Mar 20, 2017
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Four Newbies and Their Very First Real Estate Success Stories | BP Podcast 025

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are you looking to become a better real estate investor and hang on because you're about to experience another episode of the world's most popular real estate podcast the bigger pockets podcast but before we get to this week's show I wanted to invite you to become part of our community bigger pockets com the real estate investing social network the membership is free and you'll instantly gain access to networking opportunities educational content investor tools and more sign up now and get a free copy of our book the ultimate beginner's guide to real estate investing read by hundreds of thousands of budding entrepreneurs just click this link right here or just head to bigger pockets . com with that let's get to the show this is the bigger pockets podcast show 25 you're listening to figure buckets radio simplifying real estate for investors large and small if you're looking to learn about real estate investing without all behind you're in the right place stay tuned be sure to join the millions of others who benefited from figures markets done your home for real estate investing online hey what's going on everybody this is josh dork and host of the bigger pockets podcast here for our 25th show Luo Brandon turning my co-host what on earth you think about that that is exciting 25 that's like a quarter of a hundred it but you're such a smart guy i'm so glad I hired you it's amazing it's a good number what its gonna drive lucky 25 yeah that's great i'm glad we have come this far and and we continue to educate and help thousands and thousands of people each week you have the the the emails we get the the the introductions on the site from people who found us through the podcast it's a time-honored yeah yeah me too i actually the podcast is probably our number one referral of traffic nowadays i'm not sure but from the new member introductions anyway like majority of them say they found us through the podcast which is pretty cool that's awesome it's also well if you have found us from the podcast make sure you jump in on the site for today's great yeah just jump in and introduce yourself if you haven't done that already because the cool thing about that is the second you jump in and introduce yourself on on our new member forms I you have all these people who are going to say hi and and in particular if you like hey I'm John from Buffalo anybody who has keyword alert set up for the word buffalo which are going to be local investors they can jump in and they're going to welcome you so it's one of the greatest ways for starting to build up your local network is is introducing yourself but anyway so yeah listen I mean effort for today's show we we thought we try something a little different here and and we hope you guys all like it haha we've got a totally different kind of podcast something we haven't done before today we're not just talking with one real estate investor but we're actually talking with four different investors have all just recently completed their very first dealer real estate so it's so far on the show we've actually had some of the best and brightest minds and in real state and while they're all doing really incredible things with the investments a lot of people don't want to know how to wholesale 30 houses they want to learn how to wholesale that first deal so our guest today they're all relatively new to real estate and what they're gonna do is they're going to tell us their stories how are their stories of how they did that first deal which the literally just close the lessons they learn and hopefully share some really good tips and tricks that even the pros out there can learn from so why don't we start with the show what do you think that it let's do it yeah yeah all right first up we're going to talk with Nicholas Stevens Nicholas is joining us from the Boston Massachusetts area and he's got a great story of getting his first buy-and-hold investment along with those first primary residence all-in-one what do we jump onto that interview now all right Nick welcome to the show man get to have you thanks guys appreciate you having me on here now we appreciate you being here you know in the forms a while ago you talked about you buy an investment property and we're gonna get into that but I i'm really excited to talk more about it before we do want to just tell us the couple things about yourself like Hawaii where you come from and what do yet definitely thanks again name is Nick Stevens and about a three-family last October background on me I work in the financial industry a large financial institution in Boston I'm button 29 years old and this is my first investment purchase two so is my first time home purchase so definitely brand-new to the real estate game so super excited that's great that's great and what what inspired you to to branch out and and you start to start with this first purchase what got into real estate yeah I mean I was really just kinda I was after i worked one job out of college for about three years and then I ended up moving back home just basically get close to her family and it up my parents had a in-law apartment that they built basically for my sister and her husband so they saved up for a few years me ended up buying a duplex actually and I moved into that in-law apartment for lived there for two or three years to save up money i was basically just kind of saving money blindly knowing i wanted to buy a house but I had no idea what it was gonna be yeah and then I was kind of slowly saving money you know not a whole lot you know you again you need even if you put down three and a half percent the monthly payment i was kind of doing the rough math along the way and I was slowly realizing that a single family i was going to need to save up a lot of money and then start earning a lot more money to be able to afford in the Boston area real estates so expensive so yeah yeah that's kind of what I was initially thinking okay yeah so then I kinda just started running some numbers I I knew my sister who bought the duplex and she was kind of telling me about her cash flow situation i was like wow that's that makes a lot of sense i'm still didn't know all the qualifying that went into a when it comes to buying a two or three family but that's definitely got me thinking about and then I just started just kind of looking at a few and call the realtor just blindly off the internet and in she her husband is also a mortgage broker so the team of them to kind of helped me along we started looking at places and then I started learning more about how to qualify for the property and started selling real slowly realizing that in on my modest income I you know I just heard a really average income and started realizing that while the numbers really could work even on a invest in expensive property yeah so you just got a typical like a typical mortgage with in like twenty percent down or you know the FHA how'd you do that yes i did an FHA three-and-a-half percent down and I also ended up doing a renovation loan a 203k loan the bank gave me money up front to to renovate i ended up just means it's needing to work on mostly just my unit the other two units were ready to go but yeah so I did that 203k loan an FHA all-in-one cool and for those who don't have those who don't know the 23 kb 203k basically as a loan that you can incorporate your repair costs into the loan itself right exactly yeah so they give you the money upfront not all of it up front along the way but they'll basically help you pay they use that money to pay for the project and then it's it's just financed into your mortgage which is which is really nice are there any special requirements for the 203k loans there are i mean there's some paperwork involved with getting the the the right qualified contractor that you work with so they have to have certain licenses so there's a little bit of red tape qualifying the contractor that's gonna front the whole project so that's a little bit you know they can then subcontract out if they want to but that's probably the main thing that comes to mind actually did that a couple years ago I was the contractor for a friend who did a 203k loan and so I had to go through all that paperwork in the red tape and it was annoying but it wasn't too bad yeah yeah yeah it wasn't like any special like I don't have to like take a special test or anything it just was filling out forms yeah and you'd be ensured obviously they won't be like that yeah yeah licensed bonded insured and and yeah it really does work out well i mean if you got like a yeah it's only three and a half percent of the total amount to so if if you're borrowing see your body too 4000 our property and you need 20,000 for repairs you need to join total you only pay three-and-a-half percent of that total 220 which is awesome such a great deal yeah the i always recommend people look into the 203k well so I'm sorry go ahead . got out saying it was over I think it's overlooked as well yeah yeah I don't run are more i was i was gonna jump right into this this property I'm a little more detail I'm can you tell us maybe some of the numbers and and that tell us how how everything kind of came together yeah for sure uh I was putting an offer those the market was taken to tell us definitely eating out for the multifamily in my area I was basically looking around anywhere around boston where I could be relatively close to family and get to work easily and i put in i think five or six offers on two-family homes that's basically what I was focusing on and I didn't see too many three families pop up anyways and didn't get any you know didn't have any of those accepted obviously and then this three-family popped up and i took a look at it knows you know really impressed so that's a two bedroom on the first floor two bedroom on the second floor and then the unit that i live in now is a 1-bedroom ok 11 bath in each unit and at the time there was they had to get it to tenants naturally it fully rented at the time so it's kind of a situation and you know as far as when it was when i was on the market and it's listed at 400,000 i ended up putting in an offer around 380 believe you can yeah and then ended up there ended up being some work what we ask for some money back at closing ended up coming to about 383 that we agreed on $MONEY for the purchase price around and so those that it came with the not all three units are rented her or was it actually just the two that better currently rented so at the time so the the middle unit is the nicest units completely renovated that's where the previous owners left yeah and when I saw that you know like wow i didn't i didn't even think for a second living there was like wow I could get a lot of red for that unit nice nice i saw that really caught my eye the first floor was in decent shape rent maybe you just needed some updating but that was occupied I don't know if you want to run through some of the numbers for the rents not sure yeah so the first floor was being rented for a thousand and they were just month-to-month their attendant at will and then up on the third floor where I wanted to live with this was really kind of a the biggest thing that almost held it up there was a woman i was living up on the third floor that we weren't sure it was it was really tough communication between austin the seller's their attorney they done he typically dealt with other types of clothes i think and didn't usually deal with no just regular real estate residential closings but he just made that the process horrible and basically we weren't sure if she was going to be the type of tenant that was going to be you know basically squatting here and not wanting to leave and there is a lot of back-and-forth with that finally she ended up moving out but in that basically I i didn't i'm making this the decision to go forward with the paperwork even with her there and I just said I'll deal with it even though the eviction process and Massachusetts can be and probably like that might not have been the best choice and not sure but the eviction process in Massachusetts can be really difficult they were the laws really protect the tenants was she was she just not paying rent at the time or was she struggling when you acquired it or how to let her she actually was but we were just hearing very little information back from the sellers on her situation that's that's really all I came down to and in there was we were probably starting to speculate you know why they weren't telling us certain things about the tenant and why she hasn't moved out yet i think they might have said she was moving out and then she still had it at certain points so there's just a lot of back and forth and kind of miscommunication between us and the seller's I think not helped by that at their attorney and that they were working with but she ended up moving out and I ended up renovating this unit which didn't need a little bit of work like i mentioned for that loan and at the time she was pending she's paying like 600 bucks okay yes so now you moved into that unit and then the middle of the middle unit then did you just get that rented out to them yeah so for the bank i did have to make it idea to do a little bit of work to it again he was completely renovated but the bank when property appraised it praised it as a two-bedroom and there wasn't a door going to one of the bedrooms so we just had to put a door and in and Wolof one open area that I'm between two of the open areas as well so there's some minor work that the contractor need to do just to make that an official two-bedroom and my contract was awesome he you rush that for me so that within the within about twenty five days or so I got basically got a rented for the next month and got tenants in there pretty quickly for 1475 on what ended up being your 2475 in rents and then you've got your unit and then that what was the purchase again I was for something right I'm 333333 ok and then the the first four tenants ended up moving out after just a couple months ok Anna and now i'm getting 1404 that unit so right now i'm getting 2875 what's your note on that it's a yet piti is is right at 20 just under 2800 ok so you're pretty much living for free yeah minus the expenses when you have them and stuff but exactly yeah well why would why would you want to do that I mean that sounds terrible looking for everything yeah I i don't understand i mean as a first investment property buying a place where people are covering your costs that doesn't sound like a good deal at all yeah that's not what I i feel like i'm getting away with something but it's it's awesome i'll all of it obviously and and Brandon here's a fanboy of similar type things that I amick I i bought a duplex I talk about that all time one of my first properties with a duplex i lived in and i still have it today and that's the cool part about this necklace is that yeah when you move someday like if you keep it you just gotta rent out that other unit then when you're you know hopefully cash flow at that point and yeah it's a good a good way to start learning how to be a landlord and how to you know give you place to live as well some yeah really yeah kind of i was saying to a few people kind of all once I you know was the first time homebuyer going through that whole process becoming a minor construction we'd manager kind of deal on that online unit and then being a landlord so kind of all the three things happen at once which was I loved every minute of it but it's definitely a little bit overwhelming at times but it's been a it's been really awesome steep learning curve for sure ok can you talk about I'm any any of the major lessons you've learned along the way I I think you had mentioned one which was you know not really anything you have much control over are dealing with the seller's attorney who was a sound to be someone in apt I'm I i think i think that's a pretty big lesson which is you know always work with a an experienced real estate attorney if you have a choice don't just grab a lawyer right right for sure yeah i mean i did learn you know kind of all the the process of you know being a first-time homebuyer you know where I did kind of realize how difficult it can be working with the bank's I'm sure being a putting down three and a half percent FHA makes it even more difficult with all the regulations that that they're under but uh yeah I mean I the deal almost fell through so many times up to closing really so I mean just going through that whole process was probably the most stressful part of the whole thing I wanted the property so bad the more I got into it and I just know i'm just really wanted the property and you just almost fell through so many times with all the things that the bank was asking me for and the timelines I almost I ended up i initially tried going for a different type alone it was I think it was the soft second lon don't know if you've heard of that no i think it's i think it might be a Massachusetts thing but it's basically it's a similar type program but it's a little bit more friendly and I think the interest rate was even a little bit lower in the and actually the main draw to it was there is no prob PMI nice yeah yeah so that's in that ended up falling through so and i ended up going FHA and we're at that point we already signed the pns we had about 35 days to close i think and we ended up getting it done but just definitely learned that it can be difficult working with banks long story short story long but the beautiful i mean the beauty is you got this FHA three-and-a-half loan I mean what-what else you want yeah you know I mean most people with what I mean racer rates are finally starting to creep up and you know to get a three-and-a-half percent is is a out-of-the-ordinary obviously now right absolutely yeah it's awesome no it's cool cool well do you have a before we go to any tips for other people who are you know thinking about doing this I would say I feel like night when I do talk about with people I feel like they get over long and I think you know different just kind of you know looking at the whole process I think it's something that anybody could do i do have I mean my dad he's a master plumber and he definitely helped me with a lot of the renovation and some of his contacts to help with some of the work so that I think took some of the stress off me a little bit but i think yeah definitely you're looking at anybody is thinking about a single family house I would hundred percent look at buying a duplex and triplex because it's a I think it's not as many headaches as you might think and what's what's your what's your take on having your having your tenants living downstairs I mean is what one of the negatives to that for you at least definitely yeah i mean i hope this this is an old house 2 is built in the early nineteen hundreds so you can hear a lot of things and now so for sure you definitely are that's that's part of it you have to accept that going in but on a lot of tenants like this when I interview potential tenants to come in here a lot of you know ninety percent of unreleased the ones i want living here two are happy that the owners living in the house they're usually that's really good news to them if it's not good news it's usually someone who wouldn't want a movie huh huh what up yeah that stuff is something you have you have to accept some of those things for sure if you're thinking about doing it awesome well I will Nicholasville you know this was really really good so what we really appreciate you you know coming on the show to talk about this strategy yeah definitely appreciate you guys having me on thanks again many thanks for stopping by man all right now that was awesome and that was really cool brand what would you take I think it's awesome to i'm a big fan of the 203k and I haven't done it personally but I was that you know the contractor on it one time so i definitely recommend it my best friend did it and it worked out really well for him I mean it's it's a annoying sometimes with the red yeah okay i think we had like a foot high stack of paperwork when we're done with the thing but I and I yeah I think key in doing a 203k loan is finding a lender who knows what they're doing like we worked with a lender when I did it without my friend and she knew exactly how to do with 203k loan and it was it was awesome i mean it it really went faster than other people I've heard heard horror stories so yeah and i think this this interview for me was particularly important because I i think for a lot of these new new investors they're just worried hey how do I start where do i go and and the cool thing is you can go buy your first investment and it could be your first home as well at the same time and and the beauty of it is of what he's doing is he's living pretty much rent free for himself while learning and training himself how to be a landlord how to deal with rental properties that kind of stuff and that's invaluable i think yeah yeah definitely i'm hundred percent agree awesome awesome cool alright guys well why don't we move on to our next interview our next guest is as one Hawkins and she's gonna tell us the story of how she did her first wholesaling deal so why don't we like what do I got that have a hard time talking dick let's get to it hey as one and welcome to the show thank you very much for having me i really really appreciate it's an honor oh yeah listen we're so glad to have you why don't we just jump right into this thing what did you tell us a little bit about yourself and your background sure so I am a married mother of three girls they're almost thirteen almost fourteen and my youngest is six we live in washington DC I've lived here all my life and we are currently i'm looking to invest in baltimore maryland which is just about 40 minutes away from DC with hopes to include DC on that investment plan hopefully the next couple of years okay Michael so it and you just got started right i did i did and I think I join bigger pockets in February or march home okay just a couple of months no very cool so the reason I found you mean I've seen your on the side a little bit but you put a success story recently about your first deal so that's what i want i want to talk about today is how did that how did that come about just walking to the beginning to end what did you do and how did it how did it work out sure well my husband and I have made a decision at the end of februari that we would get into real estate investing we had a small amount of money that we wanted to sort of put to get youth and when i joined BP I learned about wholesaling and thought all this would be a great way to sort of add to the to the small pot of money that we already have so i started researching wholesaling a bit I'm Ned Kerry who is a very active investor in the Baltimore market graciously agreed to meet with me and I wrote around with him all over Baltimore and pick his brain for about eight hours one day at the end of March he was really really great and so after that I decided you know what we can do this so I'm having three kids especially girls extra money is not something that is that we have a lot of it obviously currently so I'm in terms of being able to do a lot of marketing and direct mail marketing we just didn't have the funds to be able to do that so I picked up the phone and just started i'm calling on landlords who were I'm renting apartments i literally was in Baltimore everyday i'm driving four dollars I'm talking to neighbors talking to the mailman talking and getting my business card whoever would take it about a week and a half after I initially met with Ned and I got a phone call from a seller who actually on is a real estate agent in Baltimore and he owned a number of properties is also an investor and wanted my help ironically and unloading a couple on so one of the properties that he wanted me to sell actually felt that didn't work out he decided to hold onto it but the other was a shell which I thought was a great sort of start for beginning wholesalers should be relatively easy to download so i was very excited find the contract while initially talking daddy wanted about 6,500 i think it was for the property and we were able to talk him down to 2,000 which is great and so on a couple of days after that i actually got pneumonia true no it wasn't i didn't know it was Melanie at the time but I had like a hundred and 4.5 temperature and I was in the bed for like nine days it was I have never felt worse in my life and so obviously that are limited the amount of marketing the property but i was able to do in advertising but as soon as I was able to sort of sit up and be able to breathe okay i started on just advertising the property on craigslist mainly Christ was actually at that point on and literally up almost immediately I i was flooded with phone calls I didn't have a buyer's list i didn't have anything but i knew from speaking add that if I had a good property at a good price in a good location that it would sound even if I didn't have anyone on the less than that's why negotiating it down was I'm so important because I wanted to be able to unload it quick yeah definitely mi is it too much information no not at all this is an excellent location is great so on aion had I feel that probably 50 phone calls maybe within the next couple of days and I had one on potential buyer who over the next three or four days after that was pretty consistent about following up with me the shell was completely boarded up so and it was not safe to enter really so I'm there was really no walkthrough needed on that her boyfriend was a contractor so they just drove by and sort of get an assessment of what they thought it would take to fix and she I'm made me an offer I we were asking 4504 the property and she made an offer of $MONEY 4000 and we accept that cool i was the first steel / very excited about that yeah that's awesome and so then you went to closing did you assign the contractor did you actually go like actual like title company to close we went to a title title company to close but the contract was assigned to her advances president yes you don't have to come with any money then no we didn't which was great we were actually able to she actually put on a thousand-dollar earnest money deposit down initially I'm so literally the day that I met with her on to sign the contract I'm she gave me the deposit and so that was strange because i was expecting it to go directly to the title company but she didn't have an issue writing the check directly I'm to us and Ned suggestion on the initial contract with the stellar was just for ten dollars that was the consideration for that contract and when he would net initially mentioned that to me I thought there's no way someone to put a property under contract for account with $MONEY for ten dollar deposit but on the seller didn't even question it at all so that definitely was was very eye-opening funny when we got to settlement there were finishes they came up the seller over a ton of real estate back we'll estate taxes property taxes excuse me on the property like somewhere they went about five thousand dollars oh well um and so he initially attempted to sort of you know with a lot of the Dion said he didn't know and I was you know professional but but firm and reminded him that he had a contract at least with my offer he would at least get two thousand dollars and help as opposed to letting this fall through you wouldn't know he would have had to be responsible for the entire out on past due amount so on he actually brought money to the table to get that they get the property sold but we were able to do that and I actually offer down when it looked like the deals on a fall apart i offered five hundred dollars of my fee which was half of what i was expecting to get back on half of the balance i was expecting to get but it was important to us for the deal to actually go through so we were committed yeah yeah I've uh I've been there before definitely him it's never fun but not now it wasn't that it was our first and then we were thrilled that you know we didn't make any major mistakes and we're able to actually make some money i'm off the deal so that was that was exciting oh yeah for sure for sure like and you know and that's a great thing about wholesaling I mean if you're brand new to house flipping and you go out and make some mistakes you have the potential to lose a whole lot of money but with wholesaling those mistakes you know they're they're usually not as costly so it's it's really a great way to learn as you as you build your business that's exactly what I used to convince my husband that this should be a good first step so i definitely agree with that alright i'll run out so have you done any more deal since then I have actually I'm a week after i think i got that property under contract or maybe a couple of weeks i got a hit through my website on this mom by thousand-dot-com from a seller who had a wanted to solve actually wanted to give away their property they said they were looking to get rid of it and they just wanted a dollar for it i guess on have some sort of consideration and the contract and when i first got the email i honestly thought someone was playing a joke on me I thought there's no huh what why would anyone give away a piece of real estate for nothing essentially and down i was able to speak with the seller and did a little research beforehand and they were you know very motivated they had gotten into this property and and a number of things that happen in and they weren't able to start working on it as quickly as they as the city of Baltimore with was i'm expecting them to and so they just you know they wanted to get rid of the property and net also mentioned to me you know that disclosures are so important and so on you know I made sure with my first still indefinitely with this one look this may be something that I keep for myself but i also may sell it to another investor are you okay with that and I probably repeated that two or three times on to them and and each time they said you know whatever it is that you need to do in order to you know get the property you know sold and out of our name you know we're completely fine with which made me nervous because I I then thought all they must you know maybe there's a huge lien on the property of what's going on and I did some initial research in Baltimore you can do some initial research in terms of outstanding liens but it's typically just for the most recent on tax year and so I didn't see anything so i sent it to the closing attorney and just cut my fingers crossed and we I kept expecting something to happen just because that's my nature it's sort of happens when you have three girls yeah that you know something's gonna happen they're going to back out there you know something's going to happen and we got to closing and I world first i was able to find a buyer very quickly for that one as well I got a lot of interest for it obviously I we weren't asking as much as as probably honestly as much as we should but again it was more it's more important to us we do with these early deals just to get them moved quickly the sort of you know build our confidence so now that's some been pretty poor important to us so we probably and I think it took us about eight or nine days to unload that one I'm netted given me sort of a tip that if i have a property longer than a week then it's probably priced too high and so that's been you know the rule of thumb that I've been trying to go by so when I got to that seven-day . i started to get nervous and I think the weekend came and by that Monday it was it was sold yeah that's awesome yeah that's cool very cool what what's your plan you know going forward what are your wedding plans well I'm the profit that we've made so far from the last video that's going to go into our marketing efforts we really like to start on direct mail marketing and so that's our sort of immediate plan we like to do you know another two or three wholesale deals to sort of add to our a pot of money and then we'll look to purchase a couple of buy-and-hold properties hopefully in the next six to nine months in Baltimore something that we can run out ok very cool that's awesome alright well good deal of that that is really really good information i actually learned quite a bit as well because I like i said i want to do more wholesaling what i love to hear you know successful whole still stories so that everyone I never thought that it would it would be me i was expecting you know nine to 12 months you know I was really committed to that time frame to sort of get it done and to get our first deal done but i think i'm the way that we sort of you know it's sort of dive right in and literally every hour of the day I was committed to talking to salaries and I probably spoke to um I don't know probably somewhere around two or three hundred people just within that couple of weeks just calling you know doing skip traces and calling craigslist ads and going out and speaking with neighbors and it's just good to see that it all panned out and worked out so we're excited about that yeah that's cool you know what I like about your story to is that like you could have gone out and spent you know $20,000 on some kind of you know private class or course or something like that but you probably learned more in those you know in the last couple months I've actually just doing it then you would have learned and you know months and months and months of courses definitely now I did I i do scour and bigger pockets every day ok yes and low stars of the day I'm I'm going they're researching something so I I definitely could have done it without all the information on the site well that's that's cool we appreciate that I mean that that's that's how I learned almost everything I've done was the same way so very cool well thank you very very much for you know being with us today no thank you for having me i really appreciate it all right we'll think you'll see on the site alright well you hopefully listeners out there learn some good tidbits about wholesaling in that interview i know i'm super excited to do more wholesaling I think I say that like every episode and interview I don't have a really started yet but I i really want to do more wholesale and I just I spend too much time on this word site called bigger pockets I don't know it is your job oh yeah that's right that's right my yeah I love that story because of you she's totally proves that it's doable so yeah now that's great and uh what why don't we why don't we move on to the next interview well we're going to talk with a great guy matt whiteside and mats from the great state of Illinois and he's gonna feel the same about his first deal and and of course Brandon you know that i love this next story because all the Guru's you know they love to talk about how easy wholesaling is but just like as a one-story Matt's gonna actually talk about some of the problems that can arise with a wholesale deal and how he overcame them to make a really great prophet cool yeah I mean yeah definitely wholesaling does work with them on the site but it's definitely not as easy so yeah absolutely alright man well why don't we jump right onto that interview all right Matt very very good to have you here let's let's start with the with this first deal you're gonna tell us a little bit about it sure I'm it was a wholesale deal i was marketing to people who were back behind on their taxes so was tax lien went down to the county and got a list and I was marketing to people who were anyone like it they have two-and-a-half years to redeem their taxes and I got them right before that two-and-a-half-year was about to end and here in our county was the 25th of april so i headed by Adam out prior to that the letters and I got quite a few calls i had this call to this woman who was the sister at the time was she was living in the unit and she said well you know my sister takes care of it my mom died passed away you have to talk to her so I started finally gave me the number i called her she come left message call me back and said you know and just tired of dealing with it she had the two siblings there weren't helping out weren't doing anything we're paying the taxes are paying the association fees we found out and she said I'm just tired of you know putting money after this thing and I'm done and there they were ready to move and just be done with amazing you know I offered her you know over the phone i offer 10,000 based off of what I could you know the cops in that area but I think I could you know get it for with making some money off of it and the taxes at the time about the 4700 dollars that they needed to redeem so she said alright that sounds good and then I went and looked at the place after that and it was it was a wreck it needed it needed at least ten thousand ten to fifteen thousand dollars in repairs did she tell you that it was perfect he didn't tell me was perfectly well how is it was good you know it's just hadn't been there in a few years so she didn't really know you know she said is three three bedroom townhouse you know one and a half baths and a finished basement she said so okay went over there and like see all the flooring was all shot in a ripped-up they started there were to put new carpeting down they just made out of money so they didn't put anything down the floors were sagging in the kitchen you know there was just just there's a hole in the ceiling from when they put in a new bathtub gently down here never repaired it so yeah there was there was a lot of work that needs to be done in there so I said yeah I went back to know what it's just it's not as as nice as you thought you said it was I said you know you had to 5,000 huh all right you know i guess i gotta get something you know it's better than nothing because at that time i was talking to you really had you know I then I found out that whoever bought the tax lien they did extend the redemption . to August fifth so we did have some time but you know she said well alright let's do it I said I find site i sent her out a an option contract where I was just going to give it with the the options he was going two hundred dollars but I was only given only gave her a dollar deposit and you know I set out by it based off of you know she was gonna get the rate of five thousand dollars cash plus I would pay the taxes roughly around five thousand dollars had her sign it and her sign a memorandum of option she signed it notarized it send it back to me I recorded the memorandum of option and then from there I i listed on the mls you know I gone and it and research didn't just to make sure that I could do it and I found that my wife's an agent and i found that yeah we could do it and I know I'm in some states i've heard that you can do that in some things you can't right that's good that you know you could do that yeah you should just get ahead but I don't see a lot of it being done you know and I would have anybody that's thinking about doing check with your local you know listing service and see what the rules are and you know maybe get an agent that can do it for you hired us so yeah we we figured it out and went to my wife's broker and said that's what we wanted to do said all right we'll do it I've never done before so it was kind of like a guinea pig here prob so we we did it we listed it I had it listed on a thursday like four o'clock on friday we had the first showing set up at like 10am first guy that came through offer me $20,000 I did listen at 25,000 based off and I was a little nervous because it was an aureole that was on there that was listed at 11,000 looking at the pictures looked a little nicer than the unit i have i was like huh I don't know if I'm gonna get much for this place you know but then I saw it sold in four days for 22 / 22 and a half thousand dollars i said well there's hope they're you know so i was i said well let's just put up for 25,000 see what we can get except that the first offer first showing I offer 20,000 I said well you know what I let me think about it now i'll get back to you came home told my wife was shocked at first showing first cash offer no and he came and he said you know this place is like 10 $15,000 work so he knew it and I think it was he was a an investor those looking to rehab it and flip it so I don't want to think about it came home talk over with the wife said you know what maybe we ought to just take the money and i was going to you know like let's just get in and get out still make some decent money off of this thing and then later that evening had another showing another offer of 23,000 so then we got into a you know multiple bids situation we told them give us your highest and best just the 20,000 easy stuff with 20,000 the 23 they came up to 25 595 souls like wow I maybe we'll go with this one and then the next day that we had at 26,000 dollar offer haha and really what happened was I was having a lawyer we do my assignment feet are not a scientific my assignment contract and he he got sick and it was taking it i was gonna take the 25,000 an offer he got six we took a few days to get it done and I was putting off that guy doing okay just hold on hold on we'll get the contract will you know I didn't say yes or no i said i'm leaning towards it and then what happened was well they call the lawyer was out sick with you know getting that sign the contract I got a $26 no.31 thousand-dollar offer that's 130 $1,000 offer came in and thought I said I'll i think they're not about haha so and it was a cash offer he waved you know all like inspections everything so I said okay great well in the meantime the at that first day I found out that the sister that was living there tells me what you know i'm behind on the ph away fees and I said well how much she said 05 and I said with five months because they're only a hundred twenty dollars is no 5000mah migrate that's good take a picture and I found I was like 5950 dollars six thousand dollars i'll take a huge chunk out but then something we got that 31,000 our office of all that that'll help you know but then I you know I negotiated with the HOA I told him I said you know if I don't buy this property we don't do this whoever bought that tax lien is going to take over this property to wipe out any of those and those fees and they never did put a lien on its we never came up in a title search for anything i don't know why they they chose not to do anything with it day 2014 4 years worth of HOA fees that they never even bothered to collect right but I got him down the 2500 so I said well that's good so I and we find out that the sister or mother died without a will didn't go through probate so now i have to get four siblings to sign off on everything haha this is the most complicated deal ever it was I'm her first deal yeah for my first deal i said i hope they good i'm hoping to get the tough one right out of the way at the beginning and everything else will be smooth sailing from here on out but uh so yeah I had to go and get them all to to sign everything that we have to do an affidavit of airship you know stating you know that they are who they are and that they have the right to you know sell this property rights ok a couple weeks and all the paperwork together and then we know I I I didn't want to take anything to chance so I at one out and a mobile notaries meet me at the one brother he looked out and Juliet which is not too far for me had him sign the stuff then then I went to the other brother was still in the area had him sign everything have notarized everything and then I took a took a weekend trip i said i'm just going to go down there and the sister move down with the other sister in Kentucky and Louisville so I said let's go meet my wife and daughter we just got in the car we on Friday night we went down there hang out saturday went she had a local notary right down the street from her we went over there him sign everything got all the paperwork set the closing for that next tuesday following tuesday make sure I had all of the all of my products around I was kind of nervous since being my first one at the last time i was in a closing what I bought my house so it's been over 10 over 10 years so I went in there without a lawyer i paid off the transfer tax got this transfer stamp went to closing actually impressed the clothing company with how well i was prepared now that they said was more prepared than most lawyers they come in there so yeah we had we had everything that we needed it the closing went fine and when I got the assignment and I i agreed to pay for the the title and then the buyer I was happy with that so you know I was only it's i put out another 1254 that the only other the other the funny thing about it is though the day we were supposed to close he he would he had asked on friday because you felt we're going to close on friday my lawyer contact him and tell him not I wasn't going to happen and we're gonna have the paperwork signed time and you know that he was asking well he did sign a lease on his new place and you know what I pay the penalty when I reimbursement from that and I said well now i'm not going to do that huh yeah I I I agreed you know I didn't have to send the assignment agreement that he would be playing all the closing costs like $MONEY for title and stuff I said no I i paid $MONEY for the title so if anything you know if there's any penalty over that maybe for some mouth it was driving never mentioned again but I went to the closing the day the closing went over there to get my wife signed the lockbox often I find out that there's workers in there and I said I were you guys I said we were the owner the owner hired us except that you'd that would be almost me haha you know they said oh he said it was ok he closed on fridays it now so he jumped the gun on me and I said I talked to a lawyer so we want to do a body goes I wouldn't say anything he says I'll just make the clothes and go easy because if they come up with any you know if they have any if they if they say anything you can go all you owe me rent for being in there for the data were and you actually put money into it so you've actually improve my place so you know I get back close but it never came up with smooth so you know after talking with the title company just making sure we had everything correct they knew and when make sure they had a you know everything in order we closed and and picked up my check so I made you know over its probably with my wife's Commission was or 11 and a half thousand dollars we made off that one for steel that's awesome very cool and cool and it only took me like I said one dollar is what came out of my pocket the beginning I mean obviously you know I paid for some other stuff like notaries and you know stuff like that and getting filing your $42 to file the memorandum but other than that really wasn't a lot of money out of pocket everything was paid at closing so no buts that's an interesting uh interesting story really really really quickly what you know what inspired you to to kind of go that route with with the tax liens you know something i ate gotten I'd read something about it ordered a book one time called deed grabber b.a.d grabber about getting you know tax liens getting them before you know they go to the tax investor you know people obviously they're motivated they're gonna lose this house just based off the back taxes and I'm you know I'm finding a lot of places that are free and clear that really old just the taxes and also if you can find those properties then do pretty well yeah that's great nice well I think thank you very much Matt for you know sharing your story with us a problem cool thanks a lot man yeah definitely alright alright guys and that was a matt whiteside that story definitely paint a different picture about how easy wholesaling is doesn't be it definitely does like I said that you know drive down to another state to get things sign that was not something you read in the you're here on the Guru's so that definitely definitely alright everybody for a final interview today we're going to talk with somebody that will if you regularly hang out on the bigger pockets forms you probably know pretty well mehron kamari neurons actually moderator now on the bigger pockets forms and is definitely one of our most active members we wanted to talk with me around today because like a lot of our listeners neurons located in a big city where prices are kind of crazy high and it just some may not make sense to invest in but I you know he lives in LA and he's actually crushing it right now with his investments by investing at a distance so if you're in an area where prices are too high you definitely definitely definitely want to listen to this interview out-of-state investing so why don't we just jump right into this alright so mehran can you tell us tell us about your first deal ok so my first deal actually for me was my primary residence you know i just got a well-paying job around 2009 i started saving some money to put towards the down payment I figured that would be the biggest investment in my life and uh when I decided to do was just buy a bunch of books learn about mortgages learn about how to how to actually buy a house and that's what led me to BP so I had a question about that to income ratio and that led me to BP and I got so much information on just the one posted i read i was like man this is a really good site i'm gonna stick around here and learn what I can before i bought my first house and the information i went from BP really helped me kind of decide what type of house I wanted to get uh I I knew from the second i started on BP that I wanted to get into real estate investing and I figured you know the best way to do that would be get some practice as a landlord so I figured I'd find a house that i can easily write out some rooms you get the hang of a landlord finding tenants screening them signing at least doing all the things you know landlord does and uh yeah that's pretty much how I got started on my first deal that's cool nice and and since then you've you've continued to I to pick up property what was what was the what was the second opportunity that you went through ok second opportunity as a duplex I found on the MLS in indianapolis had been looking at some turnkey properties from Turkey companies and it seemed like every property i looked at was it meeting my requirements for you know the two percent rule bigger pockets the fifty percent rule which I figured would be just kind of good criteria to stick to so I i figured that indianapolis would be a good market because a lot of the turnkey companies were offering properties there so I figured you know let's just check out the mls and i did that i found a good property that had the numbers that i was looking for that easily met the fifty percent rule so I just pretty much called the agent up i had a bunch of questions to ask her you know due diligence questions like what why is the seller selling you can get copies of copies of the lease rent roll stuff like that and it was pretty simple actually ok did you go and visited them before buying it or did you just don't know I did everything online pictures I hired a property a property inspector inspector and uh pretty much yeah they were my eyes and ears on the ground nothing and you're in Los Angeles so you know obviously there's there's some distance there what what was your was the strategy was it a buy-and-hold or were definitely buy-and-hold i had just saved enough for a down payment and I got pre-approved figured that i'd be able to for the house and i just bought it with conventional financing and that was it was the pretty simple require any work or was it wasn't ready grab it was but it was pretty much ready to go another investor had bought it and rehabbed in 2009 he already had tenants in their property management in place and everything was pretty much good to go I I guess we did the inspection and there was a couple repairs that asked them to do what she did willingly and a everything was pretty good going to you go ahead throw all going if you had any problems so far with with tenants or anything like that managing from far away your property manager right yeah yeah so the property managers actually she's so awesome i put together a kind of like a question here that i got from all my research I did on on bigger pockets like all the things i need to ask about this property manager to venture out see if she's really good to see if I should you know either replace her or keep Iran and she answered every question perfectly and I felt like it was such a blessing everything's been good so far the tennis that were there were long-term tenants I haven't had any problems she collects right on time and everything was all having an answer and awesome and the cool thing about that is you know you you basically saw what other successful companies were doing these turnkey companies were doing and yeah i mean certainly not everybody can go out and and do what you did then some people do need you know a company to kind of take care of all the work but you you realize that the numbers don't work for you and so you kind of went around and found I'm opportunity that would that was perfect and that's cool yeah and i found one at when I bought my house that I live in now I went through the house and I thought I saw everything it looks perfect and window with the inspector came and he found all these things wrong with the property that i didn't even see so I figured you know I'll just hire an inspector to go check out the duplex and i'm buying and they'll probably see more than I will even if I flew out there anyway so it worked out good for me that way were you concerned at all about the neighborhood since you don't know the area like how did you get mine was good so I realized a little bit on the the selling agent who I new kind of had a an ulterior motive for you know kind of sprucing it up yeah I i use trulia to check out some of the crime crime reports in that area of the of the city i spoke with the property manager was really helpful she don't really have too much the game by like by a given me kinda jumbled up information it was the duplex is the only multi-family property on the house a single-family home I mean on a street of single-family homes ok so it seemed like you know the street was well taken care of in everything that's not the nicest neighborhood but uh it works yeah I think that's really that I would look for that too of multifamily on a street of single families i followed the same i love that so yeah and you know what else works a google street view is there's a tool for doing that is well the detail James I mean if you see bars and all the windows yeah you kind of know where our cars that are you know blown out and sitting on yards i mean it kind of tells you what you're looking at yeah I think I I drove around with google street view for like two or three hours down with like I practically live there that's always a nice cool why not I know you mentioned on the forms that you also found you know a partner 3 and don't talk about that I'm with your way I found I found my partner BP her name's Don Anasazi she's in Milwaukee and I after I closed on property number two I was already i mean yeah i was already thinking about the next property and she had posted something in the marketplace she posted a couple of numbers on certain properties that she's seeing and the numbers in her neighborhood and everything and I was like man that's better than I'm seeing Indianapolis and I've seen her all over the forms giving advice on on all the different subform she's been really helpful so I've seen around there was a lot of credibility there and I think you know let's let's contact her and see if I could work on something with her yeah and we we talk to each other that each other out what I really liked about working with her is because we're part of the BP community we're always around the same lingo kinda like the same culture the same beliefs when it comes to you know investing which is like doing it right and their due diligence and make sure all the numbers are correct everything and so far it's been so smooth working with her because we're always on the same page with everything we have the same goals and it's working out pretty good that's fantastic can you tell us about the deal with you guys are doing ok yeah this is the deal we just closed actually fairly recent on the thirty-first of May is a short sale small little 21 house we bought it for twenty one thousand cash putting about 3,000 into rehab and are estimating RV is about 40,000 and we have a portfolio underlined up or we can a refinance right after we finish the rehab and put a tenant in there and get our money back and kind of rinse and repeat that's awesome . and and rent she's looking to get for it is about 750 275 so it's cash flowing pretty good for what we got for you know that just shows like you know i'm marilyn you did not going to do this but like you are one of the most active guys on bigger pockets and you're always in there welcoming people and talking and engaging and you are just proof that a I mean that it works i mean like they're just getting out there and meeting people and talking with investors and you making deals happen so I think that's really really awesome oh and one last thing one thing that really helped me get over the hump on making that first offer was posting a posted the deal analysis form so i can have you know the opinion of all the other investors on there kinda pick apart my deal and let me know if it's good or not so even though i did my own due diligence before that for some reason I was like stuck in that analysis paralysis stage and I just like couldn't get myself to make that offer but after I made the post and uh I kind of got the feedback from everybody yeah I felt a little more comfortable moving forward and it really helped a lot so I suggest any new investors that are honing in on a property that they're there they're really serious about and they just can't get over that hump if you just post something on the deal analysis form i mean youyou can't really go wrong with a the collective intelligence i guess the people that have done over a hundred hundred deal send it really helped me get over that edge so i highly suggest that yeah that's awesome I I did kind of the same thing on one when I was starting out I would post my I guess deals on there like you know is this really a deal and yeah it works really good AI think you actually even contributed to that and my posting hate out big time yeah that's cool that's good to know it's funny i went back and looked at my first comments i ever made on the forms you know and I have the the change that has happened from the time i first posted on BP and so now is like amazing and I i credited it i want to see a hundred percent of bigger pockets but pretty much all my direction has been because of that I mean I've read a lot of books also i like can't start reading books for bigger pockets and consistent I'm like fascinated with real estate investing now it's also screwed hey what's your name what's your favorite real estate investing book actually I'm kind of reading it right now actually got it from some of the other bigger on the podcast is that how i turn a thousand in 25 million really up pursuing nickerson yeah whatever what I really like about it is uh he doesn't just tell you what to do he breaks down the psychology of why he's doing it and why it's kind of the best decision to do this move for this situation and that's what i really like about it because I like to get into the mindset of a successful investor kind of not just like step-by-step what to do yeah you know that's awesome i like that book a lot to us what I'm one of my favorites I was very cool what what are your plans for the future now so my find my plans right now are to continue to buy a little cash flow properties that I could uh you know cash out refinance and get my money back so I can keep rolling with the money i have no but to build a portfolio big enough for me to leave my job to replace my income that I'm learning right now and leave my job and and pursue things full-time the job that of course that you love ya oh yeah I love my job because anyway coworkers haha i say it's not that my job is not that bad it's just that it's a the line of work I do what kind of have to work graveyard shift and it's not the ideal shift for me to be working huh I look I mean beyond that you know everybody's coming up the dream of hey i can i can work for myself and kind of have the opportunity to freedom to spend time with family and friends and and do what I want to do I mean you know if there's any boss listening to an employee who says hey I I don't want to work you know I mean I will work my backside off for you while I am working but the dream is to not work i mean come on yeah I know you're having goals for for working so hard to accomplish my goals as made me a better employee even even at my job i'm just so motivated and excited all the time rather than just sitting there you know with my back hunched and all is well that's also been an awesome listen I I I really want to thank you for forgiving us a couple minutes of your time & and i think yeah I think he shared some some cool little tickets here and and that's exciting to learn about the success that you're having so we'll definitely look forward to continuing to watch you as you grow and and share what you've learned with everybody back in the community thank you thank you yeah thanks thanks for starting bigger pockets just and make it a community what it is you guys if have made it so awesome for me it's so easy now nice i appreciate that man thank you alright thank you very much yes Baba all that was awesome awesome listen I mean met me Ron is he's definitely one of the many many bigger pockets success stories it's so cool yeah it's cool i mean I it's fun to watch him because when he first started you know posting on the forums he didn't know a whole lot of what was going on but definitely it's pretty cool to watch and i know i just talked to him the other day and he mentioned he got another deal now even since this interview that we recorded he got another deal and he's closing soon on so sweet yeah he's on fire awesome that's great and and it proves that you really can't get your use your location as as an excuse to not invest you know hey I live in New York City I can't find anything under you know 50 billion dollars and yeah well you you gotta find a way to overcome things like that just like me rounded so well yeah it's great yeah awesome yeah I i I'm a big fan of his I'm excited to see where he goes with this yeah definitely alright man let's wrap this thing up for for those of you guys who are listening we really just want to say thank you for supporting bigger pockets and furthermore we actually really want to thank you for supporting your fellow investors around the site and bigger pockets I i think is it's so amazing because the people who make up the community I you know these these four for investors have all you know they're all in the earliest stages of their careers and anytime they jump on the site and ask questions and those investors have been around our are jumping and helping them and and you know what else can you ask for i mean by a it's it's just I don't know it makes it makes me really proud to be a part of this whole thing yeah i mean it was fundamental in in my you know success so far and it continues to be so yeah now for sure well I just want to encourage everybody who has listened to two please come and leave a comment on the show notes also make sure to leave some encouragement for these guys I mean ideas encouragement any questions you've got you know they'll be around to answer them to communicate with you you can check out the show notes a bigger pockets . com / show 25 that's bigger pockets calm / 0 25 and finally if you want to close a member of the community we once again one invite you to jump into the conversations that are happening every day on the forms of bigger pockets . com / forums make sure you introduce yourself to the community in the new member introductions like we said in the quick to and let us know who you are and finally come connect with us over facebook at facebook.com slash bigger pockets and until next time this is joshua torquin fine enough you shut up you're listening to the bigger pockets radio simplifying really looking for investors large and small if you're looking to learn about real estate investing without like you're in the right place to join the millions of others who have benefited from bigger pockets . com your the real estate investing online yeah

 

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http://www.biggerpockets.com/show25

On today’s episode of the BiggerPockets Podcast – we’re going to change things up. You see, all of our interviews thus far have been with real estate investing professionals, who are absolutely crushing it in their real estate journey.

However, today, we want to sit down with some investors who are just starting out and can tell us their stories of how they achieved their first real estate deal. These stories are not only helpful for new investors, but even the pros can learn valuable lessons from their experiences. We cover everything from investing when you live in an expensive city to dealing with the drama that might arise during a wholesale deal and even tips for buying a small multifamily property as your first primary residence. Don’t miss this amazing set of interviews with some really great individuals!

Check the full show notes here: http://www.biggerpockets.com/renewsblog/2013/07/04/real-estate-beginner-newbie-podcast/

Article Categories:
Real Estate · Investing · Videos

Comments to Four Newbies and Their Very First Real Estate Success Stories | BP Podcast 025

  • Brandon & Josh!!! Can you do more of this type of podcast, maybe once every few months!! Is very helpful and inspiring, thank you!!

    Luis Ortiz July 18, 2015 11:32 pm Reply
    • I agree! It's these stories that inspire me to keep moving forward in my REI journey! =D

      donna arrogante August 25, 2016 12:48 am Reply
  • lol the idea of hiring Brandon as a contractor cracks me up.

    Powerful August 12, 2015 12:50 am Reply
  • Great podcast guys

    Desean Patton March 15, 2016 9:07 pm Reply
    • +Desean Patton Thanks, man! We try!

      BiggerPockets March 17, 2016 9:16 pm Reply
  • I would LOVE for you guys to do more of these "newbie" podcasts. I REALLY enjoy the ones you do with the gurus and big time players, but I am trying to get my feet wet and I'm ready to but I don't really hear too much on these type of people that just closed.

    Kevin Dickson October 3, 2016 11:13 pm Reply

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