. However, your sphere of influence that already exists will begin to know what you are doing and you will start to become the thought leaders within that sphere. It takes a lot of time and consistency to get strangers into your sphere, but you’ll get instantaneous results from people who already know you (i.e. friends, family, work colleagues, etc.). That’s how I raised $1 million for my first deal.

 

Tie into a Large Distribution Channel – Don’t recreate the wheel. Leverage an existing channel with a large network. For example, with a YouTube channel, you have access to millions of potential viewers. With a podcast, you can tap into the billions of ears on iTunes. With a blog, post to your own website, but also to BiggerPockets, LinkedIn, Medium.com, and social media to begin to create a following. With a meet-up, it’s a little trickier. However, someone in my network moved to Atlanta, partnered up with an existing meet-up host, and had 90 investors at his first meet-up!

 

2 – Ask Better Questions

 

Whenever I have a meeting with a client, I always ask them to tell me what is the best thing that’s happened to them since the last time we spoke. For some of my newer clients, their response will be, “oh, not that bad.” While that may seem innocuous, when we dissect it, what are they saying? They aren’t saying things are good, that’s for sure.

 

We have to be very careful with our language. Even though they are saying they aren’t bad, they are still using the word bad, a negative word. As far as I’m concerned, this puts us in the wrong mindset. The same applies to the questions we ask. When I was reading through the obstacles of the attendees of the conference, I read things like, “What happens if I raise money, but I don’t find a deal?” or “What happens if a deal doesn’t work out?” or “What happens if I can’t raise the money.” Instead, we have to ask better questions that don’t assume we are going to fail. Re-frame the question to “how do people who raise money and find deals successful?” Model them, stick with them, and grow together.

 

3 – Create Opportunities

 

To find deals in a hot market, we have to be creative and create our own opportunities. Read here for an example of how I was able to find an off-market deal while touring an on-market deal and added both to my portfolio.

 

4 – Partner Up

 

When I was a solo investor, I purchase four single-family homes and one large apartment building, and then my business remained stagnant for a few years. Once I partnered up with someone who complements my strengths and helps me with my weakness, my growth skyrocketed; I was able to added over $100 million worth of properties to my portfolio.

 

To find the perfect partner like I did, it’s important to know yourself. It takes a little bit of time and experience, but after completing a few deals, look in the mirror and ask yourself, “What am I really good at and what am I really bad at?”

 

Build a team around those answers and once you do that, your business is going to flourish.

 

Personally, after my first syndication deal, I realized I was great a raising money and marketing, but I was terrible at underwriting and asset management. My partner has an institutional background, so he is phenomenal at the underwriting and asset management. Therefore, we complemented each other perfectly, which is why we’ve been able to scale so quickly.

 

Conclusion

 

In order to raise more money and find more deals, you must:

 

  • Build your network through a thought leadership platform
  • Re-frame your mind and ask better questions
  • Create opportunities rather than wait for opportunities
  • Partner up with someone who complements your strengths and weaknesses

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below.

 

 

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4 Tactics to Get More Out of Your Business Team

If your vision is to scale and create a massive business, at some point, you will need to hire employees. If you have never managed a team before, you likely won’t have a clue what you’re doing. Even if you have management experience, it’s a whole different monster when you are at the top of the food chain.

 

Fortunately, Shawn Casemore, who has published over 1000 articles, booklets, and resources on improving individual and organization performance, specializes in teaching business leaders how to effectively manage a team. In our recent conversation, Shawn provided 4 tactics to get more out of your real estate or business team.

 

1 – For contractors, consultants, and non-employees, make your business their priority

 

If you are a real estate investor, whether you’ve manage a team or not, you’ve worked with contractors. We all how much of a hassle that can be.

 

To get more out of your contractors, Shawn said, “you have to realize those folks have their own businesses and have their own priorities, and therefore you need to somehow make your business a priority.”

 

One method, which is what you see on the real estate TV shows, is to go out and beat up on your contractor and threaten to pull business if they don’t get their act together. However, TV isn’t reality. Go in and yell at a contractor and they may perform even worse.

 

Instead, here a few examples provided by Shawn on how to make your business the contractors priority that doesn’t involve throwing a temper tantrum:

 

Leverage

 

Give them more business and they will give you more attention. Simple.

 

Make them feel like they are a part of the business

 

For example, Shawn said, “when you’re going out to take a look at a property, you bring your contractor … with you. Do you involve them in the decision making? Do you actually give them the chance to take a look at situations and provide potential solutions, and when they do, do you thank them for it and you take some of their advice?”

 

When dealing with contractors, Shawn said, “it becomes trying to ensure that other people who support me, although they’re not an employee, they feel like this is their business. That comes back to building relationships, which includes things like trust [and] honesty. And you’ll find that a lot of contractors will be very receptive to that, because everybody treats them like crap, so they’re happy to work with those who actually treat them like a human being.”

 

Don’t be a jerk

 

As business owners, we are constantly in the business mindset. We are fixated on the finding the next deal, developing the next opportunity, or maximizing our cash flow. As a result, we’re so busy and stressed out that we may run over those who support us, hopefully inadvertently, and we can come off as jerks.

 

Shawn said that when we are in this business mindset, “that stress then when you turn to answer some questions of your employee or contractor comes out that you’re a little bit of a jerk. And then what do they think of you? They think you’re a jerk, so are they going to stand behind you? Are they going to be there when you really need them? The answer is no.”

 

Therefore, you must complement the business mindset (i.e. focusing on the next deal, cash flow, profitability) with a separate, people-oriented mindset. Shawn said, in regards to the people-oriented mindset, “in order to be successful, I can’t do this alone. I need people, be it employees or contractors, or otherwise, and people are receptive to other people. People are receptive of being treated fairly, being treated honestly. In fact, I can actually warm people up a little bit if I start to maybe go that extra mile or if I drop off a coffee. When I go in to see my contractors, I always try to grab some coffee for the guys.”

 

Other example that your contractors would absolutely love is to drop off a case of beer if they are working late on a Friday or a weekend.

 

2 – Ask for feedback, advice, and ideas on projects

 

Another way to get more out of your team is to ask for input on projects you are working on. For example, Shawn said “I was just speaking with a client this morning. We were working with kind of a subset of a small group of people in the organization. We identified some very minor changes to something. This morning we sent that out to the broader team before it went live and said, ‘Hey, give us your feedback. What do you think?’”

 

It’s important to understand that your team isn’t an amorphous blob. They are a collection of individuals with their own experiences, including personal experiences, work experiences, and their own ideas, and everybody wants to share those ideas and experiences. Therefore, Shawn said, “if you want to create a stronger team and a better business, you need to really understand that everybody’s an individual, and deal with them on an individual basis to get the most out of them, to get these ideas that help them feel like they’re part of something.”

 

Always ask for input and feedback from employees. Some of it might be terrible advice if they don’t have the experience that others on your team do, but many people just want to be heard, even if their ideas aren’t acted upon. If you can listen to them and start to capitalize on the good ideas, you will build a very strong team and an even stronger business.

 

3 – Schedule face-to-face personal meetings

 

Again, when we are in the business mindset, we may neglect to schedule enough time to meet with our employees. Shawn said, “you need to calenderize some time where you’re only dealing with your people… This isn’t a stop by a property and just say, ‘Hey, how’s it going? What’s new?’ … I tell my leaders all the time: Stick it in your calendar every Friday to spend the afternoon or the morning going around and just talking to people. You might not hit everybody every Friday, but make a point of doing that. What you’ll find is you’re able to better understand everybody as an individual, therefore when you’re positioning things, ideas, viewpoints, [and] asking questions, you can position it from a perspective that they personal appreciate.”

 

What if you have a remote team? Will having this interactions over the phone suffice? The answer is no.

 

Face-to-face interactions are important because you’re forced to pay attention and vice versa (you’ll see if they are sending emails), you can see their body language to see how interested they are, and it saves a lot of time (you can get across the same message in a 5-minute phone call that you can in 30 emails).

 

Therefore, if you have a remote team like Shawn, he says, “I schedule time (if they have Skype, or Zoom, or something else) where we get face-to-face. Maybe it’s once a month, maybe it’s once a week, depending on how important that person is to the business and how frequently you can interact… Face-to-face is key with those remote people to ensuring that you’re having a valuable dialogue.”

 

4 – Provide Individualized Recognition

 

Now that you realize you must treat each member of you team as an individual, it should go without saying that you need to recognize them as an individual as well. For example, Shawn said, “let’s say you’ve got a few people on your team and you have a great year and you do the cliché send them all a jacket or give them all a ball cap. That’s fine, but if you’ve ever received the jacket from maybe a business you were working in at some point, some people love that jacket, some people would rather have cash, some people didn’t like the color, some of them got their names spelled wrong. So when you look at recognition or just thanking people, that also has to be individual.”

 

Recognizing each team member as an individual is the only way to ensure that it’s actually valuable to them. In doing so, you are going to find people more appreciative and more supportive of your business

 

Conclusion

 

The four tactics for getting more out of your business team are:

  • For contractors, making your business a priority to them and making them feel like a part of the team
  • Asking for feedback and input on projects
  • Consistently have face-to-face interactions
  • Provide individualize support

 

Related: All You Need to Know About Building a Solid Real Estate Team

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below.

 

 

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guru

Guide to Becoming a Real Estate Guru

 

For many investors in the real estate industry, the word “Guru” has a negative connotation. Their philosophy is to go out into the market, take action, learn from own mistakes, and that iteration is key to long-term success. The idea of paying someone thousands of dollars for trainings seems useless and maybe even detrimental.

 

Then for others, they attribute their success, at least partially, to a Guru course, seminar, or speech.

 

Who is right and who is wrong? Well, the reality isn’t black and white.

 

Heather Havenwood, who was named Top 50 Must Follow Women Entrepreneurs for 2017 by Huffington Post, has seen both the positive and negative side of “guruism.” “[The guru industry] is like politics. There’s the good part of politics and there’s the dirty side of politics,” she said. “There’s a lot of good that happens, and there’s the dirty side, and I’ve seen both, and I’ve been around both.”

 

Since Heather has a rare perspective on the guru industry, in our recent conversation, she explained how you can become a good guru, and how you can leverage your guru status to scale your real estate business.

 

Who Can Become a Guru?

 

You may be wondering “Joe, I’ve only done a few deals! Who the hell am I to become a guru?” Fair point. However, according to Heather, “anybody who’s done … something in real estate, whatever that is, I think that they should teach what they have learned through their mistakes.”

 

If you have been active in the real estate market, whether you’ve completed 1 transaction or 100, and you have failures under your belt, then you have the qualification to provide some sort of educational service.

 

Educating others on your failures is the key distinction between the good guru and the bad guru. “The challenge with what I call the real estate gurus out there is they show success after success after success after success,” Heather said. “The real ones are failure-failure-success-failure-failure-failure-success-success-failure.” This is the main reason why “guruism” has a negative connotation in real estate. A guru will make real estate seem easy, straightforward, and risk-free, which isn’t the case at all. Therefore, Heather said, “That’s why I think [investors] should be out their teaching themselves, so they know what it’s like to share their failures, share their successes with people. It makes a difference.”

 

Who would have known that you could monetize your failures!

 

Why You Should Become a Guru?

 

There are three main reasons to become a guru: 1) get more business, 2) get more cash flow, and most importantly, 3) help other investors.

 

These three reasons are “why a lot of the real estate investors get into the education conversation, because they want to buy more property and it’s a great cash maker to create cash to buy more property,” Heather said. “Think about it – I’m doing real estate, I want to buy more real estate, I educate people about what I’m doing, I make money from that and I buy more real estate. I don’t think that’s awkward. I think that’s actually very smart in a capitalist world.”

 

Heather continued, “If you look at it that way, then you can see how there’s a logic to that. What happens when I go to REIA meetings or I meet what I call ‘old-school’ real estate investors – they have this kind of arrogance about ‘Well, I just sit in the background and no one knows who I am. I just do my thing.’ I’m like, ‘I can see that, I guess that’s respectable, but why wouldn’t you help other people? Why would you not do a small workshop locally, or why don’t you get on a podcast and share your story about how you got started and all the mistakes that you made? Why not help other people through that process?’ Because I feel like real estate investing specifically – not realtor – is kind of the secret little society sometimes; even though people are out there constantly teaching it, it’s still this secret little society that people think is hard to get into, or they don’t know how, or it’s confusing. It’s not something you get taught in the university.”

 

Grant Cardone’s philosophy of success is your responsibility, duty, and obligation comes into play here as well. You don’t need to hide your successes and failures from others, because if everyone had that old school mentality, you likely wouldn’t have gotten the information and motivation you need to get started. Pay it forward and make some money at the same time.

 

How to Become a Guru?

 

To become a guru, you need a platform. Heather’s go to platform is podcasting. However, she didn’t start by launching her own podcast. Instead, after getting some experience in real estate, and having a few failures under your belt, the first step towards becoming a guru is learning how to tell your story. “People don’t want to hear your resume, they want to hear your story. It’s very different,” Heather said.  She accomplished this by going on as many real estate podcasts as possible.

 

“I think even if you’ve only had 10 houses or 2 houses or one apartment building, whatever it is, being out there on podcasts – because it’s a “free medium” at this moment – being out there and sharing your story helps other people,” Heather said. “People don’t want to hear your ‘When I was ten I did this, and when I was 20 I did that…’ No one cares. They want to know how you got to where you are today and where is the success story, and where is the failure? So I talk about my book Sexy Boss because that book is about my biggest failures in life.”

 

Heather focused on mastering the art of telling her story on other investor’s podcasts for one and a half years before launching her own. In total, she’s had 210 interviews.

 

Another advantage of being a guest on 210 different shows is you learn how to create a successful podcast. Heather learned how to add value, which is a must if you’re going to be a guru and host your own show. Additionally, Heather said she learned “what it takes to be a really great host. I also learned how to really launch a really great podcast. Back in June [of 2016], I launched my first show and it’s exploded. I’m now on three networks, and it’s been amazing, in less than a six-month timeframe, because I learned how to give value, and then I went and launched it.”

 

Related: How to Raise $5M in ONE WEEK Through a Powerful Thought Leadership Platform

 

Conclusion

 

An investor who has any level of real estate experience can start the process of becoming a guru. The key is having successes AND failures to leverage to teach others what you learned from your mistakes and how they can avoid making the same ones themselves.

 

The three advantages of becoming a guru and providing educational services to other investors are getting more business, getting more cash flow, and paying it forward by educating others who are just starting out or have an experience level below or comparable to yours.

 

To start the process of becoming a guru, start to learn how to tell your story and add value to others. A great way to do so is to get interviewed on other investor’s podcasts. Then, leverage that experience to launch your own podcast.

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below.

 

 

 

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multifamily

The 22 Tactics to Go from a Corporate Job to $130,000,000 in Multifamily Real Estate

 

On May 18th, 2017, I was on the other side of the mic when I was interviewed on the BiggerPockets podcast, one of the most downloaded real estate podcasts in the world.

 

During our conversation, we covered 22 different topics on how I went from my corporate job in advertising to controlling $130,000,000 in multifamily real estate.

 

Below, I included hyperlinks for each topic. Clicking on a link will send you directly to the time in the conversation when the topic was discussed. That way, you can skip around and find exactly what it is you are looking for.

 

If you want to listen to the interview in its entirety, ​click here.

 

7:20 – My corporate background in New York prior to buying my first investment property

 

11:44 – Why I began investing in single-family homes in my hometown of Texas while continuing to work my corporate job in New York.

 

13:44 – How I purchased my first deal in 2009 without ever visiting the property

 

17:00 – Tactic: How to invest in out-of-state real estate without viewing the property

 

21:40 Pros and cons of investing virtually

 

23:13 – Why I quit my job and transitioned to large multifamily investing via syndication

 

26:30 – Tactic: Shifting your mindset when making the leap from small to large investing and how I found my first apartment deal

 

31:04 – Tactic: 3 factors for qualifying a multifamily market

 

33:58 – What’s the strongest multifamily market in the nation?

 

36:20 – My overall real estate investing goal and why it’s cannot be all about the money

 

37:40 – Outlining how I completed my first deal: What comes first, the deal or the money?

 

40:53 – The Master Lease: Pros and cons of buying apartments with a master lease and why it benefits the buyer and seller

 

47:50 – Tactic: How to leverage your existing network to raise private money for your apartment deals

 

54:15 – Why putting your own “skin in the game” results in additional alignment of interest with investors

 

55:32 – Tactic: How to find off-market deals in a hot market

 

59:25 – Three ways I, the syndicator, make money on the deal?

 

1:01:52 – When underwriting deals, what metrics/criteria must an apartment meet in order for me to invest?

 

1:03:54 – Difference between economic occupancy and physical occupancy

 

1:04:20 – How do I find on-market and off-market deals?

 

 

FIRE ROUND Q&A

 

1:08:09 – Question #2: “I’ve been discussing potential investment opportunities in apartment syndications with my network. The toughest objection I’m coming across is ‘what if I need to get my money out early.’ How do I overcome this?”

 

1:09:16 – Question #3: “What are the downsides to apartment buildings with only 1-bedroom units?”

 

1:10:46 – Question #4: “How do I check to see if an investor group is real and not a slick organization trying to steal my money?”

 

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

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Friday Facts – Best Real Estate Investing Advice Ever Lightning Round Q&A

Learn this week’s Best Ever guest’s best ever books, real estate deals, ways to give back and biggest mistakes

 

Quincy Long from JF986: How and Why You Would Leverage Other People’s IRA and Cash

 

Best Ever BookRich Dad Poor Dad by Robert Kiyosaki

 

Best Ever Deal Quincy has Done – Turning Down a $2.5 Million Offer and Pursuit of a $10 Million Sale

 

“Well, I hope the best deal I’ve ever done is participated in a different real estate transaction, where we bought 196 acres on Maui for $900,000 cash from a bankruptcy estate, which we got a 2,5 million dollar offer before we closed on the property, and turned it down because we think we may be able to sell if for maybe 10 million or more. So that isn’t completed yet, but I believe it’s going be one of my biggest investments with the dollar return for effort hour.”

 

“[Our projected hold period is] Up to five years for that kind of property. We’re going to market it to the ultra-wealthy. There’s a lot of Chinese and other Asians that visit Hawaii, so that’s the target. There’s some movie stars and what not that have property in the same area, but it’s also a good property for eco-tourism. Just fantastic waterfalls and caves… Probably for the holding period we’ll do some eco-tourism to pay the costs of the property until we can find the correct ultra-wealthy buyer that can write a check between 10-20 million dollars. That’s the plan at this point.”

 

“[To find potential buyers], we’re at the end of this month or in the month of April sending a professional film crew out to document and film the property, because it’s kind of a rugged piece of property, you can imagine that of course. And then there are sites that are catering to the ultra-wealthy type properties, the trophy properties, if you will. So there’ll be a large internet marketing campaign specifically to target the ultra-wealthy individuals that might be able to afford such a property.”

 

 

Best Ever Way Quincy Likes to Give Back – Helping Others Decrease Their Taxes Owed

 

“What I do every day… Somebody asked me a question recently – if I was rich enough to retire, what would I do? I said I’d educate people about self-directed IRAs, of course, because I actually enjoy doing that and I think it’s important. I’ve just finished my estimated taxes before I’m going to Europe – tomorrow, actually – for three weeks… And I’ve finished my estimated taxes and looked at the dollar amount that I’m going to have to pay as an estimate, and I just got sick to my stomach and I thought “I need to do everything I can…” I’m all for paying your taxes that you owe, but no more than that. I don’t want people to be a tax donator, as I call them. When you do a deal that you could do tax-free, you’re a tax donator, and I just have a real problem with that, because I don’t think the government uses the money as wisely as I would if I had that money.”

 

“So again, I believe in paying my share of taxes, but not a single dollar more. I believe in that so much in fact, that teaching other people how to avoid paying taxes by using the government’s own rules that they laid out for us is almost like a mission to me. So that’s what I like to do to help people – teach them how to get out of paying taxes using the government’s own rules and following those rules.”

 

Biggest Mistake Quincy Has Made So Far In Real Estate – Failing to Perform Due Diligence on a Borrower

 

“Oh, that’s easy… I’ve made lots of mistakes. And yes, I’ve been very successful, but anybody that tells you that they’ve never made a mistake has either never done a deal or they’re lying. I would have to say, again, because I do a lot of note deals, my biggest mistake was doing a deal where I did plenty of due diligence on the property, but not enough due diligence on the person that was borrowing the money in that case. I always make the strong suggestion that anything you’re doing, you do due diligence on the deal itself, but most importantly you do due diligence on the people.”

 

“I failed to do that, frankly… So I had a great and perfectly valid hard money loan out of my account from the perspective of the property, and we ended up foreclosing on it and it’s been a great rental, and we’re getting ready to sell it after a couple of years of renting it. But four days after the buy borrowed my $200,000, he turned around and went to a different title company and borrowed another $215,000 on a property worth about 270k. Then he also sold it at a third title company ten days later for — I don’t remember the number, but he took a $45,000 down payment… And I found out later he had partners at the foreclosure sale where he bought the property for $100,000, so he took like half a million dollars from people on a property that he had a net of $100,000 in. Basically, after all of this broke and I ended up foreclosing on the property and did due diligence on the individual, I found pretty strong evidence that he’s a crook.”

 

“Had I known that, of course I would not have made the deal in the first place. I think that’s my biggest mistake and my biggest learn – you have to do due diligence both ways: people involved, as well as the property or the deal itself. And that’s true for real estate, it’s true for notes, it’s true for private types of investments like limited partnerships, stuff like that as well.”

 

Click here to listen to my full interview with Quincy to learn how to use other people’s money to invest in deals.

 

Marina Sud from JF987: How Her Attorney Scored her BIG CASH by Noticing this Minor Detail

 

Best Ever BookHarry Potter by J.K. Rowling

 

Best Ever Deal Marina has Done – $60,000 profit on a Hoarder’s Home

 

Best Ever Way Marina Likes to Give Back – “Donate with every closing to animal shelters and breast cancer research.”

 

Biggest Mistake Marina Has Made So Far In Real Estate – Counting Eggs Before They Hatch

 

“Just thinking that it’s all done before you’re closed… Counting the money in your pocket when there’s none.”

 

“[My lesson learned is to] just kind of relax and breather and just let it go. It happens when it happens.”

 

Click her to listen to my full interview with Marina to learn how to build the best real estate team.

 

Jack Petrick from JF988: Why FREE Advice Could be the Most EXPENSIVE Advice

 

Best Ever BookRich Dad Poor Dad by Robert Kiyosaki

 

Best Ever Deal Jack has Done – Ten Homes for $4,000 to $5,000 Each

 

“A lot of them. Really, honestly, the last ten houses I’ve picked up for like 4k and 5k each, I would say they were pretty much the best deals I’ve ever got.”

 

Best Ever Way Jack Likes to Give Back – Educating and Mentoring Other Investors

 

“Teaching knowledge. I have so many people that I’ve mentored and I’ve provided my playbook, my handbook on how to do this, where it took me 15 years of mistakes to get to those points. My brother right now has done a second house, a total rehab in two months, and right on budget… I just love being able to mentor and provide those services to others, and be able to help people have a better lifestyle.”

 

Biggest Mistake Jack Has Made So Far In Real Estate – Saving Money to Lose Money

 

“Bending over to pick up nickels when dollars go over your head… Meaning trying to save money, but in the end you’re really hemorrhaging out more money than you’re saving by trying to do work yourself, by trying to bring in your own crew to do all the work at $10/hour labor versus getting professional tradesmen in. That’s a mistake. Hire the right people to do the job and get it done right, because in the long run it’s gonna cost you less money and you’ll have a better quality of like and experience. Pay for it when you need to.”

 

Click here for a summary of Jack’s Best Ever advice: Why Free Advice Can Be the Most Expensive Advice for Real Estate Investors

 

John Roy from JF989: How to Save Paradise and Put Up a Parking Lot…and Garages for BIG MONEY

 

Best Ever BookThe Fish That Ate the Whale by Rich Cohen

 

Best Ever Deal John has Done – Over $10 million Profit on Turnkey Parking Garage

 

“Downtown Cincinnati. We took an old mall, we converted into a parking garage. Purchased it for $14.5 million approximately, and when I said “we purchased it”, we helped that real estate group buy it. Now potentially worth $25-28 million, two years later.”

 

“It was already done. It was turnkey.”

 

Best Ever Way John Likes to Give Back – Educating Others on Parking Garage Investing

 

“I like to volunteer my expertise in parking. Like I said, it’s a difficult field to get into, but I will always take calls and give people advice. They’re free to call me on my cell phone and I’ll walk them through a process, I have no problem doing that.”

 

Biggest Mistake John Has Made So Far In Real Estate – “Partnering up with a developer where you contribute the land and they don’t contribute enough equity themselves. We will never do that again.”

 

Click here to listen to my full interview with John to learn all the ins and outs of parking garage investing

 

 

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I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below. Or comment what is your best ever book, personal growth experience, deal, way to give back, or biggest mistake?

 

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Why Free Advice Can Be the Most Expensive Advice for Real Estate Investors

 

You just finished reading Rich Dad, Poor Dad, attended your first real estate seminar, or had some other introduction into real estate investing. You are extremely excited for the potential of achieving financial independence or growing your own business empire with real estate. And you want to scream it from the rooftops.

 

The next time you see your family or friends, you bring up your new aspirations and what do they say? “Investing in real estate? That’s risky!” and “Ew. Why would you want to be a landlord and clean toilets?” and “my uncle invested in real estate and lost everything when the market crashed. I’d avoid real estate like the plague” and on and on.

 

Can you relate to this experience?

 

Since these people should know us the most, are closest to us, and love us dearly, how much weight should we give to their advice and criticism?

 

The answer like most things in life is it depends.

 

Jack Petrick, who has been a full-time investor for 15 years, faced this dilemma when he first started, and continues to face it to this day. In our recent conversation, he explained how this “free advice” can end up being the most expensive advice you receive.

 

Jack’s Best Ever advice is that free advice is expensive advice. “There’s a lot of people that have opinions on what we do,” Jack said.  “There’s just a lot of naysayers that don’t have necessarily the experience to be able to provide an input or opinion in your life if this is what you want to do.”

 

The most expensive free advice that I can think of would be to not invest in real estate at all! Another example would be passing up on an extremely lucrative deal because you were talked out of it by your mother.

 

Maybe free advice isn’t the best term. There are a lot of free resources (podcasts, webinars, YouTube videos, etc.) that offer sound real estate advice. I think “unfounded advice” rings truer. If you were to have a health issue, for example, you wouldn’t ask a family or a friend for medical advice (unless they were a doctor, nurse, etc.). You would ask a professional who has experience diagnosing and treating medical issues. The same logic should apply to real estate investing, and business in general, as well.

 

Personally, some of the worst investment advice I’ve gotten is from family members, who should know me the best. Fortunately, I didn’t act on that advice, and that’s how I’ve gotten to where I am at today. However, I did take some advice from them on other things and it has helped me out. We’ve got to be able to distinguish between the good and the bad when it comes to the advice provided by those with minimal to no real estate experience, and especially if they are loved ones since there’s emotions involved.

 

When asking for real estate investment advice, Jack says, “I would just really vet out the experience of those people that are providing that advice.” To add to that, I would say to find out how much experience they have in the niche you want to pursue. It’s important to get advice from people who have done what you are currently doing, and even better, are still currently in that niche.

 

For example, if you want to raise money from private investors and buying large multifamily buildings, you will likely receive better advice from a multifamily syndicator with hundreds of transactions compared to a fix-and-flipper, a syndicator with no deals, or your uncle Bob.

 

Additionally, certain advice may be good or bad depending on what stage of the process you are in. You can get the same advice, but it can be either good or bad depending on where you’re at in your business cycle. In the beginning stages of your career, for example, you can afford to have a more aggressive business plan. But 20 years later, when you are approaching retirement, you will likely have a more conservative approach.  Also, if you are a brand-new investor who is single, you can likely take more risks compared to the brand-new investor who is married with four children.

 

Overall, when actively asking for and passively receiving advice, it’s important to pay attention to who is giving that advice and understanding if they have the expertise to back it up.

 

 

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That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below.

 

 

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Working in Apartment Syndication – What’s Possible in One Year!

Guest Post by David Thompson

This month is my one year anniversary working in commercial real estate.  I started helping an apartment syndicator raise capital to close on a 320-unit apartment in Dallas last May.  Prior to that, I spent about three to four months learning from Joe Fairless who had a program that was meant to teach me how to find, purchase and syndicate my own 100-unit apartment over what we decided would be about a 12 to 18 month goal. Three months into his program, it dawned on me that this end-to-end syndication business was pretty overwhelming and that it was definitely going to be a team sport. The landscape was competitive and I starting feeling that brokers, lenders and investors would be asking what my experience was before I would be able to get any business from them.  Since I didn’t have any commercial real estate experiences beyond some single-family and small multi-family properties that I managed, I thought there must be a better, faster and more successful way to get into this business.  I had left the full-time corporate world about six months prior to fully dedicate myself to this area.  Since I had the time and thought, why not just work with the experts for a while and gain that experience?

 

One day I simply asked Joe how I could help him as he was doing a lot of large apartment deals in the background.  That led to him suggesting that I raise capital for him.  I would learn and leverage the expertise and credibility of his partners while learning how to discuss apartment investing and deals with prospective investors.  Those investors I brought in would be my investors not his and that per the SEC rules, I had to be part of the general partnership (GP) and help him with other activities to be able to market the deals legally.  Being part of the GP had an attractive potential income component to it that further enhanced this proposition. I would be compensated for how much I raised, paid a bit of the acquisition fee at close (my wife liked that), I would get part of the GP quarterly distributions so creating a passive income stream and a potential for a much larger payout when we refinanced and / or sold the property in two to five years.

 

Fast forward one year and I’ve raised close to $9m to help acquire over five large apartment communities.  I’m part of the GP team and own a part of over 1200 units. I’ve grown an investor base to over 80 accredited investors.  On this last deal that I’m finishing up, almost half of the investors are return investors from prior deals which makes the capital raise process easier.  I am starting to get referrals in bunches, folks are coming to my website asking how they can learn about what we do and what opportunities are out there. My exposure has increased dramatically in a rather short period of time.

 

I’ve been interviewed a handful of times on real estate investing podcasts with one interview covering a BP post I did on the top ten things I’ve learned raising $1m in two weeks on my first deal, which I turned into my first book (eBook you can download for free on my website).  I’ve spoken at a REI conference this past February on capital raising and handling international investors.  I am in Bigger Pockets apartment forums regularly sharing ideas on what I’ve learned about raising capital, the syndication business, vetting sponsors, apartment investing, markets, you name it.  As my knowledge expands, I’ve increased my connections with others, giving back when I can and helping those either interested in learning more about investing in this area or simply wanting more direction in how to accelerate their growth.

 

My business model has morphed into other attractive niche areas like self-storage as I have a growing investor base who have done several apartment deals and are looking to further diversify. I’ve met other mentors that have helped introduce me to other top notch sponsors in these niches as they all seem to need capital to continue their acquisitions. I’ve come to learn that if you can raise capital, significant capital, you can be a big player in this business.  I’m now discussing potential partnerships with other folks that do what I do, looking to create unique funds targeting certain niches, leverage a larger pool of capital to negotiate better terms with the operators to ensure my investor base is getting exposed to solid opportunities with attractive returns.  I’ve met with some of the top sponsors in the self-storage industry to see if we’d make a good match.  I’ve written a blog on why I find this niche attractive to start getting my investor base warm to the idea. I’m attending a three-day self-storage workshop in two weeks as part of my professional development plan and already diving into his home study program.  My goal is to ensure I’m well educated in any niche area first, then vet and partner with the top sponsors and provide my investor base with solid opportunities to diversify both by niche, geography and by sponsor.

 

My personal financial goal is to be part of the general partnership in several of these niches with long term partners that are experts in their field, believe in win/win philosophies and have aspirations to continue to grow with solid deals.  When I left the corporate world over 18 months ago, it’s amazing how busy but exciting my new life has become.  This passion and success I’m seeing did not come without a ton of hard work, but I found that because I thoroughly enjoyed the process, meeting new people, sharing and educating them in opportunities they never had even heard about was a natural for me.  I never ever felt I was in a sales or marketing role and I still don’t. I simply educate and if the right person is ready, they and you will know, I then simply lead them to the next step in the process.

 

Joe is an expert at not only multifamily apartment investing but his background is marketing and advertising.  I had no clue when I started other than an investment summary deck to talk to accredited investors about.  Since then, he’s helped me immensely understand the power of reach, credibility and presence.  I have a website, I blog bi-weekly, I’m in the BP apartment forums almost daily sharing thoughts, I wrote the eBook that I’m going to get on Amazon later this year, I’ve spoken at his conference, I developed a monthly newsletter for my clients and prospects, I attend regular local multifamily meetups, but unsatisfied with that, I’m going to create my own monthly meetup group over the summer that will be a club membership for accredited, passive investors only to review educational and deal flow opportunities.

 

I have had so much fun with this that I approached Joe about doing a capital raising workshop next spring to share our best ideas on taking this niche within a niche to building an incredible business.  Wow, can’t wait to see what happens, who I’ll meet and what roads and doors will open up over the next few years at this pace.  It’s been an incredible year. I share this with you not for me, but to give you an idea of what’s possible when you put your heart, passion and energy into something and give it your time.  It won’t seem like work, it’s all fun to me. My wife told me the other day she could not believe how hard I work at it and I tell her it does not feel like work, put more time in, surround yourself with experts to get the right coaching, create a solid home support system to enable you to be your best and you will surprise yourself.

 

 

Author Bio: David has strong experiences in real estate investing in both domestic and international projects covering single-family, multi-family and land development.  He earned his MBA in finance from Thunderbird School of Global Management, and graduated summa cum laude with a B.A. degree from Arizona State University.  David spent over 20 years in high-tech management positions at Dell, AT&T, and Lucent Technologies.  At Lucent he managed a $2.5B investment portfolio and raised over $1B in funds for acquisitions.

 

After leaving the corporate world, David started Thompson Investing and has raised several million dollars in private equity.  Most recently Dave has partnered with Ashcroft Capital and as part of the General Partnership has helped provide investor capital to purchase over 800 apartment units in three separate communities worth over $68M.

David prides himself on building long-term relationships with investors and partners while providing a great customer experience.  Dave has lived in Austin, Texas for twenty years with his wife and has two daughters.

 

 

 

 

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furnished

How to Double Your Rental Income with Furnished Rentals

 

In 2016, furnished rentals collected $3.2 billion per month in rents across the United States.

 

I bet that piqued your curiosity! Peaked

 

For example, there are 100,000 to 200,000 traveling nurses per year in the United States. They work for 6 to 12 months on a contract basis before picking up and moving to another part of the county. That’s 100,000 to 200,000 candidates for a furnished rental, and it’s just one example.

 

Kimberly Smith has been involved in the furnished rental business for over 20 years, way before popular businesses like AirBnB were founded. In our recent conversation, she gave us an inside look at how to run a successful furnished rental business. This business model is relevant to a single-family investor, an investor with a 1000-unit apartment building, and everyone in-between.

 

How to Find Tenants?

 

Marketing for tenants for a short-term, furnished rental is different than finding a standard renter.

 

One way to find tenants is through old-fashioned relationship building. The idea is to find a large corporation or institution to tap into. For example, you could reach out to a nearby university’s student housing department, a hospital’s housing coordinator, or a corporation’s human resources manager and ask if they are in need of short-term housing.

 

Kimberly said when she searches for potential tenants, “I would do old-fashioned request proposals with major corporations, and they would say, ‘Okay, I need 103 one-bedrooms for 6-months. Can you get them all ready for me?’”

 

Fortunately, with the advent of the Internet, finding tenants is much easier than the old-school cold-calling of the past. There are distribution portals online you can leverage. Example of these distribution portals, Kimberly said, “You’ve got HomeSuite, you’ve got AirBnB, you’ve got Booking.com, you’ve got HomeAway. All these guys are just starting to think, ‘How do we best service the needs of the business traveler?’ So in the short run, you want to be in all those places.”

 

Another great resource is a creation of Kimberly’s called Corporate Housing By Owner. “For the last 8 years, Corporate Housing By Owner has created an annual report,” Kimberly said. “You can get it on Amazon.com or you can register for free at CorporateHousingByOwner.com and you can download it for free. And it will tell you – we asked hundreds of people across the country, ‘How do you market your furnished rentals and where do you get your best results from?’ We have 8 years of data in that report and [you should] start by just reading the details.”

 

Who Manages the Furnished Units?

When comparing management of unfurnished vs. furnished rentals, Kimberly provided an analogy of a tortoise and a hare. “In unfurnished property management, you are the tortoise – you are renting a property for a year, and if your kitchen has a leak, you report it and they come out in the next week and they’re going to fix it for you.” For furnished rentals, Kimberly said, “If I’m there for 30, 60, 90 days and there’s something wrong, I need you to deal with that [right away].”

 

Therefore, the furnished property manager is going to have a level of involvement that far exceeds that of the standard, unfurnished property manager. As a result, you are going to pay a premium. Kimberly said, “for corporate housing, an Avenue West managed corporate housing brokerage (Kimberly’s company) would charge between 25%-35%, depending on the market. If it’s a corporation, it’s paying rents via credit card. Avenue West is incurring that expense, and not passing that on to the owner. They’re doing all the key arrivals. They are doing whatever background checks are necessary. They’re doing all of that service for that corporate tenant. They have extensive software to do the invoicing and such that’s necessary as part of that whole thing. And they’re building relationships. [The owner is] working with a management company that doesn’t say, ‘Oh, I hope to find you a corporate housing rental.’ [They’re] dealing with an Avenue West company who’s been around for 18 years, developing these relationships, that says, ‘Hey, these are the corporations that work with me every day.’”

 

Most unfurnished property managers do not understand corporate housing. Therefore, Kimberly recommends finding a property management company, like Avenue West, that specializes in furnished rentals. “I would be a little wary in just handing a furnished rental that you’re expecting to get a business client into an unfurnished property management because they don’t really understand how to find that right tenant.”

 

How Much Money do Furnished Rentals Make?

 

To determine the rates you can charge for furnished/corporate rentals, Kimberly said, “You want to look at the extent of stays in your neighborhood. You want to look at the hotel rates in your neighborhood. You may even be able to find exact corporate housing rates in your neighborhood.”

 

According to Kimberly, the average daily rate for a one-bedroom corporate housing rental was $150 in 2016. However, this varies from market to market, so in some markets it will be higher and in others, lower. Kimberly said, “You have to understand your individual market and figure out where you fit. And you can purchase something called Corporate Housing Industry Report, which this year is a 206-page document that goes through all major metropolitan state areas and looks at … the average rent that was collected last year on a studio, on a one-bedroom [and] on a two-bedroom.”

 

For example, Kimberly said in Arizona, an unfurnished, one-bed unit will rent for $750 a month, but the same unit furnished will rent for $2,500. Whereas in other locations, like San Francisco in 2016, an unfurnished unit rents for more than a furnished rental. It is very market dependent. Kimberly’s recommendation is to look at the Corporate Housing Industry report to see if corporate housing is an effective business model in your area.

 

For a personal example, I currently own a four-bed single-family property in Dallas, TX. It currently rents of $1,200 a month. Kimberly said if I furnished the unit and offered it as a corporate rental, I could get $4,100 a month in rent. Knocking off the 35% management fee, that’s $2,665 a month, which is more than double the rent I am charging now!

 

Conclusion

 

Furnished, corporate rentals are a $3.2 billion a month industry and is relevant to investors in all niches.

 

To find tenants for furnished rentals, build relationships with local corporations, hospitals, and universities, or post a listing to any number of distribution portals like AirBnB.

 

To manage the furnished rentals, hire a property management company who specializes in corporate rentals. However, expect to pay 25% to 35% in management fees.

 

Depending on your market, the increase in cash flow from converting an unfurnished unit into a furnished unit will more than cover the increase in management and other expenses. However, before pursuing furnished rentals, determine the rental demand in your area.

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

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Friday Facts – Best Real Estate Investing Advice Ever Lightning Round Q&A

Learn this week’s Best Ever guest’s best ever books, real estate deals, ways to give back and biggest mistakes

 

Todd Tresidder from JF979: Why He Went Through FIVE Property Managers in FOUR Years

 

Best Ever BookThe War of Art by Steven Pressfield

 

Best Ever Deal Todd has Done – $800 Tax Lien

 

“Tax lien deal. I got a perfectly rentable house – it’s not a great value; it was probably worth 60-80k, and I think I was into it for about $800 in back taxes. That was obviously the best deal ever.”

 

Best Ever Way Todd Likes to Give Back – Educating Other Investors

 

“Through education, the business I’m doing. I love sharing my knowledge and sharing it at cost-efficient price points so people get more value than they pay for. I love the difference it makes in people’s lives. There’s not a week that goes by that somebody doesn’t write an e-mail telling me how I changed their lives.”

 

Biggest Mistake Todd Has Made So Far In Real Estate – Out-of-town investing

 

“Buying out of town, hands down. I did 9 things out of 10 right, and I did that one wrong (i.e. going through 5 property managers in 4 years). I was warned, I’d read it, but I just thought that there’s got to be a way to find an honest property manager. Luckily, I did find one [soon] enough to turn it around and sell it, but basically buying out of town is just so inefficient… It’s really hard.”

 

Click here to listen to Todd’s full interview and see how he overcame multiple corrupt property managers

Whitney Nicely from JF980: How She Became the MILLENNIAL MILLIONAIRE NEXT DOOR

 

Best Ever BookShoemaker of Dreams: the Autobiography of Salvatore Ferragamo

 

Best Ever Deal Whitney has Done – $9,000 profit on a $3,000 house

 

“I had a house… It was a three-bedroom, two-bath, and the backside of it had caught on fire a number of years ago, and I had it under contract for a lease option for $6,000 with $100 and $200/month paid off whenever it was I paid off $6,000, so 5-6 years at $200/month.”

 

“I sold it on a lease option for $12,000, with $5,000 down and $300/month. So I bought it for $6,000, I sold it for $12,000. This morning I was talking to my seller and he was like, ‘Well, what if we didn’t do the lease option? How much would you give me just to cash it out?’ and I said, ‘I could give you 3k,’ and he said ‘Okay, fine.’ So now I bought the house, people gave me 5k, I’m giving it to my seller, and I get to keep 2k, and now I’m cash-flowing $300/month on a $7,000 balance.”

 

Best Ever Way Whitney Likes to Give Back – Tithing and sponsorship

 

“I tithe to my church and I sponsor the youth groups trips – mission trips, fun trips, whatever.”

 

Biggest Mistake Whitney Has Made So Far In Real Estate – Winging it on her first investment

 

“I paid $20,000 for one of my first houses with cash, my life savings, and we get to the closing table, the seller shook my hand and he said ‘Thank goodness you bought this, because no other investor in town offered me this much money.’”

 

“That’s how new I was when I started and how clueless I was — I didn’t realize it didn’t have a central heating air unit; it didn’t have heat and air when I bought it. It also had old wiring – we had to redo that, and it was on a hill, and a part of the hill had given way, and the foundation was screwed up and we couldn’t do anything to it until we put three sides of the foundation back on, to the tune of about $10,000, and my brother’s sweat equity.”

 

Lesson Learned: “Don’t wing it… For crying out loud, when you’re putting offers in on houses, have a formula. I like to use ARV x 70% – Repairs… That’s the most cash I can give you. And probably on that house – I was probably in that formula, but I hadn’t planned on putting $50,000 of my own money into the house just to be able to rent it. Get a plan, find somebody to help you, [and] don’t just wing it. And those watch those TV shows, oh my gosh…!”

 

Click to read Whitney’s Best Ever Advice: How the Millennial Millionaire Next Door Finds Endless Streams of Deals

 

Mauricio Umansky from JF981: How He Controls 17% of the LA Market Share and Became #1

 

Best Ever BookDelivering Happiness by Toni Hsieh

 

Best Ever Deal Mauricio has Done – Selling the Playboy Mansion!

 

“I have two favorite deals. Number one was selling the Playboy Mansion – absolutely fantastic, the first deal to hit one hundred million dollars in Los Angeles. Number two is an investment I made in Malibu on a property that I just sold for 70 million dollars.”

 

“I received the listing of the Playboy Mansion by coming up with an amazing listing presentation and a full marketing plan, and all of my ads already done when I went in for the presentations. So I didn’t leave anything to chance. I already had the whole marketing campaign laid out as if I already had the listing.”

 

Best Ever Way Mauricio Likes to Give Back – Mistakes lead to opportunities

 

“I make mistakes all day long. I think that it’s not a question of what mistakes you make, it’s a question about mistakes lead to different opportunities and how you resolve mistakes.”

 

Biggest Mistake Mauricio Has Made So Far In Real Estate – Charity and homes for the needy

 

“We give back two different ways. On a personal note, I give back really to the Children’s Hospital of Los Angeles. I spent the first six years of my life in the Children’s Hospital, and thanks to them I got cured. And the second thing that we do as a company is we have a hundred percent participation in give-back homes. We build homes for the needy, and we love it.”

 

Click here to watch Mauricio’s full interview

Bruce Norris from JF982: When to Be AGGRESSIVE from an Investor of Over 2,000 DEALS

 

Best Ever BookThink and Grow Rich by Napoleon Hill

 

Best Ever Deal Bruce has Done – Understanding when do something, along with how to

 

“I don’t know how to develop building lots. I don’t know how to look at a hill and say, ‘Gosh, we could carve that up,’ but there’s a project that I bought in 2002, close to Lancaster, somebody had paid three million dollars to create the lots; I paid $270,000 at 90% discount. They knew how to create the lots; I knew when to buy them. I would rather know when to, than how to, any day.”

 

“We built [on the lots]. We waited until 2004 to start the 93-house track. We were in kind of a remote area called Rosemont. At the end of our project, our land cost was 1% of our sale price. We sold them for $280,000.”

 

 

Best Ever Way Bruce Likes to Give Back

 

“I like our charity event, where we give back every year to the Children’s Hospital and Make-a-Wish.”

 

Biggest Mistake Bruce Has Made So Far In Real Estate

 

“In 1989 I bought seven custom home lots, because everything I touched at that time was working really well, and I still own those homes about two and a half years later, at a cost of $2,100/month. I made the payments, got myself out of it, but it taught me to understand that the ‘When to…’ part of it was really important.”

 

“The last house I closed in that cycle was I wrote a personal check for 62k to close the last one.”

 

“I was very happy to see that go. Here’s the good news about that – a lot of people had downturns in the last cycle… I stuck with it; I had a partner who left the country, so I had to finish the houses out of pocket. A lot of the partners couldn’t come up with any money at all, so I paid it all, even though the loans were in their name. What was great about that experience is that I had a $21,000/month extra overhead literally hit me in a 30-day period and went on for a long time… But because I decided to solve it, I had to learn to make 21k extra a month. In our industry you can do that. But after everybody was paid off, I still had the skill level to earn the money. That was actually the biggest reward.”

 

Click here to listen to Bruce’s full interview

 

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1

 

That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below. Or comment what is your best ever book, personal growth experience, deal, way to give back, or biggest mistake?

 

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How the Millennial Millionaire Next Door Finds Endless Streams of Deals

 

Wouldn’t it be amazing if you never ran out of deals? Well, by asking the right questions and presenting the right offers, your investment opportunities could be endless.

 

Whitney Nicely, who is a contractor, broker, auctioneer, investor and self-proclaimed Millennial Millionaire Next Door, coaches real estate investors on how to uncover the best deals in the market. The reason why she can teach this investment strategy is because she’s followed it herself. She’s purchased industrial land, single families, small multifamily properties, and large multifamily buildings putting little money down, using creative investment strategies, and at prices below market value.

 

In our recent conversation, Whitney explained how she approaches deals in order to continue to find an endless stream of highly motivated sellers.

 

Whitney’s Best Ever advice for finding deals is simple to say, but difficult in practice – Keep going! “Keep going,” Whitney said. “If it’s a good deal, keep going. If it’s a bad deal, keep going. Don’t stop, keep going. My favorite Bible verse is Proverbs [31:16], which says that she goes to inspect a field, and she buys it. So ladies, go buy it. Men, go buy it. Figure it out, get a plan and go buy it.”

 

Now you may be thinking to yourself, “Well obviously Joe. But what does she mean ‘If it’s a bad deal, keep going?’ We don’t want to buy bad deals, right?”

 

Right. However, when Whitney says, “keep going,” she doesn’t mean, “keep buying.” The goal is to always press the seller for their pain point. “Whenever I’m buying a property, whether I’m buying land or a house or an apartment complex – and I teach all my students this – you have to find out what the seller’s pain is,” Whitney said. “If you can solve somebody’s problem, you’ll never run out of opportunities. If you’re afraid to ask what their pain is, or if you keep finding people with no pain, you need to go find somebody else, because there’s plenty of people out here in the world with properties they don’t want, houses they don’t want to take care of, and they just want somebody to come through and take this headache away from them so they can sleep at night. So as long as you’re actually helping people and not trying to be sleazy or slummy or anything like that, you’ll never run out of buying opportunities.”

 

If someone is selling a property, they are doing it for a reason. Likely, the reason is to alleviate some sort of pain. Whitney said, “Another thing I tell my students is it may not be that a lump sum cash payout is what [the seller is] stressed over. If that’s what their pain is, then solve that pain.”

 

If you can’t find the pain point, or the seller doesn’t have one, then Whitney’s next step is to make an offer. Not just one offer, but three. Providing multiple offers is a good way to indirectly discover a seller’s hidden pain point (or another pain point). Whitney said, “When you go look at a house, don’t be a one-hit wonder. Don’t make one offer. Don’t solve just one thing and then be like ‘Poof! I’m gone.’ I want you to take a cash offer. I want you to take a five-year payout offer, and a ten-year payoff number. You’d be surprised.” For example, Whitney submitted these three offers on a past deal and walked away with a 15-year owner-financed deal with no money down, no down payments for four months, and a completely reasonable monthly payment. She said, “Be open for those and never stop negotiating.”

 

The cash offer would be so low that if the seller accepted, it would be the best deal ever. Then, the five-year payout offer is higher and the ten-year payout would be the highest. For the payout offers, you can either form the deal so that you must have them paid off or you can form it with a balloon payment. When that five or ten years is up, you’ll have a massive net worth and you can cash out, you’ll have private money investors or partners to cash you out, the tenant buyer will cash you out (if you signed a five or ten year lease option with your tenant), or you can renegotiate with the original seller and make another deal.

 

Whitney’s best ever deal was her last deal, which was a creative/pain point combo. “I had a house. It was three-bedroom, two-bath, and the backside of it had caught on fire a number of years back (pain point #1). I had it under contract for a lease option for $6,000 with $100 [down] and $200/month paid off whenever it was I paid off $6,000, so 5 to 6 years at $200/month,” she said. “I sold it on a lease option for $12,000, with $5,000 down and $300/month. So I bought it for $6,000, I sold it for $12,000. This morning, I was talking to my seller and he was like, ‘Well what if we didn’t do the lease option? How much would you give me just to cash out?’ (pain point #2) and I said, ‘I could give you $3000,’ and he said, ‘Okay fine.’ So now I bought the house, people gave me $5000, I’m giving it to my seller, and I get to keep $2000, and now I’m cash flowing $300/month on a $7,000 balance.” In this scenario, the seller just wanted cash now, not later, to be out of the property. Whitney gave the seller $3000 of the $5000 tenant’s down payment and won’t have to pay the seller another dime.

 

Related: Two Creative Rent-To-Own Strategies with NOTHING Out-of-Pocket

 

Whitney’s parting advice is to “Keep going. Find out what they really want, give it to them, and make sure you are okay.”

 

To hear about more of Whitney’s creative deals, including how she got two tenants to lease out a piece of vacant land, click here.

 

 

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