BiggerPockets Real Estate Podcast - 43: Getting Started, Making Offers, and Crazy Properties with Shaun Reilly

Episode Date: November 7, 2013

On today’s episode of the BiggerPockets Podcast we sit down with real estate investor Shaun Reilly to talk about a wide range of topics – from getting started while living in an expensive area to wholesaling, putting in offers, flipping houses, buy and hold, and a lot more. This interview was a ton of fun to do and there are so many great nuggets of information that anyone who listens will walk out with skills they can apply to their real estate investing business. Read the transcript for episode 43 with Shaun Reilly here. In This Show, We Cover: How to start investing when properties are super expensive The benefits and pitfalls of investing in condos How Shaun got his first successful flip from a failed wholesale deal Investing in real estate with a credit card Shaun’s direct mail campaign – and how he got the list for free Tips on working with real estate agents Offering on HUD Properties Offering on hundreds of properties to see what sticks The mistakes Shaun has made in his real estate investing The craziest property anyone on our show has ever purchased And more! Links From the Show: BP Podcast 038: Unique Strategies for Buying Real Estate with Travis Daggett Books Mentioned in the Show: Rich Dad Poor Dad by Robert Kiyosaki Rich Dad’s CASHFLOW Quadrant by Robert Kiyosaki Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not! by Robert Kiyosaki Nothing Down: How to Buy Real Estate With Little or No Money Down by Robert Allen The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey Getting Things Done by Robert Allen Tweetable Topics Don’t focus on simplistic things that are easy to do but are not effective. (Tweet This!) The key to buying troubled properties is buying them at the right price. (Tweet This!) There are two kinds of real estate investors – those who make a lot of money and those who give up too soon. (Tweet This!) Connect with Shaun Shaun’s BiggerPockets Profile Shaun’s BiggerPockets’ Member Blog Shaun’s Lead Gen Website: http://www.rre-homes.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 43. 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. What's going on, everybody? This is Josh Dork and host of the Bigger Pockets podcast here with my my co-host, Brandon Turner.

Thanks for not giving me a nickname this week, Josh. Oh, man. You know, you've been crying the past couple episodes, so I figure I'd go easy on you. Tears have been shed. They have indeed. They have indeed. How you been, man?

Doing good. I'm doing great. I'm doing great, actually. Yeah, Thanksgiving's right around the corner, and we're excited for that. Yeah, yeah, we're at show 43. This is 43 weeks in a row, 43rd week of the year.

It's crazy. It has been crazy. We're coming up on the big 5-0. Yeah, you know, it's bananas. But let's jump into this one. We've got kind of a cool show today with Sean Riley from Newton Mass. Sean is a buy-and-hold investor who became a house flipper who also has purchased properties at long distance. And yeah, we're going to cover lots of cool stuff.

stuff like, what do you do if you live in an area that's pretty expensive, how to get started, and things like that. We talk about craziness, craziness, like buying a house that has railroad tracks in its backyard and sewage plants in the front. You will be amazed at what you can make money with. So check it out. Pay attention. If you've got any questions for Sean, check out the show notes at biggerpockets.com slash show 43 and be sure to ask them your questions there or check them out on the site. And otherwise, let's just jump in.

What do you think? Let's do it. By the way, I like how you said mass instead of trying to say the whole name of the state. Let's hear you say it, Josh. Massachusetts. Let's hear you say it, Brandon. Come on.

You can say it twice. I said it during the show once and it was awkward. It was awkward. I worked my way through it. Matt. Matt. Yeah, Mass.

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So welcome to the show, man. Good to have you. Thanks for having me. I'm really excited about it. Awesome. Us too. So, Sean, let's get down and dirty here, man. All right, what kind of investor are you?

I do a couple different things. So I started off as buy and hold locally. And after a couple of years, I started getting into doing fix and flips in my area in Massachusetts. And then a little over a year ago, I also started getting involved with out-of-state rentals. Okay. Hey, what's the market look like where you're at? because I know some area of Massachusetts is very expensive. Most of Massachusetts is relatively expensive,

even in the real boonies and stuff like that. It's still more expensive than a lot of places in the country right around me. Yeah, my area is pretty boonies. Well, I live right outside of Boston, so it's very expensive here. As I'm saying, like, I'm in $500,000 condo land. Yeah, that's got to be Cambridge. Oh, yeah, lots of them in Cambridge. I'm in Newton, which is close to Cambridge, borders Boston.

It's where Boston College is. One of my high school teachers didn't like it very much, so we would always call the University of Newton. Nice. Yeah, I actually lived right on the reservoir at BC after college. It was kind of a fun place to be. It's a cool town for 17 to 21-year-olds. Yeah, so, yeah, actually, so I lived in Brighton right near Newton where you're talking about.

So we actually probably had places pretty close to each other at that point. Nice, nice, awesome. All right, so you started buying hold, went to flipping, and then got to out-of-state rentals, and I guess we'll kind of cover that transition. How did you originally get into buy-and-hold? So I had actually been interested in real estate for quite a few years, had read a lot of books, did a lot of studying, wanted to get into cash flowing rentals. We had, me and my wife bought our first place, which was that condo in Brighton I was just referring to. It was actually the, we bought on the wrong side of a flip back in 2004.

And then in 2007, we wanted to move to a place that was a bit bigger because we were starting to think about starting. a family and stuff and a 663 square foot two-bedroom condo is probably not where we were going to be raising a family. But as I said, we bought it in 2004, went to sell in 2007, as opposed to eating like $30,000 or something to sell the place. We decided to turn it into a rental because we thought we should at least be able to cover our costs, which we have been able to do. And we had actually always joke that it was so close to BC that it would always make a good rental property if we didn't

have to sell it. So that's how we got started there. So then after that, as I said, I'd already kind of been interested, so that sort of kind of got giving a little kick in the pants to get started. And we like the fact that people are just mailing us money every month. So, yeah.

I'll take it. So what we did after that is I grew up north of Boston City, called Lull, which is right near New Hampshire, one of the other bigger cities in Massachusetts, Boston dwarfs, everything else. But after that, it's one of the bigger cities in the state. So I grew up right outside of that, and most of my dad's family still lives there and stuff like that. So I knew the area pretty well. I was like, hey, you know, we can probably buy the same unit for like less than, probably about 40% of what we paid for our place in Brighton.

but we could get somewhere between two-thirds and three-quarters of the rent. So we're like, hey, let's start looking there. We actually bought two almost identical units there, you know, six, eight months after we first started. Were these condos as well? Yes. Okay, okay. Actually, all my stuff in Massachusetts are condos. Really? Okay.

For rentals. Gotcha. Gotcha. Interesting. Well, let's kind of talk about that a little bit because, you know, a lot of people will shy away from condos. I know that I had a condo experience myself that did not go well. I loved where I lived.

This was in SoCal and inherited a board of directors that felt like running a board was like running the universe. They got very power hungry over a 40, 50 unit building and and started going crazy and doing bad things.

And it gave me a very bad taste for living in such a place or ever owning a rental in such a place because you know, you're at the mercy of those folks. So have you ever had any similar experiences? Or how's it been for you? There's definitely, you know, those things are definitely risks. I have dealt with my places range from anywhere from just five units. all the way up to several hundred.

So like the small ones, you know, they're generally self-managed and stuff. So it really does depend if you have good people there. I've actually been pretty lucky. And for that really, really small one, the person who's charged the trustee there is, like, awesome. And it's very easy to work with, very nice, does a good job of keeping things in order. We do have actually in our biggest complex, we had something kind of similar to what you had. like the you know there were a couple people who had been on the board forever and just had like you know crazy power trips um one was eventually voted out which was very nice but like for the first couple of years we like if i went to

the association meeting and stuff like literally they had to have like cops and like the attorneys and stuff there just to like keep things in order really that's but a cash flowed so yeah there you go There you go. Well, the big thing for me was these guys didn't want to get earthquake insurance. And living in Southern California, it's kind of a big deal. Yeah, you know, I owned everything between my four walls, but, you know, the building itself didn't have coverage. And that was a bit troubling. So interesting. So you put up with that stuff and continued to acquire condo properties after that. You're a braver man than I am. Slow down for a while, but that was actually more because, you know, like a lot of first-time investors who, you know, buy rentals like the books tell you to do. They don't make you nearly as much money as you were hoping.

So kind of got in a holding pattern for a while. I've only bought one since those first three here. Okay. But I did buy it. It was another condo and it was in the same area and the same basic unit and stuff. But, you know, overall, the thing I like about condos, especially if you're getting started. And, you know, you have to do your due diligence on the. the association and all that kind of stuff, is that if you want to self-manage your properties,

it's a lot easier because typically, as you were saying, like, you know, you're responsible for inside your four walls, but you don't have to worry about exterior maintenance. You don't have to worry about, you know, cutting the grass, plowing the snow, you know, fixing a leaky roof, any of that kind of stuff. Like the association is in charge of that. Now, you pay for that. That's why you have to, you know, you have to evaluate the fees and make sure it's worth it. But, you know, if you consider that to just be part of your property management fee,

and your reserves and stuff like that. It's a good way to kind of get your feet wet because you don't have to deal with every single issue. You only have to deal with the stuff, like said, inside your actual units. So, easier to self-manage. Absolutely. Absolutely. I think the scariest part other than the board is really those one-off assessments

that tend to pop up every couple of years or every year, depending on your board. I've paid three deck assessments, and I don't have a single unit with a deck. Yeah. So that kind of stuff is frustrating. Yeah, it could be. It could be for sure. So yeah.

So for those people listening, you know, condos do have their benefits for sure, but there are also certainly negatives. Obviously, look at your own risk tolerance and decide if an investment in a condo is really for you. But, you know, if the numbers work and you're willing to put up with it, then it could definitely be a good deal. So, but yeah, that's great. So this condo thing, you picked up a bunch of condos. Did you continue as a buy and hold guy, were you continuing to pick up? Did you move to like single families from there? Or was that kind of the, you know what, I'm going to move on to flipping houses now?

So what happened was, so after we got those first three units, the converted primary and the first two that we bought otherwise. as I said, like a lot of people didn't turn out to be as good of investments as I necessarily thought initially. So kind of got in a holding pattern for a while, sort of blew our wad with down payment money and stuff like that. And also, you know, since they weren't doing as well as we wanted to kind of step back and reevaluate how we wanted to do stuff. You know, these weren't like killer investments where it's like, oh, you know, ended up going bankrupt and lost all the properties of foreclosure. It's just kind of like, you know, instead of cash flow and, you know, $200 a month, it's more like break-even. Yeah. But, you know, we still kind of, yeah.

So we kind of got in a holding pattern for a couple of years, sort of built my network and my knowledge, kept going to my local Rias and other real estate meetings and stuff like that. And then I always kind of wanted to get interested into the flipping stuff too. So just kind of like kept learning about that and sort of just, you know, kind of one day something just kind of like clicked and, you know, started just putting out tons of. and tons of offers to try to, you know, acquire some properties and, you know, started getting some and ever since then, you know, most, I said mostly been doing that around here. I did pick up one new rental locally about a little over a year ago, which actually, so just

to show what I learned in five years is that the, it was, it was also a condo and lull, more or less the same unit that I bought the other two times, but I paid half as much. Oh, there you go. That would cash flow is a lot better. Yeah, sounds like it. I'll take it. That's cool. So you started flipping then at that point.

How did, I guess, what was your first flip look like? Did you mean to flip it or I guess how'd that start? So like most people initially, I was thinking it's like, oh, you know, I should probably get into wholesaling because it'll be quicker easier than, you know, going through a whole rehab process because, you know, I don't necessarily have enough money or connections or I've never done it before, blah, blah, blah. blah blah. So as I said, one day I just go to sort of click that it's like, you know, if I don't, basically it was like, if I don't start putting out offers, I'm never going to buy a property. So I started putting in tons and tons and tons of offers. Like, you know, basically the month I decided to really get into it, I probably put in like 200 offers. Wow. Now, a lot of like just kind of throwing stuff against the wall, like didn't really

expect there to be any traction and there wasn't. But, you know, eventually I did get, started getting some inquiries and stuff. So the first place I got under contract, I had hoped to wholesale. And I did work towards that. I actually had a buyer all lined up. And he was using hard money and basically his lender backed out the day before the closing. So like, you know, he was scrambling. And I was trying to figure out what to do with that.

It was a bank-owned HUD property. So we were going to double close. So, you know, I had to perform or lose it. Or you could get an extension. I did get a short extension. I had to pay like 300 bucks to get like a two-week extension or something. I'm hoping that he would be able to get his finances in order. So he wasn't able to pull it together.

So at that point, I sort of had a decision point. And I was like, you know, I know this is a deal. It's like, you know, I've been studying this forever. I've been putting in these offers. I've been evaluating stuff. And it's like I just know, I know there's like a ton of profit in this deal. So I was like, you know what? I'll close on it.

And then I'll just, I'll keep marketing to see if I could wholesale it. So I did eventually close. It was like for Massachusetts, it was ridiculously cheap. It was like $34,000, I think I paid. Wow. Wow. Wow. Sounds like the, I won't say it.

It needed more work than that. But, you know, but I was able to acquire, actually, I remember at one point I looked up and it was like, since it was an MLS deal, I looked it up on MLS. And it was like the cheapest any house had gone for. This was in Chiquip, Massachusetts. This was way west. probably about 85 miles outside of Boston which was actually part of the problem is I didn't have a network out there

but it was like the cheapest place that went on MLS for like three or four years before that and nothing cheaper since then so that was one of it's like you know what if nobody has bought anything anywhere near this cheap it's got to be pretty good yeah um but anyway so I tried kept marketing it did had a few tire kickers you know did like the Craigslist thing going to the Ria's thing well as is there was actually a RIA that was out of Springfield, Massachusetts, which is the border, big border town

that literally closed maybe like a month before I got the property. Oh, just go out to the Springfield place. I'm sure there'll be buyers there. And then the next closest one was one in Worcester, Massachusetts, which is the second biggest city in the state and, you know, probably 30 or so

miles from there. But I'm like, well, that's probably where everybody's going to be going now. And that one literally closed like the week. Luckily, I checked make sure it was still, you know, to get the address. I went online to check it out, and it literally had just closed. So I was like, oh, well, I'm glad I didn't drive all the way out there to pitch the thing. Wow.

All right. So you got this property under contract. You decide you're going to close. Obviously, it sounds like you had the cash to close yourself. So you were able to actually do that, yeah. Yeah, I didn't have to do anything too dramatic. I did have some cash, to be honest, I took like a huge credit card. advance to pay for it. So, you know, it's one of the other things people demonize sometimes is

using a credit card. But in this particular case, I had, you know, a zero percent for 13-month kind of offer. So I just, you know, took the money out. That was more than enough to close on it. I've done that a few times now. Yeah, I know people do demonize that, don't they? And I even am guilty, you know, of telling people, you know, be very, very, very, very careful in doing that and maybe don't do it at all. But I do it. And I'm the one who demonizes it. y'all can look at me and make your little devil eyes at me and well it's like i know i know it's dangerous it's kind of like you know i don't know there's a lot of bad vices in the world but it but it's worked for me and it hasn't

messed me up yet so well if you get a zero percent loan for the 13 16 months i mean shoot it's better than hard money i mean that's that's my point is if you get that kind of deal it's like well why is it better to get a secured loan at like you know 12 to 15 percent with the same transactional fees for the same time period. Yeah. No, listen, I mean, if you look at it from that perspective, I think using a card with an offer like that is probably your best option if you don't have the cash. Yeah, I wouldn't do the 30% cash advance fee or whatever, the really crazy cash advance charges.

But those checks are nice. Yeah, these things are usually only either a 3% or 4% transaction fee, which is, you know, that's pretty typical way you're going to pay for hard money points. So you just avoid paying, like said, the double-digit interests and all the other closing costs. And if, you know, if, God forbid, you actually do default on it, you don't lose the property. Yeah, that's true. There you go. There you go.

All right. So you've got this property now. You've been shopping it around to the clubs that don't exist, whose store is closed and are conspiring against you. And you decide, you know what, I'm going to go ahead and flip this. Exactly. So that's what happened when I was having a hard time wholesale. Like I got a few tire kickers off of Craigslist. And I actually called some of the We Buy houses people who were out there who did not get back in touch with me, which I was like, whoa. But so then I was like, you know, I just know there's profit here. So my biggest concern was, as I said, it was well out of my general area.

So I didn't have a contractor out there. But somebody who I had been, so I hadn't done any flip ship. but somebody who I had formed a relationship with and had been looking at some local properties with agreed to go out there and take a look at the job. And his quote was well within my budget. So we just went for it. And I said, you know, it worked out very well and, you know, made, you know, well over 30 grand on that first flip. So then I was like, I was like, you know, I was only looking to make about four on the wholesale. So then I was like, no, this rehabbing thing seems to be the better way to go. There you go.

Well, that is an interesting thing about wholesaling, right? Like, if you're a really good wholesaler and you can get those amazingly cheap deals, it's hard to pass those deals up as a flipper and then hand them over to somebody else to make the 30 grand. I understand the velocity thing, but yeah, that's where I struggle. Anytime I get a good enough deal that I could wholesale, why would I wholesale it? Well, so, I mean, the way I see it, wholesalers really, their job is the marketing. I mean, they're marketers versus flippers who are more. jobbers, I guess,

maybe that's a way of describing and I don't mean negative on either of them. But, you know, the wholesaler, your job is to get that flow, right? You want to work, work, work, and get as many leads as possible as quickly as possible and you want to dump them as fast as possible. Yeah, you can have 10, 20, 30 deals in a month. You can't

flip 10, 20, 30 deals in a month unless you have a huge infrastructure. Yeah, I think that's the big thing is just the difference in volume. So, you know, subsequently, I have wholesale some properties, or I sell to have a property. That, you know, at the time I actually had like a lot of stuff coming in. You know, it was a very magical time where it was the second property.

I got under contract that day after getting one under contract two days earlier and had multiple projects going. So it's like, ooh, it's actually going to be hard to get stuff going. So I wasn't able to wholesale that. But for the most part, I don't get enough leads that I can't handle them. So, you know, if I started having more projects that I could reasonably take. on it once, you know, I'd be looking at that more. And subsequently over the last couple of years, I have built up a stronger network,

even out in that western part of the state where I had hard time wholesale in this first one. So I'm not, I don't worry about getting stuff in places that I would not necessarily want to do the job myself because I do, I am much more confident that I can, you know, dump them if I needed to. Gotcha, gotcha. All right. So where are you getting your leads from? So, up until about a year.

ago, I was pretty much exclusively doing stuff on the MLS because there was enough bank-owned stuff that I was able to get deals and I was putting in, just putting in a lot of offers and getting things to work out. Especially, I did pretty well with HUD around here. Like I said, that first one was a HUD and I got quite a few other ones that way. Since then, it's definitely been the MLS, like a lot of place in the country, have dried up a lot. So I'm actually currently just getting a lot of my direct marketing to motivated sellers going. So, you know, I have not purchased any properties from that yet, but I'm definitely working on it. You know, if people see me on the forums, I've been pretty active and a lot of the ones talking about,

like, you know, direct mails and stuff like that to try to get new ideas and been blogging about my stuff on my BP blog to kind of keep myself accountable. Yeah, no, that's awesome. and they can check that out. We'll link to that on the show notes at biggerpockets.com slash show 46. So let's talk about that a little bit, and maybe we could jump back to the flipping stuff afterwards. So direct marketing to motivated sellers, you know, you're new to this, which makes it actually kind of interesting. You know, what strategy have you, did you decide to go with, you know, after doing all this research?

What are you running with? Who are you targeting specifically in terms of the motivated guys? And how is that going? I mean, obviously you haven't closed the deal yet, but fill us in a little bit. So the main form that I'm trying to use is direct mail. Because based on what I've talked to people locally and most of the stuff that I've read on bigger pockets has convinced me that that is probably the most effective. way to go.

So I've been working on that. In addition to that, I've been doing some of the more low-hanging through, like, posting Craigslist ads, getting in touch with people who post-for-sale ads there. I finally took the plunge into Tacky and started putting signs on my car. Oh, yeah. How does the fam feel about that? You know, my wife has been surprisingly not bad with it. surprisingly mediocre

well she hasn't said like take him off or anything but which i was worried she might be like oh i can't you know at least when we do go places together i figured she'd probably be okay like when i was by myself but like you know when i take him to like a kid's birthday party or something like that like she doesn't ask me to take them off the car so that's kind of where i thought she would go so you know she's been cool with that

um you know just a lot of the comments like leaving stacks of business cards in different places and those kind of like you know simplistic things that aren't particularly effective but are easy to do yeah so as far as the direct mail um i've only been doing not even quite a month yet i've been sending stuff out been doing in sort of chunks um to just start getting stuff out because i was sort of like working on a list for a long time and then i realized you know if i wait to fully refine everything i'm doing i'm never going to send out any mail. So I started sending out stuff a little more piecemeal. And who are you sending to specifically? I am sending to out-of-state absentee owners. Okay. The main reason for that is that it was a

list I was able to compile myself for free. So I figured that was a good way to start until, you know, kind of keep the cost down until I figure, get a better strategy and kind of feel my way through the actual process. And how were you able to get those for free? I am a licensed agent. I am a licensed and was able to pull the information off MLS. Okay, yeah, that's what I was thinking. It was actually for the Massachusetts MLS. It's a pretty easy system. And actually Mike Likava in one of his articles a couple months ago,

showed the process for that. So that's actually where I learned how to do it. Oh, that's awesome. On the bigger pockets. Yeah, look at that. Power of bigger pockets. Nice. Awesome, awesome.

Yeah, that's cool. So do you recommend other people getting their real estate agent license? ask a lot of our guests this. I think I'm going to come down where everybody who has their license says that they should. Because I found it pretty beneficial to, you know, if for nothing else,

just for the MLS access and the ability to put in my own offers on stuff that are like bank owned and short sales and stuff like that. Yeah. So you're not paying the commissions. You can expedite the rate at which you get it done. You don't have to wait for somebody else to respond to you. Those are definitely benefits. Yeah.

I like it. I especially like it on the buy side because like I said, I can research stuff on MLS. I can calm stuff out. I can go do my own visits without having to schedule with a realtor and I can put in my own offers. And which would come in handy when you, like you said, you're putting in a couple hundred offers in that first month. Like, you're exactly. No agent's going to want to do that for some. Well, that's what I was going to say. Yeah. So you have no, you know, because we talk with with a bunch of agents, Brandon and I, and we're always asking them, hey, how can we improve the relationship between agents and investors and agents,

lo and behold, will always say, you know, get them to stop doing that crap where they send out a ton of offers that have little chance of succeeding. And, and you think about it,

how on earth can you get, you know, a hundred offers out that, you know, with a one or two or three, four, five percent success rate, you know,

a lot of, most agents are going to tell you to piss off, right? So really the only way to do it is to do it on your own. Yeah, I mean, if somebody else was asking me to put out as many offers as I put out as an agent just for the commission, I wouldn't do it. Yeah. Yeah, I saw a thing yesterday on a Facebook group. I'm part of a real estate agent Facebook group.

And somebody had complained just about that. They said, you know, investors are asking me to put in, you know, 50 hours a month worth of work just to make, you know, the potential of making a few hundred bucks in commission on a $12,000 house. Like, it's just, it's ridiculous. There's no incentive for these agents at all. And that's something we need to understand as investors. Yeah. And I mean, I think it'll be, I think in my area, I actually have better success, like, working with agents because even, like, the beater up, like, needs tons of workplaces are at least approaching $100,000. So, like, you know, they actually are getting, you know, a reasonable commission on the buy side.

And so even though I'm an agent, I'm perfectly happy to work with other agents. So like when I network and I meet people, I was like, hey, I'm an agent, but if you bring me a deal, you can write the offer for me, and I'll list the resale with you. So that's sort of their incentive. Okay. Nice.

And I actually do list quite a few of my flips with other agents just because, you know, I just don't think I'm that great at selling places. I do list some of my own stuff. And it's like places that are close to me or if there's like, you know, some particular reason why I don't, think that I could use like a local person with the specialized knowledge and stuff like that.

But I would, you know, probably 60% of the places I've resold I've had with other agents. That is really interesting to me because a lot of, a lot of investors say, you know, all an agent's doing is sticking it on the MLS and that's it. So why am I paying them, you know, three or six percent or whatever just to stick it on the MLS? So I would love to get your take on that. Like, what does a good agent do to sell a house that just thrown it on the MLS? doesn't accomplish. It's, I don't know, it's kind of hard to say, like, I have overall had better success selling my places fast when I've listed them with other people.

But, you know, I kind of go back and forth. I would say half the time when I list a place myself, like, you know, I sell it pretty easy and then I save on the commission. I'm just like, why do I, you know, why do I waste that money listening with other people? And then the other half of the time, it is such a pain in the butt that I'm like, oh my God, this is the worst 3% I ever could have saved. Yeah, yeah, yeah. Yeah, well, listen, I mean, a good agent, I think I could answer that.

I mean, as a former agent who was never particularly good either. I mean, I wasn't a list, you know, I was a buyer's agent. I was never a listing agent. But, you know, I think what I saw that the good listing agents did was they got a lot of energy for the listing beforehand. And, you know, there's that age-old argument about open houses, open, you know, agents all complain that open houses are useless. But I think if the house looks good and the house is ready to go, an open house can sell your house pretty fast.

So getting energy about the house, getting it out to other agents, making deals with other agents and letting them know that you've got this great property. Just like an investor, it's about networking. So a good agent is going to be somebody who's very well networked. who's tight with the other investors in the area and who has the capacity to go out and basically bring you buyers. I mean, that's really what it comes down to. Yeah. So if you've got a good agent, they're going to have a lead funnel, just like an investor is going to have a lead funnel as well. And, you know, they're just going to have the capacity to do that. I think, you know,

that's really the biggest difference between a good agent and a, quote, mediocre agent, is, you know, and the other thing is also just the willingness to spend the money on the marketing. You know, good agents will spend money and they'll market it because they know they're going to see it back. And they'll put their name all over the neighborhood. They'll do whatever they have to do because it will come back and pay itself back. The mediocre ones tend to chintz out, I think, on their spend. That's just my take on it. Yeah, I think that's pretty accurate overall. So, you know, when I have, like I said, when I've listed with other people, generally I've had better success move in the places pretty quick.

Not always, but, you know, generally I think I've had more advantages that way. I've never really gotten any traction, either open houses I've done or the ones that they've done. But something that they bring to the table usually that I don't really have is they do broker opens. So they get other agents through there, which is a big thing. So my office is a small, independent, quote-unquote, investor-friendly office. The little motto is like, you know, investors working with other investors. So like, you know, all the agents more or less are doing their own kind of investing as well. So like we don't have like a strong retail branch.

Yeah. So these other people can bring in like people from their offices and if they're, you know, with one of the bigger companies, some of the other local offices. Yeah. Yeah. I think broker opens are, you know, I'd say they're probably more valuable. than just a open house to consumers. Because, you know, giving the opportunity for other folks, other brokers to show up other agents to come and know it. You know, when they've got a client, that's where it's going to come from.

So, again, when I was an agent in California, that was the one thing that I saw on the most successful listing guys. they always always held a broker open. They got excitement. You know, they, it costs, the best way to buy it, by the way to do a broker open is to have a bunch of food. The broker opens that didn't have food, nobody showed up for it. And the broker opens that had a nice little catering that you probably spent a couple hundred bucks on, brought everybody in. And those houses really tended to sell fast. So it's, you know, you never think about those things, but those are, it's,

actually pretty important. In my town, we have a, what they call it the tour, there's like probably two dozen agents that get together every Wednesday. You know, they just go all together from different brokerage. I'm in a small area. And they just go look at every single new property that came on the market in the past week, or at least every, you know, one within their, you know, whatever niche that they're in. And that, that's one of my favorite things about listing with an agent is exactly that. Almost every property I've sold has come as a result somehow of an agent who had walked through the house during that tour. So I think it's huge. Yeah, like I said, I've gotten a lot more traction from those than I have like, you know, the consumer open houses.

Yeah. Yeah, I think at least two places sold to an agent that went through one of those or, you know, to a client of an agent who went through one of those that we did. So, yeah, I definitely like doing that and always when I talk to the agents, I ask them to do that. Cool. Well, hey, let's go, let's go back to flipping a little bit and talk more about your kind of strategy with that. So first of all, what kind of properties are you flipping? What are you looking for, condition? wise or size wise those kind of things? So I actually cast a pretty wide net

both like geographically and in what kind of properties I'll do and what level of rehab I'm willing to do. Essentially the deal flow is small enough that I'm willing to chase dollars and go pretty far out and do a variety of kind of things.

So I have done let's see, I haven't done anything smaller than a two-bedroom house at this point, but I have told people I'm willing to look at, you know, like small. So as I mentioned, I have some experience with condos so those don't scare me, even on the flip side. So I do tell people I'm willing to look at those, like, as small as, you know, one bedrooms, if it's, you know, it's like in the city or something where people actually do buy those. Yeah. And I have looked at up to small multifamily, two or three families for potential flips in areas where, you know, it's not unconsored.

common to have owner occupants there. So like I said, I do a whole wide range there. But for the most part, it's been two and three bedroom single families. Right on. Right on. Cool. And are they usually pretty, I mean, like nasty, ugly, you need to do a complete renovation? Yeah, pretty much.

There's some exceptions. I have I had one place. That was kind of funny. So I had put in a bit on this place. It was a HUD property. I put a bit on it without seeing it. I kind of do a lot of analysis, desktop analysis, just kind of putting in worst case scenarios and I'll throw in some offers based on that.

So they accepted my offer, which I was surprised about. I usually just hoped to see like a counteroffer. So I like rushed down to go look at the place and I had something like, I want to say I had like a $75,000 budget on the place. And I walked in the front door and then I literally took a step back to look at the house number to make sure I was in the right house because it was so not that bad. which was kind of funny because if you anybody who knows about so as I said I'm an agent and I'm a HUD registered agent so like basically my office has a set of keys that work with all the HUD locks for the places all around the state so like I had a key to the front door yet I still was so shocked that I took a step back to see if I was in the right place nice okay so you know on on show 38 with Travis Daggett we talked a lot about a HUD home and making offers on them.

And it's kind of cool that you're a HUD agent. So we kind of get to see what it's like from your perspective as well. Maybe you could dig in a little bit on the HUD process really, really quickly for those who may not have listened and may be unfamiliar. Just like, what's HUD? How does it get listed? And how would you make an offer on a HUD home site? Where would you find these things? So being that I am an agent and my brokerage is registered with HUD, it's very easy to deal with those properties because if you want to put in an offer, you have to put it in through a HUD registered agent.

So, you know, if you're not an agent or if you're an agent and your brokerage isn't registered with HUD, then you have that extra step to go through. And then all the stuff that we were just talking about as far as like knowing the other agents by, you know, putting in too low offers and that sort of thing. since I don't have that hang up. If you can put in your own offers, it's like ridiculously easy. It's like a, essentially it's just a one-page form that you have to fill out for the property. You can't put in any particular contingencies. You just have to fill out the basic information. I can put in a HUD offer in less than two minutes once I do the evaluation.

That's cool. And I do that a lot and put in a lot of them. And I put in ridiculously low offers that I don't expect to ever get, accepted. I'm just hoping to get like a counteroffer that's like within the realm of possibility. So I'm assuming you don't go look at these properties first then, right? I don't think I've ever looked at a HUD property before I put an offer in it. Okay. Is there a danger, you know, like putting in too many lowball offers for an agent, they're going to say, you know, go away, stop making these offers. Is there a danger that

HUD stops responding to you because you're that annoying guy who always puts in these awful low ball offers. It seems for the most part to be very automated and it doesn't seem to matter. There was one time I got an email from somebody at one of the asset management companies asking if I knew how to use the system because my offer was so low. I think I offered like 1,200 bucks on a place that was listed at 120,000. You really do low ball offers. Okay.

Well, basically, if I spend the time to, well, for a HUD, this is not. This is not the same on every particular place. But like I said, yeah, since I don't see any ramifications, if I bother putting in, if I do the evaluation, I'm putting in an offer. Yeah. No matter how stupid it is. Well, I think that's an awesome strategy to do. Yeah.

I mean, if you're going to spend the time anyway and you find out what that final number is that you should offer, why not throw it in at least? You never know what might happen. Yeah. Well, what's funny with that. So like, I will resubmit offers every once in a while. Like, you know, even if I only, what I generally do is like I increment it up a dollar, just so like I know they're looking at my most recent offer or something.

That is if I don't have any other reason to change it. So for this particular one, after they said that I didn't put in more offers on it, but they kept sending me counter offers for weeks. So I'm like, well, you know what, if you're going to keep countering my $1,200 offer, then I don't really feel bad about putting it in. So you're putting in, say it's $100,000, you put an offer at $12. say 10,000, right? Say you made a generous offer, knowing you.

No, I'm just kidding. So you put in this $10,000 offer. They counter you at 95, and you counter them at 10,001, and they counter you at what? Well, so, like I said, it's a pretty automated system. What they typically do is they just send out an email

to basically anybody who put in an offer being like, you know, we have decided this is the, minimum net offer that HUD is willing to accept on this, and they basically just send it to everybody, and that's sort of what I'm looking. So if you put in an offer, you'll get that email generally, so that's sort of what I'm looking at. So, you know, like, yeah, I don't remember exactly what you said, but, you know, say that place is listed at 100,000, you know, I put in a $10,000 offer, they come back and say, you know, not that, not as low as you, or as high as

you have, but say they come back at like 70. So then I was like, okay, well, maybe if I go out there, drive the neighborhood to see if I can, you know, if my AARV might be on the low side, because I try to be conservative with that until I look at the property, obviously. And maybe I can do my rehab, like the place I was talking about where, you know, I thought I was in the wrong house. Like, you know, my rehab budget dropped $50,000 as soon as I walked in the front door. So, like, you know, if I can tighten up the budget, maybe this will be workable. So that's kind of where, you know, that's when I'll start putting in time.

Is that 70 that they come back to at, is that hard and firm? or is there a negotiation? No, they'll keep coming down. So how does that work? I mean, so if you counter again, do you get another standard? It's not really a counter. It's more kind of like you can resubmit an offer. Like, it's not like when you deal with an agent,

you can verbally go back and forth and then just, you know, update the contract. It's like you just keep, you would submit a new offer. If you, you know, if you wanted to get the property at the price that they said, you would just make sure that it netted out to the, and it's a net amount. So, like, they take a new account the commissions and closing cost credits and stuff like that.

So if you put in the offer so it nets out to the amount they want, unless somebody else goes higher than that, you're pretty much guaranteed to get it. I did that one time that I put in exactly what they asked for on the counter because they had just dropped the price and they said they would accept something like $10,000 under what the new price was. And it was pretty much like what my mayo was. Well, tell me about the counter then.

Well, I'm going to call it a counter, right? the second offer, third offer. 15th offer. Yeah. Well, when do you do it? So generally I have it sort of on a weekly, every other weekly kind of cycle where if I already have, so like I said, unless I have some other reason to change my offer, I just sort of incremented up a buck just so like I know there, because actually on that very first property

I was talking about, I adjusted my offer a couple different times or I guess once. and they actually accepted an earlier offer than the most current one, which kind of got me, I was indignant about that, but then I went and drove, I looked at the property and it's like, okay,

well, it still works, even though this is like three grand more than what I most recently asked for. So instead of rocking the boat, I just did it. But so now what I do is I make sure I put in my rock bottom offer first,

and then I'll increment up from there just to make sure, you know, that kind of thing doesn't happen again. And I'm assuming that's worked. Yeah. Okay, so you've closed it. Because always my most recent offer is always my highest now. So that's the one that they're evaluating.

You know, even if it is only higher by a dollar, it's still the highest. Yeah, that makes sense. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.

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Go to mine.com slash show me to see how mine performance. forms and get your first month free, which is much cheaper than learning the hard way. Let's move on. What is the like the cheapest home you've ever bought? How low can you go on these things? Well, so locally in Massachusetts, it would have been that very first property I was talking about that was like around 34,000. I actually bought another one, my most recent one a few months ago, was also in that same 30 grand range, which like said, is ridiculously low in Massachusetts. both of those needed much more work than the cost of the work was much more than the price of the house. But so as I mentioned, I do some out-of-state rentals.

So in that market, things are much, much, much cheap. Like even the very nice houses don't cost me that much. The cheapest house I bought ever was $2,000. I bought that at a tax sale in Pennsylvania. Wow. Okay, so $2,000, and that came totally without any kind of secondary, liens or anything? Yeah, free and clear. Okay, okay. And what was that house actually worth?

It's probably worth somewhere in the low to mid-20s. Okay, I got you. Like I said, it's a much cheaper market out there. And also this place was inhabited when I bought it. So, you know, I'm actually in the process of trying to figure out what's going on with the people. They're actually tenants who don't, I guess, have a current lease. So we're trying to see if they want to stay, if they want to go, if we're going to have to evict them. So that's a little bit up in the air. But, you know, obviously the place is fully inhabitable if people are already living there. I'm sure it needs some work, but, you know, kind of hoping to get them to stay

for a slightly below market rent, so I don't have to do turnover costs. Did you buy that site unseen again, I'm guessing? We, well, obviously, we couldn't get inside. We did go around the outside and, you know, for the most part, the exterior was in pretty good shape. It was hard to tell like, you know, didn't even want to appear in the windows once it was clear people lived there. You know, you can at least do, you can at least look in the windows of places that are vacant. But, you know, we saw people who were living there.

We saw, you know, the electric meter moving and stuff like that. So we're like, okay, we're not going to, let's just get out here before people call all the cops for trespassing. So you actually, did you actually go to the courthouse steps to buy that then? That's not exactly how it works. But, yeah, more or less, it was an, you know, an auction hall at the, at the municipal building.

But yes. Same kind of thing. Okay, well. The same idea. Yeah. So then what are these properties in this area looking like, you know, price-wise or, you know, condition like what are you looking for down in Pennsylvania, you said? Yeah, it's in western Pennsylvania right near Ohio. Okay.

Like well-west to Pittsburgh. Okay. So, yeah, what do they look like down there? You know, they look too different from what I have up here. They're, you know, an older housing stock, not super old. It's more like, you know, World War II, World War I, World War II, which, you know, given that, given that. I'm from New England, that's like new construction. Yeah, nice.

But, you know, they're pretty typical houses. You know, there's, you know, like every other place, you can have your really nice houses. You can have your really dumpy ones. But, you know, for the most part, I'm looking at there's some two-bedroom places, but mostly you're kind of like three, one and a half, three-two type places, like pretty good square footage. What kind of price? Yeah, what kind of price range are you seen?

So the stuff that I'm looking at because obviously I'm not looking at the higher end stuff for rentals these places like in really good fully rehabting condition are probably like you know in the 30s and what are you picking them up for? So I've gotten stuff anywhere

from that $2,000 house to the most I've paid for a place so far was a fully rehab duplex for 37.5 and what are those renting for? The duplex I'm getting total rent of about about a thousand.

Okay, yeah, that's great. Yeah, it's not bad. Yeah, and then I had another place. So this was a place I bought right off of MLS. It was moving, more or less moving ready. Did you have to do a little bit of work to it, but it only cost me 17 and renting that for 575. Okay, okay, that's cool.

Did have to put a little bit of work in. So I'm probably all in before getting rent for, still under 20, like, you know, 18 and a half, 19. That's still pretty good. Yeah. It's still pretty good. All right, Sean, so let's talk about mistakes.

You know, we all make them, you know, it's funny. I get these investors who will email me and say, you know, Josh, I have to close my profile because I talked about a mistake I made and now nobody's going to take me seriously. And I'm like, listen, you know, if you're a real real estate investor, you've made mistakes. Nobody is going to give you any less credit because you've made mistakes. They'll treat you differently if you're a liar. I mean, I closed a profile of somebody today who was one of those, hey, I've got a billion dollars in real estate available.

And at the same time, he's asking for money to help him flip a house. I don't know. That doesn't really work so well together. Yeah, so don't do that, by the way, for anyone listening. Don't... Click tip. That was good. That was good.

I might fire Brandon and bring you in. Hey, okay. You can take it. Yeah, but you're totally right. It's all about honesty. You don't have to be an expert in everything, and, like, you know, people make mistakes. They might say something wrong.

But, like, yeah, you have to be upfront and honest and try to be above border and everything. Yeah, so let's talk about mistakes. What mistakes really stand out to you that you've experienced in your career last far? Well, one of my funniest mistakes is, so going back to that very first property that I talked about that I went to try to wholesale

and eventually rehabbed. So when I was doing my evaluation, I had in my head the wrong place where the house was. So like I said, I hadn't seen the house. I was just doing an online evaluation, desktop rehab analysis based on the size of the house and doing comps in MLS, which doesn't necessarily tell you where the house.

houses. So I went to go put in my offer and like I had in my head that it was probably, you know, about 40 miles south of Boston. I put it in Google Maps and it turned out to be 90 miles west. So I had, so I put in this offer on this house and I had absolutely no idea where it was. Nice. That's a pretty good mistake. Okay, that's a good one. So, so, know where your properties are when you're making offers. That's a good, uh, that helps. I haven't I haven't been that far off since. Okay. Okay.

Well, there's a good one. You got any others? You know, there's, I mean, like said, everybody makes lots of mistakes. I don't. I'm perfect, actually. Oh, okay. Sorry. All right.

Keep going. Around here, we have a fair number of places that are still on septic systems. And we have pretty tight regulations around that as well. So I purchase a property. that had, it's called a Title V that's the name of the law that you have to have this past inspection to be able to

resell a house unless you're a bank. Everybody else has to have a pass when bank doesn't. So I bought... Yeah. So I did buy one of my HUD properties had this past report.

So I thought it was all set, didn't have to worry about septic and I didn't do any follow-up. So you can go to the Board of Health and check the record and stuff like that. I didn't bother doing that because I had this past report. That's generally all you need.

And when I went to resell it, the buyer's agent was looking up some other stuff on the house, just looking for some old permits and stuff. Because, like I said, it was a bank-owned property, so I disclosed that that's what it was. And I didn't have a good history on, like, say, like, how old the roof was because we didn't do the roof. So she was looking for some, like, you know, old permits to try to get a gleam a better idea of that. And she noticed, quote, unquote, something seemed funny. with the septic reports and eventually

we had to dig it up and get it re-examined and the Board of Health started making other things thank God that it was in good enough shape we didn't have to replace it but I did have to do some repair work on it and that was about a $10,000 overage that I wasn't expecting because

I just had this report and I didn't verify stuff so the old trusted but verify nice nice yeah that could have been a dirty problem Hey, before we go on to the end of the show, I want to ask you about something that you kind of teased me on the email about, and that was a property you bought. You said that was that you're not afraid of buying any type of property. And you said that's crazy one.

I look at, you know, I don't get all hung up like a lot of people do on buying, you know, nice houses and nice areas. Like, you know, whatever. So this one particular place I was telling you about, um, literally across the street was a sewer pumping station. In the backyard were train tracks. And I mean like serious train tracks and right in the backyard, like not even 100 yards away from the back of the house. And it was also in the flight path of the municipal airport for the city next door.

And it's also probably is in a flood zone now. It wasn't at the time with the new maps. It wouldn't be shocked if it was because like down the street was. and it also bordered a town Hey, since we're going to, since we like banging on towns, Lawrence Massachusetts, one of the crappiest cities in all the Massachusetts. It was,

it bordered that like literally. So there was a sewer station and then across the river was Lawrence. So being next to like one of the worst cities in the entire state was like only the fourth or fifth worst thing going for this house. Wow. Wow. So what did you do with this thing? I renovated and I flipped it.

Okay. Okay. So if you, my thing is like, you know, like I said, I look at the, I look at the prices. So this was actually, this was a funny story. So I was looking at auction.com and it was, you know, probably like midnight, one in the morning kind of thing. And there was an auction that was ending the next day. So, you know, even if I had this unhealthy obsession of looking at properties beforehand,

I wouldn't have had a chance with this particular one. But it was going at a ridiculously low price. So this, it's the town is North Andover, which has pretty good school. school, pretty high prices. Like, based on the size of this house, I was figuring it was a 250K ARV. And the opening bid was like 62,000-ish. This is the one with the with the tracks behind it. Exactly that one.

Okay. So basically I put a bid on it being like, it's never going to work. And then like the next day I get the email being like, hey, you were the high bidder. What did you bid? It's 62. Oh, you bid 62. Yeah, I just put in the minimum bid. So then I was like, oh, you know, so obviously I'm just like,

super duper excited because well at first well that's not true because whenever I have an offer but I always get scared it's like what did I miss which obviously in this particular case I miss some stuff yeah a little due diligence right yeah so immediately you know went out there got my contractor to come look at it

I had um as I said I do a sight unseen budget so I had a very high budget on the place just assuming that was probably the issue is that it needed tons and tons and tons of work so I got out to the place and essentially my ARV dropped 100 grand as soon as I pulled up to the house. And we went inside, but then it was actually in way better condition than we had expected. So then I was talking with the contractor, it's like, okay, you know, this is a lipstick on the pig.

What can we do to make everything right without having to, you know, there's certain levels of work you can do before you have to start pulling permits and update everything to modern code. Like we checked out all the plumbing and all the wiring and stuff. You know, there was no knob and two wiring. It had, you know, a circuit breakers, not a fuse box, all that kind of stuff. So like, you know, everything was working, okay. Like, obviously, if there were major problems like that, we would have had issues. But, like, you know, we didn't want to have to bring everything up to code by ripping down all the walls and stuff. Because it also had a pretty bad floor plan.

So we had to, you know, work with what we could without having to spend too much money. So we were able to come up with a reasonable budget, keeping it pretty low. And then, you know, basically was able to resell it, like I said, about $100,000 under what most other places in that town were going for. Like, literally the places that were my direct. competition when I listed it were like the uninhabitable ario's and short sales that were still on the market. Nice. All right.

So what were the final numbers? You paid 62. You put how much in? It was roughly like in the 30 range. All right. You're at 92 and we sold it for? 160. 159.

Oh, that's not bad. In the end, it netted out. So that was one of the properties I listed myself because I didn't think I needed an experience agent to just underpriced by $100. grand. Yeah. So including like the my portion of the commission, I made a little over 33,000 on it. Wow.

Well, that's, that's awesome. That's a good deal. So that kind of shows you that buying a property with a sewer plant in the back, railroad tracks in the front or vice versa, next to crappy. What is it? Lawrence. Lawrence, Massachusetts. I grew up in Lawrence, New York.

So, you know. But yeah, all right. Well, the people of Detroit are happy to hear this interview. And yeah, so you could still make money. Yeah, I mean, so, you know, my key to buying these troubled, let's call them properties, is that you just have to buy them. You have to buy them, like any real say, you have to buy them right. But, like, you know, in this case, you have to take all that kind of stuff into account.

You know, like I said, these places, the uninhabitable REOs were selling for not much less. than what I had my resale as because of these, you know, locational issues. So if I paid, you know, if I paid $100 plus $1,000 for the house, which actually it had been on MLS at 110. So, like, you know,

anybody could have bought it for that price, which was actually the cheapest place in the town at that time. Gotcha. But, like, wouldn't have made any money. I actually would have lost money on it at that price. Yeah, yeah, it makes sense. All right, so let's move on to our...

It's time for the fire round. The fire round. Fire round. These questions come from the Bigger Pockets forums, and we shout them out quickly at you, and you shout us some quick answers back. First question in today's fire round is, my handyman is ripping me off.

What do you do? So obviously we're going to go and fire them, but how do we avoid this situation? I mean, you know, it's tough. I would say one of the hardest things to do in real estate is find good, reliable contractors down to like handymen.

I have been pretty lucky and I have a really, really good contractor that I try to do as much work with as I can because he works well with me, communicates good and I think his prices are good. You know, he pretty much always comes in below what I have is my own estimates. Now I try to be pretty conservative,

so, you know, I kind of expect him to come in under, but like, you know, it's never been any kind of issue. I haven't, I have, you know, knock on wood, haven't had price creep yet, that sort of thing. To be honest, I don't have a good handyman because I haven't ever been able to find one. So I actually use the contractor on stuff that I probably should use a handyman on and probably am paying a little bit more because of that. But, you know, I actually have somebody who can do the work because I haven't just, I have not been able to find a good one. Well, and that himself is the tip right there. You know, if you have to pay more money, you know, pay more money and find somebody that's reliable.

and that can do it. Very true. Cool. All right. Next question. What color should you paint a kitchen in a flip? Same color as the rest of the house or something different? I've gone a couple different ways.

I have gone like, you know, not super bold, but like, you know, different color scheme in the kitchens. And I would say sometimes it's worked out for me. Other times people have talked about how, like, oh, you know, we don't like this color and we might want to repaint it. And they try to use that as leverage. It's like, well, you know, sorry you don't like it. I'm not going to. to knock 10 grand off the price of the house because you want to repaint the kitchen that I just painted. So we've actually gone more towards using the fairly neutral colors that we're using

throughout the rest of the house there as well. All right. What's the best way to get started with no money? If you don't have any money, I've found if you can get a good deal, I don't have any trouble getting a hard money lender to finance pretty much all of it if you have enough meat in it. Okay, good. What's the best type of property to buy first? to buy first well I guess it depends on what you're looking to do like I said I actually liked buying the condos for rentals

because like I said it makes it a little bit easier getting your feet with with property management right on right on well we're going to cut this one a little bit short because I know you're a little short on time let's move to our famous that was all Sean

that was all Sean first question is what is your favorite real estate book So I'm going to be cliche like everybody else and say that rich dad, poor dad was a big one. But actually, I kind of liked a few of the follow-up books, like the cash flow quadrant and the guide to investing with some pretty good ones. I also like Nothing Down to the Robert Allen kind of classic. I don't think a lot of that stuff is necessarily applicable anymore just because a lot of laws have changed in last like 30 or 40 years, but it's still a good kind of book to get your mindset. Yeah, I agree.

All right, what's your favorite non-real estate business book? So again, going to be cliche. E myth. Okay. I also like the Seven Habits of Highly Effective People, which I know somebody mentioned on one of the recent podcast. That's a great one. That's a great way just to live your entire life, not just your business. There you go.

And another one that I've liked recently is called Getting Things Done by David Allen. I love that book. Good stuff. I love that. Yeah. Awesome. Cool. Cool.

Good. Yeah, we'll link to those in the show notes. Yeah. All right. Hobbies. I beat you to it. Well, I have two small daughters, so that monopolizes most of my time. But, you know, I do love that, like, spending time with my family and playing with my kids and stuff.

That really is my favorite thing. You know, personally, I like sports, watching sports as part of my life, but I enjoy that. Go Red Sox, World Series. Actually, you've got to be going to Game Six of the World Series tonight, so hopefully it's a win and they wrap it up. Yeah, we'll see. This comes out in a few weeks, so we'll... Yeah, a couple weeks. people will look back into their laugh right now or yeah yeah sure you on all right final question what do you believe sets apart the successful investors from those who end up giving up and failing

i think that's exactly it is just sticking with it yeah if you you know you do see people like in the forms talk about oh i sent out this you know i sent out 500 letters and i didn't even get like one good lead out of it it's like you know you just got to keep following up you just got to keep making offers i mean i made probably 600 offers before i got that first like wholesale slash flip property under contract. My hit rate is terrible. Now I told you I put in a lot of low offers, but my hit rate is pretty low on that.

So I've put out thousands and thousands of offers to buy dozens of properties. That's cool. You know, I actually, yeah. So I actually always say there's two kinds of real estate investors. Those that make a ton of money, and those will give up too soon. Yep.

That's good. That's good. I like that quote. That's a tweetable topic. We'll add it in it. And I know I definitely couldn't do it, do it your way, man. I wouldn't have the fortitude to put in thousands of offers. That's tough. It's really hard. You've got to have a pretty thick skin because you definitely get people mad at you and you definitely, you know, get a lot of rejection.

And like I said, some of the properties I buy that, you know, the sewer play, play. Shockingly, you know, there were issues that came up and, you know, had to deal with them. So, you know, it is definitely easier to just buy the 3-2-1800 square foot with an attached garage in a nice neighborhood type places. but you know. Different strokes for different folks. Exactly. For sure, for sure. All right, Sean, well, listen, we want to thank you a lot for being on the show. We definitely appreciate it.

And we look forward to seeing you back on the site. Yeah, definitely. Thanks a lot, guys. I really appreciate it. And one last quick tip. Anybody who is listening to this who is not a Bigger Pockets member, go to the site. It is an awesome site. And it's going to have all the information that you need to learn about to get started

in real estate invest in. Josh and Brandon did not ask me to do this. I didn't even tell him I was going to do this. Totally unsolicited. Nice. Little,

little strange. Oh, thank you very much. Kind of stock range. I love you guys. Thank you very much. Appreciate it, man. Well, thanks so much. It's been good.

Thank you guys. We'll talk you later. All right. So that was Sean Riley. Lots of, lots of cool stuff in that show. We jumped around a little bit, but there's a lot

of fascinating little tidbits. Definitely hope you enjoyed it. And we appreciate you listening to the show, guys. Make sure you connect with Sean over on Bigger Pockets too. Send a call on your quest and jump into the show notes and ask questions.

Yeah, yeah. Sean's pretty active on the site. He's active on the forums. Very active on our member blog area as well, so be sure to interact. Otherwise, as always, thank you. Check us out on Facebook at facebook.com slash bigger pockets. Twitter. Twitter.com slash bigger pockets. We're on Gplus,

wherever else, and come hang out with us on bigger pockets as Sean suggested. And that's about it. Brandon, I appreciate having you as a host. You're really great to work with, man. Even if I can't say Massachusetts. Oh, you did it. Nicely done, my friend. Why don't you take it out this time? Seriously. This time? Seriously.

This is Brandon. signing up. 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. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. Damn it, Newman. I couldn't even get the intro right.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset,

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