Epic Real Estate Investing - An Epic COVID Chat with Josh Swanson | 994

Episode Date: April 20, 2020

In today’s episode, Matt is joined with Josh Swanson, Matt’s past client and a successful real estate investor. You will learn more about Josh’s background, how his business has changed since the virus outbreak, what potential risks Josh sees in the market, and many more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-Aase.com.

Here's Matt. Hey, Epic Investors. It is Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. All you got to do is this one thing, do this one thing one time, and that's shifting your focus from making mountains of cash to making streams of cash. If you do that, you are on your way and you've got everything set. You just need to back it up now with the Coralette Action. This is your first time here. Glad you found us and make yourself at home.

If you like what you hear, then, um, you're going. Make sure that you hit the subscribe button before you go. My voice doesn't always crack like that, so don't let that deter you. If this is not your first time here, welcome back. And thank you for sharing this with your friends and family. You're the absolute best for doing that. So thank you very much. Got a great guest joining us today.

I don't know why I didn't think about this before. And I always introduce our guests. Got a great guest for you today. But this one really is great. And he is a past client of mine and been working together for a really long time. I had a program a while back where people came on board and I partnered with them. And I brought in 10 people just as like a little pilot program. And nine of them crashed and burned.

But this one stuck with it and followed the instructions. And we closed several deals together. So I asked him, or I had hired him probably a couple years ago to come on board here at Epic and help me help other people. and he's still in the trenches. He's still doing business, and he's got a bunch of successful clients of his own now through Epic. And so I was just like, let's bring him on and get his ideas or take his temperature, basically, on what he's seeing in the market, because he's on the opposite coast of me. So let's just compare notes and see what we got with our clients and how things are going. So without further ado, please help me.

Welcome to the show, Mr. Josh Swanson. Josh, welcome to the show for the very first time. Thanks, Matt. Hello, everyone. I can't believe it's taking us for this long to even think about doing this. But this is Creative Acquisition April that I've committed the month to because we are in the shifting market. And as we were already talking before we started recording, how the creative offers are getting a lot more attention right now. And that's exactly how it plays out when the market kind of, when that pendulum swings back from the seller side, a little bit more to the buyer side.

And the seller's a little more contingent on, or not contingent. less resistant on those types of offers. Anyway, this is all about you today. Tell me where you're from, and so everyone else can learn and then what you're doing just before you got into real estate and what your business looks like today. Absolutely.

So I was born and raised in Los Angeles, California, and around 2010, you know, I was looking to, you know, just dive deeper, invest full-time in real estate. At the time, I was an airline pilot, and I had stumbled on that's podcast. I was really trying to get into some wholesale deals. For some reason, the idea of virtual wholesaling didn't really occur to me back then.

So I just made the move. I moved to Orlando. I had a bunch of friends there. And there's a bunch of deals there. I mean, Vegas and Orlando, I mean, I think a lot of people know that Connie hit super hard there back in 2007. And there was just so many condos to be had in wholesale. And so I got to Orlando. I met some people, got involved in a brokerage that's wholesaling.

And, you know, that's why I started doing. my first few deals were at that time we were buying contracting foreclosures off the MLS and then selling them to hedge funds and then eventually the hedge funds decided they had added enough and they kind of stopped buying for a while and then pretty soon the foreclosure market dried up and that was right around the time that Matt reached out and said hey you want to want to jump on board and do some virtual wholesaling for me and I'll send a million letters to your market and we'll crush out some deals and I was like oh my god you absolutely so we did that we you know got definitely like lot of deals, you know, over those a couple of years we did that. And it was a lot of fun and a lot of

calls and everything and a lot of, you know, closed deals and some good money. And so I was just doing that for a while. And then now taking more of an active role, you know, I'm doing my real estate business here and doing the coaching for you for the REI enforcement clients. And some of them are really starting to take off and do really well. And I'm still doing deals on my own. And I remember a few years ago you had done, I think it was like an epic intensive about strategies for the shifting market. But it was a different shifting market.

It was where the market was getting so hot. And, you know, every, you know, Tom Dick and Harry who wanted to buy, now that real estate seemed like a safe investment. You know, they were getting in. And, you know, there's so much white noise from all these other people, you know, who was just trying to. to get into the business and all that stuff. And, you know, those couple years were a lot harder, you know, the deals that we found,

we found bigger ones. You know, they were actually much bigger, but we had to, you know, figure out the very worst case scenarios for the sellers, you know, list tag and that type of things to find people who were in, you know, just super mode and, you know, basically just wanted to, you know, really just make the deal. So, we've been doing quite a few less deals last couple years, but they've been bigger. And then now it is really, you know, I mean, I feel bad for everyone this is affected. But it's been a real side of relief and maybe now we're coming to a more realistic market.

And, you know, I mean, I don't wish them as a sports on people, but also some people who needed to sell and, you know, should have probably sold a few months ago. You know, they were kind of sitting on their high horse and like they're like, oh, you know, everyone wants to buy my property. Why should I listen to you? or don't talk to me unless you can offer me at least what it's worth or more than my realtor can get me and hanging up and just, you know, they're just getting kind of cocky. So those people, you know, who are motivated and they probably should have been out of to sell their property. Now, you know, finally maybe they'll kind of get off their high horse and, you know, I've been really

seeing that. Or maybe these people I've just been encountering lately, have just been super nice people who, you know, from a different outlet or something. But it just really seems like I'm having a lot more genuine conversations and no one's calling me just to nag at me or, you know, act like their property's worth more than it is. I had one guy actually thought his house was worth more than is. And he was much older gentleman. I didn't want to say, hey, you know, like you're talking about pre-buyers pricing right now. You know, I didn't want to have that conversation with him. And so I sent him an

offer. I went, we'll see. I send them through option of every intent. And, you know, we'll see if that pans out. He's going to be in it for a while trying to unload this property because he hasn't quite came to terms of some facts yet. But everyone else has been super nice. It's been such a relief. It's like, wow, you know, we're getting back to the good old days it feels like. Even with the sellers, like the conversation and that whole mood has really changed. But with realtors, it's changed a lot too. Oh, yeah.

All of a sudden, no, they don't have five offers on day one of their listing. And now they kind of have to entertain us and really consider, well, if this is going to close and I'll still get my commission, maybe I will work with them. Yeah. Yeah. Absolutely, yeah. I haven't quite reached out to them much. I mean, as you know, my wife Patty, she's a realtor. And I've been, I've seen if she wants to go to start making some offers for me like that.

And, you know, so far, she's been kind of busy because she's actually been busier than ever with a few of the deals we had, you know, her regular listings. But a couple of them fell through or just kind of got put on pause, you know, kind of temporarily out market until everything's over. But, yeah, you know, like we have plans to definitely start trying to work with the. realtor some more. Right. Right. So I would say, I mean, maybe you just kind of answered it. Maybe there's some more detail you can go to or you can go a little bit deeper.

But how has the business change for you on the streets than just say the last four weeks? Well, it's, you know, a lot of the people, you know, I've never been the best at, you know, I've always tried. It's always been my first intention to give as many salary finance deals as possible, as many subject to's, but I've really, you know, I've always presented. the options and we've done some, you know, for sure, but mostly, you know, it's as easiest to get the people to accept to the lower cash offer and to do a wholesale. So, and very actively wholesaling and grinding and grinding. And I can't tell you just the way things have changed by,

you know, when I'm talking to people now and saying, hey, you know, quick cash, you know, I don't recommend doing that just because we're going to have to kind of go with worst case scenario because we don't know what the virus is going to do. But, you know, if you're willing to finance the house for a little while. I mean, I can get you what it was worth a few weeks ago, you know, if you want to, if you're willing to, you know, take your payment over some terms and a little, I was just to say rent to own, usually when I first approach them about that. Some people don't know what the subject to is or seller financing or they just don't quite understand. So I'm like, you know, if you do a little rent to own, you can get you all the money that you're hoping to get now, you know, just have to pay you on some installments. And then give the conversation going and the people have been just so much nicer.

They're like, oh, yeah, you know, tell me more. Wow, that sounds great, Josh. You put it in writing, and then one guy didn't get the offer to him back fast enough because I didn't really think it would probably end up being an idea because the property is a little bit more expensive. But he kept calling back, he was telling me, and he was, hey, Josh, I check my email, I didn't get anything yet. Check my email, I didn't get anything yet.

I was like, and this type of guy, you know, he would have never really considered it before, you know. Like, he would have been like, oh, no way, you know. So, yeah, it's, it's, it's, it's been. really good and it just seems like we're going to get a lot more seller financing now, which is what I've been trying to do for years. I like what you just said because there was a, I don't know, kind of a subtle suggestion that the market is being a bad guy. Like if you're willing to take it over some installments,

I can get you what it was worth probably a few weeks ago. Yeah. By saying getting you close to what it was worth a few weeks ago suggests that it's worth a lot less today without you actually saying it. Right? Yep. That was good. That's a good way to phrase it for sure.

What do you, do you deal with other wholesalers much? I have a lot of brands, but usually I found that their deals are, are not really as good. You know, as far as like joint venturing and stuff, it's like, I think that for the most part, you know, I can, I can found a deal better on my own if, you know, I have the connection with the seller. Right. I didn't know if you had like a little network of wholesalers and, you know,

You know, you're sitting water cooler if they're kind of comparing notes and what they're hearing, what they're seeing. Are they feeling the same stuff? Yeah, we send each other our deals. And if they, you know, they have a buyer and stuff. We always kind of cooperate and whatnot. But for the most part, I try to, I try that unincorporate because, you know, a lot of them want, you know, 50-50 split. And especially if I'm bringing the seller to the deal. But now that might change. Maybe now if they have the buyer, then then they're well worth their 50%. Right. So you anticipate what that just said, and I think you might be thinking what I'm thinking is it's going to be a little bit more difficult to get in and out of these things quickly, especially the out part. Yeah, but kind of the buzz from what everyone I've been talking to is there are some cash buyers. In fact, I, so you know, you figure some cash buyer that, you know, on your list that you're probably, it's probably going to go away for a while. Here's a perfect example. I had one of my buyers that I sent a house to, or he bought a house from me a couple years ago. I give this random text.

I think he mistook me for another, well, I know he did for another person. He's like, the rent payment is late. And now I was looking, because I barely remembered even who he was because he only bought one house for me. I was like, oh, oh, hey, Mark, how's it going? He's like, the rent payment is late. He just takes that back right away. And I was like, okay. I was like, who's rent payment?

He was like, yours. I was like, hey, Mark, this is actually Josh Swanson, and I sold you a short sale about two years ago, and I was a vacant house, and you can put some tenants in it. So, you know, I've never really been in a rental situation with you. Maybe you had the wrong person, and then immediately, you don't know if the iPhone and the little bubble started going, and he writes back right away.

Oh, yeah. Hey, you got anything else? So he's going through the problems where he's having tenants not being able to pay, but he's still looking for more. So I think what we should, you know, maybe, I mean, we can kind of expect that some buyers aren't going to still be buying. Some market can be able. Obviously, some of the people who only started buying when the market got super hot, kind of got to like to buy high and sell low, they're probably going to be out of it for a while. But this particular guy, he was kind of like a career type investor.

He was in it for the long haul and he stopped buying for the last couple of years because my deals, it costs too much. and he's back and he's ready to go. So, yeah, I mean, there's definitely some people who are going to be out of it. But what I've been telling all my students is now's the time to refresh your list. You know, there's going to be some people, you know, just follow up with everyone. But also start doing your marketing. If it's Craigslist, whether it's bandit signs, saying discount house for sale outside the Home Depot. Because Home Depot in most places, one of the only thing's open.

So everyone's going to go there because they have nothing else to do except home improvement projects. So great place for a lot of traction on your business. bandit signs. Cheap house for sale, must sell now, call this phone number. And you're going to get the people who are going to still be buying. And it might be some of those older people, older names that we haven't heard of since 2015, 2014 that they kind of stopped buying when the market got too high. I think they're going to come back in the picture.

Right. So it's just going to, yeah, changing out the. Like there's always money in the market, right? And I've been saying this for years that there's no shortage of money in the system for a good deal, right? If there's an opportunity to make money, then there's going to be someone that's got the money that's willing to do it. Yeah.

What I see as when the market is kind of declining, and there's still so much uncertainty, so this is a little bit of speculation at the moment. Right. Obviously, the sooner that we come out of this, I think that it's not going to be as bad, right? So the quicker we come out of it, things won't get as bad as they could get. Right. But with that said, if the market is declining and it's depreciating and you still want to

buy a low, sell high, you're kind of at a race against the market because you've got to buy a little bit lower than you normally would. Right. So you still have the buyer there because the buyer is sitting there watching the market go down too, particularly the ones that stay in at this time, they're typically going to be the more experienced buyers. Exactly. Right.

And so you're going to be dealing with a much more sophisticated, wise buyer. And the people that would be ready to buy right away probably went through the last downturn and kind of kicking themselves that they missed some opportunities and they see like, hey, this is an opportunity. I got a second chance, right? Absolutely. So that's kind of what I was thinking. And it's just like, it's not that there's less money.

It's just the relationship to the buy load of the sell high thing. You know, if you're on the buying side, you have to buy a little bit lower than you normally would, right? Yeah. That's what I'm paying. So moving forward, what do you see as the potential big risks? And how are you dealing with those? Well, the big risk, obviously, like, you know, right now we're not trying to actually close on too much with hard money or anything. that.

Most of the hard money lenders have, you know, I don't know, there's still some. I get in my inbox, you know, people, we're still lending, we're still lending. But I definitely don't want to take out hard money into a heavy rehab project right now. Because by the time I'm done, it might be worth less than I bought it for after I've spent a couple months fixing it up. So, yeah, definitely not trying to do that, but just trying to get as many seller finance deals as they can. I think that that's going to be the way to mitigate the risk as much as possible.

Yeah. Totally agree. I'm just kind of looking for for other angles like I might not be seeing, but it's really, you know, hedging your bets with paying up with terms, not paying all cash like right now up front. Yeah. And the second thing would be to stay away from the long term projects. Because that's, I mean, if you learned anything from the last downfall, not you specifically, but if anybody learned anything, it was you don't want to be juggling a bunch of long-term. rehabs and have to be making payments on those things. Yeah. Because that's what crushed everybody because, you know, I just talked to Tim Maya a few days ago. He was on the show.

And, you know, that's, I think he said I had 15 rehabs going when the market fell out. And it's just like, I was like, yo, gosh, you got it hit hard. Those are the type of people. And he even talked about how he felt before that, how he was just so invincible. And just like, he couldn't do any wrong, like, whatever he bought, just made money. And he just felt like everything he touched, turned. to gold. And I was like, yeah, that's what everyone was feeling like, right?

Yeah. You see the movie The Big Short? Oh, yeah, yeah. I love that movie. Yeah, so good. I remember what I'm saying. Why are they confessing, right? When the guys were all talking about how good they're doing.

So they're not confessing, they're bragging, right? That was great. That was great. Well, super. So you've got, I don't know, a half a dozen people here at Epic that you're working with right now. How is that going? We don't really communicate that much. So if I don't hear from you, I'm assuming it's going good. Yeah. It seems like everyone's doing good. There are a lot of people doing the text blasting right now. Sending out mail. My newest client, he's not new to the

Epic family, but he's new for the personal coaching for me, Devin Williams. He just, he sent me a message right before we got on this call saying that he had sent out a hundred of the two option letter of intense, the new ones that you're talking about. Yep. And he got one person came back that said they have nine properties that they need to sell and they're willing to do some seller financing with them. And he's like, this is definitely going to be definitely going to be a deal.

Right, right. Yeah. We shifted everything a little bit and changed up our mailing. He was on one of the follow-through crew calls. And so we kind of modified. our cover letter and included the, a version of the three-optional letter of intent. We put two on there,

and then we enclosed some other documents in a self-address stamped envelope to make it really easy for the people to get back to us. And, you know, I did 100 of those myself and I got a deal. Nice. It's a much more expensive mailing, so you don't want to, like, you can't send thousands

and thousands of them. Right. If you get really targeted with it and send it in, you know, I think for those hundred pieces, it cost me like 800 bucks to send out. Yeah. But hey, you got one deal off 100 pieces. That's a really good ROI.

So I was happy with me. And so now I kind of proved, not proved it, but it worked for me. I said, so why don't you try? And I gave it to three other people. And it's all the phone's ringing. They're having good conversations when they weren't for so long, you know? Yeah, absolutely. So it's good.

Yeah, like you were saying, it's tragic that it's happening because of the reason it's happening. Yeah. We've got no control over that. but we can only control how to respond, how we react. Yeah. That's another line that big show that just keeps going through my head. I can't quote it exactly about this like, you know, the one guy, Steve Carrell, whoever the character Steve Carrell, he's just like,

why are you guys so damn happy? You guys are, you guys are betting against the American economy. You guys are betting for the American economy to fail. And I kind of put a lot of perspective. So I just always feel like that now. I don't want anyone to get hurt, but the people who need to be selling and, you know, they were just getting a little cocky before it. It's kind of good to see them change their tune a little bit.

Yeah, especially when you get beat up so much. You're just kind of like. Yeah, for the last couple years, absolutely. Right, right. Something I've been working with my students is definitely wanting to keep them on Facebook and Google ads because I just feel like there's, you know, there's the usual suspects that we might always mail to, but. Just because the virus is what it is and it's hitting people in ways that we don't really know yet,

just being, and I think a lot of people are pulling back from spending in those avenues, especially Google ads. You know, basically just casting a broader net to where the general population would be able to find you. The people who would never have considered selling a cash investor, and all of a sudden they're booking, oh, wow, Zillow homebuyers is not buying anymore. Open door, offer that, all those people, you know, you go on their websites, oh, we've temporarily suspended our operations. I'm spending on messages and say, like, we're still buying.

So when these people start Googling, like, you know, home buyers, you know, they're going to not see, or they'll see those people as dead ends, and then they'll see my head that says, we're still buying. And I think that that'll bring, you know, the question mark motivated side. We haven't been able to identify yet because, you know, like I said, some people are just in a perfect storm just because of this virus. So. I think that that's, I saw you your Facebook post.

side of the RIA ace group saying that, you know, we're still buying, right? Yeah. I think that's just inserting that word still in there. Yeah. It's like, I think that's such an detention grabber. And then the other way it could be phrased is, I haven't stopped buying, right? Absolutely, yeah. Yeah.

And so it's suggesting everyone else has stopped. So you better call me, right? Yeah, absolutely. Check in with Devin, because I know he's running some stuff and he was kind of disappointed with his Facebook stuff. and I said you should talk to Josh because Josh is getting the Facebook stuff to work. Yeah, no, we actually had a conversation about that.

Oh, okay, cool. Yeah, he used, you know, the thing that you sent him and then the thing I sent him, and he got a couple of deals, or a couple of leads, good leads last weekend from it. Okay. Just doing the local area, I think you sent him a picture of Terrible's gas station

with the We Buy House sign. Oh, yeah, yeah. Yeah, and I sent him some, like, Epcot Center with the We Buy House sign, things like that. So, you know, And he said that worked for me. We got a couple of leads. And it's good.

Okay, cool. So just to clarify, what you were saying was you're not going so targeted on the Facebook as you're just kind of opening up and doing a broad search for your market in your area. Yeah, and it's really good, too, because Facebook has gotten so, like, they only target anyone, except rich people. I mean, you can only, you know, you can say, like, you want to do the top 25% of income earners, but you can't do anything. Can you do the bottom 25%.

No, you can't do the bottom 25%. So just casting out a broad net of, you know, basically of all that what you do these days is, you know, you put out, you know, your message that you're going to, you know, you're buying houses and then you just put it out to the general population in your area. And that's what's been working for me. Have you seen a big drop in the price of the ads? No, I'd say no. No? No. I don't know.

Have you noticed that? No. Facebook not as much, everything Google-related significantly. Yeah, yeah, absolutely. Two days my Google Ads campaign is going to start again. So I'm interested to see how that is. And Devin, you know, he's one of the long-term Google Ads people. And he said that, I don't know, he said it's been up and down as far as, you know, people reaching out.

But, like Leeds reaching out, but he said it's definitely got cheaper than the closer than the less are much cheaper. Some went from $39 down to $19 per click. And then I talked to him two days later and says now it's already all the way down to $9. Yeah. So it's like, talk about real estate being on sale right now. Yeah. Those are back like the prices when Amazon was building their whole empire. You know, they dominated all of those ads.

And we're back to pre-Amazon prices right now on the pay-per-click stuff. So, well, cool, dude. I just want to get in and see how things were going over there. I said, well, let's just go ahead and hit the record button and we'll. Awesome. Yeah. Great to talk to you. Likewise.

And stay up the date and just have to be. a new reinforcing come on today. So you'll be getting that interruption here next week. And we'll keep doing what we're doing. All right. Very cool. Very cool. Will you guys stay care?

You stay safe? Come here to say as a matter. We say, hey. And we'll talk to you soon. We'll do. All right, Josh. Take care. Bye, bye.

Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home for him. We got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.