Epic Real Estate Investing - Financial Crisis: Wholesaling Real Estate to Seller Financing | Brian Lauchner | 997

Episode Date: April 23, 2020

We are in the midst of the financial crisis and if you have been wholesaling primarily for the last decade, you do not want to miss this episode! More specifically, our today’s guest, Brian Lauchner, a virtual deal architect talks about how he made a shift from wholesaling to creative financing and how it impacted him both professionally and personally! Also, you will learn how you can join Brian’s FREE training on how to become a VIRTUAL deal architect and make money during a pandemic! Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey there, Rockstar. It is still creative acquisitions April. And I've got a few guests lined up for you over the next few days to share with you how they're adapting to the shipping market. And one of the strategies that I'm most excited about. So much so, I wish I could talk about it all over again on the show. But there's not really a whole lot more to say. It's pretty simple. And that's about the deal after the deal. I've talked about that a few days ago. Because when you really get into it, it's almost like you're cheating. I mean, that's, how much money is there. And my good friend, Eddie Speed, really has poured gasoline on the deal after the deal for me and really boosted it into overdrive. And I've been talking to him a lot lately. And he's been doing this for 40 years. Like he's been doing this for a really long time

and he's been through several downturns. And he said, Matt, get ready. This is when the pickings are good. You got to meet my man, Brian. Young kid who's killing it and he's going to come out of this thing a multi-month, multi, multi-millionaire. You should have him on your show.

And he told me that he used to be a wholesaler, and now he's seen the light, and he left that little kitty stuff behind. So, you know what? I took Eddie up on his offer and agreed to have Brian on the show. And after talking to Brian, he agreed to host a free training for us around what he's doing right now

and we'll be doing into the immediate future. So if you'd like to join us, go to train with epic.com. train with epic.com. I recorded our episode, and I'm about to play it for you, but I don't even think I mentioned the domain name of the free training in the episode. And I want to make sure that you don't miss out. So go to train with epic.com and register.

All righty? Enjoy the show. This is Terio Media. So we're in the midst of a financial crisis right now, and if you've primarily been wholesaling for the last decade, you do not want to miss this. 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, Listening. If you want it faster, visit R-E-I-Ase.com. Here's Matt. Hey, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show. If this is your first time here, really glad that you found us, make yourself at home.

And if you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back. And thank you for sharing this with all your friends and family. Really appreciate that about you. All righty, so today I've got a very special guest. He purchased his first first. piece of real estate in 2008, making the leap out of the financial software industry, he jumped full-time into real estate as a wholesaler and rehabber shortly thereafter. And then gaining traction as a wholesaler, he then expanded into other strategies, including land trades, private lending, rentals, and buying selling on terms through owner finance.

He's seen firsthand how becoming a deal architect is required to get deals done today, and that skill is only going to become more valuable in financial crisis, whether that be a recession or the dreaded word, the depression. So without further ado, please help me welcome to the show, Mr. Brian Lockner. Brian, welcome to the epic real estate investing show. Thanks for having me. You bet. So great to connect with you. You know, anybody that Eddie Speed recommends that I meet, I go ahead and I meet them. So, so here you are. And I got a little bit of your bio, but we're just kind of getting to know each other right now for the very first time. So, you know, you made this shift from software guide to full-time real estate investor. What challenge were you

trying to overcome at that moment? And why did you choose real estate? So this is what we're one of those, this is one of the, I think it's a more common story than not, but basically I was working for a company and went into work one day and they were basically like, hey, you don't work here anymore. And I was like, okay, great, right? It's one of those, you know, situations to where you're not exactly sure what to do, but I looked at my life and I had a mortgage and my wife wasn't working at the time, at a son. My wife was also pregnant. So there was a lot of pressure to go do something, right? You're going to find a way to go provide for your family. And I think just at that point in time, I was really jaded with this concept of, you know, go work for

somebody when they could just take it away at any point in time. And so I'd been reading some books and obviously familiar with real estate. I just said, look, I'm going to, I'm going to bet on myself. If I'm going to take a risk here, I'm going to take a risk on myself. And this idea of entrepreneurship and working for myself, being in business for myself, it was kind of the courage, I guess I needed to say, man, let's just do it and see what happens. Worst case scenario, I guess I always go get a job, right? And so got involved, you know, really amped up my education and just started buying houses and never look back. What made you choose wholesaling as your primary strategy? What was the appeal in that? It was actually my dad. So I'd known about wholesaling. I had been reading about wholesaling.

And my dad actually called me and said, hey, listen, there's this education thing. We could go check out. They're talking about buying and selling houses with none of your own money. And my first thought was, how perfect is that I have no money right now? Right. And so it just seemed like, I guess that's what I should do. And then obviously, just from the quick cash standpoint, I was looking to make money. I had bills to pay also just fit what I was interested in as far as I like the kind of the art of the deal. I love this idea that these people have a really weird problem that a realtor may not be willing to solve or maybe their house has some issues that they just don't want to deal with. And so I was like, oh, I'll totally step in and be the guy.

And I already knew a couple of people who invested. So I thought, hey, worst case scenario, I can always just have them take over, you know, assign it or make a little bit of money and, you know, move forward. So how long did that when you started wholesaling then? So I really started wholesaling full time in 2014. So that's, I lost my job in the summer. And I said, man, we're going all in. Let's do this thing.

And I did 21 deals my first year. After the first one, it wasn't even, it was just about getting a deal done, right? That first deal is obviously so important. It wasn't even about the money. It was like, as long as I make a dollar, at least it proves it works. And, you know, I could, I could, you know, proof a concept. Let's do it again, do it again. and kind of started growing from there.

Got it. All right. So you used 20-something deals in their first year. You did it for about six years. So your peak, what did your business look like? Yeah. So my business has consistently, we typically, depending on the year ago, from 20 to 40 deals a year. My daughter, when she was born, I'd been in business about a year and a half.

And that really shifted, I think a lot of what I was trying to accomplish. I think a lot of what people do is they say, man, I want to go out and I want to do this thing because it makes a ton of money. And that's their dream. But as soon as they get a taste of money, they either. forget about it or they don't have the discipline to keep going. My goals have always really been time-based. I really wanted to be with my family a lot. I wanted to travel and do all this kind of stuff. My daughter actually, when she was born in 2015, she happened to be born with this rare

immune disease. Unfortunately, we were just in the hospital a lot every single week. And so it really more became less about doing a billion deals or figuring out how to make $100 million and more about how do I automate this business. How do I replace myself at this? And so kind of starting that process of getting a kind of an assistant to start doing the lead management side, eventually bringing on acquisitions guy, and really kind of running that from afar while I was with my family. And that's really what it came to be about is just pay the medical bills, pay my bills, you know, save up and have some money to invest in the future. And then as my daughter got better, it was like, man, do I really enjoy managing people? That was right around the shift of like 2018

timeframe when the market was also shifting. And so it was just kind of trying to figure out well, what do I want to do? Do we double down on acquisitions and marketing and that kind of stuff? I had grown a really large buyers list and kind of during that period when my daughter was really sick. I just got really blessed that my buyers list really blew up from, we were doing a lot of marketing for buyers, but also I had just a ton of relationships with wholesalers. And so a large chunk of our business was really just all of these wholesalers saying, hey, I got a deal, but I don't have any buyers. Can you move it for us? And we were able to move it for a substantial amount more than they probably would have done on their own.

So just by doing a lot of JV deals, that made up a good chunk of our business. Again, just it fed into the fact like, okay, this is from a time perspective, and I can send out emails from a hospital. I can send them out from my phone. I can throw together something cool on MailChimp on my phone if I have to and get it going. And that's basically kind of what it turned into until about, and I'd say 2019, I kind of said, man, things are different. I spend a dollar in marketing and I don't get what I used to get.

Right. So this is like where I think Eddie really wanted us to. connect because you were this full-time wholesaler. You had this great wholesaling business. And then you made this shift, right, into more of the creative structures and becoming a deal architect, as Eddie puts it. Yeah, I think you're just going right into that. What were you dealing with or what opportunities did you see that had you make this, you know, this shift? So when you look at when I met Eddie, I met Eddie in 2016. And I was wholesaling. And I met him like at one of these, you know, real estate groups. And he's like, Brian, you know, you got to do this. I can't do the Eddie impression. I can't even, even though I hear and talk all the time.

But, you know, he said, Brian, you got to get this creative financing thing down. You know, you got to add this in your business. I think it would really change things. And I must have just missed something in the presentation because all I really heard was, you know, notes. And I kind of misunderstood. It sounded like it was for people in retirement. And so maybe I was tuned out. Maybe I had too many drinks, you know, from the free bar.

I don't really know. But he said, Brian, you got to get involved. And I said, you know, Eddie. And this just shows you what happens when you're a new business owner. That arrogance almost comes out. And I was just like, Eddie, listen, I got a lot of buyers. I got people bringing me deals. You know, wholesaling's working right now in 2016.

I don't see the problem. Maybe you're right, but I think what I got going on is fine. And it wasn't that arrogant, obviously. But when I look back, I said, that's probably what was happening in my head. And sure enough, 2018, 2019 came along and I said, oh, my gosh, I thought of Eddie Speed. And I'm thinking, wait a minute, he's probably right. He's been doing this for 40 years. He's done 40,000 deals.

Like, I should probably really listen. And so got back in contact and created a, finance really became the thing. If it's really about, hey, there's a lot of competition, and that's this giant elephant in the room that, like, maybe we're not talking about. And then on top of that, my marketing dollar getting squeezed and now I'm losing all these leads where I'm getting a lead, but I'm not getting a deal out of it. I have to make a change. I got to do something different. And that's where Eddie really, really does well, is buying on terms, using creative financing, and really being able to outbid any competitor that you're coming up against and just access to deals.

So that's really was the big shift. That was the catalyst to say something is happening in the market. I either have to adapt or I'm going to die, right? And creative financing for me was a solution. So that was a couple years ago. How has that impacted you professionally? Yeah. So the creative financing side, obviously just a lot more access to deals.

But really what Eddie has gotten me in in the last six months is really on the note side and understanding performing notes, non-performing notes, and how I can take one single asset and break it up. to parts and recoup some of my capital. But the other thing that Eddie really offers is the inventory solution. So if inventory was my problem, which 2019 it was, I had to make that shift. Then it became more about Eddie, how can you help me get inventory? And he said, I've got a solution for you and it's in the note space. And it's really not that much different than what you're doing. You don't even have to change. He didn't say stop doing wholesaling, stop doing rehabbing or anything. He just said, add this to your

business. Just me after I saw what I saw, because once you see it, you can't unsee it, one of those things. I said, dude, this is incredible. I want to focus on this. Like, I really want to focus on notes. And I'm going to try to raise capital and kind of go that route. Yeah, similar story is mine. I probably had that conversation with Eddie a few years before that. I was already into creative acquisitions, but just seeing what the note looks like on the back end. So I kind of maintained my front end acquisition creativity, adding that to the back end, the deal after the deal, as he calls it. And it just magnifies and multiplies the ROI. How has that impacted you, I guess, personally, your daughter is well now? Yeah, my daughter's well. Obviously, in this current month, it's, you know, it's homeschooling and that

kind of stuff. But realistically, anytime my business can have success, it's going to add back to what my real goal is, which is time, which means I get time with my family. Now, I don't have to stress about the whole, like, you know, how are we going to make it happen this month? I've been able to ramp down my overhead. I don't need the team as much since I have access to the creative finance side and the note side, I can do that by myself. So I'm using the same amount of time, but I'm still meeting the revenue numbers. And this year, I'll actually really exceed my revenue numbers because of what is being introduced with non-performing notes. It's been really, really great. And now I'm obviously getting to kind of share my passion and my story. Eddie's letting me, you know, go around and tell people

about that. Hopefully, kind of show other people, don't be Brian of 2016, you know, be Brian in 2020. Yeah, right? As the market shifts, and you might have just barely touched on, I think I pulled out a little bit of a hint there. But what new opportunities are you seeing for yourself that's being presented by the market? What do you think is emerging? What do you think it's going to look like going forward over the next down on 12 to 24 months? The first thing is this, that you'll hear Eddie say this is a deal-starved, yield-starved environment. There's not a ton of opportunities to buy houses, it seems like, and a lot of people with capital can't seem to find a place to put that money in a secure transaction. And so where I see the biggest opportunity is one, I have access to

more deal through notes, but also through the creative financing side. This is going to be the biggest explosion in my company's history because creative financing is going to be the key to solve a lot of these problems. Other opportunity that I really see is 22 million people out of work, right? And I'm a believer that a lot of those people are going to get their jobs back. They're going to go back to normal kind of thing. But a lot of people are going to be in some pretty tough spots. A lot of those mortgages are going to suffer. There's going to be a big wave of non-performing notes, maybe not even like 2008, but again, an increase of non-performing notes and just the revenue, the money that can be made in non-performing notes is absolutely mind-boggling if you just know how they work. And so that's,

I think, probably the biggest opportunity that I see that's coming over the next 24 months on the business side and then obviously on the personal side, going outside and maybe going on a vacation. That's probably a big shift, right? Yeah, yeah. I'm never going to complain about too much travel ever again. Right. Start to appreciate what we've got. Well, I couldn't agree with you more. If you'd like to go deeper with this to see how Brian is adapting to the shifting market. Using creative financing and creative acquisitions and how he's creatively exiting on the other side of it, how he's become a deal architect without ever having to leave his home to do it.

What a great time to have that skill. Well, I've convinced him to do a couple of free trainings for us for how you can become a virtual, emphasis on the virtual, a virtual deal architect, find killer deals and money during a pandemic. So if you like how that sounds, head over to train with epic.com. You can pick one of the two times there to join us. And he's going to share everything that he knows and how you can make it happen for yourself. Brian, it's been a pleasure. And that's it for today. God loves you. So do I. Peace, blessings and health and success to you. I'm Matt Terrio. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow.

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