The Science of Flipping - Real Estate Tactics and Foreclosure Bid Services | Chris Eymann

Episode Date: March 1, 2024

Chris Eymann and I are diving deep into the real estate game, sharing all the juicy details from our own adventures. We're talking about how we've turned those "just looking" folks into solid sales using our social media magic, and swapping stories from our escapades in sunny Florida and the deserts of Arizona. We've faced off against some gnarly challenges like crazy high property taxes and through-the-roof insurance costs, but we've also figured out some slick moves to make those obstacles work in our favor for some sweet profits. Our chat's got everything from the lowdown on marketing like a boss, to why hitting up your network and chatting directly with sellers can really pay off. We're all about making life easier with some smart tech tricks to keep things running smooth, and we've got some insider tips on making bank with foreclosure properties. We're not shy about diving into the nitty-gritty of tax strategies either, like how 1031 exchanges can be a game-changer for your retirement stash. Plus, we're sharing our daily grind, like how Airbnb can be a cash cow and planning your buys to get the most bang for your tax bucks. So, if you're looking to level up in the real estate world or just curious about how it's done, Chris and I have got the inside scoop. Follow Chris @chris_eymann Chris Eymann Graduated from Grand Canyon University with a B.S. in Math and Computer Science. After College he spent 6 years in the Information Technology industry. Chris Eymann is now a Property Wholesaler, foreclosure bid service, and hard money lender In Phoenix, AZ with www.sellwholesalehouses.com. Chris Eymann is responsible for evaluating, acquiring, and selling distress properties to real estate investors. Chris Eymann has 12 years experience dealing with distress and foreclosure properties.

All right, Science Flipping Podcast listeners, as always, this episode is brought to you by Rocketly.ai. If you're looking for a seller lead generating system that has automation in AI bot and has sellers coming to you, then Rocketly.ai is your choice. Make sure you head over to the website, fill out an application and schedule a demo now to see the power of Rocketly.ai. What is up, The Science of Flipping podcast family? I am back with another incredible episode and an incredible guest, a really true good friend of mine, long-time real estate investor, comrade in the Phoenix market.

We've done a lot together over the last my 16 years you're 20 plus now yeah um and so chris iman is in the house everybody what's up bro what's going on excited to have you here you are now a uh i guess a local floridian for fort lauderdale yeah technically yeah i uh i have my i claim taxes in florida there you go. Better than Arizona. People don't know this. Arizona is the cheapest tax state that has a tax. That's right. So I think it's like 2.5% of your federal or 3% of your federal. To tell you the truth, the property taxes on the house in Florida are way more my arizona taxes i say this to everybody people

like oh yeah you live in florida now you don't have the uh income tax and i'm like bro you think yeah they gave me that credit so they can screw me on my property taxes exactly i mean i have a nice don't get me wrong but like 15 grand a year for property taxes i'm like the fuck man this is wild i'm at 26 yeah yeah well you're right there on the water yeah yeah i'm sure your insurance is lovely too yeah it's not pretty yeah so uh that was another thing my insurance and you know this but insurance in florida i have four different insurance policies flood fire, and wind and hazard or whatever. Yeah.

I just have the two. I have the homeowners and then a separate policy for flood. Just, you know, water rises and, you know. Four. I have four, which is a pain in the butt when it comes to renew them. Because I'm like, are we sure it got paid that I don't lose the policy, whatever? Yeah. But between property taxes of 15 grand and then basically almost 14 grand

in insurance yeah like this house just alone is 30 grand a year just to like let it sit here yeah without the mortgage payment and we'll get into it but i'll go on a little bit of a rant this is why i don't believe people should own their own home for the most part if you don't think the way you and i think if you don't have our experience you don't understand what it can do for you most people can't. They'll look at the mortgage and the interest and say, Oh, I can afford it.

Yeah. But now they're taxed out every month. They're living paycheck to paycheck and they're not really accounting for the insurance and for property taxes. And so unless you can think like Chris and I, which if you're not following Chris, you need to go start following Chris right now on Instagram is Chris underscore. I'm in E Y M a N right. Uh, wealth of knowledge over 20 years in the business. Uh, a good friend. need to go start following Chris right now on Instagram is Chris underscore Iman E-Y-M-A-N

right uh wealth of knowledge over 20 years in the business a good friend we've done a lot of business together so good person to follow but I don't know I'm not a huge advocate of people buying their own home yeah it's just I mean to me it's if you do I think the thing's right and you get appreciation and stuff like that I'm still an advocate. Because you know what you know. Same thing for me. Like when my wife, you know, when I lived in Scottsdale, I just always rented. Rented, yeah.

But my wife was like, I want to buy, fine, we'll buy something. But it's also because I understand, like, I live in a very nice area of Miami. It's already appreciated like crazy since I bought it two and a half years ago. I know I have equity. I know I can rip the equity out and i can take the heloc or whatever i choose to do i can buy rentals i can buy flips i can lend it yeah right like you know but i think that way yeah a lot of people obviously just take the heloc and

go buy a boat yeah and then that's worthless worthless yeah so not a big dave ramsey fan but for those people go seek yourself some dave Ramsey. Don't be buying a boat. You know all about that. So you're now new to Florida. You have a great home, which I still haven't seen, unfortunately, even though you've invited me 20 times. On the water, what boat do you have there? I have a 35-foot center console there. But, you know, it's funny.

You come to South Florida and you think a 35-foot center console is a nice boat. And then you got a bunch of friends with nicer boats. So my boat actually spends most of its time in the bahamas at my house yeah yeah for sure yeah well and you go back and forth for your house so just anyways i get that well let's talk a little bit about real estate again your wealth of knowledge uh you and i have done i don't know how many deals over the years you are one of those people that shockingly, everything I say and I really preach, you're one of probably the only outlying examples that I can reference that you don't do what I say to do. So what do I mean by that? I say, make sure you're always adapting with the times, changing,

moving with the marketing, you know, and all that stuff. Now, I do know you and I have done our own ventures together and we've done it kind of together. So you will try things. Right. But your business is a tried and true, consistent, don't have to do a fucking thing different. And you're going to knock down somewhere between 15 and 30 deals a month. Just breathing, essentially. Is that pretty accurate to say? Yeah. A little more than that. We did 408 in 2023 and 442 in 2022. So for all those listening to me, I would say make sure you're fluid, make sure you're changing and adapting, make sure you have three or four marketing strategies going, make sure if one marketing strategy turns off, you have another

one or two to rely on in case like direct mail starts shitting the bed you and i built a call floor together and then we started looking the numbers and assumptions you know what i mean when things go wrong you need something else to stand yourself up yeah no i still i still do that like i mean obviously we're heavy into texting texting kind of went away and then you know we are high high into ppc and ppl right now over time so just out of my own curiosity knowing you as long as i have over nowadays how many come from the model which is you've been the guy in phoenix for 20 something years everyone knows you everyone knows you as deals you have the buyers and have forever how many out of the let's just say 30 a month that you're doing

and i'm just using the general number come from that model versus legion model yeah it's probably 20 relationships 10 legion okay yeah so that's fair yeah if you were just starting out and you had your budget and uh ironically i had a student he's like i I'm gonna, I'm gonna go, I want to do 800 deals a year. And I'm like, sorry, dude, you're not going to do 800. I'm like, if you want me to coach you into 800 deals, I'm going to tell you right now, you're not going to do 800 deals. Cause like, and where was he starting zero? No, he's doing one to two a month. Right. He's like, no. And I told him, he's like, I did 400 deals last year. He's like, well, I want to do 800. And I got the, I got the money in the budget to do it. I'm like, well, I'm going to tell you, you're not

going to do it. And if you think I can coach you to 800 deals, I'm going to tell you, I can't coach you to 800 deals. Just because like you said, I get call it 10 from lead gen and I get 20 because I was just before all the social media and all the craziness that we have now I was the guy at every happy hour yeah I taught every lunch again I like that yeah that was just let's go yeah and you it's funny because you and I are very we're old school in that sense and in I mean you're really old yeah old school uh but no listen I firmly believe people over anything else right I've been posting a lot about this recently which which is what you have exemplified for two decades in Phoenix. Everyone who is anyone in the real estate space in Phoenix knows who you are.

They maybe have not done business with you yet, but that's the key word. Yet. Yet. They will. Yeah. I mean, I host a local RIA, and there's a ria in phoenix that is monetizes their ria i don't really monetize my ria i literally have eight events a year which is just strictly a meetup yeah it's just a meetup yeah it costs me money i don't charge anybody for it i

don't let anybody get up on stage pitch pitch anything. It's just truly network. How many people show up to that, give or take? 60 to 80 a month. 60 to 80 a month. Yeah. I've been a part of many of those. And I will tell you, most people should go create their own meetup. In Notteria, you have an official, people know the Phoenix Ria.

Yeah. I'm saying people should go do what you're doing and have five people show up. Yeah. 10 people show up. Yeah. 10 people show up. Yeah. Because that could be a buyer, could be a private lender, could be someone who's connected in the realtor space. What you're doing, again, you are the one person that kind of exemplifies something

that I would say people need to lean on multiple verticals, meaning you need to be in the relationship business, right? You need to have relationships that can get you deals done without marketing budget. You also need to have some level of direct-to-seller marketing. Now, these days, that could be PPL, that could be calling, that could be your online presence. It can be a multitude of different things. But there should be some level of both.

What I just always have admired you is, if you took away your paid leads, you're going to be rocking 15 to 20 deals a month for the rest of your life. Right. I mean, as long as you keep the team together. Yeah. And you live a beautiful, I mean, it is Friday as we record this. Yeah. And what's on your schedule today?

Nothing. There you go. Right? Yeah. And that's reality is you're going to go make in your pocket a lot of money because you don't have this operational cost, which you're doing it right. You are the example that literally when I'm thinking of people to don't go get a big office, don't have a bunch of employees, have the people. And I want to give it back to you to go back about like you were the guy that went to every happy hour, every networking

function, every lunch and learn, every everything. If you had to go over 20 years and say how much have you made from that just doing that just doing that not spending a dollar in marketing what would you guess that wouldn't even know where to start 20 million i mean yeah over right and if so if someone's sitting here listening to this podcast saying just now i can't wait to get started i have no money but i'm hungry what is your advice to them meet every person you can podcast is over just kidding but it'm hungry. What is your advice to them? Meet every person you can. Podcast is over. Just kidding. It's free, right? It gives me shivers to think of the simplicity of what we do.

But when you coach your students, when I coach my students, they don't do it. Yeah. They won't. And you're not. Listen, for all those who don't know Chris, it's not like Chris is this charismatic, outgoing, loves to be in front of everyone. That's not your personality either. If I were to go, let's just say I finish this podcast and I was going to go to my Friday happy hour,

I could go to the busiest bar in Miami and I will slide into the corner, get one bar stool away from everybody, order a beer, and sit there by myself. Yeah, I thought you were going to say I will go to the bar across the street. That was the next best. People watching is a sport. I still love the sport. Totally. I mean, we were just talking about the Phoenix Open, bro.

If anything, I would go just to watch the craziness. Yeah. So I'll go in my corner and do a little people watching and just look at the uncomfortableness on that date. They just met up. Matches old school, sir. I'm beating myself. So let's dive into your expertise.

You really made a name for yourself kind of at the foreclosure space in Phoenix. And you and I were in the game when the meltdown of Phoenix, and I was buying from, i think that's originally how we met if i really pinpoint you became someone referred me to you as a bid service a bid service essentially think at the time you were either 1500 two grand or three grand 1500 1500 yeah for someone like me that just didn't want to have to deal with it to be able to tell your company hey i want to bid up to 100 grand on 123 main street and you guys just take care of it that is 1500 is the biggest value you could possibly get yeah no if you i mean if

you don't understand foreclosures you know the foreclosure bid service uh and not every city has it no but the foreclosure bid service is you know the best deal on the planet ever if you really so if we just talk about dollar per lead and dollar per deal, right? Yeah. $1,500 did not have to be the deal you acquire. Yeah. That you're buying per the deal. Right. So that's how we met and talk about foreclosures, right? I think there's a lot of people that don't understand the inner workings of that. I get this question a lot. Should I go after the pre foreclosure or foreclosure list? I typically am talking more to a newer person at that point. Okay. What is your advice to the newer person saying, should I go after that list?

Well, so the pre-foreclosure list, obviously you have what you need the most. Motivation, right? Because you have a timeline. Whatever that timeline, whatever state you're in, and we'll just use Arizona, it's 90 days. Now, obviously you're going to get some postponements. They might go into bankruptcy or whatever may cause it to postpone, but you still know that they have some motivation. So one of my best lead sources in Arizona for that relationship person is a company that did 62 deals last year and did over $4 million in revenue. So do that math, right?

So the pre-forclosure business is a is a really good business but if you're going to understand the business understand the pre-foreclosure business but you might as well understand foreclosures because you're going to have some that do trickle to the steps um just so you guys know if you go to buy foreclosures in most states it's the most expensive place to buy because it's public knowledge you don't have to learn all you don't have to go to the science of flipping and learn all the marketing strategies the conversion strategies all that you go to the courthouse and bid that's right and that's why that's how that's the reason i actually got in we talked about you know me not being very social and

not wanting to sit at the dinner table you know it's not what I wanted to do. I was a tech guy, got laid off twice in the tech downturn in 99. And then between two of the jobs, I went and just did the 90-hour class and got my real estate license. Got a listing from a friends and family, sold a house in Scottsdale, got $12,000. Drove somebody around for four weekends, and then I went on vacation on week five just to have them call me and like, Hey, I, uh, I just drove by this house. I called the agent off the sign. They let me, I was like, I just, I just bet. Yeah. So then I was like, okay, I want to get some listings, but I don't want to be the person at the door saying, Hey,

you know, I'm the best listing agent in town. Right. That's just not me. Right. Yeah. So I'm like, I want to buy houses. And so the foreclosures is just a numbers game. So that's where I started. And to your point, being able to pivot and move and adjust to all the different market times, you know, obviously with everybody having equity and COVID and all that stuff, I had to switch to, and I probably did it right when we started our call center. I had to switch more to direct to seller because there just wasn't the volume hitting the foreclosure sales. And I still, I'm kind of the systems guy. Believe it or not, I was the operator in our business and now I'm the systems guy in our business.

I build our systems. But actually being a coach, like you have to know how to build systems, right? Because you could be a coach, and I'm sure there's coaches out there that just have the knowledge and can hop on a 30-minute call or an hour call and coach somebody, right? Sure. Do this, do this, do this. But I'm actually like, okay, do that that but put in a system behind it it's like the whole agent outreach yeah you know which is a you know a big in the business anyone can just call yeah but if you don't know what to say and how to say it in a way right and so you need the operations

behind it what did I used to do all the time to you on Monday morning or Tuesday morning hey Justin you got a deal you remember that that text? Every time. Yeah. So, I mean, if you're doing an agent outreach, and I used to manually go to Starbucks on Monday morning at nine o'clock, and I would always put Bird Dog in the last name. So it'd be Justin Bird Dog, Steve Bird Dog. I just type in Bird Dog on my good old cell phone, and I just start texting, you got a deal. You got a deal all the way through 50 of them and in your scenario wasn't you used the word bird dog for your own verbiage but the reality is wholesaler yeah because you know you have the relationship which is the buyer who's really

going to fund because of your relationships down at the auction yeah and you know you have that buyer that i don't have yeah and you know it and you say hey I'm happy to make two grand three grand four grand five grand I know the guy you don't know the guy give me three to five grand yeah so you're out there doing your acquisitions you send me a deal you know I know where the the foreclosure guys that will spend the most money you know and I send that text to somebody else and i had a three thousand dollar starbucks but that's what you did but uh at the same time people do it today and there's systems in place i was manually texting 50 people on monday morning right you know as you do that you could have a cool crm a cool drip pant campaign, and you can do workflows through those drip campaigns, right?

Yep. So you talk to somebody today. Workflow number one on week one is, hey, I talked to you last week, right? Workflow number two, hey, it's me again, right? So workflow number one is, hey, it's kind of your follow-up. Yeah. I reconnect because you talked to me last week. And you put in workflow number one is, hey, it's kind of your follow-up. Yeah. You reconnect because you talked to them last week. And you put in workflow number two.

You're not going to say repeat that same text because you didn't meet them last week. You met them two weeks ago. That's right. So you change that to work to text number two. And so, yes, you can have a coaching call. But if you actually take the time to build out the systems, now you don't have to go to Starbucks and send 50 texts at 9 o'clock on monday morning automated automated yeah and that's all for your crm yeah that's what you encouraged it yeah and that's the cool part when you and i started and again you're 20 years in i'm 16 years in none of this shit i mean it was literally you didn't even have an option to the reason why you

started texting is because that was really what are you gonna do there's no crm there's no automation there's no bot yeah i'm not gonna sit there because at least I can copy and paste. Right. Yeah. Same message. Hey, do you have a deal? Yeah. And I was the asshole who literally picked up the phone every day and called.

Yeah. So I was calling agents. Yeah. So ironically, the big thing in our space is agent outreach, right? I get it. I started that way. I started, broke, calling agents 100 a day from Realtor.com because there was no Zillow. There was none of that back in

2007 um and if it was it was so infantile like it's nothing that we're aware of today but that was the only thing i knew is realtor.com and i would call every listing agent i could find in phoenix because i was living in san francisco at the time yeah that's how i did it now full circle i did you now reaches a massive point of topic for a lot of the influencers out there. It still works. My team still does it stay, but more in the style we're talking about. There's automation behind it. Now there's not over automation in the sense of this. Why Chris ultimately probably did so well and you continue to do well is the personability of who you are and actually physically meeting with a lot of the people over those years

where if you have automation set up on a realtor who you've never met you've never done business like you lose kind of the secret sauce of like handshakes and coffees and you know cocktail hour or whatever we still do agent outreach yeah now let's just talk about the power of what you've built over the last 20 years and the simplicity of it. Why I say that is because I have the utmost respect for it. There are a lot of people, including myself, that run a very big business at high volume, but we have a lot of operational just like boulders always pushing up the hill, right? Yeah.

In the Phoenix market specifically, and I know you're in more than just Phoenix, you can pretty much wake up at 9 a.mam if you really wanted to, and you're done working by two. Yeah. Two, two or three, as long as you're willing to be attached to your, you know, cell phone. You're following for those? Yeah. For, for, from 6am to call it 8pm. Yeah. So if someone out there is listening, trying to figure out the vertical and how they want to approach this business, would you agree or disagree? Go find the buyers first as a path of least resistance to get your first deal. And if you could do that now, as the path of least resistance to get your first deal and if you could do that now i'm kind of talking more to the person that doesn't want to

take the risk for a flip right because anyone who has a big checkbook and say just find me a wholesaler get me a deal bloom right or where make offers on privy fine yeah but i think the path of least resistance and i'll say there's multiple ways to do this but to get your first deal the fastest find a real buyer which you can find on, I don't care what it is, from Privy to REI Lead Machine, PropStream, it doesn't matter. You can find these buyers and find them a deal

that's actually a deal. Would you agree that that's the path of least resistance at this point? To me, I think the path of least resistance is to find someone like me. There's someone like me in every market, right? That owns the market. Yeah, obviously Jamil's in my market. Yeah. Right? That owns the market.

Yeah. You know, obviously Jamil's in my market, so he would be another... Resource. Yeah, another resource. But everyone came from Phoenix. Let's be honest. Name a name that didn't come like... Right.

We're all from Phoenix. Yeah. So you find somebody like that, that you can JV sell your deal. Okay. Because that's going to give you the most opportunity to get the deal across the board because we have massive buyers list, right? So if I was a newbie and I found

wholesaler Fred, you would say, Fred, I think I have a buyer for you. Hold on, Chris, I think we have a deal. Yeah. You could do your agent outreach and find the big wholesaler, zero dollars spent, little bit of time, and you could get a deal across so in in this example how does that shape up right so i know you are the actual co-wholesaler meaning you have the buyer to fred's deal yeah but the newbie investor says i found fred i think there's a deal hey mvp of phoenix i think we got something here yeah how does the economics of something how would you treat the newbie wholesaler how would that all shape up on the newbie wholesaler i'm going to take 50 right that's probably industry standard and you know he's going to get his deal from fred and you know me i'll i'll

do a deal for three grand so he's got it for six you know he just he just made three grand he didn't spend any money so it's yeah well do you think that newbie wholesaler has the wherewithal or understanding of what the value is or would you say hey why don't you send me the deal first or what the whole you know fred the wholesaler send me what he wants for it first let me see it because i know you think it's a deal but i know what my buyers are gonna pay yeah but that also it's kind of a little bit of you know too much work right a little bit of kind of my secret sauce is i'm like hey fred the thealer, like, let me underwrite for you. That's my little fishing line, right?

Sure. There are gurus that push out people everywhere. Yeah, yeah. Especially in Phoenix, right? And then that's probably their biggest struggle in underwriting, and it's probably the hardest thing to learn. Yeah. No doubt. And the biggest part of the underwriting is probably the hardest thing to learn. Yeah, no doubt. And the biggest part of the underwriting is hard thing is the construction part.

Yeah. That is always everyone. They can get pretty close to what the sale price is, right? Great. Yeah. How much is the rehab? Yeah. That's it.

And then, you know, is it going to be a rental style rehab or is it going to be a fix and flip style rehab? Yeah. Right. And so knowing that, and then this goes back to finding the guy in the market you're going after yeah because if you find that guy then you can lean on the guy to say hey i think there's a deal here can you underwrite it for me and then i'll give it to you to find a buyer and we'll just split whatever we can take is that fair how long does it take you to underwrite a house i I mean, probably longer. Yeah, longer than you because I think you're in like a 30-second thing.

But like very quick. If you have true access to MLS or if you have something like Privy or something that can give you some comms quickly. I mean, it's like if he brings it to me and it's 300 and it's worth 330, I mean, you're going to know in how long? 30 seconds? Yeah yeah if that yeah right so it's like so that's that's kind of always been my little hook is like hey let us do a little underwriting for you because the intro nicety conversation is going to take me longer to

actually tell you it's a deal a hundred percent just give me the address yeah the number is this yeah i try to give i give my newer investors kind of a couple of baselines and I want you to see if you kind of agree and it's in ballpark. A couple of quick, easy, I call it bubble math, right? Yeah. So this is before you like, you want to go analyze the deal. You go look at a property, look at the pictures if you can get them right. Yep.

And you basically have three ways of analyzing the construction. You have a repair, you have a rehab and a redo. Right. $30 square foot, $50 square foot, $70 square foot you have a rehab and a redo. Right. $30 a square foot, $50 a square foot, $70 a square foot. Yep. All fair numbers. Right. And now it's dependent upon price point.

You go into Scottsdale somewhere and you're probably rounding up pretty heavily. But I say that to say most of the country, you could probably say that when you're dealing with a three bed, two bath, under 300,000, you're on those numbers essentially. Yeah. Another thing you can just quickly look at is say, Hey, what's the ARV? If you just want it, if you're on privy or if you're on something that you can quickly look at a comp, great. You target the ARV. You got to be around 60% of that is about bubble math to where

your offer needs to be. Fair. And I say, if you're going to be around these numbers, there might be something here. And if you're not, then we need to do some diving, right? Meaning either the owner, agent, or wholesaler wants too much money and or you're not analyzing correctly. But those bubble math numbers make it really simple to find a deal these days. And by the way, it's never simple to find a deal. Let me make sure that's clear. But to say whether a deal is a deal or not. That just gives you, you know, gets you through the door. Like you said, if you have to dig a little deeper, like in certain parts of Phoenix, stuff sells at 80 cents on the dollar. And only a few people are going to know that.

That's 100% right. And that's why, to your point, go find someone who is the boss of that town that's been around for 20 years and work with them. But it goes back to finding the real buyer. I can find you. That's your company, right? Yeah. Now I just got to reverse engineer finding Chris so I can get on the phone with Chris and say, hey, here's me.

Here's what I got. Even if you just went to a fix and flip Phoenix Facebook group and said, who are the biggest wholesalers in town? How long is that that gonna take you right and people are you get that that message that's gonna go comment comment come on come and you might have two or three so talk to all of them yeah to your point it may be you and jamil okay well then everyone's gonna say chris and jamil yeah perfect yeah right so let's go back to the foreclosure pre-foreclosure i don't ever suggest any of my members go after foreclosure to your point like first of all it's public knowledge second of all it's going to be the

highest sales price because all the people down at the auction yeah and third of all and this is where i'm going to ask the question you technically aren't going to be able to wholesale it because the bank already owns it on a foreclosure the owner owns it until the auction date until the auction date yeah so that's why everybody's like well can i just go to the top of the bank no the bank doesn't own the property until the foreclosure date and they only own it the bank only owns it if the bidder isn't like no one bids on it the bid's too high and no one purchases it that's it the opportunity the bank owns it then it just turns to an reo they call their local REO agent. List it.

Right. So can you do what I still do, what I used to do back in the day, which was put in an offer and open up escrow and essentially stops the foreclosure process? Yeah. You generally need like a two or three day window. Because if you have your different states, you have your mortgage state like Florida or you have your trustee state like Arizona. So you need time for the computer to say the lawyer or the escrow officer to submit it have the bank go okay so you still

have the opportunity to go to the homeowner offer what you believe to be the right price if the homeowner likes it they can sign off now it doesn't mean the bank's going to sign off on it if it's a short sale essentially shorting the bank yeah but essentially you can at least stop foreclosure and then you get a post bone and then try to get it worked out and then you go from there okay so you know i just think there's more hair i think there's easy path to least resistance but i like that this is something that they can go do there's not many foreclosures to your point and then it's a little hairy and probably the person's going to be underwater so it turns into a short sale yeah for someone trying to get their first check would you suggest going down that route yeah the pre-foreclosure business is a very lucrative business because you

have motivation they have a time frame so you got the stuff that you really need to get a deal across the board and get a deal at a really good discount right so to your point the foreclosure sales because everybody does this as a business like everybody's first oh i'm gonna pull the foreclosure list right if there's equity they're gonna get hit first of all as soon as the notice hits they're gonna get hit right like they're gonna get hit 10 times by everybody yeah yeah and then the guys that do it right the guys that my group that i talked about that are very successful that house goes into the crm and they hit that house weekly right they get a text message weekly they get a door knock weekly i was gonna say and you diversify how you're actually reaching out to the seller yeah and it's for the entire 90 days so if that's uh what divided by

seven got 12 weeks or two weeks what would you advise is a good process if someone says i'm going to pull a pre-foreclosure list out of name the list provider yeah what would you tell them how how should they market how should they hit it what's your advice to them so it's just a combination you can call them and text them right the good you know the big texting thing is gone but if you go to like a little penny per text something like that sure and you're hitting a small list yeah you can you can it's going to be small right i mean how many pre-foreclosures in phoenix which is a massive market and you know these numbers pretty good yeah there's only like 1200 and so they're on a 90 day

cycle so it's not like there's you know you're not talking about a big list, like maybe 10 to 15 new a day. So if you had like a simple tech software that you do your clarification, like, Hey, come to my event. Like I use it. Yeah. Like you might get that number shut down. You just go buy a new click send is who I, yeah. Yeah. But it's like, whatever, a penny or two a piece. What was a mailer 50 cents right and you're doing 10 to 15 a day yes you know so you could call them i could send like an easy text to um i also like to do the door knocking process yeah and then i love it because then you know and we have a mutual friend that has murdered that game for a long time in phoenix right sam has just crushed the door knocking space yeah so then now you know if it's vacant

or occupied so you know it's it's vacant they've already moved on now it's now it's strictly a texting and cold calling game right and then now you're doing your door knocking on all the occupied ones when they do move you know that they've gone on and so that's right it's just it's a very simple system but like to your point point, my customer that I'm talking about, I wasn't even talking about Sam. Right. And Sam crushes it. Right. But it's it's a once again, it's a system. It's not just something you do once. It's repetition. The success of Chris Hyman and Justin Colby, everybody, just to be clear, is doing the same shit over and over again at repetition to the point of nausea. I'm going to every lunch and learn every cocktail hour every title company every brokerage and you would go and you're like i do not care i don't want to go meet these people or i don't care but you know it's just that one connection

one like you said i'm not even the guy that's going to go up to somebody and talk to me i i do have my height which is people come to you you're the big fella everyone knows where the big fella's at, right? So that's helpful. But it's the same thing. You go to that happy hour, that lunch and learn. You're going to get the three to four business cards. How many people take the three to four business cards, put it on that kitchen counter, and do nothing?

Not everybody. 100%. 99.9% because you're the point one. Yeah. But if you take those four business cards because you're the point one yeah so but if you take those four business cards you know you're still gonna throw them away and the next morning great meeting you right now that so you actually relate to someone you're nice and you have manners where everyone's like yo do you got a deal yet right i mean that's the reality is is that i just want to make sure people understand that there there is power in the foreclosure list but to me and you might fight me on this um pre

foreclosure and foreclosure kind of interchangeable to some extent right so i'm just kind of using them as one it isn't big enough to make it your only vertical i mean could you get a deal sure but if you're getting 10 people a day in a specific city yeah yeah or that's county-wide right yeah that's that's maricopa county so goodness god like i mean 10 a day what are you doing all day i mean you need a right well it's just it's just like everything else as you begin what are you doing all day at 10 a day you're not doing a whole lot six months down the road you have your follow-up calls you have actually you've done some agent outreach you're comping some houses like so i think you layer that on this is where i go with the three marketing strategies that is one you layer on some agent outreach and you layer on some

finding buyers yeah and the reason why you want to find buyers or whatever so you can sell someone else's deal if it comes across your plate the finding buyers is actually it's a called a six week process and it's really simple and it's a call it a six-week process and it's really simple and it's not that's what's the what's the first two or three steps that you tell someone for the buyers so you find like if you were to go to phoenix you find chris and you find jamil yeah you get on their list yeah if you have a little bit of a budget auto send once again we're automating yeah we're auto sending that email that comes in to our virtual assistant yeah they're putting that house in a spreadsheet right yeah at 30 days they that va

then goes to 30 days did it transact did it what okay transact it transacted this price number one we're also going to have them keep track of the percentage for that zip code so we can get what our house is going to sell on average 73 percent that zip code 69 percent that zip code and we're going to get the llc go to the corporation commission get the three lo members or two members whatever get the members add them to the skip trace list on the next time you get a script trace list send it off have them text can i add in my buyers list and then you just got every chris's buyers and that's it meal buyers i'm shocked you just put this out there on this podcast but good for you guys by the way if you are not yet following chris make sure to go to chris underscore i'm in on instagram this guy's a wealth of knowledge literally a wealth of knowledge has been doing this uh an incredible

time now you just had a pretty big sale. Yeah. Personally. And I think this is pretty cool. I wanted to talk about this really quickly. I know the home, it's a beautiful home. You spend years, you know, not years remodeling it, but it took a little while. It took a year. Yeah. Yeah. Talk to me about why you sold, why now? What was the part? I know it was making you a bunch of money during COVID. Yeah. Talk to me about this sale that you just flipped. So, you know, I've always, I've lived in the little section of Phoenix called Paradise Valley for 19 years, brought a little tear to my eye to sell it just because I've lived in a, like a three block radius for 19 years. So, and, uh, you know, having moved to Florida, you know, I didn't necessarily need that house. So when I to here I started to Airbnb so it was my primary residence slash moved to Airbnb obviously with COVID hitting and Phoenix

being one of the more open states Airbnbs went through the roof like every guru guru sold a look at these numbers on Airbnbs right but yeah yeah but uh obviously that changes as things go back to normal right so you know that was a great air bb but with covid also brought a lot of people not just coming to short-term rentals they decided to change their address to phoenix just like they did change their address to florida miami all these so i got a big increase in value and I had a $500,000 mortgage at 2.75. Who wants to pay off 2.75? Nobody. Ever. Unless you have $2 million in equity behind it, right?

You might say, I'll take my money now. So obviously, the Airbnb was doing great. It was averaging, call it 22 to 25 gross a month, right? So you can't complain about that and you're getting 20 to 25 and your payments 2600 you know that's that's i mean you're putting 12 15 grand in your pocket every month yeah my personal assistant was actually do the management so it kind of helped pay that personal assistant right because you pay a management company 20 that's five grand you know those numbers you could pay a personal assistant and then you get off all the all the other benefits so yeah so i lived in it so the primary residence and then it was an airbnb because i you know spend my time in florida and i actually only rent in phoenix believe it or

not i just have a rental i was just gonna say when you go back because you go one on one off yeah one off so i'm in phoenix i just have a rental and i i'm a block from carolina i can just walk out the front door dinner breakfast yeah i do my three i do my three mile walk and then i'm literally at the optima i'm not just across the street okay yeah so i'm uh i do my three mile walk i'm looking through the door of starbucks at like 5 29 you're now you're officially the old man that's like waiting for starbucks to open i love that exactly so uh yeah so i get my starbucks and then i i walk back to my car and i'm at my boot camp at 6 a.m and yeah that's kind of that's my morning but so i rent in phoenix but i had to pay out the 2.75

because i had i had two million dollars in equity right so i did this kind of little i did did a reel and i didn't think i didn't um drew who's behind the scenes over there is telling me I need better hooks because my hooks, I guess, are hard. But I took the $2 million and able to do a combination tax strategy, which I reached out to my CPA is I took the 500 married credit. Yeah. Then took the balance and put it into um a 1031 sure so then i drop a million five and a 1031 i actually knew this was happening so i shopped and got a uh another scottsdale i'm up by isabella's now yeah so i ended up grabbing another one acre property up there probably worth one nine when's the best time to shop for expensive luxury properties?

December because wholesalers can't sell anything. That's right. That's right. So I got one of those. I bought it for nine 70, got paid cash for it. Right. So then I just, uh, so paid cash for it, but then closed the line of credit behind it so that like the line of credit can just pay for the rehab.

Yeah. a line of credit behind it so that like the line of credit can just pay for the rehab yeah it's funny when you do the 1031 if you want to if you want to use rehab money out of the 1031 money a 1031 is only a thousand dollars but if you want to budget a rehab budget they charge you an extra five to manage it i'm like yeah i won't i don't want interesting yeah i just thought i thought that was an expensive jump yeah yeah but so i i just went and got a line of credit so like simultaneously yeah i got i actually got it the next day because i didn't know if that was going to mess it up and put you know a 250 line on it so like i can just write checks for the rehab it's not going to come out of my cash flow or anything it's just like here's a check here's a check here's a check and then that is a 970 acquisition is going to it's probably a one nine or two million dollar

house you know but i'm going to i'm going to do the same thing i'm going to own it for a year no just i won't be able to do the personal because i'm actually gonna but what i'll do is i'll own it for a year which will make it an option to 1031 again okay so i'm just kicking the tax can right and then i'll do it again and i'll take out and i got this other little thing i didn't have any 401k god if you get to 50 and you have no retirement the government will allow you to get to just over million dollars by the age of 62 so i can drop 300 grand okay tax-free into a 401k every single year and it and if you if you're later in life and you don't have a retirement there's a number at 45 there's an i don't i'm not i'm not the cpa i don't know but sure sure but on my particular instance i was 50 when i started it so at 300 grand i can i can drop 300

grand so what i'm gonna do every year is i'm gonna keep doing this luxury remodel i'll pull out 300 grand i'll drop it in the 401k yeah all 1031 again boom i'll go buy another one you're funding your retirement i'm funding three hundred thousand dollars in retirement every year tax free we got to end the episode right there that is phenomenal uh and again he's not an accountant but like talk to your tax strategist about this this is insane yeah and if you're there's a number of like i said so it's probably i'm just let's just do the math if it's they want you to get the $3 million and you're 40, that's 20 years is $3 million. So it's probably 150, you know, I'm, I'm not attached.

This is, and it's about how much money you actually are 1031ing and the whole thing. I mean, I'm just trying to maximize. I can, if I do the 1031, obviously every year I can kick the can. Yeah. And then you can also pull out money based on once again talk to your tax strategist if you're it's like 560 000 so let's just say you were a 300 000 or 350 000 guy your capital gains are only 15 that's the cheapest tax rate you're ever ever gonna see yeah yeah so you can actually withdraw let's just say you took out some money and threw it in the 401k you could also take you just don't hit that 560 number it's a 50 as soon as you go over that i think it goes to 22 but once again i'm not talking yeah talk to your financial advisor cpa all that kind of stuff i firmly believe in retirement like it's not the sexiest subject but i have a friend and a business

partner greg really known to trust company if you haven't set these up, I'd tell you to go work with him because he's real estate. He has five funds. He gets real estate. So he might be a good resource for you. But I say that to say it's not a sexy subject, but if you know how to use these things right, oh, my God, are they powerful. Oh, yeah, for sure. Like, I'm literally just funding my 401k. I'm doing my, you know, and that's, you know, I always tell

like my students, it's like November and December suck. Like, you know, it's just slower. If you're an acquirer, you should be buying, like, if you got the cash and you're a fixing flipper, you should be buying all your stuff. And actually my son, Jack was like, he was like, you know, on those relationships as he's getting stuff coming across the board he was specifically watching close the escrow date like you get a close the escrow date and some wholesaler passes you a deal and it's closes 12 11 for instance it's an all right deal closes february 1st you know the spring market's coming yeah yeah he's like that's worth fifteen thousand dollars more in february than it is in december a hundred percent yeah so you but you bought it in february right or no i bought it

in december knowing it wasn't gonna close till february first is the close date yeah yeah because so like wholesalers discount and november december just because there's not as many buyers buyers are you know a hundred percent they don't understand vacations to drive me nuts yeah they but they all don't understand the cycle too it's like you know we both have belonged to cg the mastermind and i'm just like to me it's it's a little interesting that these guys are doing 70 100 200 transactions a month they're all a little younger than me and i'll sit around the bar and they're just younger they haven't seen as many cycles sure and they're all a little younger than me and I'm, I'll sit around the bar and they're just younger. They haven't seen as many cycles. Sure. And they're going like, how was your fourth quarter in 2023? You got kind of got my butt kicked. And I'm sitting there going like, when you've had a

12 year run of appreciation that keeps going up, it saves you. Yeah. In 2022 and 2023, we've seen a seasonality run, spring, summer, kids go to school, stuff slows down, transactions slow down. And I'm sitting there going, guys, this is just normal. You guys just, you're back to normal. You just, this is just normal. We didn't, you had a financial crisis that brought property values to the bottom. had to come back so you had appreciation every year every year every year so it saved that deal that you were trying to list in october and november because as soon as january come it and and it kind of went up in value it saved you you didn't lose any money in 2022 and 2023 this is the cycle it's a spring cycle It's a spring cycle. It's a summer cycle. Fall is always slower.

People go away for the holidays. They stop, they get out of it. So what'd you call it? The redo. Yeah. If you're a redo guy and it's a six month, you buy your,

you buy your redo in October. I was just going to say September, October start buying, right? Like, cause wholesalers can't sell it. Yep. It big remodel everybody's scared of it you're gonna get a massive discount on that 100 but if it's a paint carpet you can buy in november december yeah but if you buy in january and february it's gonna cost you more yeah well 100 and that's why i say what i say is people

don't understand for the last decade they've had had the wind behind them. It's hard to fail when the wind's pushing you. Right. But all the gurus, not all respectfully, but like everyone made money in the last decade. Right. You were doing something massively wrong if you didn't. Right. And so not to say that systems and foresight like this, meaning you don't realize there's seasonality to real estate, you're going to buy something in January that you're going to have a redo when you should have bought it in September last year. Yeah. Someone just literally came to me with a really good deal. And it's like, what do you think this deal is really good? It's a million dollar in Scottsdale and it's a redo. When's that going to really good it's a million dollar in sky style and it's a redo when's that gonna list nine months yeah it's gonna list right there i'm like you need to budget selling that next february that's right you need to hold it and realize you're probably have two to three months of just holding it let's sit there let's just sit throw a christmas party at it brother i appreciate you coming dude you're a wealth of knowledge

thank you very much for you getting on here yeah for all you watching this over at justin colby.tv again make sure to subscribe but also make sure you follow my guy chris underscore i'm in my man is incredible uh if you're in phoenix make sure you connect with them he is the real deal if you have deals in phoenix you can't move get with chris i'm in brother it's been a pleasure to have you on the episode thanks appreciate it Get With Chris Hyman. Brother, it's been a pleasure to have you on the episode. Thanks. Appreciate it. Right on. Yeah.