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Today Matt begins his new series where he talks to real world investors about real world real estate. These investors don’t have anything to sell or promote, they have no secret agenda — they’re just smart, successful entrepreneurs chatting about investing in real estate.

On this episode, Matt welcomes 26-year old Richard Haynes (that’s right, he’s only 26!) to the show. Based in Hermosa Beach, California, Richard is killing it in the current market. Enjoy!


Recommended Resources:

  • It’s been great meeting you virtually. Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
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  • Need time? Work on your business rather than in your business by leveraging the time of others.  Access free information and find real estate-trained virtual assistants to help you free up your time.  Learn more at VAsForRealEstate.com.
  • Need training? The ultimate training environment for real estate investors: Version 3.0 of The Epic Pro Academy!  New look, new lessons & new content – we’ve got everything you need to know to get your first paycheck!
  • Need someone to do it all for you? If you’re an Accredited Investor, you can diversify your portfolio by hitching your wagon to our train and share in the profits. Go to EpicWealthFund.com to download the executive summary.


Podcast Transcript:
(Voice Over):  Epic Real Estate Investing Podcast Episode Eighteen.  You’re about to meet a man that can show you how he took control of his life and financial future and how you can do the same.  He’s never been on TV.  He’s not a millionaire.  He doesn’t know Donald Trump.  He is a full time real estate investor, newly discovered author, and family man.  He does not report to a boss.

He creates his own schedule and takes his family on a few vacations every year.  He got started investing in real estate with almost no money and a really crummy credit score.  And he’s going to show you exactly how he did it and how he continues to do it.  You will have to work. 

You will have to be responsible.  However, laying the beach, sipping fruity drinks is a reasonable goal.  Without further delay, your guru.  Sorry.  Your guide to a better life, the real estate investor, Matt Theriault.

Matt TheriaultHello.  Greetings from The Epic Real Estate Investing Podcast.  The podcast that will show you how to build wealth through creative real estate investing.  That’s what we will discuss today and for a long time to come so you’ll have the option to realistically retire in the next 10 years or less.  And enjoy the good life while you’re still young enough to do so.  How does that sound?

My name is Matt Theriault, author, full time real estate investor and family man.  Now if this is your first time listening to the show.  You want to do two things.  First, go back and listen to Episode 1 for the ground rules of the show.  Two, download the Free Real Estate Investing Course – How to Do Deals, No Money Required.  You can get at FreeRealEstateInvestingcourse.com.

It’s a step-by-step course of which I reveal everything that I do, everything that I say, everything that I use including the documents and contracts.  Everything that you are going to need to invest in real estate using no money or credit.  And that’s yours for free at freerealestateinvestingcourse.com.

Okay.  I am extremely excited for the next series of episodes.  As I will be interviewing some of my closest real estate investing contacts in order to share with you their perspectives, investing strategies, and their secret tips.

I mean perhaps you’ve heard interviews like this on other shows.  In fact, I’m sure that you have.  But what you might find different about the next several episodes is that investors I will be interviewing don’t have blogs.

They don’t have a podcast.  They don’t have an eBook to sell. They don’t have a course to sell. There are no seminars to sell.  There’s nothing to promote.  There are no alternative motives.  Nothing.

There will be no cliffhanger answers of which you have to go to their websites to get the complete answer. You’re going to get completely transparent, uncensored, thorough answers to your most burning questions.

Now having said that, mind you, these specific guests are not professional speakers.  They come from all walks of life.  Young, old, black, white, brown, male, female so you’re going to get a ton of information from people on the court from all walks of life.  You’re going to get that information from people on the court in today’s market playing the game.

There are no fans here.  There are no sidelines sitters.  There are no Monday morning quarterbacks.  There are no coaches just the players, just true players out there in the real world playing their game and winning.

So today. We’re kicking that off.  On the phone, I have a very good friend of mine.  He is probably my youngest friend.  Young enough to almost be my son just 26 I believe but a kid that’s got massive wisdom beyond his years. I mean he is a total inspiration to me.

He has accomplished so much in his first two years of real estate investing. I mean he could essentially be retired before the age of 30. I mean really at the rate he is moving, it would be no problem. I doubt he is going to because I know he likes what he does and he is continue do it I’m sure.

You know what I like about him is he keeps me on my toes.  He has amazing insights to investing strategy in the overall real estate market.  I mean he is so passionate about what he does.  He loves to talk about.  You know, he has helped me countless times in various situations but what’s so great about him is that he is here today to help you too.

So on the phone, Richard Haynes.  Richard, thanks for joining us today on the Epic Real Estate Investing podcast.

Richard Haynes:  Thanks for having me, Matt.

Matt Theriault:  You bet.  You bet. I’m glad you’re here.  So real quick, let’s just kind of go into how you got started so to kind of share with everybody how you got started investing in real estate and what was the initial attraction?

Richard:  You know that’s a great question.  I initially kind of got my start in real estate in college while getting an internship with a loan broker who’ve eventually like hired me on with no basic salary, commission only. I kind of jumped head first into the loan business in 2007.

And so I learned lot of that real estate during that time, much more kind of defining residential real estate.  As most of you know in 2007, 2008 we have the bubble burst and the financial crisis.  It was just so tough to get loans done.  I was getting a little discouraged.  I had investors calling me up, you know telling you what they wanted.

I was going like, you know what?  I’d rather be that investor calling up a loan broker.  You know, the same I wanted for my mortgage and real life cash flow to that route so eventually I ended up forming my own company that did a little bit of loan at the side but my main focus was actually getting into buying and holding real estate.

From there, I just ended taking classes, speaking with professionals, going to seminars, and every book I did it.  I started driving properties in Inglewood, California.

Working deals and one thing led to another where you know I got connected through searching deals with people who had intricate knowledge of certain buy and hold deals throughout Los Angeles.

It was kind of to keep it short I went from there and delve head first and started getting into buying and holding real estate.

Matt:  Nice.  Nice.  So you mentioned buying and holding is your primary strategy.  Then it’s right there at the end you talked about flipping, you mentioned flipping properties as well.  What’s your primary acquisition strategy? Where do you find most of your deals?

Richard:  You know, our primary acquisition strategy right now is at the courthouse or what they call in California the trustees sales.  So before a property become an REO or a bank owned property, it has to go to sales step.

There are obviously investors who bid there with cash so right now our main form of acquisition is that the courthouse steps as the things are auctioning them off.

So we also acquire properties through your traditional means of REO property and short sales as well.

Matt:  Got it.  So are you primary dealing with banks when you find your deals?

Richard:  Yes.  Correct.

Matt:  How does that have been working for you so far?

Richard:  You know what?  It’s been working out pretty well. I mean the trustees sales would you know the things are involved but not directly.  I mean they set prices and if the price is great, it’s a bidding war between you and a bunch of other investors.

The great thing about bidding at the trustee’s sales is that when you buy a property, you buy it that day and you own it.  You don’t have to go through a long-term negotiation on a REO or deal with an agent or the frustration and struggles of a short sale that could drag on for 6 months.  You buy a property at the trustee sales.

And its your that day but you now it does brings risks because you do inherit all the back taxes and the other liens from the property or distraught homeowner, late tenants so there are lot more risks that comes with it but the great thing about it is that you do get your property. You can start getting some work on whatever your strategy is.

Matt:  What are some of the steps that you take to mitigate your risks in that type of transaction?

Richard:  You know what?  The biggest risk of mitigator in a trustee sale is title in my opinion.  You got to make sure you have a great title made because if you buy a property that you think has clear title then all of a sudden you find out that you bought the 2nd loan.  There’s, you know, $200,000 loan that was recorded in front of you.

Not only, you know, that got a bad deal but also you’re going to lose a lot of money.  So that to me is the biggest way to manage your risk.  You know, I’ve heard people with bad title agents.  They get hurt pretty bad so you want first and foremost make sure that you’re getting something with a clean title.  You are prepared in the factor of things that you’re buying that you inherit lien.

Secondly, kind of, you know, on the backside is you really got to know your value.  You got to have access to the MLS.  You got to know the value of property because as you know you make money on the buy side.  If you buy something for more than it’s worth even if you got a clear title, you’re going to be losing money.

So definitely clear title with trustee sales and make sure you know your value purchased.

Matt:  Got it.  The Multiple Listing Service is your primary source of figuring values.

Richard:  That is, I mean, to be honest with you, it’s Southern California as my market so I know it pretty well but obviously there is micro marketing and you’ve got to, you know, I may even live in the area but there are areas between certain streets where you got to highlight in the MLS and figure out which things are selling.

You got to use those to figure your values because that’s what the buyers are going to be looking at if they see something selling below which you think you could sell for.  They’re not going to buy for higher than that so you got to know what the buyers and their agents are looking at and that is how your property will sell.  The MLS is the best way to get that type of information.

Matt:  Got it.  Are there any other online resources that you use to do your Do Diligence?

Richard:  A great, great resource that we use and is expanding rapidly I believe they’re in California, Arizona, Oregon, potentially Washington.  It’s a company called “Foreclosure Radar.”  They’re www.ForeclosureRadar.com.  They’re an incredible resource because they allow searching properties that have gone into notice of defaults and certain zip codes in the areas along with properties that are going to sale in trustee sales.

So you can, you know, not attract properties into default but you may hit up a buy or distressed home sellers where you can negotiate a great short sale deal but you can also track properties that you may want to buy at the courthouse.  You can see the date when they’ll sell.

Secondly, you can also if it’s sold or didn’t sell that day or whether it went back to the bank investors if it goes back to the bank that day then you know that’s a property that you can start watching to try to purchase from the bank as a REO.

Or a way to get in touch directly or a way to have it listed to buy an REO.  So it’s a really valuable tool. It gives you all sorts of information on property.  It’s something that I use everyday so it’s an awesome tool.  I highly recommend it.

Matt:  Yeah. I didn’t know you use that. I use that as well.  I probably get 90% of my lead list.  It’s an awesome tool.  It’s unfortunate that it’s just for States though.

Richard:  I know. To be honest with you, I think there’s so good and they’re growing so rapidly. I wouldn’t be surprised if they start expanding more shortly.

Matt: I hope they do. I mean it’s really an intuitive tool.  It’s pretty much going to be figured and be exactly what you’re looking for.  Awesome.

Richard:  It is.

Matt:  So you’re playing this game at the courthouse steps.  You need deep pockets to play that game.  Where do you find the money for your deals?

Richard:  That’s another great question too. I think a lot of people kind of stop in their tracks because of money.  You know, I’m the guy who graduated from college about four years.

I wouldn’t say I have deep pockets by any means to do what we’re doing at the courthouse steps but that shouldn’t stop you.  It doesn’t stop me.  What I’ve done is I’ve gone into networking events.

I worked my network at school with my professors and other people I met at certain business events. I’m raising money so we put together tools and money form investors. We tell what the return they can expect, the splits we take, and what they’re going to get like the fees that we charge.

If it’s an investment for someone to pay, you know what, I’m getting a great return on the risk I’m taking on that they invest us.  They’ve been able to get that cash to make it work.

We’ve, you know, done $300 worth of property for us based on just raising money form investors. We take parts of the profit. They take parts of the profits as well.  We’ve been happy.

We’re really at the moment kind of proving them that we make a lot of investors happy.  We are looking where to start the fund and raise a large, large amount of money so we can do this on an even bigger scale than we’re already doing it.

So really it’s, you know, getting that first investor to believe in you to deliver for them.  Then it just gets easier from there because the investors start telling other investors of what you got more money than know what to do with it.  So it shouldn’t be a limiting factor at all.

Matt:  Okay.  Right.  Now it’s very similar experience.  I mean, once you perform for one investor then they do start talking.  If you perform correctly per agreement that you have in place with them, you know, they’re sitting there once you give them their return.  They’re looking.  Okay. So what’s next?  So you get the same experience?

Richard:  It’s exactly that.  Once you make that one investor happy, they start telling everyone.  You know what? It’s a lot of people to make money and profit and flips.  I found the one that twist their investors first before anyone.  That’s when you get the referrals so even though I want to make a lot of money on a particular flip.

You know, we had one circumstance where the deal didn’t work out as planned.  It took 8 months longer than we thought.  The former homeowner sued us.  We had legal fees that we had to deal with that we eventually won so we had to eat those lawyer costs.

It made the deal where if I had taken my split of the profits.  The investor would have made virtually no money on this return.  So what I did, I called up the investor and said, “Hey, we are unlucky on this deal.  It’s your first deal.  I ate those legal fees through my company. I took the loss.”

They really appreciate that.  I think that when you work on the relationship on keeping your investor happy.  First, you‘ll eventually going to do more deals where you’re profitable and you’re going to take home a lot more money than you ever could expect.

So yeah, put your investors first.  Make sure they’re getting their money.  Once you make them happy then you have those referrals start pouring in.

Matt:  Right.  For someone that has never raised private money for and you know, I talked about it frequently on the show that you know you just got to get out there and meet people.  You got to rub bellies and meet people face-to-face, shake hands, and talk about network events, seminars, and real estate investor clubs all the time.

So for someone that’s never raised money before, I mean, what is that initial conversation look like.  How did you ask for the money?  How did you present the opportunities?  I mean, just how does it start look like in the beginning for someone that has never done it before.  Was did it look like for you specifically?

Richard:  You know, it’s funny like you said; it’s really just talking.  It’s hard to put a finger on how it happens.  As you asked for me specifically, you know, I was doing (pause.)

I started off in my career doing buy and hold. I got a call from an investor who wanted to do a distressed buy and hold over in Santa Monica.  We had a meeting and agreeing into doing some buy and hold.  One thing led to another where he didn’t want, it didn’t fit well with him.

So I said, “I got this plan to do a flip.”  He’s like, “that’s what I want more.”  He likes to risk a little bit more.  He likes the higher return.  We started these flips.  It’s just goes from there.

So I mean, it’s hard to put a thumb on it.  Starting a conversation, it’s like, “hey, I’m in the real estate business.  I do buy and hold. I do flips.”  You tell people what you’ve been doing, what you’ve been up to.  Really, people start asking because they’re interested in it.

Most people want to be part of the real estate business in some ways.  They just don’t want to put their time in.  You know, conversation opens up that way.  One thing leads to another whether they want to do a buy and hold deal with you or they want to do a flip.

You just have no idea how it’s going to happen without telling someone what you do.  You say, “Hey, we’re looking for investors.”  They go, “man, that’s something I’d be interested in potentially.”

Then you go, “great.  Lets set up a meeting. I’d love to give you more details on what we’re doing.”  I don’t know if that answers your question.

Matt: No.  Totally.  It’s very much the answer that I typically get. No one has an exact science or approach of how to approach an investor how to present an opportunity.  In the past few episodes, I’ve given actual structure.

I’ve given actual scripts.  But every time I ask somebody, everyone’s got a different answer.  So but it really comes down to being out there, talking to people, and creating that conversation.

When you create enough conversation then the opportunity comes your way.  It just kind of does happen.  It really does happen that way.

Richard:  Exactly.  Like you said, “creating that conversation” so that people know what you do.  Tell people you’re in the real estate business that you do buy and hold.  You do flips.  People will talk about, you know, you about to other people.  Someone else will be looking for that opportunity.  They’ll be like, “hey, this is what Richard does.  This is what Matt does.”

People coming in that way so it’s really just letting the world know that this is your business.  When you treat it that way, people would just start coming.

Matt:  Right.  Right.  And Richard, how old are you right now?

Richard:  I’m 26 years old right now.

Matt:  26 years old.  So you being so young and you know being so successful in this business in just a very short period of time, when you’re talking about your deal and you’re talking about people, do you come up with any challenges or obstacles because of your youth?  And if do, how do you overcome those?

Richard:  I did come with some challenge and obstacles.  Youth is always a big issue that comes up.  I think the hardest part about; you know doing this when you’re younger is the start up. I mean I started my own company and started getting into real estate deals at 23.

Some are saying on the outside that help me get over that hump is I created a company that our logo was kind of based off the Franklin Temple’s “Ten Investors” logo where they have that old Benjamin Franklin picture.

It looks like a company that is been around for a while.  I kind of took the same model but I used my great grandfather’s picture who was an inventor, you know, whom I look up to very much.

We kind of formulated a logo to give us an older look. If you sound professional on the phone and you got a logo like that, you know, people are going to treat your like an everyday business person, which is your first step to getting into that door to meetings.

Then they see you then they go you’re younger.  Then they say, “oh, I was so surprised you carry yourself and you run your business like someone who’s been in the industry for a while.”

You want to portray yourself that “I’ve been in the block type” and do your company on that sort.  Secondly, like I said, the biggest thing is that you’ve got to find that first investor who’s willing to take a shot at you.

At my school when I took the entrepreneur program, they always your first investors are always going to be friends, family, and fools.  Perhaps so you’ll have friends and family who believe in you and know you’re smart and can do it.

Then you’re going to have one or two people who you’ll meet who are so eager to get into it.  Don’t know anyone else who’d say, “hey, let’s a shot on this young kid and see how he odes.”

So you really want to work your network and people close to you.  Or you know if you don’t have that type of friends or family network, you know, there are “fools.”  I don’t want to call them fools but the people saying, “you know what? I really like this young kid.  He’s got a lot of fire and energy.  He is willing to learn.”

For a lot of investors, that’s all they need to know because if they think that they got an A person who refuses to stale.  They’ll invest in you all day. Once you do that, first person is right.

If they have a reputation, they’ll tell their friends and say, “hey.  You’ve done great things for me.”  Say, I got this investor. He is adding more money.  Now you’re doing it.  You have a resume.  You can show deals that you’ve got.

You’re just as good as that guy that has this business for 10 years or 10 years plus.  That’s the best way to do it if you’re a younger person trying to break into this business.

Matt:  Right.  I mean, that was exactly how an older person did it myself I’ve speaking of.  For that first investor, they’re definitely looking at you more than they’re looking at the deal.

I mean they’re not buying the deal.  They’re buying you so it’s very important the way you mentioned on how to carry yourself appropriately.  You know, you’re playing the big game.

You’re talking about a lot of money.  For some people, it could be their entire life savings o a significant portion of it so definitely.

Richard:  Exactly.

Matt:  Yeah.  Richard, what does your typical day look like?  I mean this is full-time for you.  When does your day start and what happens in them idle and how does it end?

Richard:  Okay. Well that’s a good question.  You know it can vary depending on what we’re doing that day.  If we sold a property and have money to go back and re-invest it but let me give you a typical day of what we’ve got cash to invest and the courthouse steps.

Normally, I am at my desk by 7AM.  I get you know all my emails out and about 30 minutes of things that we’re sent to me late night or early in the morning that need to be addressed right then and there.

Then normally, around 730AM I start looking for property that’s going for sale at the courthouse steps.  So I start analysing certain deals that are going to be going. I start finding out the value and if it’s a deal that has enough equity into it, I’ll start compiling a list of properties that I like.

So by about 8 or 830, you know, I’ll have a list of 5, 6, 7 properties.  Some days it’s 15.  Some dates it’s depending on the day and how many deals are out there. Sometimes there’s zero.

By 8:30, I’ll have a list of properties that I like.  I got a whole team set up with my company where I have drivers go out and drive the properties in the morning.  They get me all the details on the condition of the property, how much fix need to be.  Is it vacant?  Are there tenants who are the former owner?

They send me back all that information.  That type of stuff comes back where it works for the equity spread.  You know, and then I’ll be checking titles with our title company.  Make sure titles are clear.

Then I’ll really skim down the properties that still have big rooms on the returns that we want.  I’ll really skim those down and really get into details to make sure I’m getting an exact price that I can sell all that wiggle the costs.

I’ve got to a partner down on the courthouse steps with all of our cash.  I give them the next date.  He’s down there bidding all the other investors to take down a property.

So that normally goes for me for about 730 until about 1130 or noon.  And then the second half of my day, you know, I eat lunch.  While I’m eating lunch, I try to get, you know, done a lot of administrative work.  I’m responding to my legal team on properties we have going on.  We’re working on the book. We’re cutting the checks for paying our vendors.

Then about, you know, 130-2 o’clock, I’m looking at REO deals, short sales deals that are sent to me by people out there that have connections with other agents.  I’m working on those finding values or making offers on those.

Then you know, from about during that time as well, I’m also the properties that we take over when they’re vacant or when we do cash for keys.  Then driving to those properties by one of my team members who take a look inside in person in getting the exact fix up value.  Then we are setting times around 4 or 5 pm, we reach out to our contractors to go and take a look at these properties that we’re going to be fixing up or flips or hold.

Then coordinating the fix up of that then, you know, in the evening at 5 o’clock I speak with my realtors about listings, prices.  You know, properties that we’re about to list will price and the price we list with that, our strategy then they bring to me all the offers either that day or throughout the week on a particular property.

And we, you know, are signing off offers and, you know, open up escrows with them to be opened in the morning.  In a nutshell, somewhere in between we’re managing escrows on certain issues are putting up on files.

So that’s kind of a general idea of the day, and you know we’re pressed for time but you get it done when you got great deals.  You know, you want to get it all done.  It’s fun doing it throughout the day.

Matt:  Yeah.  Sounds like a very full day.

Richard:  (laughing) Definitely.

Matt:  it seems like it’s not going to end up anytime soon.  That’s a lot of doing. (laughing)

Richard:  (laughing) Feel free to cut me off and say, “we’ve had enough.”

Matt:  No.  It’s perfect.  I asked that question because I wanted to know the answer.  So if there’s a lot to know then there’s a lot to know so thanks for sharing that part of your day.  How is your approach to investing changed since you got started?

Richard:  Wow.  That is a great question. I think people, you know, definitely need to listen to this.  You know, my approach has changed in the fact that I just know I’m doing and I’m getting better deals than I did three years ago or four years ago when I started.

It’s really experience.  I mean, my approach has been I went from saying, “hey.  I want to do buy and hold and become a huge apartment investor” years ago.  You know what?  There are a lot of deals coming from down the pipeline.

For me, flipping make quick money.  We’re not going to go to the bottom anytime soon at least here in my Southern California market.  I feel like we’re going to bounce along the bottom and keep going down for the next 2, 3, or 4 years as we clear out on this foreclosure inventory.

So my strategy’s been changed.  I’ve been like, “I want to be flipper.”  I start seeing inventory dry up then I’m going to buy and hold.  So really like my strategy has changed as I‘ve gotten more and more knowledge and what I bought property to hold in 2008 and 2009 just as it was starting to go down.

There are still great deals and cash flow and great return. We’re extremely happy than what you can get better at the stock market.  But those properties right now if we try to sell them, they’d be under water.

But the fact of the matter is we bought them on cash flow on a long-term basis.  Now with my experience, I know when to buy a deal where I’m going to have equity.  If it’s slow enough, I’m like, “you know what? If the market goes down on another 15% or 20%, this property is still on the black?

So my strategy has changed because I know a lot but here’s to saying that even I got a property and the cash flow is fantastic but it’s, you know, slightly underwater.  I would have never gotten into the industry if I hadn’t done those deals.

I wouldn’t where I am at if I haven’t done that.  Those deals are kind of like all I did.  This is my first deal.  It’s your starting point.  Everything now from thereon basically compares to your first deal.

You try to get better and better and you will so even though my strategy’s changed, I wouldn’t change it for one second.  You know, saying, “man, I wish I had used this money to do flips or bought a certain different asset classes as opposed to what I bought because you got to get started.

Yes, my strategy’s changed but if you don’t start then you’re never going to have any idea on how to change your strategy without employing the strategy first.  I hope that answers your question.

Matt:  Yeah. I mean absolutely.  You and I were discussing almost the very thing last night at the USE Networking Event that personally we got started about the same time when we moved along and grown it at different rates and at different speeds.

We both had very unique experiences.  We were discussing how, you know, you’re chugging, chugging along and you’re getting these experiences under your belt.  You might not think you’re making any progress or at least not the progress that you intended to make.

Then all of a sudden, you know, we’re discussing just how the last 6 months for you and myself kind of confirmed this and put it in a way that I never thought of it before.

But just in the last 6 months, my cash flow has jumped considerably.  I was like; it was so easy in these last 6 months.  Like where was that in the beginning?  Why wasn’t that happening right when I got started when I thought that’s what’s exactly I was pursuing.

It sounds like, you know, what you’re saying. I agree 100% by the way.  You just got to get started, you know, you’ll never going to know it all.  You don’t need to know it all to get started.  There’s a lesson within each transaction that you do that you’ll probably never ever going to read in the book.  You’ll never hear it at the seminar.  It’s experience that you just don’t get unless you’re actually out on the court playing the game like you are.

Richard:  I agree 100%.  You know, you know you hit it right in the head.  You got to develop the right context, define the deals.  You got to have the right contract.  You got to have to develop an investor network when you first start.

You know, when you first starts, things are going to be choppy but like you said until you get on the court and do it and learn it and put your heart and soul into it then all of a sudden one day, you know, you’ve been doing it for 3 or 4 years then all of a sudden everything puts.  Then you’re like wow.  Someone sends me a deal I know exactly what the value is.

I got an investor who wants it. I have the tools to close it and we take it down.  It’s a great deal.  Every one’s happy.  You’re like, “oh my gosh. I can do this over and over and over again. I can do this for the rest of my life.”

So you’re 100% on.  It’s really just getting on the court, doing your first deal, and then you have a place to start from and just go for it.

Matt:  Right.  When you were describing how your strategy has changed or your approach changed, you mentioned something about the California market and how you see it, you know, bouncing along the bottom for the next 2 to 3 or maybe 4 or 5 years.

What are some of the ways that you stay up to date with the market?  How do you make the predictions?  How do you come to your conclusions?  How do you stay up to date with the market?

Richard:  You know what?  A big tool that we use are the trustee websites and what they do is that there’s actually a large trustee websites that they do a lot of the courthouse step sales for the banks across the country.

They measure the properties that have been getting notice of defaults, notice to trustee, sales, and those are the types of properties that I follow. So those are the statistics.

I think the biggest ones are compiled there in everything else. I think they said, this was a few months ago, so could have been changed but the were either notice of defaults or notice of trustee sale properties.

I think 4 million across the country.  If you read reports, you know, a year and a half, they sold a million of foreclosures off some of the banks.  This year I think they’re paid still $800,000.  You go there’s $4 million in the pipeline and they’re all getting rid of $800 grand to a million properties a year.

We got a long time to get through this stuff.  Then what I also use is I use Foreclosure Radar.  You can look and see what properties are supposed to go to sales that day.

You see, how many properties are postponed in a month because someone’s filed for bankruptcy or because they’re a negotiating a short sale or a loan modification.

So if you just look at your target area, let’s say mine is southern California, you’ll see, you know, this 400 properties in your target area that are suppose to go to sale that day or that month.

Maybe only 30 or 40 of them are actually settled that month.  Then you go, man, there’s really an extended pretend beam of the banks because the state order released all that inventory now.

The real estate just crash.  They just lose more money.  The United States would be hampered so that really controls the inventory that comes out.

When you see those numbers of how many people are in default based on how many were actually clearing through the inventory.  It’s going to be a slow and painful process.

And it’s not going away anytime soon so you really got to look at the supply and demand as far as real estate is going here.

Matt:  You know this is one of the reasons I love talking to you. I love talking to real estate investors. I mean you can tell right away inside of a conversation who’s doing it and who’s pretending.

What are some of the, how much have you invested in your real estate investing education first?  Do you continue to invest in your education?  In what ways?

Richard:  so I actually ended up joining on a real estate investing course back in 2008, it was basically a real estate school out in Arizona that hired actual real estate investors like myself.

They taught different courses on flipping, buy and hold, multi-family units, seller financed notes. I actually started one day. I went to college and got a business degree and focused on entrepreneurship.

I need a crash course. I need instant knowledge on how to do this stuff and what better than go to actual investors who are teaching it.

I ended up spending $20,000. It was actually an incentive and split it with a partner and do $10,000 between the two of you. I went out there in Arizona once every two months.

I took a 2-week leave from work and took a weeklong out there and learning as much as I could from these courses. That gave me a great ace.

It was probably one of the best investments I could’ve made for myself because, you know, even though I went to business school. It doesn’t teach details of the real estate market when you get these experts doing it who give you exact details on how to do things.

So that was step one.  Then when you get the confidence to go through those types of courses. I then started, you know, finding a great accountant, finding great lawyers, and great accountant are going to teach you how to structure your business and taxes.

My lawyer has just been fabulous in terms of teaching me how to protect myself.  You know, we can get an eviction done in two months, which in California is really tough to do at one point.

Then I subscribed to periodicals that are real estate based.  You know, I’m part of the Apartment Owners Association in southern California.  I listen to Bruce Norris who is an incredible resource at the Norris group who does all sorts of fix and flips in the Valley.  He goes to lobbies to Washington, DC on how they should help investors.

I subscribed to forecast newsletters.  So those always keep me up to date.  I’m constantly getting emails form the Association of Realtors to give me an update on what’s going on in my market nationally.

Then lastly, you know, I went out and found mentors. I found the mentor at a USC football game.  I watched a game.  He was sitting next to me in the seats.  He happened to be a trustee on the board of USC.  He was in commercial real estate.

I said, “I’d love to follow up with you.”  He gave me his card I called him.  He helped me with my business plans.  He goes shares with investors want to see like here’s what I do to raise my money for my big commercial deals.

You know, those people are not big and scary because people want to talk to them all the time. They give up their business cards.  Maybe one out of ten people call them.  One will actually follow up and write the business plan.  You know, one out of ten will actually take what uses then sends it back to him for comments.

I mean there are not a lot of people who will say what they want to do then actually do it.  That impressed him.  He is a mentor that’s helped me a bunch.  You know, and helped educate me as well.

I mean you got to spend money on periodicals and in real estate education.  You got to spend money on the real people to do your accounting and legal matters.  You got to find mentors then just stay updated with the market.

You actually stay educated by constantly deals because you’re actually doing what the market is doing as well.  That’s the best advice I could give in terms of education and how I kind of went about doing it.

Matt:  And, you know, with regard to mentor because that’s the question I get frequently is actually a question I have in a little bit later for you.  But let’s talk about it since you brought it up. I mean that’s exactly how it happens.  Isn’t it?

You just by being out there in the conversation, being out there in a community.  I mean you were out there in a USC football game and happen to sit next to a guy because you raised the conversation.  He gave you his contact information.  You actually used his contact information.  I mean it’s an invaluable resource for you.

Richard: it’s 100%.  It’s really following up so you’ll be really surprised.  There are not a lot of people in this world who follow up and say what they’re going to do and actually do it.  You’ll be surprised if you do that and do it for someone who is successful and someone who kept his word.

Someone who follows up and does things when you do that.  Then you find the like-minded person like themselves.  They’ll be happy to help you.  I’m sure you know for most of them they’re going to give a lot in terms of information and pushing your business forward.

Matt:  Right.  Right.  So Richard, what is something that you now know that you wished you’ve known when you first got started that you wished would’ve told you?

Richard:  Something that. Man. You know what?  I wish I had just started earlier and let me you know kind of circle around how I wish I would’ve known what I could’ve known earlier.

Basically, when I bought our first buy and hold property in 2008, it was the triplex.  At that time, you know, I wanted more units but it was such a distressed time in real estate.  There were no loans.  It actually buy single family residences for, you know, 80% of the cost of what we bought the triplex even though we got better cash flow.

These single families were selling that. I could’ve use money to taking down 3 or 4 single families where they would’ve cash flowed me a little bit less but the market bounced back up because there was an over correction.

And I kind of sold each of the properties for a $100,000 or $160,000 profit.  So really, to circle around on I wish I started early.  I wish I was in the business about three to four years prior to that because I would’ve known to know what, “let’s not buy this triplex.

Let’s buy these four single-family homes because I’ve never seen prices this low.  We’re not going to get that high cash flow but there’s no way single-family homes in this area are going to stay that low.  It’s an overcorrection.”

So basically, to circle around as I keep saying I wish I have known the market earlier. I would’ve made the right move and made a little bit more profit than we did now but then it kind of goes back to what I said earlier.

I hadn’t had a starting point because I haven’t known the market and really it’s the experience of getting started doing the deals.  You know, like I said I just wish I had more and more experience so that I knew what were the great deals earlier so it’s really market experience.

Matt:  Right.  Yeah.  You know, same thing. I wish I hadn’t tiptoed around it for so long. I wish I ‘d taken bolder action right in the beginning.  If you’ve come to recognize that whatever was stopping you before like wasn’t really there like it didn’t really exist.

Richard:  Yeah.  It didn’t exist then when you get the experience, now I know what I didn’t know.  It opens up a whole new area of your business that you didn’t know that you could actually do.  It really helps out.

Matt:  Right.  Cool.  Richard, this has been an awesome interview.  You know what?  I sent out a survey to all of the listeners. I know they’re getting a ton from this conversation but they sent me in some of their most burning real estate investing questions.

I pulled out some of these. I wanted to know if you could help me answer them.  Would that be okay?  You got enough time?

Richard:  Yeah.  That’s great.  For sure.

Matt:  I’m sorry I got to interrupt this interview as it goes on and on and on. You know, Richard just shares invaluable insight that I don’t want you to miss any of it so I’m breaking this interview up to two episodes to give you a chance to digest all of the great nuggets that Richard shared with you today.

No worries though.  I’ll post the second half of the interview in the next few days where Richard answers your most burning questions. I think you’ll be shocked by what he has to say.

That’s it for today though.  Until next time, as a very wise person once said, “good habits form the youth that make all the difference but it’s never too late to be whom you might have been.”

To your success, I am Matt Theriault.  Living the dream.

(Voice Over):  Thank you for spending this time with Matt Theriault and the Epic Real Estate Investing podcast.  When you have time, stop by iTunes to leave your comments and let us know what you think of this show. 

And if you haven’t done so already, get started investing today by visiting FreeRealEstateInvestingCourse.com to access Matt’s free course on how to deals, no money required.  Until next time.  To your success, to your success, to your success.

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