BiggerPockets Real Estate Podcast - 19: Short Sales Tips, Starting Out in Real Estate, & Working w/ Virtual Assistants with Tracy Royce

Episode Date: May 23, 2013

On today’s episode of the BiggerPockets Podcast, we are joined by Arizona real estate investor Tracy Royce to discuss all things related to short sales, getting started, and the best ways to run your real estate investing business. This show has a ton of tips for finding the best way to help sellers who are underwater on their mortgages and still make you a profit as a real estate investor, as well as great strategies for using virtual assistants to lighten your work load and other tips for those who are just getting started. Read the transcript for episode 19 with Tracy Royce here In This Show, We Cover: How to get paid to learn about real estate How to parlay your talents into a job with a real estate investor; How to “shift” with a changing market and recognize future trends How to use virtual assistants in your real estate business Goals: Good, bad, and ugly Getting started with no money by using technology and social media What a short sale is and the short sale process How to find a great short sale agent Tips for getting your short sale offers accepted Books Mentioned in the Show The Four Hour Workweek by Tim Ferriss Shift by Gary Keller Atlas Shrugged by Ayn Rand Think and Grow Rich by Napoleon Hill E-Myth Revisited by Michael Gerber Winning by Jack Welch Links from the Blog Odesk.com eLance.com Tweetable Topics “When investing in real estate – you have to start out in the mail room.” (Tweet This!) “Don’t expect to get rich tomorrow. You gotta put the work in, you gotta hustle.” (Tweet This!) “If you want an easy job, Sell kittens at a pet shop. Real estate investing isn’t easy.”(Tweet This!) “If you put more fishing lurers out there, you are more likely to catch things.”(Tweet This!) Connect with Tracy Tracy’s Website www.RoyceofRealEstate.com Tracy’s BiggerPockets Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 19. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the height, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Hey, everybody, thanks for listening to the Bigger Pockets podcast show number 19. I'm your host, Josh Dorkin, along with my co-host, Brandon Turner. What's going down, Brandon?

Good morning, Josh. Things are going down quite well around these parts. What about you? Oh, I'm doing good, man. Doing real good. Excited about show 19. We're excited about things on bigger pockets. Looking forward to summertime.

You know, things are good, man. Things are good. But enough about you and I. why don't we jump right in and hit today's Quick Tip? I changed it a little bit. Do you like that? Yeah, you got a little bassy there, man. I didn't realize you could get that low. Yeah, you know.

I bet the ladies love that. You know it. Well, for today's Quick Tip, which is an admittedly self-serving quick tip, you guys, listen, we've got 229 five-star reviews in iTunes right now for the Bigger Pockets podcast. And we're just a couple dozen short of being the top rated real estate podcast in all of iTunes. So if you appreciate the work that we put into this show, and I know that I put in far more

work than Brandon. Far more. Far more. Yes. Yes. That's actually not true. But if you appreciate the work that Brandon puts in and me showing up as just somebody to gab with, please head over, guys.

Please head over to iTunes. leave us an honest rating and a review. And of course, while you're there, if you don't mind, please subscribe to the show. The ratings, the reviews, and subscribing to the show, help us out quite a bit and help us get more visibility, bigger audience, more people on bigger pockets, more possible opportunities for you.

So, of course, rating us, helping us get more people to the show will ultimately help you out. So not totally self-serving, but it's self-serving in a roundabout way for everybody. Anyway, with that, we will move on and get right into the show today. Yeah, to the show. More jingles, right?

That's what we need. More jingles. Today, we're really excited to introduce you guys to Tracy Royce. Tracy is a real estate investor who's been involved in real estate in the Scottsdale. area, not to be confused with Phoenix, the Scottsdale area, which is a suburb of Phoenix, I believe, for over a decade, Tracy runs Royceofrealestate.com. And she's also a weekly columnist on our blog, the Bigger Pockets blog. Today she's got a lot of advice for us on getting started, organizing your business,

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Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care of things. Communicating with guests, preparing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. And so without further ado, Tracy Royce, welcome to the show. How you doing? I'm doing really well, guys.

Thanks for having me on. Thank you. Thank you. Thank you. Yeah. Yeah. Well, so let's jump right into this thing. You are somewhat of a jack of all trades here. Why don't we just get into how you got started into the world of real estate? Sure. Well, I think what makes me a jack of all trades is not necessarily that I am, but how I got started in real estate was working for a lot of other investors. So I've just been exposed to a lot of different types of strategies in single family residents. and I got recruited out of the health and fitness industry and did loans for a few years and decided that wasn't really my calling and started a business working with and for investors, and it really just grew from there. Wow. Okay.

So loans, working for investors, were you an agent? You are an agent today, correct? Yeah, I got licensed a few years ago. I was really hesitant to get it, to be honest, that just wasn't what I felt like my highest in best calling was. But, I mean, just with the advent of short sales, that really just melded the agency and investor world. So I had to. But, you know, I think the majority of the people that wanted to stay in the industry doing what it is that we do, you just, you know, it was a necessary, it was a necessary evil, so to speak.

So what is your main business today? I mean, what do you do mainly? So, I mean, we still buy and sell pre-foreclosures. And just short sales have been so popular that that, that was. was the largest modality that we really focused on. But certainly any sort of pre-foreclosure, you know, as the market changes, we just shift what we buy and how we sell. But the business model really hasn't changed that much. And who's we? Is that you and your spouse or your team? Yeah, it's my team. So like I said, I worked with and for investors. Typically, I would earn a salary

doing some sort of portfolio management, and they would be buying and fixing and flipping, and I would participate doing that. And now I've just started doing more of it on my own, just because at some point, it's like, okay, how much effort can I put into working for everyone else's business? And, you know, can I parlay that into working on my own? Okay. So, Tracy, how did you go from, how did you go from the actual job you had to running your own business? I mean, like you said you worked in the health fitness industry? How did that transition take place? Well, that transition was pretty much like, hey, do you want to be a lone officer? Do you want to get out of this and do something that might be a little bit more lucrative and have the chance to make a real career out of it?

Because the only way that I saw, I mean, I'm just really business minded. So the only way that I saw really making a go and having a full-blown career with the sort of goals that I had set for myself as a personal trainer was, okay, own my own business. And I just didn't really see a way for that to happen at that time. So one of the guys I worked with, he had some family that worked in the loan industry. And he's like, hey, you're pretty good at this. If you ever want to do something else, I think you should try to be a loan officer. So I moved into that and I did that for a few years. But like I said, it just didn't really fit me. I mean, I was like 20 years old at the time telling people what to do with like hundreds of thousands of dollars. So I just saw the writing on the wall that,

a lot of these people just can't afford this. Not that I wasn't participating in those types of loans, but I mean, you just see it. And I'm like, something's going to happen with this. And that just naturally gravitated me towards working with investors. And so really what I think of as like the job, which is working with and for investors, for me, it was one and the same. So I mean, I usually got to participate with them on deals. So really, the job transition wasn't much of one for me. My job was to work for them. Okay. So let's talk about two things really quick. On the loan side, as you went in to be a loan officer, I'm just curious. How much training did you actually have? Not much. And that was the scary part.

Yeah, that's my point. And that's what, you know, and that's good that you bring that up, Josh, because I mean, here we are so many years later that it's like, now you have to get, have more certification, now you have to have more formal education. Now there's more regulations. I'm like, what the heck am I doing telling people what to do? You know, I'm like, I don't have a background in finance. This isn't my place to be here. So I just bowed out after a few years. But the education that I got, you know, it really helped me learn that side of it.

So it's made me a stronger investor and agent. So I don't regret it, but it, you know, it led me to where I am. But it's, it was scary. Yeah. And obviously we've seen the fallout. Yeah, yeah, for sure. And I wasn't raising that question to make you look funny or anything. No, not at all.

It was one of these things where, you know, I mean, you could literally walk into an office and say, hey, I want to be a loan officer. They're like, cool, you're hired, you know. And so, yeah, that's kind of a scary thing. So you've talked a couple times about working with investors. Can you get into that a little bit? Explain exactly how that happens. What's your role and how did you actually end up getting going doing that?

Yeah. So one thing that I'm really, really good about is being organized and efficient. And it drives my fiance nuts because like everything around the house has a place and it's like perfectly located. It's a little antarotentive people. Right, right. However, it's wonderful for business. So I mean, the guy that the average like client that I would work for is, you know, just a guy that you wouldn't normally think is like this millionaire real estate investor but has a portfolio of anywhere from 25 to. 30 houses, doesn't really know how to expand his business, doesn't necessarily want to make it a huge conglomerate by any stretch of the imagination, but either holds another business related to real estate or has a career in something else. But it's really like, it's the kind of profile that you would think of the millionaire next door. But they're like, you know, I have enough that I can put on someone else to pay them a salary or, you know, pay them on a file basis, this sort of stuff to really help out with the marketing, administration, portfolio management, operations, anything like

that. So, I mean, it was really a huge realm of a behind the scenes, you know, and helping out with acquisition, resale, anything and everything. And I know that's a pretty broad spectrum. But when you work for one person, I mean, you guys know you run a small business. So it's like you wear so many hats and you just dive in. So really, the business was helping these sorts of investors of all their behind the scenes, administrative, executive administrative stuff to help them take a lot of that stuff off of their book or off of their shoulders so that they could run their business better. That's great. Yeah, you know, and it's it's an interesting path because, you know, the question we get all

the time on bigger pockets is, hey, how do I find a mentor? How do I learn how to do this? You know, beyond obviously, hey, read, read, read. Right. Now, that's probably one of the best ways you could possibly go about doing it is, hey, let me find an investor who's successful and end up working for them and doing, you know, doing the grunt work, do all the dirty work, do what you got to do. because you're going to learn everything there is to know about running their business.

Right. And I was, you know, I think a difference too is I was paid to get this education and they were happy to pay for my education. And a big thing I want to mention here too is if you're just someone off the street, a lot of these guys and gals are operating out of their house. They're pretty protective of their information. And I don't blame them. But it's usually whenever I ended one contract,

with another investor. I was always recruited somewhere else. And it's just because I was very respectful of their information, not sharing stuff with other people and just making sure that I did a really good job for them and that they could trust me. But when the contract was over, it's just like I had done my position to automate some of their systems, save them or make them money, and then just move on to a different contract. Well, and I think one thing you said that's really, really important is, you know, a lot of people when they think of I'm going to go work for an investor, all they think of is I'm going to go swing a hammer for them or I'm going to go to demo work for them. But I think it's cool that you found what you were good at, which was,

you know, organizing and that kind of side of things and the business side of things. And you apply that to working for investors. And so you don't have to be the guy swinging the hammer in order to help an investor. There's a lot of ways. No, not at all. And I mean, that's the thing. If you have no experience, if you have, you know, I don't know how to find deals or I don't know how to raise money and, you know, I know that's what investors want, but how do I offer, you know, so it's like, what are you good at? I'm, like I said, I know my talents and I know how they can benefit an investor. So it's, you know, if someone's out there and they're like, well, how do I find someone that might pay me to work for them? Well, what, what are you good at? I mean, can,

can you start with something as simple as stuffing mailers? I mean, that's a super, super, super low-paying job, but on the other spectrum, how can you walk into an organized business? Let's just pretend it's a larger one where there's a CEO and an HR department and everything's put in place and say, well, I want to be the CEO. You know, it's like you got to work in the mail room first. Yeah. Absolutely. Absolutely. It's interesting you say that because I used to work in the world of Holly Weird. Oh, yeah. And yeah, you know, nobody, nobody, unless you were loaded, came into that business and was, you know, was an executive. Everybody kind of worked their way up from the bottom. And, you know, you started in the mailroom exactly.

You were a grunt. You worked for somebody. You got them coffee. You worked horrible hours. You got yelled at all the time. And eventually you got to be the guy yelling at somebody else. And, you know, you got to take your lumps in this world. And, you know, I think the thing that, you know, I think is so important for new investors to understand is, you know, don't expect to get rich tomorrow.

Don't expect, you know, to be running somebody's company in two weeks. I mean, you need to put the work in. you need to hustle. And if you do that, it'll come. You know, wealth comes with hard work. Yeah. And I think that that's part of what people don't understand. And, you know, my path doesn't work for everyone. I mean, certainly if you do have the backing or ability, you know, just to step in and be more in a partnership role, so be it. I mean, that's fantastic. However, for the most part, I mean, even if you have to start stuffing mailers for someone, that might be two hours of exposure in their office, that you just overhear stuff and just really

start to gain real world experience. I mean, you can't, you can't gain that paying a thousand bucks over the weekend going to someone's shop or workshop, I mean. Yeah. Well, do you, you know, besides working for people, do you have any other, you know, good tips for new investors who want to break into this game? You know, they might not have a lot of money or experience or deals or, you know, any other good tips for that? Yeah. I mean, I think a lot of it for me, at least, just because of my experience, I'm certainly biased as to trying to find someone to help pay for your education. Again, even if it's just something small as helping them out with marketing or door knocking or anything like that, if that's not the route that they can take or they can't find an investor

in their community, just even getting a job in the industry. I mean, if you can, I don't know if you can just step into a title company, if you don't have, you know, relatable experience just to do that. But just something related to the industry that you can get paid for just to put you in the sort of circles that you need to be to meet other people and gain any sort of real world experience because that might lead you to the conclusion that this isn't as fun as I thought it was going to be. Yeah, that's great. And speaking of circles, biggerpockets.com is a great place to find a circle of real estate investors. But actually really quick, this is show 19 of the Bigger Pockets podcast. And for our show notes and any other information,

on this particular show, check out biggerpockets.com slash show 19. And you're right. It really is about networking and knowing people and through your community, you're going to start to get a better understanding of what happens. With that said, the market is kind of crazy right now in a lot of places. Prices are rising fast. Inventory is very, very tight. What are your thoughts on that? And do you have any feedback, advice, tips on finding opportunities in a tough market?

Yeah. So, I mean, I thought about this a little bit last night. And one thing is I don't like to just give people answers. I'm really about being hands-on and then teaching people to be resourceful and find their own answers because I feel like I'm better served by creating people around me that think and are resourceful. So without just giving away the barn, one thing that I really want people to think about is what are the market indicators that are happening wherever their money is being put? So it doesn't necessarily have to be in your own backyard if you're not investing there, but wherever you are investing. So look at like what's happening with the population? Are there more people coming than going? What's happening with prices? Is it going up? Is it going down? What's happening with the foreclosures?

Are they on the upswing or are they actually starting to decline? And once you start to really learn what these market indicators are, you're like, oh, okay, so probably this sort of stuff is going to die out. So for example, if you think about maybe like a few years ago, maybe like five years ago, when ARIA was basically unheard of. And wouldn't have that been a wonderful time to pick up the phone of some people in your area that are starting to get some ARIO listings? And you're like, hey, this is Tracy. And I was just seen if you have any properties that you might want me to take a look at. So you start to develop a relationship with the REO manager. So then what happens a couple years after that when they are so inundated with an inventory and then all these other investments,

come in and like, oh, man, I'm going to go straight to that person. Well, guess who beat them to the punch? You did because you understood this sort of indications of where the inventory would be coming from. So now the REO might be dying off and traditional inventory is coming back. It's like, if you really just ponder what's happening where the, if you work in pre-foreclosures, but like where the inventory is going to come from, that's going to lead you to your lead generation sources. So, you know, people like to think of whatever's happening in the market that they're investing is a microcosm of, well, the inventories down, where do I get it? You know, this has, this has happened before. What happened last time? I mean, there's cycles that are specific,

no matter what year it is. I mean, it's happening now. It's going to happen again. And if you learn how to look for what's going on and how things are shifting, you'll know how to shift with it. That's great. Yeah, plan ahead. Where do you, where do you, where do you go? see things going just in your area? The thing is, is here on any given day, in a healthy market, quote-unquote, I mean, there's still thousands of people that are in foreclosure. And my niche and background is in pre-foreclosure. So I'll probably always target that.

But that fits my business model. It doesn't fit everyone else's. So depending on what your business model is, and if you're looking for a specific type of inventory, meaning like the year build or bedrooms, baths, area, this sort of stuff, minds more towards pre-foreclosure. And yeah, I mean, there's a litmus beyond that. But, I mean, I think if people are really still looking for good deals, I think the more public, something is the less viable. It's got to be for them to be able to convert it. Yeah. Yeah. And that's why I've been, we've been talking to a lot of people about direct mail lately.

And that seems to be becoming more and more popular because you can't just look up on the MLS anymore. So, yeah, finding the finding the ones that are not as popular. It's definitely kind of the way to go, it seems. So, well, cool. I think, I think it's the methods that require more work. You know, the, the folks who just want an easy win, so to speak, aren't going to go through the effort, right? Well, and it's so, it's not to cut you off, Josh, I'm sorry. It's just funny.

It's one of those things where I keep having, you know, this redundant conversation, it seems like with people that they're like, man, it's so tough right now. And, you know, I look at these people. like, well, you got in a few years ago when it was just hand over fist and you didn't really have to do much of anything. And, you know, I don't fault people for being, for taking advantage of a market, you know, good for them. However, I think if you want to be sustainable in real estate, especially as an investor, you have to be willing to, like you said, work for it sometimes. And I'm like, man, if you want an easy job, just like go sell kittens at PetSmart or something. That's a perfect job for Brandon, by the way.

I do have three cats. Yeah, nice. No, this just isn't the industry for the faint of heart. And, you know, nothing attracts more people wanting to get in other than an appreciating market. But gosh, you know, that's going to attract so much more competition, too. So unless you're really willing to dive in and just get your, you know, get dirty and stay with it and do the grunt work and know that it's tough sometimes. I mean, people pretend that it's so easy and it's really pretty arduous sometimes. Yeah, for sure.

I remember early 2000s when I was an agent in L.A. And I mean, the number of agents in L.A. grew to some explosive number. It was insane. I mean, there were more agents than lists. I mean, it was crazy. And, you know, all these people were complaining like, you know, why can't I get listings? Why?

It's so, you know, I used to be able to just, you know, put out a sign and suddenly I got them. I'm out of here. I hate this business. And like, okay, well, you know, if you don't want to work, you don't have to. You know, there's work for other people and other people are going to, you know, do well. Yeah. So it's, it's, yeah, you know, in anything in life, if you work hard, things are going to come to you. And, and I think that's something that I really try to impose upon our listeners and people on bigger pockets is, you know, I mean, this is not an easy thing. and you know you got to try and you got to be smart and you got to plan and you got to run your business like a biz.

Right. So, well, let's talk about your business in particular a little bit more. You talk about having systems and things like that. Maybe you can explain a little bit about how you actually have your business set up. Well, so again, the business model is pretty much the same. I mean, we target and buy and resale pre-foreclosures. So, I mean, I've gotten to the point where my assistants are virtual. And so if a deal comes in, you know, I'm the one.

There's still some things that I don't want to put on someone else. Like, I just feel like I'm the one that can navigate through some of the data the best. And so, but for the most part, I mean, I still have people, I still have one of my assistants, process the paperwork, put it together, send it to the owners, go over things. I'm there, of course, for deal structure. But, I mean, I just decided that all this other stuff that I put in place for other people, you know, obviously I'll keep in place for myself. So my goal and my mindset is I don't want to make this harder than it needs to be,

but I'm also very oriented towards like what are my ultimate goals here and am I meeting them. So that's, you know, a really macro of what a day-to-day is. But other than that, I mean, I just find a, I spend a lot of time just like looking over deals and analyzing deals. And other than that, just working on looking over a cruise for the rehab and resale. Okay. I don't know if that's too broad or. Well, I do want to actually dive in a little bit deeper on one of those things you said.

You just mentioned virtual assistance. I'm wondering, how does that work? Are you talking like, you know, you hired somebody from the Philippines to do work for you? Or are you talking like somebody you just know? How does that work? Yeah. So one of the things I really embraced a few years ago, like probably like three, four years ago was virtual assistance. And I use Odesk.

I think there's find a freelancer.com and a couple other ones. But I was lucky enough to find a couple people on Odess that have just really worked well for me. And I've worked with them for years. And people think, you know, well, I'm sitting here in my home office. I don't do a ton of deals. why would I need to hire an assistant? I can just do it all myself. But part of it is, is like, okay, well, some of these assistants are like dollars. You know, you can pay them a few bucks an hour. I think even some of the more expensive ones are still under $10 an hour. So, I mean, if you can find

someone that can take anything off of your plate, even if it's just a couple hours a week, you don't have to pay them employment. You don't have to do, you know, you don't have a minimum hours of employment that you have to give them. It's really up to you. So even if it's just a couple hours of your time. So, I mean, just the thought of that and the efficiency factor of it in training someone that you don't have to take on all the extra liability on. I mean, I just, I really took that and ran and it's worked really well in their businesses. You know, I used to feel kind of weird that I was paying, I hired a guy one time and I paid him $3 an hour. That's what he was asking. And I felt kind of bad like, man, am I ripping this guy off?

But he was from Bangladesh and he was just doing some data entry. And then I read an article a few days ago. And it said that the minimum wage there, I think was 19 cents an hour or 29 cents an hour. something like that. And an average wage was like 50 cents an hour. So then I didn't, I mean, I realized like this guy was making a really, really good income for his area. And it was a really good deal for me. And it worked out really, really well. So I want to get more and more into that and kind of get more of my day-to-day step outsourced. So anything you can, I guess, offer or suggest, and I would love to know more about that. Yeah. So specifically,

even if you're just starting out, like even if you've just picked up your first deal, go to Google documents. I know pretty much everyone has a Gmail address. If you don't, just make one, real estate investor one at gmail.com. And then you get Google Docs is a free part of that whole database. And so just open up a Google Doc and say, what did I do on this to make this a deal? So, okay, I sent out mailers. So, okay, that's part of the process, right? What did I do when I put the contract together? I had to do X, Y, Z. Even if you don't really know exactly what what it is that you're going to groom to make into a process, just write down what it is that you do on each deal. And you'll start to notice because, you know, even if you're buying X acquisition strategy over Y acquisition strategy, a lot of it is still going to be redundant.

I mean, you still have to get the contract sign. You still have to put a deposit in escrow. You still have to deliver the docs back to the seller to make sure that they're signed. So all this stuff, I mean, a lot of it is just redundant. So writing down what it is that you actually do. on each deal. And so that way, if someone else steps into your business, you're like, okay, assistant, this is what needs to be done on every single thing. This is the stuff that can be done remotely and teaching someone else those administrative parts of your process. So even if you don't

know how to work with an assistant, or you're like, I can't see them, I can't work with them. How do I actually hire a virtual assistant? They're, you know, just write down exactly what it is that you do and then they can refine the process. The second part of that I find, Brandon, is people think like, well, if someone's in the Philippines, they're not going to know about real estate in, you know, Georgia or in Arizona. How does someone know how to work in my business? And what's surprising is, is there are assistants on these, like findafreelancer.com or Odess.com that are specific towards real estate. I mean, they've worked for other investors and are still working for other real estate agents and investors. And some of them work for the banks, like the major lenders.

So, I mean, they have a lot of experience. And even if they're like one of my assistants is from the Philippines. I mean, she speaks English probably better than I do. I mean, she has an accent, but, you know, it's, who cares about that? So, I mean, I think that's another big hurdle that I hear people say is I don't want to hire someone that maybe doesn't understand real estate or speak the language. And it's like, well, teach them what they need to know for your business and find someone that has, you know, that is obviously proficient in English. Yeah, I was, I really want to VA just because of what Tim Ferriss kind of popularized a lot of that. So, yeah, I mean, I mean, I mean, they are, they're pretty life-changing. I mean, the fact that it's like someone else can work while you're sleeping. And I mean, it's like they're just dedicated to your business. And what's cool about Odess, too, I don't know if this specifically addresses it. I mean, I've just never had a problem with any sort of information sharing. I mean, knowing that even one of the assistants that I work for works for other investors, you know, throughout the country. But it's one of those things where, I mean, a lot of their getting hired with other people depends on their feedback. So, I mean, if you have anything negative to say or if you feel like they've shared things, I mean, you can.

There's a lot of things in place that you can do to complain and change their rating and eventually cost them work. But, I mean, none of them want that, of course. Yeah, because it's all very public. Yeah. I mean, like you said, I mean, if the average wage is like 50 cents and they're making three bucks, I mean, what's their advantage to try to share your information versus continue with you as a contractor? Yeah. Yeah, that's definitely true. So, well, cool.

Well, let's transition a little bit over to something else that you and I have talked about before and I want to kind of get your take on. And that's goals. You know, goals are really, we talk about all the time in real estate, especially on the new year. Everyone's talking about goals. So I guess let's just kind of talk about why that's important and what makes a good goal. Kind of what are your thoughts on that? Yeah, I mean, I think why it's really paramount to be clear is just knowing that as market cycles change, your time frame to really take advantage of something. is closing. Okay, so if you step into a market cycle, I mean, it might be three to five years. And it's specific to like what you want to accomplish during that time, knowing that some landscapes of opportunity are more primed than others. So it's like, okay, I'm brand new to real estate. I want to step in right now. I want to buy 100 houses over the next two years with no money down. Okay, well, is that probably, it's probably not going to happen. So it's something that I think people really need to look at and say, what is it that I want to accomplish? What does it look like here? Can I do this in my own

backyard? If not, where do I need to go to do this? And how long is it going to take me? Because I think otherwise it's like, well, why are we sitting behind the desk? Why are we out in the field looking at deals? Why are we overseeing contractors? Like, why the heck are we even doing this? What's the end all be all for you to either retire yourself or transition into something else or meet a financial mark? So it really has to be actionable and it has to be reasonable because otherwise it's like you're just like a pilot getting into a plane and it's like you only have so much gas and maybe it's like windy out and there's a storm coming. Well, you can still get there. It might take you a little bit longer, but you just have to navigate a little bit differently to get to the same place in a certain amount of time. Can you potentially give us some examples of good goals and bad goals? Yeah. So I think, you know, like a really good goal is I want to buy, for instance, you know, enough houses to cover my monthly bills so that if I wanted to quit my job, I could. Okay. So let's just say you're a teacher and you make like $45,000 a year. So what would it take for you to be able to go in one day and say, you know what? I'm taking early retirement. I don't have to do this anymore. I can sit at home and eat bonbons and take some rental calls and I'm good to go. They still have bonbons?

I don't know, but those are... I love those things. They're disgusting. What? Oh my goodness. So, you know, depending on where you live, it's like, okay, so let's say on average, if you can cash flow 300 bucks a month on each house and each house costs, you know, $50,000, well, how much do you have credit?

Can you start putting them in your name? If not, you know, you need to figure out something else or where's the down payment money going to come from? So, you know, some of that stuff might take some time to actually put in place. if you need to get your credit fixed or work on getting down payments. So, I mean, all of it again has to be actionable. And if the end goal is, okay, it looks like I'll have to buy 10 houses to be able to cover my monthly expenses. Then how do I work backwards from there?

And that really sets a pace and vision for what it is that you're going to be doing every day. No, that's great. Well, listen, so you talked about goals. We talked about all these other things. in particular adjusting strategies. Let's take an example of an investor who may not have the budget, right? They're ready to get started and they want to get out there and they want to spread the word about what they're up to. You know, is there a way for these guys to do that?

I know you're big in social, bigger pockets. We are obviously a social portal, but maybe you could talk a little bit about that. and how you use it and how you think others might best use online. Sure. Yeah. So, I mean, I think as a micro business, I mean, even if a large company, I mean, you still need to know what's, you know, the larger companies, they might have a huge outreach and have millions of dollars that they can spend every month.

And if you don't have that, I mean, you can still use that strategy, not necessarily against them. But if that's their only strategy, you can still find ways to be able to cultivate leads. And I think that that's in part by attraction. Okay, so it's like you're inviting a conversation. You know, if you do stuff through Facebook and Google Plus and Twitter, I mean, people are going to Google you or, you know, look you up or want to know more about you. And just know that, you know, this is a real person. They're not here to rip me off.

That they have a good reputation. And the more that you make yourself available online, I think it really helps build credibility versus just seeing a billboard on the side of the road with, you know, recognizable picture. So if you don't have this sort of marketing budget that they do, you can still build brand awareness and it's still, you know, it's very much an organic level. But I think, you know, as more investors come into the market and as there's more money spent on the larger scale stuff for, you know, these nationalized companies, people just want to know, like, after all of this mess in the banking industry and, you know, just like, who do I trust and where can I go? And is this person ripping me off? Building that sort of online reputation, you know, through videos, you know,

that's becoming even more paramount. So if you know, if you have some time to spend and you're not doing a bunch of deals, start posting a bunch of videos. Just tell people what you do and how you can help them and why it's a benefit to them and just talk about yourself and talk about, you know, the marketplace. So not only that, so by providing information and just pervane information, seeing what's going on and giving that back to people. I mean, I think Bigger Pockets, especially is just a wonderful platform because people come back to it for the information. So I mean, you could do something for your own business on a micro scale, you know, for instance, in your own backyard, like what's happening in the Phoenix market or, you know, whatever market that you're in.

Yeah, yeah, for sure. Gotcha. Gotcha. Gotcha. All right, well, let's go to something that I in particular want to talk to you about. And that's short sales. You know, I, there's a, there's a lot of people who are hush, hush about the whole short sale world and short sale process. Maybe, maybe we can start with first what exactly a short sale is and then if you can explain into some detail, how does a short sale work? What's the process? Sure. So in the easiest terms, the short sale is just when the homeowner owes a lot more on their property than it's actually worth. The process of completing a short sale is when the bank will take less than what they're actually owed and then everything in between is just negotiating and getting

all the parties together to agree on final term. So really, it's just when there's more owed than it's worth and you get the bank to take less than what's owed. Okay, so I find an opportunity. Some guy wants to get out of his house. He says, Josh, you know, the problem is I'm underwater on this mortgage. What do we do? And I say, oh, okay, well, I can help you out. I don't know what I'm doing. How do I help them out? What is the beginning? What is step one for me as an investor? and how do we get from there to actually closing the short sale? Well, if you're talking about yourself actually helping them through the short sale, I mean, if you don't have much experience in it,

I don't know if that's the best use of your time, because if you're not proficient in what it takes to work with, you know, certain banks or government programs, then it's like you could end up screwing it up, basically, and not only losing the deal, but maybe, you know, putting the homeowner in a position that they might not have otherwise been, and that puts a ton of liability on you.

So, I mean, if you're approaching pre-foreclosures and they are underwater, I mean, you might want to hook up with someone in the area that knows what they're doing and just, you know, participate with them somehow. Okay. Are you thinking like a real estate agent or another investor? No, they have to be licensed. Okay. Fair enough.

So they hook up with this licensed real estate agent, walk me through the process from, I find somebody who's underwater who's in trouble, and I want to, you know, I want to I want to take advantage of the opportunity to help them, obviously, potentially make some money for myself. How does that happen? And including what the agent will do in the process. Yeah, exactly. So touching on that, I mean, if you have your license and you're able to do that, you know, so be it, if you're not really experienced and not comfortable with it, you really want to filter the agent just as much as you do the deal.

And I had written a blog post about this a while ago, but there's, you know, I really implore the listeners out there that are looking to do short sales with someone else, like as a listing agent. If they're finding short sales off the MLS or wherever, they're getting them to really go through and ask the listing agent, like, how many short sales have you done? And who are the lenders on this property? Because that right there, you're like, I just do not want to work with this lender or I don't want to work with this investor on it, meaning like Freddie Mac or Fannie Mae. Is there an HOA? And where are they standing on that? because that could end up biting you in the end, too, is the seller cooperative? Are they motivated? Just like any other deal? I mean, if the seller's like, yeah, this sounds great. And then they're like, forget it, won't answer their phone. I mean, you really need their participation.

you know, where are they at with the bank? If you're getting this off the MLS, it's like, oh, okay, great, you started the short sale. Where is it at? What's the communication? Where are you at in the process? Have they pulled title? Because oftentimes the seller's like, yeah, I got one lien with Bank of America and that's it. Well, come to find out they have a second.

You know, they might have a he lock. They might have an HOA lien that you don't find out until about months later in the process. And has the bank done a valuation. So as an investor, that especially is important too, because if there's a valuation already done on the property, most banks are going to need a percentage of that. And if they've had to redo it two or three times, like for instance, I had a short sale that I was looking at and I called the agent. And he's like, every single time they do a valuation, they demand more and more. And I end up getting buyers that'll pay that because we're in an appreciating market. And then when

it goes to approval, they're like, actually, we need even more now. So I mean, this poor guy had been working on this short sale for over a year. And he just could not get the valuation in line with what someone was, you know, he could get it to where they were willing to pay that. And then when they went to close, I mean, they would end up upping the value again. So, I mean, just starting off with a president of you know what you're doing, you want to work with someone that's experienced, it's not going to totally flub up the deal for you. And then just making them accountable, but also you participating, I think is what the necessary platform is to be able to really not learn to hate short sales and actually have.

a better experience with them. Okay, so that all said, take me through in five steps, seven steps, whatever it is. One, find short sale. Two, find a listing agent if, you know, if there's a proficient one in your area. Three. Turn in the offer and let them know be very upfront about the fact that I'm trying to make a deal out of this. My intention is to either keep this as a rental or sell this at a profit. If you have any sort of issue with that, you need to know now, but here's my disclaimer. I'm sending it into the bank. The seller needs to sign it. You need to sign it. I need to sign it. Everyone that breathes on this file needs to sign it. But if you're cool with that, here's a cash offer. I need to see the property before we close, but otherwise I'm serious. I'm

patient. I know how short sales work and I'm probably one of the best buyers that you'll work with. That's awesome. Great. Then what happens? The file goes to the bank. So then you make the listing agent accountable and ask for weekly updates. No update is still an update. And just ask them, okay, has a valuation come in? When is the valuation going to be done? I'm sorry, when is the valuation going to be done? Because you don't want it to come in without you knowing about it. Just to clarify really quickly. So the valuation is the bank going to actually value the property to make sure that they're happy with your offer and they're willing to actually take less than, than, the note is worth, yeah. Yeah, so that's a great point to bring up. So the valuation is on any lender that's on the property, they want to know what it's worth. Okay. So if the property is worth, let's just say $100,000, you send them an offer for $75,000.

They're like, well, that's great. I'm glad you're willing to negotiate with us. However, we don't know what to negotiate starting at. So they're going to go out and send a BPO, which could be anything from an agent down the street for, you know, 50 bucks, driving private property, taking a picture, spending 10 minutes pulling comps and valuing it at 150. it could end up where they pay for an appraisal and do a full out appraisal that tends to be a little bit more accurate. But either way, any bank that's involved will get their own valuation to couple

with your offer. And then they'll come back and say, okay, we're a little off. And like any other offer, they can counter, they can accept or they can reject. And the seller of title is really a signatory at that point. It's the bank that they're going to be negotiating with on the price. And BPO is broker price opinion, correct? It's opinion. I mean, an appraisal is still an opinion too. it tends to be more thorough and more expensive. Like I said, a BPO is just someone potentially just driving by and taking a couple pictures. So let's say there's a house then that, let's say I want to go buy the house from this guy, Bob, and Bob owes $150,000 on it. And I know as an investor, I would

not pay more than $100,000 for it. So if I were to go offer to the bank $100,000 and their valuation came back at $120, let's say, am I just out of luck? Or is that something a bank will be willing to take a loss on just like they would in a foreclosure. Yeah, that's a perfect question to ask. I think that's one of the missing links why investors or buyers might despise short sales after a while because they're like, man, these banks, I just can't work with them. Their values are far too high. Well, you can contest the value.

And most people just don't utilize that. Well, it's like the listing agent might not know that either. So depending on who the bank is, the investor, some of them are a lot harder to work with. but like any other, like any other negotiation, show them why it's worth $100,000. Don't just say, well, gosh, darn it, they need to know what's happening and why don't they understand what's happening in my market. Well, because they're sitting in a call center like four states away. They don't understand.

So if there's an email address that you can send pictures to, if you can send an inspection report, I mean, for God's sake, spend $300 bucks, $500, whatever it is in your area to get an appraisal, if you can show an appraisal at $100,000, I mean, they might take that over. their own. It's like they're just trying to do evaluation on such a high scale that if it comes back not necessarily in your favor or it's not reflected accurately, show them why and spend the money on inspections to be able to try to, you know, create that sort of profit for yourself. Gotcha. And why then would a bank actually agree to take less money on these short sales? I mean, you know, their note is valued at, say, the house is, the note's $150,000, $125,000, and the house, you know,

according to one guy's worth $150, you know, why would they take $100 grand? What is it in their interest to actually take less money? Sure. So in most cases, and I'm somewhat hesitant on this question now, in most cases, it's financially advantageous for them to accept the short sale because they're still gaining a premium over what they would if they took at REO. And REO stands for real estate owned, meaning real estate owned by the bank. So when people say jargon like, you know, lender owned real estate, that just means after

it actually went through the foreclosure. It's not the case in every position because, I mean, I've certainly had short sales and, of course, heard from tons of other agents that still do short sales that it's like, man, I brought them a solid offer and they still didn't take it. They took it REO and they made less on that. It's like something behind the scenes makes more sense for them. So, but to the sellers, I can still say, you know, for the most part, a short sale is a lot less expensive for the banks. It makes more sense to them to recoup more monies that they would on a short sale versus foreclosure.

But unfortunately, that seems to have shifted. So again, it's if there's certain banks that you know that you can work with that are easier to work with, the chances of that happening are less likely, then filter through those, again, asking questions of the listing. agent from the get-go and your success rate will continue to be higher than if you just throw an offer at anything and everything and just hope for the best. Okay. Yeah, that makes sense. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties. These gaps surface

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Yeah, they actually don't. And I think that's another misunderstanding too is, you know, not necessarily in the investor community. But if you're like, oh, I bought a home out of foreclosure, people are like, oh, man, it's disgusting. It's trashed. It needs a major rehab. But the thing about it is, is distress can tie itself to the sellers. And if they're in a distress position, the bank might accept their short sale without them ever having missed a payment if they have an imminent default coming. So if you talk to someone, like I've had several short sales where the seller has a condition like a medical condition, it's not bad yet. But the doctors have said like, hey, this is your prognosis. This is going to cost you X amount of money most likely. So I mean, they're just like, man, even though I have savings, this is going to cost me so much money over the next few years. I can't continue to make my payments after X date. So I'm approaching my bank. I'm getting a listing agent now to try to bite this thing in the

butt or before I can and before I actually default. So I mean, if you can even target people like that, they absolutely do not have to be behind on payments. And then that way they can save their credit, recoup the bank more money and it becomes a win, win, win all the way around. What does credit, what are the short sale usually do to credit? it tends to be less damage than a foreclosure, but the biggest thing that's really going to hurt people is the miss payments. So if you're behind on everything, I mean, if you have car payments, revolving credit, credit cards, all this other stuff, and you're behind on every, I mean, your credit's trashed. So if you miss payments, if you have a foreclosure, I mean, it's going to take you a

handful of years, if not the full seven years, to really get back on track. And that's with good credit payment history again. With a short sale. I mean, if you miss, let's just say two or three payments and complete a short sale, it tends to be a little bit better. But I mean, if you do a short sale and for instance, if you're with like one of the major banks and they're just, they waited a year to be able to take your home to short sale or foreclosure, I mean, your credit's pretty wrecked at that point. What I try to tell people is if you can stay on target, stay on payment with all your other, with all your other obligations. And if you have to miss the house payment, so be it because it's

easier to recover from that than if you just miss everything. Well, no, will they say, I'm underwater, you know, I've got my house, I pay $300,000, the market's terrible, it's worth $250, and I'm paying on time every single month. You know, is the bank going to let me go into a short sale, or do I have to show some kind of stress or strain in order to get out from the house? Yeah, there's some other strategic things that people can do. you know, in Arizona, we're a non-judicial state. So if the bank files the notice of trustee sale within 90 days, if absolutely nothing happens, the whole, the home is sold either to a third party buyer,

or back to the bank. However, because we're also a non-recourse state, the debt is tied to the house and not necessarily the person. So depending on the liens that are in place, if the bank has the right to be able to only take back the house, then there's not going to be any liability on the seller. But that's a caveat that's specialized to Arizona. So, you know, if, depending on which market that listeners are in, that this could be totally different. If they're in a judicial state and a recourse state, it's completely different. However, in Arizona, those two things work for us. So if someone's able to say, like, look, you either accept this short sale or you might get a fraction of this.

Plus, at the auction. Plus, I have absolutely no liability. I'm going to live in the house as long as feasible. And, you know, who knows if the house is going to be in the same condition when I move out. So usually in those cases, it's still, if you can show them, improved to them numerically that it's still in their best interest to accept the short sale. They don't necessarily even have to be as distressed as, you know, for instance, the same people that had a medical condition or an imminent sort of, where it's imminent that they're going

to end up missing payments or defaulting. Does that make sense? Yeah. So would you, so just to clarify then, a person probably is not going to use a short sale just to get out of being underwater, right? I mean, it's not just an easy out for a homeowner, right? It's not necessarily easy. But what I try to tell people is talk to your bank, the sooner, the better. Because if you already have the notice of trustee sale or notice of default or whatever it is in your state that's posted, you know, here it's a pretty quick timeline. Other places it might be longer, so they might just want to hang out for a little bit. But the closer it gets to the auction date, the less options that you have.

So, you know, it's really, really, really hard for me if someone calls up and they're two weeks away from auction. they haven't discussed anything with their bank and they're like, hey, I heard you can do a short sale for me and stop foreclosure. Can you bring me an offer and make this happen? I'm like, you know, I can sometimes do miracles, but I'm like, I can't walk on water in two weeks usually. So it just makes it a lot more difficult. So I think it's a strategy. And if you link up with professionals in your area that know what they're doing and know the scope of what you can probably do, even if you're not necessarily distressed as much as the next. guy. Yeah, it's still possible. I mean, I wouldn't say it's easy to get out of it. It's like unwinding everything that you put in place to get the loan. It still takes participation. But if you can numerically show them and negotiate with the bank for them to accept it, then, you know, why wouldn't you at least try it? Yeah. So let's talk about the timeline then real quick. You brought that up. How long does a typical short sale take? You know, on the average, I think a national average is around six months.

There's ones that still could take up to a year just because it just is what it is. But unfortunately, there's a few banks that are still taking a while. But in my experience, it seems like they're trying to cut down on stuff. But I think average like six months and under is pretty reasonable time frame. Again, that's going to depend, though, on the area that you're in. What's the shortest you've seen for the quickest? A couple weeks. Oh, wow.

Yeah. So you've got this process that takes. six months. You know, I'm somebody, I'm an investor, I want to go and, you know, I find opportunities that, you know, these potential short sales, that's an awful long time to be hanging out and waiting for an opportunity, a deal to close. You know, am I tying up any of my money to make this offer? Am I, you know, am I, it seems like a big stressor to be locked in for so long for that process. So are there outs once you kind of get started making offers on short sales while you're waiting for the bank to make a decision for six months? Yeah. So there's two different ways to look at that.

One of which is, is if you're in an area like Phoenix where the inventory has gone down and it's a lot more competitive, you might look at that as an opportunity to get into the sort of realm that a lot of other investors don't want to touch. So just like you said, you're like, I don't want to deal with something that might take six months. The pricing may shift again. I might have a bunch of money out on the line for a deal that's not even going to work out. Well, you know, my opinion of that is don't make short sales and end all be all. However, if you put, you know, more, more fishing lures out there, so to speak, you're more likely to catch a couple things. Now, with the money being out, that depends on if you're working with, you know, different listing agents, if they're really proficient or depending

on what their broker wants, they might say, I don't want you to leave. So I'm going to tie you to the deal. put X amount of money and escrow from day one. And you don't get that back until we get an approval and you have to close on the approval. And if you don't close on it. So they really try to tie you to it. And you know, in some part, I really can't blame them because after a while, the buyers like, forget this. I bought the house next door that went REO and I might not have gotten a 15% discount. I got a 10% discount. But God, I need to put someone in there and make money on it. So, you know, so beat. I just want to keep my money moving. Not all agents do that. So I mean, if you have to put 500 bucks, or, you know, a thousand bucks in there.

That's something that you can negotiate, too. Like I said, some brokers will require it, and there's no if-ans or buts about it. But you're like, look, I'm a serious buyer. I bought X amount of short sales. I'm patient, but this is my intention with the property. I'm either going to rent it out or sell it at a profit. So I need to buy it at a certain price.

So if we can work together, just know that, you know, you can hold me accountable. I can hold you accountable. I'm more than happy to put earnest money. once we get an approval. And after the inspection period, it can go hard, meaning you can't get a refund on that at that point. So you're committed to the deal. So. Gotcha. Gotcha. So would you say then, I mean, for somebody like me, I mean, my risk aversion is probably a lot higher than somebody younger. Not that I'm that old. But sure, do you think that, it sounds like you're saying that

it's a good strategy for somebody to, you know, maybe I'll work on one short sale while I'm doing a couple other things. But I'm not going to go out and put offers on, you know, six different short sales at once because, you know, that's potentially pretty challenging. Well, no, I'd actually recommend the opposite. I mean, if you feel pretty comfortable with it, if you have six offers out there, one might get accepted. Another one, just the pricing will not work, even if you can test the valuation and the other ones just might fall off the cliff. Okay, so it's just like if you put six offers out there, one of them might work out. But, you know, don't sit there and hold your breath and bank all your money on it. Try to negotiate what it is that you have to do to commit to the deal in the first place and have the agent accountable to you as well and make sure that they're staying on top of their process and procedures in a timely manner. But, you know, go out there and do direct mailings and everything else that it is that you do in your business, knowing that one or two of these deals might actually come through. Okay. Yeah, definitely. So, so we talked about ways. earlier in the podcast about the inventory is dropping and markets are crazy all over.

How is that affecting short sales? Should investors still pursue them today just as much? Or where's that going? Well, I mean, when you say just as much, I mean, I guess it depends on what they were doing with them before. Some people just have an absolute aversion to them where they're like, you know, what else that I'm doing is working for me? These things are just too, you know, bureaucratic or whatever the case may be that just makes you not attracted to them. I mean, I think it's like if you're still actively looking, I would say why not? Because what excites me about short sales is like there's not much else that you can do in the marketplace to really negotiate your equity spread in a deal.

So if you can actually have some sort of influence over what it is that you're buying this property for other than like a seller's like, I'll take $100,000. And you're like, okay, well, what's the best you'll take? And they're like $100,000. They don't need it. There's no distress there. I mean, being able to walk into a short sale, the sellers are like. like, I don't care. I can't make any money off of this. There's really nothing in it for me. You're solving my problem by bringing me a cash offer. I just want to get out from under this thing.

So it's, I mean, to me, I guess, if there's not a ton of inventory out there, it's still, it's still nice to know that there's certain deals that you can, a certain type of deal that you can try to create a profit out of. Hey, Tracy, you said a couple of- influence over the profit, I mean. What's that? Sorry about that. You said a couple of times, including just now, you mentioned cash offers. Can an investor buy a short sale, without a cash offer. Yeah, of course. But like any other, if you were in distress and, you know, you held the note, would you want someone to bring you a finance conditioned offer or would you want to know that you could take a little bit less and have them pay you off quickly without any of those

sort of contingency? So, I mean, it's really like not unlike if you're approaching a distressed seller, they want to know that the less contingencies, the faster and, you know, cash talks. Gotcha. Gotcha. Do you have any, uh, any quick, tips on setting yourself up for just a better experience with your offers, other than obviously the cash versus finance, less contingencies. Are there any tricks to succeeding? Sure, I do. I do. One thing that I've seen start to happen more, which I find pretty enlightening, actually, is the fact that I have buyers agents calling me and just saying, hey, you know, I'm Mary from so-and-so and I sent you an offer, but I also wanted to let you know a

little bit about the borrower. And even if it's like a cash investor, they're like, this guy's bought 15 homes in the last 30 days. He's very serious. You know, he'll stick with the deal. He's buying this as a rental and he owns three others on the street. I just want to let you know that, you know, we'll stick to the deal. He's putting $10,000 down. So X, Y, Z over what I can actually see out of the contract. And to the opposite effect, you know, it's like these poor financed buyers that are just trying to find a home to live in. They're like, I've had buyers agents call up and say, hey, I'm, you know, Joanne or, you know, Mike from so-and-so company. And this couple has been looking a house for the last three months. They're putting more money down. They're both educators.

They, you know, they have two kids. And the whole story about like what these borrowers really are and why they're the best and why we should pick their offers over the other. So I mean, it's like anything that you can do to gain a competitive advantage, even if it's calling someone like me that's on the other end of the deal and saying like, hey, I know you got 10 offers on this thing or five offers or two offers. But this is why you should take an extra look at ours and why we're the best qualified, not only quantitatively but qualitative as well. And I'd love to work with you. I'm an experience, you know, coming from them, they're like, I'm an experienced buyer's agent. I'll stay on, you know, on the buyers to keep their end of the deal. And I'm committed to this just as much as you are.

So, you know, just hearing that bit of information, it doesn't always help because at the end of the day, the best offer is still the best offer. But it's something that you can do, even if it's just a simple cover letter, to send with your offer to say, I'm a serious buyer. I'm going to stick with this deal. I'm experienced, patient, and this is why I'm the best. No, that's awesome, Tracy. I know short sales, I really want to know. That's kind of why I've been asking a lot of questions on this because I'm going to start direct mail. I want to start direct mailing more and more and more.

and for those people that are listening who do a lot of direct mail, you probably know that majority of the calls you get are at least a good portion of them are people that are underwater. And I've never had a way of dealing with that because I don't know anything about short sales hardly at all. So I'm excited to kind of add this to my tool belt. So very cool. Cool.

Yeah, well, cool. Well, I guess why don't we kind of start to wrap things up here? Before we go, I just wanted to mention to everyone again that this is show 19 of the Bigger Pockets podcast and you can check out the show notes and you can comment on this and you can ask Tracy questions at biggerpockets.com slash show 19. Before we go, I have a few questions for you. First of all, what is your favorite real estate book?

The first one that comes to mine for today's market, even though it's more oriented towards agency, but I still think it's applicable is the book Shift by Gary Keller. And it just talks about, like I said, it's more towards agency, but it's like, what do you do in a changing market and where do you find your leads? So there's still enough information in there that I think investors could get a lot out of it. Because, you know, he touches upon the whole thing I was saying before is if you've been in real estate for 20 years, you've probably been through a couple cycles. So you're still going to find leads from somewhere. But how do you shift as the market shifts to stay sustainable? Gotcha. Gotcha. And Brandon did forget to say that this is

the famous four. Oh yeah. Famous four. I didn't know. Famous for. What about your favorite business book, your non-real estate? Yeah. It's kind of hard to pin down my favorite. I love nonfiction. I'm kind of a nerd like that. I don't know if it's like a business book, but I'm finishing Atlas shrugged right now, and I have to say I'm enthralled with it.

If that changes your opinion of me, I'm sorry, but I really like. Can we get another guest for the podcast? I watched the movie. I haven't read the book, but I was bored to death from the movie. just have to say, I didn't, I could not get into it. I don't know, but maybe the book's better. I haven't seen the movie. I don't really care to. It just doesn't seem like it really does it justice. Other than that, you know, I really like just kind of the normal stuff, like think and grow rich. I thought the e-myth revisited really, really struck a chord with me just because

that's kind of my mindset anyway. But yeah, and then winning by Jack Welch. I thought that one was pretty good, too. Winning. Nice. No Charlie Sheen jokes. I was going to I was trying to think of a Charlie Sheen joke right there. Sorry. The train wreck. Yes. Oh, yeah. No comment.

Charlie, if you're listening. Yeah, he might be listening. You know, he's an avid investor, right? He might, he might, he scares me a little bit. So, yeah, I don't want to anger him. Do you have any hobbies outside of real estate? Nope, this is all I did. No, I'm just kidding.

Yeah, I'm super into. digital photography. I've done that for a while as a creative outlet other than because, you know, real estate, although, you know, like staging properties and remodeling that, that has a creative part to it and deal structure can be creative. But photography I got super into the last few years. Traveling, you know, I try to make a habit of that every year and at least get away for a couple weeks and scuba diving. I've added to that. Nice. So I don't get to do it as often as I can. I mean, there's not a bunch of reefs in Arizona. So I try to do it when I go out of down, though. Oh, cool. All right. Last question then is what do you see that those real estate investors who really last in this business? What sets them apart from those who just come and go? You know, it may seem like a surprising answer, but I think that the first thought that pops into my mind, the first word is that they're very thoughtful and not in a customer service sense. We're like, oh, I really care about your feelings or this sort of stuff. But like thoughtful about like what it is that they're, what it is that they're really doing in the business and the landscape and the temperature of the market when they enter it and then just being opportunist with that and being able to stay level-headed throughout the market shifts to be able to say, okay, this is our ultimate goal, this is how we're going to set it up, and then just really taking advantage of that and really spending time on data and information and not just saying, hey, you know, I've heard it's a fixer and flippers market. I'm just going to quit my job, go all in and fix and flip and become a millionaire overnight. There's a lot more, they're a lot more caustic about things, but they're cautiously optimistic.

And just very thoughtful. There's not a ton of bravado, but there's, what's the word I'm looking for? Like there's, like I said, the cautious optimism, but they do take calculated risks. So just I think that that mixture is what I see is like a really savvy, sustainable investor. Gotcha. Gotcha, gotcha. Well, listen, lots of really good information in particular on the topic of short sales. I think you answered lots of Brandon's pending questions and obviously questions of lots of our listeners. I just want to thank you so much for having you on the show really quickly. How can people find you? I know you're on Bigger Pockets. We'll link to that. Do you have a blog of your own? You do write for the Bigger Pockets blog each week. week, but you have your own site as well? I do. So it's just like my last name, which is Royce, R-O-Y-C-E, like the car.

So Royceof-Realestate.com. It's pretty easy in my blog there, and that one's the one that's specific to helping distressed sellers. But I do have a pretty cool blog there that talks a lot about real estate and market updates and information, more specifically to Arizona. But it covers a little bit of A-to-Z. Very cool. And otherwise, Facebook, LinkedIn, anything like that? Yeah, I mean, really, all my social networks are under the same name. So if you go to Facebook, it's Royce of Real Estate, Twitter's Royce of RE, LinkedIn. I think it's just under Tracy Royce.

But I'm pretty easy to stock online, unfortunately. So I think if you just Google Royce of Real Estate, most of my social network should show up. Awesome. Awesome. Well, listen, thank you so much for being on the show. We really appreciate it. And we will see you around on Bigger Bockets. Thanks so much, guys.

Yeah, thank you, Tracy. And that was our show with Real Estate Investor. Tracy Roy Seriously Man, this is a serious show. What do you do it? I don't believe in seriousness. All right.

Hopefully you guys can use a lot of the advice that she had to offer to help take your real estate investing to the next level. As we mentioned in today's quick tip, we love

ratings and iTunes It's a great way to pay it back, pay it forward. I don't know. So if you have not yet left one, please do. Also, we love connecting on other networks, Facebook being one. If you're not connected, we're Facebook.com slash bigger pockets on YouTube

where we've got a ton of really good videos and there's actually some really fun videos with Brandon and a couple really fun and stupid ones with me from back in the day. but that's YouTube.com slash slash bigger pockets and of course we'd love to have you on bigger pockets

it's an amazing network and amazing site and we are really all about trying to help you be successful find deals, find opportunities learn, improve the way you function not you personally

but you and your business function moving on. But yeah, that's it. So listen, thanks again, everybody for listening. This is Josh Dorkin, signing off. You're listening to Bigger Pockets Radio. Simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place.

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