On today’s show, Matt begins a new series of interviews with real estate investors. But these interviews are special because they’re with Matt’s own coaching clients. Prepare to get an earful of the good, the bad, and the ugly in these candid, open discussions about investing.
You can expect to come away from this episode with knowledge about:
*Researching new markets
*Using one of the internet’s most “deal rich” sites that the majority of people have forgotten about
*Building your confidence so that you can create great results as effortlessly as riding a bike or brushing your teeth
Download Matt’s free real estate investing course, “How to Do Deals – No Money Required,” at FreeRealEstateInvestingCourse.com.
- 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.
- Need money? We have secured more than $15,000,000 of funding for the Epic community, people just like you. Get access to fast cash for your real estate investing business with our “one-of-a-kind” credit-based funding program at EpicFastFunding.com
- 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.
(Voice Over): Without further delay, your Guru, sorry, your guide to a better life through real estate investing. Matt Theriault.
Matt Theriault: Hello and greeting from the Epic Real Estate Investing podcast. This is episode number 44 and this is the podcast that will show you how to build wealth through creative real estate investing 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.
My name is Matt Theriault. I’m an author, I’m a full time real estate investor and I’m a family man. This is an awesome time of to be a family man and if this is your first time listening to this show, welcome, glad that you’re here. Now you are going to want to do two things.
First, go back and listen to episode one for the ground rules of the show and two, download the free real estate investing course, How to do deals: No money required.
You know to this point in my investing career, I’ve implemented 12 very different specific strategies of investing real estate using none to very little of my own money and I’ve yet to use one point of my own credit score.
Hopefully that can change soon. I’ve started to do some work on my credit score because I would love to take advantage of some of these very inexpensive money that’s out there right now.
And you know, inside this free course, I gave you the very first two strategies that I used of which I believe are the easiest too and they’re the two that can generate the quickest success, the quickest results for you and you can get those for free at freerealestateinvestingcourse.com.
I take you right from A to Z. I leave nothing out, okay? Alright, I’m very excited about today as it’s the first episode of a series of shows where I’ll be interviewing some of my coaching clients as, you know, I mentioned last episode.
I think it was last episode, maybe two episodes ago but I created a new intention around this show at the sense that I’m no longer just here to inform you for the sake of informing you.
Not just going to teach you, not just going to give you information but rather, my new intention is to inform you for the purpose of actually making a difference for you. I want to see you actually get the results.
And I’m still not totally sure how the show will change. Maybe you’ll notice a difference and I don’t know, maybe you won’t but I certainly have a different intention behind my work.
You know, 2012 was my greatest year ever in real estate. I’m so blessed. I mean, so grateful and I learn a ton and I want you to experience the same results. I want to pass on my years of experience as I have been doing and I want to share with you what really has made a huge difference for me this past year.
And I want to share it with you in a way that you can actually duplicate my results. So that’s the intention and today is the first episode in the series of episodes, the interviews of my coaching clients.
And I want you to hear from people just like you, a lot of people just like you. I want you to hear about their mindsets, I want you to hear their backgrounds, from all different types of backgrounds.
I want you to hear the process inside of their investing and what their daily activities look like and how they’re finding their deals and how they’re finding the money to do these deals, everything! I want you to hear it all and if you hear enough people’s stories.
I mean, sooner or later, something is going to click for you. It’s going to click, you’re going to be able to identify with somebody and it’s going to be just the piece of information that you need to really just transform the results in your own business.
The tipping point, so to speak. And you’re going to hear from clients of mine that had great results, you’re going to hear from some that had good results and some had mediocre results and some had really no results at all.
I mean, they got, they had no transactions completed during the coaching program and I want you to hear the good, the bad and the ugly because I think there’s something to learn from everyone’s experience and there’s so much for me to learn from the experience as well.
Because I get to hear what happened or what made one person succeed and the other person didn’t when they both heard the exact same information, they got the coaching, they have the same amount of coaching.
You know, that’s really important to me and hopefully you can pull something of that as well and I want you to just basically just take this information and so you’ll know what to do, okay? Just as importantly, you’ll know what not to do, okay? Sometimes, that’s just as important. Actually, it is just as important.
On the phone today, I am joined by an awesome, awesome dude who is just coming to the close of his three-month coaching program and he’s pretty much on autopilot right now with his business.
You know, aside from an occasional email or phone call, he doesn’t really need me anymore. I think that’s awesome. I mean, that’s the intent of my coaching program is to get you to not need me as soon as possible, okay?
So let’s get into it. On the phone I have Mr. Alan Randall. Alan, thanks for joining us today on the Epic Real Estate Investing Podcast.
Alan: Glad to be here.
Matt: Yeah, I’m glad that you’re here as well. You know, you get started. Why don’t you just tell me and everybody else a little bit about yourself, your background and, you know, what you’ve been doing leading up to this point before we met.
Alan: Well, before I entered real estate full time. I was in the mutual fund industry for five years. I worked for NASAD manager in Seattle, doing operations and accounting for them and about two years into that, I began to investing real estate part time.
As I bought a duplex in North Seattle and managed that myself, you know, had a few bumps along the road but learned a lot from the experience. About three into that, I just started to jump into real estate full time after listening to the first 10 or so episodes of the podcast.
Matt: Really? Okay, so it was actually the podcast that inspired you to get into real estate?
Alan: It was the final step. I’ve been contemplating leaving my desk job to pursue my passion for real estate full time and the Epic Podcast was really the final push that led me over the edge and, you know, made me turn in my two weeks’ notice and finally gave me the, just to do what I really wanted to do which is real estate.
Matt: Cool, gosh, after all the conversations we had, I didn’t know that part. Thanks for sharing that. You can’t, you mentioned that you come from the Mutual Funds world. I mean, that’s somewhat, not somewhat, it is an investing outlet, an investing industry.
Definitely a vehicle for investing. What was it about, you know, the Mutual Funds that wasn’t working and causing you to even look anywhere else?
Alan: Well, the Mutual Funds Industry ironically is, I feel that it’s not so much focus on investing as it is, you know, treading water now.
Most investors who buy mutual fund except that 10 percent is about I’ll get in any year and there’s really a sense of acquiescence in the industry and also for the people like myself who are working in the industry.
The going mentality is, you know, work for 50 years and then, you know, assuming a pension fund or retirement fund works out, we then can retire and start enjoying life and that really didn’t fit well for me especially given all the training I had and all the knowledge I had about investments.
I knew that there was a better way and I studied every investment vehicle under the sun and I realized that Mutual Funds just weren’t the right route for me and that’s why I ultimately left.
Matt: I’ve got a couple, no, probably I think maybe four now of past financial planners and some of them extensive, 15, 20, 25 years in the business and they’re all, it’s, they’re coming to the exact same conclusion. I met a guy, actually, just last night at a USC Martial School of Business Networking event and he worked for Morgan Stanley and he was kind of expressing a little bit discontent with the industry as well.
Anyway, as a side note; and I just noticing a commonality that’s I’m crossing paths with more and more people that are inside the industry that have that sentiment, you know. Alright, so tell me up to before us meeting, what was your experience in real estate?
Alan: My experience in real estate was good. I managed to find some really good tenants to put into the one investment property I had, the two unit house in Seattle, and I started doing the math about a year into holding the property and I realized it was doing really well and if I could just find a way to replicate it, I could build myself a nice retirement fund from that instead of going the traditional stock and bond route.
Matt: Sure, sure.
Alan: It worked out really well.
Matt: Right? So you hadn’t yet one duplex when we met. What do you think it was that was in your way that was preventing you from moving forward and doing it again?
Alan: By far the biggest thing was fear. At the time they purchased the duplex, it was sort at the beginning of the real estate bus. It was about late o’ nine and I didn’t realize how deep the bleeding was going to go as far as, you know, the three-year downturn I was about to see.
I thought the price drop I had seen in my area was just a momentary blood but after I purchased it, I started seeing, you know, people getting laid off and a lot of financial heartache and I guess I didn’t feel that. I had enough experience for resources to leave my full time job and do this full time.
In retrospect, I probably did but like I said, I guess the biggest obstacle was fear at that point, you know, fear that I wouldn’t be able to be successful in real estate given that I only had about two years of work experience at that point.
Matt: So obviously you did take that leap. What was the, what was it that happened in your life? What was the tipping point?
Alan: Just general dissatisfaction with my current route in life. You know, I realized that the corporate ladder was definitely not for me. You know, I found myself waking up every morning, going to a job that, you know, that was middling at best and just being in an environment where, you know, creativity and innovation weren’t rewarded.
It, by any means, it wasn’t a bad environment. It was a good place to learn and make a salary but that was it. I was surrounded by people who had already accepted that.
You suck it up every day and do that year in and year out, you know, you keep it down, shut up and do your work and that’s overtime started to grind away at me. I really saw myself in the mirror every morning and just realized, “I can do so much better. What’s stopping me from doing it?”
So I really did a lot of soul searching for over a year because at the same time I thought about going into the MBA route, getting a graduate degree from Ivy League business school.
Obviously, I didn’t get in so I had to rethink my entire life plan and, you know, at that point, I was pretty beaten down from work and, you know, being rich I could buy business schools.
I realized, I already have this tremendous asset via my real estate holding in Seattle. That fun duplex and also a lot of experience garnered from that I realized, you know, “I’m young; I have to make this step.” And I ultimately did.
Matt: Awesome, awesome. So what I’ve gotten to know about you over the last few months is that you are, you seem very detailed oriented and continuously do your research and you’re very proactive about it. So I imagined that you would also that was also your character before we met.
So I’m curious to, with all of the options available for real estate investing education, may I ask why did you choose one on coaching with me and why did you choose the Epic Pro Academy?
Alan: Yeah, absolutely. I must have listened or read, you know, a hundred different do programs and books prior to coming across the Epic Podcast and your school. So I’ve seen what work, I’ve seen a lot of charlatans in the industry.
I’ve seen a lot of good and the Epic program was really the best combination of, I think, sawed material, realistic expectations and, yes, really well polished presentation. I’ve seen a lot of programs that either had one or the other but the Epic podcast was really the first time I’ve seen something that was brutally honest, self-informative and, you know, had a very, very sleek polished to it.
Matt: Awesome, thanks. So since you’ve been involved in, what is your experience been inside the Epic Pro Academy?
Alan: It’s been good. It’s been good. It’s foremost, for me, has been inspirational. You know, the personal side of the podcast, you know, where you share your background and story has been really refreshing for me because it’s not coming from the perspective of someone who is or claims to be a guru or someone who has all the answers.
It gives me motivation to get up every morning to do this because its proof that the average person can, you know, with a little bit of effort make an outstanding weapon from this industry.
Matt: My next question is and maybe you already answered but if you can elaborate on it, that’d be great. What about the academy has made the biggest difference for you?
Alan: It’s, well, the personal coaching has really been beneficial to me. That is probably the biggest impact from the academy as far as my career has gone because that held me accountable to all the these goals and plans and ideas I had in my head and, you know, forces me every day to get up in the morning and actually do the legwork.
You know, before when I was just studying this on my own, it was very easy to put off the cold coin prospects till the next day because, I mean, let’s face it, no one likes to face rejection but knowing that every week I had to, you know, I had my feet held to the fire. It really kept me disciplined and kept me on, you know, the cycle of success.
Matt: Any epiphanies or busted myths about real estate investing this far?
Alan: Yeah, the biggest one is there’s no magic formula. Prior to, it’s about three years ago, I believed that one had to be a certain, you know, of a certain persona or certain dynamic personality to be successful in the industry and that there was some magic secret to drawing leads from prospects and that’s, you know.
How could the average person being of mortal status be successful in the industry because so many gurus make it out to do that, they’re super humans. I realized over time just doing what I did to the program and staying to the plan that most likely those people claim to be, you know, herculean or probably lying. If they aren’t, they haven’t been able to replicate that level of success because it was truly luck.
So, I guess the biggest epiphany was, you know, Hard work pays off, it’s not rocket science, it doesn’t take a genius, it just takes doing small right activities every single day. Eventually, success will result.
Matt: Awesome, so speaking of success, tell us about your success this far.
Alan: Okay, yeah, so within the last, I think, two and a half, three months since I started doing this career full-time, I put a north Seattle house under an option contract for about $ 60,000, $ 70,000 last term. Its tax assessed value and that option is just being recorded right now with the county and will be good for the next 10 years.
And then the next deal I have under contract right now is a duplex in Cleveland, Ohio. That if all goes well will pay me, you know, about equivalent of twenty percent of my previous full time salary at my old job without much effort on my part, on the management.
Matt: Awesome. So that’s good in the first two and half months or so. You got two deals. Let’s go ahead and dissect the one in, you actually are in Seattle, right?
Alan: I am.
Matt: Okay, so you live in Seattle and you found a deal in North Seattle which you’ve created an option for. So first let’s just talk about, how did you find that deal?
Alan: It was through the yellow letter writing. I really went on a fierce marketing campaign with ad and road probably about a thousand letters by hand and just sent them out to certain zip codes, to certain properties in the Seattle area.
Three bedrooms, two bath houses and you know, the nicer zip codes. I got a lot of rejections, got a few weirdos and a few jerks but a lot of people responding saying they were interested and then this one house in that I put under contract was a situation where they’re interested and really had to make something move or had to get a transaction done.
I originally gone in there with a plan of either rehabbing or wholesaling the property but that didn’t quite work out. So I figured at that point, my only option was to write a real estate option for the property and the owner, who was under a bit of financial distress had agreed to it.
She’s going to lease out a property while she moved out and proceeds retirement and then I have the option to purchase a property at any time within the next 10 years.
You know, during the process, prior to inking the deal, it took a lot of negotiation, a lot of education of the real estate process for her and really employed a lot of tools that you’ve mention in the podcast that, you know, negotiation is the best much about, you know, presenting myself as it is learning about the seller and it worked out amazingly well.
Matt: Very good. So the value of this property as it stands right now, what would you estimate it as?
Alan: I’d estimate it’s about 240,000.
Matt: It’s valued at 240, okay?
Matt: And then, so why did she agree to you purchasing an option on that property at 60k below that.
Alan: Well I explained to her my position. I was upfront that this is how I make my living so there has to, I couldn’t purchase it for fair market value otherwise, I can’t make anything off the property. I outlined her my estimate cost of rehab of completely redoing the property because it is quite old and tired looking.
And then I also factored in a certain marginal profit. So that was really the whole just of why she agreed to sell it so much lower than what it’s after repair value would be.
Matt: Okay, so the after repair value is 240?
Matt: Okay, perfect. So why wouldn’t she sell it now?
Alan: Basically, cold feet. I haven’t been able to identify the exact reasons why she backed out from selling at that point but I imagined she would just not ready to sell and but she was entirely open to doing at some point in the future.
Matt: Got it, got it. Okay, cool. So how much did that option cost you?
Alan: 100 plus recording fees.
Matt: Wow! So you’ve locked in into for yourself and the future some point, you know, probably if the market just stays as it is. You know, probably $10,000, $20,000 and it all costs you was $100 to reserve that, right?
Matt: Cool, cool. Not a homerun but there’s nothing wrong with having a stack of those in your desk and exercising them as they come up. That’s one of the more challenging things that most people discover in this business is finding deal.
And you know, if you find an opportunity that you just don’t meet eye-to-eye with the seller today, you know, putting an option agreement to, on that property and hopefully appreciation can bring it up to where it will be a deal somewhere down the road is a great strategy.
So congratulations on that and I will give you some credit because we didn’t talk a whole about options. I don’t teach a great deal about option recover. I cover it in the academy but you definitely took that upon yourself. You’re proactive about that and I just wanted to congratulate you on that.
Alan: Thank you.
Matt: That’s the type of… Yeah, that’s the type of initiative and incentive and creative thinking that doesn’t necessarily required to succeed but it’s certainly increases the opportunities that you’ll be able to cease. Does that make sense?
Alan: Yes, yes it does.
Matt: Perfect, awesome for your intuitiveness on that. So the next deal, you’ve got a duplex that I know is under rehab right now in Cleveland, Ohio. So tell me about that one? First of all, it’s in Cleveland, Ohio. How did you end up there from Seattle?
Alan: Really just, I went where the deals were. I found that that deal during the doing cold calling by Craigslist. I called a lot of real-estate-for-sale ads that were posted online and I had to sit through a lot of interesting transactions and finally settled on this one.
It was just really just one call out of the hundred that I made and it turns out this, the person I’m buying it from, is a distressed property broker for the entire United States area.
He had purchased this duplex as a bank owned property for a very low price. I think about half of its tax assessed value. And, you know, I had not gone into the transaction thinking Cleveland, Ohio was going to be my place of operations.
I actually prior to calling him, I never thought I would go out of state or, in fact, I hardly even knew Cleveland was but I familiarize myself with the environment where this property was located and realized, it is on my criteria, it was in a decent neighbourhood, it had a strong economic backing to it where I could find and retain good tenants and it was a decent looking property that could command a certain level events.
At the price that he was willing to sell it to me for, it really seemed like a homerun. So I done property management for about three years, four years prior to find you that deal myself.
So I was very comfortable with logistical steps of, you know, building out a team of agents and property managers and rehabbers on the ground of Cleveland to manage the property and without me having to constantly be there.
So I settled on that deal because the rent to price ratio was just amazing and if I could replicate that deal several times over, I would gladly do it.
Matt: Right, right. It sounds like you’re on your way to doing something along now those lines, right?
Alan: That is correct.
Matt: Cool. Let me ask, you went through this really, really fast about you finding this guy cold calling from Craigslist. He had a deal, a duplex, in Cleveland, Ohio and then you went and did your research and built the team and got familiar with the area. I think that’s the part where most people get stuck.
It’s probably the two most common objections when I’m dealing with people through our cash flow savvy business is that either they’re uncomfortable dealing out of state or the other one is that the spouse isn’t down for it. Those are the two most common reasons people don’t.
But really that investing out of state comes out most frequently. So how did you become familiar if you didn’t even know where Cleveland was before? How did you become familiar with that market?
Alan: I know where to go to pull basic demographics and economic data.
Matt: Perfect, so where did you pull that from?
Alan: Since this bureau is a good place, the BLS, The Bureau of Labour Statistics, truly had nice set of heat maps that one can feed crime or school statistics and their system. If you searched, there’s a lot of information online. I mean the internet has really made investing out of state an accessible business, in my opinion because all the certain information is available for free and instantly.
So those are the information sources I go to to get a sort of a bird eye’s view of the neighborhoods that I invest in. And then the next step is really just getting in touch with a good property manager. I go through the National Association of Residential Property Managers. NARPM.
I find a good representative on the ground really they’re the next step and probably the most critical step in determining where there actually make the purchase because if their bread and butter is to find good tenants and collect rents on going and they have the best of interest and making sure that the property is located in a decent neighbourhood.
Matt: Cool. So go to census bureau. The BLS, that’s the Bureau of Labour Statistics. Truly has a good resource and then the National Association of Residential Property Managers. That’s .org, I believe, right?
Alan: I believe it is. Yeah.
Matt: Perfect, so those are all great resources that I’ve certainly used in the past and so congratulations for using all that information and making your decision. So now you know your area, you’re satisfied with the area that you’re investing in.
You’ve threw a few different interviewing few different property managers. You’ve decided on one there and now the property is under rehab. How did you find somebody to fix it?
Alan: Well, the sellers taking care of the rehab. His original plan was to actually flip the property but because of his circumstances, he is actually going to just voice East.
Technically he is still flipping it to me but he was already in the middle of rehab as when I contacted him. So he is just going to finish out, you know, cleaning up the floors, replacing the roof and giving it tenant-ready.
Matt: Perfect, perfect. So a little tip just on hearing that because I didn’t understand exactly. Just a little tip on that is if you like the job that the rehab team does, that’s certainly someone’s information that you want to get if you intend to keep on rehabbing that area.
Matt: So that’s just kind of how it works. You go from one contact to the next, to the next, to the next, to the next and all of a sudden, you end up with an awesome team it’s no different than investing in your own backyard. It becomes that easy.
So awesome. Let’s see. So that property right you’re in escrow on that property right now, right?
Matt: Perfect and when do you, when is the closing date on that?
Alan: The closing date is about two weeks from now?
Matt: Two weeks?
Matt: Cool, awesome. Congratulations on this rapid success. I’m very impressed. There is one thing that you’d share with me over one of our calls.
I’m not sure if it’s the last call or the call before but through your cold calling and also congratulations on that. Most people won’t do that. It can be a scary proposition. First of all, based on just what I just said, what has your experience been on cold calling?
Alan: You know, it’s actually been mostly positive which I found a little surprising. I’ve done maybe about, I want to say about 500 cold calls since we started the coaching programs and very few of them have I gotten, you know, the nightmare scenario where I have some much screaming in my face.
So it’s overall been a good experience. Most people are polite about, you know, rejecting me but out of the calls, maybe about 10 percent are receptive which to selling a property and then, you know, the rest are not, decided not to sell the property to me ultimately.
I was still able to add them to my network. I would say about maybe sixty percent of the time. So even though I wasn’t able to pull properties from a hundred percent of my calls, I had a pretty good success rate in just finding interesting people to talk to and people that I can add to my networking either as a credential buyer, seller, rehabber or money lender down the road.
Matt: Okay, so through this activity, you actually met people that you can see yourself working with down the road?
Alan: Absolutely. Absolutely, I probably added about a couple hundred people to my network.
Matt: Really? That’s significant.
Matt: Fantastic. There’s a question I was going to ask about cold calling. You’ve done a ton of calls. I’m impressed by that. Oh, this is another frequent question I get from people inside the academy.
Particularly people that live in less populated area, I guess. You know, they ask me where to, we don’t have any problem finding addresses to send you all letters to but what a lot of people have trouble is finding phone numbers of people to call.
So you’ve made 500 phone calls, at least. What’s been your source for phone numbers?
Alan: Really, real estate for sale and real estate for rent, posted online.
Matt: Got it, got it. So even calling people that obviously have real estate for sale? Have you been calling brokers also or are these just for sale by owners?
Alan: Mostly for sale by owners. I have maybe about fifteen percent of my calls have been to other brokers.
Matt: Okay, very good. You said 15 percent?
Alan: Yeah, 15.
Matt: Cool, real estate for rent. Tell me about that strategy. What’s your thought process there?
Alan: Well, the thought process is I figured if people are putting ads for their property for rent, they are at least somewhat business savvy and hopefully open to the idea of also selling the property.
Because at least in the Seattle area just from discussions with a lot of landlords, I feel a lot of property owners who are lifting on Craigslists are not landlords by choice.
They’re either rehabbers or people who just got caught in the downturn who aren’t able to sell in the last year and got ate up by cost so they have to go to plan B and rent out. And so I go there with a mindset that that is half a time the scenario I’m dealing with.
So they’ve considered a possible sale in the past, unable to do it so they’re renting out the property. I really go in there with a mind-set that, you know, I mean everything is for sale, mostly everything is for sale. It’s just, I have to find the one that’s willing to meet me at the right price.
Matt: It’s an awesome, awesome strategy and it’s actually my favourite strategy is my favourite person to purchase from are distressed investors. If you find people that have properties for rent, obviously they’re not living in them so it’s an investment to them. So it’s a great indicator of contacting or a great way to find investors.
So, perfect. You had a lot of success with that and I’m not surprised at all because distressed investors, they’re probably been a source of most of my deals. Tell me about what are your, today now, let’s see.
I’ve got a few questions written down here. Okay, here’s the one that, this will be the next one. So what’s really different right now between, what’s different about you that is allowing you to accomplish this and has given you the confidence to continue to do it?
Alan: It’s having the proof in my own life that hard work does pay off because persistence does pay off.
You know, if you would ask me before I started doing this, several months ago, if I could be successful through, you know, repeated actions on the right track. I probably would have given some appositive answer but now I can; now I’m absolutely confident. I have faith that my actions will ultimately lead me to where I want to go.
That really is a life blood of any successful career in my opinion. Having that faith otherwise we wouldn’t get up in the morning. We wouldn’t make the calls, we wouldn’t write letters, and we wouldn’t follow up on leads.
So if there was a doubt in the back of our minds that our hard work would pay off, why bother? So I would say that was the biggest difference. Yeah, I’ve been immensely positive all my life.
Matt: You’ve mentioned it, the very beginning, the reason that you hadn’t really gotten started, hadn’t done this full time was fear. How do you look back now and view that fear?
Alan: It’s almost humorous to me now. You know, I have luxury now given that I know I’m not getting end up at the poor house by leaving my standard nine to five job.
I look back on the fear. I think it was a product of number of things. I think one was the environment. The environment I found myself in was very much the traditional mind-set when it comes to building a career.
It wasn’t very entrepreneurial. It was almost like being on an assembly line. It was just I wore a suit to work every day. So yeah, I think that was the big reason why I had that revelation going into this business and ultimately that’s what prevented me from diving head first, sort of weird initiative.
I think, also I see it as it partialities the irrational. So it’s like the fear we have of the unknown. I had no idea what it meant to be an entrepreneur.
I came from a family where entrepreneurship wasn’t necessarily discouraged but I just hadn’t seen it a lot in my own life. Most of my friend and their families and all of my relatives had stayed with traditional careers and they’re highest achievement in life was to get quota on quota bedding job.
Until I totally embarking on a path that I had never seen function well before and I guess because of that, not having that proof, I assumed it didn’t work. Which is, looking back, is completely unreasonable.
Matt: You know, your very first response when I asked, “How do you view that fear?” and your first word was “Humorous” and I frequently get that email, with those questions in the email.
I’m just scared of getting started and my advice is just start. Just start because I guarantee you you’re going to look back and you’re going to scratch your head and you’re going to laugh and wonder what you’re so scared of.
And it’s just the word that you, it is humorous. It’s funny and you’ll laugh at yourself and that was your first response. So, I’m batting a thousand on that advice.
So if you’re having trouble getting started out there, just start and you’re going to look back and you’re going to laugh at yourself of what had stopped you that there is really nothing to fear out there. There really isn’t.
You know the famous quote, “There’s nothing to fear but fear itself.” And it’s too bad that’s a cliché because it’s so true. Let’s see, right now, what are your day to day real estate activities looking like?
Alan: Well, when I get up in the morning, I do some motivational activities. Just to get myself started. Check emails from my brokers and bird-dogs and wholesalers.
I do that for about, maybe an hour in the morning and then for the next couple of hours I review deals, I follow up on leads and I make cold calls.
Then weigh offers if I come across properties that interest me and then after I finish up these daily activities, I try to do at least one or two hours of, I guess researching to new markets or new techniques.
Sort of like building out my knowledge base so I can be ready in case of transactions comes by. And then after that, usually it’s either more research or in meetings with potential sellers or money lenders or talking to my brokers.
Then do that for a couple of hours and then after that it’s I probably do some more motivation to keep myself going and then going from there, that’s pretty much the end of my day.
I would say, I work about five to eight hours in any given weekday and do that from anywhere between four to seven days a week.
Matt: Got it, got it. Let me ask you, you’ve mentioned that you began your day with motivation; end your day with motivation. What type of motivation do you do and what kind of value do you see in doing that? Why do you continue to do it?
Alan: There are two things I do. One is I review the goals I set off for myself through the Epic Coaching Program. I really internalize that and I repeat it almost like a sutra because it push me to stay focused on my goal and, you know, realize why I’m doing this.
And then the second activity is I read the Ten Scrolls by Og Mandino and I’m about half way through that. I think it tremendously valuable. You mentioned this on the podcast before. It’s like motivation.
It’s like breathing or bathing. You have to do it every day because without it, it’s pretty easy to get discouraged, you know. Without doing these activities, I know someday when I’m lax about it, it’s just jerks can get to me more easily.
You know, it’s easy to get down about my activities and, you know, start to lose faith and the values of the process and then I refresh myself. I have no choice at this point that this is my career. Either this or I go back to my old job and that gives me the kick in the pants to redouble my efforts.
Alan: I think it’s, it really is like air. You need air at all times.
Matt: Absolutely. Amen to that because early you’ve mentioned that the business, you just have to do the work. It’s not rocket science but it can wear on you and it can be frustrating.
It can be discouraging and I spend a lot of time on this show, you know, trying inspire, trying to motivate because it’s not difficult to pick up the phone and call someone who has a property for rent to see if they want to sell it.
That’s not difficult at all but why people won’t do it every day, obviously there’s a some sort of disconnect and that disconnect is really in the reason why they’re doing it in the first place.
And you know, the general word that composes all of that is motivation. So definitely, awesome, it’s obvious. I mean, you’re doing these activities consistently because you are motivated to do them and you’re very aware of the alternative.
If you don’t do them, it’s back to the job. So that’s a great motivator. All of in itself and you’re getting the results and I’m not even surprised. I’m not surprised that you’re getting the results because I know people that do the activities, they get the results.
And people that don’t do the activities don’t get results. It’s really that simple. So right now Alan, what do you see in your future for real estate investing?
Alan: Well, I think it’s going to be successful. I mean I’ve gone through enough of the process and seeing what happens to realize if I keep going the route I’m going.
I’m going to be acquiring properties at least at the clip of one per every quarter which if I play my cards right and you know, stick to deals that make sense, you know, really, within two years, I’ll be able to match my old salary at my old job.
Even if I don’t, really do anything. That’s just pure rental income and I don’t have any I can management part in that. I think that’s, you know, the next immediate place where I see this, where this career will go. After that, I mean, I’ll bet you off I could, I’ll probably thought it all up and start pursuing larger deals at a faster clip.
Simply because at that point, I’ll be this, you know, it’ll be such an big part of my thinking and my daily routines. I don’t want to stop doing it but at the same time I have the luxury. If things do change, I’m not bound to any particular location or job. I could just, you know, I could effectively retire and that would be before, well before I’m 30 years old.
Matt: That’s awesome. I wish I would have started at your age. Life probably would have turned out much differently. Not that I’m disappointed with life but I could have probably started enjoying at much earlier age. So I guess we’ll finish with this. Any words of advice?
Because if you sign up for the free real estate investing course, the people that are listening right now. When you sign up for that, I think it’s the first or the second email that I sent you, I asked you directly, “What is your biggest challenge in real estate investing?” and I respond to all those emails.
Sometimes it takes me awhile but I do respond to every single one of those and the most common one is, “I’m just having trouble getting started.” So what would you say, any words of advice to somebody that’s having trouble getting started?
Alan: The best piece of advice I actually got was from a different mentor I met about four years ago. A local investor and he owns his own burg ridge in North Seattle. The saying he always used was, “You can’t steer a parked car.” I guess it didn’t really sink in to me until about a couple years ago.
I mean, really the lesson is it’s doesn’t matter if you’re going the wrong direction or the right direction, just move. Because if you’re just standing still, you’ll have 100 percent certainty and the result and that result is nothing.
So just realize that, even if you make mistakes, even if you make several times in a row at the beginning, you’re still ahead of ninety percent of the population which is, you know, basically confide themselves to jobs or lives that they don’t like but they’re just too afraid to take action.
So those will be my best words of advices. Action beats non-action or inaction ninety percent o the time. Just go out there and take that first step. It doesn’t have to be big. You don’t have to hit a home run, just do something.
Matt: I love that. “Can’t steer a parked car.” Great advice.
Matt: Great advice. Awesome, well thank you so much for sharing your experience. We’d love to check in with you somewhere down the road and see how things are going. Would that be okay with you?
Alan: Absolutely. I look forward to it.
Matt: Awesome. Well, Alan, thanks for joining us and you have an awesome day and we’ll chat soon.
Alan: You too. Take care Matt.
Matt: Thanks, bye. Awesome. Awesome interview. I want to draw your attention to a few things that Alan had mentioned and I have a feeling that this maybe a recurring theme over this series of interview episodes is that if, you know, you performed the small money making activities consistently and you do it with persistence, you’re going to get the results that you’re looking for.
I mean, for some people, the results will happen quickly and for others, slowly and for others, somewhere in between. But if you perform the small money making activities consistently and you do it with persistence, the results will happen. They have to, okay? They absolutely have to and that’s the one thing that I heard in Alan’s interview.
Another thing is, is calling and responding to Craigslist’s ads. I guess, they kind won over that vaguely but it’s actually turn out to be a strategy that is proven very effective for Alan and I’ve taken a look at it myself a little bit more closely since I’ve been coaching Alan. You’ll have to wait through some garbage.
There’s a lot of garbage on Craigslist for sure but there real estate deals there. There are some real real estate deals there. In fact I’ve picked up one recently for myself as, you know, I’m starting to notice a growing number of deals particularly in the south and particularly in the midwest that are offering seller financing. I’m noticing more and more of that. You want to keep your eyes and ears open for seller finance deals.
You should grab as many of those as you can, right? Don’t stress over the purchase price so much. I mean, don’t be foolish about it, of course, but don’t let a slightly inflated price get in the way of building your portfolio. You know, if the seller is willing to carry back a note and the property is going to cash flow for you, grab it, okay?
Grab it and just get as many as of those as you can. You know, okay, let me just say this. At least that’s what I’m doing right now. You can do what you want but that’s what I’m doing right now and here’swhy. You see we have a window of opportunity right now to buy real estate at a significant discount, a significant discount.
I have no idea how long this window is going to stay open. But it’s not going to stay open forever, that we know. It always changes, right? It opens and shuts, opens and shuts, open and shuts and it’s much easier, you see it’s, let me put it this way. It’s much easier to manage the financing and manage the debt that you have on your properties inside your portfolio.
After that window closes, then it is to find deals after that window closes. Does that make sense? You know, if you put bunch of these properties in your portfolio, it’s easier to manage that debt after this window of opportunity no longer exists after it closes. But after this window closes, it’s really tough to go out and find those deals because the window’s closed, right?
So if you can get your name on title through a seller financing deal and the property cash flows, it really is most of the time, it’s most of the time it is a no brainer, especially right now.
See with so much of the country’s real estate priced well below replacement value and that’s how I determine a real discount by the way. If it’s cheaper to buy a house than it is to build a house, that’s a discount. That’s a property you want to pick up.
I mean, you got really just, you got built in appreciation there and this past year, there has been some movement in certain parts of the country with regards to new home builds.
I’m not sure if that’s going to continue or not or how fast builders are going to build and to what extent but when they decide to start building consistently again, all of these properties that you purchased below replacement cost are going to appreciate significantly. Almost overnight, as fast as the new building happens, that’s how fast those properties are going to appreciate.
That’s real appreciation. Now, I have no idea when this is going to happen. I have no idea but I do know what will happen because the population gets bigger, bigger, bigger and bigger and we need more places for those people to live. So we’re going have to start building eventually.
So I don’t know when it’s going to happen though but as long as your name is on title and the property is cash flowing in the meantime, who cares, right? Who cares. Anyway, I’m getting a little off an tangent here.
The point is if you haven’t checked out Craigslist lately, take a look. I’m finding some deals on there and I’m sure you can too and it’s obviously working very well for Alan. He’s finding deals and you heard he’s building a very nice database and network while he goes to the process as well.
We talked a little bit; I think last episode or the episode before, your team is really important. That’s a great way to start building your team especially in different parts of the country. Now, some of the places that Alan is doing his market research and he talked about the Census Bureau.
So definitely add that to your, bookmark that page because you might need to investigate a new market and that’s it. Census.gov. Census.gov. That’ll give you information on your market’s population, economic indicators and the census bureau, I mean, they even has their own, they’ve got their own app now.
I think it’s called “America’s Economy”. We all have that information right there on your smartphone. And then also, the Bureau of Labour and Statistics, you can find that at L-B, oh I’m sorry.
How do you spell bureau of labour? BLS.gov. BLS.gov. I’ve got a little dyslexic there, sorry about that. More awesome info can be uncovered about your market there or your prospective market.
You know, Alan lives in Seattle. He’s a brand new investor. He lives in Seattle and he’s investing in Cleveland. This is really important to take a note here. I know some of you live in really small towns. I know because you email to me and tell me so. And I know some of you live in very expensive areas and those two factors might be interfering with your results a bit.
I don’t know. Or maybe there’s something else that’s unique about your area or about your situation that you feel might be hindering your results or hindering your success.
I mean, this business can be conducted anywhere, alright? There are deals everywhere. There’s opportunity everywhere. I mean, anywhere where there are people living and they buy a house just to live there.
But maybe you’ll like to look at a market with a bit more opportunity. One that kinds of fits your knowledge-base or your resources a little bit better or just maybe even just a different type of opportunity.
Census.gov and BLS.gov, the Bureau of Labour and Statistics are two awesome sources to conduct your research for the markets. And then, you know, kind of going together through calling on the ads on Craigslist is an awesome way to create some contacts in those markets.
Alan is doing very well with this approach and he, you know, he is essentially kind of bitter on accident as kind of how it happened. But it’s working for him and now he’s doing it with a little bit more intention and there’s no reason that you couldn’t that either.
Kind of one of the reasons I have been doing these series of interviews so you can learn what other people are doing and how they’re doing it effectively. There’s a million ways to build this business and I just really want you to be exposed to as many ways as possible so you can choose the one or two ways that are actually going to work for you, right?
Though, it’s working for Alan, you can do it as well. You don’t have to but you could if you want it. You’ve got evidence now from someone relatively new to investing that’s doing it that’s it working for them. Another point I want to comment on from Alan’s interview. He cold calls. He picks up the phone and dials.
Now I think it’s more of a warm call. I mean he’s calling on people that have real estate for sale, people that have real estate for rent but he’s calling them. That’s something you also want to take note of.
You see in the beginning, you’re number one job is to generate leads and you can do that in one of two ways.
You can call them, which I call hunting of which is absolutely free by the way. You do not need any money to do that. You just need to be able to pay your phone bill, I guess.
Or you can market to them and get those leads to call you of which can get expensive really fast. I mean, you can get carried away with it for sure.
The point is that you have to generate leads and you kind of have two ways to do it. You can hunt for them. You can be proactive about it and go out and seek them or you can fish for them. That’s marketing and advertising and Alan, he’s getting after it. There’s no wonder he’s getting results.
I mean, the investor with the most leads is never at a loss for opportunity and Alan’s got a new potential deal, like, every day. At least several times every week and he’s just doing what it takes and that’s why he’s got the all the opportunities right there at his feet.
You know why I noticed about Alan is his confidence level. Very significant, he mentioned it as well. I mean, he didn’t even sound like the same person when we got started.
His confidence is really gone through the roof. He says it’s what has made the biggest difference for him. And it’s what’ll make the biggest difference for you as well.
He got there by just simply getting started. You know, his quote was, “You can’t steer a parked car.” There’s a lot of wisdom in that one right there. You know, if you make a mistake or if you find yourself going on the wrong direction, hey! Just throw the car in reverse, back it up, make a U-turn, go the other way now, whatever.
I mean, just get moving. What you’ll find is nothing to be scared of, meaning nobody’s is going to get hurt, nobody’s going to die; you’re not going to jail, alright? I mean, you get in to your car every single day.
Now that, that right there should terrify you. I mean, car accidents, number five killer in the United States but you get in to your car every single day and drive from point A to point B and then you drive from point B back to point A.
You do that over and over and over and over again. You do it without giving it a second thought. How did you get to that point where you get into this death machine every single day without even giving it a second thought?
How did you get there? Well, you start driving, didn’t you? You were nervous then in the beginning but you’ve done it so many times you now have the confidence to get in the number five killer every single day and you go places and you arrive safely every day.
Real estate investing is nowhere near, not even close to being that dangerous. So I know you can do this. So just get started and watch your confidence level rise and soon you’ll be investing in real estate with the same ease as you drive your car, same thing. It works just like that, alright?
So big thanks to Alan today for sharing his experience over the last few months and that’s really it for today. So until next time, as a very wise person once said, “You can’t steer a parked car.” To your success, I’m 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 a moment, stop by iTunes to leave your comments and let us know what you think of the show and if you haven’t done so already, get started investing today by visiting Freerealestateinvestingcourse.com. To access Matt’s free course, How to do deals: No money required. Until next time, to your success.
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