JF2016: Sacrificing Short-Term Satisfaction For Long-Term Happiness With Mark Owens

Mark Owens is from Baltimore and has been an active full-time real estate investor for the past 14 years, owns over 100 units, 200 wholesales, and self manages all of his units. Mark believes his secret to having success and having more options than most investors is all due to the way he views decision making. He shares some great examples of how he has been able to separate himself from the heard of real estate investors when it comes to making decisions. 

Mark Owens Real Estate Background:

  • Active full-time real estate investor for 17 years
  • Owns over 100 units, has done around 200 wholesales, self manages all units
  • Units comprised of single families and 7-18 unit multifamilies
  • Based in Baltimore, MD
  • Say hi to him at https://markowens.com/

Best Ever Tweet:

“Manage your properties like a business, not a hobby. ” – Mark Owens


TRANSCRIPTION

Theo Hicks: Hello Best Ever listeners, and welcome to the best real estate investing advice ever show. I’m Theo Hicks, and I’ll be hosting the show today. Today we are speaking with Mark Owens. Mark, how are you doing today?

Mark Owens: Good, Theo. Thank you for asking. Thank you very much.

Theo Hicks: Absolutely. Before we begin, a little bit about Mark – he is an active real estate investor and has been full-time for 14 years. He owns over 100 units, has done around 200 wholesales, and he self-manages all of his units… So we’ll definitely be talking about strategies on how to self-manage your properties.

His units range from single-family homes, all the way up to 18-units and everywhere in between. He’s based out of Baltimore, Maryland and you can say hi to him at MarkOwens.com.

Mark, before we get started, can you tell us a little bit more about your background and what you’re focused on now?

Mark Owens: Sure. Thank you for the introduction. I was actually in the IT field when I started buying rentals in 2002. I made a bunch of money in that, and I wanted to invest it, and I wasn’t really sure where. I just knew that the stock market wasn’t a good fit for my personality type. It was more like a casino than anything else… And real estate just seemed like a much safer, controllable investment, where worst comes to worst, I’ve always got the house. I can go live in the house if I have to, and you really can’t say that with the stock market or most other investments.

So that was my life before the rental properties. When I first started buying them, I really had no intention of getting to where I’m at now. The original intention was I wanted to make enough money off some rentals so that in the event that something happened to me and I couldn’t work, that I would have enough money coming in to pay my minimum bills – the mortgage on my home, my utilities, put food on the table… Just like the minimal amount. And once I’d hit that point, I realized that “Man, if I just keep doing what I’m doing, in a few more years I’ll be able to quit this job. I’ll be able to get out of the rat race.” That was even before Kiyosaki and Rich Dad, Poor Dad and all that. I knew I was in the rat race, but I didn’t really know that that’s what it was called at the time; I just knew that I depended on other people to put food on my table, and I didn’t like that feeling. And that is kind of how things got started.

The second part to your question was — let me ask you, what was the second part, Theo?

Theo Hicks: The second part is what are you focused on now?

Mark Owens: Yeah, what am I focused on now… Sorry, I get so caught up with the excitement of talking about the business that it’s easy to lose that stuff. What I’m focused on right now – it’s an interesting thing, because at this stage I’m thinking about downsizing some of my stuff, and I just had an opportunity across my desk yesterday, and it’s something that could significantly add to the number of units that I have, and I can’t really say a whole lot about it right now, because I have agreed to a non-disclosure agreement, so I can’t really give any details about it… But right now I’m just enjoying myself. I’m just keeping the guys that work for me busy full-time, managing my tenants… Right now I’m just happy where I’m at.

I’ve realized recently, and I think most people get caught up in this – that you say “I’ll be happy when this happens. I’ll be happy when that happens.” Well, by the time those things happen, you’re always pushing your happiness into the future, thinking that “Once I accomplish some magical, then I’ll be happy.” I’ve realized that just recently, and I try to put a lot more focus on where I’m at today, and it seems like it’s lifted a big weight off my shoulders. Right now I’m just trying to focus my attention on what I have, and how grateful that I am that I have what I have… And that’s it. I know it’s not really a directly real estate related question, but that’s where I’m at right now with my mindset.

Theo Hicks: I think that’s very wise advice, always pushing your happiness to the future… So you said you were thinking about downsizing… I understand that you’re happy where you’re at right now, and you’re gonna continue to manage your properties, manage your employees, and kind of just enjoy your current situation, but what do you mean by downsizing, and why are you considering downsizing? What does that mean? Are you still gonna have your properties, are you selling the business and moving to the beach?

Mark Owens: The thoughts were — my wife and I, we bought a condominium in the Cayman Islands last year. We’ve got like 3-4 more years and our son will be out of school; my wife works, she’s gonna retire from her job, so we’re thinking in a few years possibly buying another house on the Gulf Coast of Florida… And the plan is to spend four months in Cayman, four months in Florida, and the other four months just kind of bumming around the planet, just seeing what also is out there… And part of that would be to sell maybe two-thirds of my portfolio, own a third free and clear, have a bunch of money in the bank, let somebody else manage the ones that I own free and clear… And it’s really just to get stuff off my plate, to give myself more freedom to do everything that I wanna do. So that’s kind of the goal.

Of course, that’s always subject to change. Any time I make a decision about something, I always give myself the option to change my mind at any point in the future, because the decision that I make today is based on the information I have today. I can get an information tomorrow that doesn’t fit into the goals that I’ve laid out for myself, so I always give myself the flexibility to change my mind about anything, at any time.

Theo Hicks: That is interesting. When you first started out back in 2002, did you have the goal set to do this, to sell a portion of the portfolio, to hold the rest free and clear, and kind of just do whatever you wanna do? Or did you plan on just doing it forever? And to give a little context for my question – some people obviously have the plan to eventually quit their job and then do real estate full time… But then what happens after that? It sounds like you’ve got a plan right now that is gonna come to fruition in a little bit, so I was wondering if you could explain a little bit about the thought process of when to know when it’s the right time to step away from your portfolio and have the freedom to do what you wanna do?

Mark Owens: I think the answer to that question is different for everyone. There’s no right or wrong answer. I met a guy for lunch yesterday that’s a pretty well-known local guy that’s 71 years old. I don’t wanna put too much information out there, because I don’t want people to identify him, but he owns a significant portfolio size, and he has no plans of selling anything any time soon. He’s 71 years old… And I’m significantly younger than that, and I just have a different plan.

As far as how long I’ve had these plans, I guess it’s always been — since I became full-time a few years into the business, I always knew that eventually I wasn’t gonna wanna do this; I wasn’t gonna wanna be 80 years old, taking people to rent court. So I always knew that at some point things were gonna change… And I welcome that change, and the thing that I did that was smart was I ran a really good business that gave me a lot of options.

There are some people that could be 50 years old and they have to keep their properties for another 30 years, because they cash-out-refied, spent all the money, and now they’re upside down. I never made those types of mistakes. I always ran my business smart, I always ran it looking towards the long run, instead of the short-term gratification… And as a result of doing that, 17 years into the business I’m lucky to have a lot of options available to me. And again, as I’ve said before, these things are always subject to change. I could have some deals land in my lap where I just say “Man, I love this business. I don’t wanna go anywhere”, and then I’m gonna be fighting with my wife for five years…

This is one of the things in this business that can drive people crazy – it’s kind of like going to Baskin-Robbins. Sometimes you just want chocolate ice cream, and then you’re going to Baskin-Robbins and they’ve got 32 or 33 flavors and you go crazy; you’re sitting there, trying to figure out which one you want. I kind of like those options.

One of the great things about real estate in my mind is that I can look at any deal or any scenario and I can see 15 different ways to do it. That thing drives some people nuts. Some people just wanna go in, they know how it’s gonna happen, and then they walk away. I like to have options.

And when you have a career like I have, with those options, just about every scenario that I can think of, when I reach a point where I have to make a decision on those options, just about all the time I’m looking for what’s in my best interest for the long-run, not the short-run. If you get caught up with the short-run thing, then you’re always chasing the next shiny object, and it’s really difficult to get ahead. If you think more long-term and you do things that are better for you in the long-run, then in the long-run you’re gonna have a lot more options at the end of the day… I’m approaching the end of the day, and it’s good to have those options.

So again, to answer your question, there’s really no concrete black or white answer, because everyone’s situation and goals and dreams are different. For me, mine worked out well, mostly because of the emphasis I’ve placed on making the best decisions for the long run.

Theo Hicks: Can you go into more specifics on what you mean by this long-term thinking versus short-term thinking? Maybe give some specific examples of things that you should do if you wanted to be thinking long-term, and then things you shouldn’t do, which are more short-term thinking… Because I know you’ve mentioned a few, but could you go through a list of examples?

Mark Owens: Sure. A great example would be if you’ve got a bunch of equity in a property, some people will say “Man, you should refi that out, pull $50,000 out and do whatever you wanna do. Go on vacation, buy the watch and the car, and all that stuff.” My philosophy is if I’m gonna pull $50,000 out in a cash-out refi, I’m gonna take that money and invest it in another cash-producing asset. I’m not gonna take it and spend it on consumer goods. So that’s one thing where I think in the long-run I’ve done very well. I’ve done several cash-out refi’s where I’ve literally walked away with several hundred thousand dollars, but I immediately took that money and bought other properties that made me even more money.

Some of my friends don’t have that type of discipline all the time. It’s very easy to fall into the trap of “I’m gonna go on vacation for a month, and I’m gonna buy the new Tesla”, and all that stuff. I think that that’s one example of something that I’ve done that has enabled me to have the success I’ve had.

Another great example would be my friends are shocked when they find out that I still live in a townhouse. My wife and I bought a townhouse 23-24 years ago. I paid it off 15 years ago. A lot of people think “Man, why do you live in there? You could go buy a $700,000 house.” I could, but then that’s gonna put me in a cashflow crunch some months, because I’ve got this fat mortgage… And the happiness that you get from buying that big house or that expensive car – it doesn’t last. Anytime you go buy a consumer good, whether it’s a house or a car or a watch or a pair of shoes, you get that initial happiness from it, but then in the long-run, a few months later, six months later you’re not any happier than you were before you ever bought that thing.

So one of the things that I’ve done that’s enabled me to have this kind of success is by being able to ignore that need for immediate gratification where you say “Man, I want it now, I want it now”, and I’ve been able to look at that and say that that’s my enemy right there. That is my long-term enemy, having to have it right now.

So that’s a discipline issue. A lot of people don’t have it. But if you sit down and you look at the numbers and you look at what’s in your long-term best interest and you make decisions, whether it’s a cash-out refi, or buying the big house, or buying the expensive car, if you look  to see what’s in your best interest in the long-run, then you’ll probably make similar decisions to what I’ve made, that are gonna give you a much better chance of having long-term success and financial independence.

Theo Hicks: Another piece of very wise advice. Alright, so the money question, which is what is your best real estate investing advice ever – but I did wanna ask you about self-managing, so maybe you can answer the question “What is your best real estate investing advice ever for self-managing your own properties?”

Mark Owens: Oh, man… That’s a loaded question there, because I could answer both questions with some good information. My best real estate investing advice for managing your own properties would be to manage your properties like a business, not a hobby. This your livelihood, this is how you make a living, and sometimes that means making tough decisions. That means taking people rent court that you don’t wanna take to rent court, it might mean selling a house that you like, but it’s not in your financial best interest to keep it… So that would probably be it. But there’s a lot more to it than that.

One of the things as far as self-managing that has made it really easy for me is that everybody that knows me trusts me 100%. If I’m in the Cayman Islands on vacation and I have a furnace that breaks in the middle of the winter, and my HVAC guy goes over there and he knows that “Man, I’ve gotta replace this furnace. It’s gonna cost $2,500”, and he knows I’m not gonna be back in town for two weeks, he won’t hesitate to replace that furnace on his dime, knowing that I’m gonna pay him; the day I get back he’s gonna get a check in the mail.

So building these relationships with  your contractors, with your tenants, with everybody in the business, where they know if you’re not in town, the day you get back they’re gonna get paid – that’s one of the things that has really made it easy for me… Because I do like to travel a lot… So having those relationships gives me the peace of mind knowing that if the crap hits the fan when I’m not around, I have a lot of people who are gonna have my back, because they know I’m gonna have their back as soon as I get home.

So there’s a lot of different pieces of advice I can give as far as the best advice ever for self-management… Those are a couple of them that I’d like to touch on.

Theo Hicks: Okay, Mark, are you ready for the Best Ever Lightning Round?

Mark Owens: Man, bring it on!

Theo Hicks: Alrighty. First, a quick word from our Best Ever sponsor.

Break: [00:14:33].22] to [00:15:27].27]

Theo Hicks: Alright, Mark, what is the best ever book you’ve recently read?

Mark Owens: The best ever book I’ve recently read… It would have to be Rocket Fuel.

Theo Hicks: If your business were to collapse today, what  would you do next?

Mark Owens: [laughs] [unintelligible [00:15:35].18]

Theo Hicks: What deal did you lose the most money on?

Mark Owens: This is gonna be hard for people to believe, but it is true. I have only lost money on one deal; I lost $5,000. It was a 15-unit building. 13 apartments, 3 commercial spaces. I partnered up with someone that had no idea what they were doing. They wouldn’t let me buy them out of the deal, and after 9-10 months I told the guy I wanted to auction it. I auctioned the property, absolute auction. We ended up losing $10,000 on it. I lost 5k, he lost 5k. I walked away happy, and he walked away pissed, but… He only saw the building twice; I was doing all the work, and  he wasn’t doing anything. I was getting tired of it. So that’s the only real estate deal that I’ve ever done that I lost money on.

Theo Hicks: What types of things did you implement in your business to make sure that never happened again?

Mark Owens: Great partnerships.

Theo Hicks: Simple. So let’s go on the other side of the coin – what is the best ever deal you’ve done?

Mark Owens: The best ever deal I ever did was I bought a ten-unit vacant building. It was a listed property. I was gonna keep it as a rental… I renovated the property, and this was at the top of the market, around 2007… And I decided that the property was too far from my house, and I just got this gut feeling of like “You know what – I don’t want this property.” I really couldn’t put it into words, but it was just my gut talking to me.

I listened to my gut, I sold the property to a DC investor that was doing a 1031 exchange. I made 195k on it, and I delivered the property vacant. That 195k paid off my house, paid off my car, paid off my credit card… I saved 50k and went on vacation. That was probably the best deal I’ve done.

Theo Hicks: What’s the best ever way you like to give back?

Mark Owens: Helping other people.

Theo Hicks: And then lastly, what’s the best ever place to reach you?

Mark Owens: Probably my website, because if people go there, then they can find me on Facebook, they can get my email address, all that stuff. It’s kind of like a one-stop-shop. There’s not a lot of information on there, but I think there’s buttons — I’ve got a coaching page… Mark Owens REI  on Facebook. I’m easy to find; I’m on Bigger Pockets, LinkedIn, all the other stuff. My website is probably the easiest way to find me.

Theo Hicks: Perfect. Alright, Mark. I really enjoyed the conversation, lots of wise advice. The two big takeaways for me was when you talked about you’re happy where you’re at now, because you see a lot of people always pushing their happiness in the future and saying “Once I do this, I’ll be happy.”And then when they do that–

Mark Owens: Yeah, I’ve been guilty of that myself.

Theo Hicks: We all are, but just knowing that definitely helps us get over that a lot faster. And then the second thing that I really liked was when you talked about immediate gratification being your biggest enemy… And the reason why – you’re at the point where you could potentially sell a large portion of your portfolio, own the rest free and clear, and then use some money that you have saved up, the cashflow from those properties, and have the freedom to do whatever you want – it’s just because you’ve defeated that enemy more that it’s defeated you throughout your business career.

You gave some specific examples of things you can do to have long-term thinking for your business, versus short-term thinking. The two examples are if you have equity in your property and you decide to pull it out, don’t spend it on personal things like vacations or cars. Instead, invest that into another cash-flowing asset.

The other example was that you live in a townhouse that you bought 20+ years ago, paid off quickly… Sure, you could buy a massive, million-dollar house, but again, going back to that immediate gratification and realizing that happiness is typically not going to last when you’re buying a consumer good.

And then lastly, you gave your best ever advice on self-managing, which is 1) make sure you’re managing your properties like a business and not a hobby, which requires making tough decisions, taking people to rent court, selling a house that you like that’s not cash-flowing… And then also number two was to focus on relationships. In your business everyone trusts you 100%, so if something were to go wrong at your property, for example, the contractor won’t wait for you to get back from vacation to fix a really big leak because they don’t know if you’re gonna pay them or not. Instead, they’ll go ahead and take care of that issue, knowing that once you get back, you will pay them in full.

Again, I really appreciate the conversation. If you guys wanna say hello to Mark, his website again is MarkOwens.com. Have a best ever day, and we’ll talk to  you tomorrow.

Mark Owens: Thanks, Theo!

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JF1993: The Power of Your Circle with Pat Hiban

Pat Hiban is a returning guest and for those who don’t know Pat he is the owner of Pat Hiban Group with Keller Williams, Host his own podcast called “Real Estate Rockstars” and has a new book called “Tribe of Millionaires”. We discuss the importance of surrounding yourself with wealthy individuals who are not “yes-man”, people who peel back the onion and call you on your nonsense. You will be challenged and put in an uncomfortable situation but follow this advice and you will grow.

Pat Hiban Real Estate Background:

Best Ever Tweet:

“What happens with a successful Mastermind what Napoleon Hill found that couldn’t be explained is the multiplier effect which is the right group of people compounds your efforts. The wrong group of people confounds your efforts”- Pat Hiban

The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell. 

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


TRANSCRIPTION

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

Pat Hiban: What’s up, Joe?

Joe Fairless: Well, looking forward to our conversation. A little bit about Pat, and Best Ever listeners, you’re a loyal listener, so you recognize Pat, and we’ve interviewed him twice – Episode 310 and Episode 1034. So you can go back and listen to those episodes.

Today, we’re gonna be talking about observations, that is the six effects of a tribe of millionaires. So with that, Pat’s going to talk about his new book, which is called, and lo and behold, “Tribe of Millionaires.” A little bit about Pat, just as a refresher – he’s the owner of Pat Hiban Group with Keller Williams, founded the Rebus University, Billionaire Dollar Agent, and host of the podcast Real Estate Rockstars; a very good interviewer, asks really good questions. I was interviewed on this podcast a while ago, and it’s always refreshing when I get asked very thoughtful questions – number one, and number two, questions I have not been asked before. Pat asks these questions. So if you want to hear thoughtful interviews, then go check out his podcast, Real Estate Rockstars; based in Baltimore, Maryland. So with that being said, Pat, first do you want to give the listeners a refresher on your background? And then let’s roll right into your book.

Pat Hiban: Yeah, absolutely. So a refresher – I’m a real estate sales guy, was in full-time real estate sales for 25+ years, then became an investor and then invested in everything from single-family to multifamily to shopping centers to small private companies. Now I just do side projects. Like you mentioned, I also am the co-founder of a group called GoBundance, which has over 200 members, which are all, number one, men, and all, number two, businessmen, and probably about 40% to 50% of them are highly invested in real estate.

Joe Fairless: So first off, where do you put your focus on a daily basis? And then let’s talk about your book.

Pat Hiban: That’s funny. You know what I mean — I don’t have a one thing, so to speak. I have 54 lines of horizontal income, which means the things that are paying me sideways. So my life consists of basically a little reaction to “We’ve got a new tenant for the shopping center” or “We just sold this apartment building. Where should I send the check?” that sort of thing.

I like to tell people that what I do is I move furniture around in a room. It’s like you still have the same furniture in a room, but you’re just– not really, but you have a room and you’re just moving the furniture around constantly, and that’s what I’m doing with my investments. I sell this house and then I buy into this complex in Philadelphia, then I sell this and I’m buying into an RV Park in New Port Richey, Florida. Those are real things that I just did so far this year. So just doing stuff like that; I’m constantly buying and selling.

Joe Fairless: So let’s talk about your book. What can you tell us about it?

Pat Hiban: So the book is Tribe of Millionaires, and what it is, is David Osborn – who, I say, I have 54 lines of horizontal income; he has 314 lines of horizontal income. Him and myself, who have known each other for 20 years, along with Tim Rhode and Mike McCarthy, wrote a book that goes to that Jim Rohn saying, which is “You are the average of the five people you hang around the most.” We just found that when we hung around each other, we got better ideas, we got smarter, we got richer, we got better relationships, we got healthier.

So then we started adding people to hang around with and then when it really caught on, we started charging people to hang around together. Now it sounds odd, but it really took off. We have 220 members and we get together multiple times a year and we talk about money, we talk about the economy, we talk about health, we talk about relationships, and everybody gets better and better.

So we wrote this book called Tribe of Millionaires… It’s a fictional story. It’s a fable, but it’s based on our members. So we hired a book writer, his name is Dan Clements, and he writes all Darren Hardy’s books at Success Magazine. He writes all Hal Elrod’s books, he wrote David Osborn’s book… So he flew to Japan with 27 members of GoBundance, who basically sat in a bus for two weeks and did really cool stuff, and he recorded the conversations that we had amongst each other on this trip to Japan. These are all really rich dudes. So he then created a fable about a guy that dies, who has lost touch with his son, and his son shows up after 20 years of not communicating with his dad, and thinking his dad was a deadbeat and an idiot, and seeing that the six pallbearers at his dad’s funeral are all billionaires and multimillionaires, and he’s like, “Holy dirt! How did my dad get surrounded with all these rich, physically fit, married for a long time type of guys?” One of the guys – the guy’s name is Ethan Martinez – he goes to give Ethan Martinez his estate and he’s like, “Part of the deal is, your dad wants you to hang out with us for a week. He wants you to go to this private island on my jet for a week.”

So they fly him on the jet and at that point, he uncovers the six effects that happen when you hang around people that are successful. That’s what Dan helped us write about by just hanging around these 27 dudes in Japan. Does that make sense?

Joe Fairless: That’s a smart way to package it. It’s so much fun reading fables versus self-help books. I’m a huge self-help student, but it’s just easier to digest whenever I’m being told a story.

Pat Hiban: Absolutely. So far, many people have loved it. It’s selling like crazy and getting all kinds of good reviews. So obviously, it’s striking a chord.

Joe Fairless: What are some of the effects?

Pat Hiban: Like I said, there’s six. My favorite is the authenticity effect, which a lot of people don’t think about. It’s not really the one that anybody would guess. What happens is, let’s say you and I just went and hung out, and I said “Joe, what’s your net worth?” and I said, “Joe, how much money are you making on your apartment deals?” and I got into your nitty-gritty – what’s your credit score? How long you’ve been married? What’s your relationship like? We got into that. Suddenly, what’s going to happen is you’re going to become more authentic because we’ve already broken down the barriers of these private things, and it’s okay to talk about, because I’m not someone who’s envious of you, because I have money too. So if I’m a millionaire and you’re a millionaire, this authenticity effect happens, and you end up becoming more and more authentic. Generally what happens when we get together, believe it or not, we have guys crying, we have people that share and become more authentic than they’ve become in decades, just because they’re around like-minded people, talking about things that normally might be private at a dinner party with their neighbors. So that’s a big one – authenticity. It just happens.

Joe Fairless: That’s a big one. Yeah, because those questions that you ask are not typical questions that someone is asked, in any circumstance. So how do you all create a culture of safe sharing?

Pat Hiban: That’s great. So we have something called the One Sheet, and what the One Sheet is, is you have to imagine, Joe, a baseball card. Let’s say, Joe Fairless is a baseball player for the Atlanta Braves. Your picture’s there, you’ve got the Braves hat on, whatever; you’re smiling, your teeth are white. Then you flip it over though, and it’s going to show you your stats like – are you any good? How many times have you struck it out? How many home runs have you had? All that *bleep* that is right down the back of the baseball card. So the One Sheet is the back of the baseball card and it says, “How much do you weigh? What is your body fat? What is your net worth? What is your passive income?” Not your horizontal income; not like, what do you earn trading time for money? Because we don’t care about that. We only care about what do you earn when you’re sitting at the beach? What do you earn when you’re riding your bicycle? What do you earn when you’re walking your dog? What’s coming in sideways while you don’t work? How many lines do you have? What percentage of your monthly bills are paid by real estate and by passive investments? So all that stuff’s right there, and it might take 15 minutes to go through.

Then each member goes through it, 15 minutes. They go through their One Sheet, their baseball card, and then members at their table will then throw in their two cents. Dude, that’s really sad about you losing communication with your sister. What can you do to mend that relationship? Or let’s talk about that or wow–

Joe Fairless: Well, as far as losing communication with your sister in that example, is a question on the baseball card – Have you lost communication with any family member?

Pat Hiban: Yeah. I ask you to rate sibling relationships and I ask you to relate parental relationships. So I’ll give you an example. Parents, 0 to 10, I’d given 6 on mine because I really wasn’t spending time with my dad; he’s 84. So Mark Schwager, one of the other members was like, “Well, dude, we’re gonna fix that.” And I was like, “How are we gonna do it?” He goes, “I want to take my dad to the Super Bowl. You’re going to come with us.” So we bought Super Bowl tickets, and together, the four of us are flying to Miami in January with our fathers. That’s going to be a bucket list item I’m gonna remember forever.

Joe Fairless: Yep. It’s something that we all need, in my opinion, this type of community. Why don’t people join? I’m not talking about yours in particular, but just in general, why don’t people gravitate or be intentional about this? I’ll put myself in that category, because I’m not a part of a group like this.

Pat Hiban: I think it’s scary. Number one, you’re looking in the mirror, so there’s natural defensiveness that just happens when you’re put on the spot. If you’re 10 pounds overweight, you just don’t like it. If you secretly abhor something about yourself, which we all do – nobody’s a perfect 10 in all aspects – you’re going to naturally reject it, you’re going to naturally defend against it. One of your ways of defending against it might be just not putting yourself in situations where someone’s going to ask you what your body fat is, or ask you when was the last time you called your mom or why did you only earn 100k last year. You know what I mean? Why are you behind on your taxes? That’s not cool, dude. What the hell? People generally are surrounded by yes-people. They’re rarely surrounded by someone that’s going to look at them and be like, “What are you doing? You can’t do that. You need to pay the IRS. You have a tax lien on your house? That’s obnoxious. Sell the house, get a condo and get focused.” How often does that happen? Maybe your dad or something will tell you that. But that’s it.

Joe Fairless: Yeah, it’s very true; you’re intentionally surrounding herself with people who have the freedom and take that freedom to question things that are inherently wrong about what we’re doing. But that usually doesn’t take place, because either A, it’s not shared, or B, when it is shared, I think generally people want to avoid conflict… So whoever you share with will probably not say it like it is, and could actually hurt you instead of their intention of helping you.

Pat Hiban: Absolutely. And it works. Originally, we were doing this stuff, and it was fun, and it was kind of aggressive to each other. David and I started 20 years ago. When we started this, I was like, “Well, let’s see who shows up, who comes,” and lo and behold… It’s only been four years, maybe we’re going on our fifth. We’re getting together in Aspen, Colorado. As a matter of fact, I’m going to invite you, Joe, at the end of January, and we’re going to have some dynamite speakers. We’re going to have a really cool thing where we’re going to have a bull versus bear. We’re going to go over everything from speakers that are bullish on things and bearish on things, everything from Bitcoin, to real estate, to multifamily, to industrial. Where’s the bulls, where’s the bears. We’re going to talk about relationships, all kinds of stuff we got planned. But point is that I’m really surprised at the growth of it in four years – 220 members out of 0. So it must be working, there must be something about it.

Joe Fairless: As we wrap up our conversation, what’s one other effect that you think it’s important for us to talk about? And then we’ll conclude the conversation.

Pat Hiban: Well, I think the one that really is a universal law that exists that people can’t explain is the multiplier effect, and it goes to Napoleon Hill and Think and Grow Rich – there was an interview with him and they asked him, they said, “Napoleon Hill, you’ve got a lot of things in here about how to think and grow rich, but if you had to pick one single thing as to why people fail to be rich, what is that one single thing?” And he goes, “I’m not going to give you one. I’ll give you two though.” He says number one is they quit too early, and number two is they fail to form a successful mastermind. A successful mastermind is just this is; it’s what GoBundance is and it’s what the Tribe of Millionaires is. What happens with a successful mastermind that Napoleon Hill found that couldn’t be explained was the multiplier effect, which is the right group of people compound your efforts, and actually the wrong group of people confounds your efforts. So if you hang around dirtbags, even though you might want to be — if you’re in a high school kid and you’re hanging around the smoking [unintelligible [00:14:32].27] and you’re hanging around with the burnouts, even though you might want to be the best football player, your efforts are going to be confounded by the weed smokers.

So it’s the same thing… If you hang around the right people, you’re going to be compounded; it just happens. I guarantee you, this kid, Ethan Martinez in the book, when he hangs around these six billionaires on a private jet and goes to this island, he’s coming out of this thing thinking so much better and so much differently, and he’s going to put things in place and they’re going to work. He’s going to be like, “Damn, that worked.” It’s just impossible.

I talked to another podcast host, a girl, and she had aspirations to be the biggest podcast female host out there, and she’s on her way to do it. I said, “What would happen if I got you in a mastermind with Oprah Winfrey and Ellen and some of these women, Robin Quivers or whoever you want to say? Do you think that you would grow? Do you think that that would take you to a whole other level?” Of course, her answer was unequivocal. If she spent a year with those three women, talking about how to grow a multimedia business or her podcast to the next level, she would be the best out there. Does that make sense?

Joe Fairless: Of course, it does.

Pat Hiban: All she would have to do is sit in a room and talk to them. She wouldn’t have to do anything.

Joe Fairless: Yeah. Assuming that the student is ready, for sure.

Pat Hiban: Oh, yeah. To show up, yeah.

Joe Fairless: Well, even then, just be–

Pat Hiban: Yeah, she’d have to do what Oprah said. If Oprah said, “You need to do this, like Joe Fairless does. You need to do a show every day. Instead of you doing three a week, you need to do it every day; you need to do it twice a day,” whatever. If Oprah told her to do that, she’d have to do it. If she didn’t do it, then the multiplier effect is not going to work. But she probably would never do that unless Oprah told her to do it. I could tell her, you could tell, her parents could tell her, she still wouldn’t do it. Oprah tells her to do it, she’s doing it.

Joe Fairless: Right. Oprah tells me to do anything, I’m doing it, too. [laughter] How can the Best Ever listeners buy the book? Where do they go?

Pat Hiban: Of course, you can buy it where books are sold – amazon.com, but I recommend you go and get it for free. We’re offering it for free. We’ve got 1000 copies we’ve put in the warehouse, and we’re giving them away absolutely free. All we ask is that you give us a good review on Amazon after you read it, and that you pay the shipping. The shipping is seven bucks, it’s chump change. Get it on Amazon for $20, or you could pay a shipping of $7 with us. You’ve just gotta go to tribeofmillionaires.com,  and you get it for seven bucks.

I will mention two things – number one, we just opened, for the first time ever, a women’s division. We’ve had 42 women sign up already. It’s women only. I’ll remind everybody, we do have an event in Aspen, and if you go to gobundance.com, there’s more information on that event.

Joe Fairless: Awesome. Pat, grateful to have a conversation about your book, and more specifically, a couple of the effects of being around millionaires and other high-achieving individuals. We talked about two of them – the authenticity effect, which I don’t think is as intuitive, so I’m glad you talked about that//. And then — not only not as intuitive, but it’s not something that most people are integrating into their life. I’ll even throw myself into that category as far as not having enough no-people in my life; I think I’ve got a decent amount of yes, but it’s important to have some no-people. I do have some, but we can always have more… And then the multiplier effect.

Thanks for being on the show. I hope you have the best ever weekend and we’ll talk to you again soon.

Pat Hiban: You got it, Joe. Thank you.

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JF1952: FOMO Leads To Flipping 1100 Houses with Michael Green

Michael has flipped over 1100 houses in his 10 year flipping career. Joe and Michael will discuss some mistakes he’s made, and what we can learn from those mistakes. We’ll also get some actionable tips from Michael on how to find and negotiate deals. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

Best Ever Tweet:

“Take everything to the next level” – Michael Green

Michael Green Real Estate Background:

  • Investing in real estate for the last 10 years
  • Has flipped over 1100 houses in that time
  • Based in Baltimore, MD
  • Say hi to him at www.theflipfactor.net
  • Best Ever Book: Start with No

 


The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell.

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


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; we hate that fluffy stuff, so we don’t get into it. With us today, Michael Green. How are you doing, Michael?

Michael Green: I’m doing great, Joe. Thanks for inviting me on, man.

Joe Fairless: Well, I am glad to hear that, and it’s my pleasure. A little bit about Michael – he has been investing in real estate for the last ten years. He has flipped over 1,100 homes in that time. Based in Baltimore, Maryland, which I was commenting to him prior to recording, I really enjoyed visiting Baltimore a year or so ago. Not enough good things get said about Baltimore; just a great town. With that being said, Michael, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Michael Green: Absolutely. I’ve been investing, like Joe said, for ten years in real estate. I got started in 2009. I started in there — I’m an analytical guy, so I read books for six years before I made my first offer; it’s just the way I am. I like to read, study… It wasn’t until I was playing poker with a friend and I was telling him I wanna invest in real estate, and do this stuff… He was like “Let’s just do it.” Obviously, for him, seven seconds in he’s ready to flip  a house. I’m six years in and I can’t even make a choice… He was like “Let’s do it!” I gave him about a hundred reasons not to; he actually started just seeing houses, he was like “Dude, with or without you…” And eventually, I started to get some FOMO, so I’m like “Alright, I’ll do it with you.” He was the reason I did my first deal. I’m very thankful. Obviously, awful business partner, because he didn’t think through things, and all that… But so much gratitude, so much love for him, because without him I might still be reading books and waiting to make my first offer.

So I got started about ten years ago; it went really well, surprisingly. The first house was hard, it took us like four months, but because of the six years of studying, I think I was pretty well prepared for it. I made some good choices; I still made money (about $30,000 on my first deal), split it with him, he was really happy, and then we went on to do a bunch of deals after that.

So to this day, I’ve done about 1,100 deals. The spread for me is kind of the separation. I’ve done about 800 flips, fix and flips, and a bunch of wholesale deals, too. I like to balance everything out. When deals come in, I wanna make sure that — if the deal fits really well, they don’t keep it as a rehab. If it doesn’t, I’ll usually wholesale it off. Just timing, money, manpower…

Joe Fairless: Yup. What were you doing over those six years?

Michael Green: I was a hardwood floor installer. That’s how I got into it. Everyone says “Well, you’re a contractor, so it was easy for you.” I was like, “Well, I only do the hardwood. There’s like 50 other items that you have to do.” So yes, the hardwood was very easy for me, but nothing else was. I didn’t know anything about construction other than how to put a hardwood floor in. That was it. So yeah, that’s what I was doing. And I hated it, by the way. I got in trouble as a kid, didn’t graduate high school, I didn’t have very many options, so my stepfather was willing to teach me how to do hardwood. It was the biggest gift I could ever have as a kid who really didn’t have a lot of prospects, didn’t have an MBA, a college degree… So I ended up making pretty good money. Obviously, I was making well over 100k a year as a high school dropout, and I was impressed with myself.

Joe Fairless: Wow.

Michael Green: Now, the problem was I was making about 100k a year and spending about 120k. The American dream, right?

Joe Fairless: [laughs] And you said you were studying over those six years… What did you study?

Michael Green: Well, back then we didn’t have YouTube, podcasts, all this stuff ten years ago it wasn’t really out.

Joe Fairless: So 2003 to 2009, I guess?

Michael Green: Yeah, you got it right. So it was books, some random books by random people… And it was some online stuff, we had online, but it wasn’t like today, where there’s a million people teaching so much amazing stuff. Getting access to that stuff was near impossible. As I started to put it out into the world when I decided to do this flip, I actually was out doing some hardwood for  a guy who was actually a flipper, and he invited me to a free seminar, which is very common now, but there was like one in the country going on back then… And this guy said “Hey man, you’re making all these mistakes”, and he was 100% right; he’d been doing it 30 years… And I ended up paying him 15k to coach me, and that was my first coach.

Joe Fairless: What were the mistakes?

Michael Green: I didn’t know anything. I was just making offers, I didn’t know the numbers… My numbers made no sense, obviously. So he started to teach me the numbers, he started to teach me how to go direct to private seller versus MLS, and really how to compete, how to negotiate, just how to do everything at a much higher level.

Books are really big at just giving you a very vague overview. He really got me into the science of negotiating and marketing, and going direct to seller, and creating processes and systems. He was really good; he wasn’t the best coach, but some of the stuff he was great at was how to find a deal and how to negotiate a deal, and I obviously still use his stuff today.

Joe Fairless: Well, let’s talk about how to find a deal and how to negotiate a deal. Let’s talk about the first part first. How do you find a deal and go direct to a private seller?

Michael Green: Finding a deal direct to private seller… Everyone asks me “Michael, what’s your secret?” I do a lot of volume every years, and they’re like “What’s your favorite thing?” What I’ve realized in the last couple of years for me, my big takeaway, and how I’ve really shifted my business in the last couple of years has been everything about being productive and being efficient.

Right now I do about 20 deals a year on the MLS, I do 10 deals a year from wholesalers, I’m doing direct mail, which everyone’s saying it doesn’t work anymore… It’s definitely taken a downturn as far as conversion as far as how many calls you get for how many letters you send out… But where we’ve made up for that is instead of worrying about the fact that the mail is not working as well, I’m now converting at double the rate that I was converting before. Three years ago, one in 22 calls I would get a deal. Now I’m like one in 8 to one in 10. And what I do differently is I’ll spend about two hours on an appointment, where before, because I had so much volume, I would only spend 30-40 minutes and it was all about getting in, getting out. Now it’s about building rapport, and really taking it to that next level.

So really everything works. It’s hard for me to say, “Hey, Joe, this is my secret weapon, this is my thing.” If you really take everything we’ve always done and you think of it at a higher level, you realize that you can actually do everything that you’ve done before, but just take it one or two steps above, really roll out the red carpet, treat your sellers with a high level of respect, build rapport with them… Actually come from a place of gratitude and giving back to them in service… It’s really been my secret weapon.

My new sales technique is I don’t sell anymore. No more closing. I literally am just super-transparent and people are really loving it right now… Because I think they’ve been indoctrinated with all the car-salesy stuff over the years.

Joe Fairless: Let’s talk about that… You said you’re converting at a rate double as what you were converting before, and it’s because you’re spending about double the amount of time per appointment, building that rapport, having the giving back mentality… So talk to us about what a typical meeting was like when you were doing well, but you were spending 40 minutes, and then we’ll talk about the two-hour meeting.

Michael Green: When I would do 40 minutes — obviously, five years ago the market was amazing for us. It was so easy to get deals. We were totally in a buyers’ market then, and now we’re in a sellers’ market. Back then people were very distressed, so you could just be a jerk and get deals. It wasn’t really an indication of you doing a great job if you went out and got deals, because people were so motivated. Now they’re not as motivated. They know they have options, they’re certainly in power. So now they’ll pick you based on whether they like you and wanna do business with you.

Joe Fairless: I doubt you were being a jerk, so tell us just high-level – will you walk through the 40-minute meeting first? Like, you arrive, you knock on the door… What next? Or maybe we should start a little bit before that, you tell me.

Michael Green: Basically, the 40-minute – a quick call, the basic information, what condition is the house in; everything you’ve heard, you’re learning, we were doing back then. We learned from FortuneBuilders and all the different gurus. It worked really well. It worked enough for us to do a lot of houses… But we would really cut things short. If they wanted to talk about their grandkids, and pictures and all that – I’m a very impatient person, so I would always circle things back and I’d be like “Alright, let’s get down to business.” And that worked really well back then.

Now I can spend  two hours and legitimately 10 or 15 minutes will be about business, and the rest will be about personal stuff. I’m actually encouraging them to talk about personal stuff. I want them to like me so much that if I can’t buy the deal because they have a higher offer, I’ll be very honest and tell them to take the higher offer, but I want them to be sad that they’re not working with me. That’s my different approach today, and it’s what I’ve had to do in order to combat how competitive it is. And it feels better, by the way. I feel like I’m coming from such a better place these days than I was back then.

What questions do you ask them to generate the type of feelings of “I want them to be sad if they don’t work with me?”

Michael Green: A lot of them it is building rapport and just showing a true empathy. When you’re really honest and transparent with people, it’s gonna gain a  lot of rapport. Questions I’ll ask is “Tell me what’s important to you about this deal, or what are you trying to accomplish? How long have you lived here?” When I get into those – those questions are my starters. But when they give me the answers, instead of just stopping there, I’m using questions like “Oh, that’s interesting. Tell me more about that.” “Oh, I’ve never heard that before. What made you do this?” It’s just these [unintelligible [00:09:58].18] to the questions. So it’s literally like this rabbit trail that we can go down.

We start with a question you’ve probably heard and many people are using, but it’s really what I do after the question, where I’m going and taking it. We’ll go from “Tell me what’s important to you about selling the house” and they’ll be like “Okay, this, this and this”, the standard stuff you hear… And they might just say one little thing “It’s important so I can spend more time with my grandson.” “Oh, your grandson… How old is he? What’s important, what do you love to do with him?” “Oh, I love baseball.” “Baseball? Really? I used to play baseball when I was a kid.” “What positions did you play?” And from there, next thing you know we’re talking about politics religion… Who knows. All the stuff we shouldn’t talk about, but I take a very neutral position, easy to get along with…

And man, we’re just the best of friends at some point, because it starts from there, but it’s about being willing to just let it go anywhere it wants. And I used to hate this, by the way. I was totally against this, because I had a partner at the time, and he was that guy; he was the guy who wouldn’t close the deal, but we would get invited to a cookout…

Joe Fairless: [laughs]

Michael Green: He was just so awesome. When I look back at it, the perfect version of a real estate investor is half him, half me. I got to the point, he just built rapport, they hugged him at the end… Now I’m getting the hugs, but I can’t get the business… And I know when it’s time to  get to business, but it’s often well after we’ve really gotten in some deeper, personal stuff. And I think it’s meaningful to them, because a lot of my competitors are coming in and are like “Hey, don’t waste any time…” It’s a very surface, a very superficial conversation, where ours is very deep and very personal.

Joe Fairless: Well, I’m really glad you mentioned the former partner, where you wouldn’t get the close, but he’d get invited to the cookout… I love that. And you just mentioned that you got the rapport built, now you know also how to make sure it connects back to business… So that can be a tough transition; clearly, it was for one person that you know… What are some tips for how to transition into the business side of things, and make sure that you are getting invited to the cookout in order to sign the contract to close?

Michael Green: I love that. It’s free burgers AND a signed contract. That’s amazing.

Joe Fairless: [laughs] Almost as amazing as free burgers and free property. That’s how you’d really know you built rapport.

Michael Green: Yeah, that’s the ultimate peak. So look, I let them choose. I’m very regimented; I’m like “Okay, at this point we’ll do this, and that…”, and I’ve really let loose of that, because I believe that’s been my downfall in the past, and what’s really taken away from my ability to do this at a high level. So if they wanna talk for two hours about family, at some point obviously we’ll have to stop, but I can tell when we’re starting to get winded…

Or I’ll say “Well, man, it’s been great talking with you, Joe. You’re really awesome to get along with, and we just have a lot in common…. And I really wanna do this deal with you. Let’s talk a little bit about the numbers, let’s talk a little bit about business, because I really would love to do this for you and help you out, and get this deal done, and get you the money your family wants.” By that point I know everything that’s important to them, so I can really just list the benefits of what they want and how I can help. And I kind of went from telling, where I would just be like “Here’s what we do, here’s how long we’ve been in business”, to just really repeating now what they’re into and what they want, and nothing more. It’s really all they care about, by the way.

Joe Fairless: Now let’s talk about what you said earlier, the science of negotiating and marketing. So you’ve built rapport with them, you know they’re selling because they wanna spend time with Junior, who is playing baseball and they wanna play catch with Junior all the time, and be closer to him… And they have certain terms that would not work for you to do the deal. How do you approach negotiating?

Michael Green: For me, it used to be I would tell them what the market values were, and I’d say “Okay, here’s what things are…”, kind of do the math for them essentially… They would hear it, and it would work sometimes. What I’m doing very differently now is I went from telling to showing, so instead of telling them, I’ll literally say “Let’s talk about the numbers a little bit. Let’s look at some properties. You know the neighborhood, Joe. I’d love to get a little bit of feedback on what your beliefs are, the values, and how these are comparable to you.” So I start with like “Hey, 123 Main Street – are you familiar with that property?” and they’ll literally say “Yeah, I know that one.” “Is that one pretty similar to yours?” and they’ll be like “Yeah, it’s just like mine.” I’m like “Great. Well, that sold for about 110k.” And I’m showing them as-is comps, because essentially, most people just wanna know they got a fair deal. When they give you a number, it’s just really not based in any factual thing; it’s tax assessments, what a friend told them… It’s no real facts there. But they don’t wanna take and go from that belief to another belief without facts and proof… So I now get them engaged and I really work on getting buy-in from them.

So buy-in and a couple of things that are really important… Number one is buy-in on what the as-is value of the property is based on other properties that are similar to theirs, and I show them the properties, I get their feedback, and I really lead them to telling me “Yeah, that’s just like mine. Well, that only went for 110k… I felt that would have been more.” And then I show them two more… Now I have the buy-in. I now ask them at the end, before we move on, “Is there anything different about that, or do those houses seem pretty consistent with yours as far as the value and condition and everything?” They’re like “Yeah, man. It’s pretty consistent.” Then we’ve got buy-in on what we would call the as-is value.

The next thing is I show them the renovation costs, because I wanna be transparent and show them what I’m gonna put into it… And I show them “Look, here’s my costs, here’s what I’m doing. Do you agree with about 50k? Does that sound about right to you?” If they say yes, we move on. If they say no, I literally have a line item budget where I can start walking them through and then saying “Okay, let’s walk through this  a little bit, and just give me some feedback on what I might be overdoing, or just not doing correctly.” And by the time I walk them through the list, they’re usually completely bought it, because most of the time the reason they thought it was 30k instead of 50k is they just weren’t considering a lot of the things that were gonna be done. This happens to a lot of renovators too, including me, by the way – we’re just not detailed enough and we miss a lot of things.

So once we get buy-in on that, on what the house is worth and how much I’m gonna put into it, I literally have a computer, I pull a deal analyzer out, the standard one – we all have our own deal analyzer, a little tool that works – and I just show them the math. I’m like “Look, I’m making money; obviously, you know why I’m here. I’m not gonna try to hide that. I don’t make a lot. I make a small amount, because I do a lot of value… And here’s what I’m making,  by the way. If you were doing an investment like this, Joe, you’d wanna make about that, wouldn’t you?” And I get 100% yes on that, every single time… So now I’ve gotten buy-in that it’s okay for me to make money, so at this point it’s really been working well…

Now, this is a process, by the way, but when I do this, 100% — I won’t get yes’es every time, because that’s impossible, and no one can create that, but what I get is I get a lot more people who are bought in, and even if it’s a no and they just need more, or for whatever reason they’re just not gonna take this now, I always get the “Hey, I see the numbers, I really appreciate you sharing those with me. We just need more.” And now we can start a dialogue around numbers, math, and how I might be able to help.

If they’re at 130k and I’m at 100k, it might be “Hey, listen, if you really need 130k, I’d be willing to put it under contract and present it to my investors, and see if I can find one willing to pay 130k.” This is usually how I back into a wholesale, but it’s very transparent and honest. It’s not “Hey, I’m gonna buy it”, and then lie to them, and come back later, and fight with them… This way I’m leaving the door open to come back later and have a conversation. They’re usually very willing to do that, as long as they get their 130k.

And then 30 days later, if I couldn’t find someone to buy it for that number – because there’s a lot of people that have different investment criteria than me. So I might find someone willing to pay 135k for it. If I do, I’m just gonna sell it and make 5k, call it a day. I did a great service for them, got them a great number, makes me feel good… Great way of doing business, in my opinion.

If however everyone’s coming in at 110k and I can’t get anyone above the number or closer to the number, I’ve left the door open to come back and have a conversation. “Hey, I got all my investors through… Here’s where they’re coming out with.” 30 days later it’s usually a very different story, because now they know that I’ve went out and worked hard for them, that I’ve put a lot of effort in getting that number for them, and it just isn’t gonna happen.

This is what I call staying in the inner circle, because a lot of times we make offers, it doesn’t work out, we just send them out to the world… We know a wholesaler is gonna put them under contract, or an agent is gonna list it for them… My belief is stay in the inner circle with them, so that way if 30 days later they are gonna take a little bit less, I wanna be the guy there. So it does require a little bit more work, but I get a lot of deals done because of it.

Joe Fairless: And how do you stay in the inner circle?

Michael Green: I stay in the inner circle by either getting it for the price that makes sense for me, or tying it up for a price that’s higher, but being very upfront and honest that I’m only gonna be presenting it to investors to see if I can get them that higher number. And they’re usually more than willing to do that, because it’s no cost to them, there’s no risk to them. It literally is just me going out, seeing if I can get another investor to pay more.

Joe Fairless: You go into the conversation very prepared then…

Michael Green: Yes.

Joe Fairless: And the conversation you just mentioned – and educate me on if it’s one conversation or many… First off, is it one conversation or is it usually many conversations?

Michael Green: We’re getting into a lot like deep stuff, obviously…

Joe Fairless: I’m talking about when you present to them the comps and the renovation cost, and you show them the math. That part. Is that a phone call, or is that multiple conversations, phone calls and in-person?

Michael Green: Two ways to decide that – I have a way of rating the prospect. The prospect is anywhere from one star to five stars. If they’re four or five-star prospects, they usually have a sense of urgency. So if they have a sense of urgency, I’m gonna go there prepared to present to them and try to close the deal. We usually book three hours for that appointment. I’ll come there prepared with comps, prepared with a renovation budget that I can do on my computer, right in front of them, and a deal analyzer I can pop up, and I can do it all in real-time right there. In ten minutes or so I can run these numbers.

I come there prepared to do business, because I know if I don’t, someone else might get them under contract, because they’re highly motivated.

If they’re a one to three-star prospect, then the timing would be incorrect to present to them. They might need a few weeks to make  a decision. Then I would intentionally stall it out a little bit, before I presented the numbers to them.

So I would break it into a two-part series, where I go and build rapport, spend time, look at the house, and then schedule a second appointment, and I would be very slow about it if I knew it needed to be slow. “Hey, how about we talk in 7 to 10 days. You need about two weeks anyhow to get this and this together. We can meet then and I’ll present all the numbers to you and make you an offer.” I’m doing that intentionally, because I don’t wanna present now and then they just sit on the offer for two weeks, and then give the whole world an opportunity to just one-up my offer, and potentially lose that offer. So that’s usually how I do it… It’s depending on how hot the prospect is.

Joe Fairless: Last question and then I’ll ask you the question I ask everyone on the show – how do you determine the difference between a three and a four-star when you rate the person?

Michael Green: How I rate people is if somebody is willing to talk to me on the phone and share information, that’s a star. If somebody is willing to be friendly and conversational, that’s a star for me. If they’re selling their house in the next 30 to 90 days, that’s a star. It’s a really big star, by the way. If they know what they want, it’s pretty big to me, meaning they know they’re gonna sell their house 100%, and there’s no plan B. “We’re not gonna potentially stay if we can’t get a number. I am selling this house, I just wanna get the best number for it.”

And then the last piece  is if I know that they need me and they would like me to help them. So if they’re really “Mike, we’d like to have an offer from you.” If all five of those things happen, that’s a five-star. If you start taking a couple of these things off and only got two or three our of five, then that’s a three-star. When we start to get to four out of five, you really have a hot prospect, someone who’s really checking a lot of the boxes. I generally just try to get in front of those people. I don’t qualify them like crazy  on the phone. If they’re only hitting about one or two stars, I dig deeper and I try to get those stars up. If someone they don’t get up, then that’s gonna be a really bad use of my time, to spend three hours with that person.

Joe Fairless: What’s your best real estate investing advice ever?

Michael Green: Best advice ever is just take everything to the next level. When it comes to doing sales and negotiation, and really trying to get deals done, we often are just minimizing things instead of maximizing. So let’s take as much time… Treat it like you can make 30k-40k on this deal if you renovate it. A lot of times we go out and we’re treating it as if it’s just an appointment for an hour, but it really represents the potential to make 30k-40k, so treat it as that.

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

Michael Green: I’m ready, man.

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

Break: [00:21:44].19] to [00:22:27].03]

Joe Fairless: Okay, best ever book you’ve recently read?

Michael Green: Best ever book is Start With No, Jim Camp. I’m loving that book, I’m reading it for the second time now. It states and says that all of us are so afraid of getting rejected and getting a no that it’s really important to just go ahead and start with no. A lot of people will qualify and come back. So it’s pretty different than the way I believed, but when I was reading it, it made a lot of sense, and it’s been really impactful to my business.

Joe Fairless: A mistake you’ve made on a transaction.

Michael Green: A mistake I’ve made on a transaction – probably my biggest loss I’ve ever taken in flipping was a 55k loss. I bought a house with well and septic, and I got a very loose opinion that the well and septic was good; come to find out it was not good. And not only did it cost — normally, it’s about 20k-30k, but we ran in a lot of problems with it and it ended up being about a 50k-60k problem. So really doing more due diligence with things that are out of your control, like well and septic.

Joe Fairless: What was the role for the person you asked about it, who ended up not being right?

Michael Green: It was actually a well and septic guy,  and he came out and said “Hey, it’s all good. You need like 5k in repairs.” So we were like “Cool, 5k. No big deal.” Well, we go to pull the permits and the county disagrees and says “No, you need to do this… And not only it’s not Perc-ing, so you have to go from a normal septic system to a holding tank”, which really decreases your value, because somebody asks to pay money to pump it out every couple months, and it’s just very undesirable. So that was number one.

Number two part of that was the well ended up not yielding like he thought, and we had to draw a hole for a new well. That hole didn’t hit water, so we had to drill a second hole at 7k. Five holes total, it ended up being 28k later… So I now try not to buy well and septic, because it’s not needed where I’m at… But if I do, I make sure that I pull permits and everything before I settle, just to make sure I know what I’m doing.

Joe Fairless: [laughs] What’s the best ever deal you’ve done?

Michael Green: The best ever deal I did was about nine months ago. I bought a house about a mile from DC. We’re very close to DC and Maryland. It was in a really rough neighborhood; I was definitely not sure about this one. Actually, in the middle of the renovation a guy just came and walked in the house, and  locked himself in the bathroom and started smoking crack. My guys called me and said “What do I do?” and I’m like “I don’t know. Hopefully he’ll leave. If he didn’t leave in 20 minutes, call the police.” He did eventually leave, and I was just completely weirded out by this house, thinking “What did we get into?” I come to find out a big lesson for me was this was a very desirable neighborhood, because it was on the Maryland side of DC, and DC is highly expensive… This was still a very affordable place, so we ended up selling this house for 289k list price, and we got about 15 offers, so we got up to almost 60k over list. So it ended being about 105k net profit after my hard money fees and all that… In a house where someone walked in and smoked crack in the bathroom, so who would have guessed…?

So yes, it was a bad neighborhood, but it was a highly desirable bad neighborhood, apparently…

Joe Fairless: It might have been a good luck charm. Maybe take him to all the houses to christen them before you flip them.

Michael Green: I have a different perspective on it now, for sure.

Joe Fairless: What’s the best ever way you like to give back to the community?

Michael Green: Best way I love to give back is last year I did an emotional intelligence training at this place called ChoiceCenter, and it’s been really big. I like to give back to people in our industry. Everything we do is about giving back, and for me it’s been — anyone who reaches out and says they wanna have lunch, they wanna do a quick call with me, I literally jump on the phone. I make time every week for the last year just to talk to people that are aspiring to get into the business, struggle in the business… And it’s just been a lot of fun doing that. I’m very connected to the community, and it’s just been a great way for me to give back.

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?

Michael Green: You can reach me at the TheFlipFactor.net, that’s my website.

Joe Fairless: Well, then I will make sure that is in the show notes. Michael, thank you for being on the show and discussing with us how to find private sellers, and also how to negotiate with them, and how to close more deals by building rapport, having true empathy… You said at the very end of our conversation that you took a class or a course on emotional intelligence training… I’m gonna look that up. You said Choice Center? Being a good listener, and then knowing how to combine that with business, and how you’re closing twice as many leads when you do visit with them through those techniques… And it’s almost not giving them justice when I call them techniques, because really it’s just an approach; it’s just how you interact with people. I feel like technique makes it sound gimmicky, which it’s not, and I appreciate you sharing your process. It was very valuable information, especially for those who are doing wholesaling and fixing and flipping… But even those who are doing apartment investing and bringing in private capital to deals, this is certainly some things to take away.

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

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JF1782: Overcoming A Bad First Flip To Over $40 Million In Multifamily with Ola Dantis

Ola was a house flipper first, he and Joe will cover what house flipping taught him about multifamily investing. They will discuss Ola’s first flip that didn’t go quite as planned, Ola admits he had shiny object syndrome with this deal, and shares his lessons learned. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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“Make sure that they know their stuff so that you know what you need to bring to the table” – Ola Dantis

 

Ola Dantis Real Estate Background:

 


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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, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Ola Dantis. How are you doing, Ola?

Ola Dantis: Doing fantastic, thank you Joe.

Joe Fairless: I’m glad to hear that. A little bit about Ola – he’s the founder, CEO of Dwellynn.com. He’s a multifamily syndicator and has successfully sourced deals of over 40 million buckaroos. Based in Baltimore, Maryland. With that being said, Ola, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Ola Dantis: Yes, thank you so much, Joe, and thank you for having me on the show. Obviously, I’m a big fan of your show, so it’s kind of surreal that I’m actually on the show. My name is Ola; I was born Niger, I lived in the U.K, and now I’m based in the U.S. I’ve been doing real estate for a few years now… I’m focusing on multifamily acquisitions, I’m syndicating deals and I’m sharing the profits with other investors. I’ve done a couple of flip deals as well. I’m based in Baltimore, Maryland… And I’m excited to talk to you here, Joe.

Joe Fairless: So you’ve been syndicating deals and you’ve done flip deals as well. Let’s talk about the flip deals first, and then we’ll get into the deals that you’ve participated in on the syndication side. What’s a specific project that you have flipped?

Ola Dantis: That is such a good question. We’ve flipped a house here in Baltimore, Maryland. It was a small house, just a townhouse, two-bedroom one-bath, but the unique thing is with our company Dwellynn, when we actually do a renovation we actually strip the whole house down to the studs, and obviously put it back together. And for those who know about flipping, that’s actually a lot harder than actually building a brand new house on raw land.

For our particular deal, we were lucky enough to buy that — I think it was about $75,000. The idea was to put in another, say, 50k-50k, and then sell it for 250k. That was our projection. Of course, for anyone that’s been doing real estate for a little while, that did not go to plan. [laughs] It was a very interesting project for us, but we were able to sell it. I think we ended up selling it for about 225k, which was not bad… But I think it wasn’t so much about how much we’ve made or how much we’d spent, it was just learning a ton about the mechanics of putting together a house, and just really enjoying that process and dealing with different characters, contractors. That was a  good lesson learned for us there, and then obviously we flipped others… But that was the first deal.

Joe Fairless: That was the first one… Where did you net out on that one, profit-wise?

Ola Dantis: Profit-wise I think probably about 50k. Just around about 50k, after all was said and done.

Joe Fairless: Over what period of time?

Ola Dantis: I would say about 4-5 months.

Joe Fairless: And if you were given the experience you have today, if you had that experience before that first project, what are some things that you would do differently?

Ola Dantis: Well, first and foremost, I would say I definitely have the shiny object syndrome. Obviously, our first investment property for my wife and I was buying a duplex; we were house-hacking and we were doing tremendously well, actually, with that property. Then obviously I reached out to a fellow called Joe Fairless when I heard him speak on a podcast, and obviously [unintelligible [00:05:33].08] So I was starting to get really interested in multifamily syndications, but then I kind of jumped to this plate; and we can talk about that, in terms of mindset and shiny object syndrome.

So from what I know now, I would definitely [unintelligible [00:05:43].27] at all. Just because it wasn’t the best bang for my time… Yes, I learned a lot about putting the house together, but I feel like I could have used that time wisely in looking for multifamily deals, looking for passive investors, trying to grow and build my multifamily syndication business. But flipping did suck a lot of time, because I’m a little bit of obsessive, so I was there every single day on the site, making sure that we’re on our project timelines, making sure that we’re on budget… So that would obviously take away from looking for multifamily deals and looking for multifamily passive investors. So I wouldn’t do it again.

To focus more on the project, definitely I would not strip a house down to the studs anymore. Definitely not. I think it was a little bit overkill. We were trying to strive for excellence… Which is great, but the reality is when the end buyer comes to buy the house and when they come to look, they don’t really know, or frankly they’re indifferent to the kind of insulation that you used, or the fact that the carved shower glass door was custom-made. They actually don’t care about that stuff. Obviously, we didn’t know that, and we were buying $2,000 custom-made shower doors, and when the buyer came, they didn’t even notice it. So not putting lipstick on a pig, but not necessarily going overkill on a project, for sure.

Joe Fairless: The experience you have had in flipping – what aspect of that experience has helped you with multifamily?

Ola Dantis: That is such a good question. Raising money. There are obviously different ways in which you can raise money, especially in our creative economy now, with social media. I raised some of the money from Instagram, from social media, so I’m now obviously using that medium to reach out to newer investors for our multifamily syndication. So I’ve started to realize that I can, through creative approaches, raise money using social media. It’s not the typical marketing, it’s kind of an indirect approach to marketing, to get people interested in what you’re doing and learn more about you, understanding your story and connecting with that story, with the intention – we call it call-to-action (CTA) in the marketing world – to actually invest with you. That was definitely something I could bring across to the multifamily syndication space.

Joe Fairless: And that’s because you were putting pictures of your flips on Instagram and gaining traction from an audience?

Ola Dantis: Correct, correct. And I actually wanna make a really quick point – at the time when I got an investor that reached out to me on Instagram, I think I had about 100 followers at the time on Instagram on the Dwellynn page. And on the Facebook page for Dwellynn we have about 5,000, and most of them were kind of latent; they weren’t very interactive. But then there was this page that only had 100 followers, and I had an investor that actually invested, that went through the process with us. That was really interesting.

Joe Fairless: What did that conversation sound like when you spoke to the investor and they came across you on Instagram? The very first conversation.

Ola Dantis: Yes. Basically, they’d come through the funnel. They would see one of our posts on Instagram. We basically optimize hashtags. Instagram allows you to use 30 hashtags, so we use all of that. The person would obviously look at our page, and then on our page he has a link that takes them to our website. Then when they get to our website, within seconds of the user getting to our website, then they get a pop-up, and the pop-up gets the email. When they give their email, obviously we’ll reach out to them pretty quickly and we get on a qualifying phone call with them to find out more about what they would like to do with us.

Joe Fairless: Now let’s talk about syndications. I mentioned it because I read it in your bio – “A multifamily syndicator who has successfully sourced deals of over 40 million dollars.” What does that mean exactly, you’ve sourced deals of over 40 million dollars.

Ola Dantis: Good question. We actually employ a software on Dwellynn , where we basically can reach out to the sellers – typically in the state of Texas – directly, and speak to sellers and get a deal either under contract, or get them connected with other syndicators that might want to do business with them.

So we found a deal out of Texas. It was a family actually, and I called the son. I normally have a script and say “Hey, it’s Ola from Dwellynn. We’re an equity group and we buy apartments in the state of Texas.” So we got that deal and then we passed that deal on to another multifamily syndicator in the country, and they kind of follow that process.

That was one deal, and then we kind of did the same thing [unintelligible [00:10:22].26] So far we’ve done about 40 million total of those kinds of deals.

Joe Fairless: On the deal that you were mentioning – about how big was it, whether unit size, or value, or purchase price?

Ola Dantis: Yes. The very first one was about 18 million in total. They had about three assets they were actually looking to dispose, just not so long before I called. We didn’t end up getting all of those. One of them I think [unintelligible [00:10:47].02] Frank beat us to it… But the other two we actually passed on to another syndicator that actually underwrote and continued that relationship with that family. And it was actually a local investor as well.

Joe Fairless: Who beat you to it?

Ola Dantis: Frank… It’s a broker.

Joe Fairless: Oh, got it, another broker. So 18 million in total was the first, but when I say the 40 million sourced, that means that you have had a conversation with the owner and connected the dots between the owner and buyer, correct?

Ola Dantis: Correct.

Joe Fairless: But what do you get compensated for that?

Ola Dantis: Typically, if the deal goes all the way to closing, what we say is “Look, we obviously are not looking for a windfall.” That’s not our approach at Dwellynn. So  we basically take a referral fee and kind of reinvest that into the deal.

There’s also a really interesting deal as well that I’ve found in Texas, and basically the seller didn’t really want to sell the deal to us, because the purchase price they were asking wasn’t what we were looking to pay for it. I’m sure you’ve [unintelligible [00:11:39].03] So what we did was we had a relationship with a broker in Texas, so we basically just passed that deal to that broker, and he then put it on his websites. It’s actually on his website right now. So if he does sell it at the price that the seller wants – I think it was like 5.1 million – then we get a cut off of that deal. Typically a 1%-2% referral fee.

Joe Fairless: Okay, cool. And 1%-2% of the purchase price?

Ola Dantis: Correct.

Joe Fairless: That’s what I was gonna ask. Okay. So how many deals are you in as a result of finding the deal through the software that I’m gonna ask you about in a little bit?

Ola Dantis: One so far. That’s where we’re at. We’re just hoping to perhaps close on another one in the coming month, hopefully.

Joe Fairless: Awesome. And how large is that deal that you’re in?

Ola Dantis: This is actually one that I posted on Facebook; I think you saw it as well. This is a court building and a police station in the U.K.

Joe Fairless: Oh, okay. So for the Texas ones have you received any referral fees from those? Or are they still pending?

Ola Dantis: They are still pending, correct.

Joe Fairless: They are still pending… But then you did it in the U.K. You took a right turn on me when I asked that question… [laughter] So now we move from Texas to the U.K, two very similar areas in culture… [laughter] Now we’re in the U.K. – I know you’ve lived there… What are circumstances where now you’re in a deal that — you said a court and a police station?

Ola Dantis: Right. They’re literally right beside each other.

Joe Fairless: How did you get into that deal?

Ola Dantis: Basically, we actually still do deals in the U.K. This is not the first deal that we closed in the U.K. We have a sister company called Realbot in the U.K, a really good friend of mine. I wish I’d told that story; that’s actually how I got into real estate. I went to meet him in Dubai; I think I’ve told that on different other podcasts… He has his own firm, and basically we kind of partner on deals. We’ve been going back and forth. He’s a [unintelligible [00:13:37].23] buddy in the U.K, and we’ve been going back and forth on that deal, and we closed — I think it took about six months just to close. It was different issues that we were having with the government, but we did get that deal, so we’re going to be converting the court building into an event center, and the police station into a co-working space. As you’d imagine, we’re getting really creative with what we’re going to do with the jail cells, if we’re going to remove them or keep them for the co-working space. That’s what we’re working on right now.

Joe Fairless: What type of ownership do you have in that deal, and how do you structure the partnership?

Ola Dantis: The partnership between me and my partner is 50/50. Of that 50/50, we have 20% of that on the GP side. We obviously syndicated that deal and raised 80% of the equity towards that deal.

Joe Fairless: And how much was that?

Ola Dantis: We raised about 1.1 million pounds. Not to be mistaken with dollars.

Joe Fairless: Sure. And how much of that did you raise from your network?

Ola Dantis: From my network about 250k.

Joe Fairless: How did you meet those people that you raised that 250k pounds from?

Ola Dantis: Just family and friends, people that we know from the U.K. coming together and raising funds. It’s a little bit easier to raise money where you’ve lived a long time. It was just kind of reaching out to family and friends, sending them the investment packet and raising funds. That wasn’t as difficult as we thought, actually.

Joe Fairless: You talked about you have a software that you reach out to owners directly. Is that a software that you have purchased, or is that something that you created?

Ola Dantis: It’s basically a software that we’ve purchased. We use that software in conjunction with scrubbing the lists, making sure that it’s the right owners that we’re reaching out to

Joe Fairless: Okay, cool. So it’s a software like Yardi, or CoStar, or something; you take it a step further and scrub the list, and then do the outreach and try to make that connection?

Ola Dantis: Correct.

Joe Fairless: If we don’t make that connection, then we’ll go out and send mailers to those specific sellers as well. A sophisticated letter.

Joe Fairless: How many conversations have you had from sellers as a result of your outreach?

Ola Dantis: That is such a good question. I think at the last count we were over — actual conversations with owners just over 200, but total calls I think were in the thousands. Most of the calls are voicemails, and trying to get past really savvy receptionists/gatekeepers.

Joe Fairless: Right. And how do you get past a really savvy gatekeeper?

Ola Dantis: It’s just the same script. We tell them we’re very transparent and we would like to speak to sometimes the founder or the CEO of a company, or the vice-president of acquisition, or disposition — some bigger firms in Texas would actually have an asset disposition team, so we’d try to get to someone on that team, if we can. If we can’t get past that gatekeeper, then we continue our scrubbing. LinkedIn – trying to find the owners and trying to reach out to them on LinkedIn. It’s a lot of work, it’s a lot of steps, but it works for us.

Joe Fairless: And who’s us?

Ola Dantis: It’s basically me, and I’ve got a guy in Houston, Texas that actually helps me to scrub out the list, and he makes some calls as well.

Joe Fairless: And when you say “scrub out a list from CoStar”, what are you scrubbing for?

Ola Dantis: Most times you would get numbers that you would assume that would be the number to access the person, but it would just be either a previous number that doesn’t work, or it’d be a number to a receptionist. So what we’re trying to do is get the actual person’s cell. That’s what we care about – to get closer as much as we can to that person.

We will take out numbers that aren’t working, we would take out emails that don’t match the firm of the company, if we know the firm’s name… So that’s kind of what we’re looking for. When we get to actually executing the list, we know that we’re as accurate as we can get.

Joe Fairless: Okay. And how do you find the cell phone numbers?

Ola Dantis: White Pages. It’s pretty accurate, for the most part.

Joe Fairless: Cool. And how much is that, do you know?

Ola Dantis: It’s not that much. There’s different tiers. I think it’s like $20/month. We have different tiers that we pay for.

Joe Fairless: Based on your experience, what’s your best real estate investing advice ever?

Ola Dantis: Oh, man… I would just say try to focus on one thing and one niche as much as you can, but as quickly as you can… Meaning if you’ve given yourself a year or two in a particular niche or particular asset class and it’s not really working for you, maybe a year or two might be a good place to say “Hey, this isn’t working. Can I just pivot into something else? Can I try something different? Can I reach out to a mentor or someone that can help me with this particular niche or asset class that I’m looking at?”

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

Ola Dantis: Let’s do it!

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

Break: [00:18:41].24] to [00:19:30].20]

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

Ola Dantis: Oh, man… As a Man Thinketh, James Allen.

Joe Fairless: What’s the best ever deal you’ve done?

Ola Dantis: The best deal I’ve done is actually my very first deal, my first duplex.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Ola Dantis: Trusting partners.

Joe Fairless: How do you protect against trusting partners? [laughter] You’ve got to trust partners eventually, I imagine… So what do you do to mitigate the risk of whatever happened not happening again?

Ola Dantis: Great question. I read this book by Ray Dalio, Principles, and he talked about you should actually have a believability factor. What that really means is if someone has done something more than three times, for the most part it means that they actually have some kind of strength or skill. When I talked about partnerships – your partners can actually make or break you, as you know… So partnerships are extremely important, especially in the syndication space. So you have to make sure that whoever you’re coalescing with actually knows their stuff, and if they don’t, it’s okay, but you should know that going in, so you can gauge their amount of effort and work or skill that you need to bring to the table… And if that would basically make it up for that weakness that the person has, as opposed to going in blind.

Joe Fairless: Best ever way you like to give back?

Ola Dantis: We have something called the 1HousePledge on the Dwellynn website, on dwellynn.com. Our goal is to try to give a house to a family every year. This has been a big challenge for us, but we’re still working hard to make that happen here in Baltimore.

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?

Ola Dantis: The best place is InvestWithOla.com, or just go to our website, dwellynn.com.

Joe Fairless: Thank you for talking about the approach that you’re taking to find multifamily owners directly using CoStar, scrubbing the list, using White Pages to find cell phone numbers, and reaching out to owners even on LinkedIn if needed, having those conversations… And you’ve got some deals pending, as well as one that has taken place, across the pond. Thank you for talking about that, and lessons learned on the fix and flip stuff.

I hope you have a best ever day, Ola, and we’ll talk to you again soon.

Ola Dantis: Thank you so much, Joe. I appreciate it.

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JF1437: Here’s What You Can Do To Increase Equity In Any Property with Julia Nyman

Julia started as a realtor in 2015. She is on track to sell over 100 homes in her first three years. Along with doing the normal listing agent duties, she helps sellers with some renovations that will help them get more money on the sale. This really helps residential sales, but also helps us as investors to get top dollar on our properties when we sell.

 

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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, Julia Nyman. How are you doing, Julia?

Julia Nyman: Hi, I am good. Thank you so much for having me. I am grateful to be here today.

Joe Fairless: Yeah, grateful that you’re on the show as well. A little bit about Julia – she is the CEO of Homes With Julia. She’s a listing and buyers specialist; she’s mostly focused on residential retail, but she also helps clients with remodeling projects to help increase the equity in their homes. Based in Baltimore, Maryland, and her website – HomesWithJulia.com. There’s also a link to that in the show notes page.

With that being said, Julia, can you give the Best Ever listeners a little bit more about your background and your current focus?

Julia Nyman: Yeah, absolutely. So I’m born and raised in the Baltimore Metro Area. I originally went to college in the health focus; I went into non-profit work pretty quickly, I realized that I loved the mission, not quite what my specific role was… I had a friend who knew a small residential-based property management company up in Hartford County, which is probably 30 minutes North of Baltimore City… And they were looking for a bookkeeper; they brought me on anyway, brought their bookkeeper back probably 2-3 weeks later, and kept me on as marketing and admin for them.

They never really trained me, so I kind of developed my own role as executive assistant to their main property manager, I networked for them, marketed for them, listed all the properties for rent, met all the tenants, signed all the leases… And really just realized after about a year of working with them with no real growth opportunity (because they were a small company) that everything I loved to do was really what a realtor does full-time.

So in September 2015 I broke out, gave my one month’s notice, got a part-time waitressing job to pay the bills a little bit, and jumped head first into real estate. It took me six months to sell my first house; year one I sold 23 homes, year two with my husband that I brought on and a buyer partner that we had, we sold closer to 35, and I’m on my track for about 45 myself this year, in year three.

It’s been an amazing journey, I am so grateful for each and every one of the clients who has trusted me with this, and we really try to specialize on client experience and customer service… And I know that you’re excited to talk about remodeling and how I help clients build their equity themselves… And I feel like part of that is really engulfed in the listing process, because when a home seller goes to list their property up for sale, there are usually a list of things that they can do that are fairly simple to build the equity back into their home, instead of selling for a lower price and therefore giving that equity away to the potential buyers who write offers and get that property.

So I’ve really developed a system for that and I’ve got some great contractor partners that I’ve been working with to help me carry that action plan out… And it’s been awesome.

Joe Fairless: Oh, you piqued my curiosity, that’s for sure… So what are some things on that list of things to do that we can easily – or not as an involved process – do to build equity in our home(s) prior to selling?

Julia Nyman: I’m more than happy to after this call give you a link to 1) my Facebook page, Home Transformation and Renovations, where I really post regularly in there and have a lot of interaction with people about some of those things… But also an article that I’ve written with my top 10 tips for home sellers out there, or renovators, to make sure that that checklist has really been completed.

But one of the major things, and the top couple of things that we focus on, honestly, are paint, deep cleaning, simple curb appeal, and maybe some slight updates to really kind of streamline the approach – maybe new cabinet fixtures, or a new faucet, or new paint to some cabinets… But we find when we go into homes, a lot of people have really (how do I say this…?) designed the property for their very specific taste…

Joe Fairless: Right…

Julia Nyman: …and when you list a property for sale, you wanna focus on reaching as many potential buyers as possible, which really means neutralizing and making everything more simple. So decluttering, depersonalizing, a deep, deep cleaning of everything, and freshening up some colors is really what we focus on (step 1). Then sometimes the kitchen is outdated, the bathrooms are outdated, maybe the house could use a power-washing, and those things will have a whole action plan list afterwards… Because we really find buyers are going to come into a property and double the cost of what those things would actually be when they visually see them and think about what they’re gonna have to spend to take care of it themselves.

So for sellers to do that ahead of time, they’re actually building in equity for themselves, instead of selling at a discounted rate because buyers feel like there’s so much more to do when they get in the home than there really is.

Joe Fairless: And they might not even get offers from those individuals who are thinking the “Pink walls with the purple backsplash is just too much trouble, so I’m not even gonna make an offer”, when in reality it’s pretty simple to fix, but they just don’t wanna deal with it.

Julia Nyman: Exactly, and that is really the masses. Some buyers wanna come in and build equity for themselves and get a great deal, but honestly, in my experience, when they actually look at what it’s gonna take to get that deal, they just wanna walk away and don’t wanna deal with it at all… So yeah, I find that that’s a great thing for my sellers, and I love when I can bring that full circle and really see the transformation that it makes in their experience.

Joe Fairless: Can you think of a specific example where you worked with a seller, and they were going to list it, or you, or they wanted to list it at X price, and then you did something and then you listed it at the other increased price, and you got it?

Julia Nyman: Yes, probably my favorite example — well, I feel  like the best example of this I will see transform and happen in real life probably in about a month or so, but in a past experience I had  a home in Catonsville, right outside of Baltimore City. This area has great schools and very unique, beautiful, historic homes in some of the blocks; I actually grew up there, so I was very passionate about this project…

I had a seller, and when I walked in, in my opinion, they needed fresh paint, the basement had water coming in, the bathrooms were from the ’90s, the roof was on the bridge of leaking… They had a lot of projects, so I basically laid it out on the table for them and I said, “Hey, buyers in this price range are going to be scared away from a lot of these things that they’re gonna feel that they need to do, that may be more expensive than how they actually are.”

So we talked about a 399k list price if they hadn’t done any of those projects and if they had just moved forward with the sale as is… But then we also talked about spending about 25k-30k to update the roof, do some bathroom updates, freshen the paint, refinish a little bit of the flooring, and… Water-proofing the basement was probably the biggest expense that they incurred… But we ended up listing right around 480k and getting a contract right around 475k, with two weeks on the market.

So I truly believe that we built in a lot of equity for them where they would have lost a lot by having buyers not actually see the full potential of that property.

Joe Fairless: Oh yeah, you made them $50,000.

Julia Nyman: It was awesome.

Joe Fairless: And then not that you’re thinking about this primarily, but when you do that, you also get an increased commission, so you make money along with them, which is great.

Julia Nyman: Yeah, we don’t talk about that all the time, but [unintelligible [00:08:47].05] a really hard time seeing what the market value is for their home (maybe they wanna list 20k-30k above) one of the most common conversations we have is exactly what you said – make more from selling your home for more. If I truly believed that you could get that value, why wouldn’t I want to list at that same price with you?

So our goals are ultimately the same, and it’s really awesome when we can make a true difference for people.

Joe Fairless: In the real estate world you started out working for a property management company… What are some lessons you learned there that you apply to what you do now?

Julia Nyman: That’s a great question… I feel like that real estate experience that I had that first year was really an internship on what this process looked like. I got to work second-hand with a lot of people who maybe wanted to sell and had to rent because of the market crash and the experience that they’re having with how much equity they have in their home, or how much they don’t have.

I learned a lot about exactly what I’ve said before – what fresh paint and a little bit of carpet and a cleaning can do, and I also learned how to really have those conversations with people… Because whether they’re looking to rent or sell, the conversations might be more severe and the stakes may be higher, but it’s relatively a similar process… So I got to kind of start on the ground level with some of the more basic processes and build up from there.

Joe Fairless: When you have those conversations, what are some pointers that you’ve picked up on?

Julia Nyman: With my clients and comparing them…?

Joe Fairless: Yeah.

Julia Nyman: So over the last couple of years we’ve primarily — yes, I’m the CEO of Homes With Julia LLC, but I work with [unintelligible [00:10:21].23] Real Estate in Columbia; we are a very small boutique brokerage, and I joined them back in December because we have a couple top agents and I have a goal of “How do we perfect client experience and the customer service experience in real estate?”

Some of the things that we do at the very beginning that I find that not many other people do or have the experience with is real preparation for what the process is going to look like from start to finish. On the buy side, before we meet with our clients we are sitting down for a full buyer consult and talking about the market in which they’re looking to buy a property, and what that process is going to look like, how much inspections are going to cost, how quickly that process will take, any road bumps that they may get in, so that once they ask those questions moving forward, they’re  more memory joggers and they’re more prepared and have less fear about the overall experience.

On the listing side we’re doing a very similar thing – we’re going through all the steps about what that process is going to look like, what is their action plan from the day that they say “Okay, I’m ready for pictures”, what is their move-out strategy… When sellers sell a property, they may have another property locked up, ready to move into, or they may have to purchase something else and be contingent on that sale. What does that process look like for them? Are they going to have to stay in a hotel overnight and move in quickly the next day? Are they going to be able to rent back? Are they gonna be able to stay with friends and family until they really find the house of their dreams? Or is it an investor, and  what does that process look like of inspections, and making sure that licensed contractors are doing the repairs while we’re under contract… I know that your podcast is everywhere; some of these things I’m mentioning are really specific to our Baltimore Metro market, but I’m sure a lot of these things also apply to the general area.

Joe Fairless: Have you always been proactive and methodical with your client, or has that been an evolution?

Julia Nyman: Great question. I was really lucky to start my career where I did, with Keller Williams and with the mentors that I had. I felt that I got a lot of education on some of the ways that I can really add value to my clients’ lives, so I feel that some of it  really started there. I had a couple awesome mentors that showed me what they do, and I kind of perfected my own system as such… But some of it is just — I’ve been in customer service since I started working when I was 13-14 years old in the restaurant business, so I’ve always had a customer service background… And like “Okay, this is a problem that we face”, and talking less about the problem, but more of what is the solution to that problem and how can we avoid that problem in the future.

So everything is just building and growing and making sure that we’re learning from our experiences.

Joe Fairless: Earlier you mentioned the list of things to do to build equity in your home… What are some things that people do unnecessarily that does not build equity in their home?

Julia Nyman: Great question. Probably the biggest thing that I find is that people start making updates to their home and getting it ready in the way that they see fit, before having a conversation with a local real estate professional that knows the specific market and what they can get for their home.

So I’ve walked into some properties when a client has already felt that they’ve completed that list, and they’ve spent an extra $30,000 that I will never be able to get back for them because they spent too much money and over-updated their home for the current and the current value of a specific neighborhood.

So that’s probably the hardest thing I come across, because there’s honestly no way of coming back from that. They’ve already spent the money, they already have the perception that that’s the value, and it’s a very hard conversation that we have to have about the real market and how things are selling in their specific area.

My recommendation would be have a professional out before you make those executive decisions.

Joe Fairless: And when you take a look at the most challenging aspect of your job, what is it?

Julia Nyman: What a loaded question, Joe…

Joe Fairless: [laughs] I like loaded questions, that way you can take whatever direction is top of mind.

Julia Nyman: So I am a perfectionist at heart; I love what I do and I always wanna make sure that everything is absolutely perfect from start to finish… So I think the hardest part of my job is not being in control of the entire process or knowing what is coming down the pipeline in reference to the other portion of a sale.

When you’re working with a seller, you can prepare them all day long for the process and what’s gonna happen, but you have no idea what is going to be important to that specific buyer who’s gonna make an offer on that property, the buyer’s agent on the other side, the title company… So a lot of the issues that come up are really just situational, and making sure everyone is on the same page. That’s probably one of the most difficult things I deal with – encountering the problems and the situations that come up, and getting everyone on the same page moving forward.

Joe Fairless: What’s a way that you now do that to the best of your ability?

Julia Nyman: The reason that this is one of the biggest problems is because — besides preparing and learning from the experiences and just growing as a professional and having more experiences to help you if those ever come up again, I feel like in every single real estate transaction there’s something new that comes up. There’s an easement agreement between a neighbor that has never been created, or an estate that blocks you from getting to that easement agreement, or a basement that floods a couple days before the settlement, and the parties involved want it taken care of one way, where the other parties involved want it taken care of another way… So some of it is just the nature of the beast, and one of the reasons that I feel that the Zillows and the Redfins out there who wanna take this process completely digitally will have a really hard time doing that, because it’s a living, breathing transaction where you need real people involved, who understand that specific market there and how to work with people.

Joe Fairless: Based on your experience, what’s your best advice ever for real estate investors?

Julia Nyman: To prepare as much as you can and really have mentors going in that you can go to when you have questions. We just purchased our first two investment properties last year, renovated them and refinanced them, we placed tenants… We’re in the process of actually selling one of them, but if we didn’t prepare in the ways that we did or have the connections that we had it would have been a much more difficult experience.

For example, I always recommend, even if you’re gonna use hard money and find money somewhere else, it’s great to have some money built up for that investment to start out with, because you’ll need some of your own cash in the transaction, or issues come up…

In the Baltimore Metro Area there are some great Facebook groups and online groups that meet regularly, with education and things like that… So we have the Baltimore Real Estate Investors Network here, and people are posting daily, with deals, or solutions to problems, or problems that they’re facing, asking questions… And my husband has really been taking the front of that for us, and he has learned a lot from that page.

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

Julia Nyman: Oh man, I hope so…

Joe Fairless: [laughs] I’m sure you are! First though, a quick word from our Best Ever partners.

Break: [00:17:54].07] to [00:18:54].10]

Joe Fairless: Okay, best ever book you’ve most recently read?

Julia Nyman: You’re a Badass.

Joe Fairless: Well, thank you for that — no,  what did you get out of that book?

Julia Nyman: I love that book because it’s all about motivation and your mindset in life. I find that mindset and the way that you carry yourself really depicts your reality, no matter what happens to you and what comes down the pipeline… So I’ve found that book to be extremely useful in just starting each day on the right track.

Joe Fairless: Best ever transaction you’ve worked on?

Julia Nyman: Honestly, I’m probably going to say my personal real estate transaction. Anyone who knows me or this situation that we are in would probably open their eyes wide on that one, because it’s been the most difficult one of my life, but it’s also been the most educational and eye-opening experiences of my life.

I’ve learned a lot about the type of people out there, I’ve learned a lot about how important it is to have representation even if you are a professional in the industry, and how emotional that experience can be and how much that can cloud judgment when you’re in it yourself instead of working with a client.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Julia Nyman: Representing myself in my personal real estate transaction this past year.

Joe Fairless: What happened with that transaction? Just high-level.

Julia Nyman: High-level… When you have a big emotional stake in a purchase or a sale or anything, there can be a lot of things that will cloud your judgment and say “Oh, I can just deal with that later” or “Oh, that’s not a big deal” when you would really be fighting to death to get something taken care of for a client of yours… Just like you don’t diagnose yourself when you have an illness, or you don’t represent yourself when you go to court; you hire an attorney.

In real estate I think it’s very important to hire a professional. We also have a pact in my office that we won’t represent ourselves, or we have the best 2 out of 3 rule… There are a couple professionals and I, and we make sure that everyone is one the same page about decisions, so that everyone has their say and can help each other make the best ones possible.

Joe Fairless: Best ever way you like to give back?

Julia Nyman: We built a system for giving back at our brokerage this past year, and what we did was we created a system where we have five non-profits that we work with on an annual basis, and we take a portion of our proceeds from every transaction and donate it to one of those organizations, and we let our clients choose who on that specific transaction that they’re working with.

So it’s a way to involve our clients in our own system for giving back, and everyone has really loved it.

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

Julia Nyman: They can contact me on Facebook, or Instagram, or shoot me an e-mail at info@homeswithjulia.com.

Joe Fairless: And what’s the title of the article on the list of things to build equity in a home?

Julia Nyman: I will have to find that for you. I can shoot you an e-mail after here… I think  “Top 10 ways to get your home list ready” was the rough title of it, but I will e-mail that for you for your records.

Joe Fairless: Alright, we’ll put that link in the show notes page; Grant on our team will do that. Julia, thank you so much for being on the show and sharing your insight into how you help your clients get more equity in their home prior to sale, doing some relatively inexpensive things… But ultimately, who cares how much they cost, as long as we focus on the bottom line ROI? That’s really the case study that you mentioned earlier, the 399k list price, and then they did some roof, bathroom and refinishing the floor, and then basement water-proofing – all of it fairly light, with the exception of the basement water-proofing… Put in about $20,000, so they went from basically 400k to 420k (they put in 20k more), but then they got 475k under contract… A really cool case study.

Some things that you mentioned that we can do to build equity in our home – paint, deep cleaning, simple curb appeal, maybe some slight updates, declutter and depersonalize it… Those are kind of the two themes.

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

Julia Nyman: Thank you so much for having me, and I will talk to you soon, Joe.

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JF1309: Get Out Of Student Loan Debt Through Real Estate Investing with Brentin Hess

Brentin was able to pay off all his student loan debt with his investments in real estate. It didn’t come easy though, he worked hard to complete flips, and purchase some buy and hold properties as well. To hear how he got started from scratch and is now moving forward at a fast pace, be sure to tune in to this episode! If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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Brentin Hess Real Estate Background:

– He flipped his way out of college debt. He has done 16 flips over 3 years

– He has 13 rental units with a partner

-Certified Keller Williams Instructor

– Served as an Accounting and Finance Analyst for the Department of Defense for 5 years

– Is an instructor and Board of Directors Member for the non-profit, Keller Williams Kids Can

– Based in Baltimore, Maryland

– Say hi to him at: www.brentinhess.com

– Best Ever Book: Millionaire Real Estate Investor


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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 fluff. With us today, Brentin Hess. How are you doing, Brentin?

Brentin Hess: I’m doing great, how are you?

Joe Fairless: I’m doing great, nice to have you on the show. A little bit more about Brentin – he has flipped his way out of college; that was the subject for the Bigger Pockets interview that Brentin did. We’re gonna talk about not necessarily his way out of debt – he flipped his way out of college debt – but rather how he has evolved his business and how he brought on a partner to have now a 13 rental unit portfolio.

He’s done 16 flips in three years, and he’s also a certified Keller Williams instructor. Based in Baltimore, Maryland, one of my top five favorite cities to visit in the U.S. With that being said, Brentin, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Brentin Hess: Sure. You nailed it. I am Brentin Hess, 24 years old, from Baltimore, Maryland. I got my real estate license at 19 on winter break of college; I didn’t do anything with it the first couple years, and then when I was 21, I met a mentor and he had a lot of money and not a lot of time, and I had all the time in the world, and in fact, I was at negative dollars, I was in student debt.

So we came up with this idea of “Why don’t we join forces and see what it’s like in the real estate investing world?” I was attracted to that opportunity, we came across a flip, and at 21 flipped that first house, and that’s where a lot of the stories come into play; it’s always that first flip.

From there, I’ve since been through a couple partnerships. Now I’m flipping solo, and like you mentioned, I’ve done 16 and counting. And then for the rental side, this year I’ve set a goal to get into rentals, and through various scenarios, I now own 13 rental units with a partner. And with all this, somewhere in there, in the early stages, I did leave my full-time salary job, to do this full-time.

Joe Fairless: Well, congratulations on that. How old are you?

Brentin Hess: Thanks. I am 24 years old.

Joe Fairless: 24 years old. When did you leave your job?

Brentin Hess: I left my job as soon as I graduated college, so right around twenty two and a half years old, so about a year and a half ago.

Joe Fairless: Okay, and how did you support yourself when you left your full-time job?

Brentin Hess: I was flipping for about the last year and some change of college, and it was with that money I was able to cash out to fund the first many months of no income, because the pipeline wasn’t that hot. I had one going on at the time when I left.

Then I did that to also pay down the college debt. So that lump sum of money – I had 34k in college debt, I paid that off, and then had some runway thereafter.

Joe Fairless: How did you meet the mentor?

Brentin Hess: Full disclosure – I have many, and I’m very grateful for that. The first one was – he’s a realtor (his name is Stew) in our office, and he had been doing a great job saving money, and he had rental properties, and then him and I decided to flip.

Joe Fairless: Okay, you were already a real estate agent, and then someone in that office is who you met, and you two connected, right?

Brentin Hess: Right. It’s amazing, the people inside this industry. Once you get your feet wet, just the people as far as — I mean, I raise capital from people in the industry, now looking backwards, and partnered with others, and gotten deals with others… It’s just a great industry of entrepreneurs.

Joe Fairless: Okay. You met your first mentor through being an agent, and that is at Keller Williams, I imagine…?

Brentin Hess: Yeah, my parents opened this brokerage 12 years ago, so I often joke that I had KW [unintelligible [00:06:00].22]

Joe Fairless: Right. [laughs] Well, you might actually have had that; that might be a thing, I don’t know. So that’s how you [unintelligible [00:06:08].06] then you flipped a house, it went well, and then you flipped other homes. But you said you’ve been through a couple partnerships – can you elaborate on that?

Brentin Hess: Sure. All have ended well, and they stared with great intentions. It’s one of those things where there comes a point where the vision might not align, or the values… To be a little bit more concrete, it’s simply that I had different goals. I wanted to get out of the exclusive partnership, because if I found myself finding the deals, then I was able to the figure out how to fund the deals. At that point I was like “Okay, we have to figure out if this is truly a win/win or not”, and I still have a great relationship with everybody, thankfully. Nonsolo and nonexclusive.

Joe Fairless: Okay. At the beginning you were more 50/50, because you were each bringing something, but then as you evolved as a real estate investor, you were able to bring the other aspects, therefore it didn’t make as much sense for you to continue the existing partnership.

Brentin Hess: Right. And those conversations made sense in that aspect… Going into it upfront and saying, “Hey, I’m here to learn, and there might come a time where you know enough and you have the drive to wanna do it on your own”, and that’s all it was. It wasn’t too big of a surprise, but I was 21 when I got started with no experience and no money, and I’m thankful for that partnership, very much so.

Joe Fairless: You said in 2017 your goal was to buy property and own it, and you said that you’ve done that now, you have 13 units through “various scenarios”, so please educate us on what are those various scenarios.

Brentin Hess: Sure. My business partner [unintelligible [00:07:56].18] we saw a three-unit on the MLS, zero days on market, and he was showing me how to truly underwrite these multifamily deals, having some himself… And we went out and we went to the property to view it; at that time, the listing agent was away, and we met the owner there. While with the owner, we were talking to him about why he’s looking to sell, and his future plans, and he mentioned in there, which then would be his motivation – he wanted to sell all his properties in Baltimore and move to Florida. He wanted to get rid of all his headaches. That was like that time where we asked the question of “Why are you looking to sell?” and “Do you have any other properties?” It led to that, and then from there we said “Why don’t we just make a deal where we buy your whole portfolio? What does that look like?”

So it went from a three-unit on the market to a whole 11-unit deal. It was a portfolio deal, three 3-units, two single-family… And I joke that the other eight units were technically off-market at that point. So I know there are a lot of conversations about “Deals are hard to find right now on the market.” Well, a simple question of “Does the owner have any other properties that he’d be willing to sell?” – that question itself is a lead gen tactic for off-market deals.

Joe Fairless: Oh, absolutely. That’s a very simple, but powerful question that should be asked in every transaction, that could lead to some larger stuff. You asked that question, he said in this case “Yes.” Then what do you do?

Brentin Hess: That’s a good question. At that moment, we realized that we were getting ourselves into a much higher price point than we imagined.

Joe Fairless: [laughs] That’s what I was alluding to, yes.

Brentin Hess: Yeah, so the situation pushed us into raising capital, and I was doing it on a smaller scale, for like bridge loans for flips, and it was at the time — this portfolio we bought for $423,000. We financed it interest-only with a local community bank, for six months, with the intent of once we renovate the 11 units – they were all vacant, so we place our tenants… When we get it to the certain debt service coverage the bank needed (one and a quarter), we were able to then take their six-month interest-only loan and refinance that, and they would just hold that note with their terms.

So we had to come up with 25% down of that 423k, and then we also needed our closing costs and whatnot. So we went out and raised money from friends – no family this time, or actually any of the times – and we… Now at this point I started building this muscle that I now am continuously working on.

Joe Fairless: Let’s talk about that deal… How did you structure it with your investors?

Brentin Hess: Sure. Effectively, it’s interest-only, annualized, there’s no equity; because of the relationships with the investors and the conversations had, I cannot disclose the interest rate, but to get an idea, it was in that 15%-20%. It’s supply and demand, I suppose, where now money becomes more cheaper when you build the bench and the pipeline… And it was a great learning experience. We raised that money, and now we refinanced it. The bank has the note, we had zero dollars of our money in the deal from the very beginning, and we were able to refinance and pay all of our investors back. That was seven months later.

Joe Fairless: That’s outstanding.

Brentin Hess: Thank you. In the midst of all that, we came across another two units, we bought that… So we have 13 units, no money in the deal.

Joe Fairless: With your own money, or you just raised more money for those two units?

Brentin Hess: Yeah, raised more money. We lumped it into the portfolio loan. I guess long story show now, with the valuations, the 13 units are right around $860,000. We have a note for 75% of that, and we don’t have any money in the deals.

Joe Fairless: Wow, 860k, a note for 75% and no money in at the end of the seven or so months, you said?

Brentin Hess: Correct, yeah. That’s a $645,000 note. The one thing that I’m extremely grateful for is that relationship with the portfolio lender, given my little track record that I shared, I had just graduated college, left a salary position, and my business partner is in real estate sales and he does investing, too… We both don’t look amazing on paper, especially not for a note of this size, and it was the portfolio lender that I had been working with him through my flips, and that track record plus a couple meetings, plus doing everything we possibly could… We in fact brought on a signer to co-sign with us on the purchase side, and then once it was an income-producing portfolio on the refinance, we got one of my friends who has a W-2 job – we refinanced him off the loan. So now it’s just us two on the loan. We had to get kind of creative.

Joe Fairless: What compensation, if any, did the co-signer have originally?

Brentin Hess: That’s a great question. We paid him $2,000 to co-sign on this loan, and we had an outside agreement that we put together and drafted up, so we had that signed in addition to him being on the loan, so that he was even further protected, for whatever that’s worth.

Joe Fairless: Got it. Some sort of personal guarantee if something were to happen. I’m with you. What did you all do to this portfolio that increased the value from 423k – assuming that’s what the value was at the time – to 860k?

Brentin Hess: We renovated the units… They were all delivered vacant, so we did all the renovations, and we placed all the tenants. We still have one commercial space — they’re all residential spaces, and one is a commercial unit. We’re working on it right now getting the commercial unit rented; all the other units are rented right now, and they are income-producing.

Joe Fairless: Wow, I missed that part, if you said it earlier; I didn’t write it on my notes as you were talking… They were all vacant.

Brentin Hess: Yeah, they were all vacant, which… One may make a case for how that was helpful…

Joe Fairless: Yeah, yeah, it could be better…

Brentin Hess: Looking back on it, it probably was… If you wanted to get in and get out and get this thing stabilized as quick as possible. The concern is the bank doesn’t per se love to give you a note with a non-income-producing property that’s not in great shape.

Joe Fairless: Yes, that is a concern. What questions did the portfolio lender ask you during those couple meetings, and what were your responses?

Brentin Hess: A lot of it was track record. I actually go back to when I first met him… Because we didn’t have the financials so much, so it was a lot about “Okay, what is your focus and what are your income goals?” and also it was like “What have you done in this space? How do I know that you’ve been able to renovate properties and you have your systems in place etc.?”

So going back when I met this portfolio lender, I was cold-calling them to get allowed a credit at a bank for flipping with my first partner (it was actually a partnership), and inside of that process I came across this guy. When I met him, I brought him a sandwich… Many have heard me tell this story – when I brought him a sandwich, apparently that one sandwich made us memorable, to the point where they were kind of closing their doors on giving out these lines of credit… In fact, he remembered us because of the sandwich, brought us back in… So now every time I meet with him, I bring him a sandwich. [laughter] Now we’re at the point where we go out to dinner, and just that relationship has been developed over time… And it was that simple, small, little thing, like “What can you do to just kind of stand out from the pack of this very saturated real estate investing industry?” That was one thing that I wasn’t truly doing intentionally, I just wanted to bring the guy a sandwich, because I would enjoy that, if somebody brought me a sandwich.

Joe Fairless: I love sandwiches, too. You renovated 100% of the units and placed the tenants… What was a major challenge during that process, and how did you overcome it?

Brentin Hess: Oh yeah, definitely tenant placement. We completely underestimated how quickly we can get these things renter. I was like, “Okay, well when they’re rent-ready, we’ll do everything we can to get that marketed and get tenants in there.” Well, what I realized was as some of them were ready, others were still being renovated, and with the time that it was taking to focus on the renovations and the loan and everything else, the bookkeeping etc., I decided to leverage out the tenant placement to people who have vetted tenants in my market and they know the programs.

So I would say eight of our tenants or nine are program tenants, so they’re subsidized, Section 8 and other programs… And all of this was through the relationships with tenant placement professionals. We pay somebody first month’s rent and they find the tenant. One of the greatest pieces of advice that I’ve received in this process was to make sure that it wasn’t a non-exclusive agreement. Therefore, at one point I had ten different tenant placement professionals marketing and lead generating the place, so the tenants eventually — it shakes out the one or two really good ones that you’re working with, and then thankfully they’ve placed them. But that in itself was a many months process.

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

Brentin Hess: My best real estate investing advice ever is consistency. One of the things that I had mentioned was that I’ve gone through many gyrations of sending out mailers and placing signs, and just the lack of consistency in those actions – I would have been just as well off if I took all my money and walked up to a trash can and dumped it in there.

Joe Fairless: What do you do now consistently from a marketing or lead gen or whatever standpoint?

Brentin Hess: I commit to mailing at least 12 mailers. I do split-testing, so now I do 12 mailers in six months (every other week), or I’ll do once a month for 12 months. Regardless, I commit to that; I’ll pay three months in advance every single time, and that’s just my way of not looking back, like “I already paid for it. It’s gonna go out.”

Joe Fairless: You mail how many a month?

Brentin Hess: Total number? Oh, I was saying that what I’ll do is every lead in my mailer list, I’ll make sure that I hit them 12 times, whether it’s 12 times  in 6 months, or I hit them once a month for 12 months.

Joe Fairless: Oh, okay, I understand now. I was like, “12? You could ramp up your game a little bit.” Okay, I’m with you…

Brentin Hess: Yeah, I’m only mailing a few thousand.

Joe Fairless: Yeah, every lead that comes in, you contact them in some way 12 times.

Brentin Hess: Correct, yeah.

Joe Fairless: Are you ready for the Best Ever Lightning Round?

Brentin Hess: I’m ready.

Joe Fairless: Alright. First though, let’s have a word from our Best Ever partners.

Break: [00:18:39].17] to [00:19:08].01]

Joe Fairless: Best ever book you’ve read?

Brentin Hess: Best ever book I’ve read is Millionaire Real Estate Investor, by Gary Keller.

Joe Fairless: It’s a great book. I haven’t read that book, I’ve read Millionaire Real Estate Agent, and that is a great book, even though I’m not an agent; it inspired me to hire an assistant as your first hire, and that helped me grow my company. I should read that other one, Millionaire Real Estate Investor.

Best ever deal you’ve done?

Brentin Hess: It truly was this 11-unit I went through, simply because it jump-started that track record, the confidence and all the building a rental portfolio, which is ultimately the end game. I’m really grateful for that. And then for a flip, I did make 63k with my partnership on the flip.

Joe Fairless: A mistake on a transaction that you haven’t mentioned already?

Brentin Hess: A mistake on a transaction I haven’t mentioned already… On a flip itself, I was the one finding the subcontractors, managing the subcontractors, and with underestimating the renovations budget, and I was spending a ton of time with managing the subcontractors to where I calculated it and I only made 10k in a flip, and I spent about 100 hours in the deal… So what I didn’t realize at the time was I was essentially working for $10/hour.

Joe Fairless: Best ever way you like to give back?

Brentin Hess: First and foremost, I am a proud uncle of two. My niece and nephew are my world; both [unintelligible [00:20:29].11] have fought for their lives, so every minute I can spend with them is a contribution minute that I very much cherish. I also teach for a non-profit Keller Williams (KWKC) with one of your former guests, John Newman. I also run a Facebook group – RECN Stories; that’s simply where we just document entrepreneurs’ lives, and there’s no monetary means tied to it, just giving back.

Joe Fairless: What’s the best way the Best Ever listeners can get in touch with you?

Brentin Hess: Reach out to me on Facebook or Instagram, send me a message. I will respond to everybody; it might not be exactly that minute, but I’ll get around to it. It’s just my first name and last name, Brentin Hess.

Joe Fairless: Well, thank you for being on the show. This truly is a story of resourcefulness, I think that’s what it boils down to. You’re given an inch and you take a mile, in a good way; it seems like you’re constantly connecting with others, growing, contributing, and ultimately it leads to deals like this portfolio, where you originally wanted a 3-unit, and that grew to 11, and here comes a couple other properties along the way, with that portfolio.

The lessons learned, I really appreciate you sharing, from how to get the portfolio lender on board, to bringing someone in to co-sign with you who has a W-2 job, how you structured it with investors, you paid a premium, but at the same time you cashed them out in a relatively short period, and now you own the property with your partner. Some would say that’s a much more desirable structure from your standpoint than if you gave them equity and now they’re long-term partners with you. So there’s tons of ways to structure it, and I’m glad you talked us through this, as well as your lessons learned.

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

Brentin Hess: Thanks, I appreciate it. Talk soon.

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Joseph England and Joe Fairless

JF1199: Creating Success From The Start by Utilizing an Experienced Mentor with Joseph England

Joseph is an active duty service member, and active investor. He found someone who was having success house flipping, and use him as a mentor to help him get his feet off the ground. Now Joseph is on his own and still doing a great job with his investing. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

Best Ever Tweet:

 

Joseph England Background:

– Active Real Estate Investor
– He is the property manager for all his properties and accomplished all of this while maintaining a full time position with the US Military and deploying overseas.
– Purchased first investment property in Baltimore in June of 2015
– Now, he’s done over 20 deals, 16 buy and hold properties and four rehabs in various stages
– Specialize in rehabbing very distressed properties (rentals and flips).
– Based in Baltimore, Maryland
– Say hi to him at jde@vikingpropertysolutions.net
– Best Ever Book: 10x Rule

 


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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 fluff.

With us today, Joe England. How are you doing, Joe?

Joe England: I’m doing great. Great to be here.

Joe Fairless: Yeah, nice to have you on the show. First off, thank you for your service; I know you are active in the army, so I appreciate everything that you and your colleagues do for our country.

Joe England: I appreciate that.

Joe Fairless: And then in addition, and more relevant to our podcast, you are an active real estate investor, and he has been a property manager for all of his properties, and accomplished this while maintaining his full-time position in the army and deploying overseas. He purchased his first investment property in Baltimore in June 2015, and now he’s done over 20 deals – 16 buy and hold properties, four rehabs in various stages. He specializes in rehabbing very distressed properties – I’m looking forward to hearing some of this stories – and he’s based in Baltimore.

With that being said, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Joe England: So I started out buying three rental properties. One needed about 15k worth of work, but I did it myself… I’ve had a little bit of background as a carpenter as an apprentice when I was in college, and a whole lot of YouTube videos went into that project.

The second house was actually a turnkey that we got for a pretty decent of a price; I think I bought it for 100k, and then it rents for $1,500.

Joe Fairless: Wow.

Joe England: And then the third one I actually found on Craigslist, and it was my first venture into the lower income neighborhoods in Baltimore, and it was already rehabbed, so this is technically a turnkey… At $35,000. That one rents for one thousand a month.

Joe Fairless: My eyeballs just went out of their socket with that… Holy cow!

Joe England: Yeah. That specific area actually, I sort of lucked out because some of these areas — it’s really block to block… So we found this really diamond in the rough, if you will. I found this house [unintelligible [00:04:29].09] but the whole area, probably a good five or six-block radius, just really quiet, really nice, in kind of one of not the greatest parts of town… So when other houses started coming up in that area, I started buying more of them; I bought a couple of them for 90k. Between purchase and rehab, I was averaging between 30k and 40k with these houses, and almost all of them rent for anywhere between $900 to — we actually have one that rents for $1,250 just one block away.

Joe Fairless: Those are incredible cash-on-cash returns, on the all-in 30k, renting between $900 and $1,250… I wanna talk about that, but first I wanna take a step back. You said you started out buying three properties – was that at once?

Joe England: They were within a two-month process. So me with the partner that I had, who I actually initially started with, I had recently re-enlisted, I had a bunch of money, and I knew what I wanted to do with it, so we did conventional loans on the first two, the typical 20%, they were in my name, and then what we had left was enough to buy the $35,000 house just pretty much I had the cash… Minus some emergency reserves that I set aside, I was pretty much out of cash at that point.

Then that was the summer of 2015, and then right around January – or probably the month before – I decided that I wanted to get into rehabs… One house I did do the rehab, but I did it myself; obviously, I didn’t wanna do that anymore. I wanted to hire contractors, and then I had a mentor who was a big house flipper, and kind of used him as my mentor, and then he helped me along. At this point he was living here, but he was also in the army and he had to move out of state… So he helped me in a lot of different ways, helping me out with some of his private investors, but I purchased my first rental rehab in January of 2016.

From there, I went on to do over 20 properties in 2016. That very first house was sort of the catalyst that has turned into what my business is now, which is I specialize in rental rehabs, with of course the occasional flip sprinkled in there.

Joe Fairless: And when you do the rehabs on these rentals, are they for your own portfolio, or are you looking to sell some and then use that money to buy stuff for your own portfolio?

Joe England: The rental rehabs – the goal is for my own portfolio. I have actually recently started looking into selling a few of them, sort of doing a little bit of a turnkey business, because I know that there are investors out there who are looking for a rental that’s already done, it’s got a tenant in and it’s already got property management in it… I’m setting up kind of like — that is sort of like a new wing of my operations, but for the most part they are all for my own portfolio.

Joe Fairless: Okay. The mentor who is in the army and was a house flipper and helped you learn the ropes on the rehabs… I’m assuming – but I wanna verify this – that you met him by just being in the army and you just came across him that way?

Joe England: Yes. His name is actually Ben Smith; he came to the same unit that works in the Baltimore, DC area. We instantly got along, and I just knew that he was a guy who, as he moved around from station to station, he would buy a new house in every area, and then once he moved, he would rent it out. I think by the time that I met him, he had like seven houses.

A few years later he decided to leave and head off to the next assignment, and when he did that, he decided that he was going to start flipping, and it turned out he was really good at it. After three years, he was probably one of the most well-known flippers in Baltimore, in just such a short time. His advice influenced and has been instrumental into my business, and it’s honestly a success. I wouldn’t be where I am without him.

Joe Fairless: What are some principles or tactical things (however you wanna approach this) that you learned from him that you applied towards your business, that has helped you be successful in your rehabs?

Joe England: I remember one of the first quotes he ever kind of gave to me was in regards to making offers. I remember when I was making my first offer and he asked me, “So how do you feel about your offer?” I was like, “Oh, I feel pretty good.” He was like, “Do you feel embarrassed by it?” I was like, “No.” He was like, “Well, it’s too low. If you’re not embarrassed by your offer, it’s too high.” So always go lower.

I started out adopting this principle of putting out these embarrassingly low offers, and most of them would get rejected, but occasionally – and it would happen – someone would come back and say yes, and then I suddenly got a property that was anywhere from 20% to 30% under market value, for whatever reason. You just never know… That’s my strategy when it comes to finding properties that are listed. I just see a property I have online, I look at it, I do the numbers real quick, and then I just send out these pretty embarrassing low offers. That’s how I found the majority of my houses.

Joe Fairless: Just online listings, sending embarrassing low offers, and it’s a volume game, right?

Joe England: Yeah. I know that other places this isn’t really much of a viable option, but one of the things that helps me is the fact that it is Baltimore city, and people are generally (for lack of a better word) afraid to do business in the city, for a number of reasons; we have its reputation for crime, the tenant-friendly laws, the high utility bills… You’re just dealing with the city and any type of its public work is pretty much a nightmare. But because of that, we have less competition, and then I know all the majority of the areas in Baltimore, because I drive through them; actually, I walk all of them, so I can spot areas that other people wouldn’t to find these diamonds in these roughs.

Joe Fairless: Talk to us about where the areas are in Baltimore that you see as good investment opportunities.

Joe England: This has actually changed, I would say, in the year, year-and-a-half since I started. So when I first started the actual rehabbing portion of the business, my main focus was an area known as Loch Raven. It’s sort of like a middle-income, blue-collar, working community just South of [unintelligible [00:11:27].18] University. And what was really nice about this area – the houses with the ARVs were around 150k, but we were able to get distressed homes between 50k and 65k, and they usually needed anywhere from 30k to 40k to put into it.

The margins were there, but one of the great things about this community is there were houses on Zillow that weren’t being purchased. Unfortunately, that neighborhood is now completely saturated as far as investors go, and I can’t find a distressed property there that doesn’t get swooped up by another investor… And a lot of them are new investors who are just trying to make the numbers work, and I’m getting outbid on properties; I’ll put in an offer — usually I don’t go any higher than 70k in this area, and then I’ll get outbid, and then I’ll find out that the house got purchased for $87,000. It’s ridiculous.

I think this has a lot to do with the market. As the height of the real estate market continues to raise, you get these people who are really excited about investing, and everybody wants to get into it and you have a lot of competition. But most people will go to what could be considered safe areas. Loch Raven, as far as Baltimore goes, is considered a safe area.

It got really hard to find distressed properties and not get outbid by them, so I started looking in sort of what I kind of like to think are some more of the fringe areas. For example, there’s an area in Baltimore that’s called Pigtown.

Joe Fairless: Pick or Tick?

Joe England: No, pig, as in like bacon…

Joe Fairless: Pig, got it. Pigtown, okay.

Joe England: Yeah, Pigtown, yeah.

Joe Fairless: [unintelligible [00:13:17].14]

Joe England: It’s actually just next to all the stadiums in Baltimore, just West of it, and it’s been an up-and-coming town for the last ten years, or that’s what they’ve been saying… And when I first got into it, one of the things that you always hear in Baltimore is “Oh, you should invest in Pigtown. It’s up-and-coming.” I remember first going over there in the summer of 2015 and I saw Pigtown myself, I was like “Well, this is not up-and-coming.”

Well, I just happened to go by there last year as I noticed that it was getting harder and harder to find properties in Loch Raven, and then I noticed that there had been a lot more rehabs and a lot more revitalization of that area, so I was like “Okay, well things are starting to pick up here”, so I started purchasing houses in that area. If you imagine a line of houses that are getting flipped, after a year that line moves a few blocks over… Well, I’ve essentially bought houses in preparation a few blocks down from where the houses are being rehabbed. But because people [unintelligible [00:14:19].25] block-to-block analysis, a lot of people won’t go that extra few blocks… But I first make sure that they work as a rental, so just in case that those property values don’t necessarily go up in five years, but they work as rentals, but at the chance that they do, these properties have the potential in 5-10 years to be worth $100,000 more than they are now. So that’s another strategy I’ve adopted as a rental rehab.

Joe Fairless: Let’s dig into that part a little bit, because it’s really relevant for most of the Best Ever listeners… Because when we have a submarket that we really like, and then all of a sudden it gets real hot and now we can’t find any deals, we’ve got to pivot and find the next submarket that we like. So I wanna dig in here a little bit into Pigtown, and I want to learn more and understand more about how you identify this as an area… And let me know if there’s additional things. First, I heard that you had heard for a little while that that was up and coming area, and when you first saw it, it was not, at least according to you, and now it is.

Secondly, you saw that there were already rehabs and revitalization happening in the area… Are there any more granular details or metrics or something that you can talk to us about for how you decided that this is the new submarket that you’re in?

Joe England: This is just one of the submarkets, but I think this is probably the best example of this strategy (Pigtown), but when I went and first looked at it back in December 2016 – this would be easier if I could show it on a map, but just East there’s this large road that goes down this part of Baltimore where all the stadiums are, and it’s known as Martin Luther King Boulevard… And everything West of Martin Luther King Boulevard is known as West Baltimore, and of all the parts of Baltimore, West Baltimore is known to have the worst reputation. Pigtown sits right there on the edge of Martin Luther King Boulevard, but the thing that Pigtown has in its favor is it’s right to the University of Maryland Medical Center. And one of the things that Baltimore is known for – and this actually goes back to how I pick areas – is there are hospitals everywhere in Baltimore… You know, John Hopkins and all these different satellite campuses… Well, Pigtown is one of those that’s right next to the University, so if you were to revitalize these areas, these houses, then these doctors, nurses, people who work at these hospitals would like to stay there, because it’s a good location, near the hospital, you’re right next to the stadiums, you’re a short little ride from any of the nicer parts in Baltimore…

So when we first looked, there was maybe like one or two getting flipped, and they were not that far from this particular road. But when I came back a year later, there had been maybe 30-40 rehabs in that area, and it was slowly moving West-ward, away from the road, to sort of revitalize the rest of Pigtown, and it’s been slowly moving farther West… South-West, if you will; that’s the shape of Pigtown as it leaves Martin Luther King Drive. So when I looked at it, it was hard to find properties that were right around where everybody was flipping, for there was a lot of competition. So I started looking a few blocks down, and there were a lot of houses that were either in decent condition, or they were distressed but they didn’t necessarily need a full gut… But based on the rents, I could get a house, buy it, rehab it between 60k and 70k, and they would rent for $1,200 or $1,100. Not as good as some of the profit margins that I get in some of the lower income areas, but the houses in lower income areas — and just to label one of the areas, it’s known as Biddle Street (that’s where I have a bunch of those houses).

So Pigtown has the potential of appreciating. These houses have the potential to appreciate, but the Biddle Street houses don’t. I even had them appraised last year when I was doing a portfolio loan, and the houses in Biddle Street would come out to about $35,000. But it didn’t really matter, because I owned them outright, and each one makes $1,100 to $1,200 in rent.

So going back to Pigtown, these houses made sense as far as rent goes, but with also the potential to appreciate as this line of flipping and rehabs – the whole area is getting revitalized… It may take a number of years, but I think in 5-10 years that it’s possible that this houses will be worth $50,000-$100,000 or more, because of how you looked at the history of how Baltimore revitalized some of its areas, and that’s usually what happens. The property values will definitely go up. But in case it just doesn’t — I don’t bet on that as a strategy. I don’t put all my eggs in one basket. It first has to work as a rental, so if it never appreciated and stayed at the exact value, that it still makes a good investment property. But for me that’s just kind of like the icing on the cake, the fact that it could possibly be worth $50,000 to $100,000 in a number of years.

Joe Fairless: That’s great. Thank you for walking us through that. That’s relevant for a lot of the Best Ever listeners, myself included, as we find the submarket we like, and then it gets too hot and we’ve got to identify another submarket or submarkets. Based on your experience as a real estate investor, what is your best real estate investing advice ever?

Joe England: It was kind of like a combination between my mentor Ben Smith, and I would say reading Grant Cardone’s 10X Rule. I remember going to visit my buddy Ben for the first time, and we were sitting down to talk about real estate for the very first time; I went down to his basement, and that’s where his office was. I sat down there with him; he had a multi-monitor set up, and he’s multi-tasking, going through all this stuff, and he just kind of mentioned “You know, when I get off work, this is what I do. I just come down here. I love it.” He even mentioned that it’s like a borderline obsession.

Then going back to it and listening to Grant Cardone’s book, The 10X Rule – massive action, you get those massive results, but really it comes down to having an obsession for this, because if you’re not obsessed with it… It’s hard to explain, but…

Joe Fairless: You get burned out.

Joe England: Yeah, you get burned out, but if you are obsessed with it, you just go at it; I come home every single day, and there’s a lot of other things that I could be doing, but I come back, I sit down at the computer and I start going through the listings, and I start sending out e-mails, and I start sending out offers, and much to the dismay of my real estate agent, I do this on a daily basis. Sometimes she’ll get hit with 5-10 offers that she has to do every single day.

Joe Fairless: Are you single?

Joe England: I am.

Joe Fairless: I was gonna ask how your significant other appreciated your obsession and how you navigated that, but it’s a non-factor…

Joe England: Well, I would say before that I would be – call it different things – a socialite, somebody who would always go out, go to the bars, go to the clubs; I definitely had a very robust social life. Then once I started real estate, that all went out the window. Looking back at it, I could care less, because I look at what I’m doing as I’m building a future for myself, and hopefully a future family, but also for the things that I wanna accomplish in life to help other people.

One of the dreams that I have is to take a group of people over to Africa, where I’ve deployed a lot, and help with a lot of situations over there; that could definitely help more areas that have been affected by poverty and food shortage, because of warlords taking food and using [unintelligible [00:22:22].19] and stuff like that.

When I was going out in the town and drinking and all that stuff like that, I wasn’t taking a single step forward to any of that – nothing future in my life, dreams or anything like that… So that was the biggest change in my life, once I started this venture.

Joe Fairless: Yeah, what you’re doing now has staying power for now and for your future and everyone else’s around you with a ripple effect. Are you ready for the Best Ever Lightning Round?

Joe England: Yeah.

Joe Fairless: Alright. First, a quick word from our Best Ever partners.

Break: [00:22:56].03] to [00:23:48].02]

Joe Fairless: Best ever book you’ve read?

Joe England: This is really hard. I would have to say it’s between Grant Cardone’s 10X Rule and actually Elon Musk’s autobiography.

Joe Fairless: Alright, I’ll check out Elon’s. I haven’t read Grant’s, but I get the gist of it just through me studying him, and I’ve interviewed him on the show, and some things… But I really love studying Elon, so I’ll check that out. What’s the best ever deal you’ve done?

Joe England: The best ever deal I’ve ever done… That could be like a [unintelligible [00:24:16].12] answer.

Joe Fairless: Just give me one.

Joe England: I would say the easiest – a wholesale deal where I made 12k and I feel like I put an hour and a half work into it.

Joe Fairless: That’s a very good return… Even better than lawyers and doctors. What’s a mistake you’ve made on a transaction?

Joe England: I would say I always try to keep obviously emotion out of it, but sometimes there has been one or two deals where I felt like — one specifically that I raised up in price to get the deal, and I definitely regretted it later on. I still made money, but I cut it close. It ended up being a flip. After that, I just stick to the numbers; it sucks, but at the end of the day there’s always gonna be another house. That’s one of the great things about real estate. Houses are constantly depreciating; whatever rehab has been done, whatever HVAC system you put in, it’s on its way out every single day. Even new rehabs will need to be rehabbed in 10-20 years.

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

Joe England: You can reach me by my e-mail. I’m actually currently setting up my website right now, but for right now the best way to reach me is through e-mail, which is jde@vikingpropertysolutions.net.

Joe Fairless: Well, thank you for being on the show. Thanks for talking about how you’ve been able to grow your real estate business from when you first got started, right out of the gate really quickly on those first three deals, to now rehabbing properties and perhaps eventually developing a turnkey model as well along the way, but then really growing your own portfolio.

The macro lesson for all of our listeners is how to find a new submarket when your gets too hot. Yours initially was Loch Raven – or at least one of them you had a lot of properties in… And then you had to find a new one, so you looked at — path of progress, you looked to see where are rehabs happening, and an area that’s being revitalized, plus has some consistent job presence in the Maryland Medical Center… So the takeaway would be look for hospitals, look for other medical offices, and then also having a lot of convenience factor, in this case close to the stadiums.

Then lastly, just buying for cashflow and making sure that the property works as a rental… Although I said lastly, that’s really the top priority – buying for cashflow, making sure it works as a rental, and then if you get appreciation on top of that, as you said, that’s icing on the cake.

Joe England: Exactly.

Joe Fairless: Well, thanks for being on the show. I hope you have a best ever day, thank you for your service again, and we’ll talk to you soon.

Joe England: Thank you so much.

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JF910: Why He PASSED on a $17MM DEAL, or Was It?

$17 million development deal? Well, you’ll have to hear what happened. Just remember that trusting your gut may be a good thing…especially when developing and speculating market conditions.

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Brooke Kaine Real Estate Background:

– President & CEO of Kaine Homes, Inc. & Kaine Investments
– Over 30 years experience in real estate business
– Land & new homes builder, built over 1,500 homes, private money lender $6M capital, 20-25 loans at one time
– Has 86 residential rental properties as partner with BOA Partners, LLC Jared Sleeth
– Real Estate Investor, Investment Manager at Kaine Investments, a private money lending company
– Investing for over 4 years all while working full time job, in August 2016 quit full time job to invest full time
– Based in Baltimore, Maryland
– Say hi to them at http://www.kainehomes.com/
– Best Ever Books: The Millionaire Real Estate Investor by Gary Keller

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors. We make funding your projects easy so you can focus on what you do best…rehabilitating homes.

Download your free copy at http://www.fundthatflip.com/bestever

Subscribe in iTunes and Stitcher so you don’t miss an episode!

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real estate pro advice

JF867: From Rabbi to Zillow Competitor Helping Landlords Fill Vacancies

That’s right, he wanted to be a rabbi. He later developed a platform that is becoming very pro in filling vacancies for landlords. He even states that he would love to compete with and eventually become the new Zillow. Hear how he got to this point and how he’s growing the business.

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Ben Schwartz Real Estate Background:

– Founder of VacancyFillers.com, a tenant placement company
– To date have helped sign 287 leases and brought in $3,602,482 of rent revenue for clients
– Success of his company stems from the online platform of unique marketing and systems
– Based in Baltimore, Maryland
– Say hi to him at http://www.vacancyfillers.com/
– Best Ever Book: The 10x Rule by Grant Cardone

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors. We make funding your projects easy so you can focus on what you do best…rehabilitating homes.

Download your free copy at http://www.fundthatflip.com/bestever

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JF852: How to Transition to from Pen and Paper to a CRM #SkillsetSunday

It’s time to update your process of lead generation, capture, and follow up. Throw out your pen and paper and let’s start automating! Of course this is done through an electronic program or software known as a CRM. You’re about to hear one of the best CRM’s on the market, turn up the volume and take some notes!

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Carlos Zamora Real Estate Background:

– Account Manager & Managing Partner of InvestorFuse, a lead management CRM system for investors
– Began wholesaling 3 years ago
– Graduated from the University of Maryland, College Park in 2013 with a degree in Communications
– Based in Baltimore, Maryland
– Say hi to him at www.investorfuse.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors. We make funding your projects easy so you can focus on what you do best…rehabilitating homes.

Download your free copy at http://www.fundthatflip.com/bestever

https://www.youtube.com/channel/UCwTzctSEMu4L0tKN2b_esfg

Subscribe in iTunes and Stitcher so you don’t miss an episode!

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Best Ever Show Real Estate Advice from experts

JF792: How You Are Missing Out On THOUSANDS by Not Creating This Experience for Your Tenants

Are you ready to 10 X your return? You are a few professional photographs and some excellent customer experience pointers away from maximizing your income from your cash flow properties. Today’s guest is a pro in creating the hotel or vacation experience for her residents. Hear how you can set it up in your own real estate business and why it definitely makes sense.

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Susan Colwell Real Estate Background:

– Principal Partner at TriStar Group, A Real Estate Investment Firm
– Host of Real Estate Investor Radio podcast
– Spent five years managing two successful vacation-rental companies
– Based in Baltimore, Maryland
– Say hi to her at http://tristarinvesting.com
– Best Ever Book: The Alchemist by Paulo Coelho

Want an inbox full of online leads?

Get a FREE strategy session with Dan Barrett who is the only certified Google partner that exclusively works with real estate investors like us.

Go to http://www.adwordsnerds.com strategy to schedule the appointment.

Subscribe to Joe’s YouTube Channel here to learn multifamily and raising money tips:
https://www.youtube.com/channel/UCwTzctSEMu4L0tKN2b_esfg

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JF504: How You Can Achieve COMPLETE Automation in Your Real Estate Biz!

System building is his definition of being an entrepreneur. Our Best Ever guest is tenaciously seeking to create a product and environment that streamlines YOUR wholesale business using workflows and Podio, a simplified CRM. He started in a band and later jumped into systematic software creation for real estate. You will save thousands of hours if you listen to him, tune in!

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Dan Schwartz background:

– Musician, real estate investor and automation junkie determined to enhance the freedom  of entrepreneurs through technology and systems
– Has done 100+ wholesale deals since 2011 and a handful of rehabs
– based in Baltimore Maryland and say hi to him at http://www.investorfuse.com
– working on a lead management platform designed around the 80/20 principle
– Will be launching a fully automated membership work space called InvestorFuse in 2016.


Made Possible Because of Our Best Ever Sponsors:

Please Take 4 Min and Rate and Review the Best Ever Show in iTunes. . 

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors. We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

What’s the Best Ever health plan for YOU?

Go to http://www.stridehealth.com/bestever and find a better health plan in 10 minutes or less. On average you’ll save $418 on coverage and care.

Listen to all episodes and get a FREE crash course on real estate investing at:http://www.joefairless.com

 

 

 

 

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Best Ever Show Real Estate Advice

JF350: Some MAJOR Advantages of Buying Through an LLC as Opposed To Your Own Name

Today’s Best Ever guest has the same idea you probably do- to NEVER have to work a full time job again. She is well on the track to that, and shares with us how she does her investing to cashflow almost right away!

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Nicole Williamson’s real estate background:

–           Based in Baltimore, Maryland

–           Purchased 2 rental properties within 6 months of each other in 2012 and today has a total of 6 units in Baltimore County

–           Say hi to her at http://www.streamingrentalincome.com

–           Volunteer at a local animal shelter and does work on her own cars

Subscribe in iTunes  and  Stitcher  so you don’t miss an episode!

Made Possible Because of Our Best Ever Sponsor:

Patch of Land – Could you do more deals if you had more money? Let the crowdfunding platform, Patch of Land, find investors for you and fund your next deal…and your next deal…and your next deal…and…well, just go find out more at http://www.PatchOfLand.com

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Best Ever Show Real Estate Advice

JF310: Renting to Section 8 and College Students and ALL You Need to Know About It

Our Best Ever guest today, shares with us the reasons you should NEVER stop buying. We also discuss the benefits to buying whenever and wherever you can, and all the implications of renting to section 8 tenants and college students.

Best Ever Tweet:

I go where the numbers make more income per the square footage of the house.

Pat Hiban’s real estate background:

–          Top producing real estate agent and owner of Pat Hiban Group with Keller Williams

–          Based in Baltimore, Maryland and active investor in real estate deals as well

–          Has 12 single family homes and 7 apartment buildings, a strip center, office building and 14 private companies

–          Awarded #1 Keller Williams Realty Agent in units sold nationwide in 2006

–          Host of popular podcast “Real Estate Rockstars”

Subscribe in iTunes  and  Stitcher  so you don’t miss an episode!

Made Possible Because of Our Best Ever Sponsor:

Patch of Land – Want to learn more about crowdfunding? Let the leading expert in the crowdfunding space, Patch of Land, give you all the info you need to get started. Grab your FREE copy of Top Ten Answers to the Top Ten Crowdfunding Questions athttp://www.PatchOfLand.com/bestever

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Joe Fairless