21 Sep Interview with Eric Sage
Eric Sage with ericbuyshomes.com talks about how he’s building massive cashflow through Seller Carry Strategies.
Video Replay of Interview with Eric Sage
Podcast Replay of Interview with Eric Sage
00:00:00 Hey everyone, thank you for joining us for today’s episode of real estate disruptors. Today we’ve got Eric sage with Eric buys homes.com and is here to share how he’s flipped, moved lease option buying hold and all these other different creative strategies for over 500 properties and doing about three seller carry transactions per month. Uh, if this is your first time tuning in of Steve Trang broker, owner of Stunning Homes Realty, cofounder of the offer, fast app, the one app uni for wholesaling, and I help people become real estate entrepreneurs. If you’re excited for today’s show, please give me a wave. Please give me some thumbs up. And before we get started, I started this show because I want to get back to our community. Uh, I had a lot of struggle when I first started. We’ve talked about a little bit about some of the struggles you’ve had along the way and we want to shortcut that struggle for as many young leaders as possible.
00:00:49 I don’t charge a dime for this show, I don’t make any money doing this. So here’s all I ask. This is what it costs for you to listen to this show. If you get value out of this show, please tell a friend. Either share the episode right now, a friend below, or tell them your best takeaway from the show later on. That way we can all grow together. And don’t forget this is a live show. So please post your questions, Eric. More than happy to answer them. Uh, we don’t have to wait till the second half. You can ask them right away. Um, and so with that, are you ready? Sure. Okay. So what got you into real estate?
00:01:21 Oh, well, I will, I’ll, I’ll give you a kind of a. I’ll give you kind of a little history on, on my background is my backstory is, uh, I grew up in a small town, Yuma, Arizona. My goal in life was to be a professional golfer. Uh, I was very fortunate to play for a play golf in college. Went to the University of Arizona. Cool. Uh, and uh, after that, um, I played professional golf for about three years. Um, got a very, very. I’ve gotten the opportunity to do it and a huge blessing and a great support group. Um, but after traveling for three years and I’m kind of doing my thing, I decided I don’t want to do that anymore. So I went to corporate America. Uh, got my first job selling elevators through a friend, through a referral, elevators elevator, elevator salesmen. Who Do you contact? Well, it was a referral. It was a friend of mine was in the business. Um, and my golf career, my golf got me in the door. Uh, the, the actually the regional manager that hired me took me out golfing after the interview and after that.
00:02:26 But you go door to door, door knocking.
00:02:29 I mean, we have a. When you know, you look at all the buildings being erected right now, there’s an elevator in there. And uh, and so, uh, we had repairs. We had service in new construction. So I was kind of involved in that. Interesting. Uh, did that for about six, seven years and then got into the medical distribution business and sold diapers, adult diapers, so elevators to diapers. And right when I started the diaper sales, I started door knocking pre foreclosures. Uh, I wasn’t married and have kids and I was always an entrepreneur. I was always looking for ways to make extra money. Right. What year was this? Um, so that was probably 2003, 2004. Right. And bought my very, very first rental property in 2003 the wrong way, right? Realtor found it, didn’t make any money, didn’t have any cashflow, the whole thing, you know, nothing like I know now like how to buy a distressed property at a discount.
00:03:29 So anyway, fast forward a started door knocking, found a house. Let me tell you that my very first door knocking, it’s pretty cool. So a friend of mine says you need to start door knocking. Pre-Foreclosures. Well, I didn’t even know what a foreclosure was, much less pre foreclosure at the time. And so I picked a list of properties in the area I lived in, which happened to be in Chandler, Arizona, and very first door I knocked on, said the house was going to foreclosure on a Monday. Okay. So I knocked on Friday. So you didn’t give yourself a lot of time? Well, I didn’t know what I was doing. I didn’t know cars because I didn’t even know what I mean. All I knew is I bought a rental property, right. So anyway, knock on this door. And so nice house. I’m actually in Warner ranch, so not far from where this is being recorded.
00:04:21 And a knock on the door. Now picture the biggest lineman for the Arizona cardinals. Okay. Answering the door. That would be your vision of who answered. And I’m like, hello? Uh, I think your house go into foreclosure is like, no, it’s not inside of the door in my face. I go, hang on a second. So I went back to my car, wrote my name and phone number on a piece of paper and gave it to them and said, hey, if something changes, give me a call first door ever. Okay, sure enough, I get a call from who is a sorry from his, from his wife. So they had an issue. They’re there, their house was in foreclosure because their bankruptcy got discharged. So now they’re $52,000 in the rears and they need to get the money by Monday at what does it auction at 2:00.
00:05:10 Okay. Very first house ever. So now I call it, what do I do? I call it my local real estate buddy that sold me my rental property for fair market value or higher and said, hey man, I got this deal. What do I do? And he’s like, I don’t, I don’t know. I don’t even know what a foreclosure is either. Most real, most agents back then, 2003, 2004 weren’t real sure what that was. But a friend of mine, he goes, but you know what? Our buddy, he doesn’t work a lot, but I think he’s, um, I think he knows how to do this stuff and I’d actually played in a little. I was at a wedding with, with this guy, um, a few weeks before, so I call him up. I’m like, hey man, I got this deal. He’s like, how did you get that deal?
00:05:52 I’ve been door knocking that house for a year and a half. I’m like, I don’t know. I mean, God was looking down on me, have no idea. So anyway, uh, it’ll go towards. So we ended up saving the house, uh, uh, stopping the sale, saving the house for the family. We worked out a deal. I got paid a fee and my mentorship, you know, uh, uh, uh, started like, I started working with this guy because I’m like, this is, this is awesome. I made a $3,500 check. We got this house, we saved the people. They live in the house still, which I’m probably wouldn’t do pre foreclosure bailouts and leave him in the house program anymore. It worked out for me because we were ethical and did it right. But that’s what happened. So that’s, that’s how I found my mentor because I brought him a deal. Right. Well that’s cool.
00:06:38 And so then ended up working for this guy. For now I’m still selling diapers and I’m door knocking from 10 to two on Saturdays for pre foreclosure houses because he didn’t set me up on the system so I wasn’t wasting my time. Like pure luck. What is, what happened there? Yeah. And so I started door knocking, working for him and he would show up to the properties with me and we’ve signed the contracts and then the third Mercedes later, it’s third new Mercedes later that he pulled up and I’m like, dude, you can’t come to these meetings with me anymore. I’m driving my civic, we’re going to meet with because it’s intimidating. I thought, you know. And so, uh, so anyway, I did that with him for about a year, figured out I had my own money, I, I knew what to do. And the mentorship was over and I went and started buying my own houses and that’s Kinda how I got into real estate. It was a never, never looked back. My wife and my wife and I got married. She’s been my business partner ever since. And it’s been a rollercoaster, if you think about it from 2003 until 2018 right now. A couple of bumps along the way.
00:07:35 So we, uh, we were chatting. You’ve worn many different hats in real estate. So let’s just go. What are all the different hats you’ve worn?
00:07:47 Well, I mean I’ve always, I’ve been a solo preneur door knocking, right? Finding my own lists and a meeting with homeowners. I’m acquiring the properties, working with contractors. I will tell you that I’ve never actually physically worked on a property because I caused more problems than good. I will literally hurt myself on a job site and we had that in common, so I’m not, I’m not handy. It’s, it’s embarrassing. So anyway, but I know how to buy a house cheap and I know how to liquidate it. Right? Yeah. Um, so, uh, but we’ve had, we’ve had tons of employees, we’ve had no employees, we’ve had, you know, assistance, not assistance contractors, non contractors. Um, we’ve been hard money lenders, we’ve been, we’ve been landlords, we’ve been, we’ve done all this.
00:08:31 So you’ve done lease options? Yep. Seller carry assignment agreement for sale. Subject to. Yup. I mean, any. We had a short sell business, short sale business. Yep. You had 125.
00:08:45 Yeah. So kind of. So here’s what happened. So like this is the greatest thing about real estate in the cycle. We’re in like from 2003 till now. Like the cycles probably been the extreme ever in our history, would you say? Yeah, for sure. So, so I started door knocking, basically wholesaling and I didn’t even know it at the time. I was getting a fee to bring a deal to somebody so they could do whatever they want to with it. Um, but then, um, I went on my own and started doing my own deals and we would bail people out of foreclosure, we would help them out and then they would refinance and get the house back. You know, we keep the house as our equity and insecurity and then we’d work through the deal, but there was a time, uh, let’s say 2000, let’s say 2005 would have been a good time, but let’s say 2006 ish, um, was when it started flattening off and we were looking for equity.
00:09:34 There was no more equity in the houses. And so I told my wife, I’m like, I don’t know, like we have all these, we have 70 houses and the market’s doing some weird things and we don’t have, um, there’s no more equity deals. Like what do we do? And this is before I know what I know now, which there’s tons of free and clear houses all over the planet, but I was just searching a different one way. Essentially prefer just doing pre foreclosures, right? So, um, and it, and it was very profitable for us. We were very blessed and, and it worked out. But um, so then we decided, well, wait a minute, what’s going to happen to these people that owe more than their house is worth? So we started lost mitigation company. And then that worked out okay, but then we, we, we were spending six to nine months mitigating when the banks didn’t even know what was happening.
00:10:26 So we were getting, we were charging fees and then you couldn’t charge fees anymore. So we just decided, okay, we’re going to do a short sale company and we’re going to help people get rid of their houses. And, and uh, so we did that. But we did that for, for a period of time where we had 125 deals going at any given time. We had a loss mitigation department of our own. We had realtors, we had marketing team, we had sales guys. And it was, it was great. We saved a lot of people’s houses. It was, it was awesome. Um, but then the market started changing. This is a great thing about the cycle of real estate. So when you’re in it, since I started changing and we’re like, wait a minute, we need, we should buy some of these. I mean this is, I mean, the house down the street.
00:11:04 I had, I bought for one 75 at the peak and I can buy the same house for $25,000. You think that’s probably a good time to buy? Probably, probably. Right. So we started buying them. So now we started buying them. Um, when the market crashed it was a race to get rid of everything, which we did fortunately. And then we started buying them at the bottom and then the market went up. It started selling them and then kept a few. Um, but, but keep in mind, all of this is a very active business. Like it’s very, very active. You’re making good money but you’re waking up on Monday and you’re like, okay, how many houses are we going to wholesale? How many houses are we gonna flip, what are we going to do? Right. Um, and so fast forward to today, um, of where we’re at today on seller financing and that, that’s what I figured out when I did my lease option program is I provided a ton of value.
00:11:54 Um, I made really, really good money and I, and um, I didn’t have to work very hard because at the time we kept the old owner in the house. Yeah. Their intent was to keep it and refinance it. And they did because after six months a good pace in a heartbeat, they were refinancing right? Slightly. So we charge them a fair fee and everyone was good. Well, now I was like, I told him, I told my wife this, I said, uh, sit, uh, about 18 months ago, I’m like, where did wearing the [inaudible] we have a, we had a thriving wholesale business. We’re doing very well. We have employees, we have this whole thing and we’re marketing, we’re doing direct mail. I mean, you have these shows with all the direct mail champions and all the talk to people, you know, ttp and you have internet and all this stuff and it’s a huge expense every month. Right? To do that. And I’m like, where do we provide the most value, make the most money and work the least. It was back to lease option world. That’s where we were like, wait, this is amazing, let’s do that. So we have now fast forward and now we’ve created that similar model, right. I’m, the only difference is instead of lease option is seller financing because we wanted to get rid of the expenses that go on, on being an okay
00:13:02 a homeowner. Right, right. Well, and when you talked about this in our meeting a couple of months ago, a month and a half ago, I blew my mind. So we’re gonna have to Redo some things in 2019. Uh, so along the way you, uh, we’ll, we’ll talk about southern carrying a little bit, but you built your business up. Yep. Massive team, right. Short sale that probably when you were the biggest I’m going to get, is that when you were the biggest?
00:13:24 Yeah, I mean anywhere from we would have anywhere from eight to 15 team members, you know, and then in the wholesale world, reply the same, you know, and then you transitioned to a traditional real estate team. Well, so yeah, so what we did was, is I would do direct mail. Yeah. Um, and I would take the calls and I would go meet with homeowners and then I would figure out how to dispose of it. So I was a one man show again back when we started cycling back into wholesaling. But now keep in mind I will fast forward. I’m kind of going, I’m kind of going all over the place a little bit. Sorry about that. Um, is uh, I, I did take a little stint out of real estate for about probably 18 months and bought a different company and was like, this is the dumbest thing I’ve ever done in my life.
00:14:13 I mean I have all these employees again and so it does go back to a, it does go back to. I’m going to shut my phone off here so you guys can. There we go. So it does go. It goes back to like managing people, managing people is a challenge I would say for me like the most, the greatest challenge for every company. The right, right. And, and so, um, so anyway, let’s, let’s go back to where we are, where we recently, where we had real estate agents and real estate agents want to get listings and, but majority of them don’t know how to market. They’re not great marketers or they don’t have the money or something. And so we’re like, okay, let’s hire some really good real estate agents to take in all of our leads, right? Go meet with homeowners and buy the properties for me and get paid.
00:14:58 And if that doesn’t work, let’s list them. Right, right. So it’s a really nice. We have an army of agents out there doing that and so, but what, what recently happened is, is the marketing has gotten so expensive that the margins were just, it just wasn’t making sense. And honestly, um, we, uh, I mean we had amazing people on our team, a majority of p. and I tell all the people that come and work with me is, you’re gonna. There’s nothing proprietary here. I mean, go on the Internet, you can figure this out, but if you want some confidence, come work with me, learn it. Like I did, and then go move on right now and do it yourself. Right? I mean, that’s, that’s the thing, that’s what I’ve told anybody. So in real estate, it’s very transient to, to, to have that happen. So to keep people on and other than your assistants and stuff.
00:15:45 But that, that’s, that’s kind of where we’re at now. So I was like, how can I run, you know, to uh, you know, 15 to 300 seller finance deals and how does that look? Um, employee wise, right, right. I can pretty much run that entire business with like one person other than myself. Yeah, because you don’t own the properties, you don’t have taxes, you don’t have insurance. It’s all being paid. And so that’s where I, I phased our business into, um, and there’s a, there’s a combination of reasons. Why is number one, um, and we’ll talk about this, but the private money side of raising private capital, private, private money and doing it right and now forming a syndicate and all this other garbage. I really believe that we’re providing a ton of value for that investor, right? Um, because we know how to buy really good properties.
00:16:36 Okay, so that’s one deal. And then the next is helping homeowners get rid of their distressed property and get them as much as we possibly can and still make, make it work for them as quick as possible, as easy as possible. Um, and then how, find a homeowner or a buyer and a realtor and a buyer, a team that can actually own a house now that never would’ve been able to own a whole additional financing without that have work for them. They’re not going to go to wells Fargo, Bank of America or any of these and get a traditional loan because they own a landscaping business or a pool company or a realtor. Right? But they have a nice, if they’ve saved their money and they can afford the payment. And so that’s Kinda where I went. And um, uh, you know, we talked about this earlier, um, that, that I get excited about that, like flipping a house and making 20,000 bucks.
00:17:26 It’s pretty cool. You’re revitalizing neighborhoods or you’re wholesaling and starting the revitalization, which is, as you know, you have a purpose there, but, but the whole, uh, you know, where people right now are getting displaced, you know, you go to the areas where we’re buying or the seller financing thing works. They’re the buyer. The investors bought these houses from 25 to 60 grand and now they’re worth 1:50, right? As is, um, now what’s gonna Happen to that tenant? They were, they going to go, right? They’ve lived in a house for 10 years. Well now they’re priced out, now they’re priced out. So how can I create value to them and still give them ownership and not have to be a landlord and deal with all this stuff that be coming, a landlord is and still make the profits and the cash flow and all the things that make sense. Right. Alright. So that’s kinda where we’re at.
00:18:12 So the thing you mentioned earlier about, you know, doing a syndicate and how that’s a really bad idea. So jamilla right here, comments, the quickest ticket, the jail as a syndication. He was the one that gave me the wisdom when I first got into wholesaling. Seriously, know that if you want to go to, if you want to be on American greed, start this indication.
00:18:28 I love it. No, but it’s so true. Like I don’t. It’s like Jamil, I talked to Jill about that. Uh, I don’t think they’d started. There’s no way they’re not. They’re not crooks on purpose. They get, they put themselves in a place where they just don’t know where. They just don’t fix the problem. Right. They deny it. Like you get in a fight with your wife, fixed the problem now rather than linger and get divorced. Right. Well, but we know it’s not our fault when we play with our wives are always right. Yeah. Okay. So
00:18:59 let’s go through the seller carry because like I said, it blew my mind when you, when, when you presented this to us that a few weeks back, what is a. So I carry and then after that, what would you do if you’re gonna get started. So what it, what is the southern area? Because when I first hear seller carry, I’m thinking I’m going to you the homeowner and you’re going to finance that deal, which is the traditional definition of southern carry, but when you’re talking about seller carry, you’re doing a different strategy. So can you elaborate what that means?
00:19:28 Right. Well, you can do a combination, but let’s just do like that was, that was my goal today because I knew her in speaking to you and I’m like, okay, if somebody was going to listen to this show and they’ve never done real estate, but they want. I mean, the ultimate goal is to create some sort of it. Nothing’s passive, but as close to passes as you can get and get to, you know, five, 10, $15,000 a month, which is basically, it’s a game changer. Um, if you can, you know, what can I do to help that? So yeah. So number one is, um, uh, and I, I read a lot of like blogs and people are like, I don’t have any money. I can’t start. I can promise you. And I knocked on that first door. Uh, I didn’t have any. I mean, I did have money, but I didn’t have the ability to buy that house.
00:20:11 You didn’t have faith, but I had a deal. No, I had a deal. I had a deal and then I found now in today’s world, just in our market, but in every single market there is somebody that would die for that phone call and say, Hey, I’ve got this deal. Let’s make some money today. You know, I know the network that I’m in, we make, if I can’t get rid of a house, I might call you or I might call someone else in our network and we make money. Like it’s fantastic. Right? So there’s no excuse for that. There’s none. Like I, I read about it and I’m like, there’s no excuse because you can get in your car and drive by and see a house with grass that’s growing higher and it’s probably could be distressed somehow. You can find. You can figure out a way to find that person is a little uneven or, or, or if you could have figured out someone online knows how to figure it out and he doesn’t even know because I promise you, you and I are not door knocking and driving by every day, so we don’t know what we don’t know.
00:21:03 Right? So anyway, so that’s, that’s my thing. So there’s no excuse for that. Um, so back to the seller financing deals. So right now we can, I can get a house, I get a house sent to me. I’m probably every couple of hours that fit our model, right? So we’re, we want to buy a house somewhere in that 1:30 to 1:50 range. Okay. Um, and, and right now in our market in Phoenix, and this is all over the country, a lot of houses were bought at the bottom and remodeled and rented and now they’re, they’re, they’re not, they’re rental condition. So we can go clean it up and sell that for retail. Right? And so, so what we do is we find that house and then what I, in the meantime, I have investors that are looking for a fair rate of return. Okay. Um, maybe they’ve made tons of money and Amazon, they cashed out right before the market changes or something weird happens and uh, they want to get a fair rate of return.
00:21:59 So I offer them a fair rate of return or I partner with them or something, but they’re secured to that property. Right? Right. So I find property a and find the property. Uh, I, I, I put it under contract with the wholesaler with you, with whoever, and then I have that money waiting in the wings to close on it, right? Yep. Then it’s pretty simple. Then I go and I have a real estate team, but I’ve also for fun. Um, I’ve built a massive buyers list of people that can’t get a traditional mortgage. Yeah. And so now they are my, you know, uh, a lot of the wholesalers are talking about their cash buyers list. These are my seller finance buyers list. So there’s a lot of them, a lot, a lot, 20, 30,000 down in our market. They’re everywhere. They’re everywhere. So there’s a lot of people out there that 20 to 30 k to put down that cannot get approved for a loan.
00:22:48 And you have this list? Yes. Amazing. Yes. So I have that list now. I also have realtors that have that list. I mean how many realtors out there have someone but they just, they’re, they’re basing their whole world on getting a traditional loan and so they, they lose a deal because of it. Yeah, well I can buy wholesale sell retail. I’m not selling for like there’s other guys that do what I do around the country that mark it up 20, 30 percent over retail. And I’m like no, that’s not even like we can sell these for retail and make money. We can get a good down payment, a fair interest rate, you know, based off their financial situation. But we’re putting themselves in a place where they can actually make the payment and typically they’re payment’s going to be five to 10 percent over a rent.
00:23:33 Okay. Then they get the deduction. Okay. So. So anyway, property, I get the property, I got the lender lined up, now it keeps you. So, so far I haven’t spent a dollar amount of money. Right, right. Okay. But I found the house. Yeah, it was sent to me in an email that I could probably pay more than most wholesalers. Right. Because your cash buyers, because I’ve got my, my exit cash buyer on the hook that I don’t have to do a $30,000 Rehab, I might have to do a $5,000 rehab. Right. Alright. So now that, that. So my, my underlying lenders here, my end buyers, they’re wanting to buy a house and be a homeowner and we closed the transaction, I make a little bit of money and my investor makes a little bit of money and then my agent gets a commission and life goes on.
00:24:20 So that’s not one close. They’re right. It’s two different closings. Right? So you have your, you have your acquisition, closing pays, pay a few fees there and then you. And then you have a. and the ultimate is fine. One longterm investor to fund your acquisition and stay in place, right? And then resell it and then create the cashflow in between, just like, just like any rental property, you know, but the rental property. Here’s the thing about the rental properties. So what do we have? And we own rental property we have and I just, one of my best friends, he lives in California and he managed his own properties and he’s been doing it forever and it’s his, it’s his family deal. That’s how they do it. That’s weird. Anyway, so we just had an argument this morning and I said, listen, I’m so, so what we have, we have management, we have a maintenance vacancies, repairs.
00:25:14 Um, what was the last one anyway? We have the five or six different things. Taxes, insurance. There we go. Yeah. So we have all that happening, right? When I do a seller finance house a deal, guess what? I don’t have none of those things and I have equity in the deal depending. And so, you know, people talk about this and that and I’m, you know, this is something we could have discussion about. People talk about depreciation and appreciation and how it affects your taxes. Well, I just eliminated 30 percent. So how does that look? Right. And then I have equity in the note that I’ve created because I know how to buy a house under market. Thirty percent eliminated, eliminated the 30 percent of. Yeah. You know, well, well, like, you know, you, you getting some tax benefits for being a property owner versus a seller financed it’s regular income, but I don’t, I’m not a CPA and an attorney disclosure, but I just look at the real money that comes in without the headaches.
00:26:09 Yeah. Right. So let’s, let’s highlight those six things there again, because that’s not a great writer. So a vacancy. So you have, you have a property manager and that’s what I told my buddy I will. Okay. Um, so how much, how was the property manager? Well, it’s eight percent. Okay. Do you have any vacancies? Do you have any? Uh, so you have property management, vacancies, repairs, taxes, insurance. I think we’re missing one again. Well, this turnover, turnover and that includes vacancy, but that’s new carpet because it seems like cozy and repair and repair when you have to update it. And that’s what I said. He goes, oh, I had to eviction and oh well how much do you spend on that Rehab? And then that doesn’t include depending on your property manager a leasing fee. Absolutely right. No, this is all. And then my, my fee is it’s between 10 and $18 a month for a servicer.
00:26:57 And guess who pays for that? The borrower, right. So I don’t pay any of that. And so I’ve eliminated and I was telling you this earlier, I, um, and this was so cool. So I get a call from the servicer yesterday and there was a insurance claim. Okay, a roof issue, whatever. And they’re like, you needed to sign off on the check and they thought the lender was here. And I’m like, no, just have them call me. So they call me and the sweetest lady ever. I’ve never heard from her ever. I, I didn’t, I didn’t even know actually I knew it in my file who it was. But I’ve never spoken to them, I never speak to my agents deal, all that and she needed me to sign off on her insurance check. And so, um, I said, okay, I’ll, you know what, I’ll meet you because I’d love to.
00:27:39 I mean, I love meeting them and see how appreciative she was. So appreciative. She was like, Eric, I’m so happy to actually hear from the company that’s lending me the money and in my house and we’re so happy and we’re going to Redo the roof, but we’re going to pay a little extra because we want it to be a different color so it matches this and matches that. And because we rehabbed the house already and whatever, I’m like, oh my God, that’s fantastic. Why not? Right. And so that to me, I get so pumped to have that, that call that they appreciate and they pay like right on time every month. Well the assay or. Yeah, or they lose the house and they put such a chunk of money down with their time.
00:28:12 And I think you mentioned briefly or casually was that they remodeled the house. Yeah, they updated it. I did some work, they did more work, but like attendance, like, Hey, I want to update the house. Like, like hell, you are right. No, they actually paint the walls and
00:28:26 the wrong whatever. It’s not. And now, now, now, now my asset just went up another 20 percent and my loan event, I’m still covered right there. There’s a few things that people, you know, they’re like, well, what if the market tanks. I’m like, okay, well I’ve put a fixed number in place on my cost of money and I’ve given them a fixed number so god forbid the market crashes in our houses are worth $25,000. Again, let’s just say it happens. But they were they going to move for 1400 bucks a month? Yeah. And Oh, and still own right, right. Yeah. So there’s a, there’s a risk there that I feel this is just my opinion and we could talk about this 10 years from now and be like, that was a mistake. But I really believe that. And I mean, I can’t tell you how many times I bought a house a few months ago and I went and met with a neighbor, um, and uh, he’s been there 17 years. That’s what I want. I want payments for 17 years. Right, right.
00:29:22 So I guess it was starting over again. Step one, right? I want to do, I want, I want to follow. So you’ve never done a deal ever? How do I do this? I’ve been doing wholesaling to. Oh, you’re talking about you not know. Not Hypothetically. Steve moved from wholesaling area. So what’s step one, getting the money
00:29:42 was I personally, because I mean you can use my track record because it works is, is I would go find some private money. And so here’s, here’s the thing. So I was telling, I was, might’ve been telling you this before, but so you have your high, high net worth people, right? They have tons of money and if they can make a seven, eight percent return over a lifetime now in today’s world and they’ve already crushed it, that would be pretty good. Right? All right. And so they, they look at that as diversified deal, they might have a huge estate and they don’t want their kids to get a bunch of money, but they would give them income. So that’s one place to maybe go raise some capital and tell that story. Or you have somebody who’s in there between 65 and 70, right? They want to retire and they have, let’s just say it.
00:30:27 Let’s say they’ve saved a million dollars and they have a million dollars left until they pass, right? Well, I feel my opinion, we’re all going to live til about 100 now. I mean, I’m 46 years old, being 100 years old is going to be nothing. Okay? So. So that’s 60, 70 year old version. Now I have another 30 years they’re going to outlive their money. So I feel it’s my obligation to help them get a great asset secured in first position a mortgage and get paid for, for ever right with. And then keep the balance right. So maybe they take the interest, keep the principal. There’s all sorts of ways to do it, but I feel it’s an obligation for me as a really good real estate operator and knows how to find great deals and put them in a really good position. I’m not 110 percent, but like 75 slash 70, I feel as a good place right now in today’s market.
00:31:22 Even if there’s a decline, um, that, that they’re going to get income and it’s amazing because, and I feel like I’m a really good private money raiser with real estate is, is that, um, they, once they start getting that money, they can’t. It’s like a, I don’t know what I did. I just get paid. I’m like, so what’s your, uh, this is another thing that’s happened to me the other day. So one of my. Actually as a few months ago, I asked my, one of my private guys, I’m like, so how’s your debits and credits on your private lending business? He goes, well, I don’t really have any, uh, debits. No, I don’t have any. Yeah. I don’t have any debits and credits and debits I have is when I pull money out and put it into a loan. So you’re not paying taxes, insurance, maintenance, repairs, any problems?
00:32:10 Nope. I just get paid. So that, that line item is just income is what you’re saying. You don’t have all these other things. Boys, do you have any employees in the business? Nope. Nothing. So I decided, okay, how can I do this in the owner occupied world and do that. So I know I got sidetracked a little bit on the, on the purpose behind this, but so raise the money. Go find somebody said that that wants to do. Let’s use Phoenix as an example and you get $150,000 in a first position to do your seller finance deal. Then properties
00:32:40 are easy to find, right? You probably have one right now and you’re on your list of houses yet you’re wholesaling that will fit hopefully, you know, and then so then you do that, you buy it and then, and then you go. And if you want to do it slowly, you, you know, I always have people go and look at it and do little little repair. So it’s move in ready. Like the big things is, is I want the roof to be okay, I want Ac, good plumbing and electrical and then let them go do the sweat equity. All right? I want the big stuff taken care of for, you know, for the most part. But I have guys that have come in and be like, no, we’ll do it all. We’ll do plumbing. Will do it all. Well, we just want a good deal. Okay. So a good deal off retail might be five, 10 percent off.
00:33:21 Where for us that’s like, we’re happy if we don’t have to do any work. Right? Right. So, so you find the lender, right? And then you have to have some sort of agreement with them. So you’re paying interest right away, paying interest when they land. So what I do, and this is obviously from a, this is a trial and error, but what I do is I say, okay, we’re going to fund this deal. This is what I’m doing with it. You’re going to make a fair rate of return. I’m in a great position. You’re going to get paid monthly amortized and I’m amortizing, so I’m front loading them just like a banquet. Okay. So, uh, then from there, um, I’m gonna I’m gonna Start Your first. Payment’s not for sit there for 60 days because that gives me time to go clean it up and get it sold.
00:34:06 So I’m not doing a negative cash flow off the bat. That’s the ultimate. Doesn’t always work that way. It doesn’t always work that way, but does it really matter to them like what’s their money doing right now? Sitting in cash. Earning one percent. Yeah. But that’s smart on your part. Giving yourself a 60 day headstart and it’s an, it’s a contract like, you know, after 60 days if I don’t sell it, um, then I’ll start paying. But for the most part that’s how I structure it. Yeah. Okay. And then you have, I think you mentioned before that you, you are someone got a loan originator license, so no. Yeah. So what I did, I, I like to stay completely out. So now in order for me to qualify my borrower, so now at the house is now for sale. Yeah, keep in mind all my houses are sold off market.
00:34:49 I don’t even put them on the market, right? I send them either to my list and on my list is agents that have buyers. So I’m good with that. I’ll pay him a commission, I don’t care. Um, and then a contract comes in for the price we agree to. Then that goes right to my license originator. Um, and he underwrites it, make sure that they are majority of these borrowers, they’re stated, um, but he, he goes, he gets proof of payments, proof of income proof. Not Everybody. Real underwriter. Oh, it’s a full on most hard money lenders out there don’t like to do owner Iraq because of that, the liability. This guys, these guys, that’s their deal. And so it protects me because if they’re like, oh, you sold me this house for x and I can’t afford 1500 bucks
00:35:38 a month. Well it says here you did this, this, this, and this. I just, I have him do it. I pay him a fee was actually the borrower pays for that, but he gets paid to do that and then he reviews it with me and he signs off on it and it’s done. So it’s a riddle. It’s a fully underwritten, originated loan.
00:35:55 So it sounds like when we’re ready to do that, I don’t have to get that guy’s contact. That’s right. And then on top of that you have a servicer servicing company.
00:36:01 So then. Yeah. So, so right now I’m testing different servicers, but in a perfect world as we scale this out, we’re going to have the same insurance guy. We’re gonna have the same servicer, same originator. Just process.
00:36:16 Okay. So then that’s the part that’s kind of nuts, right? Is this this crazy part where you’ve got this formula working now, now to feed this machine, you still got to find deals. That’s right. Right. So how, who’s bringing deals and what is a good deal look like to fit into this model?
00:36:32 Well, so it, it may. Right now I’m getting my deals, I’m still doing direct mail, I’m still doing internet, I’m still doing all the same things like I’m so wholesaling houses. Here’s the greatest thing about this model is your goal for me and, and I, I would hope other people is to get that monthly cashflow offset your wholesaling business, net income, and then once you get to that then you’re like, it’s just. I mean, everything else is a bonus, right? Because I mean, buying and selling houses and helping distressed sellers get out from underneath their homes is a great business. It’s a great purpose because, I mean, I can’t tell you how many people call me, you know, he called me from Tennessee and you know, aunt so and so, uh, you know, gave you this house and you think you’re going to have to fly out and do all this stuff. No. Did you know, I’ll go and box all that stuff up and send it to you and you’ll get a check wire to you. Yeah. How easy is that? Oh my God, that’s fantastic. You know, that’s, that’s the value that we provide as a, as wholesale buyers, but without, because they’re not going to be able to rehab it for what we can. The whole spiel. I’m not gonna I’m not gonna tell you this, but you guys know it.
00:37:40 Are you getting more from your direct mail marketing and online marketing versus another wholesaler bringing you deal?
00:37:45 So our direct mail’s working, um, and it’s like, it’s very competitive. I mean, we’re competing against everyone else, but honestly I’m, I’m, I’ve slowed down a little bit and the reason why, I don’t know if I told you this, but I have a fund that is going to fund my deals and so like a pretty large fund. So I’ve slowed down. I haven’t been really building my private money business that much because this fund said they want to do it and the numbers make sense and if that point I can just, I can go to every wholesaler and probably pay more than anybody and still make the numbers work. Yeah. You know what I mean? Like, then it’s just an arbitrage game at that point. Right? Um, and it’s non-recourse, which is good.
00:38:29 Huge, huge. That was, what the Hell is Chris? I am in a sudden they show a couple weeks ago. Like if you have to do all over again, what will he do differently?
00:38:37 Ask anybody that’s Rh has been in the business as long as we have. What would they say? Non-Recourse. We all. We all got caught.
00:38:44 Yeah. Um, but you learned eventually. So Scott, Charles got a question. Uh, so we talked about finding the high net worth individuals right, to, to fund your operation, or in this case you got an investor group. How would you go find an investor right now to, to fund all this?
00:39:02 Well, um, there’s, there’s so many different ways, but I’ll just give you a simple one. Which is it. Chances are I have a friend of mine, he’s 36 years old. He’s had two different jobs. Okay. The two different jobs from 25 to 36, he’s probably at two. Three. No, actually no. He has like $600,000 in 401k money from two different places. Right. But now he’s starting John Number three. Well that money at 36, he can’t touch it until he’s 59 and a half. Right? So that money is sitting idle, doing well, it’s in the 401k that they left it or whatever. But what if you could help him self direct that money in a self directed Ira and then use that as your funding. Right now there’s, it’s, we call it the four point $7,000,000,000,000 secret, which if you guys email me, you’ll give me the information, I’ll send you the book because we wrote a book called the four point $7,000,000,000,000 secret.
00:39:54 So it’s pr, it’s how to raise private money, how to but, and it’s not a, it’s not a sin. A kid is not. Tell people what do you ask? Ask anybody. What are you doing with your idle cash? Well, what are you earning? Probably between what now I guess cds are going up a little bit, but be under two percent, maybe two percent. But before it was like it’s. Yeah, right? Yeah. So you can’t make money doing that assignment inflation. So if you offered them seven, eight times that and you can still make money or you partner with them on the cashflow, are you part, if you’ve never done it before, maybe you do a little of both, but just long as the cash flow make sense for you, for your time. That’s what you do. So there’s so much money out there right now.
00:40:34 And, and, and I have, I actually did, I was talking to one of my buddies the other day, um, he sold his company and, and uh, he’s a company guy, he likes to buy companies and you know, buy something for a million, sell for 10 million or whatever. Right? So I’m like, I’m like, yeah, but what are you doing with your idle cash? Yeah, well it’s in the stock market and it’s doing this and I, you know, blah blah blah, blah, blah. And I’m like, okay, well are you getting an income from that monthly income? I mean, what are you getting from that? Is it, is it amortized out? Is it. I mean, how does that look? Could there be a change? Could the tesla owner do something stupid and drop the drop the fricking stock market? I mean all of that. Like how does that look, you know?
00:41:15 And then what and where is that cashflow coming? Is it coming from an end borrower that’s, you know, thanks God every day that they have a home to live in with their family. And if that doesn’t work, they’ll bring in another family to pay the payment. It’s not sexy. It isn’t. It’s just, it just works. Yeah. Right. Right. So, so that, that. So to answer your question on the private money, there’s, there’s, it’s everywhere. Just tell everybody that you have deals and you’re willing to pay x amount and if you’re interested, let’s, let’s do some deals. Let’s do some business.
00:41:46 Well, I think I heard you say before too, you don’t even tell them what you’re willing to pay. He’s like, what do you, what are you willing to take
00:41:52 you? You can do that. I mean, I’m pretty open about what I mean. I, I, I, I’ll tell you right now I pay, if I do a flip, is 10 percent deferred. No points. Pay Them. And I guarantee three months on a, on a, on a flip. So it’s secured, they fund the deal. I’ve been doing this a long time. They get paid back. Um, all my private lenders never defaulted on a private lender ever in my history. And I bottled it a lot of money. And then my longterm, I, I, I try to get six or seven, you know, and people have a hard time with that. Like they, they’re like, wow, that’s not very much. Okay, well what are your options are? I mean, let’s be honest now if you want to be passive, that’s a pretty darn good return. And it’s collateralized.
00:42:31 It’s collateralized. So, so I tell him what buddy the other day I said, okay, you have, um, so I give you a thousand dollars a month for 60 months and you give me 150,000, 60 months later you owe 90, now your risk is 90 on a house. It’s even if it drops to 1:50 or 1:30, you know, that’s still, you could sell that and get your money back pretty easily. In fact, I’ll buy it from you for that, you know, so, so just songs you’re. So, that’s Kinda, that’s why I love the lending world. That’s why I love that deal. And, and, and really the end result is who, who you’re helping at the end, at the end, you know, you’re helping this guy get his income, you’ll make a little bit of money. You never dealing with banks. It’s just, it’s, it’s quick and you’re providing a good service.
00:43:14 Canada’s Walton wants to know what’s the difference between a lease option seller finance.
00:43:18 So at least the option is you own the house. Um, uh, so for example, I buy the house and I own it, and then I take maybe 10,000 down and I give them an option to buy. So let’s use round numbers. Let’s just say, uh, um, I bought a house for 1:50, I sell it on a lease purchase for one 70 take when 10,000 down, and then they have five years to two to five years to give me the 60 that they owe me, something like that. Um, but I still own the house, right? I still have the responsibility for taxes, insurance, maintenance, all that stuff. I, I’ve, I’ve been successful with a lease purchase I have. Um, but I, I like it. I almost want closure like it’s done now unless they sell it or refinance it as at least purchase. I’ve done really well, at least purchases, but I, I don’t. Um, I don’t like the responsibility of being an owner. There’s liability, right? There really is. I mean, yeah, you have all the things that go with that. So if I was going to pick one of the two, I do the other one.
00:44:18 Right. And a seller carry. They’re the owner. They’re the owner lease option. You’re the owner. I’m the. I’m the owner. Yeah. Right. And they’re the owner. And then we talked about pride of ownership. We talked about a little bit earlier, but you know, if I was driving down a neighborhood,
00:44:32 I’m, I’m seeing Eric’s seller carry property and I’m seeing someone else’s rental rented property. What’s different? So, so a great, great question. So I bought a house, I don’t know, let’s say six months ago. Um, it was in good shape. It wasn’t, it wasn’t the best house on the street, wasn’t the worst, but it fit their moving criteria. Right. So they put their money, I think they put $25,000 or whatever. So a month later I was going to go drive by that I was driving to go look at another property, um, meet my agent over there and there was a house, you know, there’s, they redid the landscaping, there’s flowers out front. Um, it’s painted. I mean, it’s, it’s like the nicest house on the street. And I’m like, how awesome is that? That’s not a rental property. They own that house and they’ll. And they’ll, and they pay.
00:45:21 I mean, I made a mistake, I made a mistake one month where they actually paid early and I couldn’t figure out. I’m like, God, I don’t think they paid well, they paid too early. I couldn’t figure out the, the books weren’t right on that month or something. So. But yeah, that’s, that’s the deal. Okay. So then let’s go back to an example. Um, I, I get your mailer call you, Eric, you know, I got this house is worth 200 open market, a bit disrepair, right? Where are you buying it at for it to make sense for this model and then what are you doing? What are the exact steps you take after that? So how’s comes in, uh, to our team if it’s me or the agents are placed 200 and Maryville. Yeah. Yeah. And it’s an, it needs 15, right? So that will. Maryville is now 2:20.
00:46:09 So anyway, no, that’s a seller finance house around a b to 10 to 20. So what I do is I, uh, the first thing I do is I take the call and figure, figure out what the best price we can go to. Right? Um, let’s, uh, we really, depending on repairs, we probably need to be around 1:50 ish. Yeah. Um, but so, so that, that would fit. So then I literally texted my agent and be like, Hey, what can we sell or finance asked for? And he’ll be like, oh well I have someone in my database that likes that area and they want to um, they have $30,000 and they’ll pay probably 2:15 and they can afford this much a month, which I already know those numbers. That’s, that’s, that’s it. So, so that’s I just because I know the exit, that’s the most important part. And then I know my cost of funds and I know I could resell it for them with their payment typically is.
00:46:58 And then I just back into what I want to make, you know. And, and typically for I think four to five, 4:50, 400 to 4:50 is a good number to take the risk. I think anything less than that, I think they’re spreading the deal. 100,000 cash cashflow. Yeah. Okay. Yup. That’s right. That’s kind of my, you’re not making 450 cash flow. That doesn’t really make sense. It doesn’t fit the box now or I just haven’t put more money down or whatever. So he can play the deal. But that’s Kinda the round figures. And where the rental property typically you’re going to put 20 percent down, you’re going to rehab it and then you’re going to leverage it and then you’re going to pay all those expenses and get what, 200 bucks a month, maybe pretty much what the headaches with a headache expenses and headaches.
00:47:42 I mean the turnkey, like, believe me, I tried to get answer. I was looking at turnkey all over the country, right? And so, um, I really thought it was a good model, but when it was all said and done, like there’s no money leftover. It’s, it’s unbelievable. And not to mention all the turnkey markets that are crushing it right now, ask them what their property taxes are every year they’re there three times, certain markets will say our market. Keep it quiet. Okay. So now let’s go back to, uh, the proper. You picked it from 1:50, right? Because it’s not just the cash flow, which is an amazing part of it, but there’s front end and his back end. So let’s talk about all the different. Yeah. So typically, typically, you know, you uh, the, the, the average wholesale was 7,500 to 10 grand a wholesale fee right now these days in our market, um, you can typically in our seller finance world with the down payment and the cost of Rehab and the closing costs and all that stuff, there’s three to 5,000 leftover profit up front for us.
00:48:40 Okay. I typically like to get more, but we’re not gonna squabble over that because I’m also getting another $5,000 a year. So it’s five k upfront. Yeah, yeah. Typically about five grand up front, five k cashflow per year. Per Year. Not Stopping per year for like 30 years. Right. Well let’s just say it goes five. Yeah, 60 months, you know? Yeah. So, so that’s 30 grand. Most of five is 35 plus the profit when there’s typically because we’re selling it retail or buying wholesale. So there might be 20 slash 25 in that deal too, you know, obviously they pay it down a little bit, but you’re also doing the same on your side. So what I did is I amortized both sides so that we’re not catching up to I. So if I have a loan here, let’s just say 1:50, amortizing at seven and I sell it over here and then loans one 88 and a half percent amortizing.
00:49:32 I just want them to kind of move along together on the amortization. Right? Right. So, so it doesn’t catch up and go past it. That’s the right way to do it. So you’re doing a cash flow on a difference in the mortgage payments and on the arbitrage. Little, little little, yeah. A little cash flow on the, on the amortization too. So we get an amortization calculator. You can kind of figure it out, but right. I mean it’s next year, maybe 100 and 150 bucks. Maybe nothing to sneeze at. I mean if you guys send me savings, you got 10 of those. That’s real money. Here’s the thing, like the spread and the note is great that this, the borrower has equity, but I just looked at that as a bonus. You know the thing refinances. I mean, the reality is I, my ultimate goal in a lot of these, I want to be the lender on this property forever, right? So if someone contacts me and says, Oh, I’m selling the house, really, um, who’s the buyer, you know, can I, can I have an option to be their lender because why not? Right? Why wouldn’t you? And then you just start over again,
00:50:28 you know, so, so you don’t have to go find a place for your investors money.
00:50:32 And so, you know, you’ve acquired a few of these. Like I think 18 months ago you started taking this refocus back on how can I do less, enjoy more, right. Actually get to travel with your family, you know, dream of every real estate agent.
00:50:50 Did I tell you? So did I tell you I did this summer now. So, so there’s a company, you guys can google it, it’s called Mind Valley. And so mine valley goes to a different country every year for a month and it’s like personal development business. It has all sorts of stuff. So my wife’s goal and her life was like, we need to go to a country every year and I’m like, okay, let’s work that out. So we. So we. So we did it. So we were there for two weeks. We were in Estonia, which is near Russia. I didn’t know that at the time, but as we were there. And so uh, with our note business, like I literally didn’t do anything. Like I didn’t take a call. I mean, yes we didn’t do, we had some marketing going that was being taken care of by our agents, but the no business still paid. They give the money still came in. I didn’t have to deal with it. It works that way with rental properties too. But we were literally gone for almost 20 days in a different country doing our thing, you know, having fun. And then this year, this summer will, I think that they do, we’re going to try to do it for the month for our kids, you know, I don’t know if they want to do that or not, but. So
00:51:48 our audience right now as wholesalers, right? These predominantly people who are listening to the show right now, so what we’re telling us, wholesalers is very realistic that if they wanted to switch gears, they could in 12 months potentially acquire 12 seller carry properties. Absolutely right. And with the 12 seller carry properties, let’s just say $400 a month, right? So instead of grand, instead of wholesaling for 10 k, just get five k up front, have passive income and have 10 of those. That’s four grand a month passive and you can go hang out with Eric and Astonia or wherever mind valley’s going next.
00:52:28 Well here’s the thing, the wholesaling business, you will never stop, right? We’re always going to be marketing, always market, always, always, always market. Always tell people that you’re a cash buyer, but when that deal comes along, that fits that deal, then you can wake up a year later, five years later. I don’t know what your overhead needs to be. I mean, we talked about this earlier, I mean, how much money do you really, you know, making $500,000 a month wholesaling houses with 47 employees and a million dollars a month in marketing makes sense for some people. For me, not so much. I don’t need that. I’ll buy all those properties that they produce and I’ll create a cash flow. But I believe, I really believe the wholesalers, it’s really hard for the wholesalers were these big operations to look 400 a month as, as like this is exciting. Yeah. But they’re doing so much volume. I’m like, what if you just did 65 a month? I mean, you’re doing 30 houses a month, do five a month and now you have 60 properties at 400 a month. I mean that’s 24,000.
00:53:26 That’s a, that’s 300 grand a year. It’s okay. That pays some bills. It does, right? Not to mention any spread and all this other stuff going on. Right? Not to mention you’re helping the world with a, you know, some, some, uh, retirement people getting income and not losing their wealth. And then, you know, helping other homeowners get a home to live in because that’s when they operate, when the opportunity was not available otherwise. So, I mean, that’s, that’s what I look at it. I mean, I love wholesaling. I mean we all do because it’s quick cash and it’s great. But I think that this is where we’re at in our market is um, there’s an opportunity. I mean, could we see a correction and a big drop? I don’t know. I don’t, I don’t know. Like we talk about it. It’s possible we could have a black swan event, but I think it’s highly unlikely to have another we.
00:54:12 Here’s what I feel. I feel that there’s credit, but it’s, but it’s different. Credit housing credit is, is, is I think stable. Yeah, that’s my opinion. Um, so Scott Charlotte scan, how would you build a list of buyers for these properties? So I’m bandit signs. Let me see if I, I don’t have my phone with that. I, it’s just, you know, sell what I don’t even, I haven’t been, I haven’t personally put these out. So they just call in to our office. I know you see them in the corner, right? Three bedroom, two bath, 1500 a month, call for details. That’s right. Yeah, that’s it. I mean, I, I think we have five, 600 of them right now, but really the, in our, I have relationships with realtors that manage that list for me. So I don’t really, uh, uh, I, I probably would have as I grow, I mean we’re, we’re close, but I’ll have a disposition manager that that’s their whole deals meeting with these sellers and it’s the coolest thing like an employee.
00:55:13 I don’t know. Wherever we’re working through it, we’re working through it. Um, all right, so one was everything time right now. Do you have like a calculator or something that says, okay, here are the numbers and it makes sense. So, um, my business is not that sophisticated, but I do have a calculator that I use on my phone. It’s called Carl’s calculator. If it’s in the APP store, I think it’s free and I just plug in the numbers. I probably calculated Carl’s calculator. I don’t, I, my phone’s off because I didn’t want the alarm to go off, but um, so Carl’s calculator throw that in and then you just figure out where you want to be. What’s my, what’s my cost, what’s my interest, what’s my resale, what’s their interest amortized. There’s just spread and then. Well, and then obviously you add taxes insurance on top because you’re not paying that.
00:56:01 Right? So now you know, so now you know, okay, we’ll come. My typical borrower pay in this specific market to be a homeowner. And, and right now I think the most is like $1,600 with taxes insurance to be a homeowner in Phoenix, Arizona. Alright, that’s not bad, right? Yeah. Even if the economy tanks, I mean 1,603 bedroom, two bath, house block construction, newer. Not Newer rehabbed, like that’s pretty good, right? Yeah. For the rest of our careers, that’s pretty good. Right? And if that’s your what you’re owing your guy. No, that’s, that’s. No, that’s not what I. No, I’m only, I’m less than that. So you should be. Even if the market dips and rent depths, you’re still going to be okay. And here’s the thing, like, let’s say you have it goes, it’s like the wholesale world and all the big wholesalers that are, that are buying our market deal comes through boom.
00:56:54 They’re like, I’ll take it. Well, you do $20 a month, you might have a couple, you might have three that you overpaid, pay the money and go to the next one, right? Right. That’s the hardest thing to do as a real estate investor. Write a check on a bad deal. The best thing to do, it’s a lot easier. And then keeping it. That’s right. So one of the things too is you were talking about the value of a mentor. What can you talk about on that? Well, I’m, I’m a, uh, so with technology today, you know, podcasts, your podcast, like there’s so much information out there. So I, I truly, uh, I’ve been, I’ve been, I’m in masterminds. I, uh, I, I’ve had a mentor. I found how I found my mentors. I brought them value. Yeah. I’m like, here’s this deal that you’ve been door knocking for 18 months, let’s make money.
00:57:42 And we did, you know, that the greatest thing about my very, very, very first deal that seller still, that homeowner still lives in that house today. In fact I’ve been, you know, haven’t been in the area, but I can’t wait to go door, knock them and give them a big hug. And I mean they were losing their house, but then within days, and they’re still there with their kids. Their kids are probably older now, but a lot older, but they’re there, like, I pulled it up on tax record. Same people. Very cool. So that’s, I mean, that’s the value that real estate investors can provide. People solve their problems. So, so back to my mentorship. I mean, I’m, I get up every morning, uh, one of the, I would say one of the biggest things that has helped me personally as a personal development side world is I’ve been, I meditate.
00:58:23 Yeah. And so, uh, every morning I get up, I lay in my bed, should try, try not to like fall asleep again. But I, you know, I take 10, 15 minutes and I give, I asked for, um, you know, what am I grateful for, you know, start with gratitude. I always start with gratitude. I mean, it can be as little or as big as you want that gratitude to be for that day. Um, and then I, and then I pray, you know, I pray for it could be obviously my family, but people I don’t know. I mean, pray for you. I pray for you today. I was like, this is going to be the best podcast we ever. You all ever have. No, it’s pretty good. And so, um, and then I asked for abundance, like Ha, asking for greatness to happen to you everyday. And then you get your group, your wife, your kids, your, the people in your network to do the same thing.
00:59:14 It’s the corniest thing in the world. But greatness happens that we wouldn’t be sitting here right now in my opinion. You know, I know there’s the secret and all that stuff, but it’s the corniest thing to do consistently. Over time it pays off. It’s unbelievable. Well, you get what you asked for. Yeah, you do. And so that’s changed my life. I mean, I, uh, I, I, I’ve been doing that. I’m not super religious, but I’m very spiritual, you know. Um, and I think that, that just, if you start your day that way, you know what I mean. I get up really early, like five and then I exercise and then I listened to. When it comes to mentorship, there’s a million podcasts out there. I mean, your podcasts. I listen to a few before we came on the show earlier in the week. I dot freaking smart people out there.
01:00:00 Yeah, there are amazing. And if you just take a little bit of what they learned and implement it, you know, who knows what can happen. It’s amazing. Uh, and then the value of an accountability partner. What would you, what are your thoughts on that? So, uh, probably a year or so ago. Yeah. It’s been longer than that. I, I hired an accountability coach. Okay. So I pay him. I don’t know what a payment month actually I do, but he calls me and is this doesn’t matter at what level you’re at. I mean if you’re just beginning or if you’re, you know, you’ve got 350 seller finance deals out there. I’m having somebody that you can talk to that’s a third party that can keep your shit together and ask you why you’re not doing x and it’s not your wife. Right. I’ve tried using my wife for years. It doesn’t work.
01:00:48 I don’t know why, but we work with each other. We helped, but we each have our own little accountability team member and they, we go over where we’re at personally, professionally, and they just keep us together and I, I think that that’s the biggest. That to me is a game changer. Yeah. Because they’ll, they’ll call you out. Yeah. No, that’s great. I mean, I have exactly. Couldn’t find anybody will be your accountability partner, but pay him like actually pay them. It’s worth it. It’s worth the investment. Pam. The only difference, the only nuance would add to that is that there is some life coaches out there. I have no idea what they’re doing. Don’t go to those guys. Go to people that. Yeah, I mean my, my guy’s awesome. He. Well, I’m not talking about you specifically. No, no, I know. No, I know. But you know what?
01:01:34 Here’s the thing like, okay, so I go back and forth on this, but there’s gurus out there that teach how to make money in real estate. Right. And those gurus haven’t done a deal and ever and I, but I’ve been involved with all of them because I, I’m, I’m, I’m a geek. I love learning, right? Yeah. But here’s the thing. You can be a really, really, really good coach and not be good at that, that deal. You know what I mean? I’m personally, I would say I’m an okay coach. I want to get better at it because I love shared. I mean, I hope you can tell. I love sharing what I’m doing because it’s life changing, like it changes people’s lives. But um, but there are people that are really good coaches and, and, and to be a good coach. I mean, you’re just trying to keep
01:02:20 people accountable to, to go to the next level. Right? Right. So I, I don’t, I don’t know. I mean it’s a different skill. It’s a great skill.
01:02:28 So. And I, I hear what you’re saying because one of my favorite examples for this is the Phoenix Suns coach back in the seven seconds or less. Did you ever go wash them pregame? Shooting around. So the son’s coach. So you’ve got two Boris, the ultimatum, a great three point shooter. Yup. Everyone was an amazing three point shooter during the seven seconds or less error. Right? But if you look at the son’s shooting coach, he would go out there and correct their farm and make sure they’re shooting well and they were. And he had the worst freaking form I’ve ever seen it. I’m passionate about jump shots, shooting it right and your elbow and follow through. Fingers spread all that good stuff, right? Guy couldn’t do anything, but he’s a great coach, great shooting coach, amazing shooting coach. But I guess the reason why I was ending that nuance, that there’s some people out there that have no idea what to do whatsoever, make sure they at least know what to do in order to hold it.
01:03:13 And everybody’s personalities are different. Yeah, just slows your line. I, I know, I mean, you know, as your business, I mean, who do you go to to keep you on your game? Right, right. Like, I mean for me, you can have a spiritual coach. You have your. I mean, I went to spin class today, this gal, she’s 50, I think she just turned 54. I mean, it’s unbelievable. I think she uses her for spin class today at noon. I don’t know. And she is amazing. She crushes it and she keeps me motivated and coming back to do that. I just, I just love, I just love it. And I don’t know if anybody spins. It’s, it’s fun. Sweat, sweat to death.
01:03:50 Um, uh, as we wrap up, is there any lasting thoughts or last thoughts you want to add?
01:03:57 Um, no, I mean I, I think that, um, what we’re doing today is just another tool in the toolbox, right? There’s opportunities out there. Um, uh, you know, uh, the. Oh, the four point $7,000,000,000,000 secret did we, did, we talked about that earlier? I have a book, I’ll give it to you. So if you can, um, you guys can email [email protected]. Um, I’ll give that to you guys. It’s about private money and the whole thing. Um, and I don’t know, I just kept being starting a, you know, almost 15 years ago. The key for me in this business is Qa is cashflow. Like I think cashflow is the key and, and, and make it as passive as possible. So that’d be my, that’d be my thing. Do you have anything for me?
01:04:43 Uh, no. I mean there’s a massive inspiration. I mean, I, when I heard you speak about self care as it got, I gotta have this guy on the show and pick his brain because I want to do this. Yeah, we’re going to do this. Okay. So guys, um, if you’ve got again value from the show, please share this episode right now and if you guys want to get ahold of Eric House, we talked with Eric. Eric buys homes dot. Yeah.
01:05:03 Eric and Eric buys homes.com is good. And then or, or go to eric buys homes.com or phone numbers on there. I don’t even know the phone number on the website because I never use it but it’ll get to me get to our office. Yep. Cool. Uh,
01:05:16 and then we do have special guests tomorrow. Four o’clock. It’s unusual but he’s an out of towner so anytime someone’s flying in from out of town, they want to do a show. There will always be glad to have them so long as you know, got a track record. So the 80, he’s 100 k months and he’s going to share how he’s done that. Again, Eric, thank you for being on the show. All three shakes. Thanks. I hope it helps guys. Oh, you definitely did. If nothing else you inspired me. That’s what, that’s what it’s about. Alright. And I’ll see you guys tomorrow.
Jason PattonPosted at 08:23h, 18 January
Wait. How is this guy getting around the heavily imposed restrictions placed on “owner financed” properties by the Dodd-Frank act of of 2014? What about the “mortgage originator law?” Is he paying an mortgage broker to “originate” all these “notes?”… especially if he is in the first leinholder position. https://www.forbes.com/sites/jordanlulich/2018/07/28/restrictions-you-need-to-know-about-seller-financing/#471d57f86594