Epic Real Estate Investing - Invaluable Tools of the Trade | HTH 008 | 486

Episode Date: October 3, 2018

You want to be a successful real estate investor, and you want to get there fast! To be able to achieve that, you need the invaluable tools that will speed up the process. Learn how to research new markets, where to access the best up-to-date real estate data, and why you shouldn't be concerned about getting it just right when starting a contract. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Don't wait for appreciation to buy real estate. Buy for cash flow and wait. In other words, Hold That House! Your host's Matt Andrews and Matt Terrio. Yeah. Hello.

Flipping houses can make you rich. Holding them will make you wealthy. This is the Hold That House show. I am Matt Terrio and over there is Mr. Mr. Matt Andrews. Bring it. And before we begin, before we bring it, we've got a free gift for you. Go to hold that house.com and download the four-hour work month.

It's the Ten Commandments to Managing Property Managers, the key ingredient to financial independence through real estate that they're not telling you about. And you're not going to hear it anywhere else, but we're going to give it to you here. And you can get that for free at hold that house.com. All righty. Today, we're talking about tools of the trade. And why are we doing this? Well, a lot of people have been emailing lately asking, you know, what do you use for this?

How do you do that? So I thought, let's just do an episode where we break down some of our best tools. You know, some of these aren't groundbreaking. Some of these are tools that you guys have definitely heard of, no doubt. But maybe we're using them a little bit differently than you. And maybe they'll, you know, provide some shortcuts for you guys. So we thought we could just go down a list of, you know, some of the mostly online tools that we're using on all sides of our real estate business. Love it.

Love it. Cool. Okay. So what's the first tool? Let's jump in. The first tool is something you guys have probably never heard of before. It's called zillow.com. That's new.

You guys have heard of that. I know almost everyone has heard of zillow, right? But a lot of people, you know, the first thing I usually get Matt when I say Zillow is, oh, Zillow, their estimates are so far off. Oh, their valuations are so far off. They're either way high or way low or whatever. Sure. That might be true.

Maybe that is true. I don't know because I don't pay attention to the zestimate. Let me tell you one thing about that, though. Yeah. It depends on what size. of the equation they're on, whether Zillow agrees with them or not. Right. That's very true. Because sellers thinks it's right on.

Right. Buyers think it's way high. Buyers think it's way high. Good. Sellers think it's way low. Exactly. Exactly. So, you know, how do we use Zillow?

You know, the Zest amount, like we were saying, can be high or low or maybe it's right on. That's immaterial because it doesn't really matter to me what Zillow thinks of property's worth. That might be helpful starting information. But here's how I use Zillow. Let's say you've got a subject property. You're trying to figure out what it's worth or you're trying to figure out what you can pay for. You're just trying to get. some kind of quick comp, right?

You don't want to go through getting a bunch of MLS comps and talking to your realtor contact and getting this emailed over and looking at all these. You just need a quick valuation to figure out, is this a deal or not? So here's what you do, guys. You go to Zillow, you put it in the property address, right? You bring up the property page and then basically don't pay attention to anything that's right there in front of you. Scroll down on that page, about halfway down, on the right-hand side, you're going

to see two different sections. You're going to see nearby houses for sale, and you're going to see nearby similar sales. All right. Those are both really valuable tools. So nearby houses for sale, just let you know, okay, for the square footage in the area you're in, here are five other houses that we think are somewhat similar. So it gives you a really quick idea of what people are maybe listing properties at. But even more valuable than that is the next section down, nearby sales or recent sales, right? If you click on that, it'll bring up a full menu.

It'll show you two or three right there on that page. But if you click on nearby similar sales, it'll bring up a full page of what they consider to be comps. In that grid, kind of a spreadsheet type format, right? Yeah, in a grid. It's got a little map there. I know. I know you talk about it. So you can expand the map and get more comps or you can, you know, collapse it and make it smaller and just get a few comps.

But the idea is that you can look through that, you know, that information and you can see, okay, look, my house that I'm trying to figure out what it's worth is a four-two. So I'm going to look at just the four-twos here, all right? So you can look down, okay, we've got three or four-twos. Now, out of those three- or four-twos, which are similar in square footage, right? So you've got maybe two of the three are similar in square footage. Well, that's a good starting point then. You can see what those just sold for.

So if you're buying distressed properties, you can kind of compare that with other distressed properties that were sold. if you're rehabbing and trying to sell a property, or just trying to figure out what your rental is actually worth if you were to sell it. This is a great tool, and it allows you to do it within probably two or three minutes. Now, you want a real comp. Well, then you need to get MLS comps. You need to go through a whole comp process.

And we'll have a show on that coming up really soon about how you really get good comps. But for a quick, easy tool, just to figure out, you know what, this person wants to sell me their house at 50K. Is that way too much? or is that a steal of a deal? Well, this similar sales can help you figure that out. And it can help you figure out, hey, this is now a conversation I want to have with this distress seller.

So that's a really good tool. And that's not how most people use Zillow. Right. You know, they think they go on Zillow to get a value of their house. You know, and that's not the right way to use. The right way to use it is to just to do a broad comp analysis. Sure. That's really helpful.

Well, let me comment on that real quick. Is I never thought I would do this because when Zillow came out, And very few people know this. I was a real estate agent in... You're going to let us in on a secret right now. I'm going to let you in on a secret right now. That I invented Zillow. I knew it.

Me and Al Gore, that he did the internet, I did Zillow. Oh, no. No, here's what I mean is when Zillow was first announced, I was a real estate agent in Palace, Burties, in Southern California, in the South Bay. And I had was about only two weeks away from launching, quote unquote, Zillow for the South Bay. And it was going to be my lead generation site for me as a realtor. It's how I was going to get listings.

And Zillow came out and I was like, oh, I had so much money, so much time invested into this website. And it was so cool. And I just let it go. And I was like, screw it. So I've had this like thing with Zillow. Like I've been kind of mad at them harboring some anger about them. And especially when I find a Zestimate and it's way off. I was like, see, your thing sucks.

My mind works. Sillow's no good. Yes. Mine works. And anyway, here we are a decade later, I guess. And I actually have found myself because we do so much volume in our office now that it takes a long time to run comps on every single property. So with our formula, I actually use this estimate as the starting point. And I take 70% of that.

It's a great point. It's a great point. I subtract the repairs. I subtract my profit. And boom, there's my all cash offer. Sure. And then I'll work up from that on our other options. Yeah.

But it's actually gotten a lot better. It is not what it used to be. Well, it's not what it used to be. And also the market has changed a little bit. The reason, you know, especially in Florida where, you know, that was my main market where I started flipping, the estimates there could be crazy because it was literally worth twice as much like three months before. Right. You know, and it would, I mean, those values when the crash hit, it changed by, you know, so quickly and by so much that Zillow and the data, they analyze the property, the property. the county property records and all that kind of stuff,

there was no way it could be fast enough to stay up. So for a while there, especially in the 2009, 10, 11 years, it was really hard to get anything close to a good value because you could have two homes side by side that were the same house, basically, and one would be like 120 and one would be like 20. And stuff like that. So I see where people were coming from with that, but you're right, it's gotten a lot better because of the market

and because of their analysis, I think, their algorithm. and, you know, the sales data that you pull, like I just talked about, that data is based on houses that sold. I mean, that's public data. You know, you can't, they're not messing that up. So it's up to you to look at it and compare it and see if it's close to your house and if it's a valid comp. But it's a great way to, you know, shortcut a full-on comp analysis, which could take a long

time. Do this in two minutes, you know? And this is the way, you know, when we buy, we do postcards and direct mail to get distressed owners to call us and my people, you know, evaluate those offers by looking at this estimate and those comps real quick. Just just so we know, should we even keep talking about this, or is this something we cannot help people with? So it's a great tool for that reason. So on that note, Zillow is, like I have some coaching clients in Houston, some in Kansas City, and that sold data is not public record. And I'm sure there's some other markets around the country.

And I see you have a whole list of tools over there. And if they don't, so Zillow doesn't provide that public information on solds and say they don't have access to the multiple listing service, where else can they go? Do you have something? For other comps? Comps, yes. For comps. So, boy, there's a couple, there's e-praiseal. E-prasal. Okay, so that that takes also, they take like a composite of county data and sales data and maybe some MLS data off like Realtor.com and some of those types of things. So that's another one. Redfin is one. I think that's mostly out west. So I think you probably have that in California. I don't think we have that one in Florida, but that one is growing.

So redfin.com, I think is what that's called. And there's a couple other comp analysis tools, too. So, you know, we've got enough questions about comps that I think probably will do a show just about comps and the tools we use for comps. And how you really get a comp, you know? But the first stop for me is Zillow, just because it's easy. It works really well. And then EPraise will probably be the second stop. But there are a few other, you know, online portals, too, that will do the same.

thing. And the good news is, is Zillow will keep getting better more likely. And there will be other new tools that come out. By this time next year, there could be something totally different that blows away everything. Somebody will always make something that's better, right? So that's pretty cool. Just a sec. 30 seconds, actually, while we chip away at the rep. We'll be right back. Is Wall Street failing to meet your expectations? Has your 401k tragically turned into a 201k or worse? Don't panic. You don't have a money problem. You have an idea problem. We're turnkey allies.com.

And we'd like to share with you a new idea how one small shift can transform your financial future and accelerate its arrival. Go to turnkey allies.com to get this new idea that Wall Street doesn't want you to know about. Turnkey allies.com. More control, less risk. Turnkey allies.com. A couple other things that we use, tools of the trade. Trulia, I'm going to put these two together. Trulia and Active Rain.

for me, this is just a good, these are both good sites for moving into, let's say you're moving into a new market. So, you know, Matt and I both invest in different markets outside of our local area. We need to do research quickly and get a sense of the market a lot of times, right? So Trulia and Active Rain, for me, are a really quick, easy way to kind of get plugged into the realtors in the area. You know, get plugged into the realtors, see what kind of stuff is moving, see what kind of things the realtors are talking about. You know, what the market conditions are that's really good information for market conditions and researching that type of thing. So, Truya and ActiveRain, and even Realtor.com, even though it's a very consumer site that's not made for investors. That's a really quick, easy way to type in a couple searches and just get an idea if you're new in an area or you're moving into a new market of what things are selling for, what things are renting for, you know, what houses and apartments are renting for in that area.

just a quick search and they're not made to give you comprehensive data by any means. But a lot of these tools are tools that Matt and I both use to just quickly size up a property to figure out do we have a deal or not. And then to help create and shape our criteria for our people that are qualifying and disqualifying deals for us after we've kind of established ourselves in that market. So a lot of these are just shortcuts, just a way to quickly get access to a lot of information and cut the curve down just a little bit. so we don't have to figure this stuff out on our own. You know, looking for market data and quick stats and trends. I like RealtyTrack. RealtyTrack.com.

Just go right there, type in the city, you type in the zip code. You get instantly the median list price, the median sales price, median foreclosure sales price. You get how many homes are for sale, how many have recently sold. You know, you just get a real idea of what that market is doing, what the activity is like. So I like Realty Track. They've got some pretty good, it's a really good looking site, too. A lot of graphs, a lot of charts. Really good for data.

If you were putting, you know, if you do like what Matt and I do a lot of where we put together performas of a certain area because we're selling those turnkey properties to investors, you know, to smart cash flow investors, we will pull data from a site like realty track so they can see, you know, what are the numbers? What are the median income numbers there? What are the median house price sale numbers? You know, what's the trend over the previous five years and the next five years? You know, that's just a good place. And most of what you read on the news and most of what you read, you know, or see on TV when they're talking about real estate and they're quoting any kind of percentage or trend or any kind of numbers at all, I'd say 95% of that comes from Realty Track.

I mean, they're just going on that site and pulling that information. So that's some of the best most up-to-date market info that you can have for sure. So, yeah, we definitely both use Realty Track. And that's TRAC, right? Yes. RealtyTrack.com. So track is spelled T-R-A-C,

Realtie track.com, and that's a really good one. Another really simple tool that I like to use. I don't know if you use this, Matt, is a Rintometer or maybe it's Rentometer. I've been using that for years. Yeah. Great tool, right?

So, guys, I mean, if you haven't been there, check it out. Rent, you know, R-E-N-T-O-M-E-R, Rent-O-M-E-R. All these will be in the show notes, by the way. Yeah, we'll put all these in this. We'll have active links for and everything. Perfect. And so that's just a really quick, easy place that you can go and find out, you know, some information about the rental and what your rental price should be, you know, so you can type in, you know, a certain property address.

And so your subject property, you want to know, one, two, three main street, you know, what should this property rent for? You can put in a rental amount. Let's say you put in like $700 and you type that end. They will tell you that is too low for this area or that is higher than most people are paying in this area for the. that square footage or, you know, that type of home or whatever it is. So it helps you kind of get, you know, within 30 seconds, get some real-time data on, you know, at least give you a starting point of where your property should rent for. Now, should you rent it based exactly on what Rentometer says? No, it's a good starting point. You know, that's a great place to start.

Super simple tool. So check that one out when you get a chance. Rentometer.com. And keep in mind on Rentonmeter.com that it's a, it does a rent. estimate for apartments. Right. So I like that to use that because of primarily a single family investor. Yeah. But I like using that because it's an extra level or layer of conservatism. Sure.

You know what I mean? Like it's just an extra security cushion. Absolutely. And so I use that number and that just kind of keeps me very conservative in my estimates. Absolutely. Yep. Yep. That's great.

Another thing that Matt and I both use is some kind of cash flow or pro forma spreadsheet. So, you know, as you guys are, evaluating properties. However you're acquiring those properties, obviously you need to be able to size them up really quickly to decide if it's a good rental, right? And what decides, you know, what decides if it's a good rental for us? Cash flow, right? What is that cap rate? What is the cash flow? What's the return on investment for a good rental property? And, you know, we use a couple of different tools. One is rehab evaluator. You can go to rehabvaluator.com. I think that's a, you know, a free spreadsheet you can download. Matt, we, we,

We have some others that we've used too, right? I actually have my own version called Epicanalyzer.com. Totally free, no opt-in-necessary, no membership, no pay. It's totally free. And it has a fix-and-flip calculator on there. It has a cash flow calculator and then has a multifamily calculator on there as well. Perfect. And where can they get that?

That's it. Epicanalyzer.com. Epicanalyzer.com. So whatever you use, guys, you just need something. And I like simple spreadsheets. You know, plug in a few numbers and get your return on investment, get your cap rate. So you can figure out, is this a good rental? You know, is this the type of rental? I want to be in. And, you know, it's a real estate's a numbers game, right? So we have to look at a lot of properties.

We have to look at a lot of different deals to find the kind of deals that we like that have those double-digit cap rates, that really strong cash flow. So this is a tool, you know, something like that or a tool similar to that will allow you to do that. So definitely something you should have as a tool in your arsenal is a good, perform a spreadsheet that you can quickly evaluate property. with. A few more, we'll just run down real quickly. Craigslist and Backpage, that's something we use both to advertise properties, you know, for rent and for sale. But it's also something that we use to quickly, you know, kind of get a sense of the market. So if I'm moving into a new market when I first moved into West Michigan, I started just Craigslisting the homes for sale, you know, and what that

really did was to let me know who are the other investors in the area, you know, because what happens is you put that information in, you start looking at home. You start looking at home. You start seeing the same names pop up again and again or the same companies and you start to realize, okay, this is a wholesaler here in town here in Mesquite in Michigan or this is a wholesaler in, you know, Columbus, Ohio. And so it's almost a tool not just to see what kind of properties are out there, but see who the players are in the market. And I know no other better way than using, you know, Google and Craigslist and Backpage and some of these other advertising platforms to be able to see who's advertising, who's spending money to try and let me know that they're an

investor. And then that lets me know who I should probably be partnering with or who I should be looking at to copy and not reinvent the wheel, right? You get to see, yeah, definitely who your properties will be competing against. And another thing that I look for inside of Craigslist, which is great, is because it's still kind of wild, wild westish. You know what I mean? Like pretty much anything goes. They do have some regulation on it. It is community, community regulated. But what I look at is The phraseology and the wording in headlines, like if there's something where they're advertising a property and it says ROI, like, that's not your local, you're that your typical realtor trying to sell a house for the typical homeowner. That's, that's an investor looking for investors. That's a for a.

Or you look at cash on cash return, or you hit, you see 50% below market value, or you see 60 cents on the dollar. You see those types of little things in the headlines. Those are great indicators as that could be an investor-friendly partner for you, whether there's another investor or whether it's an investor-friendly realtor. Exactly. And that's all part of understanding the market that you're in and investing in. I mean, that's part of knowing the landscape and knowing the players in that market. So, yeah, that's a great way to look at that and look for those key words. Those are tells, right, Matt? Right. Those are pretty much tells.

That's an investor. Yeah. Right? That's not a normal, you know, consumer-trained realtor. Right. That's an investor. Exactly. or at least a really good realtor who is geared towards investors,

which is also somebody on your team. Absolutely. Good stuff. So a couple other resources we use, V-Flier and Postlets. Now, these are basically, and a lot of our property managers uses, these are ways to advertise your property. So you guys use postlets, right? We use postlets, yeah.

So you're able to upload pictures of a property, put information in there, and it puts it in a really cool template. That's what V-Friar does too. they're basically the same type of video you can put a link to a website everything in one place and then what's really cool about both of those and I won't go into details

you guys can go to V-Fliar and you can go to Postlets and you can Google those and check them out but it doesn't just allow you to make a really nice presentation format for your properties it allows you to then syndicate those all over the place so like I know VFriar you press one button and it automatically

puts it on you know Trulia and Zillow and Craigslist and you know, a bunch of other sites you've never heard of, you know, like 20 other sites or whatever. But with one click of the button, this beautiful property template that you've made shoots out to all those, you know, and also allows you to take that link

and stick that in an email. So if you guys have a list of, you know, properties that you're renting or whatever and you're sending those out to realtors to let them know, you're sending them out to renters because you've got a list of renters that are looking for properties, you just put that link in there

and it really easily, they click on it and they see a beautiful display. You can also take it and put it in Craigslist and it'll make a nice template within Craigslist. So usually on Craigslist you'd just see a bunch of text and maybe one picture or something. But if you import a postlet

or a V-flyer into Craigslist, it makes it beautiful. And it totally sets it apart from other people advertising or rental property. That's a good trick. I didn't know that. Yeah, something like that is really cool. So it actually I think you cut and paste the HTML and it just, you know, then when you post it you see it like, wow, and it really stands

out. It's very visual, lots of pictures. It's very visual. lots of pictures. So very, very cool. So V-Fly and Postlets, great ways to market your rentals, or if you're selling some of your rentals so that you can buy better rentals to buy and hold, then you can advertise those the same way. Love it. Another kind of shortcut that I use when I'm moving into a new market is I go to LinkedIn and I join the groups that are geared towards that specific area. So like when I moved into the Columbus market, I looked for real estate investor

groups on LinkedIn based in Columbus, right? Well, every person that's in that group has something to do with Columbus real estate investment, right? Why would they be there? Right, would they be there? Exactly. Why would they've ever looked for it or found it, right? So that's a great starting point again to find the players in the market. You know, that's so important when you're first moving into a new market. I mean, you're in 10 different markets, I think, right now, Matt, right? I mean, you had to, in one way or another, figure out who were the possible partners for me, who are the competitors or cooperators, however you want to look at it, right? Who are the other players in that market?

Well, that's a really easy way to amass a very quick list, you know, to start then dealing with. You know, can you buy properties from these people? Can you sell properties to them? Would some of these people rent some of your properties for you for a fee? You know, property managers are on those groups too. So that's a really, really good starting point as you're moving into a new market as well. So LinkedIn groups, and you can really, you know, go about as deep as you want to on that one. There's a lot to do there, and it's a great first contact.

A couple of other things real quick. REI Club.com. It's a site that I like just for real estate investing articles. I like to learn by reading some of those articles, but also I like to use it for content, just so I understand what's going on. And I can speak more knowledgeably about certain subjects and maybe that I don't know. So if I need to brush up my knowledge on something, or if I need to refresh on some of my calculations that I use,

for property evaluation or just kind of whatever the situation is, there's probably an article about it in depth on RIAic club.com. It's also a really cool place to go to find out all of the local investment clubs in your area. So if you're in Baltimore, Maryland, you just move there. You want to figure out what are the good RRII clubs, are there real estate investing clubs here? You type that in there and boom, they'll pull up a full list nationwide of every real estate investors club, which is pretty cool too. So you can go on there and do that as well.

we got a bunch more we could go through guys we'll just we'll mention one more here for those of you who are your do-it-yourself landlords there is ntnonline.com that is a tenant screening and there are many of these but this is one that you know that we've been that we've been looking at and one that I think would be good to use if you were a small landlord intnononline.com allows you to do tenant screening and quickly assess a tenant who might be applying for your property and it gives them a grade So it actually assigns them a grade based on their previous history. And it has a lot of different factors, I'm sure that it brings in to assign that grade. But if you're doing your own tenant screening and you want to just do a quick disqualifier just to know, hey, this person is a no-go, then that's a good first place to do it.

Now, you probably want to go on and do some more extensive background checks after that. But that's a good way to know, hey, this is not someone I need to talk to anymore. I can move on now. And again, so many of these tools we use the same way as kind of broad disqualify. You know, is this a deal? I check on Zillow and I check on the similar sales. No, this is definitely not a deal. I don't need to continue with this any further.

Boom, it's gone. Is this a tenant going to be a good tenant for me? Oh, they have a super low score on NTN Online.com. Probably not going to take the next step with them, you know? So it allows you to manage your time. Got it. It allows you to take shortcuts. It allows you to move on to the things that make us money.

And what makes us money? Finding good properties that we can buy, fix up, rent out for long-term cash flow. Amen. So that's it, man. That's the tools of trade. I'm talking about saving time is that in this business, speed is so important. To be able to sort and get on to the next potential deal is so important. Or to be able to have enough information to put a property under contract to take it off market.

So you have your time now to go do your official due diligence. Keep in mind, everything that we gave you is, I think almost everything we gave you is an online resource. And being an online resource, I mean, we know everything on the Internet is true, right? that we do know that. And that's been proven by independent studies. That don't be concerned about getting it just right when you get it under contract. Because if you're writing your contracts correctly, you've got your contingency clauses in place that you can always renegotiate or you can always cancel based on new information that you've found.

Right. That is not unethical. That is not being sneaky. That is totally good business. That's what due diligence is. Right. So you put the property under contract to pull it off the market. So now you've got the time to do your investigating, to do your checks.

And then if the market reveals something that makes that property now less desirable or not worth as much as you thought it was, now you can go back and you can cancel the contract or you can go for another round of negotiations. So use these tools to not only save your time, but also to seize opportunity and don't be afraid about securing it based off the information that you do find. That's right. And do it quickly and decisively. Absolutely. So a lot of these tools just allow you to make a decision quick to put that under contract at that price and then move forward. Because when we, you know, like we talked about in one of the past episodes, you know, when you don't know what to do next or when you're hesitant or when you're not decisive, that's really when you lose.

Right. That's when you lose money because you just, you freeze and you don't do anything. You get paralysis. And these are the kind of tools that are just quick shortcuts to help you make that decision. Help you put that under contract. You've got contingencies if you need to get out of it later. But you can rock and roll based on the information you get here. You can keep moving forward and not stop.

And that's really the key. Absolutely. All righty. So that's it for today. Flipping houses, that can make you rich. Holding them, however, will make you wealthy. We'll be back next week. And until then, remember, don't wait to buy real estate.

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