MINDSET & MONEY | WHERE THERE’S PROBLEMS OPPORTUNITIES EXIST

Thank you for joining me on the investing for freedom podcast. As we discussed last week, over the next few weeks, we’re going to talk through just some early real estate deals. I get so many questions about, how I got started and how somebody else can get started. And the thing that, we talk about a lot is just changing your focus, where focus goes energy flows. And the thing that I really want to get out of this series is just encouraging you to get out there and just start moving. Just start looking, the best way to gain experiences through execution. So get out there and get something done.

So last week we talked about the first deal, Kara and I came back from a training event where we kind of set our goal of two income-producing properties a year for 10 years. And I kind of spoke to you guys about how our first deal got done. Well, the second deal was kind of interesting, I started again, just looking for real estate and I found this deal. So I had contacted a realtor that I had worked with before on my personal residence. And this particular house was like a three-bedroom and it had a little couple of bedrooms up in the attic, three-bedroom, one bath. And as we looked at it, I think the listing price was $110,000. And so as we looked at this deal, it had some major challenges, my realtor was like, thinking that I was crazy. She’s like, you don’t want to buy this. Well where there’s an opportunity or where there are problems, the opportunity exists. And that was the case with this. So this particular house, I think probably had some, drug addicts, probably meth the way that it looked, they had taken all of the plumbing out. Basically a lot of the electrical was destroyed. There was no heating system. It had basically been stripped. And I don’t know if it was the previous tenants. I didn’t really get into the conversation with the owner. But again, where there were problems that other people couldn’t solve, that was an opportunity for us. We had a construction crew; we had a plumbing and heating crew. And so we looked at this and I told my realtor, I said, make this guy an offer. I told her to offer $60,000 and basically, he would carry a note for three years while we got this house remodeled and fixed. And then by then, we could just get it refinanced, the challenge that this guy was facing as a seller, nobody was going to be able to get traditional financing on this house. And so that’s why I saw the opportunity for him to carry the note. So we offered 60 grand, 10% down, amortized over 10 years, I think
[02:31 inaudible] payment in three. He came back and he said $90,000, 10% down. And he would carry it for a year. So anyway, long story short, we ended up landing. I came back to him and I said, listen, we’ll do $70,000, I’ll give you 10% down. You carry it for, amortized for 10 years, carry it for the three. And we basically had a deal with that. I made it clear to him. I’m like, listen, nobody’s

going to be able to buy this house. You can’t get financing. There are so many problems. I got to put $40,000, $50,000 into this house. And so that’s kind of how we got the second deal done.

And literally our guys went to work, and I think we ended up putting about $30,000 into this house and then had it appraised. And I think it appraised for $160,000 when we were done. We didn’t flip this house. I’ve never really flipped a home. I’m always looking at buying and holding. I’m interested in investing in cashflow. It doesn’t mean flipping is right or wrong. But that’s how, and now nowadays a lot of people call it the BRRRR method or whatever. But I basically have always held for cashflow. So that was our second deal.

Stay tuned next week because this is where it gets really interesting. Deal number three for us. Again, the goal was two income-producing properties a year for 10 years. In that first year, we got the first two deals done. But then all of a sudden, this 72-space mobile home park fell in my lap. And it was quite an interesting experience. So I’m really excited to start telling you about that one. It’ll pull a lot of things together for you guys. It’ll kind of explain how we got into the mobile home park investing business. I did not wake up one day and decide that I wanted to be a mobile home park investor. And that’s, there’s a lesson there.

A lot of times, we can’t see exactly where our future’s going to take us or the opportunities that come in front of us. And that’s why the adjusting part of this is so important. We’ve got these plans; we’ve got these goals. Mine was 10 income-producing or two income-producing properties a year for 10 years. But then all of a sudden, this opportunity comes in. And so if we hadn’t been flexible with the outcomes and the desire to adjust, we may have passed on that because our goal was not to buy a 72-space mobile home park in the second year, but we adjust. So keep that in mind. It’s super important that you’re flexible with your goals and the way you get there. Have a great week.