Investor Cheat Code Podcast with Mike Simmons

In today's episode, I interview Brandon Turner, who just wrote a phenomenal book called The Book of Investing in Real Estate with No Money Down. I highly recommend this book, and I am in fact going to spend the rest of the week talking about the topic of no money down investing in more detail.

I've talked to Brandon on the show before, but I was so impressed with his new book that I wanted to share it with my audience. Brandon briefly recaps his experience in real estate investing and his work with Bigger Pockets on today's show, but I suggest that you go back and listen to him talk about his career in previous episodes.

I feel like there is a lot of material out there on how to find deals, but finding money is less talked about. So Brandon's book on how to fund your deals with little or no money is really the golden ticket! Brandon talks about how the phrase "no money down" has been used and abused so much, but the concept is all about creative investing. It has nothing to do with being broke--in fact, the more advanced you become, the more you use creative investing. Brandon makes it very clear that his book is not about getting rich quick. He takes a good, practical approach to creative investing and does not present it as some sort of trick. He just lays out innovative techniques for funding deals, and makes sure people understand that creative investing is difficult and won't make you rich overnight. But if you want to get started investing in real estate right now and don't have tons of money, and you are willing to put in the hard work, creative investing can be very rewarding. Even if you do have money in the bank, you should try to use as little of your own money as possible. It encourages you to think about each deal very carefully, and to use a conservative and practical approach to investing.

One of the ideas that Brandon discusses in his book is owner occupied investment properties, or, as he calls it, "house hacking." It's the idea of using your primary residence as an investment, which has a number of financial benefits. Brandon says that there are two ways to house-hack: flipping house hacks and rental house hacks. Brandon also talks in detail about partnerships, which he says are his favorite method of creative investing, and gives us some examples of how he has used partnerships successfully in his own career. In the book, Brandon gives a wealth of advice on how to find private lenders and how to talk to them about working with you. Next, Brandon discusses home equity loans and lines of credit and how those can be used to invest in real estate. Brandon then talks us through lease options, or rent-to-own, and seller financing. Finally, Brandon explains why wholesaling is discussed in his book and is so popular for people starting out, even though it technically does not constitute real estate investing.

All of these methods are discussed in Brandon's book, so if this interview sparked your interest in creative investing, I highly recommend that you check it out. As Brandon says in today's interview, his book is a toolbox containing a variety of tools that you can use to invest in real estate. And as an added bonus, you can get a extra audio component with the book, featuring interviews with real estate investors including myself!

In this episode, I want to share with you the top three lessons I learned in my first year as a real estate investor.

As always, the goal here is to get you off the starting block and to really get you going in real estate. It's a blast and a blessing to be able to reach so many people and help you in your goals, so if there's anything I can do to be more helpful, get in touch with me at [email protected].

My first year in real estate was 2008, which was a pretty horrible time for real estate, but, ironically, a very good time for new real estate investors. Houses weren't selling for as much, so if you had a house since 2007 and had to sell it in 2008, you were in trouble. However, if you were starting in 2008 like I did, it was easier to get in the game.

Here are the first three lessons that I learned as a real estate investor:

Paperwork is important. All paperwork. It feels like it's slowing things down, but it must always be incredibly clear. You need to sign contracts so that everyone knows exactly what they're supposed to do and how much they're supposed to make. An important piece of paperwork that I realized I needed was a release of lien, which basically tells your contractor that the business is done and they have been payed. If you don't sign that and they don't sign that, you could have contractors or subcontractors come back and claim they were never paid. This is not a hypothetical--it actually happened to me. Also, if you're working with a private investor, make sure that there is documentation explaining exactly how much you were given and how and when you are supposed to give it back. All this paperwork can sound intimidating and tedious, but it is necessary so that everyone's interests are covered.

Hire the most qualified person for the job. My lesson revolved around contractors, but it applies to everyone you work with, from realtors to insurance companies. You need to work with the best person for the job, not a family member or friend or acquaintance you want to help out. Your contractor specifically needs to be the person who is giving you the best price for the highest quality and can do it the quickest. You're hiring someone as a business owner; it's not the time to be charitable to friends and family.

Momentum is key to success. Massive action is good, but tough to sustain. In real estate, massive action gets the humongous ball rolling. Once it gets rolling and you start getting results, you can't stop. You need to continue to take action. It's like trying to push a car--once you get it rolling, it's easier to keep it rolling. Once you establish momentum, you need to keep it moving because if you stop working, you will have to gain momentum all over again. You don't want to be in start-up mode forever--it's exhausting. Never take your foot off the pedal.

In this episode, I want to talk about some things that you can do to improve your real estate investing business immediately. If you do these three things today, you will see an improvement in your business. Every once in a while, it's good to refocus. You might be running around and spinning your wheels doing things that aren't actually producing results.

Here are three things that you can do right now to get you going in the right direction:

Set a meeting with two wholesalers, two realtors, and two local real estate investors. You can do this in one day. Call these people up, tell them about your business, and get them to agree to sit down with you for coffee or lunch and have a face-to-face meeting. I don't care if you're currently working with realtors--call two more. When you meet with the real estate investors in your area, take the time to talk to them about your business and what you're trying to accomplish. See if they would be interested in giving you advice or letting you shadow them. Find out how you can benefit each other. Create relationships and see what happens. You might be surprised by how generous people can be with they time, knowledge, and experience.

Find the top five things that you spend time on in your business that you can outsource. Make a list of the activities that you engage in each week for your business. Pick out five of them that you can have somebody else do for you. Outsource them to your spouse, your business partner, or a freelancer on ODesk or Elance. I guarantee that you doing at least five things consistently that aren't critical for you to be doing. There's a lot of things that you can do in your business that keep you busy, but that aren't moving your business forward. Make sure that everything you are doing personally is vital.

TAKE ACTION! This is general, but so important. A lot of people talk about what they want to do, know what they want to do, maybe even have a plan--they just don't do it. Take action. Take massive action. get out there and just do it.

In this episode, we are going to talk about realtors and the top three things to remember when working with them. These are things that new investors often overlook. I've been working with a realtor since day one and they're an integral part of my business. Sometimes I get frustrated trying to find the right one, but there are a lot of great realtors out there and they're running a business too.

Here are some of the things that you should keep in mind in order to get the best results and have the best possible working relationships with them:

Realtors are in business to make money. They will be much more receptive after they make money with you. I don't care how nice, friendly, or charismatic you are--if they don't ever make money as a result of working with you, they will not be as motivated. On the flip side, once you flip a few houses with a realtor, they're going to be very receptive, quick to answer your call, and very open to go above and beyond because they know that they will make money as a result of working with you. They're running a business, not a charity.

Most realtors do not understand real estate investing. This is the biggest hurdle that I've had to deal with working with some realtors in the past. They don't seem to understand how I determine whether a lead is going to be profitable in my business. And in all fairness, not all investors have the same formula for determining what a good deal is. But, if you give them your criteria and your formula, that should help them be more clear when they send you leads. You need to give them a simple and quick formula that they can use to determine whether or not a lead that they want to send you is a good one. Try to make it as streamlined as possible. Make sure you find a realtor who is interested in giving you the information you want.

Some realtors are better than others--find one that you work well with. It's not that if they don't work with you the way you want, they're not good realtors. I tend to look for newer realtors who are aggressive, hungry, and open to my ideas. I find that they're more flexible and teachable. They have to be interested in finding out how they can help you. And when you find someone you work with well, stick with them as your business grows. If someone's willing to put in hard work in the beginning, they should be rewarded for that.