Have you ever used Craigslist to find private money? That is exactly what Nick Beveridge did for his first flip, and it worked out well. Now a seasoned investor and agent, Nick holds a monthly meetup and helps others with their investing. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
Nick Beveridge Real Estate Background:
-Involved in real estate for 8 years and successfully investing for about 3 years
-30 year old investor and agent with Keller Williams Realty
-Hosts an REI group that meets monthly for a little over 2 years in North Idaho
-Based in Coeur D Alene, Idaho
-Say hi to him at nickbeveridge17 at gmail dot com
-Best Ever Book: Millionaire Real Estate Investor
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Joe Fairless: Best Ever listeners, 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, Nick Beveridge. How are you doing, Nick?
Nick Beveridge: I’m doing awesome, how are you today?
Joe Fairless: I’m doing awesome as well, nice to have you on the show. A little bit about Nick – he has been involved in real estate for eight years and has been investing for three of those eight. He’s a 30-year-old investor and agent with Keller Williams. He hosts a real estate investing group that meets monthly, and he’s been doing it for a little over two years in Northern Idaho. Specifically, he’s based in Coeur d’Alene, Idaho.
With that being said, Nick, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Nick Beveridge: Yes. I’m 30 years old, I wish I would have got started right when I started selling real estate in investing – that would have been a great time to get going, but I really had no idea what I was doing. Lately, I’ve been focusing on buy and holds, but I first started off flipping homes with my brother. We made a ton of mistakes, we had to learn almost everything we were doing on YouTube. We started off with very little cash, and the first house we sold, we made 44k on, and then it’s just been a snowball ever since.
Joe Fairless: Wow, 44k on your first place, and you learned it from YouTube… Any particular YouTube channel that you were watching?
Nick Beveridge: I was listening to a lot of Phil Pustejovsky, but what I mean by YouTube I mean how to actually do the repairs on our house that we bought. We had no idea how to renovate a house, so every little step came to what screws to use, how to do drywall – all that kind of stuff. We had to teach ourselves online.
Joe Fairless: Wow. Was there a particular channel that taught you, or was it just “I search on YouTube and whatever video pops up…”?
Nick Beveridge: We were just simply at the house, we didn’t know how to do something, like how to wire an outlet, we’d just type into YouTube “how to wire an outlet” and we’d just hope for the best. [laughter] And it worked out.
Joe Fairless: What type of experiences did you have with that first flip? I’m sure there were a lot of curveballs.
Nick Beveridge: Yeah, so that first flip — it was referred to me as a potential listing, and I had met this lady that referred it to me at a real estate investing seminar. Her cousin got it in probate, and after I checked out the house to give my opinion of it, he said “Hey, I heard you’re an investor. Do you wanna make me an offer?” At this time I’d never made an offer on a property before, I’ve only work with buyers and seller, so I was a little nervous, but I made him a lowball offer, I told him I can sell it for more on the market, but he just said “Okay.” [laughter]
Joe Fairless: Game time.
Nick Beveridge: And I had no idea how I was gonna get the money or anything like that, but we just figured it out step by step. I think the most important part was we got a really good deal. I think once you have a really good deal under contract, you’re able to make things happen from there.
Joe Fairless: Take us back in time – you made an offer, he accepted it… What happened after that?
Nick Beveridge: Then I got nervous and almost peed myself because I didn’t know what to do next…
Joe Fairless: Then you went to YouTube.
Nick Beveridge: Yeah, I know… Fortunately, I work in an office with a lot of investors and I was able to get help. I have some mentors here that just kind of walked me through it.
Joe Fairless: So what specifically did you do though?
Nick Beveridge: Specifically, the best advice I got was “Lock it up”, so I immediately sent him a contract and got it under contract. Then from there I started calling private money lenders, and due to the lack of experience, almost everybody said no. Fortunately, this property was in probate still, so we had a few months to close on it. It took us about three months to find somebody that would actually lend to us, because we didn’t have much down. [unintelligible [00:04:46].15] and it wasn’t much, it was like $2,000. So we were just barely scraping by, but we were able to close just on time, and we put most of the renovations on a credit card. That was about four years ago now, and we’ve learned a lot since then. It’s a lot easier for us to get money now.
Joe Fairless: Oh, I bet. Let’s still stay on this first deal. You had a lot of calls with money lenders, they all turned you down; did one finally say yes?
Nick Beveridge: Yeah, after a lot of convincing. The guy that actually said yes, at this time we had already had an appraisal done, we paid for an inspection, we had a TMA of what it could sell for, he went and actually visited the house… So at least he went that far to actually check it out, and he knew that if for some reason we couldn’t perform, he would have a good deal if he took the property back.
Joe Fairless: How did you find him?
Nick Beveridge: Craigslist.
Joe Fairless: You found the private lender on Craigslist?
Nick Beveridge: Yeah. It wasn’t too hard. It was actually the first time I — I was that desperate, I went to Craigslist, because I didn’t wanna lose out on the deal, because we had to close in just about a week and I still hadn’t found the money… So I just went to Craigslist and called the first guy that said “I lend money”, and he lent us the money.
I actually still refer him to this day. He’s a little expensive, I don’t use him as much as I would like to, but he helped us out on that first deal, so I still send his name to new investors.
Joe Fairless: What were the terms?
Nick Beveridge: Boy, I think we paid almost 10% in points and 30% interest anually, interest only.
Joe Fairless: 10% in points – so what was the loan that you got?
Nick Beveridge: It was kind of small. If I remember right, I think it was around 60k or so.
Joe Fairless: Okay, so you paid $6,000 – up front? Or rolled into the loan, I guess.
Nick Beveridge: Yeah, a lot of it was kind of rolled in. The points were rolled in, the renovations – he had an extra $5,000 in there, inside the loan and the whole back, but I believe the actual total finance amount was around $60,000.
Joe Fairless: Okay.
Nick Beveridge: I think we put about $6,500 on the credit card and we did all the work ourselves, we couldn’t really outsource anything.
Joe Fairless: Wow, you got the loan for the acquisition, plus $5,000 for some rehab, but you had to then use your credit cards for the remaining amount of rehab materials and you did the rehab yourself. Who did you do this with?
Nick Beveridge: Who did we get the loan with?
Joe Fairless: No, did you partner with someone? Did you say your brother, or am I making that up?
Nick Beveridge: Yeah, my brother and I… And we had to have something down. I think he just needed $1,000, and [unintelligible [00:07:27].15] we were actually buying another property at the exact same time, and that we got seller finance and we just had to pay off her realtor, so that’s where I needed to sell [unintelligible [00:07:39].23] pay off her realtor, and then we got that one finance directly. We were closing on that one actually just before we got this house, but we didn’t have any renovation costs to work on the one that we seller-financed… We were kind of going after two at the same time.
Joe Fairless: So that was your first one… That was three years ago?
Nick Beveridge: Yeah, that was three years ago.
Joe Fairless: And how have you evolved your business since then?
Nick Beveridge: It’s a little bit more leveraged down. We have a great contractor, we have great private money lenders and then we also have people that bring us the good deals. I think about six months or so after we did that first deal, I wanted to start kind of a local networking group here in North Idaho. There really wasn’t one; there was one in Spokane, Washington that we visited, and we wanted to network with more investors, private money lenders and contractors, so we just started our own meetup, our REIA group, whatever you wanna call it… And to this day, we still get about 30 or so people that show up every month. Out of that, we’ve been able to have a lot of partnerships that came out of it, and a lot of deals that got referred to us from there.
Over time, we’ve learned that the best strategy possible si to try to keep your properties and not flip them. If we would have kept each one and just refinanced it and kept some of the equity as profit and just rented them out, I think we’d be sitting a little bit better than we are today.
Joe Fairless: Is that the approach now – you don’t flip, you refinance?
Nick Beveridge: Yeah, that’s what we’ve been doing for about a year or so now.
Joe Fairless: How do you run the meetup? What’s the flow of when we arrive, what do we experience?
Nick Beveridge: Typically, I just wait for everybody to kind of get settled. We usually start 15 minutes late or so, and then I like everybody to stand up one at a time, introduce themselves, what they wanna get out of this. When we’re done there, I go over a little bit of like a market update in this local market, and then I’ll go over the inventory levels, current pending ratios and all that.
I’ll do that monthly with everybody, and then we might have a guest speaker, we might not… I’ll probably go over a topic if we don’t have a guest speaker, or a case study, and then I’ll try to leave it open for networking for a good hour or so.
Joe Fairless: Where do you host it?
Nick Beveridge: Right at my office, at [unintelligible [00:09:51].25] Coeur d’Alene.
Joe Fairless: And you said it’s monthly?
Nick Beveridge: Yes. We have one tonight. It’s the first Thursday of each month.
Joe Fairless: Very cool. And do you charge?
Nick Beveridge: No, it’s absolutely free.
Joe Fairless: What’s been your experience? With my meetup, I had it free, and then I’d have 50 RSVPs and negative three people would attend, so I started charging $2,50 just so people had some skin in the game, and now I have like a 95% rate of people who RSVP actually show up.
Nick Beveridge: I know that the other guy here locally in Spokane he charges for his meetup annually, and he mentioned to me he did it free at first, and then almost the same kind of thing – he felt like people would respect it a little bit more if they had to pay for it… But I’m just not interested in trying to account for money at the door. I get plenty of business from it, and I’m not really doing it for a great attendance every time.
I truly like to just network with people that are interested enough to come out on a nice day, when they could be doing other things, and learn more about real estate. Those are the people I wanna engage in. I don’t wanna feel like I have to tempt them to come here.
Joe Fairless: What’s the last deal that you did? Can you give us the numbers and the breakdown of it?
Nick Beveridge: Do you want the one that we’re just about to put on the market?
Joe Fairless: Sure.
Nick Beveridge: Okay, this property – it was interesting, I got the lead from another investor… It was like a wholesale deal, but at first he just referred me buyers to go look for a house. So I took these new buyers, I showed them the house, I got it under contract, and then in order to close on it, their lender came back and said “Sorry, but we can’t count your wife’s income. You have to pay off $38,000 worth of debt in order for us to close on this deal.”
So the investor that was purchasing their house, that referred me to those people, that he asked if I wanted to buy the property for him – he had it under contract at $60,000, and he offered it to me for $80,000, which in this market is insanely low. So I jumped on it, I made sure that the buyers/sellers were okay with me getting involved – they were totally fine with it as long as they closed on their new house… So I went and got a private loan from another private money lender for $80,000, I told him I’d bring 20k, and he would put 16k into [unintelligible [00:12:13].27] so for 4k in fees total.
The other 20k I got from other private investors. 12k from one and 8k from somebody else, and I promised to pay them back 10% once we closed on the deal.
So that one I didn’t have any of my own money into it. We got that one back in April, and we’ve had some hang-ups because we’re building a shop. We still have yet to put any of our own money into it. We’ve been using some credit lines with Lowe’s, because of course, we went over budget a little bit, but right now I think we are in at about 110k, with all fees included, and we should be able to resell it for about 179k, maybe 175k on the low side.
Joe Fairless: What’s been the biggest challenge of this deal?
Nick Beveridge: Working with the city of Coeur d’Alene, trying to get the permits for the shop, or just getting the inspection process done.
Joe Fairless: What are you referring to when you say ‘permits for the shop’?
Nick Beveridge: This house did no have a garage. In North Idaho everybody wants a garage or a shop, and this property had enough room for one, so we decided to build a basic pole building type shop, so somebody can park their car in there. So we’ve just been having issues with the city, and we finally got it resolved last week, but it held us up about a month. They wanted to make sure that the soil could handle the compactness, or something like that.
I had to get third-party inspections to make sure that the soil could handle the shop.
Joe Fairless: If you were presented with the same situation again, what would you do differently in this process?
Nick Beveridge: I would have started getting the permits a lot earlier, like right from the start, or even before we closed on the house. I think that would have sped things up a little bit quicker. I think we kind of got our systems nailed down so that the renovation (the interior and the exterior) of the house went along just fine and on schedule, so next time if I was doing the same thing, I would just start the permit process a lot quicker.
Joe Fairless: What is your best real estate investing advice ever?
Nick Beveridge: Best real estate investing advice ever?
Joe Fairless: Yup.
Nick Beveridge: I would keep the properties. On this particular one I would love to keep it, but it’s a partnership on this one, so we’ve gotta retail it, but the last few properties I kept – I love them. They pay me every month, I was able to refinance them, get some equity out; that was my tax-free profit, and then I still get to keep the house and have the tenants paying down.
Joe Fairless: Are you ready for the Best Ever Lightning Round?
Nick Beveridge: Yeah, bring it!
Joe Fairless: Great. First, a quick word from our Best Ever partners.
Break: [00:14:47].15] to [00:15:46].12]
Joe Fairless: Best ever book you’ve read?
Nick Beveridge: I’d say The Millionaire Real Estate Investor.
Joe Fairless: Best ever deal you’ve done?
Nick Beveridge: The best ever deal I’ve ever done – I bought this little house in a rural town at a very cheap price ($29,000), I put a few thousand into it, I refinance it, it appraised at 84k, I got to pay off a bunch of debt, I got to keep 25k, and it still cash-flows $300/month. I only put about a few thousand of my own into it and I got much more back just after about a year.
Joe Fairless: How did you find it?
Nick Beveridge: On the MLS. It was on the MLS and nobody wanted it, because it was too far away.
Joe Fairless: What’s a mistake you’ve made on a transaction you haven’t talked about?
Nick Beveridge: Oh, I’ve made so many… Let me see. [laughter] I didn’t really get a well or a septic inspected before I bought a property. That was probably one of my biggest mistakes.
Joe Fairless: What are the consequences of that?
Nick Beveridge: A good $5,000. It was scarier more than anything. It could have been a lot worse.
Joe Fairless: Best ever way you like to give back?
Nick Beveridge: I like to donate to this little rescue pet shelter out in Shoshone county. It’s actually not really a shelter, but it’s a rescue organization that they have and they house pets. They don’t have an actual building, but people take turns.
Joe Fairless: What’s the best place the Best Ever listeners can reach you?
Nick Beveridge: They can go to our website, NorthIdahoREI.com.
Joe Fairless: Well, thank you for being on the show, Nick, and thanks for sharing your best ever advice, as well as that first flip – holy cow, what a way to be scrappy and put it all together and just not take no for an answer and making it happen, and ultimately $44,000 in your pocket.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Nick Beveridge: Alright, thanks, Joe. Have a good day!