Real Estate Investing Mastery Podcast

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Latest Episodes:

How To Use "Small Dollar" Self-Directed IRAs to Invest in Real Estate » Episode 957 Dec 16, 2020

Show notes

In this special episode of the Real Estate Investing Mastery Podcast, I talk to my good friend, attorney, and real estate investor Jeff Watson. Jeff shares about this crazy strategy where you can take a few thousand dollars, put it in this tax-sheltered financial tool, and use it to help other investors... all while seeing a good return on your money.

Our webinar is on Thursday, December 17th @ 12pm EDT (9am PDT) or 10pm EDT (7pm PDT). You won't want to miss this so RSVP now!

JoeMcCall.com/jeff

Deals Gone Bad #19 - Buying Houses At The Height Of The Market, Before The Crash - Brad Weimert » Episode 956 Dec 14, 2020

Show notes

We grow the most through the pain because when we figure out that we’ve fallen on our face, we never want to do that again. At the height of the market, before everything crashed in 2006, Brad Weimert bought a couple of multifamily units in Indianapolis, Indiana. Everything looked like it was going to go up forever, and the banks were happy to loan him the money for what he thought was a great deal.

It took Brad a little while to figure out that just purchasing real estate wasn’t building a passive income. The quad barely cash flowed even when it was full, and he certainly hadn’t taken into account the cost of repairs or capital improvements. If a property is only bringing in money when it’s full, that’s a massive red flag for any functional investor. But as a newer investor, Brad didn’t have a mentor to point that out.

Is it reasonable to think that the value of the property will increase? Sure. But it won’t increase forever, and if it starts out overvalued, then it won’t ever increase enough to make up for the overvaluation. Now if a property is cash flowing, then what the property is worth is irrelevant. Still, Brad held on hoping things would turn around for the property.

For 8 years, Brad paid tenants to live in his units. He worried that if he stopped paying, then his tenants would get evicted. He thought that he should keep his word to the bank. And he lost tens of thousands of dollars a year.

Avoiding an expensive mistake like this is in your best interest. Don’t take advice from some 23-year-old investor, no matter how confident and smart he sounds. Older investors can help you see the market cycle and avoid the trap of properties that suck the profits out of your business.

What's Inside:

—In the lending world, the appraisal can send your loan in the wrong direction.

—Does morality figure into paying off the banks on an overvalued property?

—Taking advice from a seasoned mentor can help you see a property through the lens of the market cycle.

Deals Gone Bad #18 - Buy a $6,500 House Sight Unseen - Jay and Annie Adkins » Episode 955 Dec 11, 2020

Show notes

Looping your wife in on a new property is one surefire way to avoid buying a dumpster fire. Jay Adkins learned that when he bought a sob story and a rural home from a down-on-her-luck seller for $6500. Investing in small towns can be a solid way to build a portfolio, but there are some pitfalls you’ll want to avoid.

When Jay and Annie bought the house, it wasn’t entirely sight unseen. They did have pictures, but they didn’t realize just how old those pictures were. The moment Jay saw the house for the first time, he knew that paying for a $350 inspection would’ve saved him the headache that this house became.

Not only was the heat turned off, but it was winter and the pipes had all burst, including the hot water heater. And getting a construction crew out to the property, which was 2 ½ hours away from their home, was more difficult than Jay and Annie anticipated. Sending crews out to the town meant an overnight stay so that they could get in a full day’s work.

Included in this saga (which you don’t want to miss):

—Three separate tenant buyers

—Depressed manufacturing Ohio town

—Plus a muskrat in search of nutri-grain bars

—And a murder in the back alley

Jay and Annie love putting tenant buyers in their homes, and they see it as their mission to help low income homeowners get into a house. They talk about the requirements they put in place to protect their investment and give their tenants a running shot at cleaning up their credit and applying for a home loan. They fix and flip, wholesale, and offer lease options, all with heart and humor.

What's Inside:

—How Jay and Annie structure land contracts with a property.

—Are you a little nervous about investing in small towns? You shouldn’t be.

—How they help low income homeowners get into a house.

—The difficulties of getting handymen or Realtors to work in a small town.

Deals Gone Bad #17 - When A Tree Falls On Your House 4 Hours After You Buy It - Tim Grimmett » Episode 954 Dec 10, 2020

Show notes

The mentor of my mentor is Tim Grimmett, a St. Louis area investor since 1999. Earlier this year, TIm purchased a house for $5,000. The kitchen was burned out of the house, but it had good solid bones. He knew it’d only take about $7,000 to get the house into renting condition, and when all was said and done, he could rent the 3 bedroom house for $850.

The morning after the closing, Tim woke up and remembered that he needed to purchase home insurance, so he contacted his agent who agreed to back date the coverage to midnight. Then Tim’s assistant called to say that at 7 pm the night before, an enormous tree had fallen on the house.

According to real estate law, the moment you sign at the closing, that’s when the sale is consummated. Even if the money hasn’t transferred, everything that happens to the house is your responsibility. Luckily, with Covid shutdowns in place, Tim had nothing else to do but get this house back into shape.

Doing good things in your community will come back to you in spades. Again and again in his story, Tim talks about making choices that he knew were right,even if they took him more time or cost him more money. These choices ended up blessing him and the people around him in surprising ways.

If you want to work with Tim, or you’re interested in partnering with him for a couple of St. Louis rentals, you can reach him at Tim@hafpinc.com or (314)-283-6022.

What's Inside:

—Tim’s very specific requirements for a house really help him drill down exactly what he needs to do and how much he needs to spend to get it rented.

—Because of redlining in St. Louis, Tim recommends FCB in Illinois as one of the few banks that will loan in the areas he likes to buy in.

—Building a reputation in the community helped Tim again and again; with neighbors, with City Hall, and with his hard money lenders.

953 » Deals Gone Bad #16 - Adverse Possession on a Complicated Probate - Lisa Even Dec 09, 2020

Show notes

For six years, Lisa Even has worked specifically with distressed properties in the Phoenix market. Weird clouds on the title or city violations don’t scare her because those usually mean that the seller is having a harder time getting rid of the property.

This particular property was vacant and had a number of city violations, which made it a hot lead because it meant that it wasn’t being taken care of at all. At the time, Lisa went and physically knocked on the door of the woman who filed for probate because that’s how she operated at the time. Up until this time, she’d always operated under the assumption that someone who filed probate was an heir to the estate.

Except for this property. The long-time tenant had attempted to quit claim a deed from herself to herself, and you cannot actually do that. Well, you can go buy a form from Office Depot and pretend, but the title company isn’t going to go along with your plan.

And yet, even though the quit claim deed wasn’t valid, the long-time tenant did have a verbal agreement and one other very important ace in her sleeve: she’d paid the property taxes for years.

Finding the real heir to the property and dealing with another heir that had dollar signs in her eyes was a challenge. And even though the roof was caved in on the property and the house would have to be bulldozed, there was enough potential money in the deal that Lisa kept at it until she had it under contract.

What's Inside:

—Don’t be scared of visibly distressed properties, or properties with tricky legalities, as long as the spread is big enough.

—Why more than one violation makes a property a hotter lead.

—How a long-time tenant can gain a claim on a rental property, even if they have no legal contract.

952 » Deals Gone Bad #15 - Getting Sued On A Rehab That Later Got Destroyed In A Hurricane - Bill Allen Dec 08, 2020

Show notes

Bill Allen has turned house flipping into a 7 figure business with his companies 7 Figure Flip, Flip Hacking Live, and Black Jack Real Estate. He takes pride in the rehab work his company does, so when he was accused of selling a house with rotten siding, he felt like his reputation was at stake.

The Boca Raton house was a difficult flip from the beginning. As a larger, nicer home in a vacation area, buyers could afford to be picky about what they wanted because there were plenty of houses to choose from. During the rehab, Bill came across some wood rot because, like many homes on the ocean, the constant exposure to rain and damp ocean air wreaks havoc on the siding. But after three separate inspections, Bill felt confident that he’d done his due diligence to repair the house.

Maybe it was the fact that he was a “big, bad flipper”, or maybe it was his high-profile in the real estate world, but when a lawsuit tracked him down two years later, Bill knew that the charges were false. He was determined to make the situation right, even if it meant personally purchasing the house back from the buyers.

But wait, there’s more. Because after a while, Bill decided to sell the house again, but two weeks before the property closed, a hurricane hit Florida. Currently locked in a disagreement with the insurance company, Bill has some tips for investors whose markets are vulnerable to natural disasters. And even though nothing has turned out smoothly with this house, Bill feels that he did the right thing in protecting his good name.

What's Inside:

—Being in a high profile business, having a real estate coach, or being a real estate podcaster are all factors that might come into play when you’re threatened with a lawsuit.

—How buying a high-end house in a low-end area limited Bill’s choices for buyers.

—Does paying more for good coverage really matter with hurricane insurance?

—Rebuilding after a hurricane might take creativity and ingenuity to protect against future hurricane seasons.

We Will Set Up Your Systems And Marketing For You Dec 07, 2020

Show notes

I’ve always said there are 3 keys to success in this business: marketing, automation and delegation. Gavin and I have been working together for 5 plus years now actively doing deals and these three keys are our holy grail. And after all these years in the business and living up to those 3 keys, we’re now known for setting up the marketing, the systems and the people to do the work for us, in spite of us.

Gavin and I are doing deals left and right which may sound like we’re both putting in a lot of hours of work. No, we’re not. We’ve got marketing, systems and people in place doing all that for us virtually. This can happen for you and your real estate business too.

So, we’re doing a real quick, fast, easy, cut and dry and super simple implementation model where we take our systems, give them to you, set them up for you and help you get started in making money. So if you’re ready to kick start your REI business or need more information, go to:

https://REINetwork.com/systems

Deals Gone Bad #13 - Accidentally Buying A Property From Someone Who Didn't Even Own It - Justin Lee » Episode 950 Dec 04, 2020

Show notes

In 2010, when the real estate market was still a little wild from the crash, Justin Lee found a great deal from another wholesaler. After a 45-minutes drive to see the property, he felt pretty confident purchasing it outright with cash. The property closed with no hint of trouble, until he went to sell the property and Deutsche Bank stepped in to say that he didn’t even own it.

Scammed out of the cash, Justin had one thing in his corner: he’d purchased title insurance. For a year and a half, the lawyer’s fees piled up as Justin battled with the bank over who actually owned this house. And the title company picked up the bill.

Justin is a huge, huge fan of using title companies to protect his transactions. After nearly losing the entire $270,000 he’d borrowed from a hard money lender, Justin talks about why you should always buy a lender’s and an owner’s policy. Not only does it protect your money, it also relieves you of the months and months of stress, plus the time you might have spent talking to the FBI and law enforcement.

What kind of title company is best for your real estate transaction? That’s going to depend. Some title companies are just better at different kinds of transactions. So protect yourself from scammers by not skipping the title insurance to save a few bucks.

What's Inside:

—How to use the title company to increase your authority with sellers.

—It doesn’t matter if the seller has the deed; put your trust in the title company

—Why Justin doesn’t do tabletop closes anymore, regardless of how trustworthy the other buyer or seller is.

Deals Gone Bad #12 - What Could Go Wrong In A Probate Deal With 7 Siblings Involved? - Ester Tellez » Episode 949 Dec 03, 2020

Show notes

With every sibling seemingly in agreement, Ester Telles from Ester Buys Houses held a Zoom meeting to agree on a purchase price for the family home. But one reluctant sibling decided to throw a wrench in the plans.

With 7 siblings, there are bound to be family dynamics going on behind the scenes. One of the siblings was going through a bankruptcy in secret, and her bankruptcy was going to complicate her part of the deal. But she didn’t want anyone else in the family to know. If you’re sneaky about a special deal, karma is going to get you, says Ester.

Ester’s had more than a few lessons that she’s learned over the years. She shares about the first and only rehab deal that she did with a couple of partners. That whole saying of too many cooks in the kitchen also applies to rehab jobs. Too many bosses giving orders caused tremendous scope creep and confusion. And in the end, how many wholesale deals could she have done in the 4 months it took her to get the rehab job done?

Getting sidetracked by deals that were dragging out over months caused Ester to stop her marketing. I call that the kiss of death because marketing is not like a switch that you can turn off and on. It’s like a pipeline that needs constant leads pouring in.

Ester knows when to walk away from a potentially disastrous deal. Listen to how she decides when to cut herself loose and move on to a better, less headache-filled property.

What's Inside:

—What it’s like to wholesale a strip joint.

—Why a motivated seller who’s desperate for cash can change a whole deal.

—Stepping out of her comfort zone to do a rehab job, Ester learned the hard way about scope creep.

Deals Gone Bad #11 - How David Ounanian's Very First BRRRR Deal Went Bad - And Why He Didn't Give Up » Episode 948 Dec 02, 2020

Show notes

When he went looking for a way to free himself from cubicle-hell, David Ounanian settled on the BRRRR method: buy a house, rehab it, rent it out, then refinance it and repeat it all over again. With each house estimated to cash flow at $200-300, David knew he just needed a small portfolio to replace his W-2 job.

But of course, this is the Deals Gone Bad series, and you know that simply picking a strategy and finding a house is going to be the easiest part of the deal. After months and months of analysis paralysis, David’s wife insisted he pull the trigger, so he bought a $45,000 house in a class C neighborhood. The wholesaler he purchased the house from told him it would take $20,000 to make the house liveable, so David gave himself a conservative budget of $25,000 to get the job done.

How much would you estimate for foundation damage? Or new clay sewer pipes? Or repairing a chimney? Or pouring a new driveway to comply with a brand-new city ordinance? As the costs began to mount up, David thought he was going to lose absolutely everything on this house.

David shares how a mentor or an investor friendly agent would’ve helped him see the big costs of the property, and how he prevents getting sucker punched by a laundry list of repairs. For my listeners, he’s provided his Excel spreadsheet for estimating the true costs of repairs so that you will never be surprised when repair projects start to eat away at your profit.

What's Inside:

—How a simple $150 plumbing inspection could have prevented some very expensive sewer repairs.

—Talking to fellow local investors can help you see common problems in certain areas or types of homes.

—The careful and methodical approach David takes now to prevent a repeat of his first BRRRR deal.

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