How Judy Cook Turned 117 Distressed Houses Into 17 Free-and-Clear Properties

Judy Cook (00:00)

You could buy 10 houses for this price. And I had nine buyers that night. And I went home yeah, shoot. I really wanted 10. That’s perfect. and next morning, early in the morning, a guy called and he said, Talk to my wife, we’re gonna take 10 if they’re still available. And I said, Well, they just fortunately for you, they are.

So I sold a hundred houses for the full price of a hundred and seventeen. So would that leave me with seventeen free and clear houses? Was I a happy girl? No. How many times do you get seventeen free and clear houses for nothing other than putting a meeting together?

Scott Bursey (01:12)

Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. Glad you’re with us. Today we’re delighted to be joined by Judy Cook with Pathway to Wealth. Judy is a longtime real estate investor and teacher. She’s also the author of The Problem Is the Solution.

Through Pathway to Wealth, she teaches an approach that turns the way most investors think completely upside down. Where most people see a distressed property and walk away. Judy sees the value hiding inside the problem. And she’s built a career by being the person willing to solve it. Listeners get ready for a way of looking at this business that will change how you see every deal that everybody else passed on. Judy, welcome to the show.

Judy Cook (01:57)

Hey. It’s nice to be here.

Scott Bursey (01:59)

It is outstanding having you here with us and to help our listeners get up to speed. Please give us the ninety second highlight reel, if you will, of how your career ignited and really what you’re doing with your career now.

Judy Cook (02:14)

Okay. it started out. I went to the Rich Club, Realty Investment Club of Houston, and went to the bathroom, women’s room. And a woman in there, Iris Geddes, was talking about how she was making money buying and selling houses. she’s flipping them, basically. And I learned a lot from her. And I got back with my husband at the time and told him how much I learned in the bathroom.

I was too bad he couldn’t come in there, but he said, well, you missed a great meeting. They had speaker. So we got two meetings from me for the price of one. And I later became president of that club, the Realty Investment Club of Houston. I have a little mug to say that. That’s all I got. but I learned a lot. And what I learned was anybody can get started and you don’t even have to have money.

That’s a big thing because everybody says, I gotta save up. You don’t. You just gotta know some people that have money. And that could be your boss, your boss’s boss, or the owner of the company that you work for, or the person next door to you. and if you need to, you can call an IRA and they’ve got money inside that IRA and you could ask for maybe some names or look for some names of IRAs because

The IRA money is not making that much money as long as it’s in that ten thirty-one exchange. So you can use that money sometimes if they’ve accumulated quite a bit. They’d love to lend it out to you. It’s just a matter of you asking for it because they don’t know who to lend to. But if you let yourself be known, then they’re happy that they can lend it. And particularly if it’s somebody who’s got money

in your area and the property is in their area, they can go by and see it and they can see what a good deal you’ve got and they’ll finance a hundred percent of it. and maybe even the repairs. Who knows? fact that you’ve got a lot of money doesn’t matter. So you can get going real easy. And I would start out if I were me, starting out, I go with a single family home.

to flip it a couple of times. I do three or four of those and then just venture out, look for a problem that you know how to solve.

Scott Bursey (04:22)

Judy, wow, thank you for highlighting that. that is really fascinating. When you look at a distressed property everyone else is passed on, what’s the first problem that you look for?

Judy Cook (04:34)

All of that is beat up. That’s it. now my son and I, when he got older, bought a house that everybody passed up because the previous owner had died and he didn’t have any heirs and he didn’t have a will. So the bank inherited the house and they sold it to us. Now that house was full of his junk. bedrooms full of bedroom furniture.

Closets full of clothing, kitchen full of kitchen stuff and garage full of garage stuff. And we bought it and then we went to lunch and we thought, boy, how do we empty that house? And the first words out of her mouth were yard sale. And the second words out of her mouth was, well no, that’s too much work. So we got on four or five other ideas and then we went, let’s go back to yard sale. Let’s think about having a yard sale different.

And so we put numbers on the doors of the rooms and thirty-five dollars on the garage. Here’s the deal. You had to take everything in that room. Not just what you wanted, everything. But you might get a whole bedroom full of furniture for $25. So we had women come, look at everything, go home and get their truck and back it up.

And we hired a teenage boy to help them, get the stuff out of the house into their truck and off they went. We had enough to pay our teenage boy what he needed, and we had an empty house was what we needed so that we could fix it out and sell it. So you have to think about things differently because thinking about it the way everybody else does gets you, gee, I can’t buy that house, I won’t make any money.

‘Cause that’s what they’re thinking.

Scott Bursey (06:07)

And expanding on that a little bit, I guess the big question, Judy, is how do you tell a problem that hides value from one that’s just a money pit?

Judy Cook (06:17)

Well, you have to look at it and say, How can I solve the problem? And if you can solve it uniquely, you’ve already got a head start And I would go for it. now there’s one thing that I would also suggest that you belong to a local club, if there’s a club or an association, because you’ll meet other people and you can get maybe the other person’s opinion.

Can I make money on this until you’re confident that you can? and they’ll happily come out and say, Yeah, you can make money on that one at that price.

Scott Bursey (06:48)

Judy, tell us about a deal where the problem turned out bigger than what it looked like on paper.

Judy Cook (06:54)

Well, there’s always those. There was one we called it the Whitney project in my household. A hundred and seventeen houses. Now they were small and they were not on big lots. I don’t know, they might have been section eight at one time. they were all foreclosed on they were in various states of demise. And

I saw the price tag and I went, well, they gotta be worth more than that. but I didn’t want a hundred and seventeen houses. So I took the price tag, divided it by ten, and that was how much I sold ten houses for. Now I had them under contract, so I put that in a lc. You could put it in any kind of company or not put it in a company, but I did. And met

twenty of my best students at Denny’s and I made a presentation. You could buy 10 houses for this price. And I had nine buyers that night. And I went home yeah, shoot. I really wanted 10. That’s perfect. and next morning, early in the morning, a guy called and he said, Talk to my wife, we’re gonna take 10 if they’re still available. And I said, Well, they just fortunately for you, they are.

So I sold a hundred houses for the full price of a hundred and seventeen. So would that leave me with seventeen free and clear houses? Was I a happy girl? No. How many times do you get seventeen free and clear houses for nothing other than putting a meeting together?

Scott Bursey (08:19)

The Whitney project. Yeah. Judy, what did that deal teach you that you still remember today?

Judy Cook (09:03)

that anything’s possible, you just have to think about it differently than everybody else. they were different stages of demise. Most of the houses were okay, but they needed something, some paint on the outside, maybe some windows broke, who knows? But we went through and categorized them.

in three different groups of repair. So, with this we call that A and a B and a C. And you got so many A’s and so many B’s and so many C’s, so we divided it up. And then I suggested to them get your A’s fixed up first because they’re gonna be the ones that’ll sell and that will help pay for the other stuff. Put some money in your bank account. And they did. And that we really turned that around.

It was on cross timbers in Houston. and it’s a nice little subdivision now.

Scott Bursey (09:51)

Judy, wondering, where are the problems sitting right now that most investors don’t even see as opportunities?

Judy Cook (09:58)

Well, the realtors know where they’re at. They pass them up and sometimes you pass it up five or six times. And you go, well, that’s not listed with a realtor. Those are perfect to talk to because those guys are sometimes they’re unaware that somebody else wants it. I don’t want it, why would somebody else want it? Well there’s a lot of reasons. Maybe you don’t want to take the time to fix it and get it ready to sell.

maybe you don’t know how to sell and maybe you just want to buy it and flip it. So you can buy it and put and or assigns and then sell the contract because you said and or assigns. You can sell that contract to whoever will buy it. So there’s perfect ways to get it out. get rid of it.

Scott Bursey (10:42)

Judy, let’s dig a little deeper. What problem catches experienced investors off guard in a market like this one?

Judy Cook (10:50)

Well, they’re looking for fixer upper houses and there are other things out there. it could be an old gas station and you’d have to look at it and go, I could turn this into a donut shop. you’d fix it up for a donut shop, already have a buyer in mine, and then sell it to them or rent it to them.

Or you could do a lease option where you lease it to them with a period of time, say twelve months, and at the end of twelve months you get them into a bank loan.

Scott Bursey (11:16)

Judy, you have the book called The Problem Is the Solution. What is the thesis behind that publication?

Judy Cook (11:22)

You’re looking for a problem that nobody else can solve but you. Depends on how big. I did a lot of my work in Houston, Texas, but there’s so many problems there. It’s hard to find a solution for everything. But you don’t need to find a solution for everything. You just need to find a solution for what you’re working on. And that’s not that hard to do if you can think out of the box.

Scott Bursey (11:46)

Judy, over the course of your career, what type of value have you received being around like-minded individuals?

Judy Cook (11:53)

great. Because I can talk to other people and say, I’m thinking about buying this and they’ll go, Well, if you don’t buy it, I will. Now that’s a good sign that you got it at a good price.

And most of the time they’re really honest with you and they go, Well, it’s worth that. Yeah, it’s worth that. You can make money at that. And a lot of it, for instance, at one time we had three crews going. They had five men crew, we had three of them. I bought all the materials at Home Depot. Now the reason I did was I got a ten percent discount being who I am. And so I would get a list from them, go to Home Depot, get a list, and I would give

This one, this list, and the other one, the other, so forth. and I didn’t waste their time going to Home Depot, nor their money. And so, I’m just paying for labor. And that saved me a lot of money. And if you belong to some clubs, Home Depot does give the members of those clubs a discount.

Scott Bursey (12:49)

Sounds like you built exactly the right circle around you, Judy.

Judy Cook (12:53)

Well, I hope so. Cause you kinda learn from your good friends and you know who you can trust and who you can’t.

Scott Bursey (13:00)

Judy, let’s dive deep. Say a listener finds a distressed property with a big problem attached to it. What is the first step you want them to take before they touch it?

Judy Cook (13:45)

figure out if they can afford it for number one. And the second one is can they solve the problem? Do they have the manpower? I know the first church I did in Ronan, Montana, I didn’t think I was gonna find the right electrician because I needed somebody who knew how to get the wiring done. And all of them wanted to take all the sheetrock down and then they would do the wiring and I was like, No, that’s not

gonna do. And finally the sixth man I interviewed that day said, I’ll just dig a little hole in the drywall that’s about four inches wide. Well I’ll lay it on the floor and they can put it back up, tape it, redo it, paint it. It’ll look good. And I went, You’re hired. And he would leave his invoice in a refrigerator, one of the apartments and I’d pick it up, leave him a check.

get his invoice. So, part of the work is getting those guys. Now second church, guess what? I hired the same guys again.

So once you’ve done that, don’t think of, I gotta do this every time. you’re doing it one time. And then you go out and hire those same guys to do it one more time, or one more time, one more time. Once I got a chance to buy an empty lot, and I walked over before I bought it, and I said, Boy, this is just like Bunzel, except it’s flipped over. And I bought it, and I called one of my contractors.

And I told him, I said, we’re gonna build a house on this foundation. and he said, Okay, where’s blueprints? And I said, Well, go look at Bunzel and another subdivision. It’s the same floor plan, just flipped. the garage is over here and it’s over there on the other one. And he came back, he said, I can do that. And I said, Good, do it. So I got him all the materials that he needed, not maybe all at once, but I got him enough to get started. And

We made a lot of money on that house. at closing the banker said we don’t know who started the fire, but there was a fire here and they were in the middle of a divorce and we never figured out if she did it or he did it, but somebody burned it down and they had it cleaned off. The foundation, nothing wrong with it. had a big tree out back and had a garage. it was in a nice neighborhood.

So you look for those problems that everybody else is just overlooked. The banker was happy to sell it to me at a good price.

Scott Bursey (16:03)

Thanks laying that out so clearly, Judy. And Judy, you have given us a lot of really good insight here today. But is there any additional words of wisdom or final words you like to leave with our listeners here today?

Judy Cook (16:17)

Yeah, everything’s possible. my book’s got a lot of examples, a lot of stories about how we did this, how we did that, and how we made good decisions. But you can do the same thing and don’t think, I could never do that. Yeah, you can. And even if you have to have somebody look at the first one or two and say, Yeah, that’s a good deal. That’s a good deal. And there’s friends out there that will.

don’t think everybody’s against you. they’re there to help each other, no matter how that may look. There’s people out there that want to lend their money to you. There’s people out there that want to give you advice. They love giving advice. It’s, what’s in them. So go ahead and do it.

Scott Bursey (16:58)

Judy, that was some very good advice right there. Thank you. And thank you for joining us today on the Real Estate Pros podcast.

Judy Cook (17:07)

Thanks for having me. Anytime I can help you, let me know.

Scott Bursey (17:11)

This has been an absolute pleasure speaking with you.

Judy Cook (17:14)

Yes. Well, thank you for having the podcast. Cause I like for people to know that they can do it. It’s not I gotta wait till I get so much money in the bank or it’s you can do it right now. and everything’s possible.

Scott Bursey (17:28)

Judy Cook, everybody. Thank you once again, Judy.

Judy Cook (17:31)

Thank you.

Scott Bursey (17:31)

And to our listeners, we appreciate you. If you received value from today’s episode, please subscribe. We’ll be fueling your tanks with a lineup of elite guests, just like Judy Cook, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.