Investor Cheat Code Podcast with Mike Simmons

In this episode, I get the chance to interview fellow 7 Figure Flippers Rob Badhorn and Ernie Vargas. Rob lives in Arizona, but performs flips and owns rentals in Ohio. He worked in corporate America for 23+ years, handing $1.5B in revenue for Sales Teams Across USA. He is constantly building multiple streams of income, especially during these challenging times, as he considers himself a serial entrepreneur. Rob’s rental portfolio includes the flips and/or wholesale of 100+ homes utilizing the marketing strategies of Direct Mail, Bandit Signs, Cold Calling, RVM’s/Voice broadcast, FB Custom Audiences, and Texting. He also owns a software company specializing in Lead Generation and Skip Tracing.

Ernie Vargas purchased his first house in 1994 and continued doing real estate while working full-time, but he didn’t hit the success he felt he was capable of. In 1999, after an accident that left him in a coma, he realized that life was short, so he quit his job and went into investing full-time. Eventually, probate hit his radar and started him on a quest to learn all he could about this niche that no one had answers for.

After many years of specializing in probate, Ernie has become a true probate expert, often helping attorneys and their clients in the probate process. His ability to think outside the box coupled with his expertise in negotiating and marketing has allowed him to help several hundreds of investors, agents, and sellers get deals closed. Now Ernie not only has more time to spend with his wife and four kids, but he gets to do what he truly loves doing - helping everyday people create wealth and personal freedom.

The guys first began by giving us their backgrounds and what lead them to real estate investing. Ernie described the moment that really changed things for him when he was working as a freezer stocker at a warehouse store that would eventually become Costco. His boss said something to him that made him realize that he wanted much more from life. He changed jobs and on his way to his first day of training, ended up getting into a terrible car accident that left him in a coma. This experience, coupled with a seminar he went to, completely changed his thinking.

Rob said his journey was similar to a lot of other investors - he read Rich Dad, Poor Dad, and went to a few seminars, but he said he has always had the bug to get the passive income stream going. He was in the corporate world but purchased a couple of rentals in order to make up his salary so that he could invest full-time. Joining the 7 Figure Flipping mastermind group really changed everything for him.

Rob talked about his rental portfolio and how he manages the properties himself while employing one handyman to do the work. I asked how much of the work he actually does himself as far as background checks, collecting rent, etc. and Rob said he thought the thing that changed the most in the past several years was the software available for property management.

Even though he has a large rental portfolio, Rob felt the need to expand into other forms of real estate investing to develop multiple income streams, which is why he and Ernie partnered up. I wanted to dig deep into the details of their partnership because so many people struggle with making this work. Ernie said they both have different areas of expertise; Rob is really strong in the area of technology related to real estate and Ernie has become a probate specialist. They had met at a 7 Figure Flipping event and Ernie called Rob concerning skip tracing and the rest is history.

We also discussed the issues with probate investing which have been intensified by the COVID-19 pandemic situation. There is so much talk about this type of investing being deceitful that I wanted the guys to explain how they actually help people with integrity. Ernie talked about how many investors shy away from this type of work, but that the demand for people-loving investors is so high because there is a real need to help those who are grieving through the process.

These two investors bring so much to the proverbial table and share so much information with you in this episode of Just Start Real Estate. Don’t miss my conversation with Rob Badhorn and Ernie Vargas!

“We get lessons out of anything we experience in life if we allow them to change us.”

“I was bitten by the idea of opportunity and change.”

“Have a goal, give that goal a deadline, write it down, and go out and take action.”

“You do what you can with what you have.”

“You have to be ready when opportunities come.”

“The NBA did not work out for me.”

“It’s like bringing a puppy to the park if you are looking for a date.”

“When it can bring value not only to myself but to other people, that’s what really gets me excited.”

“There is a lot more value than just buying the leads themselves.”

“The ultimate motivated seller is probate.”

“You have to have a passion for people in this probate business.”

“Keep moving forward.”

Rich Dad, Poor Dad

7 Figure Flipping

Buildium

LeadFuzion

Ernie’s Website

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of November 23rd and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“There is no way an online experience creates a deeper, more meaningful, impactful relationship than in person. There is just no way.”

“I don’t think anyone can really multitask.”

“Even more than a maintenance cost issue, a long-term rental with a pool can be a liability issue.”

“Raising rents on a tenant-occupied rental that you just bought is 100% legal, but what are your ethical obligations?”

“Giving tenants more time to either figure out how to pay more rent or move is nice, but not required.”

“The market, or consumers, have the right to tell you, ‘That rent is too high and I am not willing to pay it.’”

“That is just how business is done all the time with multifamily investments. Why would you question it for a single-family house?”

“Please be a nice person, but don’t feel like you are doing anything immoral or unethical by raising the rent to fair market value.”

Neil is the CEO of Legacy Impact Partners and has invested in real estate opportunities ranging from houses and apartments to industrial and medical offices. Neil’s entry point into the industry was as a realtor with RE/MAX. Longing to quit forfeiting time for dollars, Neil moved into real estate investing. Like so many other investors, Neil began with single-family homes but has progressed into assets consisting of apartments, offices, and industrial space. While he owns a company that completes wholesale, renovation, and rehab transactions, Neil’s passion is now in cash flow investing in commercial real estate. Over the course of his career, Neil has been involved in over $300M in real estate transactions and is the host of the Real Grit podcast. 

We begin the episode with Neil sharing his background story and how he ended up in real estate. He shares that he started his journey in real estate brokerage 18 years ago, moved to single-family homes, and then to commercial real estate over the last few years. Neil shares that his mom, a stay-at-home mom, started a year before him. She has been in real estate for almost 20 years, and her entry point back into the workforce was as a realtor. She motivated Neil into it, and he knew if his mother could do it, he could do it better. 

We then talk about what attracted Neil to the investment side of real estate. Neil shares that he had a tremendous run. He was making pretty good money and wanted to do more. The stock market was scary for him, and the best option for him was to invest in a rental property. Prior to this, Neil was doing some fix and flip, and the experience gave him an edge when it came to investing in rental properties. The deal went well, and Neil decided to pick a little more and go down the rabbit hole. Neil shares that he never went to listing appointments as a realtor but as an investor in the direct seller market. However, in some cases, when he couldn’t make the numbers work as an investor, he provided guidance on how to get the property on the listing. 

Next, we talk about why Neil decided to move from fix and flip to investing in rental properties. Neil shares that being a realtor is a job, being a fix and flipper is a better job, but investing in rental properties is wealth building. He wanted to get onto a wealth-building path by acquiring assets and building his equity. On the single-family and apartment side, Neil has two sections of his portfolio, B and C. Neil also shares that they moved into commercial real estate about four years ago. According to him, the cash flow, the management of the property, and the ability to be efficient and get more returns are easier compared to single-family. 

We then talk about commercial real estate and how Neil is investing in the space. Neil shares that he is an asset-class narcissist and is always looking for good deals to wrap his head around. He focuses on building true relationships, having an understanding of what will transpire in the market, and getting comfortable with multiple asset classes. Neil shares that he’s in apartments and he also invests with partners in deals outside his market such as in self-storage, industrial buildings, and offices. According to Neil, the industrial market has been a great asset class in the last four years, but the office assets were dramatically impacted as a result of COVID.

Lastly, we talk about how Neil manages his portfolio without making it a job. Neil shares that the first step is to delegate. Having the ability to delegate and build the right team with the right talents is a significant backbone. Give people the space to do it, own it, be accountable, and grow without micromanaging them. Managing your properties can become a job, but delegating the work will help you get your hands off the terrible. Neil also shares more about his podcast, Real Grit, which combines all the tools you need to build your real estate legacy.

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Neil Timmins and get valuable information on how to move from realtor to flipper to commercial investing!

“Being a realtor is a job, being a flipper is a better job, but investing in rental properties is wealth building.”

“Having the ability to delegate and build the right team is a significant backbone in managing your real estate portfolio without turning it into a job.“

“Bring people in, give them the space to do it, own it, be accountable, and grow without micromanaging them.”

Getting Rich In The 20x Niche Gift

Real Grit Podcast

Legacy Impact Partners

Neil on LinkedIn

Neil on Facebook 

Neil on Instagram

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of November 16th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“Do not apologize! That is why I do these Lives. I prefer when people jump on and ask questions.”

“My company does not wholesale anything that is listed on the MLS.”

“It is infinitely easier to get a property off the MLS first before wholesaling it.”

“If the realtor is the one that brought us that seller, they will be compensated.”

“I am not trying to avoid the realtor’s commission, I am trying to avoid the realtor’s involvement.”

“One of the main things you want to look at is time on market.”

“We use ListSource as investors for finding houses to buy.”

“You want to make sure you are going into a market where houses are moving.”

“You definitely want pictures or a video walkthrough of a property before you buy out-of-state.”

“You have to start with good numbers.”

“It just doesn’t make sense to try to figure it out on your own.”

“I think coaching and masterminds are the best way to grow your business. The information you get is curated - what you need when you need it.”

“My goal is to do way more in 2023 than I originally planned because the opportunities are tremendous.”

In this episode, I have the opportunity to interview Roofstock CEO, Gary Beasley. Roofstock is a leading real estate investment marketplace that he co-founded in 2015. Gary caught the entrepreneurial bug while earning an MBA at Stanford, and spent most of his career building businesses in the real estate, hospitality, and tech sectors.

We began as we often do by diving into Gary’s background. He talked about growing up in small midwestern towns learning a bit about the business from his dad who owned a commercial real estate brokerage firm. Gary said things really changed for him when he went to school at Northwestern and how the environment really opened his eyes to the different possibilities available to him. He decided to go to business school after working a couple of years in real estate, thinking that he wanted to do something different but ended up right back in real estate after earning his MBA from Stanford.

Gary talked about his early work experience and his different roles. He talked about how much he learned and how his confidence grew when he was able to perform duties that he had not done previously. After several years as a CFO and president for ZipRealty, he decided to take a year off to work on various projects. He took some time to teach some entrepreneur courses at Stanford and ended up making a proposal to a solar panel technology company that led to another leadership role.

Gary took some time to explain the circumstances that led him to start Roofstock and the advantages of their platform. Some of these include fast sales, costs associated with selling homes are lower than through traditional means, there is no downtime for the investment and very little disruption to the tenant. As part of this discussion, I talked a lot about why using Roofstock is desirable for an investor in my situation. Gary outlined several of the benefits and guarantees that are integral to the Roofstock marketplace.

We then discussed where Gary thinks the housing market is headed. He said that it is so hard to predict the future because there are so many variables, but it is very interesting that the housing market is still so hot after several months of the pandemic. He stressed that because of the pandemic, people are valuing their homesteads more than ever and that is having an interesting impact on the market.

Gary has an incredibly interesting background and was a great guest, so please join us for this uber-informative episode of the Just Start Real Estate Podcast!

“One of the best things about college is how it expands your horizons and your viewpoint of what is possible.”

“I encourage people to view college as a time of exploration and not necessarily as a practical, pre-professional period.”

“College really teaches you how to think.”

“Early in your career, do things for the experience, not for the money.”

“The more difficult the decision, the less it matters what you decide.”

“You lean on experts that can help you.”

“Make sure you are surrounded by the right people.”

“Embrace the process and everything will be okay.”

“If you stay where you are comfortable, I hope you are comfortable where you currently are because that is where you will remain.”

“We are trying to break down the geographic barriers to real estate investing.”

“When you are building a marketplace, it has to be on a foundation of trust.”

“It has to be trust first, then growth, and then profitability.”

Roofstock

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of November 9th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“The opportunities are just off the charts on what we can accomplish in this market.”

“I didn’t know what I didn’t know.”

“I think we are going to look back at this time 10 years from now and think we missed some opportunities just because we were scared of the market changes.”

“The targets and numbers you use to calculate profit for a flip are probably going to stay the same even when you have some experience.”

“Your profit margin isn’t always a representation of what will make you happy, but also a built-in margin of error.”

“Build in at least a $20k profit margin on the first $100k so that you have some wiggle room if you run into issues with the rehab.”

“You don’t want to be on a high wire without a safety net.”

“Shoot for a profit margin of at least 15% on the retail price.”

“You want to look at what house prices have done in your market since May, since that is really when the market started to decline.”

“We don’t put inspection contingencies in our contracts. What we have are funding contingencies.”

Jay is a “real estate magician,” a proven expert in the private money space, and has been a full-time real estate entrepreneur for 14 years. Since his encounter with private money in 2009 after losing his line of credit, he has never asked anyone for money. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties and works seemingly magical deals for buyers and sellers alike. From his experience raising private money over the years, Jay has developed new, easy and simple techniques for raising all the private money you will ever want for your real estate deals.

We begin the episode with Jay sharing his background story and how he ended up specializing in private money. He shares that he got into private money as a result of a need, and all his quantum leaps in business and finances came out of big problems and challenges that he had to push through. For his first six years in real estate, Jay was primarily devoted to investing in single-family houses and relied on the local bank to finance his deals. He had one lender that he relied on for six years, but in January 2009, he learned a lesson the hard way. Jay had two houses under contract that he needed the bank to fund, but he learned he had lost his line of credit as the banks had stopped lending to real estate investors. Jay was not the only one, but he had to figure it out and landed on private money as a solution through a friend. He learned what private money was and how it works and put his program together, and since 2009, he has never asked anyone for money. Jay started teaching people he knew and had a relationship with, and from just being a teacher, he was able to attract over $2M in less than 90 days, and his business tripled.

We then talk about what private money is and what Jay teaches people about it. Jay shares that private money is not commercial money. It’s not getting money from the bank. It’s not getting money from an institution and does not equal hard money. Private money is when we, as real estate investors, borrow money to fund deals from individuals just like us, and they loan us their money from their liquid funds, investment funds, or retirement funds. Jay shares that right now, he has 44 private lenders that are funding his deals, and he has 20 projects going on simultaneously. Over 50% of his private lenders who are funding his deals are doing it from their retirement funds, and none of them had ever heard about private money, but he was able to educate them. According to him, when you are able to educate other people about private money, there is no chasing, there is no begging, and there is no selling. Instead, the lenders are chasing you.

Next, we talk about why private lenders would lend you their money even when you have done just a couple of deals. Jay explains that if you don’t pay the private lender, the property does. When borrowing private money, you are not borrowing unsecured money. You give the lender the collateralized note. That gives them the legal right to foreclose on you if you don’t pay them. Sometimes as investors, we fear screwing our private lenders when the deals go sour. Still, Jay stresses that that will not happen if we buy right, know what our formula is for your maximum offers when we are playing on cash, estimate repairs correctly when renovations are involved, and protect ourselves and our private lender by not borrowing too much money for a property. Don’t overleverage a property, and don’t borrow more than 75% of the after-repair value. 

We then talk about how to find people who have money who might want to lend it to you. Jay shares that there are three primary categories of private lenders and where you can find them. The first category is a warm market; family, friends, and connections in your phone, email list, and social connections. The second category is your expanded warm market. Whether you are well connected or not, you have to grow your network intentionally by getting involved with your community by giving, not getting first. Get involved in the local city groups, chamber of commerce, lottery club, and church to grow your local network. Networking is a big part of attracting private money. The better quality and bigger your network is, the better. Your network is the foundation of your net worth. The third category is existing private lenders. These are people that are already lending money out individually to real estate investors. 

Lastly, we talk about five steps to use when teaching a warm market what private money is. Jay shares that the first step is making your list. The first people to put on your list are people who are retired because there is a good chance they have a retirement fund that is not giving them high-rate returns safely and securely. The second step is to have a very casual, simple, no-pressure, no-selling, and no-chasing conversation over the phone or in person. Step three is arousing their curiosity by teaching them what private money is. Step four is teaching them your private money program, where you set the parameters, interest rate, maximum value, length of the note, and frequency of the payment. Step five is where they give you a verbal pledge, and then you find a deal. Jay advises to not present a deal that you need to be funded by a private lender in the same initial conversation when teaching the private lender program. You definitely want to avoid sounding desperate!

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Jay Conner and get valuable information on how to raise all the private money you'll ever need!

“When you are able to educate other people about private money, there is no chasing, there is no begging, there is no selling. Instead, the lenders will be chasing you.”

“Don’t overleverage properties. Protect yourself and your private lenders by not borrowing too much money for a property. Don’t borrow more than 75% of the ARV.“

“Networking is a big part of attracting private money. The better quality and bigger your network is the better. Your network is the foundation of your net worth.”

“Private money is where you want to end up because of the volatility of the hard money world and how the rules are changing.”

“Leveraging private money is easy - you just need to follow the right steps, don’t overthink and over talk, when someone says yes, your job is done.”

Money Guide

Omni on LinkedIn

Omni on Facebook 

Omni on Instagram

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of November 2nd and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“The deals are out there.”

“There is nothing like getting something for free that normally costs money.”

“Your business is dying, and will be dead soon, if you don’t get more leads.”

“Direct mail is one of the very best lead sources you will ever find.”

“If you have a long-term rental that someone occupies for a year or two, you can almost guarantee that the carpeting is going to be a disaster at that point.”

“You can fortify the materials in your rentals against getting destroyed or you or your property manager can do regular inspections.”

“If you want to reduce your turnover costs, inspect the property on a regular basis.”

“That is absolutely happening a ton all over the place.”

“The BRRRR strategy is not dead.”

“This is the time that it becomes easier to buy a house at 50% of ARV.”

“Some people want a unique, Instagrammable property for short-term rentals.”

Karen is the principal owner of the Huckaby Briscoe Conroy Group (HBC) with Keller Williams. The HBC Group has been recognized by the Wall Street Journal as one of the 250 Top Realtor® teams in the United States. Since 1977, HBC Group has sold over 1,500 homes valued at over $1.5 billion. The team consistently sells over 100 residential properties annually ranging from multi-million dollar luxury estates to condominiums and townhomes. Primary market areas include Northern Virginia, suburban Maryland, and Washington, DC.

Karen is the creator of the transformative "5 Minute Success" concept. Her books Real Estate Success in 5 Minutes a Day: Secrets of a Top Agent Revealed and Commit to Get Leads: 66 Day Challenge offer a combination of information and inspiration delivered through memorable stories. Her most recent book, Flip Time / Love Life is a heroine’s journey tale about loving the life you have while you create and co-create the life of your dreams. Karen also hosts the highly-rated and immensely popular show 5 Minute Success - The Podcast.

Karen starts by telling us how she got into real estate and what led her to author books and become a podcaster. She initially got started in property developments, but then switched to the residential side of real estate after staying home with her children for many years. Her success in re-building her business after the housing market crisis in 2008 led her to share her methods through her books and podcast.

I asked Karen what she thought helped her to be so successful so early and she said it was her primary strategy of lead generation that she covers in her Commit to Get Leads book. She said she consistently took a plain notebook, numbered a page from one to twenty-five, and when she had filled that up with people she had reached out to that week, she knew her work was done. She is a firm believer that this consistent effort and commitment is what has led to her continued success.

Karen then walks us through the 5 Minute Success principles. She is convinced success is achieved by getting into action immediately and applying lessons learned. Karen talks about how spending five minutes each day, especially attaching the reading of these principles coupled with an existing habit, like having your morning coffee, is very effective and makes the new habit effortless.

I then asked Karen to explain her 66 Day Challenge so we could dive a little deeper into lead generation because it is so vital to a profitable business. She pointed out that there has been a lot of research done on how long it actually takes to form a new habit. Many people say it takes 21 days, but during that period the person is really excited and, when that wears off, the habit can fail to fully form. If they continue, in the second 21 days, the person goes through a period of evaluation, determining whether they really want to continue developing this new habit. The remaining days in the 66-day period are when people actually start to experience the benefits, so it is important to power through and create the energy for persistence. And then, of course, this is just the challenge to get you jump-started for forming a life-long habit.

Because Karen has had so much success for a long period of time in real estate, I asked her where she thought the market would be headed because of the impact of COVID-19. She said she thought the concept of home has actually changed because of the shelter-in-place directives, and people are going to be more mindful of their living space because of it. Karen described how where they were seeing a trend toward urbanization, it now seems to be shifting toward suburbanization, because people want more space and land. She said many agents around the country are seeing demand, but many sellers are unsure about the ongoing situation and not pulling the trigger.

Karen then talked about her partnership with the Front Row Foundation which helps individuals and families braving critical health challenges live life in the Front Row. The hope of the foundation is to provide a Front Row experience that will allow the recipient to set aside any physical or emotional challenges while they attend the event of their dreams and create memories that last a lifetime.

Karen is an ultra-successful business person, but much more importantly, an incredibly generous and kind one as well, so you will definitely miss out if you don’t listen to this week’s episode!

“The best system is the one you use.”

“Don’t overthink it - it is the consistency and the work that matters.”

“Preparing to do the work is an excuse for not actually doing the work.”

“I call it activity blocking rather than time blocking.”

“The delivery system of these principles for 5 minutes a day is very powerful.”

“Time is a created thing. To say ‘I don’t have time' is like saying ‘I don’t want to.’”

“If somebody doesn’t want to invest 5 minutes a day into their personal or business development, then they don’t really want to be successful.”

“Leads are oxygen to your business.”

“If you are living life on the front row, you can have a front-row moment wherever you are.”

Real Estate Success in 5 Minutes a Day: Secrets of a Top Agent Revealed

Commit to Get Leads: 66 Day Challenge

Flip Time / Love Life

5 Minute Success Website

5 Minute Success - The Podcast

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of October 26th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“What I really want to know is what kind of business you want.”

“The big thing in real estate will always be finding deals.”

“That category of real estate - wholesaling - exists to serve you.”

“I don’t know if wholesaling is the way to go if you don’t have a lot of time, especially in the beginning.”

“Doing the actual flipping process - working with contractors, working with banks, taking an ugly duckling and turning it into a swan - I didn’t love it.”

“I switched to wholesaling and it was much more in line with my personality and what I wanted for my business.”

“We are going to have a long conversation before we get to the investing strategy and how to do it.”

“Traveling a lot and buying two rentals a year - no big deal.”

“No matter what investing strategy you are in, you should be developing relationships with realtors because they have access to the vast majority of properties that are for sale.”

“Realtors want leads and they want sales, just like we do as investors.”