Westside Investors Network (WIN) by AJ and Chris Shepard

January 13, 2021 4. Pre Foreclosure and Before Auction with Chris Schwindt

Chris has been involved as a principal in real estate projects throughout Oregon and SW Washington for over 17 years. He is a former practicing attorney and has deep expertise in foreclosures & redemption rights, probates, bankruptcy, land development, renovation/value-add projects, and creative financing & transaction structures within all real estate classes. He currently manages a portfolio of residential and commercial assets, and is active in buy-sell, development and redevelopment projects throughout the area. He enjoys the challenge and variety in bringing creative, mutually beneficial solutions to challenging real estate-related problems, as well as the lifestyle this work affords.

What makes Chris different from the other Attorneys

[3:43]

Chris has a very entrepreneurial mindset. He got tired of working the billable hour and so he looked for something outside of that. He was willing to take the risk of being an entrepreneur and he knew the risks of losing money or not making it sooner and aggressively.

Competition

[6:43]

It’s always been competitive. Back then it wasn't as competitive as it became. There were fewer players and more people that were just waiting for the auctions and going to buy at auction at that time. If you're trying to jump ahead of that and figure out ways to transact deals and structure deals ahead of that, that would be profitable and resolve the problems. Fewer people were doing that so it worked.

[7:29]

There are always competitors and there always has been certainly getting more competitive over the years in terms of activity, pre-foreclosure activity, and just the type of marketing that you do for that.

Chris’s Solution

[9:13]

Buying the property. Generally, you're just trying to buy properties. You're trying to buy properties below market and create a spread to market or retail or unlock some type of value in the property through development or redevelopment.

[9:47]

Doing a lease-purchase option back with the seller was one way to allow them to stay in the property and even potentially buy it back for profitable spread to the investors.

The Lease-Purchase Option

[12:39]

Doing the lease-purchase option, the transaction is pretty much been eliminated at this point in time, because of some statutes that came on the books a little while back.

Keys to Success

[13:30]

Having the legal background gave Chris a bit of a leg up in terms of understanding the statutory processes. Understanding how to read and decipher title reports, manufacture and deliver and negotiate the contracts involved. Familiarizing yourself with all three of those and building relationships with attorneys who understand it.

The Learning Curve

[14:44]

It just depends where you're coming from. There's a lot to learn. I wouldn't probably start doing that as a novice real estate investor off the bat on my own. I would probably be looking to partner with somebody who's already been doing it for a while and knows all of them and kind of bring them leads or do some of the grunt work.

[15:39]

There’s an element of just taking some risk and getting in there. I’ve learned way more just by doing deals and dealing with different unique situations than I've ever learned from any book or seminar. Just getting in there and actively doing it and giving it a shot and then learning as you go.

Motivated Seller

[16:43]

It just kind of grew more just diversifying into different ways of finding a motivated seller. Most of what we do boils down to finding a motivated seller that they have some motivation to sell on terms or on how to price it provides a profit potential and then managing that transaction through to the end sale.

Growing and adapting

[17:27]

Being adaptable, being creative, and learning and trying new things. It’s how you grow and build it over time.

Predictions and Opinions

[19:38]

January and February are going to be the highest number of eviction filings ever all across the country due to the Pandemic.

Where Chris will focus his efforts on the Future

[23:35]

I've got a lot of different irons in the fire and over time, my business and experience have grown and I've gotten into commercial and development projects and things like that so I’m not as focused on single-family, distressed properties as it once was, but it's still a good business and there's still opportunity to bring value and make a lot of money doing it.

[24:00]

I think it makes sense to be positioned as having already gained experience, knowledge, and background dealing with all that to be ready for it. I assume that there's going to be a lot more opportunity in that area probably for several years.

Chris’s Advice

[24:52]

Understand the title of what you're bidding on is important.

[25:25]

Make sure that you're capitalized well enough to bear whatever risk you're taking. You have to really understand the risk you're taking and be willing to bear the risk of loss. Calculate that you have a greater chance of gain and loss in any given deal or transaction.

[26:46]

When you're starting out, you got to rely on a third party so make sure you build in the time you need to figure it out so you can get the people in there that have that experience to tell you what you don't know.

[28:55]

The number one thing to also keep in mind is that you're gonna make your money when you buy. If you didn't make your money when you bought you probably gonna lose money.

[30:23]

Understand that you're going to make your money on that purchase and not to pull the trigger until you've lined it up to where that's almost an irrefutable fact that will keep you out of trouble.

Chris’s advice to his 25-Year-old self

[30:52]

Just start that process of learning and education. I had learned through school and books and things so starting to take action.

[31:23]

Get involved with technology and the technological side of things.

First Entrepreneurial Endeavor

[32:11]

When I was in college, I worked for a moving company and the way they did everything was everybody was an independent contractor and so you had to start your own business, essentially. I started my first LLC which was done right moving and by the end of the summer, I was definitely a lot stronger.

The Key

[36:08]

...more

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