Epic Real Estate Investing - EREI 073: Jessy Milner and How He Made $86,000 on His First Deal - Livin' the Dream!

Episode Date: November 4, 2013

Jessy Milner, Epic Pro Academy Member, shares candidly with Matt how he made $86,000 on his very first deal. Learn how he found the deal and the strategy that he used to get free rehab work to maximize his profit. Download the free course that got Jessy started on his way to that $86,000 deal at FreeRealEstateInvestingCourse.com  Learn more about your ad choices. Visit megaphone.fm/adchoices

Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Yeah. Hello. Hello, and welcome to another episode of Epic Real Estate Investing. Hope life is treating you well. And if it's not, let's see if we can improve things a bit today. And if your life happens to be rocking right now, hey, I couldn't be happier. And let's see if we can make it even better.

Deal? All right. A quick announcement before we get started, if you haven't heard, I'm going to be making some significant revisions to the Epic Pro Academy. I'm going to be doing that over the holidays. And to make it easier on myself, I'm going to be closing the Academy to new members on November 17th. So I have that time to go ahead and do everything that I want to do.

The Academy, it's still going to be accessible to existing members. It's just shut down to new members so I can focus on fulfilling my vision of the perfect real estate investing academy that I had when I first created it. I got sidetracked a bit with my own investing and never completed it how I wanted it. So here's the opportunity for you. The current membership fee for the academy is still at the launch promotion price. It's been that way for over a year. I never changed it. I never had the opportunity. Just didn't get around to it. So I'm just going to go ahead. I'm going to leave it at that price until November 17th. And then when I reopen in January, I will reopen at the regular price, which will be double what it

is right now. Right now it is $497 for an annual membership. And here's the good news for all the existing Academy members that purchased the annual or platinum membership as it's referred to. If you purchase that, if you're an owner or a member under the platinum membership, the annual membership, you will be grandfathered into the lifetime membership. So that's my gift to you. And actually, I will extend that same offer to any new member that joins before November 7th. Now, if you want to take advantage of that, go to Epicproacademy.com and click the join tab. Epicproacademy.com, click the join tab, and there you go. Do that before November 17th, and that annual membership is a lifetime membership to you.

Now, let's get on with the meat of today's show. I've been receiving very favorable comments about the episodes of this show where I interview past coaching clients, where I interview Epic Pro Academy members. and just overall, many of you have told me that you just like hearing from real investors that have nothing to sell or no agenda by being here on the show. And I can appreciate that. And I'm happy you've all shared that with me because, you know, as it's that type of philosophy that's in alignment with what this show is all about, the foundation of this show,

real world real estate investing education, telling it how it really is. So on the phone today, I'm joined by just such an investor. happens to be a member of the Epic Pro Academy. And I guess, yeah, so without further ado, I welcome to the show, Mr. Jesse Milner. Jesse, welcome to Epic Real Estate Investing. Hey, Matt, how's it going? It's going very well, sir, and you? Fantastic, fantastic, fantastic.

Super, glad to hear it. Living the drink. I love it, I love it. So I'm very happy to have you here. Thanks for taking time out of your day to chat for a while. To get started, can you just share a little bit about your back? background and specifically what was life like for you before you started to or before you decided to become a real estate investor?

Sure, no problem, Matt. And first of all, I'd like to thank you for all you've done for me as far as my real estate investing career. But, um, welcome. Yeah, roughly about, I would say two and a half years ago, I was, I still am in the military and also as a reservist and also work a government job. And I looked back, and after the last 10 years, I realized, you know, I'd made their defloiter and away from the family for about seven years. So, as you said before, I just got sick and tired of being sick and tired.

And we never had any certainty about where we're going to be, what we're going to do or anything like that. And so finally I decided I was going to be a real estate investor. I know it's kind of crazy, but one day I just walked in and stole my wife. That's what we were going to do. Where did that inspiration come from? Of all the things you could have become or decided to do? No, no. It really came out of desperation.

To be honest with you, I knew my grandfather had done it. He came from nothing, and he slowly bought houses, and he did really well. My uncle, he had also done it, too. So I had, I knew it worked, and I also knew that it was something I could do. And that was what I knew I could do. I didn't know anything else, really. That's just, I knew I needed to change things, and I knew that I wanted to be financially independent, and I knew I wanted to have something to pass on for generation.

Right. And, you know, I'm not going to invent the next iPhone. So I knew I could do this. And that's kind of where it was born. Got it. So you had an example within your family that you, you know, that's where it gave you the belief and the confidence that this would work. Yes, I did.

I never really asked for details of how they did it. But yes, I knew that it was possible and I could do it. Okay, perfect, perfect. So once you made that decision, what did you do first? So after my wife was being very cool about the entire process. After, you know, we agree that this is what we're going to do, I just, I searched everywhere. I read everything I could. I went to Rio meetings, anything and everything I could possibly think of as far as,

Learning, I did. For the first six months, we didn't really do any action besides learning because I was about to deploy again. At that point, and I looked at the emails, I contacted you when I was deployed. And everything you said in your website, and it just made sense. So, you know, you responded quickly. and it was going back and forth, and I just started listening to everything you had, taking notes, and when I came back from my deployment,

I started to put a plan in action. Got it. So when did you return? By the way, thank you for your service, Jesse. I know the government hasn't been so kind to our veterans that are fighting the battle for us, fighting for our freedom. And I want you to know that that doesn't go for the country. We all very much appreciate your service.

Thank you, Matt, and I appreciate yours as well. You bet, you bet, partner. So you returned from deployment. So am I assuming over while you were deployed that, you know, you just kind of immersed yourself in education and just did everything you could to learn, learn, learn, so once you returned, you were able to pull the trigger? So once I returned.

No pun intended there. I was out the gate. I literally did everything, you said. I wrote yellow letters. I did create a website. I did Craigslist. I even did Bandes signs, which gave me the opportunity to network police officers at two or three in the morning. I've been there.

But, you know, that's what we did for probably four or five months. And we got a deal. We got a deal off of that. and we actually bought a buy in Holdhouse. As we move forward... Let me stop you there real quick, Jesse. No problem. You sent out your letters and put up signs and ran Internet ads.

You did that for five months before you got a deal. Is that correct? I did that for four or five months before I got a deal. That's awesome. Now... The reason I even brought that up because I think that's more... I get a lot of people that say, I've been doing this. I sent out yellow letters for six weeks and no one's called me yet.

I've put up signs last weekend and I didn't get any calls. And so I just wanted to point out that you pursued this. You did. You performed the right activities. You did them consistently. But most importantly, you were persistent with that action. In five months, you got a deal. So awesome.

All right. Continue the story. No problem. And you say persistent. My wife says obsessive. But I guess it's the same thing. So, yeah, no, and I was thinking back on this, I think one of the reasons, and you mentioned this in a previous podcast, I think one of the reasons was because for the first few months, I didn't really know how to talk to people. And plus, you know, I had, I was nervous.

So some of that point was, there could have been deals in there potentially as well. I just, I didn't know how to capitalize them at that point. But after five or six months, we did, we bought a property, and I was going to wholesale it, but it was too good of an opportunity. So we held it. Awesome. From that point forward, you know, I kind of realized that for a while I just started wholesale was the only option. It's great, but we started budgeting. And if I could pass on anything, that was where it changed for us.

For us, once we started realizing that, you know, your house and this is, your house is where the business began as far as you is your business. And this is a business. And once we started budgeting and we saw where, you know, money was going and how we were basically taking care of our money, we saw that, you know, hey, we can, we can maybe afford a house. We can maybe, but we started actually buying houses. And make a long story short, we started buying houses. We live in Washington, D.C., in the area, but we started buying houses in Charlotte, North Carolina. Because as you said, the numbers make sense over there. We developed a team, and right now we're looking at our fifth personal house,

and we've actually bought in two investors. and overall we have eight houses, five we own, sorry, we're looking at our fifth and we're managing three for two other investors. Ah, awesome. Awesome. And kind of a side note, that first house we bought from wholesaling, we ended up selling, we held it for a year so we could take advantage of the 1031 exchange. and we made about $86,000 and bought two houses basically no money down.

That's awesome. That's awesome. Congratulations. And, yeah, I mean, I knew you're doing well, but you haven't shared any details with me. So I'm hearing all of this for the first time, just right along with everybody else. Let me ask, let's go back to that first deal. Of all the marketing strategies that you had employed, where did that deal come from? It was a splash page.

Splash page, okay. I created the website like you told me, and I got a hit. Even when I got the hit, I still had to go. I went to the owner, and we had to work out. She was actually having a problem with the current, she was renting the place, with the current tenant. And as you mentioned before, sometimes you have to be a counselor. And she just needed somebody to give her the courage to guide her through the process. And she was kind of being taken advantage of by the tenants.

And, you know, we still talk to this day. It's kind of crazy. But I still talk with that lady. Actually, it's not crazy because that's what happens in this business is you help people. You create relationships. And sometimes they become friends. Sometimes they become referral sources. So it's not crazy at all.

That's how it happens. So nice work. means you're doing it right? Right. So you took over that property. So what were the, can you give me kind of the structure of how you acquired that property? So, okay, it's really kind of confusing. I'll try me.

But we bought the property. We bought it at a considerable discount. Once I saw the discount, it was too good to not eat. So we kept it. I initially had it as a lease purchase for a prospective buyer. And so I had it as a lease purchase where somebody would come in and pay me a certified check down payment. We had agreed terms and agreed future price for one year. From that point, there was a certain amount of the rent every month that I'd put toward writing down the sale price,

if you follow me on that. So you're applying a portion of their payment to the principal? Correct. Okay. So from that point, in all repairs, because it needed some cosmetic work, and they just needed some fixed up. But nothing serious. There was actually, you know, there was somebody living there the day of closing.

So they were responsible for all fix-up, repair, maintenance, H-O-A fees, anything like that. with the understanding that in a year's time, they would buy it at a step price. Well, they did all the fix-up, and they did a great job on, a matter of fact. But when a year came, they decided not to exercise their option. Got it. I don't get it either because even the price that we agreed on was probably about 10 to 15% below market price. but they didn't. So at that point, I immediately put it on Craigslist because I didn't want to deal with a relator or anything like that.

And it became a bidding war literally overnight. So I probably sold it for maybe $15,000 to $17,000 more than I had it on Craigslist for. Wow. It was an all-cash-deal. That's awesome. That's awesome. Cool. So there's a couple things there. So you purchased this property, or excuse me, how did you actually buy the property?

How did you acquire the property? Did I miss that part? Conventional financing. Conventional financing. Okay, so you went to the bank, got a loan. Sure. Perfect. So once you owned it, then you went and your intention was to do a lease option as your exit strategy, right? Right. I convinced me, I just wanted to do somebody. I didn't really want to pay for the repairs.

Sure. So part of that lease option was that the tenant would do the repairs. Correct. Perfect. Okay. I love it. And then when the option came up, they didn't want to execute. And you slap that thing on Craigslist.

And because it was actually a deal, it attracted a lot of attention, which caused a bidding war. And, you know, demand drives value. And you got to sell it for a whole lot more than what you wanted for it. Did I get all that correct? That's perfect. Awesome. Congrats. Thank you.

Great story. I just want to go through the actual detail so everyone can actually follow along and learn exactly what you're doing. So I love it. Sure. Sure. All right. So that one was in the books. You pocketed what $86,000 you said.

And then what happened next? So after that, I kind of decided, you know, I have the job that one doesn't, I have to do, work. I don't have a lot of flexibility in my time. It requires a lot of hours. And, you know, my family is my number one priority. And, you know, the wholesaling thing for me at this time wasn't the most effective use of my time at this point. Now, later on when I'm full time, I will go back to that. But I decided, you know what, my best use time is to probably just favor money. And, slowly buy properties that's to a certain criteria. So we created the cash flow criteria for future properties that we were going to buy.

Once we created the criteria, we actually kind of started looking at census data and other factors, and we found the location, and then we drilled down from those two or three locations, we found where the numbers would make sense as far as where they fit our criteria and our cash flow expectations. Perfect. So you developed your property criteria, so the area that you wanted, the type of property that you wanted, and then you established basically your minimum deal standards, right? That's exactly right. Perfect. Okay. Go ahead. So we decided that would be Charlotte, North Carolina.

And we developed a team over there. we worked with a realer actually and he was very good and we started buying property okay so you live real quick you live in Washington D.C. I live in Washington, D.C. And you decided to go and

how far away is Charlotte from Washington, D.C.? Four and a half hours I'm dry. Okay, so that's far enough to be out of your own backyard. How did you, what did you do to create the team in Charlotte to be able to find a market that wasn't in your backyard to invest

and how did you build that team to do that? Okay, I'll get to that in a second, but actually, I want to say something about the out-of-state. You know, at first, people are going to say the out-of-state is a disadvantage, you know, I don't, I think, after I've done it for a while, and we're still learning through it, but I think it's an advantage because it forces you to create the systems that you might not create if you're investing nearby. You know, you would put out that fire automatically if you could just drive down there, or you would do that, whatever it is, you would do it automatically if it was 15 or 20 minutes away. When it's further, you have to have a system in place or it can't eat you on. Now, how do we develop it? Well, we developed it through mistakes, basically. We didn't know what, we didn't know how.

I listened to you constantly and I listened to other people and I read. I knew developing a team, but I wasn't sure how. So we went down there a few times. We kissed a lot of frogs and I found the guy who, you know, worked with us. I found a real leader who was working with us. He had an established team as far as contractors. He had an experience with investors. So we kind of piggybacked off of his team.

Mm-hmm. And before that, we went through many, many realtors, and we went down there a few times, and we made a lot of mistakes. Mm-hmm. So that's kind of how we, quote-unquote, build our team. Got it. Well, you might, I don't know if you'll take comfort in this or not,

but that's exactly how I built my teams. You know, a lot of people ask me, how do you find the right team members? how do you find good team members? And my answer is typically, well, you work with enough of the wrong team members to find the right ones. Yeah, because...

I couldn't agree. I couldn't agree more. Right? Because, I mean, when you're talking to them and you're getting ready to kiss that frog, I mean, they look pretty good before you kiss them. I mean, they're telling you exactly what you want to hear. They're telling you everything that sounds great.

So you give them a shot. And, you know, you don't realize it's a frog until after your lips have touched, right? Yeah. I mean, you're exactly... I mean, that's, I mean, every, and you know, I think of that, I think a little bit of that is because, because you hear it, you want to hear. You know, I think you, you know, but yeah, you're right. I mean, you, you, you want to hear the perfect thing, and they're telling you that.

And until you, and an investor realtor, and you've gone over this, is a whole different animal. I mean, it's, it's somebody that's willing to, you can't tell the average realtor that, hey, I'd like you to write 10 or 15 offers a week. Right. And, and, and, but, but once they've. Realtors sees that, at least in our case, and probably yours as well, that you're going to bring multiple deals and you can bring other investors online, they're going to finally get it. And that's the kind of guy we found. Right, right.

Yeah, once you display your competence and the people around you that are all, everyone that's involved in a real estate transaction, once they've seen competence and actual follow-through, all of a sudden, everything gets a lot easier. The barriers come down. Yeah, no, that's, I mean, we had, nobody's fault, but we, we talked to a lot of realtors, and I'm sure they've had a lot of people that called them as well. With, you know, saying that they wanted to buy investment homes and stuff like that, and they probably got burned as well.

So, but once they see that you're willing to pay, they're. Right. Right. Yeah, I mean, both sides have been burned. So, you know, it's, I'm not making realtors wrong because I was once once, one and I know what kind of traffic comes your way, whether that's through the phone or through your ads or through an open house. You get a lot of people talking a big game and very little follow through on the back end. But, you know, when a realtor does recognize that there is follow through,

you know, sometimes you just have to prove yourself first before you can have asked the realtor to prove themselves. I couldn't agree more. Right? Perfect. So, um, now you're a buyer. Now you've got up to your fifth property. Uh, you know, why don't you share me a story with the, the most creative acquisition that you've got out of those five? I'll be honest. Most of ours are conventional. Okay. Now, I will tell you for a tip that the way we're structuring our deals right now is I am getting all our conventional loans in my name.

My wife works as well, but the way that, I guess, that Fannie and Freddie are, my wife can actually get in her name as well. So as long as we don't put them both in our names, I can Fannie or Freddie out at Ken and Kim loans, and she can as well. So currently, I am getting them all in my name. And once we hit that threshold where I can no longer, we're going to switch over to her. Got it. Okay, let me ask you a question about that. Because when I was a realtor, if I had a married couple buying a property, you know, they would require both tax returns. and they both ended up being on the loan.

So you're able right now to get qualified for a loan all by yourself. They know you're married and you don't need your wife's participation? Correct. But you have to be diligent in making sure that the loan, and I've had them the same long-offs for the loan now, although we've gone past our five, so now we've kind of hit the investor. The investor area where we have to find special even-fannie Mae loans.

I'm sure you know you can explain that better than I can't. But we make sure to do it in just my name. And as long as you, for us, as long as we've emphasized that I am the sole person on this loan, then didn't know that's fine. As long as I qualify strictly from my income. Got it. Now, what would you say is your biggest takeaway from your experience inside of the academy? me. I'll tell you that what separates you, at least to me, from everybody else, is that you

haven't sugar-coded it. One, we had the common military background, and in some ways we kind of, we talked the same language. But, you know, there was never a point where you said, you know, retire and, you know, less than a month and you're going to be rich, and actually that attracting me because if it was it been easy, I really probably, either I wouldn't have trusted it or I just don't think it would have caught my attention. And you've laid it out there. And one thing you've said that I've repeated to multiple people in some form is you do what nobody else will do for two years and you live like nobody else coming in for the rest of your life. And I mean, it's for some reason that's stuff. And, you know, and now we're seeing the vision. Now things are

materializing and you're right. You know, as a matter of fact, that first contract for that wholesale was your contract. That was your, the contract you put out there. We use that for our first wholesale. I just, what you said, it made sense to me more than where I'm hearing from other people I'm hearing that. Got it. Got it.

Thanks for sharing that. So at this point, you know, actually we haven't talked in a very long time over a year. and I just got an email from you asking me about a deal or a situation that you are in. So what's going on in your real estate investing right now that's got you all excited? Right now, I mean, we're just dealing excited. I'll be honest with you because it's, you know, we put in hours. We're doing the hard work like you mentioned, and we're seeing it. We're adding properties.

We're almost to the point, you know, where properties are buying, properties. That's where, you know, we really want to get work. But I called you about a, it was a wholesale deal. And literally this was from me and Andy. We stood out at Craigslist and probably about six months ago. And somebody called and said that they were, they were fed up and they were ready to sell. So we went down there and we got a price and we started, you know, we were looked around. So we started to find, we started to contact our buyers with, and we found the buyer who was going to buy it at a price that we didn't, we believe we could do better. So we told him the price we wanted, and he, he said that he doesn't believe that, he didn't believe bird dogs

should get that much money. Well, I don't, you know, this might be, I don't know, but I I don't believe you should tell me how much money I should get. I apologize if that's rough. No. You know what I always say to him, Jesse? I said, so what you're really telling me is you wish that you were me. Right. Well, let me tell you further, Amy.

Let me, I'm sorry. I'll call you Annie. Let me tell you further that let me break down the deal for you, man. The deal was for, I'll break down the numbers if that's okay. Sure. Okay. So the deal was two, we got the property for $2.15, and we believe that you still had enough meat, plenty of meat on the bone at $2.25. Matter of fact, we had multiple people coming in. So we came to him and we said $2.25 and I didn't want to deal with a double closing. I didn't want to deal with anything like that. So I said, and I need a $10K finery, me and Andy.

He said no. But he was willing to pay $225. the property, if you can understand that. So he would have paid $2.25 for the property, but he wouldn't have paid $2.25 if it included NK for a finder fee. Right, right. So he was just, you know. No, I get it. So what we did was we came back with the seller and we said, hey, look, we have a buyer.

He can do the deal with the $2.15 that you want. and the thing is from the proceeds of the closing we require a $5,000 finery. So basically we just and she was more than happy.

She was ecstatic about that's fine. As long as she got her $2.15 she didn't care anything more. Right. We just took the 5K from we're in the process of them. That's the deal we're doing now

is taking the 5K from the proceeds of the sale and also taking the 5K from the buyer. So we're getting the same amount of money. It's just a different way. Got it. Got it.

You've mentioned a few times using the Craigslist ads and a splash page. First of all, is that the splash page that I show you how to build in the Free Academy? Exactly. Perfect. Awesome. And then your Craigslist ads, do you always drive them to a splash page or sometimes you use a phone number? You know, we just use a phone number. You just use a phone number?

Yeah. I just, because we found that you see the market in this area, if you can get on the phone, you just need to get on the phone. And you don't need to create any more barriers. You're right. Got it. Perfect. And then you said you sent it out to your buyer's list.

How did you build your buyers list? You know, you mentioned this before in multiple podcasts, but the buyer's list for us was easy because first we have a market. that it's highly competitive. And if you have a deal, I mean, you're going to have troves of buyers. You mean, if you find the deal, the buyer will find you? Correct. Correct.

Thank you for confirming. I mean, I found a bunch of buyers from the previous house that I discussed earlier. You know, I went to the Ria meetings and stuff and things like that. but we put, you put a real property at a real wholesale. You mentioned this before, too, like at a real wholesale cost. I mean, at the price, you're going to, you're not, that's not going to be the problem, at least here. Right. At a real wholesale price, right?

Right. Yeah, that's what I'm saying. Exactly. So, I mean, that's just, I love that you're saying that because, you know, that's probably the most common question that I get is I don't have the money or how am I going to find the money or why don't even want to go out there if I don't have the money? aren't I lying to people if I tell them I have the money and all these different crazy questions about the money and if you find a deal a real deal your phrasing was at a real wholesale price which is equivalent there's more than enough buyers out there and you found so many buyers from one deal now of a sudden you had a bunch of buyers for your next

deal right yeah exactly right that's awesome Jesse that's so great to hear I love hearing it. That's perfect. So what else? What do you see for your for your future now? And how is that going to impact your life? So I'm very goal-oriented and still is the life. And this is how at least we're going to start our future as this far as this is going to create the foundational generational, generational wealth that is going to move not only us forward, but you know, this is, I really want this to be where generations of my family look back and say, wow, that's kind of where the turn happens. But, you know, we've read and now I'm looking at biographies of successful real estate investors.

And, you know, we've studied. And I think legitimately we can double our business every year. I know that sounds crazy, maybe not to you, but I don't think that that's out of the realm. So we, our goal is to consist of our business. Mm-hmm. Awesome mindset. Awesome mindset. It's the right mindset to have.

And as long as you take the action correlate to that mindset, that's, that'll be yours. I have no doubts. Jesse, last question. You know, things are going so good for you. It's, I'm really happy to hear that. Looking back, though, is there anything, is there one thing that if you could do differently, you would? You know, I think that I would do it differently, but I don't think I would have known it unless I made the mistake. But I refer again, but you've talked about this multiple times on your podcast.

Initially, when I started, I wanted to do everything. You know, I wanted to be the wholesaler. I wanted to be the investor. I wanted to do, I wanted to be the flipper possibly. I wanted to be the multifamily. There was no option that wasn't not on the table in my mind. And at least right now, we just don't, you can't legitimately get great at something until you focus on, you get great at one thing and maybe you can build from there.

Right. But that's where I would have found one thing and got really good at it. And then as opposed to trying to dabble in everything. Awesome. That's great. Well, thanks, Jesse. Thanks for hanging out with us here today. and being so gracious with your time and so gracious and free with your sharing.

I know you definitely touched people today. Many of the obstacles that you've been able to overcome, you know, so many people have. And they share that, and I know they're identifying with you. So you've helped people today. So thank you. Thank you, Matt. Thank you for everything. And what you're doing is fantastic for others.

I really appreciate it, man. You bet. Stay in touch, okay? You too, brother. All right. So that's it for today. Until next time, to your success. I'm Matt Terrio and Jesse Milner.

We're both 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. podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.