Transcription:
The number one comment we get from listeners is that the show is all meet with no fluff. This week is even more so it’s all meet. We have answers to listeners questions. A good interview with Greg Gardner, who’s going to teach us how to get our offers accepted, and of course, our dare to be Dumb.
Or what we did this week segment, we had a very busy and a very productive week.
For those of you that are listening from the web if you don’t already know how to get to us, you can stop by our website at www.getrealrei.com. You can also email us at Get Real Show, get real rei.com if you have any questions, comments, suggestions for future shows, any of that stuff.
We’d love to hear from you. And on a technical note, in case there’s any issues this week, and I don’t think there will be, we’re switching over our servers for our audio files. You shouldn’t notice a difference. But we had to make the change because of the traffic from downloads. Our primary host currently gives us 400 gigabytes a bandwidth each month, which when we started seemed like an awful lot, but and then no complaints here.
It’s a good problem to have. We’ve gone over that a little bit and we’re on the verge of about 400 gigabytes a week at this point. So we went and found another solution that was gonna allow us to continue to serve everybody as we grow. Like I said, there shouldn’t be any problems, but if there are, email me at Judson, get real rei.com and I’ll get on it right away.
Anyways, we had a ton of emails this week and we wanted to answer a few of ’em on the air, so let’s get to that right away.
First we had Travis from Houston who wrote to us. He was telling us about he got a job transfer that was gonna make him change towns and relocate. And he was having trouble selling the house that he was currently living in. He had been thinking about renting it and was concerned about being a landlord, but he’s been a listener for a while and what he heard from our guests and us on the show helped him to step up there and become a landlord.
Yeah, wait a second. I think that might have been a shameless self-promotion. Anyway, he ended up renting it with a year lease and six months rent paid up front. Holy cow. We need, I’m just happy when we get our tenants to pay us one month at a time. So let’s get Travis on the show so he can tell us how he was able to do that.
Seriously, we are really proud of you, Travis. He got past the fear, analyzed the situation, and turned a problem into a profit. From what we can tell this, that’s what this game is all about. Everyone we interview is successful because they turn problems into profits. Travis has stated now he’s looking for a couple more properties in his new hometown of Houston, and we’re sure he is gonna do
well.
It we had another email from Greg this week, and Greg had another question, which I answered off the air, but he made a comment too about our intro music and the music we use and where we got that from. Greg I’m a musician actually, so I write a lot of this stuff. Most of that stuff was sequenced music where I just take loops that were already created and move ’em around to put ’em in that in different orders with different instrumentation going on at the same time.
So that’s how we created that. But I do appreciate the compliments and we’ll probably try out some different music as we go. We’ve been using that stuff almost since the beginning. I think the first four weeks we used another. Song of mine, and it was like a sleeper. So we had to change a little more lively music, jazz it up a bit.
Yeah, that’s right. And had an email from Jason from Michigan this week. Jason asked a really interesting question about pmi. It’s private mortgage insurance and the possibility of doing short sales with banks. Now to refresh everybody’s memory, a short sale is a situation where you got a house that’s in the foreclosure process and you as the investor step in to help the homeowner out and due to disrepair, declining housing values or over refinancing whatever it is, that the house just isn’t worth what it was financed for at one point in time.
And the only way to make the deal work is to go to the bank and work out a solution where you buy the house for less than what the mortgage is. Now for the pmi, the private mortgage insurance a lot of us know about that if you own a home and you’ve financed it for more than 80% of the value of the home.
So say you have a house that’s a hundred thousand dollars and you put $5,000 down on it, that they require you to have insurance. What this does, it protects the bank in case you default on the loan. So if you stop making that payment and they foreclose, then the bank can go back to the insurance company and get 80%, or in this case, $80,000 from the insurance company to mitigate their losses.
So what Jason was asking about is it make any sense to go and pursue these short sales in a situation where you want the house for less than 80% because they’ve got that insurance there and you know they can step in and get 80% and you’re offering them 70% or less of the value.
So why would they do that? Here’s the answer, and it’s twofold. The first is we do short sales and we don’t know everything about them, but we can tell you a little bit, at least from experience, And first of all, for whatever reason, banks will take less than 80% on a house that has pmi. We need a banker to come on the show sometimes just to explain it to us from why they do it.
But I can tell you, here’s our experience. We had a house that, these are the real numbers that is financed for 105,000. It was worth 110 in good shape, and it sure wasn’t at the time when we bought it Uhuh, but the bank accepted $58,000. Now 105 is well over 80% and they had PMI and 58,000 as well under 80%.
They took
less than 80%. Yeah. Because they could have gotten from the bank or from the insurance company. They should, they could have gotten somewhere around 80,000, a little over 80,000 for that. But they were willing to accept our offer and we can’t explain why. Yeah. Not every bank will do it.
Some will call in that insurance policy and cash out that way, but some of them do.
Yeah. I think it’s a matter of dealing with that insurance. It’s a matter of timing and getting rid of unperforming assets and just a whole bunch of things. Now, the second reason to pursue the house with 80% PMI is basically appreciation.
And that is what if the owner bought the house for a hundred thousand dollars and financed a hundred percent of it? All right? , so eight years ago, okay, now in some markets that house is gonna be worth 250 grand today, right? The bank is gonna get $80,000 pmi, they aren’t getting 80% of what the house is worth.
They’re getting 80% of what the mortgage was. So they’re gonna get $80,000. Now, would you offer the bank more than the 80% on a house is worth two 50 now? I’d
probably just pay off the note . Yeah. If it’s worth 250.
See, so the bank will accept offers on houses that have PMI on them. It just depends on the situation, right?
Some because it’s a better deal for the bank and some we don’t know why, but they do it. Yeah.
There’s not logic to it all the time. We also had an email from Mike. He was asking about situations in buying and financing a bunch of rental houses, and Deanna Vallejo spoke about that in episode five.
Mortgage Magic. The question is basically if a lender looks at your debt ratio, the monthly payments divided by the monthly income, they only lend up to a certain ratio. So how do you finance a bunch of houses? The answer is the fact that this is a business not a purchase. In business, you buy assets and they produce income.
Yay. Income. We like income. . It’s better than out go companies like to lend money on assets that produce income. That’s much better than lending money on a liability. So they wanna buy, they like lending money when it’s a rental property that’s gonna produce income and keep their mortgage getting paid.
Yep. If it’s a business and they’re loaning down on a piece of machinery that’s gonna depreciate, then it’s, that’s a liability for a company. And so it’s. It’s a different kind of loan. So they look at it differently.
They got their butts covered a little more, right? When something’s making money, as opposed to when you’re just spending money,
right?
So mortgage lenders will look at your current rental mortgages and if you take the rent for each one, minus 25% of that rental income for the expenses and the management you can offset the mortgage by that much. So if you have a mortgage on a rental of $575, that’s your monthly mortgage payment and you’re renting it out for $750, you have to take 25% off the top of that 750.
That gets you to $582 that you can count towards that monthly mortgage. So instead of it negatively impacting your debt ratio you’ve got $7 a month in profit . And for mortgage purposes it’s $7 a month for you. It’s better than that cash flow wise, right? But we’re talking about banks and numbers and they’re gonna be very conservative.
And so they make you take that 25% off because what if the water heater goes, or what if the roof needs replacement? They’re always looking. Or what if your tenant leaves? They’re always looking at that 25% and wanting to make sure that they cover their assets. So it doesn’t account against your debt ratio.
That’s how you can buy more houses. The key is they need to be rented with a written lease because the lenders are gonna want proof that you’re getting paid or at least you’re supposed to be getting paid unless you have a
contract. You have a contract that says it might be the first month and you’re in a situation where you just bought three houses.
You refi this one and it’s been sitting for two months and now you’ve got a tenant moving in, but they haven’t actually started the lease yet. You wanna refi another one. The lender’s gonna say, do you have a lease? Yeah, okay, it’s July 15th. I’ve got a lease. They’re moving in August 1st, they’re gonna say, okay, we’ll count that now,
but we’ll count 75% of your monthly rental income, the monthly run amount towards that.
That’s how they look at that. So the other part of the question is the number of loans that you can get, because there’s a lot of lenders that are gonna limit you on the number of loans that they’ll write with you because they don’t want you owning the bank. They wanna own you. . Does that make sense to everybody?
the bank doesn’t wanna be under your thumb, they want you under theirs. So what you need to do is go find a good investor-friendly banker, mortgage broker, who will help you find some good programs. And Deanna it works with. She’s part of a lending group that will give up to 20 lo 20 properties loans in each of our names.
So Judd gets 20 in his name. And I get 20 in mine. And please pay attention to that. We don’t go and put both of our names on these mortgages. And that’s something that because we are husband and wife, We do because we’re married and Judd knows that I’ll kill him if he tries to run off and stiff me on things.
And
it’s a, and it’s a marital property state, North Carolina, so I don’t
a choice. It’s North Carolina, so legally he can’t. But in other states, if you’re not working with a married spouse, you might have partnership agreements that will cover you, but that way they’re in both of our names so that we can get 40 properties between the two of us by, through just that one mortgage lender instead of having to go out and find another mortgage lender.
Now if we end up with 40, 40 mortgages we just need to figure out something else to do cuz the first of the month is, gets hairy, but, ah, Anyway, back to back on track. Find somebody that is already doing this on a daily basis for other investors. Find a broker, investment friendly broker, like we said.
And just a quick blog for Deanna, www dot deanna Valle, d e a n a V as in Victor, a l e o.com for, that’s her contact information. We’re not getting anything out of that. We just trust her and we know that she can make deals work for everybody out
there. I can’t tell you how many times we’ve, and I would normally say I’m not slamming mortgage brokers here, but I am
I can’t tell you how many times we’ve talked to people, gotten business cards at investor meetings from mortgage brokers that tell us, oh, yeah, all we do is investor loans, or we do investor loans all the time. We know exactly what it is. Then we pony up to the table with what should be a slam dunk of a deal for them.
They should just need our information, which we keep in a book and we’ve got all of our pay stubs and our taxes and everything. I’m
ready to go when the deals come. You gotta have your stuff
ready. Yeah. We’re the dream clients. . And you don’t believe us. Ask Dean. Dean’s told us very happy when, because she needs to ask nothing from us.
And we’re in a good situation where it’s easy to give us a loan. So we go and talk to some other people that tell us about how they’re, all they do is investment loans and we can do all types of things. We can work anything. We’re very flexible. Yeah. And I go back, take out of the box, I go back to ’em and ask em to pony up and they’re like, oh, we don’t know.
We can do that. Or We don’t know this or that. No, you’re a residential mortgage broker and it’s all you do is owner occupied homes. Just because you say you do other things when it comes time to, to actually make it happen. To put up or shut up. Yeah. They’re just like so the key here, I’m not trying to complain , but the key is to find somebody.
Understands and works with investors, and it’s somebody like Deanna does that. If you don’t wanna work with Deanna, there’s people in your local area
and in a, there’ll be some mortgage lenders that that
really
do. Yeah, but listen, don’t talk to the mortgage lender about how good they are. Talk to other investors to find somebody that’s good.
Get some referrals. It might be somebody that’s not even at that meeting, that’s the best one to use, right? So look at that too. Okay. Enough complaining. All right. Off the soapbox, . Yeah. Remember, like I said earlier, if you do have any questions or comments and you’d like to hear your emails right on the air, we’ll get to, as many of ’em as we can during the week.
Go to, you can email us that Get Real Show get real rei.com, or you can email us each individual, Judson or Lynn, get real rei.com and let us know where you live too. I’ve noticed a lot of people do that and some don’t. But if you let us know, then we know where everybody’s coming from. We can maybe hook you up with local resources so that you can find people and we can help you find people in your area to answer your questions.
We have connections in that area. We can make a hook up there.
We have listeners all over the country and in a few other countries if we know where you’re coming from, we might be able to answer it or get you to the right place a little easier. So anyways, we got a marathon show today.
So let’s go on to talk to Greg before we run out of time here.
We have Greg Gardner with us here today, and Greg has a company called s and j Properties and Greg does wholesaling, which I know we’ve talked about on the show before, but for those that don’t remember, basically he, he finds properties at a really good deal and works with other investors to help them out.
Now, Greg, can you tell us a little bit. About your company and how, we’re talking about wholesaling, how that differs from what maybe the average investor does one property at a time. Yeah. A lot
of investors, what on late night TV and what a lot of people teach is buying a house at un, something under value for whatever reason.
Distressed property, distressed owner, there’s a thousand different reasons, but for whatever reason, they buy the property less than what it is or could be worth, and then they fix it up and they sell it, or they rent it. They, in some way hold onto this property for some period of time. And with wholesaling, we don’t hold onto it.
Typically, I buy and sell the same day, at the same table at the same time. Now, sometimes if I’m selling to someone whose lender requires me to be on title for. A week, 14 days, that’s sometimes the case. And I will fund the deal close on it and sit on it for a couple of weeks if I need to.
But for the most part, it’s a very quick profit and a great way to get some now cash.
Gotcha. So a lot of the folks that that listen to our show that write in will say, I’m interested in getting started in investing, but I really have zero cash right now to buy houses. This would be a way for them to start building up some money to either spend or use for investing in other ways later.
Absolutely.
I’m an educator also, and I never think that anybody should put all their eggs into one basket. If you’re just a wholesaler, you’ve got a job, you quit wholesaling, you quit making money. I think there’s a lot of other avenues of real estate that people need to go into in addition to wholesaling.
But wholesaling is probably the best way to generate. Now money that you can have in a matter of, 14 to 21 days.
Got it. So grocery money, . Yes. Got it. So a big part of your business, obviously, because you’re moving a lot of houses through to, to get that now, money, over and over again.
It you have to worry about getting your offers accepted on those houses that, that maybe somebody else might not be able to get. It is that basically your competitive advantage.
It is, you’ve gotta make your offer stand out for whatever reason, whether it’s cash, whether it’s high, or whatever you can do to make your offer stand out above everybody else’s.
Because there’s a lot of people out there that I’m competing against people that may typically be able to spend a little more than I’m willing to, and I’ve gotta make my offer look better than theirs by some means.
So what do you do to make your offer stand out?
Oh, that’s the big question. . Of course there are a lot of different things that you can do.
Primarily for me, it’s making an offer, cash, making a cash offer and being able to close quickly. I had a house in Charlotte, North Carolina that was listed for 2 49. I went in and offered full price and they immediately came back and said, this is a multiple offer situation. It is definitely gonna go over asking price.
You need to give us your highest and best immediately. And I refigured my numbers and I was able to go, about that. In fact, I offered $288,000. Yeah. I said this is all cash and I’ll close in 21 days. And as I found out later, someone else offered $301,000 all cash close in 30 days. They took my offer that was, almost 13, almost $15,000 lower just because I was able to close a little quicker.
There were other offers that were higher than that, that were subject to financing that they did not accept because this finance company wanted to move this house quickly. Gotcha.
So for those of us that don’t have $280,000 in cash, how do we make an all cash offer?
There, I don’t have $288,000 in cash either, but there, there’s a whole nother episode that can deal with coming to, where to get cash.
There’s lots of people that can cover that, but if you wanna make your offer stand out, one the other things that I did, if I had just gone to any agent and made that offer, it may not have been as enticing as it was. To whom I made the offer to, I went straight to the listing agent. I don’t have an exclusive agreement with any part, any single, particular agent.
If I can, I by all means, wanna deal with the listing agent. Why is that? Because if you are looking at $290,000 with my offer, and $300,000 was somebody else’s offer, but with my offer, she gets the whole 6% commission. And with somebody else’s, she gets 3%. All of a sudden she’s got, I don’t know what the map is on that, but 15,000 reasons for the seller to take my offer.
Now is she doing anything unethical by getting them to take my offer? I don’t think so, because what she does is I bought properties from that agent before and I, and she told me, she said she went to the seller, which was a national lender, and she said, I know this person has bought properties from me in the past.
This person will close this deal, I feel like he’s the better option for us to take. So she enco, she simply informed the sellers that she knew me, that I bought properties from her in the past. She did what she thought was serving the seller’s best interest. And it was the seller’s decision to take my lower offer, but through a little encouraging from the listing agent.
Okay. And I feel like if that offer had come through another agent, then she’d have, would’ve simply been a mathematical thing. Which offer is she gonna get more money with? And if one 15, $20,000 higher than mine, then she’s gonna get another, thousand, thousand dollars from the deal.
Sure. That makes sense. Everybody has to look out for their interest. She’s able to represent you because she knows you. And that’s important too. That makes sense. But the same thing
is true. Even if she hadn’t known me, she, she can still say, if you represent yourself as a serious investor who knows what you’re doing, educate yourself before you go out and start making offers.
If you do that and you sound intelligent, you sound like you know what you’re doing. Then when you make that offer, that agent can legitimately go to the seller. Even if your offer is a little bit lower, they can go say, Hey, this guy sounds like he knows what he’s doing. He’s done his research, he’s done his inspection.
This guy’s ready to close his house, and seems like a serious investor. All of a sudden, the agent has made you sound better than somebody else whose offer may be higher than yours. Got it.
Cause sellers want houses to close. That’s their biggest thing. They’ll trade a couple bucks for knowing they’re gonna close.
Yeah.
Even individuals, especially banks are a lot more serious when you’re willing to close quick. Price is obviously a consideration, but I think speed is a bigger consideration a lot of times with individuals, especially if you’re somebody, if the distress is monetary, that closing quickly and letting them know that you’re serious and that you’re not gonna back out of their field can a lot of times make the difference between them taking your offer or someone else’s.
Okay. All right.
I guess along the same lines of being serious, we’re always talking about, you don’t want to get into a situation that you can’t get out of. So you have contingency clauses, but there’s a balance, right? If we have 80 contingency clauses, you’re not gonna look very professional to to that bank.
What kind of clauses do you put in your contracts?
I only use one. Wow. And you have to be careful the way you word it. And I’ve read books. There’s actually a book I’ve. book a million. It’s called 1,001 Weasel Clause . If you walk into a room that has a thousand doors in it and you wanna get outta that room, you only have to walk through one.
You can’t walk through a thousand doors. You don’t need to have 10 clauses, five clauses. If you’ve got one that will work, then that’s all you need. A lot of people like to write in there that the offer is subject to buyer’s inspection and they leave it just like that. A lot of times they wanna limit the inspection period, but that’s a great clause to use.
The one that I use and that I’ve come to really is I, and like I said, you have to word this carefully. The offer is subject to an acceptable appraisal to the buyer, and you have to add that, not just acceptable appraisal, but to the buyer on the end because. A lot of people consider an acceptable appraisal, one that is at or over the asking or the sale price.
And I don’t need it to appra. If I’m paying $30,000 per house, I’m not gonna be happy with a $35,000 appraisal. Yeah. So I have to make sure that it’s acceptable to me. And then, if it’s not acceptable, say the house needs you expected $10,000 in repairs and the appraisal, it’ll appraise for 70, but only if you do $20,000 in repairs and your appraiser lists those repairs, then all of a sudden, even though it’s a repair issue, not a value issue, those issues are still addressed in your appraisal.
And therefore the appraisal is unacceptable. So now the last thing I think anybody should do is plan on backing out of a contract. I think that gives investors in general a bad name. Yeah. And we need to have our due diligence done prior to. That point this year, I’ve had one house that unfortunately I’ve not been able to purchase, and that wasn’t because it didn’t appraise.
That was actually because some paperwork didn’t get it done in the attorney’s office and they had multiple backup offers and they opted to go with one of those backup offers rather than extending me another 48 hours. Yeah. So I typically have got most of my due diligence done. I know basically what it’s gonna appraise for, and I try to give myself a little bit of a cushion.
So as long as I’m within 5%, I’m okay. If I expect 70 and it’s 67, 68, I’m fine. Okay. If I expect 70 and it’s 60, then obviously we’ve got an issue. . Okay.
So how long you threw out 21 days. Is that usually how, wait, do you close, how long you wait to close on a house or is it.
It used to before I, I’m closing anywhere from three to seven or eight houses a month right now.
So I’m trying to extend that and I’m asking for 30 days when I was just getting started. In order to make myself stand out, I would a lot of times say 10 days. Okay. I’d say 10 days from acceptance of the contract. Then once I felt like I was gonna get, once the agent said, looks like we’re gonna get this under contract, I would call my appraiser, call my contractor, get everybody out there and tell my appraiser, listen, if you can knock this out for me in three days, there’s a hundred dollars bonus in it for you.
Because I only had 10 days to get everything done, including getting the property sold. So that gets really tight. But now I typically try to ask for 30 days. Okay.
Okay. And they’re, they accept
that most of the time they will. Now, if it’s a multiple offer situation, I’ll sometimes scale that back to 14 days.
Just to make my offer stand out a little bit. So for the most part I ask for
- I gotcha. Okay. You just gave us a great idea because we got a house that we have to close with the bank on the 28th and they just told us on Wednesday that they’d take our offer and we were worried about getting an appraiser, so I never thought about throwing money at it.
That’s probably a good idea, .
Yeah, it’s a great idea. The same thing works with your contractors. When you’re getting the estimate or when you’re getting the job done, you finish this early, there’s $500 in it for you. If they’re looking at running, if they’re already two weeks behind, I said, look, if you can have this done by Friday, there’s a $500 bonus in it for you.
Yeah. You’d be amazed how well that works to get somebody motivated. Yeah, that’s a good
idea. That’s a good idea too. We’ve got some that say if you get it done within six months of when you said you’re gonna do it, we’ll give you a 500 bucks. Oh man. . So now you’re buying the house and maybe holding onto it, but usually you’re selling it right away.
Do the buyers and the sellers know that you’re making money on this deal? Absolutely.
I feel like that’s the only way to do business. I typically, some people that, some wholesalers will, they’ll do double closings. They’ll close on the same day, they’ll walk into one room and they’ll buy it from this person, and then they’ll walk into the next room.
They’ll wait till that person leaves, and then they’ll go in the next room and they’ll sell it to somebody. But it’s all public information. If somebody wants to know what I paid for it, they can simply go on the county website and find out. So I don’t try to hide what I’m making. I typically make three to $7,000 per house.
If it’s a $30,000 house, I’m gonna, I’m not gonna make this much. If it’s a $280,000 house, I’m gonna try to make eight to $10,000. . , and it’s still a good deal for the person I’m selling it to. So if they don’t want me to make that, then they’re probably not the right person for me to sell to. So a lot of times I close in the same room.
Of course, most of the time I’m buying from banks, so they’re not there anyway, right? But myself and my buyer, when we all attend, we’ll go in the same room. I’ll sign the paperwork to buy the house, and right there in front of ’em, I’ll sign the paperwork, sell the house. So a lot of times I simply give them copies of everything because for the most, most the time they already know, they’ve asked me how much you make it on this.
And I’ve got no qualms with selling ’em because I work my butt off for the money that I make. Sure. And I’m out there, eight to 10 hours a day sometimes looking for that one deal a week. And I feel like I should be compensated for that. So nobody should feel like they should hide what they’re making, whether it’s, as long as it’s reasonable.
If you’re wholesaling a $50,000 house and you’re making $15,000, then yeah, you might wanna hide it because I feel like that’s a little
unreasonable. Yeah, I agree with that. Yeah. So now you were talking about everybody knowing, and you deal a lot with banks. How do you work around it with the bank when you write up the contract, knowing that you’re going to assign it, essentially assign it to somebody else?
See there’s the key. I don’t assign the contracts when you assign it. A lot of times the banks have issues with assignments. Of course. There’s lots of ways to get around that, through digg it into a trust. And if you’ve got a cash buyer, there’s lots of ways to sidestep that. But I feel like the cleanest business is to simply close on the house.
Okay? If you’re upfront and everybody knows what you’re doing and your buyer either has cash or his lender is okay with it, then what you do is you use, I use buyer’s funds to make my purchases. Now, in some cases, they’re getting financed and the my buyer’s lender is gonna say no, I’m not. You’re not using our money to buy your house.
And what I’ll do is I’ll simply fund the deal if I have to. Now, in the beginning, you can use a hard money loan for that. There are lots of private lenders who will say, look, if you just need the money for a couple hours to do a double closing, then I’ll do that and I’ll charge you two points or five points, whatever.
It varies, okay? But now I simply will just fund the deal. And it just makes it a lot cleaner practice. Now you’re gonna enue or incur two closing costs, my closing to purchase and then my closing to sell. A lot of times my attorneys will gimme a little bit of a break on that.
My typical closing costs on my average house is about with recording courier fees, everything, it’s about 650 to $700. So it’s
very reasonable. Yeah, that’s not bad.
You’re doing double closings. Most attorneys will give you a break on that price.
Yeah. Cuz doing the title work is pretty easy to, cuz you’re only doing it once essentially ,
right?
Yeah. They’re getting paid twice, even though they’re doing it once.
Yeah. . Yeah, it’s easy to fill out the paperwork both times. Same way, same address. Yeah. So do you have any other tips for us as far as, we got new investors out there, a lot of ’em listening and they’ve, and I know you’ve been through it and we have to, the first thing you do, you get out there, you start trying to make a whole bunch of offers.
And they, they don’t get accepted probably half the time they come back and say, give us highest and best, and you don’t get anything. And you walk away and you say, there’s just, there’s no way to get deals out there. Is there another tip you have that might help those folks out?
First of all is you don’t be discouraged.
When I first started, I made a lot of offers. The fir very first offer that I got accepted terrified me. I went directly to a loan officer and I said somebody that I knew, I said, okay, I need to finance this and I want to borrow 120% of the purchase price. , no collateral on a personal loan. And they said, you can’t do that.
And I said, great. Can you write me a letter of denial? And I faxed it over to the company because it just terrified me that I now had a house under contract . What the heck was I gonna do with it? And, that was probably my, I probably made 50 or more offers by the time I got that under contract.
And so don’t give up first of all. Okay? The other thing is go to the listing agents and ask them, be honest with us. Say, listen, I’m try, I’m an investor and here’s where I, here’s approximately where I need to be. Let’s say you’ve got a house that’s listed those, a house that was listed in Kings Mountain, North Carolina last week listed for a little over $40,000 for just under 41.
And I went to the agent and I said, listen, I’d love to buy this property, but before we go through the head headache of writing everything up let me just tell you I’m gonna need to pick this up in the mid 30. Do you think we need to write an offer? And the agent said, I think this is gonna be a multiple offer situation.
I think this house is gonna sell for list price or above. So give me your highest and best. And I said, okay. My highest and best is gonna be $37,900. As it turned out, that was not enough to buy the property. . And the agent called me and she said, listen, do you want me to write this up because I do have another offer and it is higher than yours?
And I’d already told her, I said, I’m not gonna come back to you and go higher. This is truly my highest and best. And that’s the key. I’ve got a reputation. If I tell the agent that they know that I’m not gonna come back and say, okay, I’ll go 40. Okay. But just be honest. Just ask the agent. That way it’s gonna keep you from writing up a bunch of offers that are not gonna be accepted.
It’s going keep you from having a reputation of throwing out low ball offers. Because if you do that, nobody’s gonna want to deal with you. Okay? So go to the listing agent and just be honest. Let them know what you feel like you could pay. If they say, listen, I can submit anything, let’s go ahead and write it up, then by all means, write it up.
They may come back to you and say, Greg 30 seven’s just not gonna get it. But if you could get up to, pretty close to 40, then I think it might be worth writing up. A lot of times they’ll simply tell you, if you ask the question, they’ll simply tell you, it’s gonna take $40,000 to buy this house if you wanna buy it right now.
Now does that always mean I’m gonna offer 40? Absolutely not. What I’ll typically say is, listen, I think I can get real close to that. Let’s at least give them an opportunity. Let’s go in at 39 5. If she just absolutely says, somebody just offered 39 5, they were declined, the bank didn’t even encounter, then I’m not gonna waste anybody’s time, especially mine , because I got better things to do than write up offers that aren’t gonna be, you
know, accepted.
Yeah. That’s just a waste of paper. I gotcha. Waste of
paper time and reputation. I can make more money, but I can’t rebuild a reputation once it’s been damaged by making ridiculous offers.
Okay. I think you’ve given everybody a good, real, a good real world understanding of how to get offers accepted not some crazy ideas that some of the people come up with.
I just try. Yeah. If people are interested in more information. And I know that you’ve been really good. You live in this area, so we know you, you’ve been really good at giving back to the community and helping educate other people. Part of the reason you came on to talk to our folks today do you have an event coming up this fall?
Is that correct? In the
end of the end of September, we’ve got a three day event where we’re gonna cover everything from investing without any cash of your own. Okay. A lot of people ask me how have I done that? I’ve bought, $1.4 million in houses this year and have only funded one deal.
Wow. And I did that with somebody else’s money, . And it’s really not that difficult, and we’re gonna cover everything from getting started without cash to. Making offers, evaluating offers, selling offers, and then what to do with your money to hopefully protect yourself and your assets in order to be able to keep what you make.
It’s gonna be a jam packed weekend from Friday afternoon till Sunday afternoon. Okay. And if anybody wants more information about it, there’s two ways they can contact me. Okay? The first and best way to reach me, because I stay on my cell phone a lot, is by email. Okay? And I’ve got two email addresses, and it’s Greg g r e g, at it’s s and j prop.com.
But it’s actually a lot of people call it Sand J. It’s Greg, s a n d j p r o p.com. That’s my primary email address, Greg s and j prop.com. My secondary email address with another server just in case one goes down is also Greg g r e g sjp, A n d i.com. It’s s j p and i.com and I’m breachable at one of those two email addresses just about any time.
And obviously, the old cell phone is (704) 460-8468. Now really difficult to reach on the cell phone. A lot of times they can reach somebody at the office, whether it’s me or somebody else. That’s 8 0 3 2 2 2 2 3 7 8. But I should be reachable at one of those numbers or email addresses just about any time.
Okay. And for everybody that’s driving in their car right now, we’ll put that on our show notes. So when you go to r i.com Yeah, you can just pick it up there. All of Greg’s information will be available there. Oh, Greg, we really appreciate you coming on. For everybody that doesn’t know Greg’s out traveling today, he stopped just long enough to talk to us, so we really appreciate him taking that effort.
Cool. Yeah, you have a good one and we’ll catch you when you get back into town. Thanks a lot, Greg. Thanks, y’all too.
Okay, now it’s time for us to get to our Dare to be dumb. I still don’t like that name. I know everybody else is starting to like it, but. . I think it’s proving that maybe as we’re moving along in this, we’re seeing that maybe it’s not so dumb, but just a matter of taking action. All right.
Anyway,
anyways, Lynn doesn’t like that name. I used it one time as a joke and now it’s done. Now we’re getting emails and everybody’s referring to it as our dare to be dumb segment so it’s probably gonna stick start to stick. Yeah. Anyways, we were on vacation a good part of last week, at the end of last week, in the beginning of this past week.
It’s the magic of recording, huh? Yeah, we were still here on Sunday. Everybody got to hear the show, but yeah,
magically the show appeared on Sunday, but we were sleeping on the beach ,
so we had a shortened week, but a very productive week. First thing when I walked into the office on Monday, no, Tuesday morning, not morning, I, sorry, I was sleeping.
There was a fax from the bank with an acceptance letter on a short sale offer that we were working on. So that’s always a great way to come home is you got a deal sitting there, you’re off on vacation and the bank’s working hard to help you out. Yeah.
Let’s just say too that we also did make some business phone calls while we were on vacation.
That’s true. That’s the magic of cell phones. So I think maybe part of those trip expenses can get, become business expenses. Yeah. But I’ll anybody from the irs, I’ll, but I’ll talk my accountant about that
first. Yeah. So anyways, this home is almost, a perfect situation. It really needs no repairs.
We gotta go in there and paint it and do a little landscaping to spruce it up on the outside. It hasn’t been lived in a while. So you clean carpets? Yeah. Shrubs aren’t doing too good. So it needs to be worked out and fritted up. Yeah. I gotta clean the carpet. Not a big deal. It’s a five year old house, four year old house, five year old house, yeah.
. So anyways, the homeowner, without getting into it too much, was in a situation where their spouse had passed away. And they didn’t, hadn’t worked before. So there really wasn’t any income coming in. We were able to purchase it at a discount. The homeowner was able to be saved from foreclosure on their credit, and the bank really didn’t do all that bad either from what we’re paying them.
We paid them a pretty good chunk of money for this. Now the tough part, they want us to close by the end of July , which if you can do the math is like a week and a half away or something like that. So we need to finance it quickly, and that’s not always the easiest thing. There’s gonna be a little more to come later on that we’ll talk about how we ended up financing it, because this is not a, your usual hard money deal where you’re put, you need a whole bunch of repair money.
And a small amount. This is really big chunk of, it’s just the purchase price and very small amount of, of repair costs. With a
lot of equity. And let’s just, I just wanna add on here quick that. This was supposed to go to the foreclosure auction at the courthouse on Tuesday morning.
And we worked the deal over the weekend through the bank and they accepted, they postponed the auction so that they could analyze it more readily. And then, like Judd said, when we walked in the office Tuesday morning, they’d accepted our offer. Now, did we pay too much? No. Judd thinks maybe we should have offered less, but we knew that we had to act fast because it was going to foreclosure.
We wanted to get the bank to pay attention to us. So I didn’t wanna start out really low balling ’em and having them laugh at us. So I probably offered more than I should have, but it’s still gonna work out to be a good deal for us when it’s all said and done. And like we say, we’ll have more information on that as we move forward because it’s what we did last week and we haven’t gotten any further than
that at this point. And there’s a good lesson for folks out there. I’ve always said my number one rule is when it comes to real estate investing and you’re learning from other people. If they tell you there’s only one way to do it, don’t listen to that person . And if they also tell you that this is how it is, absolutely 100% of the time, don’t listen to ’em either.
This was a situation where this person came to us 10 days before the sale, right? And the amount we were paying for the house was a pretty good chunk of money, right? So for those folks out there that feel this way or have had other people tell ’em this one, Hey, you can’t work a deal in that short period of time.
Okay? , especially if you live in Irondale County. Trust me, you can’t do it. Don’t even
mess with them. Don’t even try it. It
won’t work. Yeah. We’ll keep ’em all for ourselves, . Second thing is if it’s over X percent, whatever that percent is, it’s a bad deal. Don’t always go with that because sometimes deals just because they’re over X percent.
When there’s more zeros at the end of. That could be a good deal. So that, that’s the two lessons from that property. All right.
So now we got our never ending rehab project. It just will not end. Ugh. I’m getting so frustrated. So LA on the last show, we told you that we had a punch list of little stuff left and it is little stuff, but there’s a couple of things on it that are preventing us right now from getting that final certificate of occupancy or co I guess that’s our word of the week, co certificate of Occupa.
That final inspection that lets somebody move in. And we had a handyman who was supposed to start two Wednesdays ago and we be done this last Wednesday. And he was a no-show. He never called. He, we’ve left messages, he’s just disappeared. And this week we had someone else come out and look at the work.
He is going to start on Wednesday. That’s what we know right now. , we can’t tell for sure, but we think that this guy is gonna be better because he was referred to us by another investor. There’s another lesson we somehow can’t seem to get it right. But yeah, it’s lesson use contractors, attorneys, accountants, everybody that is referred by another investor get because they have a track record of working
with investors.
Yeah. I can’t tell you how much time that would’ve saved us money too, in a lot of different situations. If we would’ve just done that. Upfront. Yeah. Went to other investors that we trust that know what they’re doing, that have track record of doing deals and use the people they recommend.
Right.
And you also don’t use the people that they say, oh, don’t use that guy, because they’ve learned that it’s cost them some money to
use that guy. Yeah. You run across the guy that’s rehab 50 houses and he says, don’t use that contractor . If you think, ah, yeah, he’s cheap and everything, but I can wrangle him.
I can manage him. Yeah. Yeah. We’ll see
the guy that, yeah, don’t even try. . All right.
What else? Okay, so we had a contractor, one that was referred to us. , looked at a house, that’s another big rehab project. Un, unfortunately, the situation is, right now, his numbers were higher than I would’ve liked.
Not, he wasn’t more, it was just, there’s more work than I saw up front. So it wa, it wasn’t like I could talk him down on his price. I think he was very reasonable. On his quote. And since we are basically cheap, we’re always trying to do the least amount of work. But I know he’s right. I know he does a good job and I know he knows what he is doing, so I just gotta leave it in his hands, as he says.
Gotta take the windows out and replace ’em, then I know that’s what has to be done. So now I need to go back to the seller with these repair numbers. Basically explain what my best price is. If you can’t help us with the sale price, then there’s really no reason to buy it. The numbers don’t work.
I really do like the house. It’s a nice project. It fits in really well with our timeframe because the other houses we’re acquiring right now just don’t need much work. So we’ve got time for a big rehab project. But I also understand that if the numbers say no, then I gotta say no because
for us it’s a numbers game.
It’s not an emotional game.
Yeah. So we’ll see what he says to, I’ll present him the numbers and explain why this is the best I can do. , he’s a professional real estate investor himself that’s wholesaling the property Either he’s gonna say, yeah, I can do that, or no, I’m gonna wait for somebody that doesn’t know what they’re doing to come along and sell the house to them.
All right couple more things that ju doesn’t have in our notes here, but I want to touch on. The first one is the one that we’ve been watching at the courthouse for upsets. It has been upset again by someone other than us and we are gonna continue to monitor it. It’s gonna come to the point here that it’s just not, the bids are too high for what we’re gonna pay for it cuz it’s like all about the numbers, like we said.
So we’ll continue to monitor that one. I call my friend up at the courthouse every few days and see if a new upsets come in and find out what the new upset bit is and we’ll just keep you informed of what happens on that one. The second thing is that Judd earlier this week was monitoring his he went back to check an email account that he hasn’t checked in months.
about seven months. Yeah, because he, it hasn’t, we, it’s not one that we use regularly, but it’s one that’s on a lot of business cards that we’ve handed out. And there was an email from January from a contractor that we really liked who used to work almost exclusively for one Rehaber, but he said he didn’t work for that guy anymore and he is looking for jobs and he started his own company.
And so now we’ve got him looking at deals for us, looking at looking him over before we buy him, giving us estimates because he’s a good guy and he’s fair, and he is reasonably priced and we know that we can work with him. And so the lesson on that one is when you start, we have several email addresses for both of us.
When you start getting an abundance of ’em, keep a list of them somewhere or keep track. Always make sure that you monitor that because we lost track of this guy. We didn’t have a phone number for him. And if we could have found him six months ago, our never ending rehab project could have been done back in probably March and already sold at least.
Yeah. Yeah. . So there’s another lesson learned. Yeah. All right. Now we know that we’ve, you’ve all heard a few times about it from us, but the Georgia R Convention and trade shows coming up in about a month, and we’re gonna be there, podcasting live and doing interviews with the show attendees. It’s gonna be an awesome time.
And we have Michelle Carey, president of the Georgia R Board back with us today to tell us more. Michelle, I guess the centered to the Georgia R Convention is educating its members and attendees that are not yet members. How many keynote and breakout speakers will you have this year? We will
have a total of 19 speakers.
We will have 14 convention speakers, four keynote speakers, and one guest. All in
total. Okay. Wow, that’s quite a few people. That’s a lot of people. Yeah. So now
that is a lot of people. Hey, variety is the name of the game here,
right? That’s
true. Everybody wants something different. Speaking of a variety, you’ve got 18 people.
Are there really 18 ways to invest in real estate? Or some of these folks gonna be repeating what somebody else is talking about? I don’t think it’s so much repeating, but there are so many ways to, to skin the cat in real estate. And when you talk about short sales, you have, so many different ways, to do the short sale and the marketing and everybody has their different opinion and you may really like the way one speaker teaches something and you may not like the way another one teaches something.
So there’s a wide variety of different personalities that are not necessarily teaching the same things, but there’s so much to, there’s so many people to choose from in order to get the information that you need.
Oh, okay. Gotcha. Now you have a couple of features that are not common to many investing conventions.
The first one of my favorite things is the round table discussions. Can you tell everybody how that works? Sure.
That’s one of our most popular features at our convention in the evenings. It starts about eight o’clock in the evening and we have up to 10 speakers in the room and each of them have a round table.
And you go into the room and you choose whatever speaker you wanna have, basically one-on-one with for 20 minutes. There’s usually maybe five or 10 people at each table, and the speaker will answer your questions individually right
there. Okay, cool. And then you can very,
Very popular. And then you get to move around to another speaker.
So you get a taste of a bunch of ’em. Yes. After 20 minutes, you move on to the next one and that, that’ll go on until 10 or
10 30 at night. So then you get to pick the brains of a lot of these different investors. Absolutely.
Yes. And the speakers love it too because sometimes they’ll speak to a large crowd and not be able to answer individual questions so much and they really enjoy the interaction, one on one.
Also I gotta tell you a quick story too. Last year when we were there A lot of, some folks might know these guys, but some don’t. We got stuck in between Richard Ro and Dan Duran. They both had tables there. And I gotta tell you I’ll be honest, we didn’t leave our table. We just stayed there because it was entertaining.
Just being between the two of them all night.
We would go back and forth between the two of them, and for people that don’t know they kinda work together. They’re business buddies. So we would go from Dan to Richard and then back to Dan, and then back to Richard . I know,
I know. It’s really fun.
It is .
So now another thing that you guys have is on Thursday there’s a whole day session where you just have one speaker who is the speaker this year? It’s Andy Holler and he’s the author of the Fortune magazine recommended book called Buy Low, rent Smart and Sell High. Oh, okay.
That’s, we’re real excited to have him this year. He’s gonna have the whole day, he’s gonna cover, from A to Z. Cool. And is there an additional charge for that session? There is his seminar is $79, but in that it includes a weekend convention pass. Oh, so really you’re getting his seminar for 30 bucks and you’re getting a convention, for 30 bucks.
Wow. That’s still $79 away from Free .
It is,
It’s a total no brainer just to pay for, you’re not just getting one seminar for $79, you’re getting the whole, kit and
caboodle for that price. Sometimes you would just go and pay for one day for one speaker for that, and this is like a whole weekend of, 18, 19 speakers.
Now, each year you have a keynote speaker, and this year you have a special guest speaker on Friday night. Can you tell us who. Sure.
That’s Neil bts, he is a nationally syndicated radio talk show host based out of Atlanta. But the reason we’re having him is our members have expressed interest in his speaking topic and that is the fair tax.
Yeah. And a lot of real estate investors wanna know how this fair tax is going to affect our real estate business. And that’s why we chose to have him in.
Okay.
Okay. And folks that haven’t heard Neil’s show too, will realize he’s entertaining. He’s a cutting edge guy. Very entertaining . Yes, he definitely is.
No doubt about that. He’s, he will definitely keep your attention and you’ll want more,
believe me. Cool.
That’ll be nice. Little bonus at the end of the day. We appreciate. Yeah. He’s
gonna have,
I’m sorry, he’s gonna have an hour and a half networking session with the folks who go to.
And then after that, he does his speech. Oh. So you’ll have the ability to actually interact with him before he gets up on stage.
Okay.
Cool. That’ll be really neat.
Great. Thanks so much.
I’m looking forward to it myself. .
Yeah.
Thanks for talking to us again today, Michelle.
We’ll catch you in a few more weeks as we get closer to the convention. My pleasure. Take care. Thanks. Now on top of these segments, we’re also going to have some of the speakers on the show to talk a little bit more about what you’re gonna hear from them at the convention. So look forward to those in the next few weeks, and that’ll really give you a really nice taste of the educational part of it
coming up. Let’s just review what we’ve got, some upcoming shows. Next week, Travis Schultz is gonna be talking with us about bookkeeping for real estate investors. If you don’t have many projects now, trust us that when you start getting rental properties plus some rehab projects, All going on at the same time.
The amount of paperwork can be staggering. We’ve got piles and it just gets overwhelming. Travis is gonna help us with getting that in line and talk about what we need to do to keep track of the stuff for our accountant at the end of the
year. I was at the bank the other day and the teller said to me when I was doing deposits and moving money from here to there and this, that, she said, this must be a nightmare for your bookkeeper
So I guess when the teller’s starting to give you a hard time, you know you got a problem. The week after that, we are gonna have Andy Heller. He’s the author of Buy Low, rent Smart Sell High. And that’s a book it, Forbes called it one of the 11 essential books for real estate investors. So obviously that’s, I think that’s a good book.
Yeah. And for those of you looking to grow your wealth over time, but still have some income today, that Andy’s system, he’s basically the guy for that. Listen in, you’re gonna get some real world tips about good solid investing and if you like what you hear, Andy is also gonna be the speaker for the full day seminar at the Georgia R Convention on Thursday, August 24th.
So you’ll be able to get a whole big taste then. That’s
the, that’s the supplemental session. The Thursday before the convention kicks off. Hey, I just noticed we didn’t have a website of the week.
Yeah, but we got something even better this week. Ooh. Cause we’re way over on time anyways. As.
We’ve got a contest. So instead of website of the week, we’re giving away free stuff.
Free.
We like free. We’re gonna give away two free passes to the Georgia R Convention and also one of our soon to be released, officially licensed. Get real t-shirts. Yeah, I’m gonna have a picture on it, on the show notes and on the website you can take a look at this week.
So how do you get it easy, I guess You’re gonna write to us with details of a real estate deal you’ve done, or if you haven’t done a deal yet, we aren’t gonna discriminate. You can tell us about what type of investing you wanna do and why you picked that based on your personal plan. Now, if you don’t know what we mean by personal plan, go back and listen to shows.
I think two through four. It was all about goal setting and plans. And you’ll understand what that means now to make it fair because we aren’t gonna go through and pick it out and have people complain about, why didn’t you pick me? We’re basically gonna choose from all those entries, one name at random, and you’ll get the prize that way.
And all we ask for in return is that once you get your t-shirt, if you could take a picture of yourself in the t-shirt and email it to us so that we can use it for promotional uses. Or even better wear the t-shirt to the Georgia R convention where you’re getting the tickets for, and we’ll get a picture of you and your t-shirt and the two of us there together.
Stop by the, our podcast booth. Yeah. And we’ll all get a picture in there together. Now you’ve got until midnight on Saturday the 22nd to get your entry in. And just email it to get real Show at Get real r ei.com
so you can get ready for next week. We’re gonna do this again, another contest that we’re gonna give away.
Two more. And t-shirts to ran a random winner who emails us. One thing they have learned from this show and how they’re implementing it, that better be an easy one. The hard part needs to be only picking one thing that you’ve learned. . Those emails are due by midnight Friday, the 27th, because Judd has to run sound at the church all weekend, and that starts on Saturday and gets to become a pretty much all weekend thing.
So we have to get it ready ahead of time. Yeah, run out of time. And just so everybody knows too, that those emails, once you send them to us, they become free rain property. We can mention the what you’re doing or what’s you, what your goals and plans are on the air. So we just use
first names.
That’s right.
Yeah. We’re not gonna disclose all that information. We everybody to learn. Able to share with everybody out there. Yeah. Wow.
We ran over this weekend, we had to cut some stuff out just to, to fit it into a reasonable timeframe. So some of the topics we’ll try to add back in, in a future show.
But anyways, until next week, remember to keep your head down, swing through the
ball in I, I think you got the wrong show, honey. Remember, get real. Oh yeah.
