Hey everybody! I’m excited to talk to have my buddy, David Hall, on the show today! Today, we are going to talk about how to squeeze more juice out of your business and how to monetize more of the stuff that you might be passing on or not taking advantage of.
Resources and Links from this show:
- Investor Fuel Real Estate Mastermind
- FlipNerd Facebook Group: Join for Free!
- Investor Machine Real Estate Lead Generation
- Achieve Lansing
- David Hall on Facebook
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FlipNerd Show Transcript:
professional real estate investors know that it’s not really about the real estate. That real estate is just a vehicle for freedom. A group of over a hundred of a nation’s leading real estate investors from across the country meets several times a year at the investor fuel real estate mastermind to share ideas on how to strengthen each other’s businesses, but also to come together as friends.
And builds more fulfilling lives for all of those around us on today’s show, we’re going to continue our conversations of fueling our businesses and our lives. I’m glad you’re here.[00:01:00] Hey David, welcome to the show. Am I thanks for having me. Yeah. Good to see you. I’m excited to talk about this stuff. We we’ve been talking about, uh, things like this over the past several months with you. You’re an agent and an investor, and I think that’s becoming more and more popular. Now, some agents are coming downstream into investing.
Some investors are getting licensed because they see the benefits of that. Of course, in some States they have to get licensed. That’s starting to change a little bit and you run a REIA club. Um, and get some deals and some value out of that while of course adding value at the same time. And you’re starting to do more and more creative deals and all those things are super timely right now for people that are listening.
So excited to talk about that into some more detail. Yeah, definitely. Yeah. Yeah. Hey, before we get started, why don’t you tell us a little bit about your background and how you, how you found your way into the real estate world?
David: Yeah. So I think like everyone else, I read rich dad, poor dad, um, when I was in high school and it ruined me for college.
So, uh, at the time I wanted to get into flipping, this was in [00:02:00] 2008. Um, so I bought my first house when I was 21, um, went to renovate it and was hoping it would only take a few months. I ended up taking a year and a half. I was hoping I could sell it for 50 and it appraised for 90. So. Did not go super smooth on my first deal.
Um, but we moved into it. Um, and then I pulled a little bit of money out and was able to buy, um, multi-family I started buying four units, three units, um, and being, you know, 22, 23, I didn’t have much money. Uh, so I had to use some creative options. So I bought one on a credit card. I bought one. Um, I borrowed some money from my retirement account.
I borrowed money from family and friends to get money, to buy, uh, pay for the William contract down payments, um, and kind of started scaling from there. And then as the market came up, I was able to sell some properties. Um, I was disappointed with the agents I was working with. Um, Trying to, you know, something came on the market that was hot and I wanted to see it.
And they, for some reason, weren’t thrilled about looking at a $20,000 dump, you know, over and over again. So I ended up getting licensed. Um, and then, you know, other people heard I was licensed, started using me as an agent. [00:03:00] And that allowed me to get out of my nine to five job, the money I was making as an agent.
So fast forward to now, you know, I’m, uh, an agent with the team here in Lansing, Michigan. Um, Growing my portfolio and doing a few flips along the way.
Mike: That’s awesome. Yeah. And those things fit well together and they’re fitting. I think they’re fitting better and better together as time goes by. Like it, I think it used to be, like you said, my wife, when we first started investing back in 2008, Within like a couple months, my wife got her license.
Cause we, same thing we would ask agent, can you, can you send me comps for this house? Like yeah. I’ll get them to you in the next two or three days. And we’re like, Oh no, we need these like right now. And you’re just like, why, why are there so much incompetence here? And there’s a lot of good agents out there.
Don’t get me wrong. But I think. Even good agents would agree. There’s a lot of not so good ones as well. Uh, and it just, it was almost like a necessary evil, but at the time that’s how we felt. And it sounds like maybe that’s how you felt a little bit too, but I think over time you can start to see the value more and more of actually being licensed.
So we can, we’re gonna talk some more about that today. Um, in fact, why don’t [00:04:00] we just jump into that? Like the benefits of kind of being an agent and an investor, and I’ll kind of give a little caveat here, you know, this is. Well, you don’t, I mean, you may not know this part for years. I kind of said, there’s no reason to get, like, if you’re not licensed, if you already are, that’s great, but there’s no reason to go get your license to get started in real estate investing and, um, in States are different.
Right. And I always kind of said, there’s no reason for that. I’ve flipped hunters, a Hunter’s house I’ve never been licensed. Uh, and now recently I got licensed, uh, cause I see some of the benefits of that and being able to gather, collect referrals and all sorts of other stuff. But what do you think some of the benefits of being an agent and an investor at the same time are.
David: Yeah. So the, the first, um, thing I’d say is the biggest negative is sometimes you can get sucked into being an agent. And if you, I mean, if your goal was to be an investor, long-term sometimes the commission checks keeps you so busy that before, you know, it years go by and you’re still just an agent, not at actually investing.
So that’s the downside, but the upside is they, they do compliment each other. Well, as you [00:05:00] said, there’s. Deals that show up on the MLS that I’ve shown clients that they’ve passed on that I walked through and I was interested in, so if a client passed on it, I have put my eyes on it and I can buy it. You know?
Um, same with, if you can set up alerts the way you want for the MLS. Um, I like reading through and sometimes. There are certain things that don’t make sense in a listing. Like it might be 3000 square feet. That’d be listed as a one bedroom. So because of that, it’s not showing up on anybody else’s radar, but I can, I can go look at it.
I can tell that, you know, an error was made, um, or, you know, if a listing comes up with no pictures, I can look at the last time it was listed and I have access to all the, all the details that other people might not. But I mean, it allows me to kind of Pierce through and see more options and potentially more opportunity than I think other investors who don’t have access to the M-Class.
Mike: Yep. Yep. And there’s the relationships too, right? The, whether they’re pocket listings or just some kind of inside information sometimes of something that might be coming up that is as an agent, uh, either in your office or that you know of, that’s like, Hey, you know, would you be [00:06:00] interested in this before anybody else even knows about it?
David: Yeah, definitely. I mean, so Asians are not in Michigan. You’re not allowed to have pocket listings for residential. I don’t know if it’s like that everywhere, but it’s, you can get fined and get in trouble. But that being said, there’s lots of agents I have worked with that might get a landlord. Who’s gotten, you know, 10 salami properties and the listing agent now wants to know how can I make money off of this without having to list all of these show, all of these deal with all these tenants and all these headaches.
So by positioning myself as an agent investor, there’s other agents that recognize me as that they sometimes reach out and say, Hey, before I list this, you know, would you be interested in buying it? And I, I just bought six, uh, in December that were all off market that were all land contract, seller, finance, low money down.
Um, I think I paid $5,000 down for all six houses and they’re all cash flowing. And it was just because some agent didn’t want to list it. And he called me first. Yeah,
Mike: that’s awesome. How do you, how do you build up those relationships where agents will come to you first? How do you create that awareness?
That you’re an investor and an agent to just agents that are really [00:07:00] just, you know, agents.
David: Uh, yeah, so it’s about, you know, building a reputation. I think first has to be built on integrity. You know, there’s a lot of people that just get their license and then wait for referrals without really proving themselves.
You know, so always doing what you say, I think is important. And then at every, every staff meeting, every agent meeting, um, I always tell people that I’m an investor agent and I’m looking for deals, you know, just, I feel like every investor should always be telling everybody that that’s what you’re doing.
Um, but between social media and, um, agent meetings and board meetings that the board of realtors, you know, I just tell everybody that that’s what I do. And then, you know, constantly be posting and sharing the stuff that you do. And then eventually the lead start, start coming in.
Mike: Yeah, that’s great. I think there’s this, obviously, there’s this merge going on of more agents and investors getting dipping into each other’s kind of ponds, if you will.
I’ve always kind of said that, that I think that the kind of a traditional agent thinks that investors are like slimy. Uh, but they all actually want to be one. So sometimes that’s a way [00:08:00] for them to kind of get exposure is to just work with somebody else. That’s doing that already.
David: Right? Yeah. Yeah. And it’s, it’s depressing to see that there’s older agents that never invested.
They have, they might’ve helped hire some best, but now they’re 80 years old and I have to keep working cause they never kept anything. You know, wholesalers, I feel like it’s kind of the same thing that you have to, you have to eventually buy and hold some of what is coming in and out of your. Portfolio you’re in, out of your, your inbox.
Cause otherwise you’ll look up and yeah, you made all this money, but you got to hold on to something, you know? Right,
Mike: right. Yeah. And let’s talk a little bit about the benefits of being an investor and getting your license. I mean, one of those obviously is if you can’t buy it, you could potentially list it or have a referral for somebody else to list it.
David: Yeah. When it comes to marketing, um, you know, anytime someone calls as a, as a seller, I can help them in whatever way they need. You know, so if they’re calling, they want retail prices, great. I can help them list it and make a commission. You know, if they need cash fast, I can give them a fast price and, you know, buy it and wholesale it or flip it or whatever.
So, um, anytime you pay for that marketing, the phone rings with someone that’s going to sell a [00:09:00] property. You can, you can take that lead down in one way or another. If you’re licensed and you have multiple tools to help them.
Mike: Yeah. And talk about, because one of the things that I, that you said up front is, is the same reason why I’ve always told people like don’t, don’t get licensed.
You don’t have to get licensed. Of course, that differs in different States, but, um, is the fear that. They’ll go that path and spend a lot of time, um, handling traditional listings and cannibalize themselves in terms of their time, at least on the investing side. So any tips on how to get paid for listings, uh, without having to actually spend all your time doing it.
David: Um, I mean, so I think the best advice would be a higher help, as soon as you can, you know, having a, an admin or someone that helps you in the, on the end stuff. So you can still be the face of everything, but if you get a listing, you turn it into your, your office admin or your assistant, and they can get, they can schedule the photos and, you know, organize the showings and all of that.
So even if it is a small, you know, cause some of these. Some of the marketing you get are for middle dumpy [00:10:00] properties that aren’t going to make a lot of money, um, as an agent. But if you can have someone else take care of the $15, an hour type of tasks and still, you know, make a thousand or two or three off of a listing that didn’t require much work from you, then it can still be, you know, they can still make sense.
Mike: Sure. Yeah. And for sometimes when you have a team, you can just basically hand it off to somebody on your team as well. Right? Like another agent.
David: Yeah. Yeah. And they might get thrilled with that yet. Or if you have agents on your team, you can give them. All your, all your leads potentially, and then just get a referral.
So you’re making less off each deal, but it, you know, you could still be making really high, um, per hour dollars.
Mike: Yep. Yep. Um, so the next thing we’re talking about is kind of create a finance. So obviously create a finance has become really hot right now because it allows people to. Maybe monetize some deals that they wouldn’t have otherwise.
And in your market, I know in Lansing, um, it’s very kind of very much an affordable housing type market in terms of, you know, rents and mortgage payments. And, uh, so it works. Creative finance works really well in markets like yours, where the cost of you [00:11:00] being a, you know, owner financing, a deal and having that their monthly payment be, you know, really until they close to rent is.
Is easier in markets like that then certainly like, you know, California or whatever, most of the coastal markets. So talk a little bit about, um, what you’re doing from a creative finance standpoint and, you know, what are those others should be thinking about and how to do more of this in their business as well?
David: Yeah. So the sweet spot, I think that I’m finding is there’s a lot of, um, the marketing that we would do, or the leads that we would get would be, you know, kind of gray area, not a cheap enough deal to where it would make sense to wholesale it, but not enough room on it, based on the amount of work it would need to make it, you know, Top dollar, um, a flip.
So it’s kind of stuck in between them. So for those ones that have an offering, um, a seller finance deal, um, as well, and it kind of depends on how you, how you word it with the seller, but I say, Hey, how about I just take over your mortgage payments, give you a couple of grand upfront, and then I’ll just make your payments for, you know, five years or, you know, I try to stretch it out as long as I can.
And sometimes the payments I’m making to the seller, um, are, are [00:12:00] pretty minimal. You know, if you’re giving them. If you’re buying it for a lower price and you’re stretching out for a 30 year amortization at a low interest rate, you know, that payment’s going to be rather small. So then I would take the pictures and we would do the bare minimum, you know, which typically cleaning it, fixing whatever’s broken and maybe painting it.
And then listing it on Craigslist as a lease option. Um, the idea being the option consideration that you would get as the down payment would go towards them purchasing the property. So they feel like they have some ownership. Uh, also that down payment hopefully gives me all my down payment money back that I have into it and all the money I have in the rehab.
So essentially the goal is to try to get into it and out of it with no money of your own left in the deal. Positive cash flow each month, hopefully a little bit of money upfront in your pocket with a potential balloon, you know, down the road that you’ll, you’ll get the rest of it. So some of them typically the balloons on the backend are where you would make the most money, but it’s yet to be seen that if these buyers who couldn’t get qualified for a mortgage in the first place will actually be able to commit, you know, but if you’re, it [00:13:00] seems like an easier model for me to scale since it doesn’t require any of my own money.
Mike: Yeah. And you’re like, like I said, you’re in a very affordable market. And so mixing in that affordable market thing and, uh, I know a lot of lower price point markets, um, tend to have a lot of, uh, you know, more, uh, prospective buyers. Right. Um, and then I think on top of that, just the historically low interest rates over the last.
10 years, really, really may kind of assuming those mortgages are doing a sub twos, um, really kind of is in your favor, right?
David: Yeah. And a lot of the stuff too, like the lease options that I’m selling on are even lower than market rent, you know? And it still allows me to make a few hundred dollars a month and gets money up front.
And now it’s kind of a win-win for everybody, in my opinion.
Mike: Yeah. Yeah, that’s awesome. That’s awesome. And I think, uh, you know, more and more like obviously advertising costs, competition has gone up. Inventory is way down. And so as investors, we have to [00:14:00] find more and more ways to kind of monetize that maybe in the past, we would have not been able to, to move it to just kind of pass on it.
Right. But now we can find some ways to monetize those using creative finance techniques. Yep. Absolutely. Yeah. Yep. So the, uh, one last thing we’re gonna talk about is you run a REIA club. And so, uh, you know, I don’t run a REIA club, but I run a big online, you know, network with, uh, with our podcasts and have done that for many years.
And there’s been a lot of benefits of. Having a network of people that kind of come to you for advice or listen to you one way or another. Um, and the benefits of doing it locally, like in a REIA group is you can find deals through people and lots of other things. What are some of the big benefits that you’ve gotten from your, uh, from your REIA club?
David: Yeah, so we, uh, meet here, um, twice a month. So once for coffee and then once an evening event, and it allows me to build relationships kind of. At scale, you know, I’m trying to leverage my time a little bit. So if I can meet, you know, 10 or 20 people in an hour, instead of meeting everybody, one-on-one, you know, you get some benefit there.
Um, and then whenever we [00:15:00] have a speaker, cancel, it forces me to get up there and do my own presentation, you know? So not only does it help build my, my personal speaking skills, but it also makes me seem like the expert in my area, you know? So if anyone has a house that they need to sell or that they want to buy an investment or something, I think I am top of mind in those areas.
Um, Then the coffees that we do typically if the week after we do our evening event and that’s, again, there’s a lot of beginners that come there that want to flip their first house or they want to buy their first rental. Um, and so if I have, you know, wholesale deals or deals that I know are coming up as listings, um, I kinda have my own private pool of buyers that I can tap into and say, you’re looking for a flip, I got one coming.
This one will be perfect for you. And so now I’m able to kind of wheel and deal with no competition. Yep.
Mike: Yep. And you can, you know, do you, do you attract as your vehicle primarily attract just investors or given the fact that you’re an agent and some of the stuff we’ve already talked about, are you, are you educating some agents on [00:16:00] how to get into investing as well?
Or is there some, some of that going, yeah,
David: the last cop we had, we had 10 people and eight of them were agents that were looking to scoop up some business, you know, but we walked out of that meeting. Um, and I got some leads from some of those agents because they didn’t know what to do with this. Crappy house or, you know, Hey, there’s a tenant.
That’s not paying, what would you do? And Hey, do you wanna, you know, cold list this, can you help me? You know? So there’s lots of opportunity that comes just by putting yourself out there and running a regroup makes it makes you the go-to person when it comes to investing in your market. Yeah.
Mike: Yeah. I was talking to somebody the other day.
Of course, all this has been really weird or the past year with COVID. Right. But, um, there’s been this polarization of massive Facebook groups. Right. And in my experience, uh, when you’re in, um, you know, it just all becomes a blur and it’s kind of the same thing over and over again, the same questions and, and all that, which is fine.
But I think a lot of people are really hungry, especially over the past year for like a real, a true physical connection. Right. Like having a [00:17:00] Facebook friend is not the same as standing in a room and talking to somebody for real in real life, you know? And I think that there’s pros and cons of, of social media stuff, for sure.
But I think, um, that a lot of people that ran REIA clubs have shut them down or they just stopped running them over the past year, obviously. But I think the time is right right now, if you’re not running a group or you have a group taking them lean back into that, because people are really craving, uh, physical relationships, like real life.
You know, shaking hands and having conversations over, over, uh, you know, at a meeting or over a happy hour or coffee or whatever, right?
David: Yeah. And I mean, nothing beats, face to face and talking to people, you know, the last deals I did, I think I, I met all my private investors at this local REIA group that I run and it wasn’t because I built some solid relationship with them necessarily.
It’s just that I was the repeat based there every month and overtime, they. Grew to know, like, and trust me, and then we were able to do business together. Yeah,
Mike: that’s awesome. And I, I do think that [00:18:00] that face to face stuff is so much better. Like people, especially since it’s so much of it’s gone away, like people it’s easier to kind of climb that, uh, That, uh, that Hill, if you will, of building relationships, I think now more so than in many years, because so many people have relied on social media, but it just doesn’t feel as genuine as somebody that took the time.
I mean, there’s this law of reciprocity, right? If you create a REIA club or a community for people to come into and you add value to them and share. Value then at some level, some of them feel some obligation, uh, to work with you. And you’ve of course, built up trust in a unique way because they know you put effort into making that happen.
Right. So I think, uh,
David: That’s a lot of credibility too. You know, if you’re putting yourself out there and say, Hey, I’m, I’m a repeat guy here. You know, you can trust me. It’s not like, you know, if a deal comes up from some guy that never heard of her, you they’re going to most likely lend to you because they know you and they know that they’re gonna, you’re gonna have to save face.
You know, you can’t [00:19:00] can’t screw them and then keep coming to your meeting, you know?
Mike: Right. Yeah. There is some truth in that if you’re putting, if you’re putting yourself out there in terms of a, of a group, you have a reputation to uphold and they know it, it gives you more credibility for sure. Yeah. So speaking of, kind of in-person meetings and getting together with, uh, other like-minded folks, you’ve been a member of investor fuel for a little while now, would you mind just kind of sharing a brief testimonial on your experience of being a member of the group?
David: Yeah, I mean, the great thing about the group that I found is that there’s lots of different types of investors. You know, the, um, So, if any, if I have a question about anything, everyone’s been pretty open to helping me and even beyond the group, you know, they’re guys give me their phone numbers or we, uh, you know, texts back and forth or, um, you know, jump on Facebook calls and things.
So if I have a question about something that’s. Some crazy odd ball, uh, you know, before it was like, I don’t even know where to go to ask this question, you know, let alone get an answer. But, uh, luckily with the group and everyone seems to be, you know, pretty open to sharing and I can post on there a question that might be [00:20:00] off the wall and someone will recommend somebody else or, uh, you know, have the, at least be able to steer me in the right direction.
So I think it’s allowing me to grow faster than I would otherwise because I’m able to get answers, you know, answered faster.
Mike: Awesome. I appreciate that. And glad you’re glad you’re in the group. Yeah. We’ve, we’ve kinda built this culture of giving and sharing knowledge and, you know, hopefully not holding back and we’re all like a bunch of Petri dishes, uh, try and stuff and, and kind of reporting back to the group of like don’t ever do that again.
Or I tried that, you know, here’s how I do it again. If I had to do over again, here’s how I would do it. So that’s one of the beauties of our group, I think so. Awesome. I’m glad you’re a part of it. Uh, D David, if folks wanted to connect with you, you’re Lansing, Michigan, but if anybody wanted to learn more about what you’re doing or potentially find ways to work with you, where, where would they
Oh yeah. Our website is achieved, like dancing.com. Um, and then my email is [email protected] and then I, and then I’m on Facebook and Instagram and all those things too. So you can find me, find me there. Facebook is probably where I’m on. [00:21:00] More often than I should.
Mike: I hear that. Um, yeah, we’ll, we’ll add links down right down below in the show notes here.
For those of you that may be listening, couldn’t write that down. So make sure you check it out, check us out on, uh, investor fuel.com. Uh, by the way, if you guys have not yet applied or talk to us about investor fuel and you’re an active real estate investor, there’s a lot of members of the group that have had dramatic improvements in their business and the quality of their life by just getting in the room around the right people that are thinking bigger and.
Um, aren’t afraid to take challenges to try to learn and grow, and we do that all together. So we’d love to talk to you. We actually just added two groups, which we call the cashflow groups, uh, that are aimed at commercial type investments. Uh, namely, uh multi-family and that’s in partnership with Corey Peterson, the big kahuna.
So go to Vesta fuel.com and you can learn more, David. Hey, thanks for joining today. My friend.
David: Thanks for having me. It’s been fun.
Mike: Yeah, thanks for sharing your insights. And I think everybody could benefit from doing these things more building networks and communities, potentially getting licensed, uh, and using some [00:22:00] more creative finance techniques in their business.
For sure. So everybody appreciate you a bunch. Hope you got some value today. We’ll see you.
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