Jason Lucchesi joins Brian on the show today to talk about a topic that hasn't been discussed on REI Live yet: short sales. Currently based out of Indianapolis, IN, Jason talks about how he got his start in real estate doing short sales, and how he continues to have success today. Jason and Brian talk about what a short sale is, as well as strategies for new investors.

Key Takeaways:

[1:27] Jason got into the mortgage business back in 2002 and after the market crash in 2008, he started his business full time. He started with short sales and then moved into direct assets.

[4:55] When Jason first got started in real estate, he was in a tight spot financially. He created a plan that would allow him to work for himself, and through his perseverance, he closed his first deal and realized that real estate was something he could do. There was a lot of anxiety, nervousness, and fear around the transition, which many people can relate to.

[10:30] If you're listening to this podcast and you're scared to get started, just do it! Many people focus on the education part and procrastinate on the application. There is security in working for someone, but also an element of control when you are running your own business. But you have to want it; you either have to be 100% or 0%.

[13:30] When he first got started with short sales, Jason would go to the clerk's office to see recently filed notices of default. Once he had his list, he would go door-knocking; he would present the opportunity of a short sale to help these people get back on track.

[16:20] A short sale is when they negotiate with the amount to purchase a property for less than what is owed on the mortgage. Banks agree because most of the time they don't know what they are going to do with the asset, and it becomes a negative asset. It is better for them to do a short sale than have to pay an agent and an attorney to sell the property later.

[19:11] Short sales aren't as common as they used to be, but there are still homeowners today who are facing trouble with their mortgage payments. Usually, it's due to car payments, student loan debt, and credit cards. In some areas, the banks are more likely to hold on to the property and list it because they know it's a hot market.

[23:50] As a coach, Jason does have students that still do short sales. It's typically not someone's primary lead source, but you can still get deals through short sales.

[25:15] For someone new to short sales, it is good to develop a relationship with the bank, because it's already been foreclosed on but hasn't been listed. They use a website to find local and regional banks that have those properties as assets. It is also key to work with an agent so they can do the negotiations with the homeowner.

[30:38] In real estate, you have to be able to provide something for someone else. If you are a wholesaler, you can collaborate with wholesalers by going to get these short sale leads for them. You can do some of the initial leg work on the leads, and in Jason's business, they go to the listing with their agent and they help them be strategic about an offer and the listing, etc. Your agent should be there when there is an appraisal to provide them with the information they need, as well as the purchase agreement and the current listing.

[35:50] Once you've found a person who is behind on their mortgage and the bank's come in to foreclose on the property, it has to be listed. From the seller, they get the listing and the sales agreement almost at the same time. It then goes back through the bank, and it is appraised. A loss mitigator from the bank then collects the packet of paperwork. The real importance of having the agent there during the appraisal is so the appraiser can focus on "as is" price rather than highest and best comps. This will help when the packet is returned to the bank.

[41:30] This episode wraps up with a brief discussion of the market in Indianapolis. There's a steady amount of growth, and it's a high cash flow market. There is more job growth, especially downtown. Rent has increased, and most people are getting about 98.5% of the list price of their homes.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

Bauer Financial

Jason's Website

Today's guest has been involved in real estate since 2004. With a technology sales background, Gary Boomershine was interested in getting in front of sellers in the real estate market. In today's episode, he talks about the services his business, REI Vault, provides, as well as some actionable steps you can take to get involved in your marketing. This includes direct mail, cold calling, and how to approach your first appointments.

Key Takeaways:

[2:15] Gary has a computer engineering background, and before he got into real estate he was in the heart of the '.com' boom & bust. He shifted to technology sales and then in 2004, he became interested in negotiating with banks and doing short-sale deals. He took the plunge and went full-time real estate. He's since done 350-400 deals.

[5:05] Coming out of the technology, he knew he wanted to get in front of sellers in the real estate market as well. He hired a group of people overseas to build an algorithm for direct mail; they've done 27 million pieces of direct mail since. His group, REI Vault, handles marketing and conversion for several professional real estate investors across the country. This allows them as real estate entrepreneurs to be in front of as many sellers as possible.

[8:05] Fortunately for Gary and his wife, their headfirst plunge into real estate worked out. There is a lot of risk in this business but it doesn't have to be that way. Having accountability coaches and being in mastermind classes are essential.

[11:00] Getting started, it's important to focus on one or two pathways, rather than try to become an expert in all of them. To choose one pathway, pick a strategy that you like that has a skill set you have. Wholesaling is a good market to enter if you're brand new. Only once you pick a strategy and get it working, then you can branch out into other avenues.

[15:30] At REI Vault, they're mailing out 750,000-1,000,000 pieces of mail per month. There are an art and a science to direct mail to make it work. In most areas, direct mail is a good strategy but you have to have the formula.

[19:05] For it to work, you have to send enough pieces that attract enough people to call, and enough that are interested in selling. That number is about 1 in 30 on average that should get a deal. After you generate a lead, there has to be consistent follow up (usually via phone call) to get details. At Vault, they have taken on the direct mail and phone follow up, and the investor goes on the appointments.

[23:20] Brian and Gary break down the cost in different markets. In a place like Birmingham, you could get a deal for every $800-$1200. As your market size increases, this price goes up. As an investor, you want to aim to get about 4X-10X as a return on investment.

[27:35] For someone brand new to real estate, Gary doesn't recommend using the direct mail strategy. Co-wholesaling or teaming up for your first few deals is a good idea. For your first few deals, pick one strategy and learn by doing it.

[30:40] It's important to start learning the skills first before you start spending money. Mess up on the free leads before you invest too much in unsuccessful leads. This allows you to focus money on getting in front of sellers and building a pipeline.

[36:50] Direct mail and cold calling are pretty close right now. The appeal of cold calling is that most people aren't doing it right. Direct mail has gotten more competitive, so the cost per lead has gone up. There are several steps involved in cold calling, and they're seeing that cost per deal is about $3,000 across several markets.

[40:00] When your marketing finally gets you a seller, it's time to go to the appointment. If you can be face-to-face with the seller, your close rate will be higher. People sell to other people that they like, trust, and respect. It is important to be able to build rapport, ask probing questions, and then provide a solution.

[45:05] Gary shares some specific things he says (and things not to say!) when he meets with sellers that you can also apply to your own deals. Another thing to do is find stories to tell that can connect you to the sellers. It's really all about how you frame the conversation and allow them to also guide the conversation — provide numbers for offers, etc.

[50:25] If you'd like to contact Gary or are interested in getting involved with REI Vault, follow the link here. Gary also shares some other tools (linked below), including the lead calculator and a script for talking to sellers.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

REI Vault

Lead Calculator

Script for Calls

Three Feet From Gold: Turn Your Obstacles into Opportunities! (Think and Grow Rich), by Sharon L. Lechter and Dr. Greg S. Reid

Episode 67 with John Martinez

Samurai Selling: The Ancient Art of Service in Sales, by Chuck Laughlin

Hope Is Not a Strategy: The 6 Keys to Winning the Complex Sale, by Rick Page

Rob Drum from 205 Realty updates us on the current state of the Birmingham real estate market.

Rob is a data analyst and provides us with data to help us determine what the market in Birmingham is doing.

You do not want to miss this year-in-review recap that will no doubt impact your buying decisions in 2019.

To subscribe to Rob's blog, go to www.robdrum.us

Today's guest is Zack Childress from Huntsville, AL. A big name in the real estate industry, Zack has not only seen many changes in the coaching industry but also initiated some for himself and his business. In today's episode, Brian and Zack talk about some of the changing the coaching industry has seen, and how those changes have manifested themselves on a small scale like local REIAs to the big coaching brands.

Key Takeaways:

[3:15] When this episode picks up, Zack is describing how he plans to reduce some of his training efforts — rather than traveling around to do seminars, he's keeping everything local in Huntsville. He's had the big business, but it's been at great cost to his livelihood. His real estate business is about two-thirds of his income and 20% of this time, while his training business is a third of his income, but the other 80% of his time.

[5:30] Zack got started in the training side when someone recruited him to be a coach for his students. From this, he created his own information company but was also recruited by other people in the industry to building their coaching programs. He still loves coaching but what he doesn't like is the big marketing approach and having to "compete" for the biggest brand. It's more about the bonds he formed with his students, and the impact he was making on others.

[10:10] It's been 12 years since Zack started in the coaching business, and 10 years since he's been on his own. Over the course of his tenure, the coaching business has evolved from being about the student to being all about the net profit. When Zack and his generation entered the field, they made things a little more personal and prices started going up. When the market crashed, coaching shifted to be more group coaching.

[14:30] In the last three years, there was a big push into deal splits with the students. Around this same time, there was also an increase in local experts, which allowed more people access to coaching than having to get into the big brands.

[16:40] To create waves in this industry, you either have to do something no one else has ever done before or you have to be extremely polarized. People either love you or hate you and when they love you, they'll follow you to the end. There are several different ways to approach coaching and you have to take advantage of the method that's going to get you to where you want to be.

[19:30] With the age of the internet, coaches and brands are a lot more visible than before, whether that's for good or bad. You have to be authentic or people are going to call you out. If you believe in your product, speak up! But to be successful, you've got to be okay with some people not liking you.

[24:15] There are a few different cultures across different REIA's. The older models were originally created as a place for people to come to sell their products. The culture has been rebuilt that focuses more on teaching people how to get started in the real estate business and network. For Zack's REIA specifically, it is an inviting culture where people know they can come and idea share and maybe even share deals.

[30:00] It seems that the older REIAs aren't changing much, but the newer clubs and investment groups seem to be coming in with a fresh new brand. There are some REIAs out there that jade investors, but also some that are committed to building loyalty between teachers and students.

[33:40] Today's episode focused on some perspectives and topics that really aren't discussed in the real estate industry. The ultimate message for people is that who they pick to move them into the real estate business is their choice, but you have to have the commitment and be willing to make a change in your life to get out of whatever situation you're in.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

Zack's New Book: My First Deal Playbook: Your Pocket Guide to Real Estate Success

Zack's Website

In today's episode, Kevin Angle joins Brian to talk about his local market, Charlotte, NC, and how he is using social media to enhance his business. Kevin remains a smaller investment business, but really takes advantage of free social media to promote, network, and give value to clients. In this episode, Kevin shares how he got his start, and Brian and Kevin talk about some different ways to get creative when you're in a competitive market.

Key Takeaways:

[1:50] Kevin is a mom & pop investor who's been in the real estate business for about seven years. While his operation is small, he likes to provide value on social media. His niche shifted from wholesaling and contracts to more finance options.

[4:45] He got connected with a few individuals early on and that's how he learned about networking. He has taken advantage of free social media to enhance his networking.

[7:10] One of the biggest ways you can use social media to your advantage is to give back free content. Make your presence known in your area and try to provide value first so you can get it back later. If you're new, you may feel like you don't have value to provide yet but you can still use social media to let people know what you're doing.

[8:55] The social media presence has been huge for Kevin and his business. It keeps him engaged with like-minded people, and his business grows as his network gross.

[9:50] Kevin played golf growing up and when he didn't pursue that professionally, he became a roofing sales contractor. He got his introduction to real estate from a free course in Charlotte and took time to absorb knowledge from some peers. He spent a lot of his first year trying to learn several things, rather than focusing on one or two things.

[12:25] His plan with his real estate business is to get it to a place where it's bringing in steady income so he can get back to playing golf. Not giving up real estate, though!

[15:35] Finding his two mentors was huge to the start of his real estate career. It helped establish his reputation early on because he had resources locally that he could get information and knowledge from.

[17:00] Being a huge business is not necessarily a goal for Kevin, but he does have a goal to own a certain amount of units. Right now, his business is pretty small. He has an assistant and spends most of his time making the calls and closing. He describes some of the day-to-day of his business, as well as how him and his assistant manage different aspects of the job.

[19:35] Kevin's technique is to get in touch with the customer several times before the sale happens. The first contact is when the assistant calls to introduce the company, then a follow-up email to provide information about the company, and then finally, contacting them about the sale. He actually conducts most of his business over the phone, rather than going on appointments.

[26:00] Kevin describes some different steps he takes when he has a "subject to" property. If you're new, make sure you understand how these transactions work.

[29:55] There is a very competitive market in Charlotte, NC. To find great deals, you have to have great referrals. Kevin actually invests in some areas surrounding Charlotte. Average sale price is trending down.

[33:20] If you're looking to invest in Charlotte, Kevin suggests looking on the outskirts. A lot of the best deals seem to be tapped out. The contrast between Birmingham and Charlotte really highlights the fact that real estate is local and live.

[36:05] The best way to contact Kevin is through the Facebook links below. To join the secret group, send Kevin a message on Facebook and request to be part of it. Make sure you tell him that you heard about him from the Real Estate Investing Live Podcast.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

Subject To Investing

Kevin's Facebook

Mission Unveiled Real Estate Group

In today's episode, Eric Moeller joins Brian to talk about Airbnb for real estate investors. As a newer option for investors, Airbnb provides new opportunities for short-term rentals. In this episode, Eric talks about how he got started in real estate, how he learned about Airbnb, and what his company is doing now to help investors use Airbnb to grow their tool belts and their income.

Key Takeaways:

[1:30] Airbnb has brought some new opportunities to the real estate investing industry. It allows investors to repurpose their investments and leverage other people's property, as opposed to leveraging other people's money.

[4:20] From an early age, Erick was enamored with real estate. One of his first properties on his own was a vacation rental.

[10:11] Being fully immersed in the educational part of real estate investing is what kept him going as a young real estate investor. One of the things that made him successful as a new investor was full immersion in real estate - he read books, went to meetings, and took action.

[15:03] When Eric first acquired his vacation rental, it was a way to create passive income without having to go through some of the hardships of property investing. After he got into it, he realized that he could bring investors to the Jersey Shore to buy properties and help them run their vacation rentals.

[19:00] When the market crashed, Eric started getting into short-term rentals. They would find people who were upside down on their mortgage, secure a contract, and then negotiate with the bank.

[24:15] At the end of every diversity, there is beauty. No matter where the stress is coming from, there is beauty when you finally get to the other side. These were values instilled in Eric from his father, and how he has been able to maintain success in real estate. When he was backed against the wall, he always found a way to push through.

[25:30] When he was living on the East Coast, he and his team specialized in buying the worst properties in New Jersey and completely tearing them down and building them back up. Within one week, two of his projects fell through in major ways. He took a break traveling the country to visit masterminds, staying at Airbnbs.

[29:10] When he was talking to one of the hosts of the mastermind, he realized that there was a business model associated with Airbnb. He started his company by renting out other people's property, staging them, and then putting them on Airbnb.

[30:45] One of the biggest initial challenges was education around the Airbnb investment. At the time Eric got started, there weren't any experts doing this, so they were all sort of learning at the same time. He also had to educate the owners of the properties about Airbnb.

[34:00] Airbnb acts as the connector between the host and the traveler. They do marketing, connecting the guest with the correct host, and they manage the money and pay it out. The part of the investor is to develop a hospitality business; this includes the entire guest experience.

[37:10] Eric helps real estate investors who see Airbnb as an additional tool to their tool belt, and he also has the education aspect where he teaches people how to get started in the Airbnb hospitality business. As an additional tool in the tool belt, focusing on Airbnb opens up opportunities to pay more money on properties, because now your monthly income is twice or three times more than the typical monthly income amount.

[41:20] The beauty of Airbnb is that it brings short-term rentals to the urban areas all around the world. It doesn't have to be a destination location. It's about creating a unique experience inside the Airbnb.

[44:50] There needs to be a reason for your guests to travel to your property. Being close to attractions helps you be more successful with your Airbnb. If you're not near something that will attract guests, Eric's advice is to go above and beyond on the experience to attract guests.

[47:20] The way we share our homes and the way we travel is relatively generational. There are usually three types of travelers when it comes to Airbnb: family stays, nomad travelers looking for the unique experience, and then business travelers. Hosts range from all types of real estate investors, but especially members of the Baby Boomer generation.

[50:00] Currently, Eric lives in the Epic Entrepreneur House in San Diego. He essentially lives with his board of advisors, living with other entrepreneurs. It's all about how to take your life to a 10. These are popping up across the country.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

Homtel

Live Training

Facebook

Lou Brown comes to the show with over 40 years of real estate experience. With so much experience, he's learned a lot about what works and doesn't work in real estate. Today, he joins Brian to talk about how to use land trusts to protect your real estate property. He shares some on the process of how to create trusts, as well as the benefits of using trusts to protect your assets.

Key Takeaways:

[1:25] With 40-plus years of experience in real estate, Lou Brown discovered that he loves to teach and share his knowledge of what works and what doesn't work with others. His local REIA approached him about teaching a class, and he started doing this monthly on different topics.

[3:10] Lou bought his first house when he was 18 by taking over someone else's loan and their existing financing. He went full-time in real estate in 1983 and has been full time ever since. One of his areas of expertise is trusts.

[5:00] The Garn-St. Germain Depository Institutions Act of 1982 ended the opportunity of taking over existing housing. There is an exception to the law, and that is when a person places their property into a trust. A trust is an entity that provides the opportunity to transfer and own your properties in trust (not just real estate, but cars, stocks, bank accounts, etc).

[7:55] With a trust, you get the benefit of the 4 P's: privacy, protection, probate avoidance, and profit. Once you have the paperwork, you can manage your trust yourself and build your estate as you go.

[9:25] Trusts are very useful for "subject to" transactions — with these transactions, you as the investor show the seller why it makes sense for them to allow you to take over their existing financing. Once they agree, the next step is to complete the paperwork for them to transfer the deed that's in their name into the trust name.

[11:45] Once you have documentation that the seller is the beneficiary of the new trust, there is another document where the seller "quit claims" their interest in that trust to another trust (a personal property trust). The land trust converts real estate into personal property interest. With a personal property trust, you can have any entity you choose as the beneficiary.

[13:15] One of the major benefits of going from land trust to personal property trust is that the seller doesn't even know who the beneficiary of the new trust is. This provides privacy and protection to the investor. The less that the seller knows about what's going on behind the scenes, the better your transaction will be.

[14:45] Lou created a document called the Affidavit of Trust, and that, along with the deed, are the only documents that the public sees. The Affidavit protects you when you want to transfer a property out of a trust, and prevents you from having to share the full documentation of the trust.

[18:45] You always want to have a third party that's the trustee if you are the beneficiary. One of the things Lou has learned in his years is that it's a good idea to not be the owner when you have your property in trust.

[21:05] There are few people who know about this process; a lot is what you have to learn on your own and then teach a willing attorney.

[23:40] A trust is an entity and a contract between and trustee and a beneficiary. The contract has its own responsibilities and agreements. Ownership goes on public record, but having the two levels of trust provides extra protection.

[25:00] It is important to get liability insurance, but there are exceptions that insurance companies may not tell you about. Lou puts each property in its own trust so it has its own separate liability that won't affect other assets.

[29:50] Lou suggest a preventative strategy when it comes to this liability. If you put each property into its own trust now and there is a suit later, they can't undo that.

[30:20] Cycling back to the 4 P's, probate avoidance is incredibly important for people who are buying off-market properties that are likely inherited. Avoiding probate is one of the primary reasons to use a trust. Once you place the property into trust, you've already named who is going to get that property.

[33:05] The final P is pretty self-explanatory: profit. Trust can help defeat and delay the banks for a period of time. Lou hasn't found anything that's been more beneficial to his business than putting properties into a trust.

[34:35] Lou advocates that all of your assets be in a trust. This episode has been packed full of information about trusts. If you'd like a copy of Lou's book, follow the link here: Maximumassetshield.com/book/ to download the book.

Mentioned in This Episode:

Meetings

Daily REIA Show

REI Facebook Page

Brian's Book

Watch this Episode

Street Smart Investor

Lou's YouTube Channel

Jared Irby joins Brian from Mobile, Alabama, to talk about his real estate ventures and the Mobile market. They talk about how Jared got started in real estate, the importance of marketing, and some of the benefits of investing in Mobile.

Key Takeaways:

[1:14] Jared is based in Mobile, Alabama, with his business Irby Home Buyers. They focus on wholesale deals that they primarily sell to other real estate investors, as well as multi-family real estate and some commercial investing.

[2:40] Jared actually got into real estate when he was looking for an outlet to invest some money from another business. He started flipping houses and had a small rental portfolio over the course of about eight years, before committing to real estate full time.

[4:05] Wholesaling really supports their infrastructure and marketing and allows them to acquire rentals and grow that particular portfolio. He started wholesaling as a way to get a good profit without a lot of capital and without much risk.

[6:57] Jared has a sales and marketing background and discusses how real estate is more like sales, rather than real estate itself. They were able to put systems and processes in place so they were able to create deals quickly and get them out in front of people.

[8:47] If you're first getting started, it's important to get plugged into some REIA meetings to make connections, but also take control of your marketing machine. There are many different ways to advertise, but the key is to focus on one. This can you automate your marketing to get 'lead flow,' so you can focus on building up sales training.

[11:01] When looking for deals, they first look to just find some good deals. Once they get a deal, they evaluate it to see what next step makes the most sense. They flip or rent the ones that fit their model, and then sell the rest. This allows them to provide value to several people throughout the scale of a transaction.

[12:45] Brian and Jared talk about the real estate market in Mobile, Alabama. It is about half the size of Birmingham but is a very diverse market spread out over a larger area. One of the good things about investing in Mobile is that they've got a great climate and there is also a lot of job growth.

[14:30] When you pick a market, you want to pick one that's growing, as well as a market that has good fundamentals. This particularly includes the need for people to have a place to live, as well as a good cost of living.

[15:40] The price compared to the rent makes sense in Mobile. You can find a property and buy it in the mid-$80Ks and can get about $1,000 for the rent.

[19:00] A lot of people get into real estate because they're looking for a certain type of lifestyle. For Jared, real estate has allowed him to be able to afford some luxuries (a boat, a plane), but also allowed him to have more freedom. Once you build up your rental income stream, you're free to do whatever you want really.

[20:45] If you're interested in getting started in the Mobile market, you can find Jared Irby on social media, or visit the Irby Home Buyers website linked below.

Mentioned in This Episode:

Irby Home Buyers

Facebook

Meetings

Daily REIA Show

Facebook Page

Brian's Book

Martine Jackson interviews Brian Trippe on her podcast, The Do It Movement. It's all about taking action!

Martine and Brian talk about the how-tos of networking. Also, Brian deep dives into the psychology and the how-to of getting your first deal.

Listen to Martine's podcast here: https://itunes.apple.com/us/podcast/the-doitmovement-podcast/id1435485899?mt=2

Brian Trippe and Rob Drum sit down to discuss the real estate market, specifically in Birmingham, Alabama.

Rob's blog can be found here: www.robdrum.us

Contact Rob or Brian to be added to our buyers list.