Working with a Local Banks REOs

John Harcar (00:00.909)
Hey guys, welcome back to the show. I’m John Harcar, your host. I’m here today with Jamie Knight and what we’re going to talk about.

is how to work with local banks for your real estate or your investing or your traditional real estate business. Remember guys, here at Investor Fuel, we help real estate investors, service providers, and really all real estate entrepreneurs, 2 to 5X your business. And that’s by providing tools and resources to grow the business you want to grow, which in turn helps you live the life you’ve always dreamed of. So Jamie, welcome to the show.

Jamie Knight (00:33.816)
John, thank you so much for having me brother. Excited to be on, man.

John Harcar (00:37.135)
Yeah, me too, man. And I’m super excited to kind of talk and learn more. before we kind of get in the weeds of all the stuff that you and I maybe talked about before we got on, tell our audience a little bit about you. How you got into real estate, what you’re doing now, how you got here.

Jamie Knight (00:52.686)
Awesome, John. Yeah, so I just celebrated my 20th year in the real estate business as a realtor. Thank you. As a realtor here in Lafayette, Louisiana, I’m down here in the deep south. I started my journey in real estate because I thought that I wanted to be a real estate investor. And I had a friend that had reached out to me and he said, man, if you want to be a real estate investor, you want to do flips, you want to buy rental properties.

You need to just get your real estate license. That’s the best way to A, learn the market. And if you find opportunities, you can pay yourself a commission. So that was the core of why I got into the real estate business. And I really have had the opportunity to purchase several flips and opportunities through the years. own quite a few rental properties and different things here locally. And I still feel like real estate is a great investment tool.

John Harcar (01:32.923)
Yeah.

John Harcar (01:46.715)
Mm-hmm.

Jamie Knight (01:51.192)
to grow your personal brand and your network and your income and your family. And we can get into some of the challenges that we have here locally in Louisiana. If there’s anybody who’s in the South, I’m sure you guys are having some challenges. But yeah, I’m happy to go wherever you want to go, John.

John Harcar (02:09.957)
Cool, yeah, now let’s go back. Why real estate? What were you doing before real estate or have you been doing real estate your entire life?

Jamie Knight (02:17.726)
So I actually was a mobile DJ and I DJed for some nightclubs here locally and had a lot of fun doing that. And I just felt like the club was not the right place for me with a young family. So I graduated from the local university here in Louisiana. I’m a raging Cajun. So I graduated in industrial technology. No, not, not, not, not LSU. Yeah.

John Harcar (02:25.389)
Sweet.

John Harcar (02:42.329)
Louisiana State. Yeah.

Jamie Knight (02:47.474)
U L so basically university of Louisiana at Lafayette. Yeah. So yeah, it’s a little different, know, Cajuns and tigers are a little, a little different, a little different, but man, yeah. So graduated from the local university in industrial technology and just at the time, man, here in Louisiana, oil field is big. So I just said, man, I’m either going work in the oil field or I’m doing something here locally. And when I had the opportunity to get my license, I said, I’m going to just give that a try. And 20 years later, here we are. So

John Harcar (02:47.767)
you, yeah, you’re Swiss.

John Harcar (02:54.543)
That’s right, that’s right, that’s right, yeah.

John Harcar (03:16.827)
Okay, okay. So what gravitated you? You know, I mean, you’re obviously you had established yourself as a realtor. And then those times, I’m sure you had a lot of opportunities for investments. But why did it take so long for you to gravitate towards the investor side?

Jamie Knight (03:16.942)
Kind of a crazy, crazy journey.

Jamie Knight (03:31.702)
Well, I invested quite early when I got my real estate license. I probably within the first two years or so purchased my first home, right? So I started investing right early in my career. I purchased my first home. That was the first. My wife was like, we can’t buy a rental before we buy our own house. So we bought our first house and we base everything in Louisiana off of when hurricanes passed. So Hurricane Katrina, which was the largest hurricane to hit the state of Louisiana passed and we purchased our home.

John Harcar (03:38.514)
cool. Okay.

John Harcar (03:57.443)
huh.

Jamie Knight (04:01.408)
our first home the day Hurricane Katrina passed in Louisiana, did a lot of damage in New Orleans, but our area wasn’t that affected. But around that time, I purchased my first home, purchased my first rental home around about that time because I was so anxious to get the ball rolling with investing man. And then I just basically used that equity that I had in that first rental home.

John Harcar (04:19.597)
Mm-hmm.

Jamie Knight (04:26.04)
to be able to buy another, then buy another and another and another and another, and just continue to continue to acquire real estate that way, which also allowed me to do flips and all of those other investments, man. So that’s really how I started. And I would probably say I’d been investing in real estate for probably about 15 years and had a lot of success in that up until kind of recently. And I can kind of go into a little bit more, if you’d like, of why I’m starting to kind of

John Harcar (04:36.453)
Mm-hmm.

Jamie Knight (04:55.682)
be very selective about what I’m investing in right now in the South. So.

John Harcar (05:01.241)
Yeah, no, well, yeah, we’ll definitely talk about that. I just had a quick question. What do you like the best, being a realtor, doing a flip, or being a landlord?

Jamie Knight (05:08.888)
Man, I don’t know many people that say they enjoy being a landlord, man. I mean, that’s a tough call, right? They dealing with tenants, man, I don’t know. I’ve started to turn a little bit of my really nicer ones over to management and having a really affordable between a 5 and 7 % cost per month for me to have professional management that handles everything from collecting payments, screening tenants, all of those things.

John Harcar (05:15.033)
Right.

John Harcar (05:24.143)
Mm-hmm.

John Harcar (05:31.675)
Mm-hmm.

Jamie Knight (05:37.606)
I’ve kind of, I do have quite a few that I manage myself, but they’re just people have been with me forever and they’re just, know how I operate. So I get the business. But to answer your question, obviously I think I enjoy being a realtor best of all of all of those things. Cause I, that it’s core, I just feel like I can really help more people. And in this new model that I’m in at my current brokerage, I have the opportunity to help more realtors achieve their goals.

John Harcar (05:43.353)
Sure.

Jamie Knight (06:05.58)
by using my experience in the business and also just kind of helping them grow their business, Talking about things that work, talking about things that don’t work, strategies that work. yeah, so for me, I think the best thing I enjoy doing is being a realtor. So to answer your question in a long form, but.

John Harcar (06:12.869)
Sure.

John Harcar (06:16.379)
Sure.

John Harcar (06:22.361)
Okay. Yeah, no, no, that’s awesome. And I, there’s a lot of folks that are realtors that have transcended into some other things. it’s, I just like to find out, you know, kind of, cause some people have that motivation to swing a hammer. I don’t. Some people like the mailbox money. I do. So, you know, what do think have been some of your biggest challenges in the whole real estate game getting into this thing? And it may be challenges as of late. You’ve been through a lot of the market shift.

Jamie Knight (06:52.31)
Yeah, for sure. I think the biggest challenges that we face right now in the South, and I think people who are maybe listening in Florida and other states that have very high homeowners insurance and high costs, but the double whammy that I’ve been hit with as of recent is I had some debt position go from 5 % to 10 % on a recent rate relock, right? With a local bank. So man, that was just a really big hit.

John Harcar (07:19.141)
Mm-hmm.

Jamie Knight (07:21.74)
And now I’ve been owning these properties for a while. So you kind of are at a weird spot, right? Where you’re at the tail end of your, your interest payments, but yet you’re at a point now where you’re saying, okay, now the payments kind of has taken an end, cut in a lot to my profit. So I know a lot of investors that are out there right now can resonate with this because over the past few years, interest rates have been very attractive for investors.

John Harcar (07:40.75)
Right.

Jamie Knight (07:51.566)
And I mean, I have debt, you know, five, 6%. I mean, I thought that was reasonable. 7 % still in the reasonable range. But when that local bank hit me with the 10%, I’m just like, man, that’s huge. That’s a big difference to go from 5 % to 10. And that really cuts into your profit margins, man. So thankfully I’ve owned these things for a long time. So I have a great equity position. And some of them I’m currently in the process of moving some things around, selling off some real estate.

John Harcar (08:01.817)
Yeah, that’s huge.

John Harcar (08:06.875)
yeah.

Jamie Knight (08:21.182)
and moving it into a 1031 exchange right now. I’m in the process of doing that a few times. So that’s, that’s, that’s where I’m at. But another, the double whammy, we talked about two things, but the insurance costs, man, the insurance costs on these things in Louisiana, in Florida, in some of these Gulf States, man, with the storms that we’ve been having, we are absolutely getting murdered on these things. It’s horrible. mean, they, it, I’ve just for an example, starting the policies on some of these

John Harcar (08:32.495)
Mm-hmm.

Jamie Knight (08:49.294)
these single family homes, I might’ve started at a six to $800 a year cost in insurance. I’m up to probably a $3,000 cost to insure on these little small $60,000, $80,000 houses, man. And they’ve got these things forced coverage of up to $350,000, man. So, I mean, look, if these things burn down, I mean, the insurance companies are going to be in a bind because I’m looking for that whole 350,000.

John Harcar (09:11.983)
you

Yeah, yeah.

Jamie Knight (09:17.228)
coverage that you making me cover these things for, know what I’m saying? So it’s crazy. just, that’s, that’s the struggle that I’m dealing with in the, in the investment side of things, you know, so.

John Harcar (09:20.492)
Yep, yep.

John Harcar (09:26.861)
Okay, so what does your business look like now? Like what is your, I how many properties are you holding? Are you focusing more on real estate versus, or traditional versus investing?

Jamie Knight (09:37.678)
So I’ve probably sold and flipped probably 10, 20, 10 to 20 properties somewhere in there. I’m pretty much a guy like I see the opportunity and I take the opportunity that comes across my desk as a realtor. I think that that’s as, as realtors, if there are any realtors out there, obviously they should be positioning themselves to take advantage of the opportunity that’s in front of them. Right. And that’s to buy real estate.

John Harcar (09:52.955)
Mm-hmm.

Jamie Knight (10:05.762)
because you know it better than anyone else does. I would say as far as flips, I’m not doing as many flips as I used to do. Now I’ll still kind of pick up one or two a year to do a flip on. I’m not really getting into flips. Rent- wise, I’ve probably owned 30 houses or so. And then now I’m kind of shaving that down with some of the costs being really high.

John Harcar (10:21.947)
Hmm.

John Harcar (10:30.978)
Yeah.

Jamie Knight (10:31.19)
and just kind of little risk down to, I’m not even sure what I’m going to kind of shave that down to, but it’s, it’s, I’m, I’m in the process, which is crazy. I’m in the process of actually liquidating a few of my rental properties, just because in our world, in our world right now, it’s, it’s tough. It’s, it’s tough to make profit and I’m not going to be left holding the bag, I guess, when it comes down to profits and stuff like that. in regards to

John Harcar (10:44.621)
okay.

Jamie Knight (11:00.366)
just like the total profit that I’m making for a house. I like to be probably two or $300 a month profit on these things. And now with the expenses, it’s brought me down to maybe $100 a month profit. And man, if you get a hot water tank go out, or if you get a refrigerator go out, man, you’re in the red. So that’s just kind of, that’s where I’m at. And that’s where, unfortunately, what I’m forced, I feel like I’m just being forced to make that decision.

John Harcar (11:08.12)
Mm-hmm.

John Harcar (11:17.785)
Yeah, yeah, yeah.

Jamie Knight (11:27.096)
Cause I’m in a state that has really high insurance and then I got hit with some debt position. So I know that wasn’t exactly the perfect answer, but that’s kind of the pulse of where we are in the South right now. And I know people are listening to this and they’re like, man, Jamie, I hear you, dude. It is tough out there in the South.

John Harcar (11:29.915)
Mm-hmm.

John Harcar (11:43.963)
So what advice could you give? mean, what type of recommendations for folks? I one thing I liked, and we’ll talk about this maybe first, is I like the fact that you’re a realtor that understands investment, right? And let’s say there’s a bunch of realtors out there maybe listening to this and they’re not knowledgeable in that investment side. mean, what advice would you give to them about how they can better improve their business?

Jamie Knight (12:13.206)
I would say just get into the market every day, man. That’s one thing as realtors you have to do, right? You have to be in the market every day, understand what makes a great investment, even investors, right? You should be getting into the market every day. Understand what makes a great investment because yes, you might have a realtor partner that’s a friend and you trust and everything else, but when it comes down to it, all investors should understand what goes into making a great deal on a purchase, right? It’s not just.

the agent said it’s a great deal, so I did it. And don’t trust just the agent’s comps. Use your own comps and use your own judgment on it because at the end of the day, the agent gets the commission and they move on with their lives. And you’re still going to be potentially stuck with this property in a flip. to me, it’s a tough market out there. know things are staying on the market a little bit longer.

John Harcar (12:56.89)
Mm-hmm.

Jamie Knight (13:08.058)
it can be just tough, but as a realtor, what I’m recommending all agents are investors is just get, understand the market, man. Like really understand what makes a good investment, what areas of town have growth, you know, all of those things. it’s, it’s, it’s, it’s, you definitely have to just, that’s the first thing. If anything, if you don’t do nothing else as a realtor, do that, you know, understand the market. So.

John Harcar (13:20.187)
Mm.

John Harcar (13:27.087)
Yep.

Right. Okay. Fair enough. Fair enough. All right. Now let’s talk a little bit about our kind of theme today about working with, I say with local banks. What is the benefit of working with a local bank versus the hard money lender, private lender?

Jamie Knight (13:50.028)
Well, I guess what I was hoping for to talk about too, in that was I actually list and sell a lot of properties and I represent local banks here in our community in the sale of their Oreo inventory. And I mean, you know, we can talk about that aspect of the local bank versus a hard money lender too, if you’d like, but yeah. So I would say as realtors man.

John Harcar (14:00.271)
Huh.

John Harcar (14:09.069)
Yeah, yeah, no, mean, whatever you want to talk about, enlighten us. Let’s go.

Jamie Knight (14:15.658)
you know, finding the opportunity with some local banks is a really great thing, man. I did this about, I’ve probably been representing a few local to regional sized banks in Louisiana in the sale of their foreclosure REO inventory. And it’s been a great thing for my business. I created the opportunity by reaching out to local asset managers.

and connecting with them, but it was a tough process to get in with them because a lot of people want the opportunity as realtors, right? And I’ve been able to build trust with those asset managers and get the opportunity to list those properties for sale and help them. And I mean, I’ve sold millions and millions of dollars worth of REO properties for these local banks, man. And it’s a great opportunity if you can set it up the way that I’ve set it up.

John Harcar (15:02.074)
Hmm.

Jamie Knight (15:10.654)
And I think what’s important is that you to create this opportunity, you really have to go out and find a great vendor list, somebody that can clean out houses, somebody that can do rekeys on your locks, somebody that can obviously take care of yard, do these major cleanup type scenarios. Right? So you build your network of people, and then you bring that to a local bank and you say, Hey, I’ve

John Harcar (15:30.629)
Mm-hmm.

Jamie Knight (15:40.312)
been in this community a long time. I’m a realtor and I have this built-in network of service providers that can help you with your getting rid of these properties, but not just getting rid of them, actually maximizing the amount of money that the bank can make off of these things, not just fire sailing these properties. And I think that’s what a lot of realtors think they’re getting into when they get into the REO game is to, is to fire sale. And that’s not what I’m about. I’m about.

bringing value, cleaning the property up, professional photos, even on a foreclosure and going in there, man, and really like getting the properties dressed up and getting them listed for sale and really truly looking at a local bank as a client, just like a seller that I would look at to help them sell their house. So like that’s one thing I think I’m good at. And I think if realtors are listening to this messaging,

John Harcar (16:32.229)
Mm-hmm. Mm-hmm.

Jamie Knight (16:39.596)
You know, Hey, reach out. I’ll show you exactly be glad to tell you exactly what I did to, set up my Oreo side of the business. And I’d be glad to share a little bit more strategies on how like I set that whole thing up, but that’s been a great thing for me.

John Harcar (16:53.529)
Yeah, and I was gonna ask you when you said you went in and you built that trust or whatever with that local bank asset manager. So how you did that or how you built that credibility, I guess you could say, however you want to term it, is you went out and just found all those service providers just to kind of say, hey, look, I have it all covered in a sense.

Jamie Knight (17:15.594)
Absolutely. Yeah. And I think what you’re going to find is when you’re dealing with these local banks, man, they they’ve been operating at a pretty poor level when it comes to representation from their listing agents that are currently listing their properties, right? They’re not professional photos. They’re not great descriptions. They’re not

really preparing these properties for sale, right? And the bank has got a certain amount of money to be able to spend on dressing these properties up. If they can invest a thousand dollars and get two thousand dollars out of it, they’re going to do that. You know, so yes.

John Harcar (17:57.015)
Is that something you bring to them? Like, do you say, hey, if I can invest five grand into this property, I’ll be able to sell it for.

Jamie Knight (18:07.246)
Absolutely. Yes. So we definitely bring that kind of stuff to them. I mean, we’ve gone as far as putting brand new roofs on houses that had a leaking roof, brought in an affordable roofing contractor and did a $8,500 roof. You know, but the, but the foreclosure then had a brand new roof on it. I mean, I’ve gone as far as that we’ve gone as far as, know, cleaning up different things, repainting if we have to, and it just depends on the property, right? I mean, it’s going to depend. mean, if you’re

If you’re talking about a property that’s maybe got a bunch of holes in the walls and you just got to go in and repair a bunch of sheetrock, it’s, you’re going to do all those things. And as a realtor, I guess it makes sense when you look at it like this, as a realtor, when you are dealing with a seller, you’re not going to just list the property right away. You’re going to give them a list of, you’re to do this, this, and this, and this, or I’d like for you to do that. And, and that’s going to get you more money. So the same thing with a bank.

John Harcar (19:02.043)
Merit.

Jamie Knight (19:04.844)
We do the same thing and even even in more cases with the bank because they’ve got the ability sometimes to do something big and they see the value because they’re in a they’re a bank and they’re saying, okay, I can do this and I can bring more money in our pocket or net more, sell it quicker or whatever. So.

John Harcar (19:04.922)
the Binzer.

John Harcar (19:24.663)
Right. Hmm. Okay, very cool.

If someone wanted to get into doing some stuff like, mean, getting in touch with the asset managers at local banks or all that, mean, how do they, what advice would you give to someone that wants to do that? Wants to kind of follow in what you’re doing.

Jamie Knight (19:47.84)
I would say try to identify a few banks in your area that actually hold mortgage debt or paper on their their own, they warehouse their own loans, right? Cause if you’re dealing with a local bank that all they do is make the loan and then they send it off or sell it off, then it’s probably not worth your time to try to go after that particular bank, right? But these local banks who are probably small to medium sized banks,

John Harcar (20:00.517)
warehouse.

John Harcar (20:11.579)
Mm-hmm.

Jamie Knight (20:19.16)
they’re holding their own mortgage debt because they’re dealing with local people, right? So those are the type of banks to go after. But I think the first question that you kind of need to figure out is, are they holding their own mortgages or not? And are they selling them off? And if they’re holding a large portion of their mortgage, there’s a good chance that there is a decent amount of delinquencies, especially right now.

John Harcar (20:24.43)
Right.

John Harcar (20:47.033)
Mm-hmm.

Jamie Knight (20:47.214)
I mean, we’re in an economy where things are, foreclosures are going to be probably higher than ever in 2025 because of the amount of credit card debt in the nation and all of these things are at record highs of expenses. And look, people are under a lot of pressure. So, you know, getting in there and being that trusted person that they can call when they have, you know, some properties that need to be liquidated.

John Harcar (20:52.218)
Yeah.

Jamie Knight (21:15.192)
hey, that’s a great position to be in, Sometimes I’ll get a few at a time. And then we’re tasked with getting rid of all eight properties just with some local banks. But yeah, to answer your question, to do that, I think you have to really go hyper local. Try to identify who the asset managers are or who the REO managers are. They’re different titles, special asset managers, another title that people

John Harcar (21:19.896)
Yeah.

John Harcar (21:44.485)
Mm-hmm.

Jamie Knight (21:44.566)
use. yeah, just identify if you can try to identify that person, they’re going to be very hard to get in touch with because they are probably dealing with a lot of people on a day to day basis. So a great email to them would be good to several emails. mean, the banks that I’ve gotten, it was several emails and everything else that I’ve I’ve sent several phone calls that I’ve gotten to them. But the rewards are

John Harcar (21:57.987)
Sure, right.

Jamie Knight (22:13.25)
You know, closing hundreds of these REO properties through the years has been a great deal for both the banks and me and my family. So it’s definitely worth it because it’s a long, it’s a long relationship that you have with, with these banks. So it’s a hard to get in touch with them, but if you can identify asset managers, their names, maybe you know somebody that they work with at the local bank.

John Harcar (22:24.921)
Yeah, for sure.

John Harcar (22:42.052)
Okay.

Jamie Knight (22:42.092)
And you’re like, Hey, I know Sarah, she’s at that bank. And I could call Sarah and say, Hey, Sarah, put me in touch with Steve, you know, or Hey, make a good recommendation for me to for Steve or have him call me. I’d love to talk with them. I’ve got some ideas, you know, so that’s the kind of the thing is just kind of making it, trying to get in touch with that right person at the bank and trying to get that opportunity, but it’s not going to come on one, one phone call. They’re not going to be like, Hey, Jamie, you know, great to talk to you. now I’m going to turn over millions of dollars worth of. Yeah.

John Harcar (22:49.211)
Hmm.

John Harcar (23:06.939)
Yeah, right. Yeah, here you go. Yeah.

Jamie Knight (23:11.106)
things to you. It’s a trust thing, right? They got to trust you. and, even if you can get one opportunity from them, let’s just say they’re not happy with their current person. I mean, go in, go in research these properties that they have listed in the local MLS and say, Hey, I think I can do a little bit better than we’re currently y’all are currently doing with, with the marketing and, be able to say, Hey,

We’ll come in there and get it cleaned up for you, do professional photos versus the cell phone pictures that the guy took during the rain. know, like we can do better than that. So, you know, those are the kinds of things that I would recommend doing. Yeah.

John Harcar (23:40.878)
Yeah, in the dark. Man, that’s all such good stuff, man. That’s good. If anybody wants to get in touch with you, find out more about what you do, pick your brain, all that. How do they get a hold of you? What’s a website you have? mean, do you have a podcast? you have anything else you want to share with our audience?

Jamie Knight (24:06.092)
Yeah, absolutely. I say the best ways that people can get in touch with me is probably on Instagram, at realtor Jamie night, or with my podcast, I do a daily encouragement reel for realtors on at real south agents. So that’s R E A L and then South agents on Instagram. They can reach out to me there. I am also a realtor at real broker.

So I’m in a national model, which is another kind of interesting investment standpoint. of another reason I’m selling off some of my real estate is I’m kind of leaning more into helping agents grow their business. And we’re building out a network of top tier agents who a lot of them are from the investment background and they see the value of building generational wealth for their families. So if they’re interested in that side of things too, we’re just doing a lot of different stuff, man. And I guess

John Harcar (24:40.763)
you

John Harcar (25:02.872)
Cool.

Jamie Knight (25:03.948)
That’s yeah. mean, so we do. also, yeah, like I said, the podcast that I do is called real South agents. It’s live on Spotify, Apple podcasts. We’re up to about 52 episodes. And I basically just interview top realtors from around the South, around the state of Louisiana. And they share exactly what they do to grow their business. And they don’t hold back. It’s literally like, this is what I’m doing. This is what’s working. This is how to grow your YouTube channel. This is how to grow your Instagram. This is how to grow your

John Harcar (25:20.443)
Nice.

Jamie Knight (25:32.266)
sphere, your personal network, this is how to buy more REO properties. it’s cool. Definitely check it out for sure. But connect with us on some of those platforms because that’s probably the best place that we can really connect.

John Harcar (25:41.155)
Okay.

John Harcar (25:46.709)
Okay, yeah, we’ll put a lot of your contact stuff down in the show notes so lot of our folks can get ahold of you. Jamie, man, you shared some great stuff. I hope some realtors out there that are listening to this got some good knowledge, good nuggets on maybe how to boost some business with REO stuff. But guys, I hope you enjoyed the show. Hope you guys got a lot of good nuggets out there and we’ll look forward to seeing you on the next one. Cheers.