Wondering where you can find amazing deals? The foreclosure system is a tried and true method and a win-win solution for all parties involved.

We’ve got Paul Hale and Austin Steele joining us today to talk about the advantages of using the foreclosure system to find great deals, real-life situations where they’ve used the method, and why you should start applying it to your investment business.

Check out the full discussion here!

Key Takeaways:

• The profitability of the foreclosure system.
• Why you don’t have to feel guilty for using the foreclosure system.
• Why using the foreclosure system is a win-win solution.
• Why you need a mentor.
• The inspection process for rehabilitation.
• The benefit of using bandit signs.
• Check out my book: 7 Reasons Why Private Money Will Skyrocket Your Real Estate Business and Help You Build Incredible Wealth!

Get it here for FREE: www.jayconner.com/moneyguide

Timestamps:

0:01 – Raising Private Money with Jay Conner

0:45 – Today’s guests: Paul Hale & Austin Steele

3:00 – How Does It Feel To Work With Jay Conner’s Private Money Coaching Program

5:45 – Profitable Deals In Foreclosures

10:28 – How To Locate Properties In Foreclosure

13:09 – Creating Win-Win Solutions

14:51 – Paul Hale & Austin Steele Prettiest Deal

18:04 – Identify Where You Are Good At, Then Practice Doing It Again and Again

19:47 – How Long To Hold A Property Before Selling It?

20:38 – Do Still Have To Go Through Inspections When Doing Rehabs?

21:30 – What Are Street Or Bandit Signs?

How Do You Find Profitable Deals? With Jay Conner

 

 

Jay Conner (00:00):

Well, I don’t want to do the deal unless everybody’s winning. And so we always, as you just shared, we create win-win solutions in every transaction that we do.

 

Narrator (00:12):

If you are a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you are in the right place on raising private money. We’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money because the money comes first. Now, here’s your host, Jay Connor.

 

Jay Conner (00:44):

Well now, I have two very successful students of mine that I’ve invited to come on, and Chaffee and I are going to interview them. So, everybody, we have got Paul Hale here and Austin Steele from way over on the other side of the nation, Paul or Austin, which everyone wants to tell it. First of all, tell everybody where you’re located and, and everybody. I want y’all to know that Paul and Austin are very successful students of mine. And in addition to that, they are actually in my very top-level elite group, which is my mastermind group that both Chaffee and I run. We meet in person four times a year. we’ll be meeting virtually <laugh> in June. We won’t I dunno, we might be together. We might be virtual, we might be doing both. I don’t know, Paul and Austin, we’re, we’re just talking about that yesterday. But Paul and Austin share your story as to how you got into real estate, where you’re located, and what your journey looks like, you know, as of now since you got into real estate. And then Chaffey, I think Paul and Austin have got a, a short little PowerPoint presentation that they’ll wanna share, and we’ll tell you how to do that when you’re ready for that.

 

Paul Hale (02:02):

Oh, nice, nice. Great. Okay. Well, so I’m Paul and I’m the kinda started all this I’ve been doing this, you know, investing in real estate for about six years now, and we operate out of southeastern Washington state, so probably a certainly a good distance away from where Jay lives and kind of a unique market here. We actually don’t do a foreclosure. We cannot market to foreclosures in Washington state. So I know that Jay’s talking a lot about foreclosures today, and we have in fact just tripped over a couple of foreclosures in the process of doing normal marketing and so forth. And so we can talk about those that we’ve done. But yeah, we’ve been doing this for about six years. I brought Austin on a couple of years ago and he’s terrific. He’s brilliant and he keeps everything going and I’m always going a thousand miles an hour and about a hundred directions at once and he just kind of makes sure things actually get followed through on and actually happen. So, you know, we kind of work well together in that sense.

 

Jay Conner (03:00):

Sure. Remind me, when did the two of you start working with me In my coaching program?

 

Paul Hale (03:06):

So in your coaching program? It was last October, but you know, we’d seen you around, we’d seen you speak, and definitely kind of aspired to wanna work with you. And then when I was ready, I came all in, got everything all the way up through the Mastermind and everything, so.

 

Jay Conner (03:22):

Right, exactly. What’s been your experience of us working together? So it’s been, let’s see, 5, 8 months or so, at least track of time. What’s your experience been since us working together?

 

Paul Hale (03:37):

Well, I’ve never seen you make a promise you haven’t kept, I’ve never seen you do anything that I felt was questionable or you, you are a man of integrity is what I’ve seen again and again. And I’ve seen situations where you come in, you, you’ve been doing this for years, you kind of have the upper hand. You understand how to do this in a way that is beyond what most other people could understand. And with that, you could do things that would take advantage. And I’ve been watching and you’ve never done anything ever on any level. That’s even made me wonder if maybe you’re being anything less than a man of integrity and it’s your values that make you very effective. Someone who I would want to be working with and want to continue working with. As far as your knowledge, it’s impressive. Really, impressive.

 

Paul Hale (04:25):

You clearly know what you’re doing and you’re very actively still doing those kinds of things. You’re still working in your business. This is not like an academic exercise. 10 years ago I used to have a real estate business. It’s, you’re looking at deals right now. When I come out and see you in Morehead City, we’re looking at houses you have under contract at that time, houses you’ve just finished working on right there. So it’s super clear. You’re absolutely in the trenches right now and it’s very comforting too, to talk with you, and ask you questions, knowing that you’re right there in the trenches working the same kinds of deals that I’m working on. And you understand exactly what I’m working on very, very well. Not just from your past, but from what you’re doing right now this week. So

 

Jay Conner (05:07):

I appreciate you sharing that. what’s been your personal experience Austin since we started working together?

 

Austin Steele (05:14):

Well, I’ve also been super impressed with your character and, and also your knowledgeability. Honestly, there’s, you know, a lot of things that have been clarified for us and just helped us to know how to do different things that we haven’t done in the past and just a lot of super useful just very applicable information about how to build up our business to be more efficient more effective overall and better able to help people.

 

Jay Conner (05:39):

Wonderful. I appreciate you sharing that. And I had a note slip to me a little while ago that y’all have got a PowerPoint presentation that you wanna share.

 

Paul Hale (05:50):

I just wanna be clear on what I am and I’m now presenting here. So I gotta say, honestly, I have not used Jay’s foreclosure system because we do not market directly to houses that are in foreclosure in Washington state. However, we have found amazing deals and we’ve heard from so many of Jay’s students who are having great success with us. So my intention today is to kind of talk about foreclosures in general and what we’ve seen, the kinds of deals that we have found and that we have, you know, kind of tripped across, as I said earlier in Washington State. So yeah,

 

Austin Steele (06:19):

But what he’s trying to say is you’ll be able to find these deals easier than we did.

 

Paul Hale (06:22):

Yeah. And well, actually most people are finding these kinds of deals all the time. We just kinda stumble on ’em from time to time. We have to, you know, do other techniques, to find our deals. But anyway, these are fantastic, two different deals and there’s just kind of a lot of pictures and metal space and numbers as well. So, Jay, feel free to stop and ask any questions you want. So this is a little bit of a before and after. There’s not much difference to the outside of the house. We found this old house. What was the deal on this house? You wanna tell the story about how we found these people just real quick?

 

Austin Steele (06:49):

Yeah, you know, we actually just sent out a letter. We sent out letters to people who are in probate and inherited how situation. And they called us up and they actually, the house was in disrepair, poop all over the carpets from the dogs, A new paint needed everywhere, just kind of really poor condition throughout. When we were in the inspection stage of things and checking things out, we found out the plumbing actually all needed to, be replaced anyway, so there were just a lot of different problems with it. It was also a fun situation with the title. There were some issues to clean up there and so, but they just didn’t really have very many options of how they’d be able to sell it because it was in terrible shape and we’re just thrilled that we were able to even make them an offer that we can make good on, which we were able to do.

 

Paul Hale (07:31):

Right. And, and this, this goes back to something we, we listened in a little bit with what Lee was sharing before we got on and about not, this is not taking advantage of someone. When you see these numbers, you’re gonna be like, what you guys bought, you got this much money on this house. I’m telling you right now, the brother and sister who are trying to sell this house, this is their mother’s house, they were crying and praying every day for some kind of miracle to get them out of this house cuz they couldn’t pay on it and it was moving toward foreclosure and they just, they felt like they each had their own homes. They didn’t know what to do when we bought this house. I mean, there were tears of joy and gratitude and they were so, so thankful that we were able to solve so many problems that they just were not equipped to be able to solve on their own. And so, but to hear the numbers on it, we bought the house 88,000, and then we did about $13,000 worth of work on it. And then we sold it for this hundred. And, you know, about basically 170,000. So you’re looking at, our revenue is about $68,000. And so that’s, that’s

 

Jay Conner (08:34):

Thousand dollars on my average 67. So awesome. You beat me by thousand bucks.

 

Paul Hale (08:39):

Well, it’s not a contest, but there we’re

 

Paul Hale (08:47):

So if, if it was a contest, Jay, you, you’d still be one. You do, you do so many deals. So anyway, but this is easy to look at these numbers and think in your brain, oh, there’s, you’re cheating, you’re taking advantage. But I’m telling you, there was raw sewage under this house. There was, there were problems that these people had no capacity to resolve on their own and they didn’t have the money to even do the rehab. We were able to get the rehab done at such a low price because we’ve been doing so many. So we had great contractors who were able to move quickly. They knew us, they trusted us. And so we were able to just do one thing after another because that’s what we decided we wanted to be doing for this house. That’s what we wanted to do professionally be a flippant house.

 

Paul Hale (09:25):

And so that’s how we were able to do that. So we, well we bought, let’s see here. So we sold one that we had just flipped over December and January, and then we sold it off. I mean we signed the paperwork in March, so things were starting to get weird just a little bit. And then we bought a house in March and then sold that house in April that we just bought in March. And so yeah, we still have been doing deals in Covid. We actually just put a house under contract on Tuesday. And so just like two days ago, three days ago. So, or was it Wednesday today it’s Tuesday or Wednesday anyway, and so we’re still working. There is definitely still opportunity for people right now there are a lot of situations where people are scared to sell, but I’m telling you, there are a lot of situations where people are scared to not sell and they feel like Exactly. Company options. No,

 

Jay Conner (10:16):

I heard you mention as you were starting to tell the story of this deal that these people were in probate and they had inherited the house and they didn’t have the means to take care of it. How did you locate these people?

 

Paul Hale (10:32):

We sent out letters, kind of like probate letters. We have our own version of probate letters. And then now as we’ve been working with Jay, he’s got, his letters are way cooler, actually <laugh>. So, but we had our own letter that just kind of said, look, if you wanna do this if you wanna sell, if you have a house that you, if you don’t want this house or you need options, just give us a call. And the lady, it was cool, she, she called up, the sister called and she said, she’s like, I didn’t know if this was a scam or a fraud or what, but I figured yeah, why not? I’ll just give ’em a call. And so she called and it was like we’d sent the letter out and they kind of sat on it for a while. They didn’t take quick action, but when they were ready to call, you know, they, as soon as they started the dialogue, we began to build rapport and we saw what was going on and we looked at the house and there were challenges.

 

Paul Hale (11:16):

There were definitely challenges. There were extra, you know, liens. There was a government lie on the house for like a quarter million dollars that we had to negotiate down. And there were just a lot of problems that needed to be solved. And that’s the point, that’s the whole point guys, is that if you live in a, you know, capitalist market, you get paid based on the amount of value you bring to the marketplace. But when you see this rate here, the $68,000, that’s the money that we made because of the value that we brought to the market. We solved problems for sellers all over the place. We solved problems for those who held leans on the house that knew they weren’t gonna get all of their money out, but we could at least try to resolve it and get them something. We solved problems for all of the workers who were trying to get work done and wanted to get paid. These contractors came through and we created a house that was gonna be a home for the next family that bought it. And so that was the value that we actually brought to the marketplace by solving all these real problems. And so it’s not about taking advantage of people at all.

 

Jay Conner (12:09):

Exactly. Paul, I’m sorry Austin, were you saying something?

 

Austin Steele (12:14):

Just, just a quick comment. What I found, was that I was in the early conversations with a seller. Part of what I found is that the conversations over 10 as we were working through some of the issues related to purchasing it, each conversation provided hope, and honestly the better prepared you can be and you know, some of you will go on to become J students, but the better prepared you can be, the more you’ll be able to reassure the seller and, and provide that hope and confidence as you’re going through this process. And honestly, hope makes a big difference for people.

 

Paul Hale (12:44):

It really does. It really does. It’s hard to appreciate the level of hopelessness that someone feels as the home that they used, their mother used to live in, or that they were raised in, or whatever. And it’s just fallen into disrepair. They can’t keep it, they’re gonna lose it and it, they just feel this weight and it’s just, it’s suffocating. And so to be able to take someone in that situation actually be able to provide solutions, it’s an amazing experience. It’s an amazing feeling. And so

 

Jay Conner (13:10):

Yeah, we talked in the first session this morning about I don’t want to do the deal unless everybody’s winning. And so we always, as you just shared, create win-win solutions in every transaction that we do. Jim, ask a question here. He’s saying, what type of motivated sellers have you been searching for? So this one was probated. What other types of motivated sellers are you do you search for?

 

Austin Steele (13:40):

So one of the, honestly, sometimes people come to us when we’ll put out street signs and if they’re motivated then they give us a call. But other than that, we also target people that are absentee owners, or in other words, they own the property but don’t live there. So most of the time that means that there’s some kind of a landlord. Actually, the house that we purchased in March, was actually a landlord that had a very difficult tenant and so was motivated to sell even at a discount. And so that’s another big criterion that we’re hitting. You know, sometimes if you can target people if properties that have liens on them. But those are some of the main properties that we’re targeting.

 

Jay Conner (14:27):

Excellent. Well, Paul, I’m so proud of your guys. I tell you, you all have just taken your business like to the roof in the last few months and you’re, you know, you haven’t buried your hand, your head into the sand, you’re still doing deals, you’re in the midst of covid and et cetera. So any final comments, advice, or words of encouragement that you’d like to leave the audience with?

 

Paul Hale (14:51):

Would it, would it be alright if I just quickly run through this next house just cause this is the prettiest house we’ve ever done? This one. Oh

 

Jay Conner (14:57):

Sure. I’m sorry. I didn’t know you had

 

Paul Hale (14:58):

Another house. Yeah, we’ll be quick on this, but cause I don’t wanna hold up your program, I’m very proud of this house. So anyway, this is a house we came across and how did we find this one? I do not even remember this actually also sign was also, oh that’s right. This was a street sign. This guy called up and anyway, the situation was the guy ended up moving to his parent’s house out on the western side of the state and just abandoned this house. He just stopped living it stopped paying the utility bills, it was going toward foreclosure, and everything was like going wrong. All the utility bills, this was on a well. And so they couldn’t cut the power without cutting the water and or yeah, cause it was pumping out its own water from, anyway, so the bottom line is these guys, they were so stuck by the time they came back to this house they’d abandoned over the winter, all the pipes were frozen, busted all the pipes in the house. It was crazy. So we took this house and we flipped this house and you can see there’s a little bit of difference. I carefully took all the pictures before and after I tried to stand in the exact same place. Just so you can kindly get an idea of what we were actually doing here. This is a driveway, it’s up at the top of this big hill. That hill is way than looks. So here’s the living room, bathroom, shower, bedroom, kitchen and very nice, very nice.

 

Paul Hale (16:16):

Yeah, lots of good.

 

Jay Conner (16:19):

You got rid of the, in the kitchen. I can’t believe you

 

Paul Hale (16:25):

Could have it sitting around somewhere we can mail it, here are the numbers on it. We bought it for 136,000. the rehab, that’s 52,000. That’s actually a deceptive price because there’s probably about $14,000 just to bring the mortgage current and also to bring the utilities, which were about, it’s not right. Two and a half thousand, $3,000 behind on their utilities, which is crazy cuz normally they never let it get that far behind. But cuz they’ll just cut off the power at that point. But they couldn’t cut the power cuz it would’ve cut the water. And if you cut the water, people can’t live. And so anyway, I don’t know if they, for whatever reason, had lots and lots of bills. So about 14,000 of that was just getting everything current. And so, and then here we are, the $70,000 is kind of what we made afterward.

 

Paul Hale (17:11):

And again, Jay, not to compare, it doesn’t matter the 67 versus 70,000, it’s not a contest. But anyway, we sold it for 200 and, you know, $58,000. And so anyway, my, my purpose is not to brag here at all, it’s just to say, you know, we did solve so many problems. He including moving all kinds of stuff outta that house. And anyway, there were a lot of problems that were solved and that’s what we do and that’s what we get paid to do. And so anyway, but I, I love that experience of doing that house and helping that family. And it’s the same exact thing. This guy and his wife, when they sat down first when they first talked to us, they’re like, are you guys really gonna be able to help us? And by the time they were done, they were so thankful they said, this is the miracle we’ve been praying for. So that

 

Jay Conner (17:56):

All, that’s what it’s all about, is serving and helping people and I’m glad you brought that second house. So yeah, back to final thoughts and comments and what you’d like to leave with the folks.

 

Paul Hale (18:09):

Well there’s definitely lots of opportunity and what you get good at is what you practice doing again and again, Jay is really good at doing what he does because he practiced doing it again and again. And I remember when I first started doing real estate, I remember thinking, you know, and in fact, I remember I was friends with Austin even when I started this journey. And I remember telling him, I said, you know, I could go get a desk job and I would get really good at it, but I want to be doing something for myself and I wanna be getting good at doing things that are helping people and, and actually really making some great money doing it too. And so it’s just a matter of starting to take that first step, trusting in yourself enough to really do it. And it does really take having a team.

 

Paul Hale (18:49):

It does take training. I did not jump into this without training at all. I would never, I could not imagine I’d be able to navigate this many different things and solve this many different kinds of problems without help. And so I know there are lots of TV shows that make it look like it’s sensational super easy. Anyone can do it and on some level, yeah, anyone can do it, but you gotta have the right resources to know how to solve those problems. Otherwise, it ends up, just, ends up just getting you into, into more trouble ends up getting your, your sellers into more trouble and that’s not what you need. So it does take working with someone who knows what they’re doing and we’ve been looking for years for a good mentor, a good coach, and Jay is the best. We have found in six years of my looking all over the place. And I’ve talked to a lot of different trainers, there are a lot of good ones, but I don’t know that there’s anyone better than Jay Connor in all honesty. So

 

Jay Conner (19:41):

Thank you so much, Paul. We do have, were submitted before I let you all go, how long do you hold the property before selling it?

 

Paul Hale (19:52):

So that’s a good question. And let’s see here. The Landon house, wait, how long did that take? That was like a month. That was, was it? Well, but we held it, we held it longer. It didn’t take long to rehab it, I don’t think. If I remember right, we had to hold onto these, both of these houses were sold using F HHA financing and they have to, and the current owner has to own it for at least 90 days before it can sell again or something like that. There was some kind of restriction. So in both of these houses, we actually had already finished all the work that we were gonna do on it. We were just waiting for the FHA loan, to be qualified for the house. So, I think in both of these cases it ended up being 90 day hold period and just by necessity.

 

Jay Conner (20:34):

And the other question we had I’m sorry, two more quick questions. Anita says, do you still have to go through the inspection process on these rehabs?

 

Paul Hale (20:44):

Absolutely, absolutely. When we find the buyer, who’s gonna be buying it? In both these cases, we just had, someone who came with bank financing and so they had to have their own inspection and inspections are always kind of the same. They’ll find like, you know, they’ll, they’ll come back and they’ll be like, we need you to fix five things. And it’ll be, it’s always like, it’s always five things. It’s like never 10 things. It’s never two things. It’s five things every time. And sometimes it’s like, oh we need earthquake straps on the water heater cuz it might fall over if there’s an earthquake. And also the light switch cover has a screw loose, so could you tighten that screw? Like whatever, they’ll find five things wrong with that house no matter what you do to it. But they do those inspection reports, they come back, let us know, here are the things we want you to tweak. So,

 

Jay Conner (21:27):

Yep. And one last question, forget who it was that asked it, they said, what do you mean by street signs?

 

Paul Hale (21:33):

Thank you. That’s a great question. I appreciate that. So some people call them bandit signs and basically you, you maybe you’ve seen ’em in your community, maybe not, but sometimes you’ll see these little signs. They might be yellow, they might be white and they say, sell your house for cash, sell your house quickly, or something like that. And it’s fascinating. In Washington state they regulate everything. I mean everything. You can’t get a plastic straw at a restaurant anymore, but they have no problem on this side of the state with you sticking those signs in the ground. So we put ’em out and no one pulls ’em up and no one reports it. Like a lot of communities across the country, they really have a problem with that. For some reason out here they don’t seem to mind. So we use those signs, we put ’em out there, we’ve got kind of a, a distinct sign and we do get calls on it and that’s a sign of someone being pretty motivated.

 

Paul Hale (22:19):

Honestly. You think where you’re at, if you’re calling a sign on the side of the street cuz you’ve got a house you need to get rid of, probably have some motivation. You probably think, well there’s a reason I’m not calling a real estate rate. It’s a real estate firm right now. There’s a reason why I’m not, you know, listing the house. There are some unique problems here. So when those signs are put out, just say, Hey, you know, call us if you need to sell your house. Anyone who calls that sign, they have a situation. There are some problems that they need some help solving. And so good question Gil,

 

Jay Conner (22:50):

Paul and Austin, thank you so much, and congratulations on your continued success.