Epic Real Estate Investing - No Regrets with Stuart Gethner | 370

Episode Date: April 9, 2018

Today on The Epic Real Estate Investing Show, Matt is joined by Stuart Gethner, an accomplished real estate investor and coach who has invested over $10 million in Arizona. Learn what Stuart did differently to actually get results from paid REI programs, his marketing strategies (and clever target audience), the one thing he wishes he knew when he got started, and much more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Yo, yeah, we got the cash flow. Cash flow. Yeah, welcome. Welcome to the Epic Real Estate Investing Show. Glad you found us. And quick announcement, the Epic Intensive is coming up. This is the Cash Flow Conclave, May 31st through June 2nd in Indianapolis, Indiana,

where we'll be revealing the secrets of creating cash flow with real estate. Yeah, there's still some secrets left. Got some stuff up my sleeve I'm going to share with you. The early bird seats are almost gone and you don't want to miss this intensive as not only are I going to be revealing what's been working for us in our markets and what's working today is I'll also have three different students joining me to do the same. Different students, meaning different students from the last intensive. So this intensive, we have Parker out of Atlanta, Georgia area, and we got Russell and

from the Columbus, Ohio area, and they're going to join me up on stage and share with you how they got started and how they have become rock stars in their own right, how they have traversed and overcome all the obstacles and challenges of starting in this business from scratch to a point where they are all working full-time as real estate investors, and they're holding nothing back. I'm not going to allow them to hold anything back. So tickets are still available at epicintensive.com. Epicintensive.com. So don't delay. All righty. So I've got a great guest for you today, great show. He's a longtime listener of the podcast. He's a successful real estate investor and a very accomplished real estate coach as well.

And he's become a really good friend of mine. He's born and raised in Chicago, moved to Arizona. Shortly after graduating from the St. Louis College of Pharmacy in 1987, he has invested over 10, million dollars in Arizona since arriving and he has seen the real estate cycle go full circle twice and the future he says looks even brighter and as a presenter at the Arizona Ria and N-R-E-E-E-S not quite sure what that stands for but it sounds official he facilitates workshops on foreclosure short sales and lease options to everyone from real estate novices to professionals alike. So please help me welcome Mr. Stuart Gaffner to Epic Real Estate Investing.

Stuart, welcome back to the show. Glad to be here, Matt. Thanks for the opportunity. You bet. I think one of your esteemed titles and accomplishments should be you've made it through several years of listening to the Epic Real Estate Investment podcast. And that has not really been a challenge. You really have some outstanding guests and you provide some quality information. That's why I keep listening. Super. Well, thank you very much. And here we are today with another outstanding guest.

Stuart, before we get into your business of real estate, I'm curious, what led you to the transition from pharmacist to real estate investor? How'd that happen? So when I was a little kid, I used to watch these, what they called infomercials, about how people made big money investing in real estate. They would go surfing in Hawaii during the day. And when the weather was bad, they'd do these deals and make lots and lots of money. So I became enamored with it way back when I was a little tight.

Got it. All right. Which program was it that? It lured you in. It was Dave Del Dotto. I remember that. I remember that name. I don't remember that name.

I don't remember the name. Right? And I've always wanted to do it. And I own pharmacies. And one of the pharmacies that we owned was a hospice pharmacy, where they take care of elderly and dying patients. And I was talking to the hospice nurse one day. And she said to me, do you know what the number one regret of my patients are?

And I said, well, probably they spent too much time at the office and not enough time with their family. And she said, you're wrong. And I said, well, what is it? She said, they lived their life for someone else. You know that? My dad's a pharmacist. My uncle Max was a pharmacist.

My grandpa was a pharmacist. It was just a natural path for me to go into. But I realized, you know, if I didn't start making a move, before I knew it, I'd be 50, then 60. I mean, life just travels actually kind of fast. So when the opportunity presented itself to sell the pharmacies, I did. And I went out and I became a full-time real estate investor. Sweet.

Good. I like that story. Regret. That's a, that's a painful experience that there's really no cure for it because it's all it has to do with time and you can't get it back, right? Right. Sweet. Yeah, it's near and dear to my heart at the moment. So I get it. I resemble that comment. Let's see. All right, so you bought a program and you've obviously been very successful with it and whatever you've consumed after that as well. But I'm curious to what do you think? Because you're also an educator now. You're a consultant.

There's a lot of people that buy those programs and don't get the results. Why do you think it is that you got the results that you were looking for? And most people don't. What did you do differently? Yeah, what a great question. And you know, you mentioned I bought that program. If I can be honest with you, I bought everybody's program. I was the guy that I had to sign up for the books and tapes in the back of the room,

just trying to complete knowledge. And what I realize is that the process, and you've preached this as well, it's not hard. The process isn't hard, but it doesn't mean that's not hard work. So you've got to put the time and effort and energy into it. And like I talked to a lot of my clients, coaching clients, it's easy to get discouraged if you don't see results. It's easy to get distracted if you're not on a solid path. So after many attempts and finding a lot of ways that different work, now I stumbled on a way that work for me.

and I just kind of replicated that over and over again. Got it. All right. So perfect. Why don't you tell me what was that way that worked for you? Can you describe that briefly? Absolutely. So I didn't know what I was doing and I was again working as a pharmacist.

And so I started having tenants as I bought a rental property pay for their own repairs. And I started having tenants working out deals with me to buy the property for me after I helped them through a service repair some of their credit. And what I learned was that I was doing a lot of lease options. I didn't even know it was a lease option. And so I stumbled across that, and there were quite a few people in our community that had either credit issues but had a few dollars, and they were looking for a house for them and their family that they could not get financing through a bank at that time. And so I would take their five or ten or $15,000 down, let them rent for 12 or 24 months, help them repair their credit, and then buy the house from us.

Got it, got it. Okay. So that's a pretty traditional model. and you stumbled into it because what you found was a legitimate problem that people had out there and you had a legitimate solution, right? Exactly. Perfect. So how long have you been doing that?

Since 1989. Right. You are OG, aren't you? Yeah. You know, time flies, like I said. So I'm glad I got off the being the J-O-B employee and started to do it. on my own. It's a much happier lifestyle. Right. Okay. So you've been doing this for a long time. Yeah. We mentioned at the top that you've been through a few real estate cycles. How has your

view of real estate changed over the years? I've become more in love with it because I've realized that you've got to take the emotion out. And you can't, you can only be, you can only control what you can control. So things that I cannot control are like interest rates. I can't control that. I can't control the market. Is it going up? Is it going down? I can't control those things. However, knowing where you are in the market is then I can control my strategy. So if prices are going down like we saw eight, nine, ten years ago, you'd like to be in cash. When things are at the height of the market, you know, are we at the high right now? I don't know. We may not know for six or 12 months. So we look in the rearview mirror. So just knowing where you are in the market and using your toolbox of strategies, you can continue to stay in the game. and compete. You know, I tell the story of, I wanted a fix and flip on a property, and I made a lot of money. He made about $90,000. And I was so happy with that profit because I had a lot of money in the bank. And as time went on, I used some to pay bills, living expenses, do some more investing. At some point in time, I was out of the $90,000. But I didn't want to be out of the game.

So I learned the subject to strategy, the lease option strategy. So there's ways to continue to participate, whether or not you have money in the bank. Mm-hmm. Mm-hmm. Yeah, it provides, I guess, over the years you start to see there's a million ways to make a million bucks just inside a real estate, right? Exactly. So you just, if you long as you adapt and what is it, I'm a Marine and I don't remember what

it was, adapt and overcome on something. It's been a long time. We like to stay flexible. So sometimes when the phone rings, people say, well, will you wholesale that deal? Will you fix and flip it? will you buy and hold it? When the phone rings, we don't know what we're going to do with it yet. We have to evaluate the property and see its strengths and weaknesses and what works for us. So yes, we do all those things, but we won't know until we evaluate the property and where it is the marketplace.

Cool. All right. So let's talk about today. What does your real estate investing business look like today? We love the buy and hold. Okay. So we're going to create a passive cash flow through buy and hold, whether it's through seller financing or working through investors. We just closed out a fourplex a few weeks ago. and we're closing on one again tomorrow. So for us, it's about, we average about $500 positive cash flow per door. And so we're looking for those deals and opportunities where we can buy a property that needs improving. My favorite properties to buy are from older folks that own more than one property.

And we call them whales. Maybe they're over 55. They have multiple properties. And what I've noticed is for the first 5, 10, 15 years or so, they've owned the property. they took really good care of it. And for the last five or 10 years, they just kind of milked it and just, you know, did a lot of deferred maintenance.

And so those guys don't mind selling, not at retail. They understand the product that they have, that they've made their money from it, and they're willing to pass that opportunity onto someone else like me or people in the audience. Got it. So you are marketing to people that are over a certain age that own more than one property.

That's correct. And have owned that property. property for more than 15 years. And own the property for more than 15 years. That's your criteria. Perfect. So how are you delivering your message to them? How are they finding out about you? Great. So we do a fair amount of direct mail. That's what we use. We drop about 10,000 pieces a month. Got it. You doing postcards or letters? We do letters. And if I could be brutally honest, we didn't start. We only allowed dishonesty here. We didn't start at 10,000 a month, right? We started at 500 handwritten letters. So when you just get going, you work with

what you got, but you do it, and you just keep doing it and doing it. And believe it or not, the system works. Right. Perfect. So are you sending like a professional corporate looking letter? Are you sending a yellow letter, handwritten? What type of letters are you sending? That's, again, another great question. So the answer is, as clear as mud. It depends. It depends on, one of the things we like to do is multifamily. So in multifamily, it's more of a professional letter. When we're mailing to the older folks, it's more of a yellow letter with a casual picture of me instead of me in a tie, which I never wear it anyway. So depending on we're presenting ourselves to, we try to relate to them in a professional or casual manner.

Got it. And are you sending the same one over and over, or are you mixing it up? Yeah, we tweak it every so often, and we update our list every three months, every quarter. We figure every quarter, some properties come on the market, some will come off the market. So we'll take our cycle. We'll divide it into four for four weeks, drop every Friday. We'll do that three times and then we'll update our list. And you just got to do it. Even when the phone's not ringing, even when you're wondering if this thing works, you just keep doing it. And believe it or not, I'm living proof. It works. It works. It all works. Everything works. Nothing doesn't. Okay. So you're sending, you got your criteria, your audience, you're sending to. You're marketing via direct mail and you're using mostly letters and varying those letters. You keep your list for about three months before you refresh it. If you don't get a response, you just keep on mailing. I like that approach. I think consistency beats everybody. A lot of people will take the results from one or two mailings and say this didn't get, and they didn't get the response

they weren't. Say this doesn't work and they stop. I think it's the biggest mistake that people can make out there. You've got to be consistent. You've got to be persistent. And so, all right, cool. So, The phone rings, and do you answer the phone or do you have somebody answering the phone for you? We make sure that a live person answers the phone. We don't use a service. I have one of my associates, Liz, I have another gal in the office, Dolly. We'll answer the phones. Some of my clients like to use a strategy to have someone leave a message,

and so they'll be able to buffer through the phone calls, you know, take me off your list, and then they'll only call back those that are serious, contenders, not pretenders. I'm kind of old school, I guess, and I still think, you know, if somebody answers the phone, especially for the people that I'm marketing to, They're older as well. I mean, some of these folks I talk to, they don't do email. They'll still do facts, right?

So trying to be, like you said, consistent, always, always professional. And one thing that learned from you and just learn from business in general, you know, it's about the next transaction. It's not about this deal. It's about the next one. So establishing rapport, building relationships, having some credibility in the community has a lot of value for us. Got it.

Cool. So we'll answer the phone. We'll evaluate the property. A lot of times if the owners are out of state, they would like us to not go by the property, to not disturb the tenants, and we'll always honor that. And we'll always, again,

trying to build rapport from the perspective of, you know, what is it that the seller wants? What do they need? And try to make it a win-win for everyone. Sure. So what's your process when the seller won't let you into the property? How do you buy that property and do it confidently without being able to see it? So at the end of the day,

we're not going to buy anything that we don't see inside. You know, that's just silly and that's bad, that's bad business. So we'll still write an offer. I always want to leave them with an offer, right, Matt? But at the end of the day, we just want to, you know, the offer at least gets the conversation going, shows them that we're serious. And one thing most folks will do, they'll go ahead and they'll check you out on the Internet. So we want to make sure we've got a good, strong professional, whether they're in state or out of state, a strong professional appearance because we want them to know that we're serious and we're legit. Mm-hmm.

Got it. Okay, so you write the offer, and then once you get the offer accepted, now you kind of press the issue or force the issue to your inspection, which is the customer. Okay, cool. You'd said it in a different way, and I wasn't, I was thinking something else, but yeah, perfect. Yeah, we always want to see it. Tough to buy something sighted and seeing, and I'm sure everyone's had the experience when you ask somebody, hey, what kind of condition is the house or the condo or what have you, and then I'll say, that's a pretty good condition. And then when you get there and finally see it, you know, sometimes you wouldn't let your dog. live there. So you got to buy it. Right. Yeah, dogs deserve nicer quarters than I do for myself,

in my opinion. So cool. Let's see. What's one thing right now, you've been doing this for a long time now, Stuart, and congratulations to you and awesome. You're awesome dude. I've been out to visit you in your club a couple times and just hospitality's top notch your first class, dude. what's one thing that you know now that you wish you knew when you got started? It's a cycle. It's a cycle that just because nobody calls on the phone today doesn't mean that they're not going to call tomorrow. Just because I couldn't find an investor today doesn't mean I'm not going to find an investor about just because I wrote a bunch of offers and none got accepted today. You know, it's a cycle and you're committed.

to being, like you said, consistent. And it's easy in the beginning to get discouraged because you don't see immediate results. Many times you're planting seeds. And I think I had one coaching client, Roberto, and Roberto on his very first call, hit like a grand slam home run. The call, the guy wanted to sell, sold it way below market, he did a fix and flip. And I felt so happy for him. But on the side note, I was like, you have to understand that you.

you hit a home run. And so for the next 20, 30, 40, 50 phone calls or offers, you may not get a deal. So you just have to keep continuing to feed your pipeline. It's a very inconsistent model as far as cash flow is concerned. And so those that are leaving the employee world where you get a paycheck every other Friday and you know what that paycheck is, this is going to be different. Entrepreneurship is different and you have to be able to stomach it. So keep your nose to the grindstone and have a lot of faith. And consistency. It just always wins. You know why it wins? Because nobody else is consistent. So I always take a lot of comfort in that. If I get up and I just do the work and take the activity, whether I get the result or not, I have so much comfort and confidence in that because I know nobody else is doing it. And I know other people are quitting today when I felt like quitting, but I just did.

You got it. And I appreciate your kudos about being successful and being doing this for a long time. But to be brutally honest, there are times where I... Going in. Only dishonesty here, Stuart. There are times where I, you know, it's not that I want to quit, but boy, do I get frustrated. Yeah. No, it's, it can, this business, it can be frustrating. Yes. But, you know, if you set your mind to it and you endure that frustration for a few years,

you know, you can have a life of no frustration after the fact. If you choose another alternative to work where somebody else, you can do. just have this mild frustration over the next 40 years, right? Exactly. Choose your poison. Pick your poison. And again, be committed. Hmm?

Be committed. Be committed, of course. Yes. Commit to yourself, right? And speaking of committing to yourself, here's a great transition. You've got an awesome event coming up. This is on April 12th through the 14th, the Real Estate and Business Conference and Expo. And this is in Scottsdale, Arizona.

and you've got three awesome days with three or six, seven amazing speakers. You yourself, you'll be educating and hosting. And then there's Bob Bloom from the asset defense team. There is Aaron Chapman, a good friend of mine, security and national mortgage. There's Sean Tag, is how I think he says his name, from Memphis Investment Properties. Ben Williams from Iself direct and Jason LaFleche Results, Realty, Real Estate, Power Out. He's got the longest running show in Arizona on real estate. Is that right? That's true. Well, it was a radio show. Radio show.

Radio show. Got it. Perfect. And Stuart, you were here to invite everybody, yeah? Absolutely. So an easy way to get to the website to see more information is contactstuart.com. Contact steward.com. Look at that. You're all growing up with a website and everything now. How about that, huh? And so honestly, the goal is I'm big in education. One thing I don't want to be, and I think you're similar, Matt, is I don't want to be that guy on stage that says, but that's not all.

If you buy today, I'll throw in the extra books and tapes. That's not me. And nor do I ever want to be that guy. But I do want to be the guy that reveals from behind the curtain that this is an easy process. This is a system. And when you understand the systems that you put in place and you learn how to position yourself in the marketplace, you can't help but be successful. And I've been teaching these classes for, like you mentioned, Asria, the Arizona Real Estate Investors Association for the past 15 years. I teach 12 online classes for the National RIA.

And this is just my opportunity to kind of do this on my own and invite my friends, my peeps, who I know are quality people, Aaron, Chapman, as you mentioned, Bob Loon, Jason LaFresh, Ben Williams, Chante, and yourself. They're all great guys, and they're coming to educate. Certainly when you leave, first of all, I put it in this in my end. If you show up and you really show up, you'll leave with a master plan on exactly a step by step what you need to do next in order to be successful. Perfect. That's it.

There's no hype. I'm not that kind of guy. And that's not who we are as an organization. So if you're interested, please go to contact Stuart. I have one other speaker coming from Kansas. He didn't make a flyer he just committed. And when you come to speak, we give you complimentary tickets. there's a charge for this event.

This gentleman said he's not going to be able to give away his tickets. So we put up a link at the Contact Stewart website on a first come first serve basis. We're going to give away his tickets at no charge because he asked us to. And he wasn't going to give him away anyway. So if someone's interested, even if you can only make it for one of the days, I'd love to have you. All right. So you go to Contactstuart.com. And I'm there right now looking at it.

and you got your countdown clock going, and it's, we're not too far away, are we? A couple weeks. So to get these free tickets, how do we do that on the website? So Liz has a button. Hopefully you'll see it right there. That says a click here to register, and that'll take you right to the free tickets. Okay, so just the register now button. That's right.

Okay, got it. And I have to set that up, and it's an account, it's a ticket countdown basis, so please don't wait. I'd love to have you come. Cool. So you got some really high quality people coming. I'm going to be there on one of the day, on Saturday, I think. And let's see. You are invited to connect the network with local and national experts,

learn proven strategies, generating tremendous results from accomplished business leaders, new economy, proof techniques, make money now, always. This unique conference is guaranteed. Stewards putting a guarantee on it to educate and inspire you, learn how to be prepared to weather any market cycle and not lose money. Sounds like a good thing to go to. You know, a lot of folks that come, they come because they once had a bad experience in real estate investing. And they swear they would never do it again or they said something like this stuff doesn't work.

And again, regardless of your situation, had a bad experience or just getting started, you're welcome here. And again, guaranteed to educate you and show you how. Perfect. Well, thanks, Stuart. It's been a pleasure. I wish you the best of luck here. And I'm going to see you there shortly. And then, yeah, I guess if anyone wanted to get in touch with you in any other way for any other reason, say they can't make the event, what would be the best way for them to do that?

So at the contact Stewart, there should be a link there that Liz has set up, that people can email me directly, and that goes right to me. So if you want to get a hold of me, I'm not, I don't live in a silver palace. I don't have walls of barriers in front of me. I find myself, just like you met, very accessible. I like people. Cool. Yeah, upper right hand corner of the website, then you can get the contact button for Stuart. Well, Stuart, it's been an absolute pleasure. I will see you very soon. And yeah, I guess that's it. Yeah, and other than that Dodger garb that you've got on, I always enjoy hanging out with you, Matt.

Yeah, for those that are listening and you can't see, we are recording this on opening day of Dodger baseball. And we're going to go watch them beat up on the Giants. And then at the end of April, I'm going to go to Arizona. owner to watch them beat up on the diamondbacks with Stuart. Well, thank you. All right, buddy. Take care. All right, so that's it here at the epic real estate investing show. I will see you next week for another awesome episode.

To your success, God bless. I'm Matt Terrio, living the dream. Take care. The cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home boy, we got the cash flow. This podcast is.

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