Investor Cheat Code Podcast with Mike Simmons

Today I want to talk about your best birddog. Who out there is on the streets every days, knows every vacant house on the market, and has their finger on the pulse of real estate? The mailman!

The mailman who walks your target market knows everything going on in the area. Talk to your mailman about potential leads. Give them a bonus for the information they gave you when you get a deal. They spend more time in the neighborhood than anyone else and are also most likely to know of vacant properties. This information is pretty useless for them, but for you it's priceless! Don't overlook this really valuable resource. You could drive for dollars, or you could ask the person who is basically driving for dollars every single day.

Today I want to share with you an inspirational talk similar to the one we listened to last week. It's a fairly quick talk by life coach Tony Robbins meant to inspire you and help you set your New year's resolutions. But let's not wait until January to think about our goals! Listen to this talk by Tony and think about what it means to set goals and how to determine those goals for the next year. Start thinking about these things early, so that you can start the next year fully prepared and ready to take on new challenges.

I hope those of you celebrating had a wonderful Thanksgiving and are recovering from all the good food and fun!

Today I want to give you a chance to reflect and think about how you ran your business in 2014. Did you create a job? And by that I mean, are you doing everything in your business? Does your business 100% depend on you? Are you doing all of the labor yourself? For most of us, the answer is yes. Up until fairly recently in my business I was doing everything myself. Sure, I had contractors and realtors, but I was doing all the running around and finding deals and financing by myself. You can never scale a business that way.

If you plan to do the labor yourself, you’ve bought yourself a job. Nothing wrong with that – I’ve done it multiple times. However, it IS a job.

A lot of us want to do real estate investing so we don't have to have a 9 to 5 job, but if you're busy enough in real estate and doing everything yourself, all you've done is replaced one job for an even harder one. When it's your business, you can never clock out.

If you don't want to create a job for yourself, you need to hire out a lot of things. If you want to run a scalable business, learn to budget for others to do the labor.  The first thing to outsource is the actual rehab--if you want to do more than 1 or 2 deals a year, you need to hire a general contractor. Next, you might want to hire someone to take care of administrative tasks for you. You could even have someone in house taking care of acquisitions for you. You do that so you can scale.

The ability to scale depends on your ability to create systems and hire the appropriate people. Now, the number of people you hire depends on the size of your business; maybe one or two people will be enough for your business right now. But as your business grows, you will need to hire out more and more things. You have to learn to let go of simple things, and free yourself up to do what you really need to be doing.

 

Today I want to share with you something that I did very poorly when I started in real estate. If you want to be a real estate investor, you need to think of yourself as a real estate investor, and you need to tell people that you are a real estate investor. I don't care if you have another full-time job--if you're investing in real estate, you're a real estate investor.

This business cannot and should not be done in secrecy. When I started, I was embarrassed to tell friends and family about my business because I was worried that I would look stupid if I didn't do well or if I decided real estate wasn't for me. But connections are essential to this business, and if no one knows that you're investing in real estate, you have significantly handicapped your ability to do deals.

Once I started telling people about my business, opportunities started opening up for me. I realized that acquaintances were excited about what I was doing, and they were even sending work my way! These are leads that I never would have gotten had I stayed quiet about my business.

Tell everyone you know that you are looking to buy real estate. You never know who will know someone who knows someone with something to sell!

On Mondays I usually interview a great real estate investor, but as investors we don't only need to know the nuts and bolts of real estate--we also need inspiration and motivation. My buddy Justin Williams from House Flipping HQ recently shared a great video of a speech by Darren Hardy with me.

Darren is the visionary force behind Success Magazine. He is a business leader and has incredibly access to some of the most successful people in the world. He recently gave a speech sharing the secrets to the success of these incredibly high-achieving individuals. I was so captivated by the wisdom in this speech and I really want to share it with all of you. It will make you a better businessperson, a better entrepreneur, and you will learn to achieve more in less time. This is must-listen material.

Today I want to talk about finding free leads. This isn't some sort of weird secret--this is about very old-fashioned, grassroots real estate investing. How do you find free leads? It's not that easy.

Realtors are a great source of free leads. You may have to take them out to lunch or coffee, but you won't have to pay for the leads they send you.

Another great way to start getting free leads is driving for dollars. It's very simple: you figure out your target market, you get in your car, and you drive up and down the streets in those neighborhoods. Look for abandoned houses in bad condition. Look for stickers and warnings on the door, or boards over the windows. Looks for newspapers collecting on the front porch. These are all signs that no one lives there anymore. Chances are that the owner doesn't even live anywhere nearby. It could be an old rental or an inherited house, but either way the owner probably wants to get rid of the house. If you find these houses, write down the address, track down the owner through your local title company or city website, and send them a letter. Tell them you're interested in buying the house, and they'll probably be very excited to sell it!

Today I'm going to give you a little pep talk about fear. I probably should've titled the episode "embrace fear!" Fear will keep you sharp, careful, keep you from getting sloppy or lazy. When you're afraid, you don't just dive into a bad idea. Of course, you don't want fear to hold you back. If fear is keeping you from taking action, that's a problem. But if you can control it and harness it, fear can be very useful.

When fear starts paralyzing you, that's when you have to fight it. I want you to just start, I want you to be able to go for it. Use your fear to push forward. Let the fear of not achieving your goals or of being stuck in a day job you hate or of never being able to retire propel you into taking action.

Today I'm excited to bring you my interview with successful new house flipper Tyler Smiarowski. I found his recent success story on Bigger Pockets very inspiring and I think his advice will be particularly useful to all you newer house flippers out there.

Tyler started investing in real estate by buying an owner-occupant duplex in 2007, but he only recently started flipping houses. He just sold his first flip last month, is currently working on his second, and closing his third next week. He already owns 23 rental units and he plans on flipping eight properties in 2015. On top of that, Tyler works full-time as a CPA.

Tyler initially got interested in real estate as a way to start saving up for retirement when he was still in college. He closed on his first duplex right out of college and he admits that he didn't really know what he was doing at first but he was very eager to get started. He made a lot of beginner's mistakes, but he still owns the property today.

Tyler found his first two duplexes using a realtor, while the last four he found privately by cold-calling and sending out letters. Tyler talks through the details of finding and assessing those properties in the interview, so make sure you check it out!

Tyler also goes over how he financed each one of his properties. He has certainly tried many different financing techniques in the past and it's fascinating to hear his thoughts on each one.

After acquiring 23 rental units, Tyler dove into house flipping. He explains that he always considered it, but it took him a long time to try it for himself. In May of this past year, he had just found out that he was going to be a father and he wanted to make more money, so he decided to flip a house by the end of 2014. To find his first flip, Tyler bought and set up bandit signs in his target market. There wasn't much of a negotiation with the seller and the deal was a success. For all you new real estate investors, I have a word of advice: if you know your numbers and you get an offer that fits your criteria, buy it. Everything doesn't have to be a negotiation. If there's no battle, then don't fight.

Tyler calculated the ARV for his first flip by searching for similar properties listed or recently sold online. He tried to be conservative and came up with a pretty good estimate of what his house might go for. Then he brought in his contractor to estimate the rehab costs. I've talked about accurately estimating rehab costs in detail before, and Tyler goes over  what he ended up replacing and the lessons he learned in the process.

Tyler is currently working on his second flip, which he found through a realtor, and just started renovating. Listen to the full interview for the numbers and inside scoop on this one!

The biggest piece of advice Tyler has for new real house flippers is the acronym KISS: Keep It Simple Stupid. Simple can and will make you money.

If any of you have questions, you can contact Tyler at [email protected]

Today I want to talk about a member of your team that you really need to focus on and make sure you're paying attention to: your real estate agent. You may have a license yourself or you may not. I don't, but I understand that real estate agents are critical to the success of my business: they have access to the MLS and they work with buyers and sellers all the time. Real estate agents are a part of your team that you shouldn't overlook, and you shouldn't settle for the first one you find. It's not an exclusive relationship. You should be working with a lot of different agents.

Get to know some real estate agents. They can help you find great deals, get you comps, help you connect with lenders or contractors, and a lot more. Don’t settle for an average agent though – find great, investor friendly agents. Build those relationships and get as many agents as you can sending you targeted leads. The more leads you have coming in, the higher your chances of getting a great deal! The more real estate agents you have sending you leads, the faster your business will grow.

Make it a point to meet one new real estate agent a month, or even one a week, build those relationships, and before you know it you will have deals pouring in and feeding your business.

A lot of people say that real estate is a "get rich quick" business. I hate to be a downer, but I don't think that's true. You can get rich in real estate, and if by quick you mean in a few years, then yes,  you could make a lot of money relatively quickly. But you're not going to get rich overnight or even in a few months. "Getting rich" is also very relative.

You could luck into a once in a lifetime opportunity or have a big windfall and become financially independent pretty quickly, but that's not how it usually works. Generally, people start off wholesaling properties or flipping houses, and each flip or sale takes a long time and you get better at it as time goes by. I think real estate is a great vehicle for becoming financially independent, but it doesn't happen quickly and there is plenty of work and skill involved.

Unfortunately, a lot of real estate investor "gurus" perpetuate this "get rich quick" idea and that there's some well-kept secret they know that will make you rich, and it's just not true. There's no secret formula to becoming rich in real estate. All the information is out there in podcasts and websites like mine. I support coaches and mentors, but there really isn't any one big secret they can teach you.

Just like any business, real estate takes a lot of hard work. If you put it time, energy and dedication, you can absolutely become wealthy. Does it happen overnight? No. But are your chances of becoming independently wealthy in real estate better than with a 9 to 5 job? Absolutely. It all depends on you and what you're willing to do to get there.