In Jay Conner’s recent video, he was joined by a dynamic duo Crystal and Dan Mewhorter. They shared their story on how they have raised millions in private money, in equity and from deals that they have done.
And the couple is back for more!
They met Jay in a real estate investing event, where the latter is one of the speakers. From there on, Crystal and Dan would leave their full time job and build their own business. In addition to their business the couple also work for Jay, assisting him with their clients and by being part of Mastermind.
In today’s show, they are talking about real life deals. Discussing how they find and fund the deals. The kind of profits they make, the kind of cash flow that’s involved and what system or procedure that is best used today in the world of real estate business.
To know more about closing a real deal, just keep watching this video!
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
Jay Conner is joined today by Dan and Crystal Mewhorter.
Dan and Crystal used to both work full time, Crystal was in the healthcare industry and Dan was on call 24/7 supporting software for the coast guard. A few years ago the couple stepped away from their careers and entered real estate investing.
Now after four 4 years since the couple have met Jay they have raised millions of dollars in private money and private funding for their own business.
Dan and Crystal business model in real estate investing focused on a combination. Meaning 80% to 90% of their portfolio have some terms deals and the predominant piece of that percentage is in “rent to own status”. While ten (10) to twenty (20) percent are in “fixed and flip” by which are all in private funds.
An estimate of the couple’s average profit and equity is seventy two thousand dollars ($72,000.00) per house.
If you want to learn more about the recent deals that Dan and Crystal have done, how they found, funded and all the work that needed to be done to make a successful deal, just continue watching this video.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:00):
Well, hello there and welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority and your host on the show. And that this is your first time joining us. We want to give you a very, very special welcome. We talk all things real estate here on the show. We talk about investing in single family houses, commercial deals, land, self storage, any way you can think about carving up a real estate deal, we talk about it. We talk about how to find deals, how to fund deals, how to rehab them. If you’re into rehabbing, how to sell them fast, how to automate your business and actually work in the business list and 10 hours per week and make a lot of money while you’re doing it. And if you’ve been tuning into the show you know that I have amazing guest come on the show you’re with me, and today is no exception, but before I introduce my guests today, by the way, the reason you should stick around is we’re going to be talking about actual deals that are going on right now.
Jay Conner (01:13):
And my guests are going to talk about how they’re finding these deals these days and what the numbers are looking like, and you’ll be able to duplicate it. But first I’ve got a free gift for everybody that is tuning in. And that is, I recently launched my membership, which is called The Private Money Academy. And in this membership we are live on Zoom coaching calls at least twice a month, and we have phenomenal content and teaching inside the membership sites. So if you’re remotely interested in getting more funding for your deals, without relying on local banks or mortgage companies and not relying on hard money lenders, cause this has got nothing to do with hard money, this is private money. If you want some more funding for your deals and not have to worry about your credit score and verification of income and all that mess.
Jay Conner (02:04):
Well, get right on over to www.JayConner.com/Trial. And that’s going to give you a full month’s free access to all the benefits of the Private Money Academy. So again, that’s www.JayConner.com/Trial. Be sure and take me up on that free offer. Well, it’s now time to bring on our guest today. Oh, one more announcement. I really appreciate for you to be if you’re tuning in, on iTunes or any of the venues like that, be sure to subscribe and share and like and review particularly review of being a whole lot to me as well, I’d appreciate that. So now on our guests, my guests today are up in Virginia and we first met oh somewhere around four years ago or so, and it is amazing what they have accomplished in such a short period of time.
Jay Conner (03:12):
They’ve raised millions and millions of dollars in private money and private funding for their own business. And they’ve massed a huge wealth and equity and cash since doing deals. In fact, in just the past four months up there in their market, they have purchased 16 additional houses bringing their portfolio to almost 100 houses that they have in their portfolio and their inventory. And I’m going to bring them on here in just a second to share with you how they’re finding these deals these days, how they’re getting them funded and what their business model is looking like. So with that, welcome to the show, Dan and Crystal Mewhorter.
Crystal Mewhorter (03:55):
Hey Jay.
Dan Mewhorter (03:55):
Hey Jay.
Jay Conner (03:57):
Hello, good to see you. And didn’t we have just a fantastic time last week here in Eastern North Carolina at my live event, The Real Estate Cashflow Conference.
Dan Mewhorter (04:09):
Absolutely
Crystal Mewhorter (04:09):
So much fun. It was so great to be in person with all the students.
Dan Mewhorter (04:13):
Yeah.
Jay Conner (04:13):
And we had our Mastermind meeting last, let’s see a week ago last Monday and Tuesday, two full days. That’s our top elite group Mastermind members from all over the nation. So yeah, we had us a full week, Monday through Friday for sure. Didn’t we?
Crystal Mewhorter (04:30):
Absolutely.
Jay Conner (04:31):
So, Crystal and Dan, whichever one of y’all wants to do the talking I’m sure you all want to go back and forth. Why don’t you tell our audience how it is that we even know each other.
Crystal Mewhorter (04:46):
So I had, I have the great privilege of actually running into Mr.Jay Conner. So I was at a Real Estate Investing event and I was running down the hall as I’m known to do. I generally don’t walk very slow. So, just wasn’t paying close enough attention, ran smack into him we were at the elevator up, he was delightful, surprisingly pleasant. I had no idea who I was talking to at the time he introduced himself asked me a couple of questions. I went back to the event, you know, had my head hanging just a little bit, cause I was really quite embarrassed and not moments later he’s introduced as the next speaker which much to my surprise. From that point forward, I had the great opportunity to get to know Jay and Carol Joy and then ultimately attended their events sometime later. Dan and I did, and got to know them a bit better.
Crystal Mewhorter (05:39):
And I think the really special part was obviously spending time with them at their events and getting to really know them and, what a family it really is. So signed up to be members of the Platinum Program and we worked the entire program. And as Dan had said, we did what Jay said, that is his rule, Jay said to do it. So we have to do it. And we really credit that to our success. And in the end of it all have the absolutely awesome, awesome pleasure of getting to assist with coaching, your students that are in the program at this point. So we’re very, very blessed.
Jay Conner (06:16):
Absolutely. So I sort of spilled the beans, but the kind of results that you and Dan personally have achieved so far and not to be personal or too specific, but how would you describe, your results?
Dan Mewhorter (06:36):
Phenomenal. And it is far out exceeded or exceeded my expectations and we just continue to keep growing. So we continue to do what we do and it works for our market and we’re still using the basis of it as your structure and it’s been great.
Crystal Mewhorter (06:55):
And I would chime in life changing. So we’re both incredibly fortunate. We both worked full time, many, many hours. So I was in the healthcare industry and also in leadership. So I worked well over full time. Did activities required, nights, weekends, things like that. And was raising two small children and actually stepped away from that career a few years ago now and are able to enjoy a lifestyle we could have never have dreamt and Dan was able to step away from his way over full time career. Cause he was on call 24/7 supporting software for the coast guard and in their search and rescue program. So the two of us has an incredibly different life than we could ever have imagined. So life changing would be the best word.
Jay Conner (07:47):
So you’ve been both of you been full time working together husband, wife team in The Real Estate Investing. And how long have you all been full time now?
Crystal Mewhorter (07:59):
I’ve been three years.
Dan Mewhorter (08:01):
And two and a half for me. Just a little less than two and a half.
Jay Conner (08:04):
That’s awesome. So tell everybody, what does your all’s business model look like? And what I mean by that is, you know some real estate investors focus heavily on terms. And I know you all do a lot of terms deals. Some investors rely on hard money as far as funding their deals. Some investors buy and hold, some buy and flip, some do a mix. So what’s just the overview of your all’s business model look like?
Crystal Mewhorter (08:36):
Our business model is focused on a combination. So by all means we do a lot of terms deals. That’s one of the things that we specialise in and really enjoy the benefits of. So at any given time our portfolio has about and it, of course it changes cause it’s goes through evolution. So 80 to 90% of the portfolio may have some sort of terms in that and or predominant the predominant piece of that is in a rent to own status. And though all of those deals, whether they’re owner finance, subject to you or any other level of combination of creative financing may have some private money on that as well. And then anywhere from 10 to 20% at any given time are fix and flip directly all private funds.
Jay Conner (09:25):
What’s your average profits looking like these days? And when I say average profit, you may have, you know, you sell a lot on rent to own, so you haven’t cashed out on selling it rent to own, but you got a big chunk of equity. So, either in cash out profits or equity, what’s your average profits looking like?
Crystal Mewhorter (09:45):
Average, when we put it together I guess about two weeks ago, we revisited that to see what our numbers look like. We’re averaging 72 as our profit margin, obviously they vary.
Jay Conner (09:57):
Yeah. Just to make sure everybody understands that $72,000, not separate, we’re not talking $7,200 in wholesale fees. We’re talking profit and equity of $72,000 per house. What’s the median price, a house in your all’s area.
Crystal Mewhorter (10:16):
250,000.
Jay Conner (10:18):
So you’re 250. So obviously for you to be getting these kind of average profits, you gotta be finding these in very, very deeply discounted being able to buy them deeply discounted, right?
Crystal Mewhorter (10:30):
Yes.
Jay Conner (10:30):
Yeah. So I asked you to come on the show today and talk about a couple of recent deals that you all have done. So let’s talk about your first deal and let’s tell them everything, you know, from how you found the deal? How much you paid for it? How did you fund it? What kind of repairs if any, were required? What did you sell it for? Or how did you sell it? What kind of marketing you use to locate it? And just sort of from start to finish,
Crystal Mewhorter (11:04):
Do you want to talk about long lap or do you want me to start? Okay. So a purchase that we just recently completed within actually, I guess, about two weeks we found the deal. It was actually someone that identified us on Google. So we can attribute that to all of the SEO efforts that we’ve put in place. So search engine optimization for those that aren’t familiar with that term, having had companies that have assisted us with that as well as really working that organically. So making sure that we’re reaching out to our customers asking them to share when they have a good experience and so forth. So this was a Google search.
Jay Conner (11:47):
Let me ask you all this. What are just I mean, if someone wants to other, I mean, it’s always best to hire an Expert, but if someone’s wanting to increase their organic results of people just searching to find them. What’s a couple of tips you can give people on increasing their exposure on the internet and people finding their website.
Dan Mewhorter (12:12):
So, I mean, we do a lot of free advertising, free SEO, organic SEO, if you will, Facebook and the social medias. So whether it be Twitter, Instagram whatever else we get out there, I don’t know, we’ve got a ton of them out there, but Facebook, primarily we do a lot of advertising on our Facebook business page to get the word out of that. When it comes to Google searches though, when you put on your website, if you have a website and you should have a website if you’re a business, you should be putting in a lot of keywords in there that when people do a search for say, buy my house fast, or sell my house fast, or sell my house in X city, putting those phrases in there will allow them and on your Google my business page, which you should have as well, putting those in there, those allow people to find you on a Google search.
Dan Mewhorter (13:08):
So understanding what people are looking for when they do searches is really critical. I would highly suggest that you do some research on that. There are websites you can go to. To identify what people are looking for in your area.
Crystal Mewhorter (13:22):
And another really simple tip is send your link, your Google link out to people that you’ve done business with. And it doesn’t have to even be necessarily a buyer or seller. It could be somebody that’s had a really good experience with you in terms of working with them on something where you’ve supported them or assisted them, but sending them the link so that they can go in and give you a Google rating. And a review, those things help a great deal. And those are really simple things to do. Not always easy to get people to reach out and complete those things. But if you send people a link, they’re generally more apps to get that done for you.
Jay Conner (13:58):
Excellent. All right, well go ahead.
Crystal Mewhorter (14:01):
Okay. So, Oh, so he found us on a Google search. We had a conversation, this is a three bedroom, two and a half bath in Virginia Beach. So it’s a good area desirable. The current CMA is 185,000. We were able to negotiate with him to 1225, and he did not want to accept terms. So actually I’m going to give you probably for the first time ever when we’ve discussed deals, I’m going to give you two that aren’t entirely cash, which is a little unusual
Jay Conner (14:42):
Now, what was his motivation? What was his hot button?
Crystal Mewhorter (14:47):
He got a job in Louisiana and this is actually a second house. So, he was trying to rent It, have had a terrible time with it. Last thing you want to do is be renting this house, when he just gone through a not great situation, and move to another state far, far away.
Jay Conner (15:07):
We can never know for sure why other people decide to do what they do, but do you know, or do you have a guess as to why this particular seller was willing to give up so much equity?
Crystal Mewhorter (15:20):
I do actually. He’s done, and he did not want to have to go through the process and try to get a realtor he’s been down that road felt like that wasn’t a very comfortable road either. I.e, getting what he wanted and for him to get to know that the sale was complete and we we’re going to hand him the cash, He was fine.
Jay Conner (15:42):
Gotcha. So repairs, are any rehab required or is it a, just a beautiful house?
Crystal Mewhorter (15:50):
He actually completed all the repairs from the previous tenants, even putting in new carpet and painting.
Jay Conner (15:56):
So you don’t have to touch it. All you gotta do is put it on over to disposition. So the numbers again were the after or the as is value.
Crystal Mewhorter (16:06):
The as is value Yeah, it’s 185,000, we bought it for 122,500
Jay Conner (16:11):
122,500 Okay, nice.
Crystal Mewhorter (16:14):
Yeah. And so, and of course we’re selling it rent to own, so we’re going to be able to increase that sales price. But as it stands right now, if we were to take it to market and, you know, sell it ourselves, we obviously could make 62,500 on it just directly as it sits today. We won’t do that. It’s in too good of an area and it’s and it’s also a townhouse, so it’s like fairly ideal for a rent to own status.
Jay Conner (16:49):
Right.
Crystal Mewhorter (16:49):
And so it really fits the bill. So our monthly going out to our private lender is $883. Actually, It’s 1550 all day, every day to rent to own it. We might even be able to push that a smidge, but like on a really, you know, fair day, we can do that. So it’s already cash flowing $667 for all intent and purposes as it sits now. And so we’ll actually go ahead and carry it for a little while and watch what the market does and sell it from there.
Jay Conner (17:12):
Well, you know, for the long term selling rent to own is the most profitable.
Crystal Mewhorter (17:16):
Yup.
Jay Conner (17:16):
Because when they get ready for a mortgage, your rent to own buyer they didn’t negotiate with you on price.
Crystal Mewhorter (17:27):
Uh-huh.
Jay Conner (17:27):
They and when it comes time for them to cash out, you’re not having to pay realtor fees on selling.
Crystal Mewhorter (17:36):
Yup.
Jay Conner (17:36):
And, you typically don’t have to go through the painful process of the buyer hiring their inspection company and nitpicking you to death. Right?
Crystal Mewhorter (17:48):
Absolutely.
Dan Mewhorter (17:50):
Yeah.
Jay Conner (17:50):
So you just closed on it two weeks ago and just to make sure everybody knows what we’re talking about. When you say you funded this deal with private money, does that mean you went to a broker or how did you, what do you mean by, in your case? It’s funny with private money.
Crystal Mewhorter (18:09):
Oh, so one of our private lenders that has their money in a self directed IRA. So somebody from our warm market.
Jay Conner (18:16):
Right.
Crystal Mewhorter (18:17):
Directly our warm market, it’s not even a conversion from a cold to warm there’s somebody that was in our warm market. It was actually somebody that Dan worked with when he flapped all the CDs on the desk when he walked out the door.
Jay Conner (18:29):
So Dan what’d you tell folks about that CD is.
Dan Mewhorter (18:33):
Okay, so we, Jay.
Crystal Mewhorter (18:36):
What’s the CD?
Dan Mewhorter (18:36):
The CD is The Private L ender CD.
Crystal Mewhorter (18:38):
The 16 minute stress free investing.
Dan Mewhorter (18:42):
Right. It’s the intro.
Jay Conner (18:44):
Right. And so what is it? And how’d you use it and how did it work?
Dan Mewhorter (18:48):
So, when you’re in Jay’s world, Jay will help you create these CDs. But we thought it would be great if my beautiful wife with her lovely voice would create one as well. So we locked her in a closet for about, I think it took about an hour really to get it what you wanted. And it walks through the introduction of what a self directed IRA is and how it can invest for you and how you can make a profit off of it. And it’s kind of like a 10,000 foot introduction into it, to get you interested in it, and get you to kind of understand that there’s other ways that you can invest in real estate. You can buy and sell and do what you want to with your own money and not be a slave to somebody else.
Crystal Mewhorter (19:28):
It’s the teaser,
Dan Mewhorter (19:30):
A teaser,
Crystal Mewhorter (19:30):
And what do you do with it?
Dan Mewhorter (19:32):
So, when I decided that it was time for me to leave my job prior to being escorted out of the building, which is what they do on a government job, I took probably about 50 CDs, about 50. And I distributed them to everybody’s desks within a hundred feet of my cubicle. Everybody got one. So they all started calling me up and laughing and saying, that was the funniest thing they’ve ever seen. And now they’re all starting to call us up saying I was funny, but now I’m interested because the mark has been doing the whole roller coaster thing for him. So, Yeah.
Jay Conner (20:10):
Right. So that’s the gives everybody an introduction to what Private Money is. So the funding that you got on this deal was actually from an individual using their retirement funds. And of course you probably had to train them on how to get their retirement funds moved over from wherever they had them, to a self directed IRA company, and then that, and then they could fund your deal or deals by using their retirement funds.
Crystal Mewhorter (20:36):
Absolutely.
Jay Conner (20:38):
So, have you already got a buyer for this rent to own home?
Crystal Mewhorter (20:41):
He had, how many did you have on this one last week?
Dan Mewhorter (20:44):
700.
Jay Conner (20:47):
700 inquiries.
Dan Mewhorter (20:49):
Yeah. 700.
Jay Conner (20:50):
Wow. I think you might have it sold.
Crystal Mewhorter (20:54):
Think so.
Dan Mewhorter (20:56):
Weeding through them all, finding the best qualified one.
Jay Conner (20:59):
Right. So you’re still working through all those inquiries,
Crystal Mewhorter (21:02):
Correct. Cause we were gone last week, so yeah, so we took communications and talked to people that we in sent out potential applications. But we don’t have them firmed up. I.e, we haven’t run background checks or confirmed their exact funds, So.
Jay Conner (21:24):
Right. What did you price the house at?
Crystal Mewhorter (21:28):
What did we price the house at.
Dan Mewhorter (21:29):
A monthly?
Crystal Mewhorter (21:31):
No, we priced at 1550. What did you sell it for? Did you do.
Dan Mewhorter (21:35):
200 even? I think I put that on my 200,000, even as what they put out.
Jay Conner (21:40):
Okay. So back to the point, when you sell on rent to own, you’re able to raise the price above what it will appraise for today. For at least two reasons your rent to own buyers are not negotiating with you on price per se, but they would be in the multiple listing service. And the other reason is how long are you going to give them the cash out 12 months? 24 months? How long is the term?
Dan Mewhorter (22:03):
On this? On this one is a 24 month one.
Jay Conner (22:08):
Right.
Dan Mewhorter (22:08):
But again, the way that I communicate with them is that obviously I’m looking for the most qualified people to go in there, the ones that A, can afford it and not be eating beans and rice the entire year or two years, Right? And not be housed for. And then B, the ones that their credit, while it may not be the best credit to be able to get a mortgage. It’s not the worst one either. So if they’re in there and they’re sitting at, you know, 500 X, whatever it may be, I know I can get them qualified because we have, we’ve got a great credit repair program that we sponsor as well. So I know I can get them requalified as long as they follow through. I also look at their record of where they are renting at before and make sure there’s no addictions, things like that. And if they match that 700 dwindles down very quickly to probably about 75 of those 75, I have a conversation with them. And if I feel good about that, and Crystal feels good about it because we’re pretty good about judging people’s personalities by conversations.
Dan Mewhorter (23:06):
Then we decide, okay, these are the top five. Let’s get them in there. And we know that they’re most likely going to qualify well before the two years. So we do explain to them if you’re able to qualify quickly and you don’t want to rent it the entire time, just let me know when you’re ready to qualify when you’re ready to get you on mortgage. And then we’ll shut it down. So, we can get them qualified as quickly as three months, or it may take the entire two years.
Jay Conner (23:29):
Gotcha. Well, those numbers work. Let’s say your $200,000 is the option price that you’re selling it for. You bought it for 122.
Crystal Mewhorter (23:40):
Uh-huh.
Jay Conner (23:40):
Yeah. You probably didn’t have to take that one to the committee, did you?
Crystal Mewhorter (23:43):
No.
Jay Conner (23:43):
That’s awesome. Look, I know you all came prepared to talk about another deal, but we’re out of time on this show. So will you all come back on another episode very, very soon.
Crystal Mewhorter (23:55):
We would love to, anytime.
Jay Conner (23:58):
Awesome. I’d love to have you come back and talk about the other deal or deals that you had lined up. Well, I know the audience wants to hear it. So any parting comments before we wrap up this show,
Crystal Mewhorter (24:10):
I just want to say, you know, thank you for all that you’ve done for us. And it’s really great to be part of this world and everybody that’s out there, just listen and do what Jay says. So anybody that’s getting ready to join us on the journey. We’re super excited for you. If you’re in the early part of your journey and looking at either the membership or you’re following the podcast listen up and look for your opportunities, cause there’s just so much out there and we are so blessed and fortunate and really excited to be able to give back.
Jay Conner (24:40):
Well, thank you so much, Dan parting comments.
Dan Mewhorter (24:43):
If you can make it to one of Jay’s events, I highly suggest that you do so. The networking alone there is incredible, but getting to meet Jay and the family in person and not just virtually here, which is great, but in person is absolutely phenomenal. Again, I wouldn’t trade it for the world. Jay, it’s been a heck of a ride and we look forward to seeing where we’re going and sharing it with you as well.
Jay Conner (25:04):
Thank you Dan. Thank you Crystal, Carol Joy and I love you guys, and I love your servant’s heart. You’re making a big impact in a lot of people’s lives so that you have it Folks! That wraps up another show. I’m Jay Conner, the Private Money Authority wishing you all the best and here’s the taking your real estate investing business to the next level. I’ll see you on the next show.
We’re streaming live right now on Facebook and YouTube. Hello everyone, I’m Chaffey-Than Nguwen, and I am at the Jay Conner Mastermind, and I’m here with Fred,
Fred Wallace (00:18):
Wallace.
Chaffee-Than Nguwen (00:20):
And Fred is going to tell us all the wonderful things that he learned today.
Fred Wallace (00:25):
Well, what we’ve learned is the Private Money Lending world is great. Helps a lot of people also being able to how to help other people buy. And when they’re in pain with their house and had, it was relief from the pain, and to help them out of trouble.
Chaffee-Than Nguwen (00:46):
But we can’t tell them specifics about what you learned in here. Cause what happens in the Mastermind stays in the Mastermind. What are some of the general topics that you discussed today that maybe you haven’t discussed before?
Fred Wallace (01:01):
Your brand building, How to talk to customers, work with customers. It is more of a, the interaction with customers and trying to solve their needs.
Chaffee-Than Nguwen (01:15):
Andy come on back over here, come on over here. So what’d you think about the first day? This is our first time here, correct?
Fred Wallace (01:26):
This is our first Mastermind meeting is great. We plan to be beat each one and hope to continue with the Mastermind.
Chaffee-Than Nguwen (01:33):
Awesome. Any thoughts or comments you want to share with the audience? Final thoughts or comments?
Fred Wallace (01:40):
You really should check out, Jay Conner and his program it’s been outstanding for us and we look forward to everything in the future with it.
Chaffee-Than Nguwen (01:47):
And you get, you got fed today.
Fred Wallace (01:49):
I got fed.
Chaffee-Than Nguwen (01:50):
And we’re going to go to dinner right now as well.
Fred Wallace (01:52):
We get fed again.
Chaffee-Than Nguwen (01:52):
That’s right. Awesome.
Scott Paton (01:56):
Could you tell us a little bit about your background in real estate?
Fred Wallace (02:01):
We some, a commercial property right now, we’ve rehabbed a few houses, we built a house. We generally have a few, a licensed general contractor, home inspectors, Mothers. but they real estate broker. The most proud of is a drone pilot. That’s a good one, but we really tried to embrace the real estate world.
Chaffee-Than Nguwen (02:30):
So, question popped in my head Fred, you got like nine different licenses.
Fred Wallace (02:36):
Yes.
Chaffee-Than Nguwen (02:36):
You’ve bought and sold real estate.
Fred Wallace (02:38):
Yes.
Chaffee-Than Nguwen (02:38):
You got a multiunit property and Andy is joining us. Thank you for coming. And so with all the experience and everything that you know, why are you here? Why did you come to this event? Why did you feel that you needed to be here? And has it been obviously, has it been worth it?
Fred Wallace (02:55):
Oh yeah, we took a ton of notes. You can never learn enough. And we’ve looked at other programs, we’ve joined other programs, we’ve got more way far more information out of this one than the other ones, but it’s all a life learning experience and, you know, you never stopped learning.
Chaffee-Than Nguwen (03:13):
Awesome. Well, thank you very much.
Fred Wallace (03:16):
Appreciate it, Chaffey
Chaffee-Than Nguwen (03:16):
We appreciate you guys coming out. Would you like to say a few word Andy?
Andy (03:22):
Just knowledge is power.
Chaffee-Than Nguwen (03:24):
Knowledge is power. So thank you guys for coming out. Thank you for being here. And then we’ll see you guys at dinner tonight. Jay’s going to treat us well as part of the Mastermind group. So we will see you there and I’m going to pull Austin over. Who’s busy typing away on a cell phone, so thank you. And we’ll see you later.
Fred Wallace (03:42):
Thank you Chaffey.
Chaffee-Than Nguwen (03:43):
Mr. Austin, come on in.
Austin Steel (03:50):
Hello, everybody, I’m Austin Steel.
Chaffee-Than Nguwen (03:52):
Tell them a little bit about your background in real estate.
Austin Steel (03:55):
So my background, I’m a, I’m still a young guy. I actually graduated a few years ago studying business management and then started working full time for a real estate investor and had a interest, you know, kind of growing up and decided to get involved in real estate after I graduated.
Chaffee-Than Nguwen (04:13):
So fun fact about you, what’s that fun fact cause when people see you, they might think they’re drunk.
Austin Steel (04:18):
Yeah. Fun fact, I am an identical triplet, so I have two look-alikes, So.
Chaffee-Than Nguwen (04:26):
So they can get a lot of real estate done.
Austin Steel (04:27):
Yeah. So if you happen to see me around and you come up and say, hi, Hey, I saw your testimonial. That may not be me, So.
Chaffee-Than Nguwen (04:35):
Awesome. So what have you gotten out of this Mastermind so far? And I know you’ve attended before.
Austin Steel (04:42):
Yeah.
Chaffee-Than Nguwen (04:42):
And so a little bit about your Mastermind experience without obviously sharing some details. Cause you know, this is an exclusive club to be a part of.
Austin Steel (04:52):
Yes. a lot of really good things today. You know, honestly, we had some really good ideas for approaching the idea of looking into other markets. Our market’s really hot, and so we’re currently evaluating, looking into some other markets close to us, maybe even farther away. So we’ve got some really good ideas about that. We also got some really good ideas about social media marketing and branding and you know, some of the ideas were ideas that I’ve heard in other places, but they were set in a way that I realized, Oh wow! I’ve always just kind of turned off when they talked about that. But hearing people share about, you know, how they’re implementing these ideas and to see the kind of business that they’re running and how many deals they’re doing, you know, really adds credibility to the ideas that they sharing when you see, Oh, like I thought that didn’t actually work, but I can see that it actually works so.
Chaffee-Than Nguwen (05:43):
Awesome. So as I said before, this isn’t your first time here.
Austin Steel (05:47):
Yeah.
Chaffee-Than Nguwen (05:48):
Go a little bit. Or tell us a little bit about how maybe have you seen progression from the previous times that you have attended, have you tested things out, have you done things and has it helped the business grow a little bit?
Austin Steel (06:01):
Yeah, absolutely. So we’ve we’ve had this specific marketing like lists and tips that have been given to us and those have worked out well for us. We’re generating more leads than we used to. And you know, we’re on track to generate even more based on the leads that are coming in right now. So also we’ve definitely improved our processes. So we operate more smoothly as a business and definitely have a bigger vision for where we’re headed.
Chaffee-Than Nguwen (06:33):
Yeah. I know that was a big issue for you guys at the last event, was really just focusing on those processes and everything. And so tomorrow morning we get to share one thing that you got out today, and then we have a full day of sharing and education again tomorrow. So I’m going to be excited to hear what you guys are going to share tomorrow morning, So.
Austin Steel (06:50):
I’m looking forward to it.
Fred Wallace (06:51):
Well, that’s what all I got. Scott, you got anything else?
Scott Paton (06:56):
No, That’s Great. Good to Oh, just a sec. Okay, Good to see you, I wish I could be there. And so that’s day one of the Mastermind is over it’s in the books.
Chaffee-Than Nguwen (07:08):
Yes.
Scott Paton (07:08):
And it sounds like it was well worth everybody’s time and everybody learned a lot.
Chaffee-Than Nguwen (07:15):
Absolutely. And we got a full day tomorrow and hopefully I’ll be able to pull up another, you know, a couple of Mastermind students and do this again at the end of the day and just share again, some concepts and ideas that we were talked about discussed throughout the day, So.
Scott Paton (07:30):
Awesome. All right, See you tomorrow. Thanks for joining us, everybody.
Real estate investing success isn’t just about selling houses. It’s about selling yourself… to sellers and lenders.
Imagine what your business would look like with a consistent stream of deals… all from motivated sellers and private lenders in your market who… see YOU as the Clear Choice!
In this episode Jay Conner talks to former math teacher turned real estate investor, Max Keller about how he stopped chasing leads and struggling to compete for deals by positioning himself as the “Trusted Expert” with his own book.
Max also shares how you can copy his strategy to Stand Out from the competition…even if you’re not a writer.
You definitely don’t want want to miss this.
Especially if you are investing in a market packed with flippers and wholesalers… all chasing the same motivated seller leads.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
————————————————————
Jay Conner (00:00):
Well, hello there! And welcome to another episode of Real Estate Investing with Jay Conner. I’m your host, Jay Conner also known as the Private Money Authority. And what do we do here on the show? Well, we talk all things real estate. We talk about how to find deals, how to fund deals, how to sell properties fast, how to automate your business. And we talk about all kinds of real estate. We talk about single family houses, commercial properties, multifamily, land deals, self storage, and you name it. We talk about it, but if you’ve been tuning into the show, since we launched back in 2018 you know, that I have amazing guests here on the show today is no exception, but before I introduce you to my special guest, what is it about private money? Why am I known as the Private Money Authority?
Jay Conner (01:02):
Well, back when I started investing in single family houses back in 2003 here in Eastern North Carolina, the first six years, I’ve relied on local banks and mortgage companies to fund my deals. And I got cut off like the rest of the world did in January of 2009. It’s that time I was introduced and learned about private money. And since that time, and by the way, I’m not talking about hard money. I’m talking about private money doing business with individuals, human beings, borrowing money from their investment capital or their retirement accounts by using self directed IRAs. Well, since that time I’ve starting to use private money back in 2009, I have not missed out on a deal because I did not have the funding. You know, we can talk about terms and creative financing, all we want to, but at the end of the day, most sellers are going to require all the cash.
Jay Conner (01:56):
And so when you got money sitting on the shelf, you don’t have to worry about missing out on deals and my special guest today, that’s going to be a big part of our topic to talk about today. And that’s private money, Again, before I introduce him while we’re on the topic of private money, I’ve got a free invitation and gift for all of my viewers and listeners. And that is I just launched what’s called The Private Money Academy membership. And I have got a free 30 days for you to take advantage of that and access. You get me twice a month, live with coaching and training and talking about private money and all aspects of real estate investing. And so if you’d like to check out the membership and come check it out for free for a full 30 days, you can get on over to www.JayConner.com/trial.
Jay Conner (03:00):
Well today, my special guest is a very, very good friend. We’ve known each other for quite a while now. And I’ve invited him to come on the show today. And we’re going to be talking about Deals Chasing You ain’t that pretty cool. When the deals are chasing you, you’re not having to chase them. Or also, as I said, we’re going to be talking about private money. Well, as you probably know, when it comes to residential real estate, well, most success for real estate investors are gonna tell you that 80% of their time is focused on two things. In fact, these two things are the most common two questions that I get asked when I’m doing training. And that is Jay, how do I find deals? And how do I get my deals funded? Where do I find the deals? Where do I get the money?
Jay Conner (03:52):
Well, it’s no secret. Motivated Seller Leads are yes, the life blood of your business. I tell my coaching students and clients all the time, unless you’ve got consistent deal flow, motivated sellers coming into your pipeline in your funnel all the time, every day, you are not in business. So, in addition to that, if you are investing in a highly competitive market with a lot of flippers and a lot of wholesalers, well, competition for the seller leads everybody’s just fighting over those leads. Well, that means that generating motivated seller leads is really the main major part of the equation. You see, you also got to convince those leads to choose you over doing business with your competition. Now, in addition to that, when it comes to raising private money, well, a lot of lenders, especially new private lenders, they can be concerned about picking the right real estate investor to do business with over the right deal. So the question is […] believe it or not, the man himself, Robert Kiyosaki.
Jay Conner (05:56):
And my guest was presented with the 2019 industry innovator of the year award. In addition to that, he’s fueled by his passion for real estate, and he’s a, still a teacher at heart, right? He teaches he coaches. And today he’s going on my show to share a strategy that’s working right now in some of the most competitive real estate markets across the country. And this strategy is yes, transforming ordinary real estate investors into being a trusted expert in the eyes of motivated sellers. And, one of my favorite subjects and topics, private lenders. So with that, my good friend, Max Keller, welcome to the show.
Max Keller (06:45):
Alright. Hey, glad to be here.
Jay Conner (06:48):
Glad to have you Max, and tell everybody, where are you coming from today? Where do you hail from?
Max Keller (06:54):
Yeah. Fort Worth, Texas. So, you know, in between Dallas and Fort Worth and starting to cool down and things are going well.
Jay Conner (07:03):
Well, here’s where I want to start. We’re going to be talking about deals chasing you. We’re going to be talking about private money, but before we jump in Max, I want people to hear your story because you’ve got quite the fascinating story. I mean, you know, you had some of the same frustrations, challenges and obstacles that a lot of real estate investors, you know, have faced out there and that is looking for and chasing motivated sellers. And, you know, it’s something that all real estate investors at one time or another, particularly when they were starting out can relate to. So we want to hear your story. Tell us about from math teacher to becoming a trusted expert in this lucrative house buying business.
Max Keller (07:50):
Sure! Yeah, awesome. So, you know so it’s it’s 2017, well like transport there and things are going okay. You know it’s, I flipped nearly a hundred houses and, you know, I’m making money, but I’m getting the feeling like, you know, I’m only as good as my next deal. I’m in a very competitive market, you know, the Dallas Fort Worth area. And I need a lot of leads to run my business. And if I don’t, you know, have leads for my business, then I don’t have any deals. So, you know, no deals, no business, you know, I’m going back to being a teacher. So I knew that, you know, leads were Motivated Seller Leads, especially with true motivation was the lifeblood of my business. And, you know, Jay in a, probably a two, three hour span or, or two, three years, I had tried nearly everything. You know, I had tried you know, different websites band-it signs. I tried, you know, cold calling.
Max Keller (08:50):
I had people in the Philippines cold calling, you know, yellow letters. Every list that I could find. So I worked, you know, pre foreclosure, vacant properties, tax, the link went on and on and on. And, you know, all these things worked, but they were very unpredictable. And I felt like there was a lot of waste. And at the time it wasn’t deals chasing you, you know, that’s what happened now. It was the total opposite. I felt like I was chasing people. And so I wanted to fix this, I wanted to solve it. So, you know, it didn’t actually take very long to figure out what the problem was. You know, Jay, the problem was, is I was basically sending out the same messages and the same mail to all the motivated sellers on these lists that all the other investors, you know, were sending out to.
Max Keller (09:40):
So I was basically, you know, another investor in the stack of mail. Sometimes they would pick me, you know, sometimes they wouldn’t and when they didn’t pick me, usually it was because it was either a newer investor that was overpaying, or maybe it was a hedge fund. And so, you know, I’m glad I didn’t get into that trap of paying too much for deals. Cause that’s definitely a way that you can go out of business quickly, but I needed to, you know, I need to buy deals and I needed to play the game in order to, you know, to win. And so I just kinda kept sending out more of the same thing that wasn’t working as well. And my return on my marketing investment just kept going down and just kinda kept getting lower. And so, you know, back then it felt like a total grind and I really didn’t feel like it was that sustainable.
Max Keller (10:29):
And you know, the whole reason that I left teaching was because I wanted, you know, more than just a grind, I wanted to get more out of life. I wanted to do big things with my family. And so I kinda, I went on this quest to find a better way and I didn’t want to continue the way that I was going any further. And it took me on this really, really unexpected journey. What happened was, I made a list of all the deals that I had done up to that point. And I was looking for the deals that met these three conditions. So they were, the deals had to be profitable, they had to be the type where the seller didn’t resist my offer. So they were really open to what I was doing. It was, I was like the consultant. That’d be fun.
Max Keller (11:13):
You know, I didn’t want to, this is my home buying company, save your home buyers. And, you know, I wanted to have fun. I wanted to help people and I wanted to make money. So there was kind of good and bad news. The good news was, I’ll go with the bad news first, the bad news was is that most of my deals that I had done up to that point did not meet all three criteria. The good news was, is that when I did see the few deals that met all three of those, they were all they all had the same pattern and it was, they weren’t just motivated sellers. They were senior homeowners. And so I went on this quest to find senior homeowners, something kind of unexpected happen again. And then that’s what, that’s how it turned into, you know, having a new tool for private money lenders too.
Max Keller (12:03):
So if it’s okay with you, if we have time, let me break down what happened with the motivated sellers and then how it transitioned to this discovery I made in the private lending space. Is that okay with you?
Jay Conner (12:15):
Sure. Please tell us about it.
Max Keller (12:17):
Yeah. So essentially what happened was I was like, okay, these are the motivated sellers, cause you know, I mean, you know, this well as anybody Jay I mean, you have to have a deal in order to have a private money or hard money or money problem, you know, if you don’t have any deals, so it starts with the deal, so that’s what I was doing, I was starting with the deal. And I saw this group of folks, seniors that were awesome, you know, there, but so I was like, how do I get more of them?
Max Keller (12:44):
So I go and look at what list they were on. And what I found was, is that they didn’t fit the typical motivated seller like buy box or category. So they weren’t you know, they weren’t in pre-foreclosure a lot of them didn’t even have mortgages, you know, it wasn’t a vacant house, It wasn’t a tired landlord. A lot of the houses actually were in good shape, they just needed like cosmetic updating. And so I was wholesaling these houses and flipping them for really good profits. And and I was like, okay, well, if I didn’t get them from a list, where did I get them? And I found that most of the folks actually came by accident, either they got my postcard by mistake, or I was trying to buy a house in the neighborhood or I was rehabbing a house in the neighborhood or referral.
Jay Conner (13:26):
And I was like, okay, well how do I get more of these folks? now that I know who they are, and why are they most importantly, why are they picking me? So I called one of the sellers, it wasn’t actually the seller she’s in an assisted living facility, but I called her son because I remember this particular deal I had about, I had an offer out. There were other investors they were looking at and one of the investors made an offer that was like 10 grand, more than mine. So I, this was six months after the deal closed. They went with me and at the time I didn’t make a big deal of it, cause I didn’t want to blow the deal up. But after the fact I called up the son, I said, Hey, you know, I’m Max, you know, Save Your Home Buyers.
Max Keller (14:06):
Do you remember me? He was like, Oh yeah, I remember you. I said, Hey, at the time you had said like you had gotten a higher offer. I was just wondering like, I’m glad you picked me, but why did go with me and not the higher offer? And he said, you know, Max, when we worked with you, you know, we trusted you, number one. So trust is really key, trust is like the key to marketing. I’m going to teach a couple of things around that, you know, later on and give your audience a free gift that they can use to build trust, cause it’s huge. He said, you know, when I was working with you, there wasn’t pressure. You know, the other place was offering more, but they were just kind of like, you know, when are you going to hurry up and sign when are you gonna move out of the house?
Max Keller (14:49):
And he felt like I genuinely cared, you know? And I did, you know, that was a huge eye opener. Like you had mentioned earlier, Jay, you know, I was teacher. So I was at these folks’ homes, I was teaching, I was trying to help them, I was trying to help the families. And you know, I had a really close relationship with my grandma. I took care of her for 15 years of last 15 years of her life. And she helped take care of me when I was little. So, you know, so, I had that bond and I felt like when I was going over to these folks’ homes, you know, it was like I was working with my grandma. So I knew this is who I wanted to work with. I knew why they’re picking me, but the problem is, I couldn’t find a really scalable way to do this, because I’m in these folks living room sometimes for two to four hours, you know, and I had another gentleman who’s helping me buy houses.
Max Keller (15:41):
And you know, we’re explaining all these details, cause these folks, there’s a huge education gap and there’s a huge education gap right now for private money lenders too. And I’m gonna share what we’re doing about that. But wherever there’s huge education gaps, I learned this being a school teacher, it’s a huge opportunity, because if you can be the person to fill that education gap, then that person, that student, that motivated seller, that private lender, you know, really is appreciative of what you’re doing, and they, you know, reward you with the business. And so, I remember it very distinctly. I went to it was at a home, I’ was buying it in the evening and it was myself, the mom who lived there by herself and the daughter, she was probably like in her early sixties. And the daughter was like, you know, Max you’ve like helped our family out a ton.
Max Keller (16:31):
Actually helped the family find a place for their mom to live in an assisted living facility. And she said, you know, you’ve liked helped us out tremendously. Why don’t you, have you ever thought about writing a book about all the stuff that you know. And I was laughing, I was like, no, I don’t think so, you know, I’m not, I’m a house buyer, I’m not a writer. And, I went back to my car and I thought about it and I was like, you know, that’s actually a pretty good idea. I had spent a lot of time learning about senior housing, cause I was noticing my seniors, even when I would teach them what to do with their house, you know, they still had other things they needed to know before they can move. So I would go and learn and, you know, start talking to people at these facilities and read online and just do my research.
Max Keller (17:17):
And I was like, you know, I have, I noticed the more I learned, the more I can help my prospect, the more, you know, they appreciated me. And it was like setting me apart, I’d say 95% from my competition. So I was like, okay, this is a way with a book that I could take this to the next level. So that’s what I did, I basically just sat down. I wrote down a list of all the questions that I keep getting asked and you know, folks living rooms and and then wrote the pros and the cons of different options. And that was my first book, Home to Home The Step-by-Step Senior Housing Guide. And I just printed out a hundred copies of the book. I started giving it away and you know, what it did, Jay is the book became my new business card, but it became a lot more than that.
Max Keller (18:02):
You know, it also became my new credibility piece. Now I would give people my book and I would have just like instant credibility. I would have, you know, instant trust with that motivated seller. And and I was really positioned as The Senior Housing Expert. And so, to make a long story short, I used the book, It’s been an amazing way to generate deal flow. How private lending got into the mix is that was around the same time that I started making the transition from hard money to private money. And when I was reaching out to private money lenders at first, it was a lot, you know, just a little background about me. I’m doing, you know, three to four deals a month at this stage. And you know, I need to get these deals funded for short term and for long term stuff.
Max Keller (18:51):
I’m reaching kinda my limit at the community banks that I had been using. So I went to hard money and it’s very expensive. And so when I started reaching out to the private money lenders, you know, they saw me as a deal maker, but I was pitching, you know, my deal to them. And I was showing them my deal and why it was a good deal or not a good deal. And sometimes they would be really excited about it, but then sometimes they’d look at me crazy because the house is in rough shape. It’s not the kind of neighborhood that maybe the private money lender would, you know, want to live in. And so I was getting mixed results. And so, at around that time, you know, fast forward about 18 months later, I, the book system that we use for private money lenders got an award at a, like a real estate conference.
Max Keller (19:36):
And Robert Kiyosaki was there to give me the award. And he, I gave him a copy of my book and it was a really, really cool moment. And a gentleman in Houston named Brad Philips had been doing the exact same thing with his Private Money Book that I was doing with my Motivated Seller Book. He wrote he was a police officer. You know, I think people who work in public service, you know, they do it more than just for the money, you know? And and so he had taken all the questions that his private money lenders had asked him about and, you know, did the same thing and wrote out pros and cons. And he was using it to source private money in Houston. And so he called me and we met through a mutual friend, somebody, you know very well. And we connected, and now that’s part of part of our licensed content that we have. So, you know, originally when I made my Motivated Seller Book, when my partner Brand made his book for private lending, we never intended for anybody else to use it. And you know, later on, I’ll kind of share some of the ways that we work with you know, real estate investors and how we help them, whether it’s deals or dollars build more of that trust and that credibility, you know, so their prospects see them differently, but that’s in a nutshell, that’s really kind of how it all happened.
Jay Conner (20:59):
Well, you know, some people, don’t really feel all that comfortable or really that confident in putting themselves out there as an expert or referring to themselves as an expert.
Max Keller (21:14):
Right.
Jay Conner (21:14):
So, you know, from the standpoint of somebody selling their house.
Max Keller (21:18):
Right.
Jay Conner (21:18):
Or standpoint of a private lender, loaning money out, in their mind, really what is it that qualifies somebody to be an expert?
Max Keller (21:28):
Yeah. That’s a great question. You know, so, people who are committed to being an educator and an advocate for someone else, that’s truly what an expert is. It’s, you know, that’s actually a requirement that we have for our students that we don’t bend on. You know, being an expert is not a way for, you know, shady, you know, people, real estate investors to, you know, take advantage of people. It’s really about it’s not about celebrity, It’s not about when people hear the word expert.
Max Keller (22:02):
A lot of times they think, Oh, well, you know, they think about people like Robert Kiyosaki, or they think about people who have done thousands of deals. And they’re like, Oh, I’m not at that level. You know, it’s an expert is not something that a title that we put on ourselves, an expert is something that our prospects see us as. And it’s really about being an educator, being an advocate, and most importantly, putting yourself out there, to be found, you know, the folks that plug into what we do, they want to be out there to be the go to persons of people in their community have questions. They can answer them and they can help. And so it’s really more about being an educator and being an advocate and putting yourself out there. That’s truly what an expert is.
Jay Conner (22:49):
So you’ve written a book about, you know, to give yourself credibility when you’re talking to a seller of a property.
Max Keller (22:58):
Yes.
Jay Conner (22:58):
You also now have another book when you’re talking with a new potential private lender that gives you credibility as a real estate investor to be trusted. So, how powerful would you say it is in having someone having their own book to use as credibility?
Max Keller (23:17):
Yeah, so great question. So it’s very, very powerful, you know, I’ll speak from my own example. You know, when I think about all the different ways that I have used my book to get a, you know, return on investment, you know, the first step I did when I got my book was I started giving it away. And a lot of times when people think a book, they think sell the book, and, you know, sure, there’s, you know, folks like you know, Stephen King, I mean, you know, JK Rowling, they sell a lot of books and make money. But for me, you know, that would have been really, really shortsighted. I mean, I did put my book on Amazon and it did hit number one on a couple of bestseller lists, I mean, that was really cool.
Max Keller (23:57):
I do get some sales from it, but the biggest thing that I get as a, as a home buyer, as a real estate investor. Is it gives me three things. It gives me expert positioning in the minds of my prospect. It gives me the ability to walk into an appointment and be really prequalified because the prospect has already read and invested four or five hours learning about me and my story. And most importantly, things that are really important for them. And it’s been an ultimate referral tool. You know, I didn’t write a book you know, to have something to sell. You know, I wrote the book in order to have something that, you know, sells me. And so I think that’s a huge, huge difference. And, you know, I’ve been giving it away and it’s helped grow the business.
Max Keller (24:47):
And like I said, there’s so many ways, you know, one of them is it’s a referral tool. So, you know, it’s just kinda common sense that if you give somebody a book, you know, they see it as valuable. It’s actually, it has value to us whether they read it or not, because it’s almost like having a band-it sign in their living room, cause when they get the book, they just, they’re not gonna throw it away. So they keep it around. When they read the book, they get to be with us for four or five hours reading it and we’re not there. The other thing is like when their friends, whether their friend needs to sell their house their friend is interested in doing something other than the stock market, you know, when somebody knows the person who wrote the book on a certain topic, It’s just kinda human nature for them to say, Hey, well, I know this, I know the guy who wrote the book on senior housing.
Max Keller (25:38):
I know the person who wrote the book on Private Money Lending, here’s his book, you know, and they give it to them and it’s, so it’s a really, really easy way to get referrals. But most importantly, you know, word of mouth, you know, right now we’re, you know, talking to hundreds and thousands of people and the Internet’s amazing tool, but nothing really replaces word of mouth. And I have not found anything that’s been, you know, better when it comes to word of mouth and spreading than a book. So it’s been, I’ll give you another example. Used to be, we went to appointments to buy houses and, you know, we were there, bunch of other investors were there to, kind of felt like we were a dime a dozen, you know, we’re another investor in the stack.
Max Keller (26:21):
Now when somebody calls our office, the first thing we do is we say, Hey, do you have a copy of our book? And they’re like, your book? Sometimes they know about it, sometimes they don’t. They say yeah, Max, can you come over? You know, and they book the appointment. Or I, if I talked to them, I book the appointment. I said, but first we want you to read chapter three of the book. It teaches you how to sell your home, you know, pros and cons of each way. If you just still decide that you want to sell it after you read that chapter, you know, then just, no problem, if you decide you don’t, just give us a call and we don’t have to come over. And so we pay a courier to send it over to their house, so they’re getting an autographed copy of our book before we even show up, they read chapter three, but they also read the other chapters.
Max Keller (27:03):
You know, now they’re curious, they’re not getting a lot of autographed books from authors. We’re educating them. The book is educational. It’s answering the questions that they have, and they’re having trouble getting the answers from somebody who’s really objective. And so what it does, and the reason we’re getting a lot of exclusive deals is because the people that they call before us, they call them and say, Hey, you don’t need to come over anymore. The people that they were going to call after us that are in the big stack of mail, they don’t call them because why would they call anybody else when they have the person who wrote the book on this subject? And so it’s a really, really big game changer as far as increasing conversions, because when we’re walking in, we’re already presold, and now it’s just sort of like taking the order and just working out the details of the closing and signing the paperwork. And so, I mean, yeah, it cost me a few bucks to send out these books and send a courier, but it’s just so, so worth it. So that’s some of the ways that we get business gains and how some of our students get gains from what we do.
Jay Conner (28:05):
Well, no doubt having your own book is hands down a powerful marketing tool for sure. But I can hear our viewers and listeners in their mind right now thinking to themselves, okay, I’m a real estate investor. How in the world am I supposed to write my own book? Like, how do they start?
Max Keller (28:27):
Right. Well, the good news about that Jay, is that if you’re thinking that or your audience is thinking of that, imagine what your competition’s thinking, you know, like they’re thinking the exact same thing, which is a good thing because traditionally, you know, writing a book did not have a very low barrier to entry. It was a pretty high bar that you had to clear now, and we’ve made it easy for real estate investors. We think, you know, easier than anybody else ever has, but essentially there’s really two ways to do a book. And it’s really kind of, the breakdown runs along the same lines as there’s really two types of real estate investors that reach out to us. And there’s the, there’s the DIY real estate investor and the ROI. So the DIY real estate investor, you know, those are the folks that like to roll up their sleeves.
Max Keller (29:16):
They invest a lot of their own time into the deals, you know, get their hands dirty. And, you know, there’s a lot of trial and error with that method and it takes a little longer to get your return on investment. But if you know, folks enjoy the process and they get satisfaction from that, then there’s like nothing wrong with that at all. So that’s the first kind of person that we help. And I’m going to share here in just a minute specifically, how we help them. The second kind of investor that comes to our Business Deals Chasing You is, I call them the ROI real estate investor. So for them it’s just like, time is money. They don’t want to go to houses. They want to have you know, the acquisitions team go to the house. They don’t work on the rehabs themselves.
Max Keller (29:59):
They have teams to do that, and they really leverage a team on all aspects. And so they can focus on just walking down more deals and acquiring more money for their deals. So for the DIY real estate investor, we created the first of its kind, it’s called The Real Estate Investor Book Writing Checklist. And so we sell this, but I’m offering it to your audience, a free copy. So you can go to the links that we’ll have at the end and check it out. And this is a tremendous resource cause what it does is it breaks down, you know, how to pick an audience, how to speak specifically to your motivated sellers, how to structure a book, how to overcome writer’s block. So if you’re DIY for all areas of your business, you can plug into this book that we created that is specifically for real estate investors who want to write their own book to get more deals or dollars. That’s what it is. And so we took all the learnings that, you know, took us hundreds and hundreds of hours to learn and provided a shortcut for you. So that’s one way. And then the other way is we have some licensed content that we allow for some different niches and for the ROI, we allow them to plug into our licensed content.
Jay Conner (31:17):
So you got the, do it yourself, people writing their own books, and then you get sort of done for you?
Max Keller (31:24):
Yes.
Jay Conner (31:24):
Right. So you got both ways. Well Max, why don’t you go ahead and tell everybody how you can help them.
Max Keller (31:33):
Sure. Yeah. So just go find out about us just go to DealsChasingYou.com/Conner and that’s with an ER and we’ve got a copy of The REI Book Writing Checklist. They can check it out, get a free copy of it. And then we’ve got some links on the website once they do that, they can go into our portal and they can see what specifically what we’re doing with the different niches. So yeah, just, you know, something to explore some of the checkout and and you can get some value from this book. Like I said, we’re offering it for free for a limited time. And so yeah. Check it out. And we got our contact info on there. If you have any questions about, you know, what it is that we do, and if we can help you, we you know, more than happy to answer any questions that you have
Jay Conner (32:21):
For our folks that are listening on our, on the podcast, you may be on Google play or iTunes. Let me spell that website out for you. So it’s www.DealsChasingYou.com, And to get that checklist, is add a /Conner, Is that right, Max?
Max Keller (32:50):
That’s correct.
Jay Conner (32:51):
So again, let’s put that site up. www.DealsChasingYou.com/Conner, Are there any other ways that a real estate investor can use this book to grow their business?
Max Keller (33:12):
Yeah, absolutely. So, you know, I had mentioned earlier about how, you know, this turned into a huge referral tool, you know, for me, it was just easy for people to, you know, connect me to other folks and kind of pass my book around. You know, and another one that’s really, really sort of like a little secret that people know who write books is speaking engagements. So there’s groups of people that are over, you know, your ideal prospect, whether it’s private money lenders or motivated sellers. And and they’re always looking for people to speak, whether it’s virtual or live. And so shortly after I published my first book, I had a church, a local church reach out to me. They had gotten the book from one of their congregation and said, Hey, we got a copy of your book. Would you be interested in speaking at our church?
Max Keller (34:02):
And I didn’t. I said, sure. You know, and I didn’t have, you know, presentation, I didn’t have PowerPoint slides or anything. I basically, it was kind of a last minute thing. I just showed up to the church. I had a box of my books and I made sure that everybody got one and I just, you know, basically held up, I got a copy of my book right here. I just held up my book and I just taught out of it. And I taught what I knew. And it was awesome, because the folks were super engaged, you know, they’re just like leaning forward in their seat. And afterwards they came up and told me how much they really appreciated me. And they asked about my services specifically and actually booked a couple appointments that night to go look at houses, which was awesome.
Max Keller (34:45):
And, and so, you know, I was really, really blown away that I had given them something that they really wanted and, you know, it was just a small local church, you know, but to me it felt like, you know, I headlined a big stage. I mean, I really wanted to do it again. And so, like I was saying event organizers, you know, they’re always looking for people to speak and being a subject matter expert, being an author makes it really, really easy for them to pick you. You know, I remember one time the organizer asked me what my fee was? And I was like, stuttering, I didn’t even know what to say. I was totally unexpected. And I was like a zero. And they’re like, Oh, okay, well, that’s great. You know, cause we had a budget for a certain amount and I was like, Hey, wait a second thinking about it.
Max Keller (35:29):
I mean, honestly I would pay to speak there. You know what I mean? Like when you get a recommendation from the pastor of the church saying, you know, Max is the author, Max is coming to teach about housing. Everybody needs to show up. I had one church that printed out 2000 like flyers and put it in their church bulletin full color 2000 2 weeks in a row. And I didn’t pay for any of that. So that’s a really big deal. And then the other thing is it’s kind of interesting as celebrity, you know, I didn’t write this book to be a celebrity. I’m happy just being a home buyer. And I buy houses here in Fort worth and Dallas. And now I have a group of students that plug into our licensed content, but I didn’t do any of this to become a celebrity, but it’s just sort of part of it.
Max Keller (36:24):
When you write a book, people look at you like the other people they know who have written books, like, you know, Dave Ramsey, or like you said, Robert Kiyosaki, I got to meet, you know, recently and you know, Barbara Corcoran and Oprah. I mean, these folks all have books and it is no secret that being a celebrity or being seen as a celebrity, even local celebrity has a lot of power behind it. And folks trust you more. They, they look at you more as the doctor prescribing them the medicine instead of just a salesperson. And so I get folks all the time that asks for a copy of my autograph and they get all excited and I still sort of like bewildered and I just never get used to it. And I say, okay, well, here’s what we’ll do. As soon as you sign the contract over there, you give me your autograph, then I’ll give you my autograph. And we all kind of have a little laugh. So it’s been a really it’s been a really fun journey and it’s been a really different way to buy houses and raise more money for my deals.
Jay Conner (37:26):
Well, there you have it folks. I know you’re interested in learning about how to have your own book for your own credibility, for your own story. And you can get the checklist on how to do that yourself, or you can plug into Max and get it done for you. So that website one more time folks is www.DealsChasingYou.com/Conner, Max it’s been fantastic having you on the show, parting comments before we wrap it up.
Max Keller (38:01):
Yeah. Just commend everybody for listening to you. You know, you run a really great program and I, you know, I’ve got some time to, we gotten to spend some time together and see your operation and it’s, first-class all the way. So I just commend everybody listening to keep focusing on their education and look forward to checking back in with you in the future and, you know, give you any sort of updates.
Jay Conner (38:25):
That’s awesome. Thank you so much, Max. There, you have it folks. Another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, the Private Money Authority wishing you all the best. Here’s to taking your real estate investing business to the next level. And we’ll see you on the next show.
Today, Jay Conner interviews Andrew Campbell about multifamily investments.
Real Estate Builds Wealth better than any other investment vehicle. No other investment class has 4 ways to provide returns that real estate provides including: Cash Flow, Appreciation, Amortization, Depreciation. Focusing on Value Add & Infill Locations Minimizes Operational Risk.
This is a strategy that uses both Macro & Micro Economic factors provides our operating team with strong upside potential. The U.S has already become a nation of renters.
Home affordability, economic uncertainty and a shift in the mentality of the American Dream has made renting, not owning, the new normal. Texas is better-positioned to capitalize on population and job growth than any other state.
A business-friendly environment, strong employment opportunity and family affordability have made Texas the best place to live in America right now.
Tune in to the discussion today to learn more about this with Jay Conner and Andrew Campbell.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:01):
Well, Hello there and welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, your host also known as the Private Money Authority. And if you’re brand new to the show, a special welcome to you here on the show, we talk about all things relating to real estate investing, how to find deals, how to fund deals, how to sell deals quickly, how to automate your business. So you’re running it and it’s not running you. And if you’ve been tuning into the show, my land, since we launched in June, 2018, we’re blowing right on through 300,000 downloads. We appreciate all of our subscribers. So if you’re tuning in on iTunes or Google play, or one of those type formats, we really appreciate if you will subscribe and rate and review us and give us five stars. And also if you’re new to this show the reason I’m called The Private Money Authority is because back from 2003 to 2009, I relied on local banks to fund our deals.
Jay Conner (01:11):
And I got cut off like the rest of the world in 2009, I was introduced to this wonderful world of private money to where you actually do business with individuals. And so I’ve got right now about 50 different private lenders investing in our deals. And I also coach and train and educate other real estate investors on how to get funding for your deals without relying on banks and mortgage companies and et cetera. So if you’d like to learn all about that, and how you can get plugged into the money and get plugged into funding, I’ve got a free trial for you to come join my membership, where I actually do live training twice a month, and you get all kinds of content and training inside the membership. It’s called The Private Money Academy and for you to come check it out for free for 30 days, get on over to www.JayConner.com/trial.
Jay Conner (02:11):
Glad to have you in there. Now, another thing about the show is that I’ve had just some amazing experts and guests join me here on the show and today is no exception. My guest today is a native Austinite in case you don’t know what an Austinite is that someone from Austin, Texas, and he’s a real estate entrepreneur and he broke into real estate investing first back in 2009 as a passive investor. Well, in 2012, he transitioned into active investing and management as a personal portfolio that grew to 76 units across Austin and the San Antonio areas. Well, he earned his stripes if you will, building and managing his personal portfolio before moving into much larger multifamily buildings and deals. Well, the name of his company is Wild Horn Capital. Well at Wild Horn Capital, he’s focused on acquisitions, finding deals and maintaining investor relations.
Jay Conner (03:19):
Also leveraging his marketing background to build long term relationships. Well today, his company Wild Horn Capital controls over $200 million in it’s portfolio. And they have over 1700 units in Texas. Well, my guest’s background is in market research and brand strategy, and he’s spending time in both advertising agencies and emerging technology consultants where he was most recently a partner and an award winning app developer. That’s pretty interesting right there. In addition to that, he received a BS in advertising from the university of Texas at Austin, and he has his MBA from Baylor University. With that! well, welcome to the show, Mr. Andrew Campbell. Hello Andrew.
Andrew Campbell (04:12):
Hey Jay, how are you?
Jay Conner (04:13):
I am doing fantastic! So you grew up in Austin, Texas, right?
Andrew Campbell (04:19):
Yes Sir.
Jay Conner (04:20):
Excellent. Well, my wife Carol Joy, she’s from Wichita Falls, Texas. And so we got a little bit in common right there. So you actually started in real estate back in what year?
Andrew Campbell (04:33):
Kind of 08, 09 kind of move back to Austin around then right as the world was ending and thought it was a good time to jump in.
Jay Conner (04:42):
Wow! Well, I tell you that reminds me of what I just shared. I mean not, from 2003 to 2009, I was relying on local banks for my single family house business and wow! With no notice I mean, I got like cut off with no notice, but you know what, for me, Andrew, it was a big blessing in disguise cause I learned about private money very quickly. And actually within 12 months of being cut off from my funding, our business actually tripled because I had access to the funding. So I was able to do, you know, so many more deals. So with you coming in back in 2008, 2009, what was your first year or two like?
Andrew Campbell (05:25):
Well, I was probably you know one of the guys you might have been borrowing money from then. I think the first the first few years kind of based in passive investments or I was not real active, you know, kind of barrow lending money and admit it and as a passive investor in some ground up deals in Austin, some infill condo developments and kind of you know, got to see the business happen, got to see things be built, got to see returns come in and, and I think caught the bug a little bit. And really it was started looking for creating a little bit more longterm, passive cash-flows which led me into more on the active side, you know, buying duplexes, fourplexes, and ultimately kind of graduating and now we’re buying, you know, call it 200, 300 unit apartment complexes.
Jay Conner (06:07):
I got you. So you and your company is totally focused right now on multifamily units, right?
Andrew Campbell (06:17):
Right, yes Sir yeah. Austin and San Antonio, our focus is really kind of class B, B plus assets that have some sort of value add component but you know, good assets and good location. And the business plan is to hold them for five to seven years and you know, make everybody real nice return and just fortunate to be from a market that’s growing as fast as Austin’s growing.
Jay Conner (06:42):
Well now, just to make sure our audience understands what is a, B, B plus project or property?
Andrew Campbell (06:48):
So, you know, most properties, is kind of a subjective, you know, but ABC properties, maybe a D people might have D properties, which I certainly recommend steering clear of, you know, A-class is going to be typically brand new, highly amenitized, you know, might be downtown B class a little bit older, you know, I’d probably say stuff built in the eighties you know, or nineties, early two thousands, even it’s somewhat based on the asset type and somewhat based on the location.
Andrew Campbell (07:17):
You know, but I think for us B, B plus, you know, that’s a good grade in school and that’s a good grade in the real estate world, it’s, we’re not trying to get top of the market rents, but we’re also, you know, we’ve got a good professional base of renters, young professionals, teachers nurses, that sort of thing that are, you know, good, good quality folks and looking for, you know, rental property, but you know, kind sort of middle of the market.
Jay Conner (07:42):
What would you classify or list are the benefits and investing in multifamily versus single family houses?
Andrew Campbell (07:51):
I think efficiency you know, as I started out kind of with some duplexes and fourplexes, you realize the more sort of shared units you have say under one roof you just it’s more efficient. So if your roof goes out on a single family, you know, you’re out $20,000 on an eight unit building, you know, it’s the same $20,000 to replace that roof or to replace that concrete you know parking lot or whatever the system might be. So I think that’s a big one, I also think as you get into larger,
Jay Conner (08:23):
So, Scott I’ma need for you to come to the forefront and save the day for a moment because I just lost connection. And I think you all can hear me. I’m gonna sign out and sign right back in. So pick it up, Scott, I’ll be right back.
Scott Paton (08:39):
I don’t know if we lost him or not, but continue on Andrew cause you’re live for us.
Andrew Campbell (08:45):
Okay. yeah, so, you know, I think they’re just more efficient and, you know, as I saw you get better, I guess better management, as well as something I saw that you can afford and a property is big enough to support onsite management. You get a better quality of manager. You’ve got, you know, one, two, three, four people whose full time job is to oversee and over that, that asset. And also just logistically of us as the asset manager, having one place to go where you’ve got a collection of you know 250 units, I think it’s a little bit more efficient than you know, kind of if you had 250 single family homes, you’re trying to drive around and keep tabs on it’s just a little bit more difficult.
Jay Conner (09:26):
Alright, I’m back with you Andrew, Sorry I got bumped up there for a quick second. So you were talking about efficiency and you know you got one roof and you know, it was $20,000 and you know, you got eight units versus, you know versus one unit. So, let’s talk about acquisitions cause you focus a lot on acquisitions in the company, right?
Andrew Campbell (09:45):
Yep.
Jay Conner (09:46):
Yeah, So how about help us out and understand, what’s your criteria when you’re looking for a deal? What is it that determines what a deal is? And I know that’s a Multifaceted answer to that question, but at least give us the 30,000 foot view on what’s your criteria on whether to buy or not to buy and what are you looking for?
Andrew Campbell (10:10):
Yeah, I think the first thing for us is it’s gotta have some sort of value add component. You know, whether that’s an interior renovation play or it’s a land entitlement, but something that you we’re buying an existing asset and there’s a path, a very feasible path forward to increase the value of that asset. And then we’re going to look at location, you know, so we want to be in good locations. We want to be you know, where we don’t want to bet that the city is gonna make a left turn. This is going to be in a good area. You know we’re pretty strict about our rule of being kind of class B neighborhoods. And I think the final thing is just looking at what those investor returns ultimately become. You know, I think our job is very much to sort of pair you know, good interesting real estate plays with investors.
Andrew Campbell (10:54):
And it’s gotta be something that we feel like is a good risk adjusted return that’s also competitive and that you’re gonna feel good about, you know, take into your friends and family your investor base. It says, Hey, this is a play that’s gonna double your money in five years or seven years or whatever that business plan is. So it varies a little bit into your point it’s very multifaceted, but it starts with having a good asset with good bones and then a business plan we believe in, and then, you know, is it, do we think it’ll make money?
Jay Conner (11:24):
So when it comes to funding these deals obviously your company raises private capital for some of the funding. Do you use some institutional funding? Do you have some owners that will actually sell to you on terms or is it all the above?
Andrew Campbell (11:45):
It’s all been kind of private individuals is where we get our funding. We don’t have any bunch of institutional partners. It’s been just relationships and folks that we know and folks that have heard about us that we’ve gotten to know, you know, based on our focal geographic focus, kind of our track record and, you just a lot of recommendations. So it’s, you know, putting those together and really focused on just helping people understand. I think there’s other alternatives out there to investing and you don’t have to you know, you can have a small piece of a large deal and if you like real estate, but you want to be passive that’s kind of been who our investor base is.
Jay Conner (12:26):
Alright, So I know it varies, you know, what year are you in? It varies on the project, but what’s a ballpark type of return that your investors can receive these days.
Andrew Campbell (12:41):
So we’re kind of on a typically thinking about things on a five or seven year horizon. You know, so again, that it taken advantage of where we’re located in Austin and how much the city’s growing. You know, we’re not looking to do something in 18 months or two years. So on a five to seven year horizon, typically looking for something that’s going to get you sort of a two X or a one eight X multiple on a five year investment. You know, it’s gonna have some cash on cash. I think that’s the advantage of buying an existing asset as we know kind of going in what that’s gonna look like, in Austin right now it’s been really competitive, you know that may be 4% in year one. But you’re going to get some initial cashflow and you know, looking for a total IRR of kind of a low teens maybe 12 to 14% somewhere in there.
Jay Conner (13:28):
Say, if you can double your money or somebody can double their money in five years that is a whale of a return right there.
Andrew Campbell (13:37):
Yeah, no it is. And I think that’s you know, when you pair the getting some cashflow with some of the appreciation and being you know, the advantage of leverage I mean we’re pretty conservative in our leverage about 68% across our portfolio, but the power of leverage really allows you to get some outsized returns in real estate.
Jay Conner (13:56):
Yeah, for sure. So what are the what are some different ways that you can increase the value you know, of a you know multi-family you know, apartment complex property?
Andrew Campbell (14:11):
Yeah, the most straightforward is just in improving it, you know, going in, we typically will buy an asset, we’ll rebrand it kind of change the story, update the look and the amenities, update the clubhouse, so it feels like a newer more modern property, and then we’re going to go update the interiors as well. If it’s a deal that was built in the eighties you know, update the cabinetry, knock out some walls, open up the floor plan, modernize it. When you do that, you’re able to raise the rents. You know, maybe you raise them $75 or a hundred dollars. But again, over 200 units, you know, that’s increasing the NOI quite a bit. We’ve also got some strategies, you know, parking, adding covered parking adding private pet yards, you know, or just, if you’re on a first floor unit, you want your own sort of private space for your kids to run around or a grill or anything.
Andrew Campbell (15:01):
You can charge 75 to a hundred dollars a month for that. Amenity fees, package lockers. There’s lots of little strategies that you can employ and you know, add to the NOI. And at the end of the day, these deals are I think one big difference with single family is these are valued like businesses. So it’s based on a cap rate in the market. If you can improve the NOI on a property by a hundred thousand dollars, and the cap rate in Austin as a four and a half, or maybe sub, you know, maybe it’s a 4% you’re getting an outsized return on your value of the dollars you’ve spent. So that’s really the name of the game is finding ways to to increase the NOI
Jay Conner (15:39):
Is your exit strategy typically to be in a project for five to seven years add value to it and then sell it?
Andrew Campbell (15:46):
It is , and I think a lot of that is driven by you know, investors. I mean most investors want to recycle their capital. You know, my personal we’ve got some personal properties and the goal is to own them forever, you know, longterm cash flows but when you partner with investors, people want to recycle that capital. And the hope is they’ll recycle that and potentially might do a 10 31 with those investors but yeah, typically you’re going to sell it in five or seven years.
Jay Conner (16:15):
Excellent! So here we are at least in today’s show we’re still in the midst of COVID-19 and the aspects of that. So is now and today still a good time to be investing in melded family with whatever consequences and ramifications of COVID-19 that’s going on.
Andrew Campbell (16:39):
Yeah. You know, who knows what the world looks like? It changes by the day. We think it is, you know, and I think couple of reasons our investment thesis has always been you know, people need to live somewhere and offering that kind of B class property you know, It’s a good thing to do you know, people are gonna not pay their car payment, There’s a lot of things you’ll do to make sure you got a roof over your head. We’ve seen collections be very, very strong you know, over 98% across our portfolio since the beginning of cope. And so people have if they can pay their rent they are paying their rent. And so far they’ve been able to do that. I think when you compare it with other asset classes, you know, we feel like multifamily and industrial have been the two asset classes that are outperforming.
Andrew Campbell (17:23):
Obviously office is a lot of concern about office space downtown across the country. The office space in the coast is people are kind of leaving the coasts retail, you know, a lot of question marks about how fast, how many of those businesses come back. So, you know, if you look at what your options are and kind of keep cash under your mattress or, you know, you put it in the stock market and kind of, how do you feel about where that’s going to be, or your multifamily it’s always been for us a pretty conservative play and not a business it’s get rich slow. You’re not gonna go we’re not trying to hit, you know, 30% returns on development deals we’re buying existing assets, conservative leverage, and they have good returns. And we think that thesis has held up so far in COVID. And certainly we’ll continue to look for the right opportunities. Obviously you gotta tweak your underwriting and some of your assumptions now with as the market softened some, but it’s still relative to your other options a very strong bet.
Jay Conner (18:23):
Yeah. I’ve experienced the same thing here in Eastern North Carolina. We’ve got quite a few people that are purchasing single family homes by using our rent to own program. And we are at 100% collecting all the way through a COVID-19 and, you know, like you just said, a moment ago, people are going to do what they can do. You know, all they can do to keep a roof over their heads. One thing I’ve heard you say Andrew, is that in this line of, in this investment class, if you will, the way you offer people, you know, investing in your business and et cetera, really four ways to get returns. And, you know, you talk about cashflow, appreciation, amortization and depreciation. Can you talk for a minute about what’s the difference between those four and what are those four returns and what they mean?
Andrew Campbell (19:20):
Sure, so you know, cashflow is just, it’s pretty simple. It’s kind of the, what’s leftover at the end of the month after we pay all the expenses. And again, a benefit of buying an existing asset, you know, we know how that’s performed, so there’s cashflow and that when we make those distribution to investors, that’s a pretty simple concept appreciation, you know, that’s us benefiting from being in a market that’s growing really quickly. And there’s new people moving here every day, there’s new jobs. So the values go up, you know, I think a lot of people talk about real estate as an inflation hedge, which is another thing, you know in today’s day and age where there’s lot of concern about inflation with the FED and their conversations and real estate, you know, if inflation runs people for paying, you know, tomorrow’s dollars for our assets.
Andrew Campbell (20:09):
So it’s a nice hedge there, but that’s just appreciation. It’s the market saying that, you know, your house, you bought it for $200,000 and in five years later, it’s worth $250,000, that’s your appreciation. Depreciation and amortization are kind of based on the leverage and the tax structure. So we’re able to depreciate these assets. We actually had one advantage of large properties, cost segregation. So we can come in you hire an engineering firm and rather than taking a straight line, 27 and a half year depreciation schedule, they break down your property, you know, 200 lines on a spreadsheet and say well, your roof has as a useful value of X years, your appliances, your flooring, your mechanical, et cetera. We can depreciate about 80% of that property in the first five years which lowers your, you get a K1 that shows you, you made little to no money, even though you made got distributions. And then amortization is just us paying down the loan, you know, so every month as we pay our mortgage we own more of the property. And so you kind of combine those four aspects and it makes it’s another big advantage of really any real estate investing. But I think from a passive standpoint you know, what we’re doing multifamily it gets pretty powerful.
Jay Conner (21:26):
Last question I’ve got for you Andrew, what are some of your favorite ways? I mean, you’re in acquisitions. What are your, some of your favorite ways to locate these deals?
Andrew Campbell (21:36):
You know, we just are inherently focused on relationships, you know, so we’re born and raised in Austin. We’re focused on Austin and San Antonio. And so we pride ourselves on having really good relationships and being very plugged to the community, with the brokers and the other owners. And so we want to hear about every deal that’s coming out and we want to underwrite them and just see where the market’s going and trending. And, you know, we want to get the opportunity to buy stuff off market, which we’ve been successful three or four times, or you know, getting the first phone call if somebody’s gonna get a listing. It’s just been very laser focused on our market and building relationships here at home.
Jay Conner (22:14):
I got you. Well, you can’t beat the network, you can’t beat the referrals. So folks you’ve been listening to my special guests today or watching, depending on how you’re tuning in to Andrew Campbell. And so Andrew final thoughts and comments.
Andrew Campbell (22:32):
No, It’s been great. You know, I enjoy talking real estate and you know, mentoring people or talking through investing. And so if anybody is interested in reaching out you can see the website here, WildhornCap.com My email’s AndrewWildHornCap.com be more than happy to have a conversation, and I’m kind of a real estate junkie and love to have conversations. So it would be more than happy to reach out to anybody if they were interested in learning more.
Jay Conner (22:58):
That’s great! So for those of you that are listening in, let me give you that website specifically it’s www.WildHornCap.com. That’s spelled WildHornCap.com One more time that’s www.WildHornCap.com and you can reach Andrew specifically himself. And that email address again Andrew, correct me if I’m wrong, Andrew@WildHornCap.com. Is that right?
Andrew Campbell (23:37):
That’s right.
Jay Conner (23:38):
Alright, Andrew, thank you so much for joining me here with the show today.
Andrew Campbell (23:42):
Thanks for having me, I enjoyed it!
Jay Conner (23:44):
Alright, very good! Well there you have It folks! Another show Real Estate Investing with Jay Conner. I am Jay Conner, the private money authority wishing you all the best and here’s to taking your real estate investing business to the next level. We’ll see you on the next show, Bye for now.
Jay Conner is joined by The Real Estate Preacher, Randy Lawrence.
“I’ve seen and done it all in real estate. Now I want to help you achieve the success I’ve enjoyed.”
– Randy Lawrence
Prosperity Capital Partners lives its mission of serving others by providing
Investors with financial freedom: Double-digit returns with zero capital loss and excellent tax benefits to our private investors for 17 years via asset-backed real estate investments.
Families with high-quality, affordable homes: Offering updated affordable housing enhancing the quality of life of working American families who live in our apartments.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:02):
Well, hello and welcome to another episode of Real Estate Investing with Jay Conner! I’m Jay Conner, the Private Money Authority, also the host of the show. And I wanna welcome you whether you’re a brand new or you’ve been following the show for some time. My lands! We’ve launched back in June, 2018, tracking fast over 300,000 downloads. Thanks to you. And I do need your help. If you find this episode to be valuable, and you can use this information in your real estate investing business, then please help me out. Let’s share this information, like share, subscribe, write, and review whether you are on iTunes or watching on YouTube or any of our other platforms. Well, here on the show, we talk all things that relate to real estate investing. We talk about how to find deals. We talk about how to fund the deals without relying on local banks, mortgage companies, or even hard money lenders.
Jay Conner (01:11):
We talk about how to sell houses, rehab houses, and how to automate your business to where you’re actually running it. And it’s not running you. But as I mentioned, I’m known as the private money authority. I became an expert on raising private money and I’m not talking about doing business with brokers. I’m talking about actually attracting hundreds of thousands and in the millions of dollars in funding, that’s got nothing to do with your credit, your verification of income, or actually even the number of deals that you’ve done. If you’re interested in getting more funding for your deals to where you never miss out on a deal because you didn’t have the money, I’ve got a free gift for you. Yes, I have got a new monthly membership that I launched that I’m going to show you how to get free access to the membership. It’s called The Private Money Academy, and on the, or in the membership twice a month, I am live on Zoom with coaching for all of the Academy members.
Jay Conner (02:11):
We’re tracking fast to a thousand members. Right now, we got about 150 members. And as a matter of fact, the next live Zoom coaching call is within the next week. So I’m going to tell you how to get in, you get the live coaching. We also put someone, one of the members in the hot seat where we analyze your business, figure out your challenges and fix your challenges to where you’re able to take your business to the next level. And we also have new content and training in the membership every month on finding, flipping, automating funding, selling, et cetera. We also cover all in the membership, all types of real estate deals. We cover single family houses, commercial land, self storage, and you name it. We got it covered. So here’s how you can take advantage of checking it out for free. Go to www.jayconner.com/trial.
Jay Conner (03:10):
Again, that’s JayConner.com/Trial. Look forward to having you live on the membership Zoom conference calls. Well now in addition to that, if you’ve been tuning in for any time, you know that here at Real Estate Investing with Jay Conner, I have amazing experts. And in fact, the guests that I have on today’s show is a good friend of mine and is a fellow member of a very top and mastermind group where we have about 120 real estate investors from all across the nation. We get together about four times a year and help each other out on our businesses. Well, let me tell you about my friend. First of all, he’s an entrepreneur with over as of today, 24 years of experience, and he has four very successful real estate investment companies.
Jay Conner (04:08):
In addition to that, my friend and I have got the same, same heart, and we’ve got a lot in common. He’s a pastor and also a founder of multiple life-changing ministries. And as of this day in the last 15 years, he has impacted and then blessed impact over 40,000 people. He’s been seen on CBN, NBC, CTN and featured in the St. Petersburg times Tampa Tribune. And he’s known as the transformation expert. In addition to that, he’s experienced his own life transformations as well, overcoming the upbringing from a broken home and his life as a drug dealer to becoming a successful entrepreneur, pastor husband, and a father. In addition to that, his spiritual breakthroughs led him out of the economic collapse and the financial collapse of 2008. And man can, I not relate to that! Took him from bankruptcy to a real estate rehabbing business, generating a seven figure annual income, again, something else that he and I have in common.
Jay Conner (05:16):
Also he, and I’ve got another yet person. That’s a mutual friend and mentor back in 2013, he co-authored a book titled Dare To Succeed with Jack Canfield, who is the co-creator of Chicken Soup For The Soul detailing in this book his personal and professional rise from the ashes, his mentors and his coaches include world renowned business leaders, authors, international speakers, such as Les Brown and also John C. Maxwell. He also is an active member contributed to the same mastermind group that he and I are a member of. Comprise, as I mentioned of nation’s elite real estate investors, beyond that he passionately believes in God’s promise of abundance and freedom, and he uses his unique strategies to help transform lives like yours by unlocking spiritual, mental, and tactical financial potential through real estate investing. He also has a very popular podcast titled The Real Estate Preacher on the podcast. He shares his successes and his failures along with his proven strategies and techniques that help build systems that work he’s proven them to work. And he does this so others like you can achieve their own seven figure incomes and their own abundance, just like him. Welcome to the show. My friend, Randy Lawrence also known as the Robo State Preacher.
Randy Lawrence (06:47):
Awesome! My brother. Good to see ya.
Jay Conner (06:49):
Good to see you too, man! Would you reach around please? And like scoop up a little energy and bring to the show to grab a little more
Randy Lawrence (06:59):
After that intro I’m ready to jump up and run around the building Man! Praise the Lord!
Jay Conner (07:04):
Randy, you’ve got quite the story, quite the backstory at one time you were a drug dealer you were bankrupt. You were like, you know, you were like slap dab in one time. And the financial collapse of 2008.
Randy Lawrence (07:19):
Yup!
Jay Conner (07:19):
So, before we get into those pieces of your story how about give us your backstory and little an overview as to.
Randy Lawrence (07:29):
Yeah
Jay Conner (07:30):
Where you’ve been in, what you went through to get you where you are now
Randy Lawrence (07:34):
For sure, man. Well, so my background, I come from, you know, a broken home parents divorced it, you know, four or five years old that kind of led to, by the time I’m in middle school, high school doing my own thing, kind of wayward with the wrong crowd, wrong group, doing the wrong things and just, you know, partying and all like that. Went on through college, got my degree in finance, minor in economics, went into the stock brokerage business right after that really kind of continued on with that same kind of money and partying lifestyle and all. And it was probably about 27 that I, you know, had had success in, in that respect, but really wasn’t fulfilled. And it was at that time that I really kind of found through reading a book Norm Miller chairman of Interstate Batteries, where it outlined about faith in God.
Randy Lawrence (08:25):
I put my trust in Christ. It really just complete 180 from my life, Got involved in the church locally and then got met my wife there. We got married and then, you know, God called me in the Ministry as well. And so I’m running a money management company that I started and then also ministering there at the church and probably around about 2003, God, just really, Has showed the power of the difference of what real estate can do versus, you know, stocks, bonds, option traditional money management. So really started focus on that. And you know, that was really the beginning of where things took off for us. We sold our money management practice in 2006 and moved out North of Tampa to start a church. And then of course that’s where we were having gone through that economic collapse that happened here in Florida.
Randy Lawrence (09:17):
And it was just quite the incredible journey because I was simultaneously pastoring the church, also running the real estate business and navigating the economic collapse that the whole country went through. So really kind of an incredible time at that moment in time.
Jay Conner (09:34):
Did you say you met your wife at church?
Randy Lawrence (09:36):
I did. You know, it’s funny. My dad always used to ride me now again, he was in North Carolina, we’d see each other, maybe once a year, talk on the phone once a week, I’d be going to the bar at happy hour after work, you know, and talk to him on the weekend. And he’s like, what’d you doing? That’s all, I’m going out with some friends at a ball game. And he’s like, man, you should go to church. I’m like go to church? He’s like, well that’s where you going to meet you a right girl. And I’m like, yeah, that’s not the kind of right girl. I want to meet, but he was right. You know? And so yeah, I was blessed to meet my beautiful wife, Sarah Jo there. And we’ve been married now 21 years coming up in October.
Jay Conner (10:16):
Did you say her name is Sarah Jo?
Randy Lawrence (10:18):
Sarah Jo? Yeah. She’s.
Jay Conner (10:20):
We got two things in common, We both met our wives or our to be wives At church.
Randy Lawrence (10:25):
Yeah.
Randy Lawrence (10:25):
And both of them have good Southern devil names. Mine’s Carol Joy,
Randy Lawrence (10:32):
Okay.
Jay Conner (10:32):
And yours is Sarah Jo, you want to know something else we got in common?
Randy Lawrence (10:36):
ah.
Jay Conner (10:36):
So in your bio in 2013, you coauthored a book with Jack Canfield named Dare To Succeed.
Randy Lawrence (10:44):
yup!
Jay Conner (10:44):
Well guess what? Two years later in 2015, I got certified as a Jack Canfield trainer by Jack Canfield.
Randy Lawrence (10:53):
Awesome. Yeah, it’s a, it’s amazing how many things, you know, it’s like the commonalities that the Lord, when you surround yourself with great people, it’s like you attract those similar qualities. And then here it is, you know, that we’ve been together through CG and the friendship there. And then now as we connect together with that further, you find all these backstories that line up with the identical things. That’s just pretty cool.
Jay Conner (11:22):
Well you know, I don’t know who came up with the idiotic idea, In my opinion, that opposites attract that’s stupid.
Randy Lawrence (11:29):
yeah.
Jay Conner (11:29):
I want to be around people. That’s like me. It’s like birds of the same feather flock together. Right?
Randy Lawrence (11:34):
For sure. Absolutely. And that’s, you know, we’re really, as you begin to have the synergies, the thinking is the same, the thinking that elevates one another and pushes each other to higher levels. That’s when I heard your intro about the monthly mentorship program, it’s like, man, that’s what people need to be a of because you know, you just, you come together with great thinking and then it inspires your thinking and then you see these actions that others are doing, or, you know, it’s just a win, win. It’s like the synergy of one plus one, it’s more like, you know, two times two equals four and then it just expansively grows, you know? And that’s the thing, man. So,
Jay Conner (12:15):
Yeah, exactly. So would you say, first of all, were you raised going to church or no?
Randy Lawrence (12:21):
I was not. You know, both my parents, you know, kind of by the time I was in middle school, I was kind of given ability to start making my own decisions and, you know, good parents, but this not focused on, you know, religion or, and again, as a broken home you know, they were just trying to do the best they could do to do their thing. And, you know, so that left me to my own accord and left them on accord. I probably connected together with the wrong group and ran with the wrong crowd and all that kind of stuff.
Jay Conner (12:53):
So I want to speak for a moment to people listening in or viewing whichever platform they’re viewing as someone or listening. My best guess is the majority of people out there like you and me went through a time in their life. The majority, not all, but a lot of people went through a time in their life or an extended time in their life that was very dark. Right? And I went through my dark time. My dark time lasted from the time I was 21 years old until I was 24 years old. And it just progressively got darker and darker and darker. Here’s my question for you. Did you have a wake up call? If so, what was it?
Randy Lawrence (13:42):
Yeah.
Randy Lawrence (13:42):
And if you did, what was it?how did you get out of it?
Randy Lawrence (13:50):
Yeah, So I was, you know, in that period for me would probably been 13 through 27. So like 14 years kind of like a Joseph in the journey, the two kind of coming out of the pit and all like that. But it was really at 27. I was helping take care of my mom. She had gone through numerous health challenges with failed back surgeries and all like that. And I had gotten a DUI charge, you know, for driving home apparently intoxicated. And again, I’m like, no, you know, that’s not the truth, but really what it was for me at that moment was it was this wake up call that here I am, 27, I’m facing the possibility of losing my license for six months. And, you know, I worked at a brokerage firm in Tampa. I lived in Seminole there with my mom helping to take care of her.
Randy Lawrence (14:43):
There were these recoveries and health things she’s going through and it just hit me like, you know, good Lord, man. I’m nowhere near where I want to be in life, cause if I lose this thing, now I’ma have to ride my bike to the 711 and maybe get a job. There not knocking people to work at 711, but that was not my aspiration. And I’m like, what I’d aspired to become and to do and achieve is nowhere near the realities. And the truth of the matter is it’s because of where I’m at in my life and the choices. And so that began to be that process to me, to see it’s like, what I’ve been doing is not the right thing. And so in short order, I laid my hands on a book, another friend of mine and I we’d started in an automotive garage and in the we sold interstate batteries.
Randy Lawrence (15:33):
And so the interstate battery salesman dropped off a book called beyond the norm. And it was about Norm Miller and his journey. I thought it was a sales success book, but it was his journey on how he came to faith in Christ. And then they became the number one battery reseller in the world and went on to such great success. And when I read that book, I’m like, that’s it, he’s got a beautiful wife, he’s got success, he’s got fulfillment. He’s in, he’s found it all in Jesus. And I’m like, wow! And I’m like, you know, Lord, if that’s true, and this is real come into my life, come into my heart, show me the direction you want me to go. And it was just like wham! This giant Volkswagen that I’ve been carrying on my shoulder for 15 years was just released. And it was just an incredible thing. And I, I knew I didn’t know what exactly happened, but I knew something happened and that my life had been changed. I could just feel it at that moment,
Jay Conner (16:31):
If you would like to follow Randy Lawrence and his story, you can follow Randy at www.TheRealEstatePreacher.com So Randy what does your, so how’d you. So when did you start in real estate? How did you get into real estate and what is your business model look like today?
Randy Lawrence (16:52):
Yeah, so we started in 2003. I bought my first multifamily property with little small duplex in 99. And you know, just really loved real estate even while I was a stockbroker and a money manager, you know I just loved real estate. And the more I looked at it, I saw the power of the returns you could generate in real estate with a really a lower adjusted beta or better risk adjusted return than what we were getting with our stock portfolios. And so it was 2003. I mean, God just really helped me to see that’s the direction. And so we bought our first small apartment complex in 2003 and began buying more properties. Now in Florida, it was a real white hot market. So it was tough to get properties. My first mentors had a several thousand doors that they own in apartments.
Randy Lawrence (17:41):
And so that had always been our focus, but you know, we probably started in five and six rehabbing houses just cause there’s so much, you know, money that could be made in that arena. And so we started building that business and also, you know, owning the small multi-families and 2008 hit. We went through the decline here in Florida you know, thankfully it was a great retooling that helped me to just learn a lot through that process. And so we came out through that process where a lot of people just left real estate. We did a huge short sale business, helped hundreds of people. And then, you know, 2011, 12, 13 started rehabbing houses again. And then 15 started focused back on large multifamily. So now to this day, kind of fast forward, we have over a hundred million dollars in apartment complexes on our commercial multifamily side. We have probably three more complexes under contract. Now we’ll buy eight more complexes next year. It’s kind of a velocity approach that we use. And then we still on the residential side buy fix and sell about 70 houses a year.
Jay Conner (18:53):
Wow! That’s quite an operation for both single family and your commercial, what size operation do you have as far as employees that are with you full time and numbers size is your team?
Randy Lawrence (19:08):
Yeah. So our internal team here in the office, we’re based in Largo, Florida, which is kind of the Tampa Bay area. We have seven employees in our internal office team. And then we have right about 28 employees that are through our multifamily side, through our management partnership so that, you know, they’re, they’re not direct report to me, but they work for our company through our management operations. So with every property that we buy, cause on the apartment side, our complexes tend to be 75 units to 200 units is the range kind of the sweet spots, probably a hundred, 110 15. And so every one of those complexes, we always have a full time manager and a full time maintenance. And so with every complex we buy that adds two more people to the mix. And then we have a regional manager that oversees them. And then one of our internal asset managers that oversee them as well
Jay Conner (20:07):
On your apartment complex projects is your business model to search for distress properties that you can fix up and get the rents raised and then turn them for a profit or what’s your business model would like, are you staying in the deal long term or what?
Randy Lawrence (20:24):
Our focus typically is about a three year hold. We look for kind of the threefold, the Holy grail, if you will, that we’re looking for the, the property that has a, you know, original type condition. So we focus on workforce type housing. So that’s people making between 30 to 60 grand, you know, real C, C plus type property. These people are, you know, typically blue collar or lower end white collar workers, you know, just good quality working Americans. They need a good place to live. So that property typically built in the seventies, early eighties, original condition on the interiors. A lot of times, a little bit of deferred maintenance, you know, where they’ve owned it, but they just haven’t really fixed it up and kept it spruced up on the outside. They’re typically, you know, keeping the cashflow and then operational areas where we can improve efficiencies.
Randy Lawrence (21:15):
Cause we have a more corporate structure, you know, large scale discounts. So with that, we’re able to go in upgrade the units so that they’re for about $3,800. We’re able to make them like new two thousands, you know, paint the cabinets, new floor, new lighting and then bring the rent because if they’re renting at 800 and the market’s at nine, it makes sense. This place is a little tired. The place is not updated. So we’re able to update the units on the turn. So that keeps cashflow consistent. It keeps us to be, you know, positive out of the gate so that we’re not running a negative. And it also is much more secure because we’ve got positive cashflow from day one. So on a hundred unit property, it takes us probably about 18 months to cycle through the rent roll, renovate the units. The first 90 days though we renovate the exterior. So it gives it a fresh pop and looks nice. So, you know, you know, the first three months you pull up on the property, looks like a new place and we’re able to start methodically working through the rent roll to improve the interiors during that time as well. And then that prepares us to be done within 24 months and then operate it for another 12 months to really improve the the T 12 and prep it ready for sale.
Scott Paton (22:37):
I think we lost Jay for a minute there, Randy. So.
Randy Lawrence (22:42):
No problem. Well then, you know, so just kind of carrying forward with our business model on it. So typically those properties, you know, we’re buying them at 85, 90, 95% occupied, and we have people that invest with us in the complex. So, you know, we’re buying a, let’s say a $10 million complex, we get a seven and a half to $8 million loan. And then that additional 2 million comes in the form of our capital as well as other people investing with us. And you know, it’s a typically like that is a three year hold period based on the model that I just share.
Scott Paton (23:18):
Cool! So I have a question that’s of interest to me, and that is, is the, if I invest in your deal or your project, is it interest that comes back or interest plus a percentage of profits? Or how does that?
Randy Lawrence (23:33):
So how it works on the majority of our properties, we have a preferred return model where you’re getting a 12% preferred return. So you get 7% paid on cashflow. So that’s a quarterly check every quarter. And then you get another 5% appreciation that is then a preferred return so that you, for example, put in a hundred grand, you’re getting 7,000 a year paid quarterly and then another 5,000 a year that’s accruing as appreciation so that when the property sold in three years, you get the hundred grand back plus another 15,000. That’s the appreciation. And then meanwhile, you were paid 21,000 through the cashflow during that three year hold period. The interesting thing with apartments too, and this is one of the greatest elements to it because you’re an actual owner in the individual apartment, you get a K1.
Randy Lawrence (24:24):
And so instead of a 10 99, you get a K1. And on that K1 because of the depreciation, you’ll get you typically on a hundred thousand, about a 40,000 depreciation loss. So you actually got 7,000 of income, but your tax statement shows you lost 40 grand. So you don’t pay any tax on that 7,000. So it really is a highly favorable and tax efficient investment vehicle.
Scott Paton (24:48):
I don’t understand why anyone would buy stocks, just listening to you right now. But Jay has returned.
Randy Lawrence (24:54):
Awesome!
Scott Paton (24:54):
I’m going to step away and make room for him right now.
Randy Lawrence (24:58):
All right. Very good.
Randy Lawrence (24:59):
So I don’t know what happened, but poof! I’m going poof I’m back
Randy Lawrence (25:05):
Yeah.
Jay Conner (25:05):
So, You may have already answered this question, Randy, but one more chance, your favorite way to find your apartment deals and how many of you got the analyze to buy one?
Randy Lawrence (25:14):
Yeah, they’re very good questions. So really, you know, we network in any market. So like if you focus on a market that you want to be in, we want to be in high growth markets cause that’s where demographics and jobs are coming. So in that market, you’re going to have typically three to five people that are the majority of the brokers that sell the big projects. Right? And so we develop a relationship with those people. They know that we’re no BS shake on it, we get it done. And with that, we’ve developed a very clear track record and a confidence. So when a deal comes that’s like, I just got an email yesterday, guys like, Hey, we’ve got an amazing property that it’s off market. The sellers looking to want to sell it. We want to get your input on it. First we get that kind of first shot at stuff that other people aren’t going to get because of the relationships we’ve developed and the performance that we’ve done in executing, you know? And so that’s really the number one strategy that is yielded the results that we’ve seen. And then currently we own 11 complexes right now just over a thousand doors. And then we have three more complexes under contract right now. That’ll bring us right to about 1400.
Jay Conner (26:34):
Awesome. And how many deals you’ve got to analyze to buy one?
Randy Lawrence (26:37):
Oh yes. That’s the question right there. So it probably is anywhere from 30 to 40, a lot of times, you know, we’ve developed a system where I have a full time acquisitions person. We have a two 10X14 double spreadsheet and he’s just going through property after property, after property. And so on a weekly basis, kind of the crap that’s on the back and it migrates to the front. So now when you get to the front page, the top 5 to 10 are right there for me to look at. And then we say, okay, dive into this one, this one, this one. And that’s a process that we’ve refined and developed so that we’re able to go through that kind of ball on, because you got to shift through the chafe, define that, you know, nugget of gold and you know, and that’s really been the key.
Randy Lawrence (27:26):
And so I think a lot of times people looking at apartments, you know, they mistake well like, Oh, well I look at this one or look at that one. And it’s like, that’s really not how it works. You’ve gotta be willing to 1, be accurate and understanding the dynamics that go into it. And then 2 have the volume ability to be able to look at a lot of deals.
Jay Conner (27:45):
Excellent. Well, Randy has been such a pleasure to have you here on the show and folks to stay connected with Randy Lawrence, go on over to his website at www.TheRealEstatePreacher.com. God bless you, Randy. Thank you so much.
Randy Lawrence (28:04):
Thank you so much, brother. You have an awesome day. God bless.
Randy Lawrence (28:07):
You too. There you have it. Folks. This wraps up another episode in show of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority wishing you all the best here’s to taking your real estate investing business to the next level. And I’ll see you on the next show!
Jay Conner is joined by none other than Dr. Paul White, the founder and CEO of White Orthodontics, and author of several best-selling books.
White Orthodontics is a high-end, technology-focused orthodontic practice based in Virginia.
Dr. White created RealNumberz with his son, Trey, to utilize the latest technology to “supercharge” his real estate investments.
RealNumberz is the only comprehensive software application designed to help investors manage a diverse set of assets that includes rental properties, private lending, fix-and-flip, and fix-and-hold projects, as well as mortgage notes and syndications.
This incredible software eliminates investor anxiety by using real-time data and an automated reminder system to allow real estate investors to maximize their returns with 50 percent less time.
Paul believes the key to achieving financial freedom has as much to do with optimizing your existing investments as it does with acquiring more of them.
RealNumberz is the easy-to-use solution for the ongoing problems associated with late or inaccurate rents, incorrect note payoffs, uncontrolled and over-budget rehab projects, “yield drag”, and much, much more.
RealNumberz has helped many of its clients save thousands of dollars and manage their real estate investments from their pockets! Go to https://www.realnumberz.com to see how you can “supercharge” your portfolio with this amazing software!
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:00):
Well, hello there and welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner known as the Private Money Authority. Also the host of the show today. And if you’re brand new to the show, we talk about all things that relate to real estate investing. We talk about how to find off market deals, motivated sellers. We talk about how to get your deals funded without relying on banks or mortgage companies also talked about how to rehab houses. We talk about how to sell them fast. And just as importantly, we talk about how to automate the business because after all, why are we in this business? Well, we’re in the business for the wealth and the freedom. So we’re not looking to replace our day job with another job, called real estate investing. We’re looking to run the show to where we are running our business and our business is not running us.
Jay Conner (01:03):
Well, again if you’re brand new, I started back in 2003 in Eastern North Carolina, investing in single family houses. And for the first six years, until 2009, I relied on the local banks. I got cut off like the rest of the world did in January, 2009, after being in the business for six years. And I learned about this world of private money and private funding. How to use people’s individual investment capital and their individual retirement accounts to where I can have an unlimited number of private lenders into an unlimited number of private deals. As of today, my wife, Carol Joy, and I have got 49 private lenders individuals, just like you, that are investing with us and and funding our deals. So if you are also interested in learning how you can get funding for your deals and not ever miss out on another deal, because you didn’t have the money and you don’t want to rely on your credit, you don’t rely on your verification of income and your credit score.
Jay Conner (02:05):
I’ve got a free gift for you. And that free gift is to come join me, access free for the first 30 days to my new Private Money Academy membership. So why in the world would you want to come check me out for free? Well, first of all, you get me live two times a month in a Zoom coaching call in the group setting for all of the members. Right now, we’ve got about 150 members or so, and it’s growing very, very quickly. We do that twice a month. You can bring all of your questions to the Academy membership, Zoom call. And we also update content every month, talking about locating deals and funding and et cetera. And on each Zoom coaching call twice a month, we put one of the Academy members such as yourself in what we call the hot seat, where we analyze your business, figure out what your challenges are and help you put together a plan to help take you to the next level in your business.
Jay Conner (03:04):
So come join me for free for the first 30 days at Jay Conner, www.JayConner.com/Trial again, that’s Jay Conner, JayConner.com/Trial. You will absolutely love coming and checking out these Zoom calls and et cetera, with all the benefits that you get as being in the membership. Well, if you are brand new to joining the show, you may not know this, but if you’ve been tuning in for awhile then my lands, we launched June, 2018. We’re almost North of 300,000 downloads and growing very, very quickly. I have some amazing experts here as guest on the show. Well, today is no different. Let me introduce to you my friend and expert. Well, this gentleman is the founder and CEO of a company called White Orthodontics, which is a high end technology focused orthodontic practice in Virginia.
Jay Conner (04:12):
And he’s also the author of several bestselling books. Now this gentleman also created a service that is called Real Numberz that ends in a Z. And he created that with his son, Trey, and the reason he created it, they created it was to utilize the latest technology to supercharge their real estate investments. Well, here’s what Real Numberz is about. It is the only comprehensive software application that’s designed to help real estate investors manage. And that’s the key word because this gentleman is an expert when it comes to managing deals after you bought them, which is a challenge for some people, but he designed this software to help real estate investors manage a diverse set of assets, which could include rental properties, private lending. There you go! Fix and flip properties, buy fix and hold properties, as well as if you’re into notes, mortgage notes, or syndications, his software will also help manage those investments as well after you get in.
Jay Conner (05:25):
So this incredible software that he and his son Trey developed eliminates the number one investor anxiety by using real time data and an automated reminder system that allows real estate investors to maximize their return with 50% less time of yours involved in the deal. He also believes the key to achieving financial freedom has much to do with optimizing your existing investments as it does with acquiring and getting more investments. Well, his software Real Numberz is that easy to use solution for the ongoing problems associated with later inaccurate rents, incorrect note pay offs, uncontrolled or over budget rehab projects, and much, much more. In addition to that, this software has helped many of their clients save thousands of dollars and manage their real estate investments from their pocket. So with that, let me welcome my friend to the show and expert Dr. Paul White. Hello, Dr. White!
Dr. Paul White (06:35):
Hey Jay, how are you doing?
Jay Conner (06:37):
I am Fantastic! And just for the sake of these, may I call you Paul on the show?
Dr. Paul White (06:42):
Oh, please do.
Jay Conner (06:45):
So. Welcome to the show Paul. So glad to have you. Of all the experts and guests that I’ve had on this show. I haven’t had anybody else come on the show with this type of software and this kind of service to help real estate investors. I mean, in my business still today, we keep up with everything on an Excel spreadsheet. Seems to work pretty well since our average profits are 67,000, but you know, one of the four pillars that I teach in my business is what I practice. And that is automation. I actually work in the business less than 10 hours a week because of automation, other software we use and the team we have. And so I’m so excited to hear about this automation software that you and your son Trey have developed.
Dr. Paul White (07:33):
Well, Jay, thank you so much for having me and, you know, I appreciate so much what you do and the great coaching that you give your clients. And it’s an issue that I have seen. It’s the same thing you just said. There’s just not much out there, right? We’ve never had anybody on that talked about this stuff. And it was a problem that I had and, went to solve the problem by looking for software. And all I found were spreadsheets and things like that. And I had sort of a bigger list of things I wanted to accomplish. And so spreadsheets are great, but they don’t take care of everything that you want to do with them. And so as a matter of fact, I was a member of a mastermind years ago, and I’m doing a lot of what you were coaching and that is to acquire stuff.
Dr. Paul White (08:09):
You know, I had been for too long that guy that did what Dave Ramsey said, and that was to just save your money and pay off all your debts and do all those things. And that’s great if you’re in debt or if you have, if you can’t manage your money, but it’s not a great formula for managing wealth , and so anyway I started, you know, I had some money saved up. So when I got into these masterminds, I started, you know, acquiring a bunch of assets and I was feeling really good until the phone started ringing, you know, for more money and, you know, verifying payoffs and all this stuff. And I just started going, Oh my gosh! You know, what do I do? And here’s the problem. I went and talked to some of the guys in the group that had been in there before me.
Dr. Paul White (08:43):
And I said, what are you doing to kind of keep track of all this stuff? And surprisingly the answer was nothing, you know, and occasionally the really sharp guys were using spreadsheets. And so then I asked, okay, well, what, what kind spreadsheet? And one guy said, well, I got this one off the internet. And other guy said, well, I got this from my brother-in-law. And I looked at him and they weren’t even the same, you know, and as orthodontists, we were like things nice and straight and neat, and even, and I just, I wouldn’t see in any kind of congruency there. So it made me a little nervous. So that’s sort of how it got started.
Jay Conner (09:11):
There’s no doubt. There’s a huge demand for this type of service. Let me go to your background for just a moment.
Dr. Paul White (09:17):
Sure!
Jay Conner (09:17):
Please share with me and the audience, your story. You’re a doctor. And you know, you can straighten people’s teeth, right? And then you got into real estate investing along the way. So let’s hear your backstory.
Dr. Paul White (09:31):
Well, you know, thank you for the question, cause it’s a great question. And it’s a lot of what we wrestle with it, you know, Warren Buffet famously said, you know, if you don’t make money, while you sleep, you work till you die. And that was sort of a, you know, kind of a crazy thing. And the Aha moment for me was when I finally understood the difference between income and wealth, you know I have a great job, but as Kiyosaki would say in his book, Cashflow Quadrant, I owned my job and that was all I had. I didn’t have wealth and I wasn’t building any wealth I was just working. So, you know, just like you’re trying to do with your clients, we’re trying to have freedom. You have to have income for that. Actually I have to have wealth from that.
Dr. Paul White (10:08):
And I had income and I didn’t have freedom. And even still with my job, I own a good job and I make a good living, but I can’t leave the job for more than, you know, a week or so because of the amount of work that it creates before I leave and the tremendous amount of work that leaves when I get back. And so you just never gone very far and you’re always, you know sort of tied or chained to the practice. And so that was sort of a big Aha for me, is understanding that if I’m going to have some more freedom, I have to have something that’s making money while I’m not there. And for me, orthodontics was not that, not that thing. I love it it’s been great, but I started looking for other ways to make money and I discovered what you know, and what all your clients have known or will know.
Dr. Paul White (10:46):
And that is that all the wealthy people in the world that are successful have real estate as a major portion of their portfolio, if not all of it. And so including our current president. Thanks. So, anyway it’s one of the things that I’ve learned is that real estate is the way to go. And, as I said, when I was in this mastermind sort of, you know, a little hand holding and trying to learn how to learn the ropes I just found that no one was keeping track of things. And so you see these pictures of messy desk and and so mine, wasn’t a messy desk. It was on a pool table. So I had paperwork spread everywhere and I was just excited, you know, I was acquiring stuff left and right. And I was just leaving this pile of, paperwork and assets behind me.
Dr. Paul White (11:26):
And I thought, that’s all I had to do. Right. Cause you hear the term passive income. And so I thought that was it right? I’m there I’ve arrived. And then, you know, the headaches started coming and the questions started coming and you’re getting a lot of emails and phone calls asking for more information or more money or any of these things. And I just started going, Oh my gosh, how am I going to handle this? So my, momentary moment of sort of peace and I feel finally arrived and I’ve got it going, just sort shattered into the reality of my portfolio was chaos. And so I had to find a way to get control of it. And and that’s when I went to my son. Cause I know you mentioned you know, spreadsheets Excel. And to be honest with you, I’m a little intimidated by that.
Dr. Paul White (12:08):
It’s not that I don’t like numbers, but for some reason I never learned Excel and all the other software that I ever learned, I just sort of picked it up and started working with it. So, and I can do the basics in Excel, but I can’t really do, you know, create all the sales and do those kinds of things. And so I asked my son who is a programmer. I said, can you make me an Excel spreadsheet? And he said, sure, what do you want on it? And so I told him a few things and as he’s programming, I said, I started asking more and I started adding more things. He goes, alright, do me a favor before I keep this madness going, make a list of all the things you want this to do, and then I’ll make it happen. Right? And I made the list and I handed it to him and he goes, he said, data, a spreadsheet.
Dr. Paul White (12:42):
I mean, spreadsheets, can’t do this kind of stuff. I said, If I said, so what are we doing? He goes, you need an app. And I went, A what? Cause I had no idea what an App was Right? And so that’s how we started Real Numberz. And that’s been the, probably the most rewarding thing for me has been to have these ideas of how I want to manage my real estate and all the different investments that are real estate related investments have him sort of have these ideas in my head and I write them down on a piece of paper and he makes it happen. Now in the software world, they call Wire Frame is how you plan out every little step in the development of software out. And I, I call what I’m doing, you know, Wire Frame me. He said, dad, just writing crap on a piece of paper.
Dr. Paul White (13:20):
You’re not Wireframing so, that’s been kind of fun, but it’s been amazing. Number 1, to recapture some of the money or my investment in his education. And number 2, to be able to work together with him and sort of work through these tools. And to be honest with you when it first happened, you know, and I looked at for spreadsheets, I go, well, there’s gotta be something else out there. And I looked everywhere for some software that was as comprehensive as what we’ve created and there’s nothing out there. So that’s been, you know, my why for 30 years was to make the quality of orthodontic treatment in the Richmond area better than it was when I got into it. And now my why’s to help real estate investors know their numbers so they can get to freedom faster.
Jay Conner (13:59):
I love it! S, what different, before we actually get into what Real Numberz does.
Dr. Paul White (14:07):
Sure!
Jay Conner (14:07):
And the benefits of it. Because it definitely sounds multifaceted as to what it will do before we get into that. What type of different business models can this software serve and help real estate investors? For example, my business model is two fold. I either buy them in single family houses. So we’re talking to here all single family houses, I mean, in my case. So that will be a subset of my question. What different business model is that many single family houses only is it also commercial? We’ll get to that in a second. But in my single family house world, I’ve got two business models. I buy them. Business model, number one, I buy them, I fix them up. I flip them, I cash out, right? So we kill the golden goose, no wealth right there.
Jay Conner (15:01):
That’s just big checks. My second business model or that I do with other deals is I’ll buy them. If they need fix up, I’ll fix up. If they don’t need fix up. And they’re a pretty house in either case. The second business model is I sell on rent to own. Now what makes my rent own or selling a lease purchase different is I actually believe it or not actually require my buyers to enter my credit repair program. And I actually help them get a mortgage. Therefore, 80% of mine cash out. Most of the real estate investors may be 5% cash out on least purchase. Those are my two business models. So leading up to my question what are the different models that Real Numberz will serve?
Dr. Paul White (15:54):
Yeah, that’s a great question. Well, you know, what’s so funny about software and this is a true expression software’s never done. So you have this long runway of things that we’re trying to accomplish. And, basically real numberz is divided into four basic buckets. One is real property. The next one is private lending. The third is mortgage notes. And then the fourth is funds and syndications. And so within the real property space you can it takes care of any kind of property think of multifamily, single family you know, self storage, all those kinds of things. And, and what’s really neat about it is also there’s a dashboard for the entire portfolio. And so what we’re trying to build is a piece of software that not only manages all of your properties or all of your assets day to day as needed, but it also gives you a global input about how you’re doing as far as having some kind of target date for retirement or job transfer or, you know, whatever it is that you’re trying to do.
Dr. Paul White (16:49):
And so what we’ve gotta do is have weighted average returns on all those things. And that’s a pretty complicated piece that we’re building. As far as real estate now, all there’s a general ledger for the entire portfolio for your entire asset base. And so, regardless of what kind of assets or different types of assets you’re doing, there’s a ledger that keeps track of all the money coming in and out of your portfolio. Then each individual asset has a ledger as well. And so it obviously takes care of transactions. And then those ledger items are then used to drive analytics, and then eventually it’ll drive tax reporting as well. And one of the features that we added to it, what’s sort of speaks to your fix and flip is I, years ago I was buying active turnkeys, like you’re talking about.
Dr. Paul White (17:35):
And I had bought a piece of property and and from a guy in CG and so they were rehabbing it. And then I got an email that said we needed, you know, $8,000 more. And so I just wired the money site on scene. And, you know, one of the challenges with professionals, doctors, dentists, lawyers, whatever is at least for medical professionals, is we do whatever it takes to make things right for a patient, even if it costs us money. So we’re just, you know, we just want people to trust us. So we do whatever it takes. And we tend to have that same mentality with those that we work with. And what I’ve discovered in all other walks of life is not everybody’s that way. And even there’s some, I guess, in the medical profession, not the way, but I don’t know any of them.
Dr. Paul White (18:15):
And so we’ve just always done whatever it takes to make it right. So there’s a high level of trust. So if somebody said I needed $8,000 more, I just would wire the money. Right? I don’t do that anymore, but that’s what I did when I first started. And it turns out after the the property had been rehabbed and closed, and then we had a tenant in place. We had actually then just finished creating real numberz. So I went back and just to play with the software, entered in all of the the data from the acquisition. And it turns out that that $8,000 was $8,000 over the budget. And I didn’t know it, and I had no clue. And and so I called the property management. So what’s the deal with this $8,000 is, Oh, we put new windows in the house and I go, well, great!
Dr. Paul White (18:53):
I’m not saying I wouldn’t have done it, but that certainly would have been a decision I would have liked to been involved in. And so that really sparked me to create one of the features of a real property is a thing called a rehab tracker. And so you create a budget and you create as many different rehab projects as you want to name them. And then you put the amount of the budget, and then you start making deposits towards that budget, which come off your balance sheet, but then any of the charges against those do not, again, hit your, ledger again. So it keeps track of those things, and it keeps a running balance of how much money was spent in those kinds of things. So it can certainly be used for that. If you’ve got a business where they’re flipping a bunch of houses all the time, you know, there are other softwares out there where you need a professional to help you develop it for you, but for the average investor, it’s a great, it’s a great solution.
Dr. Paul White (19:37):
That’s a fairly inexpensive to be able to manage those things, and then to have the property and track the income, if you’re renting it as far as the the selling part of it, it’s one of the things that’s actually in development is a sell feature that then you create a subject to, and then seller finance the houses as well. So in our mortgage note section, we already have that capability. So you can then turn and open that app up in the mortgage part, and then keep the mortgage that way, if you want it to. But eventually I want to meld the two, but we’re trying to get a basic program that works for enough people. Cause that what you’re talking about is fairly sophisticated. So,
Jay Conner (20:12):
So you mentioned there’s actually four different categories for Real Numberz, one was flipping, Right?
Dr. Paul White (20:22):
Well, real property in general. Yes.
Jay Conner (20:24):
So just real property though whether you’re flipping or holding,right?
Dr. Paul White (20:27):
right, right.
Jay Conner (20:28):
And then you said private money or private lending. Tell us how.
Dr. Paul White (20:31):
Yeah.
Jay Conner (20:32):
Tell us how the software helps that category.
Dr. Paul White (20:37):
That’s ,Thank you for the question. Yeah, one of the things that’s funny is, you know everything that we do in Real Numberz, I wanted everything lifestyle wise to be able to my portfolio from my pocket. So everything you need is stored on the app. Your pictures, your photos, your contacts, your documents,security duct, documents, all those things are right there in the app. And so one of the things that’s interesting if you’ve done, I know you have, but I don’t know about your listeners that have done private lending, but you know, at some point in time that the borrower wants to pay you back. And so they want you to verify the payoff. And again, because of my ignorance and inexperienced, I just assumed when they gave me a pay-off amount, I went, yep, that’s right. And it turns out I went back and checked them off by several thousand dollars or one of them.
Dr. Paul White (21:18):
And so, and I typically lend out of my self directed IRA for those, those types of investments. And so one of the things that I kept noticing was the sense of urgency when they want to close all of a sudden, they out of the blue, they need to close some cause some deals coming up or they need money. And so anyway I got an email one time that said,we want to close this deal today, if possible, can you verify this pay-off? And I got, well, you know, my stuff, the documents are on a pool table back in my house. I don’t even have them here at work. And I’ve got my hands in somebody’s mouth all day. And so, I said, I can get it to you as fast as I can.
Dr. Paul White (21:52):
And so, you know, worked all day. And then I went home and then I found the folder. At first I had things in piles on the pool table, my wife at least put them in folders put address on. So I found the folder and I find the the promissory note and I started doing the math. And at first I didn’t even understand that. So I’m doing it monthly, which is not the right way to do it either. And so of course now know that. And so I did the math for how much I was owed. Then I had to log into my self directed IRA account, find that asset, then look at all the amount of money that had been paid to me and then subtracted them, and then add it back to my original principle. And five hours later, I got the instant pay-off for him.
Dr. Paul White (22:27):
And I was like, well, there’s gotta be a better way to do this. And so, because each asset, regardless of whether it’s your lending or flipping a house or whatever, has its own ledger, you’re tracking all the payments that you’ve received, which actually saved me a lot of money in the long run. But anyway, and so it knows the deal of the, of the original note, even if you’re wrapping somebody, which you can do, you can have a, we shouldn’t use the term JV, but a partner in the terms it’ll keep track of what the partner what his portion of the deal is. If you’re wrapping somebody. And when you hit, pay-off, there’s a button called pay-off and you hit that button, select a date, and it’ll give you the pay-off amount instantaneously. And it’s accurate. I closed five lending deals in January and every one of them was wrong to my favor, you know? And so it’s nice to have a piece of software. I just pull it out of my pocket and do find the, you know, open the app, find the asset and then push a button. And it tells me what I need. So it takes no time. And, It’s really kind of fun to be able to do that and people know, I know what I’m talking about now, so.
Jay Conner (23:25):
That’s awesome! So that’s,
Dr. Paul White (23:27):
yeah,
Jay Conner (23:28):
That’s an App or that category confirms to the private lender as to how much they should be paid off.
Dr. Paul White (23:37):
That’s right. So, yeah. And so it’s great for me. So I’m doing mostly most of the lending, so it’s telling me to pay off what it should be so that they, and they want me to verify it. So that’s the way that it works best. What’s really interesting is again, before I hadn’t created the software with my son I went back and again, sort of historically looked at a deal I’d done. And it turns out that they had missed a payment to my IRA. And I just thought, I didn’t really understand what a custodian did. I just thought they keep track of all the payments and call them when there’s a missed payment. And then they will give you some analytics to tell you how much money they’re making. And it turns out that that’s not right either. I looked up the word custodian means, it hold your stuff.
Dr. Paul White (24:19):
You know, so I had closed the deal. I went back and just entered all the numbers. And this particular borrower had not paid a $1,500 payment during the whole transaction of the whole note. But then they closed the note as if they had paid that. So I missed a $1,500 payment, you know, and didn’t even know it and had already closed the note. So I couldn’t get that money back. So the app, just for that reason alone has saved me thousands and thousands of dollars. And it’s been great. And we hear that same thing from other investors that use the software.
Jay Conner (24:50):
And I suppose that, of course, for the app to give you an accurate pay-off, then when you receive money you or someone is putting in the App, Oh, I received.
Dr. Paul White (25:03):
that’s right.
Jay Conner (25:03):
$1,500 payment on such and such a date. So it’s keeping up with what you have received so far.
Dr. Paul White (25:09):
Yeah. And even if you get part of your capital returned, it’ll track that as well. So it’s really doing the math based on what you’re owed and what you’ve already received. And so that’s really, you know, and again, if you have a lot of these going, it’s hard to keep up with that kind of stuff. You know, spreadsheet can do it, but you know, what’s great about this software is it sends me a reminder of somebody misses a payment. Now, again, my need was somebody didn’t pay me and I didn’t know it cause an IRA is not calling them. I thought they were right. So, now I get a reminder if the payment has not been entered as received into the software. And so it’s a great way for me not to have to scan all the investments all the notes that I’ve got to see if there’s a problem. You know, it tells me if there’s a rent, a missed rent payment, it tells me I don’t have an interest payment from a loan, or if a note, a monthly payment hadn’t been made, all those things I know without having to go looking for it. So it really does make it easy to it reduces my stress and it alerts me when there’s a problem. So I can kind of keep doing what I’m doing and not have to worry about it all the time.
Jay Conner (26:06):
Dr. Paul White’s website, that you can check out Real Numberz is www.RealNumberz.com , Paul there’s two other categories you mentioned that this software keeps that where, so it keeps up with any kind of real property investment keeps up with private money when you are the lender and what was the third category?
Dr. Paul White (26:32):
Well, the other is a mortgage note, and I make a distinction between private lending and mortgage notes, because it’s a longer term investment and what’s unique about, and you can do these things with a lot the private lending, but a lot of private lending is usually straight answers with some points. And so what’s interesting with mortgage notes is you know, it’s an amortizing investment. And so it keeps track of all those things. And basically you can just buy a note and hold it and that, and just have this income for as long as you want. But there are other things you can do with a mortgage note that really can supercharge it. And one of the things you can do is sell it. And you can sell either a portion of it, or you can sell all of it.
Dr. Paul White (27:08):
If you sell a portion of it’s called a partial.And so you can actually, in some deals, like if you bought a note, that’s, you know, say $50,000 and you bought that note for $30,000 let’s say a 10% rate, you can turn around and sell it to another friend or investor let’s say a 6% rate and get your 30,000 back out of it. And they will tell you in the app itself, it’ll calculate the number of payments that you have to sell in order to get your money back. And then at the end, the note comes back to you and you’ve got zero money in and invest it. And yet you have this stream of payments that are coming to you. And so, you know, a zero invested money returned is a pretty good infinite return that we all like to hear about.
Dr. Paul White (27:45):
So that’s one of the things you can do. And the other thing you can do is borrow money against that note. So it’s just like having a house where you can borrow money against it. You know, it has that same kind of value to a bank or to a private lender. So there’s the things, and it keeps track of all these things. And again, if you sell five months, five years of a mortgage note, it creates a reminder at 4 years and 11 months to tell you that this payment’s coming back to you. So again, it gives you a heads up when a note is coming due when investment’s coming due. When rent is coming. And when the end of a lease on a rental that you have, it’ll send you a reminder, say this rental is coming due in 30 days. And so it helps me to send a note, send that very thing I just forward it cause it comes to my desktop or to my phone to be able to forward that note to the property managers say, okay, what are the plans for this property? We got anybody rolling here. Is he going to reinvest, you know, or renew? And so that way, again, I look like I’m on top of my game and I’m not having to do all that. I love that kind of aspect to it.
Jay Conner (28:41):
That’s what I call automation. And then there’s a fourth category that this app provides service for, right?
Dr. Paul White (28:47):
Yeah. Some people do funds or syndications and we’re just starting to build that part of it out. It’s mainly to track, you know, the issue with funds or syndication, is really no money in it and not much is returned to you until the deal closes. So, you know, a typical fund or syndication, will go five to seven years. Some of them pay off early. And so that one, we haven’t put as much time into it. Cause not as many people do those. It’s a great way for people that maybe don’t have a whole lot of experience to, if you can trust them. That’s, that’s the deal because a lot of those things can, you can lose your principal real quickly. So you have to be able to trust the people that you’re doing business with, but you don’t have to know a whole lot about real estate. But again, everything has due diligence. A better way is to have somebody like you start them off with a single family home because you can see that thing. You have all the control where you have no control over a syndication. So it’s one of those things that we’re sort of programming out for some of the other investors that have requested that. But most of what we do is those first three buckets.
Jay Conner (29:45):
So the bottom line Paul, as I understand it is whether you are investing in single family houses, commercial, any kind of real property, the software is going to keep up with where you are and make sure you’re not, you know, wasting money or losing money, same thing as a private lender, make sure you got coming to you. What was in the promissory note and then mortgage notes, which are longer term you can do fractionals and then again, syndications. So, wow!This is simply amazing, Paul! And I’m so glad I’ve had you on here. So what do people need to do to go check out this software?
Dr. Paul White (30:25):
Well you know, if you go to our website, RealNumberz.com and there’s a 14 day free trial. If you want to check it out, we’ve now adjusted it. So we’ve got a special running now where there’s a discount of 30% off the monthly fee and we do it by property. So if you have five properties or less, it’s less than it’s $47 a month as a subscription. And you have all the software, one of the cool piece of software that I didn’t talk about, there’s a piece of software attached to this, again, that you can’t do with a spreadsheet that actually connects to your bank account securely. So we don’t store any of the data. So it’s secure and encrypted, but it’ll pull the numbers and the transactions that go to that account. So on the general ledger, you’ll get uncategorized transactions and you would simply assign those transactions to one of your assets and it automatically populates the the ledger for that particular asset.
Dr. Paul White (31:14):
And then it keeps track of all the other things that are going on. So it’s really helps you understand what’s going, coming and going and your business account. So it’s a great way to keep up with things and you should have a separate business account. Don’t keep this in your personal account. I’m sure you already have taught them that, but I’ve seen guys do that too. And it’s like, yeah, they have no idea where their money is or what’s going on with it. And you have to keep some reserves. Cause you know, real estate takes a little bit of management sometimes. So anyway, and then there’s an unlimited version of that, which is which also includes the mortgage notes part plus all the other things. And it’s unlimited data, all those other things and it’s $97 a month with a discount.
Dr. Paul White (31:49):
And so one of the things that’s interesting to me is we had a client that was, I think he was spending a thousand dollars a month for a Bookkeeper’s account just to keep track of some rentals. And I’m like, dude, we can save you some money here. And he jumped on this in a heartbeat. He goes, this is way more than what I was getting before. I said, well, that’s, you know, we’re trying to make it something that you just, after you start using it, you won’t want to go without it. And that’s been my experience. It has saved me literally thousands, thousands of dollars.
Jay Conner (32:14):
That’s wonderful!
Dr. Paul White (32:15):
Yeah.
Jay Conner (32:16):
Well Paul, thank you so much for joining me here on the show. And folks there you have it. Be sure and check out www.RealNumberz.com And go check out how to stay on top of your business and save a lot of money. Paul, thank you so much. I look forward to staying connected with you and folks, I’m Jay Conner, Private Money Authority wishing you all the best. Here’s to taking your Real Estate Investing business to the next level. We’ll see you on the next show!
Brad Smotherman manages a 7 figure flipping business, and hold notes across Middle Tennessee. We invest in multiple states, and have houses from Michigan to Georgia right now.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
Jay Conner (00:01):
Well, hello there! And welcome to another exciting episode of Real Estate Investing with Jay Conner. I’m Jay Conner, your host of the show. Also known as The Private Money Authority. And if you’re brand new to the show, here on this show, we talk about all things that relate to real estate investing. We talk about investing in single family houses, commercial projects, small apartments, self storage, land deals, notes. And we also talk about how to get funding for those deals creatively and with private money. Now, if you’re brand new to this show, I’m known as The Private Money Authority, because from 2003 to 2009, I relied on the local banks and mortgage companies to fund my deals. But then I got cut off with no notice in 2009, but it was one of the biggest blessing in disguise. I was introduced to this wonderful world of private money.
Jay Conner (01:02):
Since that time I’ve never missed out on a deal. I’ve rehabbed over 400 houses. Done even more deals creatively. And the reason I’ve never missed out on a deal since 2009 is because I got the cash ready to buy those all cash deals. And as we know, most of the sellers require all the money. So I’ve got a brand new free gift for everybody that’s tuning here on the show. And that is, I just launched The Private Money Academy. Which is a monthly membership where we actually have two live zoom conference a month with yes, yours truly me. For at least an hour to an hour and a half answering all your real estate investing questions. Getting you plugged into private money and funding for your deals. And we also have a hot seat session where we will take one of the members of the Academy, put you in the hot seat, analyze your business, and create a plan to take you and your business to the next level.
Jay Conner (01:57):
So I have a free gift for everybody tuning in, and that is four weeks absolute free access to The Private Money Academy. And you get to come on the next two live shows for the Academy membership. Absolutely for free! You can take advantage of that and learn all about it after the show today at http://www.JayConner.com/Trial that’s http://JayConner.com/Trial Be sure and check that out, come on in to the membership for free, and I’ll see you on the inside of those live zoom conference coaching calls.
Jay Conner (02:41):
Well, as you know, if you’ve been tuning in to Real Estate Investing with Jay Conner, we have amazing guests and experts here on the show. And today is no exception. Before I bring my special guest out of the green room and here to the forefront. Let me tell you just a little bit about him. Well, my guest today is a real estate investor and a mentor. And he owns and manages a seven figure per year flipping business. So my guest and I, we’ve got a lot in common. Well, his passion is being a top house flipper in the nation. And his other passion is also helping other newer investors build a sustainable real estate investing company. Well, with 11 years, he started back in 2010 on the real estate investing side. With 11 years in the real estate investing business, he’s invested in over 15 States. And yes, today on today’s show, we’re going to be talking about how do you do this business remotely and totally virtually.
Jay Conner (03:41):
He also has houses all the way from Michigan to Georgia. And today he has completed over 550 transactions today. Yes, he knows what he’s talking about from experience. In addition to that, he focuses on buying single family flips creatively. Using both subject to the existing note strategy, and he buys a lot with owner financing. In fact, he is known as the Owner Finance Guy. He also uses the strategy of selling retail or with owner financing, with creating wrap around notes. I know you’ve heard that terminology. Wrapping around a note. And if that’s sort of a new term to you or an old term, and you don’t know what it means, we’re going to talk about that on today’s show as well and how you can utilize that strategy as well.
Jay Conner (04:34):
Well, he is also the host of one of the top 100 business podcasts in the nation. And the name of his podcast is Investor Creator. And there on the podcast, he teaches new and seasoned real estate investors. How to take their house flipping business to a multiple six or even seven figure income without sacrificing freedom. After all, what do we want in this real estate investing world is, wealth and freedom. And my guest today is an expert in that area. My guest lives in Nashville, Tennessee. And with that, welcome to the show, my friend and expert, Mr. Brad Smotherman! Brad, welcome to the show!
Brad Smotherman (05:18):
Jay, I appreciate you having me on. I have a feeling we’re going to have so much fun with this. I’m just going to have to take a nap after we get done.
Jay Conner (05:24):
Yes, you are! My lands! Brad, I’m so excited to have you on. And I know just by your intro, your bio and the short period of time that we’ve been around each other, we’ve got a lot in common. In fact, my best guess, one of your core values, and one of your secrets to success is having the mindset and the framework of putting other people first, having their interests ahead of your interest. Would you agree with that?
Brad Smotherman (05:52):
Hundred percent! A hundred percent!
Jay Conner (05:54):
So Brad, first of all, you look entirely too young to be this successful, but anyway, I’ll go beyond that statement pretty quickly. You’re from Nashville, Tennessee. You grow up in Nashville?
Brad Smotherman (06:06):
I did. Born and raised.
Jay Conner (06:08):
You’re sing country?
Brad Smotherman (06:10):
No. I don’t see anything. And that’s a good thing for everybody that would have to listen. So for the people that know how to sing it I’ll just listen politely like everyone else.
Jay Conner (06:20):
But now you enjoy going to the Grand Ole Opry, right?
Brad Smotherman (06:22):
Oh, certainly! And like I was telling you guys before I’m out taking my grandmother to see Merle Haggard there twice, and we saw George Jones once and just had a great time. So, absolutely!
Jay Conner (06:33):
That’s awesome. Well, I’m excited to have you here on the show today. Brad, because you’re known as the owner financed guy. You’re an expert in the area of buying houses on terms controlling them creatively or whatever. So first of all, if you would explain to the audience, what is your business model look like?
Brad Smotherman (06:59):
Well, I think my business model is a little bit different than most because everybody out there, especially the past five or six years, what they wanted to do is, you know, they wanted to wholesale something. They wanted to fix something and flip it. And you know, the past 10 years we’ve had an explosion of these fix and flip TV shows. And frankly, Jay, those shows just give me anxiety. Like I can’t watch them. Literally. I went to the dentist the other day and asked me what I wanted to watch as I’m sitting there in the chair. I was like anything, but this HGTV stuff, right?
Jay Conner (07:25):
Well, wait a minute, Brad. Now, why would I, why would a reality show that I’m sure is real, that shows you how to make a hundred grand in 30 minutes with no headaches. Why would that give you anxiety?
Brad Smotherman (07:36):
Well, just like, you know, I mean, it’s not real. And then, you know, secondly, I’m looking at what they’re spending on the kitchen. I’m thinking I could do it for a sixth of that. And then the person buying the house, it’s like, well, what do you do for a living? And they say, well, we catch butterflies and rainbows all day. And our budget’s 2 million bucks and it’s just like, it just doesn’t seem exactly genuine to me. But maybe they’re just in a different market, a better market than I’ve ever seen. Let’s just say that.
Jay Conner (08:01):
Yeah! I get it, Brother, I get it. Sorry to interrupt. What’s your business model looks like?
Brad Smotherman (08:04):
Yeah. And that’s a hundred percent fine. So, you know, I started in 2010 and my background was very similar to yours in a certain way, although I didn’t live it. So I worked for a builder developer. Well, I sold real estate through college and everything was going really, really well up until the crash of ’08. And in 2009, the bankers came in and said, well, sorry, we’re going to have to call your loan. You have 30 days to pay us off. And as you know, during that time, there’s really no way to refinance commercial lending, you know, especially a development loan. And so it bankrupted them. And luckily I was able to learn the lessons from the crash without actually having to be involved in the crash. And so when that happened, I realized very quickly, I didn’t want bank money in my business. Very similar to what you’re dealing with. Right?
Brad Smotherman (08:46):
So it’s like, guys, being able to raise private money is paramount to this business. Like what Jay is talking about is super, super important. But, so I got started in 2010 and back then, you really couldn’t wholesale because no, very few people had an equity position that was big enough to where you could wholesale it. And then also the fix and flip model was very difficult because that couldn’t get money. And so I had to find another way. Well, what I found worked. Has always worked and what I feel will always work is creating owner financing. And so what we do is we buy creatively when we buy and then we sell with owner financing and a vast majority of our transactions. We still go retail at times and that’s okay. But what we want to do is we want to create longterm cash flow with longterm capital assets. And for me, I’d rather have that in mortgage notes. I feel like it’s far more scalable than rentals. We’re able to get paid to take the note in most of our transactions. It’s not like I’m putting cash out there to invest. We’re getting longterm assets given to us. And I just had to find another way because I couldn’t, I didn’t want to wholesale, I couldn’t wholesale. And the fix and flip model looked like really difficult to me during that time. And so we’ve been pretty much doing a similar model ever since.
Jay Conner (09:53):
So to recap what you just said, tell me if I got it right. Your core model is buy on terms, buy with owner financing, buy with subject to, buying creatively without paying all the cash. Take that same property, turn around and sell it creatively to a new buyer with owner financing or what have you. So let’s break that down. First of all, you said, the reason you do that is because you want to build longterm wealth by leveraging an asset that’s going to continue to pay you monthly for a long time. Is that right?
Brad Smotherman (10:38):
A hundred percent. That’s right.
Jay Conner (10:40):
So in today’s market, I know from my own business, I know from my students’ businesses that finding a deal today in the multiple listing service is a bonus. The deals are not in the multiple listing service buying large. So we have to find our deals off market. We have to find houses that are not in the multiple listing service. So if you don’t mind pulling back the curtain for us just a little bit and give us a little sneak peek as to what is working for you today to find these people that have houses for sale, or maybe they haven’t considered selling their house. How do you find these deals?
Brad Smotherman (11:30):
That’s a great question. Well, I mean, as we know, everything starts with a motivated seller. So the foundation of the business is marketing for motivated sellers. Now for me, real estate is a means to an end. I mean, if I can do this business with dump trucks or swimming pools, I would do that. I’m not in love with houses. They break, they smell bad. Some of them. One of my apprentices yesterday in San Antonio, he’s buying a house that has 70 cats in it. And I can’t imagine how bad that is, but you know, at the end of the day, marketing comes down to two different avenues. We can do sweat marketing, or we can do paid marketing. Man. When I started, I didn’t have any money. So I had to do the sweat marketing side of things. And so the examples of that would be, you know, putting out bandit signs, you know, although you’re paying for the sign, what I would do is I would put them out Friday night and pull them up early Monday morning.
Brad Smotherman (12:13):
And so a hundred signs, a couple of hundred bucks would last me three or four months, right? So that’s more of a sweat technique as opposed to leaving them out. Another one that were having a lot of success with is actually networking with wholesalers because wholesalers are slave to the 70% rule. We’re able to go in and do deals that they can’t do, right? Because we buy creatively as opposed to just throwing cash offers around all over the place. Right? So I’ve got an apprentice in Texas. He’s done three transactions this month, where wholesalers are bringing him the deal. You know, one of them is at a 0% owner finance rate. Now why a wholesaler would want to make a $5,000 assignment fee on a deal where we’ve got like four years and this thing is going to be paid off and we’ve got an $80,000 note on it.
Brad Smotherman (12:55):
I don’t really understand. Okay. So that’s a couple of options in terms of sweat marketing. What I hope for people is that they understand that marketing is an investment. It’s not a cost. So effective marketing should at a minimum of 25 X. So if you’re spending a thousand dollars in effective marketing per month, you should over time buy at $25,000 per month in equity. Right? As an average. Now, what I hope for people is that if you have to start with the sweat side, that you go to the paid marketing side, as soon as you can. Okay? So in my world, the best paid marketing that we can do is Pay-per-Click so being there on Google ads, whenever they’re there, like people are searching for us. Searching, sell my house fast, or companies that buy houses. We want to be there. When people have already realized that they have a problem and we can be there to offer a solution, but it has to be done very well. I know a lot of people that have lost a lot of money when it comes to doing Pay-per-Click campaigns, because they don’t understand how to drive traffic number one, and how to create conversion. Once someone is, has landed on a page number two, but those are examples of sweat marketing paid marketing that we use in our business.
Jay Conner (13:57):
Excellent! So as we know, and most of our audience here knows. When talking to an off market seller, a person that owns a single family house, you know, they don’t have it in the multiple listing service. They have some type of motivation. Most of these people are going to be anticipating when you’re starting that conversation with them of you buying their house. Most of these people like 99% of them are more having their mind that, well, if I sell my house, I’m going to get all the money, right? I mean, it’s like, that’s the traditional way. I sell a house, I get all the money. But now, you come along and you are going to be talking to them about creative selling or them becoming the bank. Or there’s a note and they’re going to get payments. What are your secrets? And as our friend Eddie would say, talk off points. Well, what are you, what are your secrets or scraping that takes a person that’s never considered selling on terms and waiting for all their money over time, from the point of then expecting to get all the cash up front?
Brad Smotherman (15:06):
That’s a great question. And what I would submit to you is the first thing that we can’t do is make offers. So in my world, I really feel like an offer is a commodity to shop. And I can’t even begin to tell you how many houses that we’ve gone in and bought because, you know, two or three other investors had gone in and left an offer behind for them to think about. And then we come in because we won’t give them our price. They’re giving us a price. We’re making sure that that’s the least that they will take. And then we’re going to switch it to terms. So let’s say that someone says, well, and we talk about things in terms of cash at closing. So if somebody owes a hundred thousand dollars and they want to sell the property for 115, then I’m going to switch it and say, well, so your cash at closing is $15,000.
Brad Smotherman (15:48):
So assuming that they would sell to me for that $15,000 cash at closing, then I’m going to say, well, you know, I can do that. If we can do it another way, and this is how we can make it work. So I’ve never given them a price and they’ve given me the price. So I mean, what we’ve done there is we’ve made it very difficult for them at that point to really begin to pull back and think about it because we’re giving them their number. We never give a price ever. Now, Jay, there’s some times that we do pay cash for properties, we just bought one outside of Huntsville, Alabama, about a month ago that the people had paid $160,000 cash for it in 2012, we paid 15,000 for it. And, you know, it’s like at that price, I don’t really feel the need to negotiate terms.
Brad Smotherman (16:29):
You know, it’s like, we’ll just pay the 15K. And I thought about it. It kinda hurt my feelings to not get 0% owner financing on that 15. But I was like, you know, they need the money. They need the 15 grand we’ll just go ahead and pay it. But the short answer is I think the real skill is to, to be able to negotiate with people, without giving them a price, giving them an offer. I feel like if you give an offer, it’s a commodity, a commodity for them to shop. I also think it’s kind of acrimonious. People feel like they’re good negotiators because somebody can say, well, I want $200,000 from our house. And you can say, well, how does a hundred thousand sound? I don’t think that’s negotiation at all. I think that’s horse trading. And like my family came from the agriculture world.
Brad Smotherman (17:09):
So, I mean, we were pig farmers. I mean, and I saw that growing up all the time, you know, that doesn’t work for houses as well. Like if we can make people realize that we’re not there to take advantage, if we can make the number work, then we will make it work. But there’s equity. There’s two types of equity. There’s equity at price and equity in terms. So if we can create equity in terms, a lot of times that’s a better equity position for us to have as a longterm play, as opposed to just like really working in the 70%. If that makes sense.
Jay Conner (17:37):
Do you ever offer or give multiple offers or multiple strategies of saying, okay, if you want your price, we can do it this way. If you’ve got to have all cash, we can do it this way. And if you want a third option, we can do it this way. Or do you, most of the time stay with say the the terms negotiation and conversation?
Brad Smotherman (18:02):
And that’s a great question. So we don’t do like the three offer strategy of like, we can do it this way, this way, or this way, this way, because what I’ve found, at least in my own personal experiences that I had people say, well, I want this price with that term.
Jay Conner (18:14):
They want to pick and choose the way they want it.
Brad Smotherman (18:18):
Yeah. It was like, we’ll take this closing date. We’ll take that price with those terms. It’s like, well, that’s not really how it works. What I’ll say to that is it’s really common for us to, to bounce back and forth between price and terms. So if someone says, okay, this is the price that we want, they’ll say, well, if you want it like that, here’s how we can make that work. And they said, well, that doesn’t work for us. And then we’ll go back and say, well, is that price the least you would take? And so we start talking about pricing in. And I’ve had situations where we have to kind of go back and forth three or four times before we land somewhere. And it’s generally somewhere kind of in the middle that we find that people will work within kind of the median based on what they’re hoping for. You know, if we can substantiate pricing and values and costs to where we can show like, Hey, these are the numbers that you’re working with. Like, this is the value. This is the cost to get it there. Here’s my breakeven number. You know, what are you hoping for your cash at closing people generally tend to be a little bit more reasonable if we can substantiate why they should accept a lower price and what they were hoping for.
Jay Conner (19:15):
When you have someone that is agreeable or at least open. They’re open to the idea Terms and, you know, taking payments or equity over time or whatever. Do you, in your, in your conversation, do you tell them how long or how long the term of the note would be? Or do you ask them what’s the longest they could go? Or how do you get to that agreeable length of the note?
Brad Smotherman (19:51):
Yeah. So what we talk about is in terms of some now and some later, so we’re going to talk about it and say, okay, how much cash do you need at closing to make it work? And they’ll give us a number and we’ll kind of negotiate that. It’s like, okay, if I can get you X at closing, then how soon were you hoping to get, no, we do it this way. We can either do payments every month, like an annuity or retirement plan, or we can do a lump sum in the future, which were you hoping for? Generally, people kind of gravitate towards the payments per month. But the thing that we never mentioned is interest. Okay. We never really talk about terms. We’re going to talk about it in terms of, you know, $20,000 at closing and $500 per month until paid.
Brad Smotherman (20:27):
And so people are kind of looking at that and saying, especially if they’re a landlord. Guys, if you’re, if you’re dealing with a landlord that has free and clear property and they’re tired landlord, you should absolutely be able to negotiate owner financing because these people are open to receiving payments. That’s what they bought the property for in the first place. Well, if we can just kind of segment it to being like, well, how much do you need at closing? What would you like a lump sum in the future? Or would you like monthly payments? Generally, they’re going to say, well, I’d love monthly payments and we can negotiate something, but we never really talk about it in terms of, well, it’s a 10 year loan and here’s the rate we never mentioned. Certainly we’d never mentioned interest. We don’t really ever talk about the term as well.
Jay Conner (21:03):
So you would agree that most of the terms that you structure are payments with no interests?
Brad Smotherman (21:10):
Correct. A hundred percent. I’ve only paid interest twice on owner finance deals. And both of those were properties I wanted. They were both lake properties and I was like, I’ve gotta have this. I think I paid a 3% rate on one and four and a half on the others.
Jay Conner (21:24):
I love it! I love it! Well, Brad, now let’s really change gears from the owner financing thing and the term thing to this world that you’re in of investing remotely. My lands! You are in, you’ve invested in 15 States. You invest from Michigan to Georgia. And when I asked you a question that could take you three days to answer, but you got about three minutes instead.
Brad Smotherman (21:55):
We’ll work with that.
Jay Conner (21:55):
But how in the world do you invest remotely in 15 different States? And we know what, we know everybody’s concerns are. I mean, how do you find those deals, you know, out there in a different state, what’s your boots on the ground? How do you make sure you’re not being taken to the cleaners? How do you manage all that stuff remotely? And you know, my land! You can’t drive by it and see what’s happening to the property. I mean, what does that world look like?
Brad Smotherman (22:24):
Yeah. And you’re right. That would be about a three hour answer. But to put it into three minutes, the first fundamental that we have to understand is that the farther away we are from our own personal market, the cheaper the property must be. So we have to have a higher discount. Now, I’ll buy something at 60 cents on the dollar cash in my backyard, but I’m definitely not going to do that, you know two States away, right. So we have to have a greater discount because you’re a hundred percent, right. We’re going to have issues that we don’t expect right now. We don’t have, you know, a large amount of like workforce that can help us in these deals generally. Right. So what we’re going to do is we market to areas that we like, okay. And because we’re marketing in big geographic areas, our lead cost is actually quite a bit lower.
Brad Smotherman (23:12):
It’s substantially lower. So we can do one of two things. We can either have a lower ad budget, or we can keep our ad budget the same and have maybe three or four times a lead flow. Okay. So let’s just say we have four times the lead flow. Well, what that means is that, that deal that comes around twice a year, three times a year is going to happen for me roughly every two months. Or, you know, the deal that happens every four months is going to happen for me every month. So I can be a little bit more picky based on what I’m looking at. And so in terms of the value, the decisions are very easy, actually. So I mean, case in point, we just bought one in Montgomery, Alabama. The property had a comp across the street that sold in in February for 76,000, we bought this one for 13, so we have it under contract.
Brad Smotherman (23:59):
And so once we have an under contract, we go into due diligence. So the first thing we’re going to look at is value. So what is the value based on what we expect right now? So we feel like roughly this thing’s worth $75,000 and I can probably owner finance it for 89 or maybe 99,000 with a 10K down payment. You know, at a minimum 10K. So with that, we’re gonna talk to two or three brokers in that market, real estate agents that are gonna give us CMAs. Give us an idea of value. And then we’re going to then once the value looks okay, we’re going to switch to condition. So we’re going to get actually a home inspection on this property. Okay guys, once we have three different CMAs from agents and they all kind of make sense for one another, like there’s congruency in those three CMAs, and then we go and we get the home inspection, we’re going to know really everything that we need to know in terms of that property, especially with the discounts that we’re buying.
Brad Smotherman (24:48):
So, I mean, the question being is that a little bit more risky than buying it around backyard? It certainly is. Whenever, if you were paying dollar for dollar the same amount, but if you’re paying 60 cents in your own backyard or 20 cents in another state, then I would ask you, well, which is more risky at that point. Okay. So short answer, we’re going to get things under contract that we feel pretty comfortable with. Then we’re going to verify and find the facts that we know and what we don’t know. At that point, we’re going to make a final decision. Sometimes we have to renegotiate price most of the time we don’t, because it’s just such a severe discount on the front end. And I mean, in terms of management, the thing is that we’re owner financing most of these, almost all. And so if we’re owner financing things, we’re serving the least served in the most underserved buyer pool in the country.
Brad Smotherman (25:32):
There’s a lot of people that need owner financing. And since March, this is what I heard from Eddie Speed yesterday. And Jay, I know, you know, Eddie. So he said that if a hundred people could get a mortgage in March before this COVID thing hit, then right now there’s 64 people that can get a mortgage that’s left out of those hundred. Well, what happened to those other 36 people? Did they just decide not to buy? Well, no, they need owner financing at this point. So we’re serving a very needed, a very underserved buyer pool that needs owner financing. So sell the house with owner financing, create the note. I don’t want ownership and property. I feel like property is liability. We want to own the paper. Okay. So we create owner financing. So the house owner financing to have a longterm cash flowing asset. And in a nutshell, that’s how we buy remotely.
Jay Conner (26:18):
To what extent do you buy houses remotely with owner financing? To what extent is, are you comfortable with the amount of repairs or rehabbing involved?
Brad Smotherman (26:33):
Yeah. I mean, we’re not going to rehab anything. So if the property means that the grass cut, somebody better go cut the grass because we’re going to buy it. We’re going to sell it as is, you know, the best example that I have with this. I had a house that I bought for $2,000 one time. And now I don’t understand why people do what they do sometimes. Jay, I know that doesn’t resonate with you. I’m sure that you’ve never seen anything that didn’t make sense. But for me, I see a lot of things that don’t make sense in my world. And this lady sold me the house for $2,000 and she had just done new vinyl and new windows on the exterior. They surely looked great, but she said, I don’t want you to go in the house because I’m afraid you won’t buy it.
Brad Smotherman (27:07):
This was maybe six or seven years ago. And I’m actually going to look at houses. I said, well, respectfully, I have to go look at, you know, I have to go inside. And so this lady, the roof look kind of bad, but I didn’t realize how bad the roof was. She did new vinyl, new windows. She didn’t do the roof. And so water had been pouring into this house for like four or five years. And so like, literally the back half of this thing was gone. I mean, it was like molded. It was soft, the subfloor, you couldn’t stand in the kitchen, all this, it was a mess! But we sold it with owner financing. As is! Like, I’m not going to do that kind of construction. I’m not a construction guy. Literally I had to come over. I had to have a handyman come to my house and replace the doorknobs because I don’t know how to do any of that stuff. So like, I’m terrible.
Jay Conner (27:46):
You and I have something else in common, my friend!
Brad Smotherman (27:49):
Glad to hear that, man! I think we’re like kindered souls just, probably not from the same parents, just generationally, but you know what I’m saying? We’re cut from the same cloth.
Jay Conner (28:00):
A brother from another mother.
Brad Smotherman (28:04):
For sure.
Jay Conner (28:07):
So you’re not gonna do any, you’re not gonna do any major rehabs. I get it. So my lands! How do you find, so are you finding most of these deals remotely in other States? Again, as you mentioned using Pay-Per-Click. Google Pay-per-Click.
Brad Smotherman (28:25):
A hundred percent. So, I mean, these are people that are actively searching to solve a problem and we’re there when they need to be.
Jay Conner (28:30):
I love it when people are looking for me and I’m not looking for them.
Brad Smotherman (28:34):
Big difference because people don’t understand the difference in the negotiation structure. So, I mean, if I’m contacting someone to sell me something, versus someone contacting me to buy something, that’s a huge difference in the frame of negotiation. And so we always want to be where someone is searching for us. If we can be, of course, there’s always exceptions. You know, like anything works some of the times. So we can do the text, we can do the direct mail. I used to do 70,000 direct mailers a month. I don’t do any of that anymore because it comes down to, I don’t want to contact someone to sell something. I want people contacting me to buy something.
Jay Conner (29:08):
Final question, Brad. At least almost final question I have to, I have to precursor that. So we know how you’re finding these deals. You got all these people that need owner financing. They don’t know there’s a way. So how in the world do you get the word out to all these people that you’ve got owner-financed terms available? How do you find the buyers?
Brad Smotherman (29:29):
And that’s a great question. So our big three are Craigslist, Facebook marketplace, and then putting yard signs out that say owner financing. And so…
Jay Conner (29:38):
My number one on a, so I sell, I don’t do owner financing out here in this market. That’s another conversation. I do a lot of rent to own. I love your model. Regardless. It’s the same buyer, whether they’re buying owner financing or they’re buying rent to own. But with that, Facebook marketplace, hands down. Is my best lead source for finding these owner finance buyers.
Brad Smotherman (30:04):
Yeah. It’s really amazing. I’ve got a, I’d say she’s at least half time and probably closer to three quarter time. And the poor girl, she probably has carpal tunnel by now because like you post a house for sale with owner financing and all of these buy-sell-trade groups. And like, you can see like the computer almost begin to melt because it’s overheating from all the people responding. And it makes sense. I mean, it’s really common in a market. So I’m in Nashville, Tennessee. The last time I checked, there were 2,700 houses on the market on the MLS to service everyone that could get mortgage financing. Well, there were three that were offered with owner financing and they were mine. And so it’s like, if that’s the case, you can see the disparity in the supply demand curve. You have a huge group of demand for very, very little inventory. And so selling the houses never really been a problem.
Jay Conner (30:53):
I love it! Brad, I know my audience wants to stay connected with you. How can they stay connected with Brad Smotherman?
Brad Smotherman (31:00):
Yeah. So for those that are interested more on owner financing and what we do, then you can listen to my podcast, Investor Creator, on iTunes and the various other platforms. And if anybody wants to reach out to me directly, feel free to do so. At http://BradSmotherman.com
Jay Conner (31:13):
That’s awesome, Brad! It’s so great to have you here on the show, Brad, I really enjoyed our conversation. I know the audience did as well. And so let me give it to you for parting comments and final advice.
Brad Smotherman (31:26):
You know, the thing that I want to say to people is, always would try to instill the amount of hope that I can, you know, I think a lot of people want to do this business and they have a lot of fear. And I remember how that was in 2010 when I started, because you know, I started in the brokerage business. I was a realtor and not a super successful one at that. I made a living, but you know, whenever I decided to be an investor, I thought, gosh, like nobody’s going to leave a loan in place. Nobody’s going to sell out a discount. Nobody’s, you know, and it’s the same thing that I’ve heard, you know, and here’s kind of like the hierarchy of beliefs that fell down for me. I thought nobody would leave alone in place. Well, that happened.
Brad Smotherman (32:01):
And then I thought, well, nobody’s going to sell at 50 cents on the dollar. And then that happened. And then I thought, well, nobody’s going to give me 0% owner financing. And then that happened. And then I thought, well, all of this is because we’re that good in person. We can’t do it on the phone. And then we started buying all of those on the phone. And so at the end of the day, I mean, this business works. It’s an amazing business. It changes lives. And if you feel compelled, you have a passion for the business and you have a passion to help people with their problems and you can do very well in this business. Stay with it.
Jay Conner (32:28):
That’s awesome! Brad, thank you so much. And thank you! My audience for tuning in. It’s always great to have you here. And I know you found this episode very valuable. I’m Jay Conner, The Private Money Authority. Wishing you all the best and here is to taking your real estate investing business to the next level. And I’ll see you on the next show. Bye for now!
Jay Conner (00:10):
Well, hello there and welcome to another episode of real estate investing with Jay Conner. I’m Jay Conner, your host, and also known as the Private Money Authority. If you’re brand new here to listening on iTunes or Google play, or you may be watching and listening to the live stream right now on one of our YouTube channels or Facebook and you’re new to Real Estate Investing with Jay Conner show. We talk about all things, real estate, how to find deals, how to get them funded, how to sell them fast, how to automate your business. So you’re actually running your business and it’s not running you. And since we launched the show back in June of 2018, I’ve had some very, very amazing guests here on the show with me, and today’s no different, but before I bring my guest on, I want to let you know about what one big thing that we do here on the show. And that’s talking about funding for your deals.
Jay Conner (01:04):
Well, the short version of my story is, my wife, Carol Joy and I started investing in single family houses here in Eastern North Carolina, back in 2003. And the first six years that we were doing business, I relied on the local banks and mortgage companies. But in January of 2009, I was cut off from a funding, but no notice like the rest of the world. And so I was introduced to this wonderful world of private money. How to get funding for your deals that has nothing to do with your credit. Nothing to do with your verification of income. Nothing to do with your experience and how you can actually set your own rules to get funding for your real estate deals. So I’ve been using private money for funding ever since 2009. We’ve got 49 private lenders right now, funding our deals.
Jay Conner (01:55):
And if you would like to learn as well about how you can get funding for your deals, the same way I do without relying on banks, then I’ve got a free online class for you to check out after the show. You go over after the show to www.JayConner.com/MoneyPodcast. That’s JayConner.com/MoneyPodcast. There, I will teach you and reveal the five easy steps as to how you can quickly have zero funding for your deals, and very quickly having the hundreds of thousands and millions of dollars in funding.
Jay Conner (02:37):
So with that, I’m just so excited to introduce to you my guest today. My guest is a CPA and a real estate investor. You don’t find too many of those combinations inside the same head. So anyway, he implements this thing called the BRRRR investing strategy. And we’re going to dive on that and find out what in the world that strategy is. So he primarily focuses on small apartments and commercial deals. Now he has got a very, very popular YouTube channel. That right now has over 60,000 subscribers. And we’re going to tell you here in a moment, how to get over that YouTube channel and you can check him out, but on his YouTube channel, he teaches you how to analyze multifamily properties and how to maximize your return on investment through strategic innovations and renovations. That will show, that will allow you to increase your rents, increase your equity and how to increase very quickly your cash flow and these properties. And own this same YouTube channel, you’ll find videos where he’s teaching this ranging from renovating properties, duplexes, triplexes of all sizes, as well as dealing with student rentals his best practices for buying properties, how to manage your tenants and your portfolio of properties.
Jay Conner (04:02):
So he’s also going to show you on his YouTube channel, how he structures joint venture deals. How he gets funding for his deals. How he negotiates with banks, refinances properties, and of course, much more. So be sure to subscribe to his channel when we tell you about it here in a moment, and you’ll be able to follow him in his pursuit of financial independence and how you can get it also as well. With that, I’m so excited to bring onto the show right now, Mr. Matt McKeever. Hello, Matt! And welcome to the show, my friend.
Matt McKeever (04:35):
Thanks, Jay. Appreciate the warm introduction.
Jay Conner (04:38):
Absolutely! Glad to hear you. So, you’re up in Canada. Well, whereabouts in Canada?
Matt McKeever (04:43):
So located London, Ontario, about two hours from Toronto, which is our big city here in Canada.
Jay Conner (04:49):
I got you. Now is all of your investing these days taking place in Canada?
Matt McKeever (04:54):
Yep. So right now my portfolio is exclusively in Southwestern Ontario. So within right now, actually it’s pretty much all clustered in London, Ontario, which is a market with a 500,000 Metro population area. Just to kind of give you guys a rough idea. Median house price is around 350 to 400.
Jay Conner (05:14):
So with everything that we’re going to be talking about here on the show today, and also on your YouTube channel, do all or most of the strategies apply to doing this type of business the way you do it in the United States?
Matt McKeever (05:29):
Yeah, absolutely. So if anything, the United States has maybe more friendly investor regulations in most States. So everything we do here in Canada can absolutely be replicated in the States. And in fact, sometimes it’s easier because you guys have nifty little tricks, like the 10 31 exchange, which is completely nonexistent here in Canada.
Jay Conner (05:50):
I got you! And that comes into play more often in the world of commercial than it does in single family homes. Right?
Matt McKeever (05:58):
Absolutely! So here in Canada, unfortunately we don’t have that 10 31 exchange. We can find a handful of other innovative ways to try and, you know, help us speed up the velocity of our money. But really for myself, when I first joined like a lot of investors, my biggest thing was either limited amounts of resources, right? The limited amount of my own money. And like a lot of people I had discovered private money like yourself. So we’re constantly focused on how can I stretch the little bit of money I have to control the most amount of real estate as possible. And that’s what really led me into that BRRRR investment strategy, where you buy a property, renovate it, you know, fix it up, bring it up to its highest, best most efficient use, then rerent it out at a higher amount, then go back to your lender and refinance and pull out the money. And I started originally doing that on small single family homes and small multi-families. And now I’ve just graduated to doing the exact same business model, but just with small apartment buildings, rather than like a triplex or a fourplex,
Jay Conner (06:56):
I got you. Well, just in case some people aren’t able to stay to the end of the show. Let’s go ahead and let everybody know right now how they can find your YouTube channel. That’s got all the trainings on it and et cetera, where can they go for that?
Matt McKeever (07:09):
Yeah. So if you hit me up on YouTube, it’s just Matt McKeever. That’s M C K E E V E R. And anywhere social media, you’ll find me on those platforms. So if you’re not on YouTube, I’m everywhere else as well.
Jay Conner (07:24):
Well, what I want us to talk about. Well, thank you for sharing that, Matt. What I want us to talk about today here on the show are really three topics. First I want to hear about your personal journey in real estate. Secondly, I want to, I want you to talk about the power of social media and how you use social media to leverage success in your business. And then thirdly, you got an interesting concept that you talk about. You don’t talk that much about ROI, Return On Investment or Return On Cash. You talk about this thing talking to call return on time. So those are the three topics let’s start with your personal journey, Matt, and your story.
Matt McKeever (08:03):
Absolutely. So like a lot of real estate investors you know, my gateway into real estate investing the gateway drug, as I like to say it, Rich Dad, Poor Dad. That’s what really started my entire journey. And in my fourth year at university, you know, I was going through for business. I was going to get my CPA license and really the reason I wanted to get into business or become an entrepreneur was to, you know, get rich. Like a lot of people. But I didn’t really know what get rich meant and had no idea how to actually achieve it. And so I was speaking with one of my roommates at the time we lived in a six bedroom student rental house and I was like, Jake, your dad’s rich. He owns like a big company with hundreds of employees. I was like, go ask him how we get rich.
Matt McKeever (08:49):
Cause we both know we want to get rich, but we have no idea. And he actually gave us the book, Rich Dad Poor Dad. And ever since reading that book in the back of it and a list of other books to go read, I went and read every book from that as well. And just really got addicted to this idea of real estate investing and being able to build up a, you know, passive cash flowing investment portfolio. I didn’t end up jumping into real estate until age 25. So from kind of 2021 discovering real estate to 25 and actually executing that I was just consuming information, trying to save up money. But also I was trying to get outside my comfort zone because all my friends and family thought I was crazy for wanting to get into real estate investing when I was already on, you know, the corporate path to that white collar job with the corner office.
Matt McKeever (09:37):
At the age of 25 is when I bought my first rental property. And on my 25th birthday, I ended up making a commitment to myself. So I downloaded an app on my phone that would count down the days to my 35th birthday. And I decided to make a commitment that I would retire by the age of 35 because of real estate investing. And so I was the guy at different parties or networking events, people would say, Hey, Matt, what’s new with you? What’s up? I’d pull out the phone and be like, Oh 2,465 days until my 35th birthday. When I get to retire. Long story short, kept buying real estate, kept in asking them that. And instead of having to wait 10 years, I actually retired from being a CPA, a chartered accountant at the age of 31 and just went all in to real estate investing at that point.
Matt McKeever (10:22):
And then from that I found like a lot of people, once I left the corporate 9-5 behind, my success in real estate actually really started hockey sticking because I had all this extra time and energy now to deploy into my real estate investing business. And in that first year of quitting my day job, I think I acquired 32 additional units that year. And then continued just to, you know, focus on different unique investment opportunities, started teaching other people about real estate investing as well. Because when I quit my day job at 31, I found it’s kind of lonely. There’s not a lot of other 31 year old retirees out there. And so I didn’t really have a peer group to hang out with. So I decided to start writing these really long emails to my friends, you know, like 5,000 word emails, trying to explain to them how they could quit their day job in five years, if they would just invest in real estate like I did.
Matt McKeever (11:15):
And I’m sure as you can imagine, your audience can imagine. No one responded to those 5,000 word emails because that’s a small novella. Thankfully at the time I happened to be reading a book and the books that speak to your audience in the language they wish to be spoken to. And immediately clicked for me, the reason that I love real estate and the reason so many people are drawn to real estate investing is because it’s such a tactical, you know, real investment, right? Like it’s a physical thing. Unlike say paper stock or paper assets. So immediately started documenting on my YouTube channel, just how I was going about investing in real estate. So if you go back to like my very first video, you can see, I was still swinging a hammer. Like I was still sweating up in the attics, re-insulating, running duct work, stuff like that.
Matt McKeever (12:01):
So really have been exposed to almost every aspect of the real estate investing journey. But at this point now what the day to day looks like is I’ve got a wholesaling business with five full time employees just wholesaling real estate. I’ve got a company that just BRRRRs apartment building. So in the last eight months or so we’ve acquired about 70 units in that entity and have just been BRRRRing those apartments and then also have my education and just networking, which is, you know, my YouTube channel, social media presence and a couple other little education companies. So definitely just, you know, constantly trying to level up and surround myself with like minded individuals when it comes to real estate.
Jay Conner (12:43):
Now you just said, that particular entity you’ve been BRRRRing properties. First of all, how do you spell that? Secondly, what does it mean?
Matt McKeever (12:53):
Absolutely. So B R R R R. And so it stands for Buy, Renovate, Rent, Refinance, and Repeat. And so really what that looks like is simply finding, to me the best way to explain it is you’re just looking for under utilized assets and you’re going to try and bring them up to their highest, best, most efficient use. So oftentimes what that looks like for me these days is we’re buying an apartment building here in Ontario that maybe is being rented out for 50% of fair market value. And the landlords owned it for 10, 20 years. There’s not a lot of equity and they’re no longer motivated to operate it at a hundred percent efficiency or anywhere close to it. They’re often approaching retirement age. So we go in there, buy the property. Then we implement strategic renovations, which again, unlike, you know, on HGTV, a lot of my YouTube fans would love to see me blowing out walls, you know, doing open concept this, that, and the other, but most of my renovations are really boring.
Matt McKeever (13:52):
It’s like, let’s clean out all the junk. Let’s paint the property. And maybe we’ll put a new kitchen and bathroom tops. And so really we’re just focused on what creates the highest return on investment from those dollars we’re investing into the property. So in my market here in London, Ontario, specifically usually adding dishwasher to a kitchen that can increase not only the rent we can charge every month, but also in general increases the quality of tenant that we’re going to be drawing from as well as say, adding laundry. If you can put in suit laundry, oftentimes in my market, I can charge between a $100 and $150 more per month in rent. And yet the cost of actually, you know, installing that laundry, depending upon the layout of the unit might be $2,500. So a very fast payback period in regards to when we can earn back that initial investment. But because we’ve increased the rent amounts.
Matt McKeever (14:44):
Now the actual capitalization rates of the property, you know, is going to revalue the property at a higher amount as well, if we the same cap rate. So again, what I’m really focused on is just taking underutilized assets, bringing them them up to their highest, best, most efficient use. Then re-renting them out for top dollar. And once we’ve re-rented it out for top dollar, you know, our income statement looks a lot more attractive, which means the lender and the appraiser is going to reappraise the property and refinance the property a much higher value. And ideally with our business model, if you’re doing it right, once you’re done this BRRRR and with the larger apartment buildings, it’s usually taken us about 18 months to do it from start to finish. What you’re going to end up doing is being able to extract all the initial capital you invested in. So the idea here is, you know, if I can refinance at a 75% loan to value, I maybe buy the property for, let’s say a million dollars, put 500,000 renovations, but then get it to reappraise at 2 million. Well at a 75% loan to value, I actually will get $1.5 million in new financing, right from the property, which means I can pay off the entire acquisition costs. So that’s really the base model here is to implement what we call a perfect BRRRR.
Jay Conner (15:58):
I love it! I never heard of the BRRRR strategy. I love it! Now, one thing you were just talking about was buying the properties. That’s the first letter in the BRRRR strategy. So here in the US there’s a popular website called LoopNet. What are, what are some of your favorite strategies these days for locating these under you know, these underperforming assets?
Matt McKeever (16:26):
Yeah, so there’s a lot of different strategies. One thing that is very different about the U S market and the Canadian market is, in the U S market, you guys have the freedom of information act. Here in Canada, we’ve got the protection information. It’s so like, it’s literally the exact opposite. So you guys are all about free information. We’re all about keeping it all secluded and hidden and private. So honestly my best way is like personal networking. So I’m happy to share some tips here, but it’s something that doesn’t seem to resonate with a lot of people my age or my generation, which actually makes for a great opportunity for anyone that’s willing to actually just build relationships, build rapport. And so, like, we actually target a certain type of realtor even to network with. Like the realtor I want to network with is he’s like, realistically, they’re above the age of 55.
Matt McKeever (17:21):
They’ve been in business for at least 15 years. And what we’re doing is we’re approaching those realtors and being like, Hey, who have you sold the property to? Like a large apartment building to 10 years or longer ago? They’re sitting on a ton of equity. I want to go make them an offer and make them a ton of money and make that offer through you and have you make commission off of it. So we’re very focused on trying to structure win-win opportunities when possible, and make sure that everyone eats because we find when make sure that everyone else profits from a deal we’d done, they get addicted to that cycle and they want to get us more deals. But again, we’re very boots on the ground and often focused on doing things that our competition won’t do. So everyone loves the idea of hiring a VA out of the Philippines and hitting them, them hitting the phones for a thousand calls a day.
Matt McKeever (18:10):
But what we’ll do is I’ll literally send one of my employees to stake out an apartment building, and they’ll just park in front and literally talk to every person going in that building, being like, who’s the owner? Can I get the owner’s phone number? And we find that usually, you know, we ask enough, we will get that owner’s phone number. And a lot of the apartment buildings I buy are literally through that process of, originally it was myself or a business partner just taking it out. Now we have employees taking out the apartment buildings, but we found that that’s the best way to really get deals. Because if an owner has already thought about selling the property, contacted a realtor and listed on the market, they’re now focused on just getting top dollar. And if they’re solely focused on getting top dollar, that’s fine for them, but it’s usually not going to work for me and my business model. So we’re often focused on not finding sellers, but actually creating sellers by making what we call blind offers. I don’t even really know what their motivations are, but I know that they’ve owned it for so long that they’re probably sitting on massive amounts of equity. And so I’m hoping that I can present them with a unique offer that they haven’t even really considered. And, you know, then we can get that conversation rolling.
Jay Conner (19:17):
So do you have your people stake out properties that looks just on the outside like it could use, you know some rehab and renovations and really be brought up to increase, you know, rents or whatever, or do you approach it differently? By again, looking for someone that probably has owned this property for a long time or which comes first? They’ve owned it for a long time or it looks like it could use some renovations or both?
Matt McKeever (19:47):
Yeah, we’re definitely open to either. In general, the way we’re usually going to like again, because we don’t have like easy databases of information. It can be very cumbersome to really figure out who’s owned what property for how long on a grand scale. I can definitely look it up individually, but there’s no way for me to like print off, you know, a giant data set. So in general, we’re more focused on the building first and then doing our research afterwards. So literally what I’ll do, and again, nothing fancy here, but I’ll go to my local cities, zoning map, look at the zoning, look for a high density residential. And then I’ll go on Google satellite and look just from the satellite view and find apartments, buildings, right? Identify the apartment buildings. Then literally go on Google street view. Sometimes on Google street view, you can see the property manager sign on the building.
Matt McKeever (20:40):
So we’ll immediately just call the property management firm then. If we can’t find that, that’s when I’m probably going to send someone to stake out the building. Get in contact with the tenants and find out who manages it and how. But at the same time, we’ve got a lot of other strategies. So here in Canada, Kijiji is really popular in the States. I think it’s more often Craigslist is the, you know, the online classifieds the people are going to use. But I also love going on Kijiji, looking through the for rent ads. And you just look for the landlords that are beaten down and they’re just sick of it, right? So like there’s no good photos taken. And sometimes I don’t know what it’s like in the States, but in Canada you can read it like, the landlord will write all in caps, like no debt deeds. And that’s like the title of their Ad. And like, this guy doesn’t want to be a landlord anymore. This guy wants to sell to me, even if he doesn’t know it yet.
Jay Conner (21:31):
I love it! When you said a moment ago, something really, really important to your, the success of your business is networking and relationships. Well, that ties right into how you’re able to leverage social media. So would you share with my audience here strategies and tips that you’re doing these days to leverage social media and to really how you harness the power of it?
Matt McKeever (21:57):
Yeah. And so the first thing I think that we need to really discuss is why even care about social media, right? And I find a lot of investors think that it’s simply a distraction. And if you use it as a distraction, it absolutely is if you use it as a business tool, it absolutely is. So you’re right. Either way, it really just comes down to how you use it. But for me, what’s really powerful about social media is having that one to many conversation before the advent of social media and online networking and things of that nature. Realistically, the only one to many conversation we could have as real estate investors is going out to your local real estate investment group. Right. And you could maybe go, and if you were lucky, you could get up on stage and maybe talk for half an hour, give a little presentation or breakdown about what you’re doing.
Matt McKeever (22:44):
And that group maybe met once a month. So maybe once a year, you could get in their lineup, get up on stage and talk, or you had to become the host of the meet-up group in order to have that one to many conversation on a reoccurring basis. Whereas on my YouTube channel. And again, like my YouTube channel, isn’t massive by YouTube standards, but it’s important for what I’m focused on. And what I’m focused on is really talking to my core audience, which is Canadian real estate investors, and then just real estate investors in general. And so even with just like 60,000 subs on my YouTube channel, any given day, I’m averaging 4,000 to 5,000 views on my YouTube channel. The average view on my YouTube channel is about seven minutes long. So I view that as myself being able to have, you know, 4,000 to 5,000 conversations that are seven minutes long, every single day.
Matt McKeever (23:33):
Well, that’s more minutes than there already is available on the day. So right away that one to many conversations, extremely powerful. But even more so as real estate investors, it’s not like we necessarily have to go, you don’t need millions of followers or millions of views in order to have a very effective business model. You really just need, like for a lot of real estate investors, their business would be changed if they had five good private money partners, right? Or five private money lenders. And you can really build up a relationship with those people through social media. So a lot of people, they decide that they want to lend their money to me before I ever even make an ask. And that’s simply because they’re able to watch and see my projects. They get to see me interact on interviews or go live on Instagram or Facebook and just have conversations.
Matt McKeever (24:20):
And they get to build a personal relationship with you. And something that we all need to remind ourselves as people like doing business with people they like. And so if you’re not putting yourself out there on social media, if you’re not trying to present, you know, your story, your image, your business model, you’re not giving anyone even the chance to fall in love with you and your story and want to invest in you or your business. So for me, there’s just so much power when it comes to social media, but I know I’ve just been kind of talking high level. So specifics. If any of your listeners here are brand new to social media, they’re intimidated by the idea. They don’t have a lot of time to invest into social media, pick one platform and spend at least 80% of your social media efforts on that one platform.
Matt McKeever (25:03):
Now, if you’re a small investor and you’re looking just to get a couple money partners or finding say two or three money partners with six figures or more to invest would be a game changer. I personally would focus on LinkedIn and I would literally just write one or two blog posts a week about my business model. Understand that’s never going to go viral. You’ll probably be lucky to get more than a couple of dozen views, but that’s all it takes. All you really want to do is really cultivate a strong relationship with a handful of money lenders. Now, for myself, there’s value in the education and email list and all that stuff. But for a lot of beginner, real estate investors, you don’t need that. You just need to build a handful of relationships and still social media is going to be a faster means to that end. Than going out to your local real estate investing group.
Jay Conner (25:49):
That’s awesome! And then to wrap up Matt, I want us to hang out a few minutes on your view and your take on return on time versus return on instead of ROI, et cetera. So what’s your take on return on time and why is that so important?
Matt McKeever (26:08):
Yeah, it’s something that I think a lot of investors are looted by at the start. And so in general, I kind of view this evolution of real estate investors and their sophistication based upon the metrics they talk about. So CPA by nature. So kind of a numbers nerd and, you know, a ratio nerd to begin with. But in general, when brand new people come to real estate investing, I find they talk about ROI, you know, return on investment. And they’re really impressed by the return on investment real estate can generate. Then once they get a little bit more sophisticated, they really start appreciating and understanding leverage. And we hear them talking about things like cash on cash returns, and really then it’s about the velocity of their money. Then as people continue to graduate and evolve as investors, maybe they start looking at larger multifamily properties.
Matt McKeever (26:55):
At which point in time, they usually start talking about cap rates or IRR. The internal rate of return. And again, all of these metrics are useful, but at the end of the day, what really draws us to real estate investing in my opinion, is the ability to have a high return on time. And that’s what I’m really focused on these days as an investor and I’d encourage anyone else that’s in real estate investing to start viewing things through that lens. And so one of the best examples I can give is wholesaling real estate. Here in Canada, it’s still a relatively new concept. It’s maybe only five years old that people have really been doing it to any serious capacity. And so it’s got a little bit of a negative stigma still here in Canada. However, if you look at what you can accomplish with say, wholesaling versus flipping a property, usually the return on time, even if the total profit is lower on that wholesale deal, let’s say you can wholesale a deal for $10,000, or you could flip the same property and make $50,000.
Matt McKeever (27:52):
Well, the bigger question to me is how long does it take to wholesale assign that piece of paper versus actually flipping it. Well for the average person here in Canada, assigning it, you’re probably going to assign it in one to two weeks. So your return on time, let’s say it took you even a month. Well, your return on time is $10,000 per month. Whereas if we’re going to flip the property, well again, we have to tie up the property. We have to wait for it to close. Then we close on it. Then we have to do our renovations, fix it up. Then we have to put it up for sale. Then we have to sell it. Then we have to wait for it to close. Well, oftentimes even if you’re going to make $50,000, that entire process from start to finish, it might be five or six months.
Matt McKeever (28:31):
Well, at that point in time, you’re looking at very similar return on time, but your perception of risk is higher as well because with the wholesale deal, we make the money before ever even closing on the deal. While we’re flipping there’s a speculative piece to it because we don’t really know what’s going to sell for, until it sells. So for myself and a lot of people that I’m trying to help level up as real estate investors these days. I really want them to focus on the highest return on time investments. And this is also really important because a lot of us, when we first get started as investors, a lot of us swing the hammers ourselves. We clean up the units ourselves. We paint the units ourselves. But oftentimes those are the lowest value skills, right? Like you could probably find someone to pay $10, $15, $20 an hour to clean up or paint the unit. Whereas you, as the investor would likely be better served going and finding the next deal or going and talking with your next private money partner. And really building those relationships and send yourself up to do more deals rather than trying to squeeze every deal for every penny. We’re better off to go find more deals. So this idea of return on time is just really being cognizant and not getting distracted by one piece of the puzzle, but really looking at the puzzle as a whole, When it comes to our investing and investment strategies.
Jay Conner (29:46):
Excellent! Thank you, Matt. Well, folks, go ahead and check out and subscribe to Matt’s YouTube channel at YouTube/MattMcKeever and that’s M A T T M C K E E V E R. Matt. Thank you so much for coming on the show today. I really enjoyed having you.
Matt McKeever (30:07):
Thanks, Jay. Really appreciate it.
Jay Conner (30:09):
Alright! There you have it folks. Another show. I’m Jay Conner, The Private Money Authority. Wishing you all the best. And here’s to taking your real estate investing business to the next level. We’ll see you on the next show. Bye for now.
Jay Conner (00:05):
Well, hello everybody there! And welcome to another episode of real estate investing with Jay Conner. I’m Jay Conner. Your Private Money Authority and the host of the show. And welcome! If this is your very first time, a very special welcome to you. You may be watching on the iTunes or listening on iTunes or Google Play. You may be watching live right now. If your live stream on mobile Youtube channel or on facebook. Or wherever you’re coming in from, we’re glad to hear or have you. If this is your first time here on Real Estate Investing with Jay Conner, we’ve talked about everything that relates to real estate from finding deal to funding deal. To automating your business. To all kinds of real estate. Single family houses, self storage, land, commercial deals. You name it. So today, for the first time since we launched the podcast. And my lands! We’ve now exceeded probably over 300,000 downloads and listens since we’ve launched. Got a subject today that we have not talked about on the show.
Jay Conner (01:26):
So I’m very excited to have my special guest. And if you’ve been following me, you know, that I have the best amazing guests and experts as it relates to real estate investing. Well, today is no different. I’m so excited to have my special guest who is known online as The Tax Lien Lady. And she’s the author of the books, “The Truth About Tax Lien Investing” and the Amazon best seller, “Tax Lien Investing Secrets: How You Can Get 8% to 36% Return on Your Money Without The Typical Risk of Real Estate Investing or The Uncertainty”. And we know about that folks! The uncertainty of the stock market. And she’s also a contributing author to the Amazon best seller, “Trust Your Heart: Transform Your Ideas Into Income” Now, my special guest, she’s been featured in the online magazine, NuWire Investor and Foreclosure News Report. She’s also been on real estate investing website, www.REIWired.com and for ForeClosure.com and addition to that, REIBluePrints.com. And she was mentioned in the January 2013 issue of Forbes Magazine. Our special guest, also known online as Tax Lien Lady, her articles on Tax Lien and Tax Deed Investing appear all over the internet. Her easy to follow step-by-step guide – nonsense approach and to investing in tax lien certificates and tax deeds.
Jay Conner (03:05):
And it earned her the reputation of being the most trusted authority on tax lien investing in the United States. Now her website is www.TaxLienLady.com. She has actually helped thousands and thousands of investors around the world answering their questions about tax lien investing and tax lien certificates and tax deeds. And has helped her subscribers and students to profit from this little nutting and misunderstood real estate investing strategy. Now, when you stay on here to the end of the show, you’re actually, we’re going to tell you, she’s going to give away for free her Amazon bestseller book, and you’ll learn how to get that. So with that, I’m so excited to introduce everyone here to Joanne Musa! Joanne, welcome to the show!
Joanne Musa (03:56):
Hey Jay! Thanks for having me. I’m honored to be here today.
Jay Conner (04:01):
Absolutely. I’m excited to have you on Joanne. And by the way, we’ve got live participants right now that have already tuned in. So everybody, if you are watching the live stream, of course, this isn’t going to work. If you’re listening on iTunes or Google play, but if you are on the live stream right now, we welcome your questions about tax lien investing. So right now, if you’re on the live stream, go ahead and say, hello and where you are tuning in from. I see we’ve got Lori and we’ve got Paula on so far. So everybody say hello as you’re coming in. So gentlemen, before we dive in to this tack this world of tax lanes, how’d you get started in real estate?
Joanne Musa (04:43):
Oh, well, you know, I always wanted to be a real estate investor, but the one thing that I didn’t know how to do, I don’t have a, I didn’t have a background in finance or real estate. And I, I didn’t know how to negotiate. So one thing I didn’t like to do is negotiate. Back in 2000, I was reading books by, I was reading books by Robert Allen about, you know, no money down and real estate investing and multiple streams of income. And I tried go into foreclosure sales and sending out pre-foreclosure letters. And this was at a time when people could get loans easily and pay off what they owed. And I just back then, I didn’t know how to do it. Now, since then, I’ve learned how to do it. But what I found out was that I could invest in tax liens and go to these tax lien sales, and I didn’t have to negotiate with anybody. And I didn’t need a lot of money because back then, I didn’t know how to use other people’s money. I didn’t have good credit and I didn’t do deals. You have to have cash. And of course, if you know how to get back, then I didn’t know how to do that. So one thing I did know is that I had enough money. I could go to these tax sales and buy these tax lien certificates. And that they had a high rate of return, no matter what the market did. I still got the same rate of return on my investment and it was backed by real estate. So it was a safe investment, as long as I did my homework, which I learned in the very beginning. You do have to make sure that it’s good real estate that you’re buying a lien on.
Jay Conner (06:45):
I got you! So you started doing the tax lien business in what year?
Joanne Musa (06:51):
Oh, 2002.
Jay Conner (06:53):
Oh, wow!
Joanne Musa (06:54):
Yeah. It’s been a little while.
Jay Conner (06:58):
So let’s first be clear and let everybody make sure we’re on the same page. Exactly. What is a real estate tax lien?
Joanne Musa (07:11):
Oh, good question. Good question. Well, you know that your property taxes are depended on by the County or municipality where you live, who collects your property taxes. They need them to pay school teachers, build roads, pay other civil servants, like firemen and policemen. So what do they do if people don’t pay their taxes? Because they need that money to meet their budget. So in some States, I live in Pennsylvania now. When I started this, I lived in New Jersey. But in Pennsylvania, if I don’t pay my taxes, the next year my property will be sold out from under me in a tax sale. They’ll just sell the property. Okay, well, they’ll let you go a year delinquent. And after that, they’re gonna, they will, they are going to try to get you to pay it. But if you don’t, they’re going to put your property in a tax sale.
Joanne Musa (08:09):
But some States, when I lived in New Jersey, they don’t sell your property. They give you a little bit more time to come up with the money. So what they do after your year delinquent, they sell your taxes to investors. They have an auction. Where they auction your taxes and different States do it different ways. Some they bid down the interest rate because in New Jersey, the penalty, if I don’t pay my taxes, if I went up property in New Jersey, there is a penalty that I will pay when I finally pay it, which is 2% to 6% penalty. And there’s also an interest per annum interest rate of 18% per annum. That I will have to pay. When I finally do pay those taxes. Well, guess what? The investor gets that. So that’s why they are so willing to buy those taxes because where else are they going to get that kind of investment return on their money?
Joanne Musa (09:07):
Not in the bank today. Not, years ago, you used to be able to get that in a CD, but not anymore. They can maybe get that in the stock market, but look, what’s been going on lately. It’s a little bit risky to do that. Now, but when you buy somebody’s taxes, if they don’t pay you in a certain amount of time, that’s called the redemption period. Then what happens is the investor gets to foreclose on that property. Now that is their leverage that they’re going to get paid. So you have that property is your guarantee that you’re going to get paid. Okay. So that’s why it’s very important to do your research and make sure it’s a good piece of property because there’s a lot of reasons why people don’t pay their taxes. If I have an unbuildable lot next to my house, that I know that I can’t build on, can’t do anything with, and maybe it’s not next to my house.
Joanne Musa (10:02):
Maybe it’s, you know, a block away or a town away or a state away, but it’s not buildable. Why do I want to keep paying taxes on it? Well, I’m going to get tired of that after a while. So I’ll just stop paying. So you don’t want to come along and pay those type of taxes. You want to pay taxes on a property that is useful in some way. You know, it doesn’t have to be a three bath, two bedroom house. If it’s a buildable lot, that’s good commercial property is good, but it’s just something that you’d be able to sell or something that has value.
Jay Conner (10:37):
I got you! So comparing tax lien investing to other types of real estate investing, why is, why have you chosen tax lien investing? Why is it a good investment versus say, other strategies?
Joanne Musa (10:56):
Well, it’s easy to get into because you don’t need a lot of money. You don’t need good credit. It is a real asset that it’s backed by a real asset, which is the property. And it’s in the state that I lived in, in New Jersey, there were tax sales all the time that I could go to. So that’s how, it was an easy entry. It’s an easy entry point for most people to get in.
Jay Conner (11:28):
Right! So is it correct in saying, when a real estate investor invest in a tax lien, they’re either going to earn the interest or they’re going to be able to claim the property and do whatever with the property that they want to, is that right?
Joanne Musa (11:49):
Yeah. And I just want to let everybody know that, I know years ago there were these infomercials and people think that you could buy a lien for maybe a couple hundred dollars and then get a hundred thousand dollar house. It doesn’t usually work that way. Think about it, if you own, let’s say you own a house you know, that’s a $150,000 or $200,000 house, and you have you know, maybe $5,000 of back taxes that you owe. Are you going to let that property go for those back taxes? If it’s a decent property? Probably not. It doesn’t happen very often. So it’s not really a way, buying tax liens is not a way to get property for pennies on the dollar. There are some States like my state, where they actually sell the deed in the sale. And those are the sales where you could actually get the property, but are you only going to pay the back taxes? Probably not because these are auctions and the price of the deed gets spit up at the sale. So can you buy it for less than you would pay if you went through the normal channels? Yes, you can. But it’s more like 50 cents on the dollar, not pennies on the dollar anymore.
Jay Conner (13:17):
Well, I’d tell you 50 cents on the dollar. You know, if it’s a good property, is a fantastic deal. I mean, I buy a lot of, a lot of single family houses and those that we rehab, which were most of them we buy them at 30 to 40 to 50 cents on the dollar. So that’s, it may not be pennies, but it’s, you know, 50 cents is 50 cents. Right?
Joanne Musa (13:41):
Yeah. And also these, like you alluded to, when you say most of the time we have to rehab them. Most of these properties have been neglected. Some of them are even knocked down. So, and you know what I’m talking about when you buy stuff for 30, 40 cents on the dollar, you know, you kind of get what you pay for.
Jay Conner (14:03):
That’s right!
Joanne Musa (14:03):
Yeah. So you just have to think about how much more money you got to put into it before you can turn around and make a profit when you’re buying a tax deed. But what I use tax liens for is a way to invest my money at high return. Without, as my, the title of my book says without the typical risk of real estate investing or the uncertainty of the stock market.
Jay Conner (14:26):
Right. Right. Well, now you’ve already mentioned it, then you sort of chuckled when you said it and that was you found out early on that you really need to investigate the property to make sure it’s a good property. And that’s probably the biggest mistake that new people in the tax lien investing do is not checking it out. So what’s your process on investigating property to see if it is a good property and what’s the definition of a good property?
Joanne Musa (14:57):
Yeah. Good question. What’s the definition of a good property? Well, that kind of depends on what you’re after. As I mentioned before, I like building lots. Remember you’re paying the taxes on a property. So, and the taxes on a building lot are typically lower than they would be on a lot with a building on it. And anything that could be resold, anything that has value to another buyer is something that I would consider a good property. So commercial properties can be good properties. Residential properties can be good properties. And sometimes vacant land. If it’s buildable. Especially building lots can be good properties. But what you have to check is what I like to check is the assessment value. I check the assessment of the property. And then I will check the market value of the property. So you might want to check comps on the property. And then another thing that I like to check, especially if I’m investing in a place that I’m not familiar with is I want to check the crime rate in the area. So you’re not only checking out the property, you’re checking out the area. And Jay, you’re shaking your head. Cause this sounds just like real estate investing. Doesn’t it?
Jay Conner (16:22):
It sure does! Now, do you invest in the tax liens, just right around in your area where you can drive by the house or do you invest in areas that are outside of your area?
Joanne Musa (16:37):
Well, I’ve done both, but I will say I do. I always recommend. And I do like to look before you buy. Whether it’s just a tax lien you’re buying or whether it’s a house, you know, a deed that you’re actually buying the house. And the reason is because if you look at pictures online, you might see a house there, but when you drive by it, that house might be gone. There I’ve been, I’ve been there, done that. And a good thing, I looked first because the house wasn’t, that was supposed to be there. That was there in the picture wasn’t there. Maybe it burnt down, maybe it got knocked down.
Joanne Musa (17:22):
Well, exactly, exactly. So you don’t, and with land, you always have to look at it first because you can’t tell what it looks like from a picture or a map. You don’t know what the grade is. You don’t know how wet it is, how Rocky it is. You don’t know if it’s buildable and sometimes you don’t even know if you look at it, if it’s buildable. So you have to check with land. I also recommend checking with the zoning officer. To make sure that it’s buildable. And you also want to look for things like road access. You want to make sure it passes zoning regulations, that you have the right road access, that it has a utility access. That utilities are there or where the property is. It’s different things that you look for.
Jay Conner (18:18):
I know, I know you’ve got a ton of students. I mean, how long have you been teaching what you do?
Joanne Musa (18:26):
Well, I’ve been doing this since 2002 and in 2004, I started, how I got started was I was investing in New Jersey and I ran into somebody else who was trying to figure this out the same time I was. Well he asked me if I would work for him and he had a lot more money than I did to invest. And he was after the larger liens and I was after the smaller one. So I said, yeah, sure. If I could buy liens for me while I’m buying them for you, I’ll do that. And in New Jersey, unlike it is in some other parts of the country, the tax liens are not big County tax liens. They’re small municipal liens. Municipal sales. So there are over 550 municipalities in New Jersey and each one has a tax sale once a year. So on any given day, there could be a few tax sales all the same time on the same day.
Joanne Musa (19:20):
So I hired five other people and taught them how to find out about the tax sales, how to do the due diligence, how to bid at the tax sale. And I even helped the person I was working for develop a software program to manage the liens. And so after doing that, I realized there were people all over the country and even all over the world that wanted to learn how to do this. And so that’s when I, I started my website around 2005. I started teaching around 2004, but I started my website in 2005.
Jay Conner (19:58):
Okay. Wow! Well so you’re like me, I do the business. I coach. I teach, and I teach the business. And I’ve read. And I don’t know if we have time for you to go through it here on the show, but I’ll ask you about how much time it takes you, but I’ve read where you actually have five steps to, for people to take, to buying a profitable tax lien. Can you give us the 30,000 foot view of each of those five steps?
Joanne Musa (20:30):
Sure. You could use the acronym steps. S T E P S. Let me see if I can remember them first though. Since I did this. But they’re, they’re also all in my book. I actually have seven steps for the complete process because after you buy the liens, there are other things that you have to do to make sure that you’re profitable. Okay. Once you buy liens.
Jay Conner (20:56):
You said thos steps are in your book, is that in the book that you’re going to give away here at the end of the show?
Joanne Musa (21:01):
Actually, you know what I’m going to give away. I’m not going to give away the book that’s on Amazon because I don’t have enough of those to give to everybody. But I have a, I have a special report called the seven steps to building your profitable tax lien portfolio. And those seven steps are all outlined in there.
Jay Conner (21:23):
Okay! Great!
Joanne Musa (21:23):
And the first one is, I could give you the first one and that is, Select The Right Place To Invest. That is, that is the first S in the steps, five steps process.
Jay Conner (21:35):
That’s awesome! That’s awesome! So, I know it’s all over the board, but you know, you got it. You got started in this strategy because you know, it’s a low entry, doesn’t take much money. So what’s the definition of not much money? I mean, I know that depends, but like, what are some examples of like real amounts of money people need? You know, what’s an example of being able to get started, you know, doing this?
Joanne Musa (22:05):
Okay. I’ll give you an example. One of the real profitable liens, I did back in 2002. My original lien was for less than $500.
Jay Conner (22:19):
Okay.
Joanne Musa (22:19):
And it was in New Jersey where I invest, they don’t just sell taxes in these sales. They will also sell utilities. Anything that you owe to the municipality and don’t pay can go into this tax sale. You get a tax lien certificate, and it’s just as good as, you know, a regular tax as the taxes. So this was for the water and soar amount, I believe for this property. And it was for 400 and change was the first amount that I paid. And then every, the next year I got to pay the subsequent taxes. And I paid them for the next few years. And then when this thing finally redeemed, and then I stopped paying, I think after seven years. Now, you can’t let all your liens go that long, but in New Jersey you can.
Joanne Musa (23:08):
And so that’s like being able to put money away at anywhere from 8% to 18%. And without having to go to a sale and bid, once you have that lien, you could just keep paying those subsequent taxes. And then years later, I made over 40% on my money. I think in seven years that it finally redeemed and I made you know, almost doubled my money and that, it’s not the only incidence where I did that. As a of fact, I have another secondary lien that I bought where I put up a little bit more money and made about 30% on my money in 18 months. So it, and that, that lien was you know, was a couple thousand dollars.
Jay Conner (24:06):
Okay. So yeah. We’re not talking anything about huge amounts of money.
Joanne Musa (24:10):
No, yeah. That’s the, see, small investors can do this when you’re doing it on your own. When you, when you have somebody else do it for you, you have to come up with a lot more money, but when you’re doing it on your own, you could start with smaller amounts.
Jay Conner (24:26):
Excellent! And the free report that you’re going to give away, and we’ll give out the website here in just a second, but does it like tell, does it tell people how to get started and like where to go? I mean, you know, where do you go in your local area to find out where the sales are? And when the sales are?
Joanne Musa (24:44):
Well, here’s the problem with that. It’s different for every state. I do have, I’ll tell you what, I do have another program that I could give to your listeners. And it’s called the Sweet 16 Tax Sale website, swipe file. And that’ll give them 16 places they could go to find out about tax sales. 16 different tax sale websites, because that changes. Now I have a special tool that I use to find out what tax sales are coming up around the country that, that I give to my members. But they can not, they can find out about that after they get the basics, you know, and I doubt if it’s the right thing for them or not.
Jay Conner (25:36):
Well, I’ll tell you what, Joanne, let’s not hold it back anymore. Let’s go here and put up on the screen and those that are listening, write it down. Here’s the website where you can go to get Joanne’s free gifts that she just mentioned. To get you started to learning about tax liens. You go to www.JayConner.com/TaxLien And just to make sure you got that straight tax lien is T A X L I E N. That URL one more time. It’s www.JayConnner.com/TaxLien Joanne, final words of advice here on this show for our listeners and followers who want to learn about getting higher returns on their money without the risk of the stock market. Final words and thoughts.
Joanne Musa (26:35):
Well, I believe the best place to invest is in your own backyard where you know, what the property values are. And you just need to check out what happens in your state, in your County or in your town, depending on what state you’re in, because it is different in every area of the country. So you want to find out what happens in your particular area of the country.
Jay Conner (27:03):
Wonderful! Joanne, thank you so much for taking the time to come on the show and for offering your wonderful, valuable, free gifts to my folks. Thank you!
Joanne Musa (27:14):
You’re welcome. Thank you for having me on your show!
Jay Conner (27:17):
You bet it Joanne! Well, there you have it folks! Another episode of real estate investing with Jay Conner, I’m Jay Conner, The Private Money Authority. Wishing you all the best. And here’s to taking your real estate investing business to the next level. We’ll see you on the next show!