Today’s guest has been doing real estate investing in Birmingham for five years, but has been in the real estate business for over fifteen years. In this episode, he talks about what drew him to the real estate market in Birmingham, as well as where he sees the Birmingham market headed in the next few years. He talks about his business, REI Traders, as well as the importance of having multiple revenue streams.

Key Takeaways:

[2:28] Originally from New York City, he ended up in Birmingham after the market in Ft. Lauderdale/Miami went down. Birmingham is a fix-and-flip market, as well as a buy-and-hold market, and he found success very quickly in this market. Since moving to Birmingham in September of 2011, he’s done around 400 deals.

[3:55] In 2011, when he was looking to find a new market, he was noticing that the trend was moving away from the fix-and-flip market to passive cash flow. Secondary markets seemed to be where the opportunities were for investors. There were many benefits to the market in Birmingham: temperate climate, low taxes, and low insurance, to name a few.

[6:20] Many of the primary markets are cost-prohibitive in terms of the amount you have to invest to fix and flip or wholesale, whereas in the secondary markets, the cost to get properties are much lower.

[7:01] Jonathan and Brian talk about how the real estate climate in Birmingham has changed since Jonathan moved there in 2011. There are a lot of new developments in the downtown area of Birmingham that provide a lot of opportunities for investors (many who are developers). There is a lot more competition now for properties, which has resulted in higher buying prices. In the last year and a half, there’s been an influx of new investors moving into this market. One unique thing about the Birmingham market is that you can be successful with buy-and-holds and fix-and-flips.

[12:48] Where is the Birmingham market headed in the next few years? Birmingham doesn’t have wild dips in appreciation and value. The market is conservative and stable.

[14:20] What is the power of having multiple streams of revenue? You can move inventory in multiple ways, and if you have a license as an agent, that creates an additional opportunity to generate revenue.

[17:43] As a new person to the real estate market, you should start small with some wholesaling deals. Once you gain more experience, then you can start branching out and looking at the other types of ways you can be successful in real estate investing.

[20:01] In terms of getting your real estate license, many first-time real estate agents fail within the first year. It’s an uphill battle to start as a wholesaler or as an agent; however, if you do both together, your opportunities double. Getting your real estate license will teach you a lot about real estate as well, that could be beneficial as a new person.

[23:20] Jonathan explains his business, REI Traders. He and his business partner, Jeff, wanted to develop a platform that aggregates all of the inventory for different investment properties in one place. In Alabama, they act as a broker for investors, and from out-of-state investors they receive client referrals. Jonathan explains the process of how the platform works.

Mentioned in This Episode:

ALAREIA Website

Daily REIA Show

Facebook Page

REITrader

To contact Jonathan: [email protected]

Jeff Morris is a Closing & Title agent for Member’s Title. In today’s episode, Jeff shares information about the basics of closings and titles, as well as how they address different issues that arise from wholesale properties.

Key Takeaways:

[2:24] Before he got started in real estate, he received a degree in Biology from Samford. After he graduated, he took a job with Robinson Adams working to recover assets when they had losses that exceeded a certain amount. It was fun when he was young, but he realized it wasn’t necessarily a career that would allow him to have a family as well. He had various educational and professional experience beyond that, before he interviewed with the Title Company and got a position.

[6:17] He sat in on closings for about a week and then opened his own office. This whole process was a learning experience, as he figured out what worked for him in certain situations. He was able to keep the business going through the dip in the market, and in 2013 he merged Member’s Title and Shannon Crawl to become Member’s Title as it is today.

[9:10] When you get a house under contract, what happens next? Once the house is under contract, you email your title company the contract, and they will verify address. Next it goes to an abstracter, and they trace the property backwards to make sure everything is correct with title. Next the underwriters receive the title abstract, and they prepare an insurance commitment (promise to insure).

[11:45] What exactly does the title insure? The insurance is a one-time per owner premium that is paid at closing. By having this insurance, you know that the property that you have purchased belongs to you.

[13:50] Steps a wholesaler can take to ensure the owner of a property: 1. Look at the tax records to double check the owner. 2. Use the clerks at the probate court to find the last deed of record. If someone is tax delinquent or something has been sold in tax sale, the person listed may be the person who purchased the tax certificate. You may have to look further back to find the true owner. To find the deed of record, there are programs online, but you can also go to the Courthouse to obtain records.

[18:32] When it comes to wholesaling, the properties with the most title issues are usually the off-market properties. The most common issues he sees involve a death in the family, and the two types of deeds that define what happens with the property. Jeff defines the terms of these deeds and what happens in each case. There could also be situations involving divorce, and people who pay taxes on the property for a few years, even though they aren’t the owner.

[23:28] How can someone who is wholesaling avoid bringing some of these issues to the closing agent? Any preliminary research might reveal something, and you may able to ask for a copy of the deed where the seller got the property. In some situations, there may be no way to know until the title agent receives the documents. Sometimes as the wholesaler, you may end up having to do the leg work to get transactions closed.

[28:26] What are some of the common mistakes a wholesaler could make that listeners can avoid? Some wholesalers don’t leave themselves enough room in a deal. Not managing both sides of the transaction can also be an issue. Scheduling a closing with a reasonable time, and setting people’s expectations, is probably the best thing you can do to look professional to everybody involved. This will help hold you accountable as well.

[32:34] Between 50-60% of Jeff’s business comes from real estate agents, as well as about 15% from his investment business. They get business delivered from loan officers at banks, and some business from builders and people who sell land.

[34:37] Jeff explains a situation where it would be beneficial to get insurance as the middleman in a wholesale deal. It can be easier for a wholesaler to get stuck in the middle, and getting title insurance can help make these situations easier.

Mentioned in This Episode:

Next ALAREIA Meeting: July 13th

ALAREIA Website

Member’s Title

Citizen’s Access Portal — Jefferson County

ALAREIA YouTube Channel

Landmark Jefferson County

To contact Jeff: (205) 776-8800

Email: [email protected]

Cell: (205) 718-2289

In this episode, Brian talks with Joseph about all things insurance. Joseph talks about his background, as well as several aspects of rental insurance. He talks about the importance of viewing the insurance company as your partner, different types of policies, cost, and some of the different situations they cover.

Key Takeaways:

[3:03] Joseph shares how he got started in real estate insurance: He began in banking, but has been an insurance agent for almost 8 years. He got involved with Foremost Insurance, and made a niche for himself in the rental market. In addition to rental insurance, they also do things like home and auto insurance. He now works for Farmers, but with his contract, he can access other companies to help customers get what they need.

[4:21] Joseph talks about the different kinds of policies they write, including cost and coverage. They typically write for $30,000-$60,000 property, covering rentals, vacants and flips. The price is generally very good.

[8:30] Joseph talks about the importance of insurance as a safeguard, and how looking at the insurance company as your partner can help strengthen the trust and help prevent problems up front.

[9:36] The Foremost product has two different policy types. The Dwelling Fire 1 covers whatever is named in the policy, such as wind, hail, etc. The Dwelling Fire 3 is more comprehensive, with some additional riders available, and offers more extensive coverage than the 1. The types of liabilities include premises liability and a personal-injury type liability. Joseph goes into further detail of what these include.

[12:50] Cost of coverage, specifically for rentals: typically for a $50,000 rental would probably run somewhere around $600 - $800, depending on different credit factors involved. There are options to break it down into monthly or quarterly payments.

[16:15] For a person who has many rental properties, what would an umbrella policy look like? One downside is that there is not one blanket liability for multiple properties. Currently, each property has its own liability limit. Most umbrella policies require that you carry a certain amount of underlying limits (usually $300,000).

[18:40] How does a mortgage affect coverage costs? You always want to at least cover your mortgage amount. Joseph recommends covering the house for at least the purchase amount and improvements.

[22:51] Brian and Joseph talk about vandalism in terms of rental insurance. Joseph typically doesn’t write policies without vandalism, because it’s one of the biggest risks. Joseph talks about what qualifies as vandalism, and the line between vandalism and theft.

[27:21] Joseph talks about some of the different claims he’s seen in his eight years of experience.

[31:06] Call Joseph for your one-stop shop for rental insurance! There’s not much he can’t cover, and if you have any questions he’s happy to answer them!

Mentioned in This Episode:

ALAREIA Website

Next Meeting — June 8th with Claude Diamond

Facebook Page

YouTube Page

Farmers Insurance

Contact by Phone: 205-701-4924 

Email: [email protected]

Today’s guest joins the show from Miami, Florida. Alex Pardo talks about his business, his podcast, and his giving mentality. Brian and Alex talk about some aspects of networking and different ways to reach other people in the business that can ultimately help everybody win in real estate.

Key Takeaways:

[3:06] Alex talks about the real estate landscape in Miami right now. The market has changed quite a bit in the past year or so, and currently there is a lot going on. Alex and his team focus on how they can differentiate themselves from the other people out there.

[4:55] Both Alex and Brian don’t like to view other people as competition. Alex has found that when he is generous with his knowledge and information, a byproduct of that is that he gets so much more than he expected. Viewing other wholesalers or agents as people you can work with, rather than competition, can open up other opportunities you may not have imagined.

[9:15] As someone new to real estate, it can be a challenge to filter through all the “noise.” Alex’s advice is to find one person whose mentality aligns with your mentality, and network with them to learn from each other.

[10:50] Alex’s current business in Miami is completely focused on wholesaling. For the past three years, he has been building a team so he’s not having to go out and do everything involved in a wholesaling business. His team includes an acquisitions manager, a dispositions manager, a transaction coordinator, a VA, and himself. When his team scaled down, their results have almost doubled.

[13:33] Brian and Alex talk about some of the cons of having a big business, both monetarily and from the managerial side. They also talk also talk about different aspects of marketing, and the importance of keeping this aspect consistent.

[15:48] Alex has found marketing success (in Miami specifically) with direct mailing. As response rates have decreased, they have expanded to other areas of marketing; they are currently testing Facebook marketing, and they are also having a lot of success with outbound calling. They get contact numbers from their own leads and also use a website to try to obtain numbers for their records.

[18:48] With Mojo Sells, they’ve been able to increase the number of calls per hour. The program calls three people at a time, and provides the capability to have pre-recorded messages for voicemails and the situations where two people answer at the same time. Alex talks about some tactics you can use to increase familiarity when making a call — identify who you are and why you’re calling.

[23:00] Alex also has his own podcast called “The Flip Empire Show.” It’s been going for about a year now, and has given him an opportunity to network with high-level people, provide value to the audience, and at the same time learn things himself. Both agree that the podcast platform is a great way to open doors and increase joint ventures with others.

[26:03] Bouncing off Alex’s statement, Brian talks about how he changed his business plan to being “jab jab jab, right hook” — this idea is about giving, giving, and giving some more, and then asking. If you can approach people and ask how you can add value or help them as they help you, that may help to positively grow both relationships and results.

[27:45] Alex’s podcast is more geared nationally, and they release two shows a week. One is a masterclass similar to ALAREIA where he meets with guests, and the second episode is a Q&A show where the audience can submit questions for Alex to answer. With his national show, he gets opportunities all over the country, which he can then share with people he knows in other areas.

[32:00] Alex’s last words of advice: you have to know your market. Keep up with what works in your market specifically. You should always look for opportunities to learn something from other people, and see how those ideas might work for you and your business in your market.

Mentioned in This Episode:

ALAREIA Website

ALAREIA Bootcamp

Next Meeting: June 8th

Daily REIA — YouTube

The Go-Giver, by Bob Burg and John David Mann

The Four Hour Workweek, by Tim Ferriss

Mojo Sells

infoUSA

Alex’s Podcast

Jab, Jab, Jab, Right Hook, Gary Vaynerchuk

Facebook — The Flip Empire Group

Alex’s Website

Contact Alex at: [email protected]

Frank Rolfe, with his partner Dave Reynolds, teaches people across the country how to buy, manage, and sell mobile home parks. Frank and Dave are the fifth largest owners of mobile home parks in the US, with 23,000 lots in 28 states. In this episode, Frank talks about his decision to get involved with mobile park home real estate investing, as well as some of the benefits of investing in this industry. He discusses some things to look out for, as well as resources for people new to the industry.

Key Takeaways:

[4:28] Their venture started as hobby: about a decade ago, they started writing little books about the industry and would sell them on Dave’s website. As that industry grew, they’ve covered everything from managing, buying, and operating mobile home parks. Both Frank and Dave continue to write, as demand continues to grow.

[7:01] How would one go about analyzing and purchasing a mobile home park? The first thing you have to do is set your territory — a good distance is probably 4-5 hours from where you live. After you know where you want to buy, you need to decide what you’re trying to buy; Frank shares the numbers behind this decision. Some nice commodities are city water and city sewers, paved roads, no master electric or gas, enough space, and desirable location.

[9:21] Frank talks about recession-resistant markets, and some locations that are ideal for mobile home parks. There are two kinds of locations — nice suburban areas and gritty urban areas. He also discusses some others favorable aspects they look for, including economics.

[11:23] Brian and Frank talk about some different issues newcomers might face. Frank shares an example of capping the home rent, and how this can be detrimental to your business.

[13:35] The Southeast is not typically desirable to buy mobile home parks. To make the industry work, you have to have two things: 1. Contrast between home values and mobile home values and 2. A market with a recession-resistant economy. In some cases, it’s just as affordable to live in a “stick-built” house as a mobile home. Additionally, many economies are not as diverse as far as the employment sector.

[16:20] Frank and Dave have looked at properties in Alabama and other surrounding states, and although they haven’t found anything so far, the stats in Alabama (and Georgia) are pretty favorable. Louisiana and Mississippi are two Southeast states that are not ideal for mobile home parks.

[17:55] There are two parts to a mobile home park: real property and personal property. It is better to own the real property, because it will appreciate and hold up over time, unlike rental property. If you own only the rental property (land), you don’t have to worry about maintenance costs and upkeep for the mobile homes. This concept goes all the way back to John Jacob Astor.

[20:05] Frank talks about his decision to invest his time and money into mobile home parks, versus any other investments. Before he got into mobile home real estate, he was the largest owner of billboards in the DFW area. After he sold it to a public company, he got into mobile home parks and just hasn’t really found anything else he liked better.

[21:56] As a mobile home park owner, there are a few things that you have to monitor. The biggest thing is collections; they have to collect the money, but it can sometimes be challenging because their residents typically don’t have a lot of money. To ensure they can collect, they charge a steep late fee and follow through with filing eviction.

[26:30] The next course coming up is in Minneapolis, July 14-16. In these bootcamps, there are several talks, question & answer sessions, information about forms, and many other events!

[30:25] Frank’s business partner, Dave, has a website called mobilehomeparkstore.com that has a lot of information about parks for sale. If you want to get started, get in contact with Frank or Dave via contact information below.

[34:25] An article in Time magazine just came out that speaks very favorable about the mobile home park industry. The article speaks optimistically about how many people in the retiring generation may find opportunity here.

Mentioned in This Episode:

Mobile Home University

Mobile Home University Books

Mobile Home Park Store

AlaREIA Bootcamp: June 2-4

AlaREIA Website

“The Home of the Future,” Time.com

Next Meeting: June 8

Email Frank: [email protected]

Phone: (855) 879-2738

Sign Up for the Course

Coach, mentor, and real estate investor Shaun McCloskey joins Brian on today’s episode to talk about his work in real estate and with Lifeonaire. Shaun shares his personal journey in real estate, and the other influences that have helped to shape his business and personal development.

Key Takeaways:

[2:40] Shaun actually got involved in real estate when he, like many others, was laid off from his job. One of his clients was making good money in real estate, and he decided to try his hand at selling. He ended up losing a lot of money on his first deal, but this has been a learning experience that has inspired his further real estate career.

[9:30] Despite the first experience being rather crippling, he had the motivation to keep going, partially because he felt like getting another job wasn’t going to help fix the deal gone wrong. For his second deal, he got a mentor/local coach, and since then, he has experienced success with so many of his deals.

[11:05] When asked about overcoming the fear of getting into the real estate business and having a family, Shaun talks about his background as a lifeonaire. Through coaching people in real estate, he found that many investors were sacrificing exactly what they wanted to get from their business. Lifeonaire teaches people how to design a business with their life first in mind, and then design the business around it. Money is not always a big enough motivator, there’s got to be something bigger than money.

[15:10] Shaun talks about his transition from real estate full-time into his current pursuit of a motivational strategist. He still does real estate, but now he gets a lot more joy helping other people to be successful in real estate.

[17:20] The book, Lifeonaire, came from his business partner Steve Cook. After attending his first Lifeonaire event in 2009, he began implementing some of the principles and made massive changes, not only his business, but also in his life. Shaun talks about the monetary effect this had on his life.

[22:23] He found that when he reduced the expenses and simplified things, he began negotiating things differently. By being more selective in which deal he chooses to pursue, he’s found success by being in control.

[24:07] His lifestyle-first teaching began as mostly real estate investors, but has since grown to include people of all ages and occupations. Together with his business partner, they are putting out some great content that could help anyone!

[28:05] Visit the link below to receive a free gift from Lifeonaire — The Four Stages to Financial Prosperity Training. They talk about four stages: the vision, how to get monthly bills taken care of, how to create excess income, and recurring revenue every month.

Mentioned in This Episode:

AlaREIA Website

Next REIA Meeting: June 8th

Facebook Page

Daily REIA

Ultimate Real Estate Bootcamp

[email protected]

Lifeonaire

Lifeonaire, by Steve Cook and Shaun McCloskey

In this week’s episode, Brian has compiled clips of some of the “best of” the episodes so far. The clips talk about what the real estate climate is like in Birmingham right now. This episode provides a snapshot of what they’ve been talking about on the show so far. Listen today to catch up, and check out some of the previous episodes!

Key Takeaways:

[5:13] Joe Turney talks about lifestyle: His experience in real estate has allowed him to exceed all previous successes, and he now has total freedom in his life. He has created an income that will last him and his family.

[6:26] How money plays a part in real estate: Gary Boyd talks about the tax lien investing aspects and their goal to get end prices low; in addition the risk is very low. This process also endows you with the same rights the state government had on the property.

[8:50] Paul Latham talks about his approach to investing, and his preference to avoid debt. He would rather save to buy than take out a loan. Brian Todd also took a similar approach and saved enough so he didn’t have to finance a loan for too much.

[11:00] Balancing a family and a career: Cindy Tolbert talks about juggling an investing career and raising her family, and how she makes use of the time to learn more about the business.

[12:00] Specific strategies for Alabama: Jason Holland and Bill Gulas talk about different approaches to wholesaling. Jason views wholesaling as sort of a byproduct of other leads, and is a big advocate for networking. Bill talks about using wholesaling to build up the IRA.

[13:43] A strong market in Birmingham: Clayton Hobley talks about some of the specific areas in Birmingham that are “hot spots” for real estate, specifically turn-key real estate. Jay Baxter found in his nationwide search that Birmingham was one of the top five cash flow markets in the country. He discusses some areas in Birmingham and some of the benefits of each. Chad Maness talks about the “hot market,” focusing on rent prices in specific areas.

[18:38] Bruce Glenn talks about his success in the Birmingham market, specifically price-wise. Joe McCall thinks Alabama is great market because not a lot of people know about it yet. As prices for good deals go up in some of the larger markets, the numbers and economy remain strong in Alabama. Aaron Chapman talks about how he got involved in the market in Alabama.

[22:30] Carl Randal talks about the Huntsville market, and how it’s a little less transient in nature compared to Birmingham. Huntsville has a large employer in town that helps stabilize the real estate market.

Mentioned in This Episode:

AlaREIA Website

Next REIA Meeting - May 11th

AlaREIA Bootcamp: for information email [email protected]

Carl, a Realtor® and an investor, is active in the Huntsville area. On this episode, Carl shares his background, and discusses the real estate climate in Huntsville. Slightly smaller than Birmingham, the market is slightly different, and has a lot to offer! Listen in to hear what Carl is up to today, and how he has found success in the real estate market in Huntsville.

Key Takeaways:

[3:10] Today’s real estate market in Huntsville: since Huntsville is a little off the beaten path, the market is a little less transient — it’s a pretty solid market. There is a large employer in Huntsville, which means the real estate market is pretty stable because of the incomes and the industry.

[6:35] On the investor side, there is a pretty strong market as well, because of what Carl refers to as “the funnel.” There is a lot of buying and holding, as well as flipping and wholesaling going on in this area. In the areas surrounding the funnel, there is also a lot of fixing and flipping.

[8:21] Madison County is set to be a beneficiary of the new budget. As the three big organizations in the area, as well as the big contractors in the area, will benefit from the new budget, there are several other industries — including real estate — that will likely grow as a result. The projection of growth for Huntsville right now is 20% over the next four or five years.

[13:45] This projected growth in Huntsville in the next five to ten years could greatly increase appreciation with buy-and-hold types of properties.

[14:40] Brian and Carl talk numbers in Huntsville. For $50,000-$60,000, you could get a 3-bedroom, 1.5/2-bath with a $650-$750 rent. Many of the neighborhoods have a mixture of all types workers and incomes. In general, many of the areas in Huntsville are good and safe. The average is $750, but spending a little more initially would allow you to get a higher rate on the rent.

[18:32] Carl got into real estate beginning in his childhood. The “family business” was two apartment buildings and a bunch of rental houses. During the weekends and the summers, he and his brother would work on rehabbing the houses after tenants moved out, and attending to issues. When he retired from the Army in Huntsville, he got back into real estate and got his real estate license. He currently works as both a Realtor® and an investor.

[23:35] Right now Carl’s current focus is on lease options and seller-financing. Lease options are appealing, because there are different options for profit. In his most recent lease option, a couple paid the option fee, and they split the commission. When the couples purchases, they’ll get the second half of the lease option fee. While he did this deal as a Realtor®, they would normally be done as an investor, in which case the payout would be much greater.

[31:17] What’s working the best right now in Huntsville? Carl think buy and hold is working the best — people are getting houses for maybe $25,000-$30,000, doing a little fix up, and can get the same $750-$900 rent. If you spend $50,000-$70,000, you’re going to command a $1100-$1200 rental.

[34:07] While there are many different activities on the real estate front in Huntsville, there are not many turn key companies. Additionally, there are people who would be interested in investing.

Mentioned in This Episode:

Next AlaREIA Meeting — May 11th

AlaREIA Website

Next Meeting in Huntsville — May 6th

Facebook Page

Daily REIA Show

Contact Carl: [email protected]

Cindy Tolbert currently works as a broker and a real estate investor. With 30 years’ experience, she joins Brian on the show to talk about her ventures in real estate, women in real estate, the Tuscaloosa market, and the importance of educating yourself in the business.

Key Takeaways:

[3:35] What does Cindy do now? She occasionally works with buyers and sellers, but for the most part she is advertising and looking for houses to buy and hold, or buy and flip. She is currently has two contracts on purchases for rentals, and one flip in progress.

[5:30] Cindy finds most of her deals by direct mailings, looking for wholesale deals, and advertising to expired and withdrawn listings. She had previously tried a billboard, but did not find it as productive as other methods of marketing.

[8:15] Cindy and Brian talk about how to find a good contractor, and how women deal with contractors. There may be a little prejudice in our society that women may not know as much about contracting as men, but that’s not always relevant; it has to do with your experience. If you’re new to the real estate business, a good strategy may be to partner with an experienced investor to find good contractors and good deals — working with an experienced investor can help further your real estate education.

[13:30] Cindy shares her story of how she got started in real estate. In her early 20’s, she dabbled in some classes and tried her hand at buying, but wasn’t entirely successful. After she got her real estate license, she started working as a real estate agent, which was a great training for the real estate industry itself, but not as rewarding as finding a deal and closing on it.

[16:43] What suggestions does Cindy have for people who are brand new to real estate in Alabama? She definitely suggests attending the REIAs, finding a local mentor to train you, and taking all the opportunities you can to learn from others around you.

[20:13] Cindy shares some experience about balancing a career and a family. While it may be a little slower, it’s a great opportunity to learn about the business, and maybe start with only a few properties.

[23:03] The Tuscaloosa real estate market is a really hot market right now. There is a lot more competition on your offers, and investors tend to pay more there, than in Birmingham. They discuss what the future of the local market might look like, as well.

[26:30] Cindy talks about the importance of surrounding yourself with education. As an investor, you’re responsible not only for the transaction on the purchase of the property, but the management of that company, including accounting, legality, and protecting your assets. Listening to podcasts, or going to meetings are great ways to get information to prepare yourself for the different tests that come with the job.

[30:30] There are so many easy ways to learn about the difference aspects of this business. If you spend the time to educate yourself on specific subjects, you will be able to intelligently stand your ground in interactions with others. This can be especially important for women or other situations where there may be prejudice.

[35:10] Cindy has started a meetup in Tuscaloosa, where she hosts different speakers. For more information, check it out on meetup.com.

Mentioned in This Episode:

Next Real Estate Investor meeting: May 11

Daily REIA Show

Facebook Page

AlaREIA Website

[email protected]

Meet-Up: Tuscaloosa Real Estate Investors

Cindy’s Website

To contact Cindy: (205) 393-1554

In this episode, Aaron Chapman joins Brian to talk about some technicalities of loans, and some different ways new investors can acquire real estate properties. Aaron talks about the type of lending his company does, and explains, a little more in-depth, some of the different ways people are making money through real estate investing by moving liquid accounts into non-liquid growing assets.

Key Takeaways:

[2:43] Aaron works with Security National Mortgage Company, and since 2003, he’s been focusing his energy on helping real estate investors build their business. As need grew, he expanded his business to other markets, and that is how he ended up in Alabama.

[5:58] The nature of the real estate lender is a very transactional relationship. As a lender trying to grow their business by helping other people grow their business, they’ve taken the time to really get to understand the needs of the real estate investor, and that’s why they’ve been so successful expanding the business to 23 states.

[9:06] Aaron’s advice for a new person getting started in real estate investing: first partner with someone on the lending side who can help you figure out your financial capabilities. Once you know what you can do, find someone who understands the market, who can help you find the properties that fit your capabilities. It is important to find someone you mesh with, who understands your goals.

[13:26] What makes real estate a profitable investment over something else, like stocks, or another type of investment? Aaron and Brian talk through the numbers in a typical scenario, to discuss how real estate investment is a profitable business.

[18:31] In addition to this scenario, Aaron and Brian talk about what could happen if some variable of that typical scenario changes, and also consider how wage-based economies may affect the success of real estate as an investment.

[25:03] On the surface, in his business Aaron is just like a conventional lender, though they preferred investor loans. Aaron talks about delayed financing, meaning the individual would’ve financed it, but they were in a situation where they found it better to buy with cash.

[29:18] The difference between Fannie Mae loans and portfolio loans: Fannie Mae loans will back you up/protect you if you lose money, but they get some money out of the deal. Portfolio loans are more of a bank’s money, and are backed by their own rules, based upon the risks associated with deploying those funds.

[32:54] When acquiring this type of loan, the real estate investor becomes a business partner with the bank, who is putting up maybe 80% of the capital for your business, but doesn’t want 80% of the ownership. As an investor, you’re moving money from liquid accounts to non-liquid growing assets, and partnering with a business partner who has created an exit strategy for themselves to take a small piece and leave.

[35:57] In a somewhat unpredictable market right now, it’s important to sit down and understand your cash flow, and how a change in the interest rate might change that. Focus on how you might build it, regardless of what’s going on in the market.

Mentioned in This Episode:

Alareia.com

Next Meeting

For a free book, email: [email protected]

AlaREIA Facebook

Aaron Chapman AlaREIA Keynote

Security National Mortgage Company

Inequality for All (documentary)

Rich Dad, Poor Dad

Aaron’s Website

Email Aaron: [email protected]