JF1435: How To Pick Markets To Remotely Invest In with Chris Stafford

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Chris has been in real estate for over two decades, both as an investor and as a real estate broker. He’ll take his earnings as a top broker in San Francisco, and invest in other markets as a real estate investor. All of his efforts are to achieve freedom for himself and being able to help others get that same financial freedom. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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Chris Stafford Real Estate Background:

  • Listing agent for 25 years
  • One of the top producing real estate brokers in the San Francisco Bay area
  • Works with motivated listing agents, helping them 10x their income while enjoying life
  • Say hi to him at: https://epiclistingagent.com/
  • Based in San Francisco, CA
  • Best Ever Book: The Go Giver

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TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Chris Stafford. How are you doing, my friend?

Chris Stafford: Great! Thanks so much for having me, Joe.

Joe Fairless: My pleasure, and nice to have you on the show. A little bit about Chris – he has been a listing agent for 25 years. He’s one of the top-producing real estate brokers in San Francisco; he’s also an investor, and you can learn more about him at his company’s website, which is in the show notes.

Prior to us recording, he said “I hope you don’t mind if I’m a little goofy on this show…”, and I was like “Oh, be as goofy as you want, baby!” With that being said, Chris, take it away… Do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Chris Stafford: Sure, absolutely. And you forgot to mention that I’m generally a nice guy.

Joe Fairless: [laughs]

Chris Stafford: Yeah, actually I was born and raised in Detroit; I am by training a CPA. I used to work for Price Waterhouse Coopers for 11 years, so I have a really strong financial background. I decided that I hated my life and I hated being a CPA, and I went into real estate, which was really one of my biggest passions.

I have been selling real estate in San Francisco for, like you mentioned, over 25 years, and I absolutely love it. I also started a coaching program where I coach investors and also real estate brokers. It’s called EpicListingAgent.com.

I love giving back, and that’s why I particularly love what you’re doing with this show, and what you’re doing to educate and give back to real estate investors.

Joe Fairless: So what type of deals are you focused on?

Chris Stafford: Two different types of deals really. One is for me personally — first I’ll tell you in my real estate business I’m focused on residential investors. In San Francisco we have a lot of buildings that are two, three, four, five, six-unit buildings; obviously, we can get up into apartment houses that have 50-60 apartments… But the smaller apartment buildings in San Francisco – there are quite a few of them, so I help investor purchase those properties.

It’s a pretty crazy market here in San Francisco, with the rent control that we have here, and sort of financing restrictions…

So I love doing that, and from a real estate investing standpoint, for my own personal portfolio, I tend to go with brand new single-family homes, and I do that in different marketplaces that I think have a really good, strong up-sell potential.

Joe Fairless: What are a couple deals that you’ve done, just to give us some context for what you’re working on?

Chris Stafford: I’ve purchased two homes in Oklahoma City, which I still think is a super-strong market. Brand new single-family homes, the typical track home, 3-bedroom, 4-bedroom home, fully outfitted… Those are the kinds of properties that compared to San Francisco prices are very reasonable for me. Those are properties that you can get for under $200,000 each, and the rents are very strong, very strong local economy, so they cash-flow quite nicely.

Another example is Baton Rouge, Louisiana. Another strong local economy that has brand new single-family homes, in the same sort of demographic, same kind of type – 3 or 4-bedroom homes that cash-flow really nicely.

Joe Fairless: When you say “cash-flow really nicely” – let’s go to the Oklahoma City brand new 3-bedroom 2-bath properties that you’re buying… What are the numbers on those?

Chris Stafford: I think that you’re probably looking at something around $150,000 for brand new homes, and I’m getting about $1,300/month rent for each property. I have to run the numbers, Joe, but I think the last time I checked, after taxes and insurance, property manager and all that, on a yearly basis I think I’m averaging about 6%-7% return, which I’m totally happy with.

Joe Fairless: You’re in a couple different markets… You mentioned Oklahoma City, you live in San Francisco, you mentioned some other cities… How do you get comfortable with a particular market?

Chris Stafford: There’s nothing better than boots on the ground, so what I’ll do is I do a lot of research in advance on mostly what the local economy is, what the local real estate market is, and then I have a pretty wide network of realtors across the country that I can just talk to about their markets and they help me a lot. But before I pull the trigger or make any decisions, I’ll actually go to a city and spend a couple days there and just sort of check everything out.

Joe Fairless: And when you’re at the city, what are you looking for?

Chris Stafford: Well, primarily what I’m looking for is a realtor that I feel very comfortable with, which obviously being in real estate, as a real estate broker for over 25 years, I can pretty much vet them very easily… But I’m also looking for support people, and this is the biggest concern that I have – I have the support people that can help me not only make the decision, but also help me maintain the property.

Obviously, having a good realtor, having a good insurance agent, having a good property manager, and meeting these people personally… Obviously, you can’t do anything by yourself; you really have to have a group of people to help and support your decision, and that’s the number one goal that I’m trying to do when I get there.

Joe Fairless: What type of questions do you ask to qualify those team members?

Chris Stafford: Well, I ask them questions about their experience, and I ask them all questions about what they think the local economy is like, and do they have any concerns about that, and then most importantly, I also ask them for referrals… Helping me vet that is talking to other clients of theirs, and sort of see what their other clients are saying.

Joe Fairless: When you are looking at different markets… You’ve got Oklahoma City; what are some other markets that you’re in?

Chris Stafford: Baton Rouge, Louisiana…

Joe Fairless: How did you end up there?

Chris Stafford: You know, it’s funny that you ask me that, because — and a lot of this is obviously word of mouth… I really like New Orleans a lot, and I understood that there are some areas of New Orleans that were really hot, really great to invest in, but I was really freaked out about it being so close to the water, so consequently, I wasn’t really willing to invest in New Orleans.

But the realtor that I had in Oklahoma City told me about Baton Rouge, which is about an hour outside of New Orleans; about an hour North, I believe. Obviously, it’s away from the Gulf of Mexico, and he introduced me to a realtor there.

Again, some really great business is there. I think there’s a couple headquarters there. And then I was looking at the Chamber of Commerce websites, and every major city in the country has some really good stats, some really good information that everybody should check out, and that’s part of my research as well.

I was just talking to the realtor there, doing some research with the Chamber of Commerce, and he convinced me that there were some great deals there, and I flew down and checked them out.

Joe Fairless: You’ve been in real estate for more than a couple decades, and you are not only a listing agent, but as we’ve talked about, you’re also an investor… My question is why focus on 6%-7% return when you could do more, say, value-add deals, that aren’t’ as turnkey, that would get a higher return?

Chris Stafford: Well, I think that’s a really good question, Joe. One of the reasons I think that I sort of shy away from that is because I’m absolutely a numbnuts when it comes to repairs and fixing up properties… I just don’t have that gene, and I don’t think I’m that smart to actually add value to a property; I like things that are new, that I think that I don’t have to worry about for a very long time… And I’ve had some really bad experiences with clients of mine that have purchased fixer-uppers, but I’ve also had some bad experiences myself too with contractors that have taken advantage of me.

I’m a very busy guy, and it’s just not in my wheelhouse to fix up properties. I’d just much prefer to just buy brand new properties that I know have a warranty and are gonna last for a while.

Joe Fairless: So your high-level plan, if I’m listening to this correctly, is you’re a top-producing real estate broker in San Francisco, so you make chunks of cash from listing and working in San Francisco, and then you invest that in real estate that cash-flows in other markets, and then you just continue to feed that cycle.

Chris Stafford: That is correct. And then there is one small part of the equation that is near and dear to my heart, and that is hopefully the whole concept of appreciation – that’s also going to factor in as well. So not only am I cash-flowing these properties, but I’m usually into at least a 10-year hold on these properties…

And generally speaking, if you invest in a pretty nice area, a pretty strong local economy, with a 10-year hold you can usually figure in some pretty decent capital appreciation. And assuming any major tornados, earthquakes or political stuff isn’t gonna kill this country, usually you can count on that… So that’s a big factor in my equation.

Joe Fairless: And do you access that equity and reinvest it?

Chris Stafford: Generally, no.

Joe Fairless: How come?

Chris Stafford: Because I take it out and blow it in Las Vegas. [laughter] No, for me that’s part of my savings plan, is to leave that money intact in the property. Fortunately or unfortunately, I also have some investors that if I did wanna tap into and buy other properties, I could hit up my other investors, so… For me, it’s a big savings piggy bank.

Joe Fairless: What’s your primary focus as a real estate professional right now?

Chris Stafford: As it relates to…

Joe Fairless: Investing or being a listing agent – what’s your primary focus as a real estate professional?

Chris Stafford: My primary focus is freedom. That is my primary focus. I hate to be so esoteric about this, but what I wanna do is use the money that I make in real estate, not only from real estate sales, but also real estate investing, to give me the financial freedom and the time freedom, both of which are tremendously important to me, to help others.

Joe, for me this is something that I love talking about – I love becoming so emotionally and physically and financially strong that I can use all these investments and all these sales to help others. And I do that through a coaching program I have, helping other real estate agents become the best that they possibly can.

Also, I am in the process of starting a youth charity for disadvantaged youth. That is for me the greatest thing that you can do. Actually, Joe, I’ve written a book about this; it’s called Massive Abundance: How to Create Passion, Purpose and Prosperity in Your Life, and for any of your show-goers that are listening to this and they want a free copy of the book, they can just hit me up on my website.

This book basically talks about really my passion for setting goals, making yourself super strong in all areas of life, so that you can ultimately, like a big circle, give back. I think giving back is to me, at my age – I’m 59 years old, and I’ve been very successful and I’m so blessed and so grateful to be so… To me, there is nothing better than helping others. And I help a real estate agent become a better real estate agent, or I’m helping a child – which I do nonprofit work here in San Francisco for youth organizations… That is a high that I can live off for days.

Joe Fairless: In terms of the coaching program, what’s the outcome that you’re hired to accomplish with your real estate agent client?

Chris Stafford: When I’m talking to real estate agents, my whole thing is to get them to 10x their listings. Real estate agents really want listings. Most successful real estate agents wanna be listing agents; working with buyers is sort of a hassle, and as a listing agent you’re always part of the deal, and you can take more business on, and it’s not as labor-intensive.

So on the face of it, Joe, what I’m doing is helping listing agents really increase their listing inventory, so that’s really what it’s all about. But for me, and this is also on my website, I think that’s only possible — and I love saying this… Tony Robbins always said “Success is really 80% mindset and 20% strategy.” So I don’t think that you can teach listing agents or any entrepreneurs, any businessperson to be a better person without addressing that… So what I love to do is I also love to talk about brain-hacks – things that you can do to make yourself stronger, so that you can be a better listing agent.

I have a coaching program that’s really all about the combination of brain-hacks and hardcore sales skills, and I want them to be super-successful, but ultimately – and I always talk about this – I want them to be super-successful so that they can feed their dream, whatever that dream is. I firmly believe that people don’t go into real estate to sell real estate, just for the benefit of selling real estate. The real reason people get into anything, and the only reason people really wanna make themselves stronger in any area, especially financially, is hopefully they have some kind of dream that they wanna feed… And whether that’s taking security of your family, sending your kids to school, feeding orphans in Central America – whatever it is that you’re hopeful that it’s gonna give you the freedom (which is why I keep coming back to that work) to pursue your dream.

Joe Fairless: What are some of those brain-hacks?

Chris Stafford: Some of the brain-hacks – well, it’s interesting… One of the things that I love talking about is making sure that you start your day right. I’m just really into making sure that everybody – all listing agents, and everybody… I’ll give you an example of what I do – I get up in the morning and I meditate for 20 minutes. I go swimming; I’m usually in the pool by [5:15] in the morning, and then when I’m done eating healthy, journaling, reviewing my goals… These are the kinds of things that I think super-charge your day.

When you start out healthy and you start out mentally super-charged – when I do that, I can absolutely feel like I can accomplish anything that day.

There’s another little thing that I love doing, which I call Kaizen… It’s something that if I’m fearful about doing something – and I’ve helped many agents employ this technique… You take baby steps. The old adage, a road of 1,000 miles starts with the first step.

People still freak out about “Okay, I need to cold-call, I need to go knock on doors, or I need to go do public speaking” or whatever it is… But if you take it step by step and you take it very slowly, you can circumvent the amygdala in the back of your brain that freaks you out. Each day if you work towards doing something to get over that fear, you become more and more confident and you wanna do more and more of it. So that’s just another one, too.

Joe Fairless: Is Kaizen an acronym?

Chris Stafford: No, it’s actually an Asian philosophy that started a while ago. Basically, I’ve just summed it up; I don’t know where the word comes from, but it’s Kaizen…

Joe Fairless: I almost spelled it right in my notes.

Chris Stafford: I think you can spell with s, too.

Joe Fairless: Okay, well I got even closer then, if you gave me the s part.

Chris Stafford: There you go.

Joe Fairless: It makes sense. So what’s something that you initially were fearful about doing, but then you implemented that approach and you took those baby steps and you got that momentum, and lo and behold, you got there?

Chris Stafford: Oh my god, so many things that I’ve done in my life… Because I scare the bejesus out of myself, pushing myself to do so many things.

An example is investing in other cities. 15-20 years ago somebody said “You should really check out Phoenix”, for instance, and I was like “I’m in San Francisco. I know jack about Phoenix. Why would I go to Phoenix and invest?” So you can imagine, anybody that wants to invest in real estate, 2,000 miles away from you – that’s gonna be really fearful.

And yet again, little by little, taking baby steps, doing the research, talking to people… I think your listeners could see that if you took small little steps towards that, knowledge is power, and that gives you more confidence, and the next thing you know, you’re on a flight there, buying a property.

Joe Fairless: Based on your experience as a real estate professional, what is your best real estate investing advice ever?

Chris Stafford: Surround yourself with great people. There’s no question. I talk about this on public speaking tours – no matter what it is in life, you do not operate on an island by yourself. If you wanna become successful in real estate, if you wanna be a successful clerk at 7-Eleven, if you wanna be investing all over the world, you have to have a team in place, locally, and obviously in the place that you’re looking at… But you have to have a team in place. For me, when I’m investing in other cities, that typically means what I mentioned earlier – having a good insurance agent, having a good property manager, having a great realtor, having a great mortgage broker, a finance guy…

These are people that you need to trust, they need to be smarter than you… Because I don’t know anything. I just rely on the expert opinions of all the people that I surround myself with, and I think that’s gotta be the best advice to give anybody, to make sure that you’re surrounding yourself with the best people that are out there.

Joe Fairless: What’s one way you qualify some of the great people that you surround yourself with?

Chris Stafford: Well, I hate to sound all woo-hoo on you and all airy-fairy, but one thing is my gut. After I talk to people, after I research them, after I talk to their testimonials (I listen to testimonials that people give, or I call people that they refer me to, past clients of their), really it boils down to my gut. Most of the time, I feel pretty grateful that once I have all the facts and all the information that I think I need, it really sort of comes down to “In my gut, do I feel that this is the right person for me to add to my team in this particular city (for instance)?”

I think that the times that I made mistakes, Joe, is when I did not follow my gut in the end.

Joe Fairless: What’s one of those mistakes that you’re thinking of?

Chris Stafford: Lord knows I’ve made a few… For instance, there was one particular situation where I bought a property – I’m not even gonna tell you where it was – where the insurance agent… I missed the boat; I completely missed the mark on evaluating whether this insurance agent was any good or not… And I ended up getting the wrong insurance, and that property flooded. The property was in — to my knowledge, it was not in a floodplain, so I never thought about flood insurance. I mean, who thinks about flood insurance when they buy a house?

Lo and behold, this property flooded out, it was destroyed and damaged, and I did not have any insurance coverage on it… So I lost quite a bit of money on that property.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Chris Stafford: Sure.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [[00:19:59].07] to [[00:20:59].16]

Joe Fairless: Best ever book you’ve recently read?

Chris Stafford: Best book is called the Go-Giver. You’ve heard the term go-getter; Go-Giver is a great story about the power of giving back. In a nutshell, this book just says that if you come from a place of giving to people, you can become wealthy beyond your dreams. I highly recommend it.

Joe Fairless: I highly recommend it as well. We’ve had multiple guests recommend that book, and I interviewed Bob Burg on this podcast way, way, long ago… He’s the co-author of the Go-Giver. So if you just search “Joe Fairless Bob Burg”, that episode will come up. I’ve actually interviewed him a couple times, because he’s got a couple follow-up books on that, too. Great book, I highly recommend it.

Best ever deal you’ve done that we have not discussed?

Chris Stafford: Best ever deal… I bought a 3-unit building in San Francisco for $1.25 million and sold it for $3 million.

Joe Fairless: That’s a pretty good return.

Chris Stafford: And actually, I guess I should tell you [[00:21:56].20] probably like six years. It was like a six-year hold.

Joe Fairless: So you bought it for how much?

Chris Stafford: $1.25 million.

Joe Fairless: And you put in how much?

Chris Stafford: Very little. It was already done.

Joe Fairless: It was already done… So appreciation was your best friend.

Chris Stafford: I’m not that smart to fix up buildings, so… [laughs]

Joe Fairless: And where was that located?

Chris Stafford: In San Francisco.

Joe Fairless: And you mentioned if you took out equity from your properties, you’d just blow it all on Vegas, and you’re kidding; you’d blow some of it, but you’re kidding for the most part… Why not be focused on doing what you’ve just described, the one million to three million, six years, just doing that in your backyard, versus diversifying all across the country?

Chris Stafford: Because it’s much more difficult to do that in San Francisco. The prices in San Francisco really don’t allow one to do that. It’s hard to find really good properties here in San Francisco, that are sort of a little bit undervalued. Our market is just crazy here in this city. We’re selling properties anywhere from $1,500 to $3,000, some properties $4,000 a square foot. At that price point it’s much more difficult.

Joe Fairless: Best ever way you like to give back? You’ve talked about it already, but I would love to hear another example. I know you really like this topic.

Chris Stafford: Obviously, I love giving back to real estate agents. I love talking to real estate agents and helping them 10x their listings; I also love youth. One of the things I do is use the book that I have as a basis. I actually go into homeless youth shelters and talk to them about how they can start their own businesses… And I’ll tell you, when I give those talks, for instance at the Larkin Street Youth organization here in San Francisco, I am on a high for a week. It is the most gratifying thing that I do.

Joe Fairless: Best ever way the Best Ever listeners can get in touch with you?

Chris Stafford: You can hit me up at EpicListingAgent.com.

Joe Fairless: The psychology of a successful investor and a top-producing real estate broker is what we’ve talked about today, from the Kaizen approach that you mentioned, when you’re fearful about doing something, to some case studies, and your overall business model when you think of investing, where you make chunks of cash in San Francisco, and then invest it in more cash-flowing markets across the country.

Thank you so much for being on the show. I really enjoyed our conversation, I enjoyed talking to your give-back approach, which clearly you’re passionate about, and has done well for others and then also it does well for you too, both in your soul, but also I imagine in your pocketbook, whether you look at it that way or not, which it sounds like you don’t… But it certainly is helpful for everyone.

Thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Chris Stafford: Thank you.

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