Epic Real Estate Investing - $42K a Month in Less than a Year with Brad Donley | Episode 75

Episode Date: November 14, 2013

Epic Pro Academy member, Brad Donley, has successfully made the transition from "day job" to full-time real estate investor in less than a year. He's averaging $42,000 a month wholesaling properties, and now he's seller financing deals to fix n' flippers. Yep, he's now "hard lending" money to other real estate investors. It's pretty unbelievable, really. But, it is indeed happening. Listen in as Matt grills him with question after question to discover how he's doing it, and how he's done it so fast. The doors of the Epic Pro Academy will close to new members on November 17th at midnight. Join now as a Platinum Annual Member and come January 1, 2014... your membership will be automatically converted to a lifetime membership. Click here to save 50% off the 2014 membership fee. To your success... Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey there, Matt here. Now, I know this episode. It's coming out a little early as, you know, I just couldn't wait to share this one with you. And if you knew it was coming out, if you knew what was in it, you, I guarantee you wouldn't have wanted to wait either. So you're going to be happy that it's coming out now. And you'll understand what I'm talking about in just a minute. Also, if you have yet to listen to the last two episodes, number 73 with Epic Pro Academy member Jess Milner and number 74 with fellow Academy member Brad Weber, make sure that you go back and download and listen to those two.

And here's why I think those two episodes, along with today's episode, represent three of the more inspiring episodes that I've ever released. More importantly, though, I think each of them are loaded with valuable insight and action steps that if you're having trouble getting started, if you're having trouble getting your business off the ground, or if your business just isn't working as well as you want it to, what these three real estate investors share could be the very thing, I think, that really, could push your business over the top. Oh, and this will be the last show before I close the doors of the Epic Pro Academy over the holidays.

The doors, they are closing to new members on Sunday, November 17th at midnight. And then I'm going to reopen in January right after I finish all of my revisions and additions. I can't wait to show it to you. It's going to be awesome. But join now at 50% off the regular price. It's 50% off the regular price

of the annual membership. And then, effective January 1st, your membership will be automatically converted to a lifetime membership. And so that goes for for all current members. And that goes for anyone that joins before November 17th. If you're an annual member, a platinum member, you will be grandfathered in as a lifetime member under the new terms. Okay.

So go to Epicproacademy.com and become a member right away. Go do it right now. And that's it. Okay. That's it. My last promotion, that was my last promotion for a while for the year at least. It's all nuts and bolts from here on out, nothing but meet.

But take advantage of this opportunity. and become a member today. It's a 50% savings. And then you'll get to learn from and network with these guys that you're going to hear on this today's show in the last two episodes. They will be your fellow academy members. So that's it. Enjoy the show. Broadcasting from Terrio Studios in Glendale, California.

It's time for Epic Real Estate Investing with Matt Terrio. Yeah. Hello. Hello. And welcome. Welcome. Welcome to another episode of Epic Real Estate Investing. I got a great episode for you today, a very special episode. And it was actually inspired by a text message that I received last week. The text message it read $42,000 a month in wholesaling. And I'm hard money loaning with 20% return on my money. Thanks again for the coaching. And I was like, wow, all right. And I always like to receive those text messages. I like to know when my students, the Academy members are doing really well, but that one was one of the bigger ones that I've ever received. And that text message, it comes from Epic Pro Academy member, Brad Donnelly, of which you might

remember him when I interviewed him back on episode number 53, which pretty much blew everybody's mind. You know, he shared his story of how in less than 60 days, his first 60 days in the business, he made $50,000 wholesaling and how he acquired two buy and hold properties while he was at it. It was a very popular episode, got a lot of feedback, and it's, you know, his results, they're certainly not the norm, not at all. But they definitely happened. And so if you didn't catch that episode, go back to number 53 and give it a listen. He shares his methods very graciously.

He holds nothing back. Got a great heart. He's happy to help just about anyone that asks. And, you know, during that episode, he even came up with an idea that I use today in my business. It was a new idea that I never thought of. You know, in some respects, the student actually be. became the teacher in that episode. It was a very, it was very rewarding for me to hear just how his business was growing so fast and the initiative that he's been taking, how resourceful he is.

And, you know, those are very much integral parts of being successful at this. And given the, the text that I received last week, it appears it's continuing to grow his business and, and it's taking on a new look as well. So I immediately sent him a text back asking him to come on the show and share with us what he's now doing. So I haven't talked to him yet. I have no idea exactly what he's doing other than what I share with you on the text. So I'm going to be hearing all of this the same time that you are. And then, you know, when he agreed to come on the show, he actually signed off with, I have another ninja trick you can talk about on your podcast. So I can't wait to hear about that either. So let's get to the meat of the show. Without further to do, I welcome back Mr. Brad Donnelly.

Brad, welcome back to Epic Real Estate Investing. Hey, what's up? Yeah, that's how you do. That's how you live in now. Yeah, I'm good. I got a, I got a, I'm at one of my rental properties, got an inspection of day, so I'm just, she might hear some echoing. That's the only reason. Got it. Okay.

Things are good. Cardinals lost. Yeah. I wish they would have lost to the better team, but, you know, sorry to hear about that, dude. I know that's a big deal in your city. But, God, I was crushed myself when the, when they nix the Dodgers out. Anyway, glad you could make it, Big Baller. I have no questions prepared or bullet points to discuss other than just what I mentioned earlier as I opened up the show.

So why don't you leave off from where you were after the last time you were on the show and bring us up to date, up to where you are today? Okay, so I guess that was May or June. I finalized the sale of my cleaning company, about two and a half. No, probably in middle of September. Okay. And I've been wholesaling. I mean, I've been wholesaling. So I think in September, I did 16 a month, 16.

October, I think I did, October, I think I did 16 again. And then this month, actually, I sent that text at what, 42. It's actually 56 now because I got... I got another one on her contract this morning. Dude. And I got one on Monday. So we're trying to do two a week. Mm-hmm.

Mm-hmm. Got it. Okay, so let's just hold up for a second. For those of you that have no idea who Brad is, he owned a cleaning business. He did the corporate cleaning, corporate offices, and went in and cleaned. And when he found me, he didn't really, wasn't too crazy about that business. And he wanted to go out and become a real estate investor. and that's exactly what he's done.

And he's made that entire transition from where he was kind of holding both down. He's holding his business down and holding down the wholesaling. But he's making so much money in wholesaling that he decided to sell his business. So that's where he is right now. And you're hearing the kind of numbers that he's throwing out. And, you know, they're almost too difficult to believe. But I know he's doing it. And because through our website, Epicwholesalers.

We're actually buying a lot of them. So I know he's actually doing it. I know that we're paying him a lot of money, but we're not buying all of them. He's definitely found other outlets to wholesale his properties too. So I guess, Brad, let's just start with, how are you doing so many? What does your daily activities look like? How are you generating your leads? How is this working?

What does a day look like for Brad? The, in the Academy, the Epicrow Academy, you teach you the Yellow Letters and the Bandit sign. and networking. That's my three major ones. I started out writing 20 letters a day, you know, back in March when I started the academy and the coaching. And now we're, after we, you know, you reinvest back in your business, we're sending over

3,000 mailers a month now. Wow. We're putting out at least 100 bandit signs a week. Mm-hmm. And we go to, I teach, you know, these people that want to bird dogs for me to at least go to two RIA meetings a month. And so you have, and we have, of those three, which one do you think is generating the highest return on your time and your money? On the time and the money, it's probably the networking because, yeah, the networking, because, yeah, the networking, because. There's no, I mean, when you have relationships, there's no competition.

I mean, it's just like, hey, man, go look at this house, see what you can do for me. I haven't told anybody about it. The garage door, I got this house today. The garage door opener is on the sliding door of the back porch. Just let me know what you can pay. Okay, so who are you networking with that would give you that type of information? Fix and flippers. Buy and hold.

Buy and hold guys. So fellow real estate investors? Correct, exactly. Okay. You know, lenders are good, lenders are good people because they need to lend, money, hard money lenders. That's actually how I got into my ninja trick that we talk about. And other lenders, man, I mean, that's the networking,

and then I would say direct mail is the next most effective. because you're dealing directly with the homeowner. That's key, right? It's the most challenging because they don't speak your professional dialogue or your normal dialogue you have with other investors, but it's the most rewarding and you have most control when you're dealing directly with the people in the home. Super.

So fellow real estate investors, It's actually my favorite source as well. That's why I'm such a big proponent on networking. And I got to tell you, Brad, I'm surprised by your results, but then again, on the other side, I'm not surprised by your results because I do share that, you know, we teach the bandit signs, we teach the letters. I've coached you through all of that stuff.

And those are the fastest way to generate leads. But really, the best way to generate leads. And for long term, our building relationships and networking, and one thing I just want to acknowledge you for is during our coaching program, program during the very beginning, you started networking. You started building that. And it's reaped amazing rewards relatively quickly. So awesome on that.

I was going to ask you, oh, for your yellow letters, where, who are you sending those to? What lists? What demographics? I mean, currently right now we're sending to absentee owners in the rental areas. of St. Louis that had bought property between 2000. Now, if people are in St. Louis are listening to this, I mean, oh, well, more than the merrier.

There's plenty. From 2008 that have bought rental property from 2008 to 2010 or 11, because we know we know as them as a prospect to us that they have one paid cash, so there's no balance, because banks weren't lending on them then. Right. And two, they're absentee. So more than likely that they're out of the state or if they're in-state, they saw a great deal and now they're mismanaging it.

And so we're getting them to call in. And when they say, oh, it's rented, but I'd look to sell. They would tell us we would do another thing. We'd ask who the property management company is. They would tell us the property management. We would get on the horn of the phone. and call the property management, find out the scoop.

You know, what's going on with this property isn't in good shape? What kind of renter is in there? You know, if it's even a good prospect, and that just leads to another relationship because they know more owners and sellers and buyers. Right, right. So, and then we're also mailing to, I'm mailing to people that have a mortgage or a deed date,

1993 and prior previous and they have not changed that deed at all so there hasn't been a refinance there hasn't been a quick there hasn't been any change the deed of the title meaning a refinancer alone so I know that they haven't touched that they haven't touched that loan and that loan it's been paid down for 20 years so there's equity got it and I'm mailing to homes that are valued at 120,000 and more. So we have equity-rich properties that are absentee and non-affancy. That are people, oh, and they're older than, they're more than likely older than 58, 59. So they're downsizing.

They're not, they don't, their kids are gone. They don't want to live in a bigger house anymore. Right. Awesome. So those are two different groups, right, that you're sending to. Yeah, because in St. Louis, that 70, until they roll out the new lending, like that subprime they're talking about in 2014, the price range between like 75 and this in my opinion, in 75,000 and 120,000, there's just not a market for that right now because there's no loanability, no banks, you're not giving loans on that. When you say there's no market for that, there's nobody buying those homes right now in that range? Yeah, like rental properties, yeah, a permanent resident for fixing flippers.

You can't, it's hard to wholesale to those guys because there's no retail, the end buyer, the permanent resident, there's no really big bulk of buyers in that price range. And I might be wrong, I mean, but that's what I found so far. And I just use my data I only have, so. I love it. One thing I'm noticing right away, Brad, is that when we first met the only piece of real estate you would ever purchase was your primary residents. All of this was very foreign to you. And now you're really talking like a pro. I mean, you've really got your criteria defined and you know why you have that criteria. And you've based it around life events, which is why what causes people to become motivated sellers is life events. So

it's awesome. You've got the absentee owners that bought recently in the last three or four years. And your reasoning behind that is because they probably paid cash and there's probably, there's most definitely not a loan on there. So that creates a great offer. opportunity and also what I like about, and this is why I like investors, this is why I like absentee owners, and you're finding out the same thing as well, is that people think it's a good idea to get in real estate and they realize that it's more work than it actually is, and they want to get out of it. And that's not everybody, but there's a good number of people there that presents a good

enough opportunity for those that want to take this seriously like you have. So, awesome. And then I love the 1993 and before. Very specific. You know your market very well. How did you come to know your market very well? Or as good as you do? Trial and error.

Trial and air. You know, people telling you that it's not a good deal. You know, just, I mean, I was thinking about that on the way right before this interview. How, I mean, I just in the beginning, I just started mailing to everyone. And it essentially goes to trial and error. You just find out what is a lot of work or you find out what it doesn't take a lot of time and nobody's mailing it to people. And so when you start mailing to a certain group like this, I started mailing in 1993, these people were getting these letters and they were motivated and they hadn't got any sort of direct mail before. So I was like, shit, nobody's marketing these people.

Right. And they don't, more likely, these people have computers, but they don't have, you know, they don't go on and, you know, look for someone to buy their house quickly, like, you know, like these paper-click people. There's no, I'm not competing against Google because they're not a computer generation. They're, you know, there's a newspaper generation. They're the paper generation. So direct mail is even more effective with them than it is normally. Normally it's a 10 to 15%. It might be an 18 to 25% with that generation because they still love to check their mail.

Mm-hmm. Mm-hmm. Super. So when you say trial and error, that's something that can actually really scare people. What has been your worst experience with your errors? Oh, man. Monetarily, not that much because of we've built in, you know, on your inspection clauses. I mean, pretty much, if you know you're going to, if, you know you screwed up an offer within the first four or five days because the buyers or the lenders would tell me that's a bad deal.

You're like, oh, thank God I got that inspection period. Basically, rehabs, rehabbers. I mean, it's just, yeah, rehabbers. Okay. So I asked that question because a lot of people, especially when they're getting started, I mean, you haven't even doing this a whole year yet. So I would still consider you getting started. You just made a lot of progress. But people in your shoes that might be inspired by what you're saying right now,

that I know it just because I've talked to so many people, I've taught so many classes, I've coached so many people, I answer so many emails, people are so concerned about making those costly mistakes. And, you know, what you just said is you put it under contract, and because of your out clauses, you have three, four, five days, or within three or four or five days, you'll know if it's a good deal that you should proceed forward.

with or not. So you haven't had many costly mistakes in that sense, right? Right. Okay, so tell me more about the rehabbers. You know, the two places you're going to lose money in real estate is either through property management, a bad property manager or a bad rehabber. Bad property managers, you can usually correct the course rather quickly. The rehabbers, though, sometimes they get you in it, and it's too late. It can happen really quickly. So what have you done to protect yourself in that sense? from bad rehabbers. Pictures of everything. Pictures of everything.

Pictures of everything. Pictures of everything. I keep you repeating it. Okay, so how do pictures of everything? How does that serve you? So, so when we say, like, I would go to buy a property.

I would take pictures of everything. The wall, the air conditioning. So when the bid comes in, we're like, okay, this is on the bid. So halfway through a rehab, we would say this was done. The rehabber would say, oh, you know, this got done, but it was stolen or this. But we have a timestamp picture of it was there in this time. So when we're saying, so it just gets rid of the he said, she said.

And when you get into the, when you get into the rehab, when there's actually, you can't, possibly micro manage a rehab because, I mean, it's just so time-consuming, you have to rely on some sort of documentation. And the pictures is documentation. And it just, it just holds everybody accountable. So, um, okay. So what you're saying is, and one thing, this is a part of real estate actually is not discussed very frequently when, when a rehab job is going on,

whether you're going to fix and flip it or for you're fixing up to hold it yourself, building materials are expensive and building materials have some value to people and during the building process, that property, or during the rehab process, that property is vulnerable to people that recognize the value of your building materials. And this is nationally, this happens everywhere, particularly you hear about copper frequently, but it comes with AC units. It comes with, you know, if you leave your wood flooring the night before because you're going to put it in tomorrow, that becomes vulnerable. And houses under rehab typically are a little more easily accessible than a house that has someone living in it. So that's definitely something that you need to think about.

And what Brad is saying is, and this is something we've noticed in all of our markets. And even when we were doing fix and flips here, you know, two or three years ago in in Southern California, had the same issues. We had to secure the properties. And what Brad is saying is that your less than scrupulous rehabbers might say because they know the nature of the building materials being stolen. And they know that you know that. They see that as an easy opportunity to say, hey, the AC unit was stolen. We need another $1,200 to buy a new one. And what Brad does is he now goes through all of his properties, and he documents with photographs of everything that is there. Right?

Yes. It's so. And stress, if you get into that business, I mean, that, that, the rehab is the, is the most crucial time for you to be as a type of personality as you could ever be in the history of your life. Because it's, I mean, it's $1,200 pop is a lot. It's a big surprise. Right. especially when your rehab is like 10,000 bucks. I mean, $1,200, that's an extra 12%.

Correct. Yeah, that can certainly eat into the profits. Absolutely. Okay, so anything else there that you've done to say protect yourself from those errors? We've got, you have your escape clauses in the contracts. You take photographs with rehabbers. Anything else that you've done to protect yourself from losing. Risk management.

Okay. Man, that's a great question. I really, I'm not very good at thinking about risk because I'm so damn aggressive with things. I think one thing that is kind of built in to your risk management, it kind of inherently is there, is that this is what you do now. This is your full-time gig. Yes. People see you all the time.

They know you're watching. They know you're taking pictures. And I think just by being active in your investments in that sense, particularly in the beginning, during the acquisition process and the rehab process. I think that right there cuts risks down a little bit, don't you think? Yes, yes, because I'm putting it under, I think I had 30 properties under escrow, and on paper they looked absolutely great, and we went and toured them, and the fourth or fifth property in, I told the rehab and property manager, Bob,

I was like, I wouldn't even sell these fucking properties to my worst enemy. These are disgusting. And so, I just, yeah, I mean, that's a good way to do your diligence in the beginning. It's being active. Right. And that's exactly why we have project managers on the ground in each of our markets, because we have, and you happen to be our project manager there. And you're active there. That's good.

And I think that right there eliminates a lot of risk. Reduces it for sure. Let me ask you about, you know, you've got these very specific lists that you're mailing to. How are you generating your list? What's your source for your lists? On the absentee, we just generated list source. Pull absentee owners on list source is a good one. ListSource.com, right?

Yeah, and I have a real estate agent that I'm friends with that pulls some of my list off of MLS MLS, the MLS data. I think I talked about last time we looked at property manager websites and just look at vacant houses on rental property and you mail to them. You just go on the tax assessor and mail to them. I get a lot of, I'll be honest with you, I get a lot of information from MLS. If you know how to mine MLS and, you know, do your searches correctly in the, you know, in the tax database section, you'll never have to go anywhere else. I mean, you don't have to pay for searches anymore.

Right. And that just takes time to learn and, you know, working with your real estate agent 10 to 12 o'clock at night, you know, trying to figure out the searches. Right. Yep, you need access to the MLS. it eliminates a lot of the labor. It eliminates a lot of the expense. So you need a realtor on your team if you don't have a license or access yourself. Let me ask you for a real estate agent that you found that works with you on a regular base,

that will stay up with you until 10, 11, 12 o'clock at night to do this type of research. How did you go about finding your real estate agent? Well, he's part of our team here in St. Louis. Nick and Bob, their agents. Well, how did you meet them? How did you meet Nick and Bob originally? I think we went to the Hyatt to drink beers during the interviews. That's exactly how.

Well, I know how you introduced me to them. What I'm asking is, how did you find their names to even invite them? We just grabbed realtors and said, come on and have a beer. Real estate investment clubs. Okay, investment clubs. More networking at the clubs. Yes, sir. Got it.

And you tend to find your investor-friendly, real estate agents at investor clubs or else they wouldn't be there, right? Yeah, absolutely. And then, you know, real estate agents, there's a lot of real estate agents that when your students get into this, they start doing more and more deals. A lot of agents just keep their license because they don't want to pay a seller-side commission when they flip properties. So as long as you sell one or two deals, like I saw one to this real estate agent, and he's like,

yeah, I'll work with you to find out what you need to find out. Because, you know, they don't have the time to mine all this data and do all the wholesaling. They just, they don't, these guys don't care as long as they can make their spread on their deal. You can make $10,000 to $25,000 on a wholesale deal. I have one of them working on I might make $21,000 on. As long as he can buy it at what he needs to buy it at. Super. I mean, super.

So speaking of selling, I know we've purchased quite a few properties. We've also sent several of your properties through our buyers list, through Epic wholesalers. And we've actually, over this year, I think it could be defined as a boatload of properties that we've gotten from you. We've purchased from you. But I know you've sold probably two or three more boatloads to other people. How have you found your people to sell the properties to? LinkedIn. LinkedIn?

Yeah, I think we just became friends on LinkedIn. I had it's so funny. I got, I got an email from someone that says, hey, you're in a cleaning company. And I go, no, how do you know that? And he goes, I found you on LinkedIn. So I went on my LinkedIn page, and I changed my status to, you know, real estate and all this. And all these people started showing up, you know, how they do their be friends with them. Right.

And I found a guy in, I found, I found a couple buyers this month off of my LinkedIn page, and they just messaged me, and one guy bought a property. It was less than three weeks from finding them on LinkedIn. Because I changed my status, the real estate investor, wholesaler, and they've, direct mail, is when you start mailing out your, to your absentees, you're going to get a lot of LLCs. our business property owners that are going to call you and say, hey, I don't want to sell mine, but I want to buy. I buy in, you know, our zip code 63136.

I only buy three bedrooms with a brick front. That's about as narrow as you can get. And you just note that. So he's a buyer. Real estate clubs. Right. So normal stuff. That's the thing is.

Just stick with it long enough and be creative and I mean. Super. You know, I was just thinking about this. Actually, on this very drive-in this morning, I was listening to a marketing podcast, and it was actually on a venture capitalist. And they were talking about how people stand up in the audience, and they ask, you know,

how do I start a company if I don't have any venture capital? And then how do I attract venture capital if I don't. don't have a company. And a lot of questions like that. And I get a lot of those similar questions in real estate. And people are like, why or how, or how do I do this? How do I do that? And sometimes the answer is just, you work your ass off.

You hustle. Right? Work your dick into the dirt. Say that again? Sorry. Work your dick into the dirt. Thank you for the colorful commentary. My style, sorry.

No, I know it's your style. That's good. No, you're real, Brad, and that's what I appreciate. with your style comes hustle. It comes hard work. And it comes with learning something and implementing it. So, you know, you take the mail and you find your audience or your crowd or your, your, your, your targeted audience. And you mail to them and you do it over and over and over again.

And so let me ask you, like, when someone hits you up on LinkedIn, when someone gives you a phone call off of one of your marketing pieces, or someone calls you from a networking event. Do you direct everybody to your phone? Or do you send them to a website? Or how do you do that? As of like three weeks ago, I was sending them to my Google, but I have a – or a – Mike, I've taken on a partner to help with –

I mean, $3,000 to $3,000 phone calls. We're getting like $20 a day, $20.20 to $3,000. I mean $3,000 mailers a month. You get about 20 a day. Yeah, I mean, and that's just off the mailings. I mean, we have wholesalers that call us. We have, I mean, we're doing nine deals a month now. So we get a lot of calls.

We direct them everything to Google Voice because we're still in our newborn stage. So we like to talk to everybody as much as we can. I mean, so right now, talk to everybody as much as you can. I agree. I agree. I think you should do that as long as you possibly can until you have too many people, too many leads, too many deals that it actually cost you money to talk to everybody because you've got money making other places. But yeah, I totally agree. You should talk to everybody as long as you possibly can.

Go ahead. We do, after we talk to them, we get their email and we direct them to like a, one of your slash pages we use. I think it's, it's an epic website, epic pro website. Thank you, Brian. Epic real estate websites. I'm not very good with details. Epic realestate websites.com is what he's talking about.

But go ahead. We have a couple of those up. And we'll go, just go to there because it's a convenience thing for us. One, we know if they're motivated enough to work, they're going to go, take two minutes, go to a, splash page and fill out their data because the data goes directly into our software system and it saves us from typing in a computer, it saves us at two minutes and it shows us that they're actually motivated to make an impact.

Right. Like bird dog, I hate to word bird dogs. I just, yeah, bird dogs, they're bird dogs. There are people that find real estate for you. That's good. Right. Super. And we have, I mean, we have.

we have just a we send out an email every two weeks to our bird dogs I mean we try to add adding two a week so you know

so we'll send out an email to those guys saying we're looking for a a house in a zip code this that says I need it by Friday so it just comes

the law of people now I mean you just get people working for you off of a click of you know typing up emails and a click of a button Mm-hmm. Mm-hmm. Well, it didn't start out that way, though.

What's that? I said it didn't start out with a click of a button, is what I wanted to say. No, absolutely not. But it definitely gets to the point where you're driving that type of traffic and that type of conversation that it can be that way. But it doesn't start out that way. And, you know, I just didn't want to discredit what you've built because I know you've worked really hard. And you've, you know, you've been able to benefit from the fruits of your labor. Appreciate it.

So this text message says, you're making $42,000 a month in wholesaling, and now you're a hard money lender. Tell me what that's all about. Okay, so I, whenever you start making money and you're getting properties, I mean, you want to inevitably build cash flow, that's the goal. And so I buy a property, so I'll buy a property for, I'll buy it myself for $30,000, simple, $30,000.

I will buy it with cash and I will resell it to a fiction flipper for, let's say, 35. My deals are structured that they put 20% down of the 35, and then they have three points to get in. So that's whatever that is, those numbers, and then three points at the end of the loan. and then they're charged interest only for 1.5% a month for six months. And I am on the first deed of trust. So I'm basically the first lien holder on the loan. Okay. So on my original $30,000 investment, I know I'm getting at least 20% return

because I'm getting 20% down. I'm getting another 3% on the front end because of the loan origination. Right. I'm getting another 3% on the back end because of the loan closing, and I'm getting 1.5% a month for six months, so at least another 9%. So I'm making about a 34% return on my original $30,000, plus I'm getting at the end of the loan. I'm getting that $5,000 wholesale fee. Right, right.

So I don't know what that, maybe a 35% or 40% total return on your money. It's awesome. It's awesome. Yeah, annualized probably right about that. That's awesome. What that kind of shows is all the different profit centers inside of real estate. It's not just all about wholesaling. It's not just all about fixing and flipping. And it's not just all about buying and holding. There are other profit centers inside of real estate. Actually, they can be countless. They're really, you're only limited by your own creativity and brand you're a creative guy. So, awesome. I think you deserve everything that you're getting. What's this ninja trick you were going to tell me about that you were going to share on the podcast today?

Oh, that, shoot, what was it? I knew I sure wrote it down. The one was the first deed of trust and the two, I can't remember. I'm sorry. Ninja trick. Ninja trick. I know. I had it.

I had it in my head. I know, oh man, my brain goes so fast sometimes. I forget it. No, I know this. So give us another trick then, not that one. Give us a different one. Okay. When you're wholesale, I learned this a couple weeks ago,

when you're wholesale on a property and you have a lockbox on it for all these people to protect your deal from people going behind you, change your lockbox code every time you give it out. So you give out a code to someone to go, look at a property, after they look at it, obviously this is, hopefully with you're looking at the five and ten minute drive of the said property, go and change the lockbox number. So, you know, people are playing games on you?

I learned that the hard way when on a property that I actually own, well, more money out, a guy went and looked at it, and he, once again, contractors. He stole some, I think he did. I'm not, he stole some shit out of it, excuse me, and he wanted a lower price because he said stuff was stolen out of it. And I had pictures, you know, documenting, like when I originally walked through the house, and it was there, and then literally it was gone within three days. And I know that, so change your lockbox code.

Like it? Yeah, securing the house during our rehab is really an important one, especially in today's environments, today's economy. I'm surprised of what people will go through to get $6 in copper out of your house. But when they go and get that $6 of copper out of your house, they leave a mess too. So not only have to replace the copper, they leave a big mess behind. So definitely secure your property. Oh, I heard it.

What was it? Another kid bit. I told Mercedes about this for an extra small fee of, if you've got to be, if you've got to I'm in the Midwesters' basements, obviously. You just, if it's unfinished, paint your basement floor, paint your walls in your basement, you get a 50 to $75 extra a month in rent, and it'll rent so much faster. Really, how are you able to get more for it just from painting the walls on the floor? It just looks cleaner.

It looks like a finished look, whereas exposed concrete. You paint the concrete in the basement walls, you know, a 7. gloss white, and you speckled the concrete floor with that, you know, that epoxy paint and that speckle, you see in garages. And people, I mean, people like that, you know, finished look. And it only cost, like, $3 to $500 more depending on the size of your basement. Right. And then you recoup that in six or seven months, and then it's 100% profit after that.

Yes, sir. Super. Super. All right, dude. I'm getting ready to get on a plane here in just a few days. going to come out and see you in St. Louis. What day are you actually coming? I am.

I will be there on Tuesday, all day, Tuesday. All right. All right. So we'll be there bright and early Tuesday morning. And, you know, we'll go and run the neighborhood, check out everything. And then I'm sure we'll finish up the day with a nice steak and some beer, maybe. I know you don't like to drink, though, so. No, I don't like to drink at all.

Anyway, super, Brad. Thanks for coming on the show. Thanks for sharing. I'll see you soon. And then keep your business growing. So we've got something else to talk about in six months. Cool? Yeah, no problem, man.

All right, but. Okay, so that's it for another episode of Epic Real Estate Investing. Until next time, to your success, I'm Matt Terrio. And for Brad Donnelly, we are living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in Real Estate Investing, education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio.

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