How to Find Off-Market Deals & Make Big Profits

Share via:

• Facebook
• X (Twitter)
• LinkedIn
• More

Subscribe via:

Show Summary

In this episode of the Investor Fuel podcast, host Michelle Kesil interviews Chris Padgett, a seasoned real estate investor who shares his journey from his first investment to navigating the commercial real estate market. Chris discusses his strategies for low-cost investing, the importance of networking, and his focus on affordable housing solutions. He emphasizes the significance of overcoming fear and building relationships in the real estate industry, providing valuable insights for aspiring investors.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Chris Padgett’s Website
    • Chris Padgett on Facebook
    • Chris Padgett’s Phone Number: (864)863-1482

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Chris Padgett (00:00)
  Like I said, I got off the plane. My niece asked me about it. We rode around her little one block, one block in her where she lives at. And there was a dumpster outside. We stopped and I said, let’s let me go knock on the door. And it’s funny how people get fear. Fear really will shake you up. And she said, are you going to knock on the door now? And I said, well, there’s two cars in the yard. Do think we ought to knock on the door today or wait until maybe Monday or Tuesday when nobody’s here?

  It was a Sunday afternoon, on the door. It just so happened the folks knew my wife, had been a school teacher locally. We made our offer on the house, they accepted it, we found a buyer. And that one, we picked a check up for that particular, the largest one we’d ever done was $47,000. And we didn’t have a penny in

  Michelle Kesil (02:15)
  everybody. Welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. And today I’m joined by someone that I’m looking forward to chatting with, Chris Padgett, who’s been making serious moves in the investing space, doing flips, consignments, and some commercial. So excited to have you here today, Chris.

  Chris Padgett (02:37)
  Thank you all for inviting us. We’re glad to join you.

  Michelle Kesil (02:41)
  Yeah, absolutely. think our listeners are going to take something away from how you’re handling creating all of these investments and your strategies. So let’s dive in.

  Chris Padgett (02:52)
  Well, I guess we could start from our first one we did approximately five years ago. It was really, really pretty amazing. We, we kind of knew that, or looked at real estate as an option of making additional income. Years ago, I took a course from a guy named Carlton Sheets, but that you wouldn’t remember that Michelle, cause you wasn’t around them, but there’s some older guys would remember that cassette tapes and all that sort of stuff.

  Michelle Kesil (03:14)
  I’m

  Chris Padgett (03:19)
  I was interested in it but never really had the guts to take a dive into it. When I moved back to the hometown I was born in, had a friend of mine walk into my office one day and he’d been trying to help some veterans. They had a home, wasn’t working out well. The neighbors didn’t want the veterans there. It was kind of like a little recovery house. And the guy had had to make the veterans move out.

  And he had asked me, he was telling me a story and I said, well, do you think the guy would want to sell it? And he says, sure. And so we got a, he gave us a idea of what he wanted back then. It was the same house and then it was going for about 130. He said the guy wanted 20 grand for it. I said, okay, well, let me go look at it. Went over and looked at it and we got an offer in at 15. Called a friend of mine that does rentals and I’d met him through.

  a business group. Like I said, I wasn’t in investment and insurance, real estate business at all then. Actually, I was a shelter manager for a homeless shelter. That’s where this guy was at. But I had a business background. I did financial planning years ago. So I called Dave, my buddy, and I made an offer on it. And he went over and looked at it and he said, yeah, I’ll pay you 25 something. And I go, okay, we’ll take it.

  And he said, I’ll take care of the closing. So he set us up for the real estate, the real estate office, attorney’s office. And he said, we’re going to close two weeks. So I had a consignment on the property and they told me I was going to make 13 grand. And I thought, if those guys write me a check for $13,000 and I’d put about five hours work, I don’t even believe it. I told my wife who’s a school teacher about it. And she said, that’s going to be a while. Well,

  Sure enough, we went over there to closing. The owner was there, I was there, and all we did was a single page consignment contract. And they slid us a check across the table for $13,000. And I walked out of my truck and sat down and tear-cane him out. I thought, what? How have I missed this, that I’m 60 years old? And so that was our first deal that we did about five years ago, and then we made 13 grand on it.

  Michelle Kesil (06:11)
  Amazing, that is so exciting and what a way to get into the industry with that feeling that this is possible.

  Chris Padgett (06:20)
  That’s right. And we only put $500 down, you know, so people that I know when I first heard about this industry, I thought you had to have money or be able to know folks that have money and have a relationship with a bank. And I guess you can do that, but really you can do some of the things that we’re doing. And I’m sure some of you other investors are doing in the real estate market in that space with very little or no money at all.

  Michelle Kesil (06:45)
  Yeah. Yeah, maybe you can expand on that. Like what some of those strategies with so much money look like.

  Chris Padgett (06:52)
  Well, the most we only on a flip or a consignment now in South Carolina, the law has changed a little bit on the consignment market. So we had to adjust it as to the even assignment contracts. now use investor relation specialists. means that if, give you an example, we just did one. I was down in Dallas, having my son working a house. We flew back in or I flew back in and my niece picked us up from the airport.

  and they knew we had been doing some flips and consignments and things like that. And she said, Chris, how are you doing this? And I said, well, on a very low key method, we’ll take a ride on a Sunday afternoon. We’ll see a property that’s got some grown up trees and shrubs and maybe little bit too much mail in their mailbox. We’ve got an app.

  I’m not advertising for anybody. We happen to just use Propstream and Landglide. And we pull that up and we find out and it gives us a little bit of data. And then we can reach out to those guys by mail or sometimes even if we go, we cross, we cross it over to white pages and we may even get a phone number, which is fairly easy. And I use the same script every single time. And now I’ve got an office manager. She uses the same script every time. We just say, Hey, Michelle.

  You know, we saw your property. have some family and friends are looking for something in that area. Have you ever thought about doing anything with it? And we hush. And that’s all we ever use. We use that on our mailers that we send out now. One of the software data packages we use is PropStream. You can create your own little mailer and they send it out automatically for you and that sort of thing. But that’s how we started.

  Real low key, no budget, no marketing, just riding around on Sunday afternoons. the first three years we had flipped 11 houses and I think we had put it in our pocket right just above 280 or 290 on those houses. You know, made $10,000 on some, made, like I said, 13 to $20,000 on other ones. The latest one we just did

  Like I said, I got off the plane. My niece asked me about it. We rode around her little one block, one block in her where she lives at. And there was a dumpster outside. We stopped and I said, let’s let me go knock on the door. And it’s funny how people get fear. Fear really will shake you up. And she said, are you going to knock on the door now? And I said, well, there’s two cars in the yard. Do think we ought to knock on the door today or wait until maybe Monday or Tuesday when nobody’s here?

  It was a Sunday afternoon, on the door. It just so happened the folks knew my wife, had been a school teacher locally. We made our offer on the house, they accepted it, we found a buyer. And that one, we picked a check up for that particular, the largest one we’d ever done was $47,000. And we didn’t have a penny in

  Michelle Kesil (10:24)
  Amazing! Wow, that sounds like such a creative solution that you guys came up with.

  Chris Padgett (10:31)
  Yeah, and the neat thing about it, the sellers love it because we asked them, you know, what are they wanting out of their property? They said 220. I had a young guy, he was a retired guy in the military from medical leave. And so he had a pretty good income with four kids, needed a place to go. And never could find him a four or five bedroom. And this one happened to have that. He was already pre-approved and he’d been kind of calling me a few, well,

  a lot because he had ADHD so he called me a lot checking on his property. And so he had a pre-approval. We did that. And I think the only thing we paid for was a termite inspection for him. But what we do, we add everything back into the cost. So the buyer and the seller, everything comes out of my profit pool. So I kind of back that again when I do an offer to a buyer.

  And that particular one just worked out real well. He had a good approval. He had a was proved at 290 and we did it at 285. We paid all the closing calls, all the taxes, everything and still walked away with 47,000 and that’s unusual. But when you’re out there, those some of those things do happen.

  Michelle Kesil (11:35)
  Absolutely. So what are you most focused on right now when it comes to your business?

  Chris Padgett (11:41)
  Well, I’ll tell you funny story. went to, me and my son-in-law is a school teacher and we accidentally stumbled into the commercial market about a year, about two years ago now. We went down to a bunch of kids and they did a day camp and we were down there with them in this little small community and met the mayor and it was kind of a distressed area and they were needing more affordable housing.

  And I knew a little bit about that because over the years I started reading about it. And we got down there and Habitat for Humanity had a property that never did anything with, so the city had it again. So the city sold us the property and they said, look, we’ll sell you the property at a discount rate if y’all bring affordable housing in there. So the most affordable that we could come up with was mobile homes. And so we

  Over the next six months, picked up nine mobile homes, went in, really did a good job on them, remodeling them and putting all deck and panel flooring in there. Put a ⁓ nice circle driveway into the property landscape that put cameras on the property. Now we went to the bank on this because I didn’t realize this, but if you got anything in South Carolina over five doors, that means five units at one time.

  They treat that as a business and I don’t treat it like a residential property where you got to put your money up and put the money in and get it out on the other side when you sell it. By that time, we had accumulated a little bit of money. And so we went in and did a loan on the property. And we got approved for it because of the cash flows that were showing out of the, you know, we’re gonna have an end of it. So they treat it more like a business transaction. They do like buying up.

  residential piece of property and trying to flip it and resell it. Because all that’s on you, on your name, even though if you’re a business, they want to see your income debt ratio and all that stuff. And so we got nine units there. We’re averaging about $4,800 a month coming out of that property. And what was neat about it, we got about $380 in it. We wind up putting in about 50 upfront, the 25 % that the bank wanted us to do.

  And they gave us a floating line of credit to get it finished up with, you know, as, as we submitted invoices, they gave us the money. And now that evaluation on that property is about $800,000. And that sounds really great. It’s a great property, but we would have never done it if we wouldn’t have did that first little crazy house that the veterans lived in. Cause I wouldn’t have the confidence to go do that. And I learned, and it was funny, we went to a

  I’m not going say who it was, but we went to a real estate training deal for three days. the guy said, are y’all doing anything now? And then we said, yeah. And we talked about the mobile home property and they said, you’re already in the commercial market. And I go, we really are. We didn’t even know we were in the commercial market until they told us that. And that was kind of comical because they said, you’re already a commercial real estate investor. just thought, well, we had a mobile home park.

  That’s what we’re looking at more now because those, especially in area in South Carolina, there’s a lot of folks moving here. We’re close to Greenville, South Carolina, which is very popular. You know, we’re close to the mountains, but there’s still a need for affordable housing. Even the administration now that’s in Washington, they see the need for affordable housing and they’re kind of opening up some more doors on that side of it too.

  Michelle Kesil (15:40)
  Amazing. That sounds like such a cool project and things that you’re working on right now. So let me ask you this. What are you focused on solving or scaling next? Like what are those other goals that you have?

  Chris Padgett (15:55)
  Well, I think one of the, the neighborhood I live in in Greenwood, South Carolina, uh, Helene hit us pretty hard, especially our neighborhood. We were the hardest hit neighborhood in the Greenwood County area. And, uh, it’s called Belle Meade and some of the folks that own the houses and we’re, and I just left Augusta, Georgia an hour ago and they got hit real hard too. And you still see houses almost a year later with tarps on them.

  People may be living there. Some of them are unoccupied, so they’re not livable. And so we thought, well, let’s look at some of those. Maybe we can help the owners get out from under it if they’ve got a mortgage and do that. And so in our neighborhood, we have about 80 houses here. me and my wife just rode around and said, nobody’s repaired that one yet. Nobody repaired that one yet. Thank God, the only thing that happened to our house.

  back in our backyard, one of the big trees fell and just got our fence. And so in our neighborhood, we found four houses that had not been repaired, did the same thing, went prop stream, found the owners, reached out to them. We closed on one last week that the folks that already got portion of the insurance money, but still had a small mortgage on it, but just never followed it through. just didn’t have, they just couldn’t.

  work with the, couldn’t work with the contractors and got sideways. So they just took their money and moved somewhere else. And so the house was here. So we picked it up and same thing. I didn’t have time to flip it or be involved in the flip and I called one of my buddies and they picked it up from us and we cleared about, I think $9,000 on that one. So we’re kind of looking at that. It was a

  It was really a tragedy here and we only lost one life in Greenwood County. But the more we started looking, you know, there’s a thing in our brain called a receptacle indicator. And that’s, one of those things when you like, you buy a car, a red Kia, and you think this is the only one in Greenwood and you’re out around for 10 minutes and you see four of them. Well, they were there before you just never noticed them. And, and then we started noticing these houses all over the place with tarps still on them.

  a tree on the backside of the property. We’re picking those up for really, a discount price because several of the owners are just not moving back into them, but they still have a mortgage on them. So we can just pay the mortgage off. They’ll make a little bit of money and then we can go in and do a flip on it. And that’s just for our area, you know.

  Michelle Kesil (18:21)
  Yeah, absolutely amazing. It sounds like you’ve figured out your way through this world and yeah, I love that. So let me ask you this, when it comes to growing your business and building your network, what things have made the biggest difference for you?

  Chris Padgett (18:39)
  Well, I think that one of the biggest things is you just have to get rid of the fear because I think all of us don’t and none of us know how to do it all real real well. It’s just getting out there. There’s nothing you can really do wrong. Nobody nobody’s gonna shoot you or throw a rocket at your car for stopping by and asking if they’re gonna maybe do something with the property. But what I think on the network side is

  I’m in Rotary and actually our banker helped us with this mobile home project. Like I said, we just stumbled into that. We had no clue what we were doing. We knew it could be done. And I remember standing on that acre property that would hold nine mobile homes going, what have we got into, dealing with the city and all that. But you just learn.

  And the other thing is there are real estate groups all over the internet like y’all guys, you know, and there’s folks out there that have to, folks don’t realize this, especially on a 1031 exchange. And I didn’t even know what that meant when I started, you know, I just, so folks have money that they want to get rid of and have to get rid of, especially if they’ve sold a piece of property that year and they’re looking for people.

  to give that money to buy property. Cause if they don’t spend, if they don’t put that investment back in another piece of property, they’re gonna have to pay taxes on that income that year. And so it’s free money sitting out there. if you find a property and you go to one of these guys and you can find them at real estate companies, you can find individual investors, you can find them on Facebook. There’s a lot of them out there.

  But one thing that I thought everybody’s doing this, so there’s not going to be any deal. not everybody’s doing this. And so when you get on those sites, you meet some really neat people out there, really solid folks that are wanting to do business and wanting to help each other to succeed at it. When you get three or four partners like that, it just gives more credibility. Now, when I call somebody, I say, well, me and my partner.

  We glad to come out and look at it. And it may just be a guy that I know just got 80 rental houses. That’s a good rental house. He don’t want to flip it. He wants to fix it, put it back out for income. And then we’ll make eight or 10 grand on it for just turning them on to the kind of like a little finder’s fee, what we call it consignment.

  Michelle Kesil (21:06)
  Amazing. Yeah, that’s such a good strategy and yeah, it’s helping you create those new relationships. So that’s very valuable. Awesome. So before we wrap up here, if someone wants to reach out, connect, learn more from you, where can they find you?

  Chris Padgett (21:23)
  Okay, we do have a website. finally, my wife and my daughter are down here helping me with it this weekend. And it’s called the hub group. And our website is thehubg.us. And our phone number is 864-863-1482.

  Yeah, and one thing I’d like to tell y’all, we’ve got this, it’s got to be so simple. we can do, if you can do addition, subtraction and multiplication and division, and you don’t mind riding around. Like I’ve got my granddaughter, she’s a senior in high school and she sent me two properties this week because I told her what to look for. I got a little receptacle indicator working and so she sent us the addresses.

  We went by and looked at them. We did a search on them, got the owner’s names. We’re supposed to go meet with them next Tuesday. And she’s 18 years. I mean, she’s 17 years old. The deal we just did on the, that one, I said, I was our biggest one. Our niece made 10 grand. So what we do is our folks that are kind of like our bird dogs, we go out and look. The first deal they find, I said, Hey, you go find it. We’ll put the deal together and we’ll.

  I’ll do a 70, 30, 70 split. We get 70, you get 30. If you bring us two deals, we’ll do 50, 50. And then you bring the third deal, you get 70, we get 30. And so I tell you, when you hand somebody a $10,000 check and she’s a single mom and teaches school, she gets real motivated to go look for more houses. Because when we handed that check, she cried. And it’s all about relationships and work with other people and just trying to help out the best you can.

  Michelle Kesil (23:01)
  Yeah, I love that you’re helping people. That’s beautiful. Thank you for sharing that. I appreciate your time, your story, and your perspective. So yeah, thank you for being here.

  Chris Padgett (23:11)
  Michelle, thank you all for having us. We really enjoyed it.

  Michelle Kesil (23:14)
  Awesome. And for those listeners that are tuning in, if you got value from this, make sure you’ve subscribed. We have more conversations with operators just like Chris, who are building real businesses, and we’ll see you on the next episode.