\n<\/p>\n
How do you make six figures in <\/strong>passive income<\/strong><\/a> with no <\/strong>college degree<\/strong><\/a>, very little money<\/strong>, and zero experience<\/strong> in real estate? Do what Hunter Lawler <\/strong>did and take it step-by-step; within a few years, you, too, could be making over $100,000 in cash flow with just ten properties! But the only way you\u2019ll get there is by thinking outside the box, buying properties most don\u2019t even know about<\/strong>, and taking risks when talking to sellers.<\/p>\n Hunter learned very early on that a college degree doesn\u2019t guarantee a big paycheck<\/strong>. He was making a full-time income from his crawfish-selling <\/strong>side hustle<\/strong><\/a> when he decided to drop out<\/strong>. After seeing entrepreneurial success, Hunter pivoted and started investing in the sexiest, highest-priced properties ever\u2026mobile homes<\/strong>. These dirt-cheap rentals gave him the sweat equity he needed to build a bigger portfolio<\/strong>.<\/p>\n From mobile homes<\/strong> to single-family houses<\/strong>, self-storage facilities<\/strong>, and killer seller finance deals<\/strong>, this episode is a masterclass on how to grow a six-figure income stream<\/strong> without a college degree or hundreds of thousands in the bank!<\/p>\n David: Ashley: David: Hunter: David: Hunter: David: Hunter: David: Ashley: Hunter: David: Hunter: Ashley: Hunter: David: Hunter: David: Hunter: David: Hunter: Ashley: Hunter: Ashley: Hunter: Ashley: Hunter: Ashley: Hunter: Ashley: Hunter: Ashley: Hunter: David: Hunter: David: Hunter: Ashley: Hunter: Ashley: Hunter: David: Hunter: Ashley: Hunter: David: Hunter: David: Ashley: Hunter: Ashley: Hunter: David: Hunter: David: Hunter: Ashley: Hunter: Ashley: Hunter: David: Hunter: David: Hunter: David: Hunter: Ashley: Hunter: Ashley: David: Ashley: Hunter: David: Hunter: Ashley: Hunter: Ashley: Hunter: Ashley: Hunter: David: Ashley: Hunter: Ashley: Hunter: David: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is the BiggerPockets Podcast show 856. What\u2019s going on everyone? It\u2019s David Greene, your host of the BiggerPockets Real Estate Podcast. Join today with my co-host, Ashley Kehr, and boy, have we got a show for you. If you have been struggling to figure out how to make real estate investing work in this challenging market, or asking the question of well, what would work for me? Today\u2019s show is for you.
Our guest, Hunter Lawler, has an incredible story where he blazed his own path and then left breadcrumbs so me, Ashley, and you can follow in his footsteps. Hunter has an incredible story where he started off dropping out of college to start a business, put that money into a double-wide \u2026 Yes, double-wide mobile home right out of the bayous of Louisiana, scaled that into a portfolio of 15 properties, got into self-storage, and did a whole bunch of other stuff all while working a W-2 job. I love this story, I love the example that\u2019s being set, and I love today\u2019s podcast. Ashley, welcome to the show. What are some things that people should keep an eye out for that really crushed it in today\u2019s show?<\/p>\n
Well, thank you so much for having me as your co-host. I know that you personally selected me and it is very much appreciated. With Hunter, first of all, I got to say you are a very vivid storyteller. I\u2019m more to the facts. And I\u2019m just going to say that we are having two master classes today, and one is going to be on screening a tenant and the other one is going to be on sheriff sale. David and I don\u2019t have any experience in this so this was a whole learning process for us too.<\/p>\n
Absolutely. You get a ton of information at a very fast clip in an incredibly entertaining fashion. All right, let\u2019s bring him in. Hunter Lawler, welcome to the BiggerPockets Podcast, how are you today?<\/p>\n
Doing well, David, thanks for having me.<\/p>\n
First off, your name sounds like you should be in the WWE. Has anyone ever told you that you sound like a professional wrestler?<\/p>\n
No, but the last name usually triggers it quite a bit.<\/p>\n
And the first name. Like you\u2019re hunting and you\u2019re a Lawler, you\u2019re made for this. But that\u2019s not what you do, you\u2019re actually a real estate investor with an incredible story. So why don\u2019t you start off letting us know how you got started in work and in real estate?<\/p>\n
I really can\u2019t talk about my real estate journey without giving credit to a side hustle that I started while I was in college. I was working Monday, Wednesday, Friday for a family-owned construction company and going to school on Tuesdays and Thursdays. And I could see the writing on the wall very early on that I would need another source of income to keep up with a high cost of living so I started thinking of ways to make some extra money. And I thought everybody in Louisiana likes crawfish so I decided to open up a crawfish business, bought a catering trailer from a guy in my hometown. The crawfish business ended up being very successful. It got to the point where I got so busy with the crawfish that I started failing in college because I couldn\u2019t go to class.
A little side story with that. One day I was walking in to take an exam, it was about 9:00 AM, and I got a call from one of my best customers and he says, \u201cHey, Hunter, can you bring 400 pounds of crawfish and have them ready on an oilfield location by 4:00 PM?\u201d And I was like oh man, that sounds like a good job. And in my head I was thinking, I can make $2,000 off this job, profit. But at the same time, I was walking in and taking an exam. And I was like man, if I miss this test I fail this class. Needless to say, I took the $2,000 and went and fired up the pot. As I was driving to this job I was weighing out did I make the right decision. I could either make this $2,000 and fail this test or pass the test and lose this customer. I had learned more in the two to three months of owning my own business than two years of college had taught me.
I don\u2019t want the listener to take away like hey, you need to drop out of college and go make $35,000 a year selling crawfish. What I do want you to take away is knowing that experience is a way better teacher than the classroom. Whenever I bought that trailer it was December and I knew that I had to be up and running by February. Due to that pressure of pulling the trigger \u2026 Keep in mind I knew nothing about cooking crawfish at this point, I knew nothing about running a business. I didn\u2019t know what an LLC was, I didn\u2019t know what type of insurance I needed. But because I pulled the trigger on it it forced me to get creative and figure out what the next steps were in order to make it successful.<\/p>\n
I got to say, you\u2019re sounding like the backstory of a WWE wrestler being from Louisiana selling crawfish.<\/p>\n
Well, we haven\u2019t even got to the end of the story. Maybe he ends the episode with he actually is a WWE wrestler.<\/p>\n
That\u2019s a side note. Absolutely. Well, no, if you saw my stature you\u2019d be like oh, that little guy\u2019s not in the WWE.<\/p>\n
So you were in the position where you had to decide am I going to stick with school or am I going to start a business? Ultimately, you followed the money and the education experience that comes from that. What ended up happening with school? Did you retake that class or did you drop out?<\/p>\n
It was a wrap after that. And like I said, I knew I was going to get into the construction industry. You don\u2019t need a degree to be a contractor, all you need to do is go pass a test with the state of Louisiana and pretty much they give you a license and they say, \u201cGood luck, don\u2019t go broke.\u201d<\/p>\n
What was the point where you decided to learn about real estate? So you have this business going on, you\u2019ve decided to not go back to school. Are you still continuing this crawfish business? What happened?<\/p>\n
No. I sold the crawfish business and ended up buying \u2026 Using that cash from selling the business to buy my first rental property. My first rental property cost me $42,500, it was a double-wide on an acre of land. This wasn\u2019t in a trailer park it was just double-wide on the outskirts of town, came with an acre land. This seemed like a good deal, it didn\u2019t look like too much was wrong with it. I know I said that I paid cash 42,500 for it. And I know there\u2019s probably some listeners thinking right now like you idiot, why\u2019d you spend all your money on the house, why didn\u2019t you leverage the bank\u2019s money? Dude, at that time I didn\u2019t know. I must\u2019ve been on a Dave Ramsey kick or something like that didn\u2019t want any debt.
So that being said, I did spend all my money on the purchase so I really didn\u2019t have any money to hire a contractor on the rehab so that\u2019s whenever I got my crash course in sweat equity. Me and a buddy of mine pretty much just spent weekends over there, on YouTube a lot, figuring out how to build a frame for a bathtub, painting, putting up trim. That being said, since we did most of the work I was only into repairs maybe two to $3,000 before we had it finished up.<\/p>\n
Hunter, the DIY destroyer, Lawler crawls out of the bayous of Louisiana, starts a crawfish business, saves up his money, keeps it all, drops out of school, uses that money to pay cash for yes, a double-wide. You heard that right. Then fixes it all up himself to save even more. This incredible origin story is yours BiggerPockets, your welcome. We\u2019re going to be going to a quick break and when we come back we will hear what the next phase of this superhero\u2019s journey was really like. All right, welcome back. Everybody has been waiting with bated breath to hear about the next phase of this journey of yours. I\u2019m trying to figure out what more Louisiana stereotypes we could possibly work in to this thing. Was Theo Von one of your first sponsors on this deal? Did Gambit from the X-Men show up and throw some assistance in this? What did you do once you had this property? You\u2019ve now framed out a bathtub, you\u2019ve done all the work yourself. It is a double-wide. By the way, are double-wide literally twice as wide as single wides or are they just wider?<\/p>\n
Good question, but I\u2019m pretty sure it\u2019s twice, exactly.<\/p>\n
So they\u2019re accurately named.<\/p>\n
Absolutely.<\/p>\n
Well, thank you because we don\u2019t get to talk about this very often on the podcast. But something tells me you\u2019re going to see more and more people taking the same journey that you took. Because as margins get smaller we have to get more creative. How did that deal end up and then what was your next one?<\/p>\n
Like I said, I ended up renting the house out not long after we finished the rehab. After listening to BiggerPockets, I\u2019m figuring out what\u2019s the best way to tap into the equity of this home. I reached out to a local lender and he recommended that I set up a commercial line of credit which would allow me to tap into 70% of the home\u2019s equity.<\/p>\n
Hunter, real quick, can you explain what the difference between a commercial line of credit compared to just what a regular line of credit is?<\/p>\n
That is a good question. The only line of credits I can think about are commercial line and a HELOC. A HELOC is basically a home equity line of credit and you use your personal residence to use the equity in your personal residence to set up a line of credit. In this commercial line, basically, the house that I\u2019m collateralizing is my rent house is that-<\/p>\n
Yeah. And you\u2019re going on the commercial side of lending too.<\/p>\n
Yes.<\/p>\n
You\u2019re talking to a different loan officer than you would if it was your primary residence.<\/p>\n
Yes, great point, great point. I guess I already had that relationship.<\/p>\n
And usually not as great of an interest rate either too.<\/p>\n
No, absolutely not. And it is definitely not good right now. Absolutely. It\u2019s a little steeper than a residential.<\/p>\n
You were at that 70%. What did that end up being of the value?<\/p>\n
I was thinking probably around 65 to $70,000 what it would appraise for. And man, the house ended up appraising for $100,000. I\u2019m like oh man, this is great I got $70,000 to play with now I can find another house. I ended up finding another house very quickly, not too far away from the double-wide that I bought. And it happened to be, you guessed it, another double-wide, $38,000 this time. Anyway. So I bought the second house for $38,000. This was a complete disaster. I ended up selling it for a loss maybe within a little over a year after I bought it, and that was due to bad tenant screening.
I had a bad tenant in there. It got to the point where he was making rent on time for about eight months, and then by the ninth month I had to call him. I was like \u201cLook man, you got to pay on time.\u201d And after that, it was pretty much he just ghosted me, vacated the house without telling me. If you had every intention of destroying that home in one year, I don\u2019t see how he did it. It took a lot of effort to get that house as out of shape as it was after he moved out. I say that to say, I really didn\u2019t put the right tenant in place.
Back then my pre-screening process looked like \u2026 I would post a for rent sign in the yard with my cell phone number. Tenants would call me, ask me any questions about the property, and I would answer the same questions over and over. How many bedrooms? How many bathrooms? Are pets allowed, yada yada? I would, after that, meet people to show them the home. If they would even show up I would figure out they don\u2019t have a job. Or \u201cHey, can you waive the first two months rent?\u201d I\u2019m like \u201cNo, absolutely not.\u201d Why didn\u2019t you ask me this on the phone? But back then I had a very strict list of tenant qualifications and they were number one, do you have a pulse? And number two, do you have the deposit and the first month\u2019s rent? If yes, here\u2019s a lease, sign it, and move in tomorrow.<\/p>\n
Hunter, before we go any further I have to ask, what would you do different today?<\/p>\n
Yes. Today I would use my current pre-screening process which looks like number one, advertise the property on Facebook, Zillow, or Realtor.com. Typically, in my area, whenever I do this within the first day I\u2019ll have 50 to 100 people inquiring about the property. And instead of writing them all back individually I create this generic basically response that covers all the details about the property. Number of bedrooms, number of baths, square footage, are pets allowed, yes or no, and then I provide them my minimal rental qualifications. In doing that I also paste a link that allows them to pre-qualify through RentRedi. Shout out RentRedi if you all are still partners. So anyway. It leads them to RentRedi where they can pre-qualify. Typically, by the time they pre-qualify I\u2019m down 10 to 20% of the original applicants. So after they pre-qualify I\u2019ll run through all of them and make sure they meet our minimal qualification standards which are now they must exceed three times the monthly rent, their income, and the tenant must have good references, the tenant has to have no prior evictions, have a credit score of 600, and must pass a background check.
And after going through all this I\u2019ll email them either an acceptance letter with an opportunity to schedule a viewing or a denial letter which basically shows which one of the qualification standards that they failed to meet. And now after this we\u2019re down to three to 5% of the original inquiries. Once I have a pool of pre-qualified applicants I\u2019ll schedule maybe one or two showing blocks and I call these a landlord open house. That\u2019s when multiple people come look at the house at the same time. And I think that showing the house, while other applicants are there, creates a sense of urgency to make them respond faster. If they like the home I send them a final application. And at this point, I\u2019m usually down to one to three, the most qualified candidates that I can choose from.<\/p>\n
Well, that\u2019s fantastic. Hunter, in the beginning, what do you think was driving you to skip the steps? Was it just a belief that human beings were inherently good? Did you not understand the consequences of picking a bad tenant? Because clearly once you got this down you did it well. Why do you think you skipped those initial steps in the beginning?<\/p>\n
I think in the beginning, obviously, you\u2019re putting so much money into these homes, time and effort, and you just want to get it rented as fast as possible. I think it takes the experience to shift your mindset of well, I don\u2019t want to do that again. I don\u2019t want to go there and somebody stand me up on meeting. Or, meet somebody all the way over there for them just to tell me they lost their job. Weed everything out, and filter them, and pick the most qualified candidate.<\/p>\n
All right. So it was just if they had a pulse you\u2019d put them in there. Now basically you\u2019re putting a lot of information in the showing itself. And then as they\u2019re applying I think you mentioned \u2026 What was the next step that you said that you\u2019re weeding out to get to Only 5% of the people sticking with it?<\/p>\n
You give them all these steps that they have to go through to actually pre-qualify. And then once they pre-qualify I will either send them an acceptance or a denial letter. Pretty much I get it from 10% to 5% because they didn\u2019t even read the pre-qualification standards. Number one, they showed me their monthly income and it wasn\u2019t exceeding three times the monthly rent.<\/p>\n
Or they have a dog-<\/p>\n
Exactly.<\/p>\n
And it says no pets.<\/p>\n
Exactly, exactly. They have to see it three or four times and then they still don\u2019t know and I still have to tell them \u201cHey, you\u2019re denied based upon this.\u201d<\/p>\n
Okay. So now would you feel like screening tenants is actually a strength of yours where at one time it was clearly a weakness?<\/p>\n
Absolutely. Since I\u2019ve implemented this strategy I can honestly say that I have not had one person move out. If they have moved out of one of my houses it is \u2026 You can probably eat off the floor by the time it\u2019s ready to rent somebody else.<\/p>\n
You had mentioned RentRedi. Is there any other tools or software that you\u2019re using to do this whole listing, and showing, and move-in process?<\/p>\n
No. RentRedi pretty much provides everything that I need. The only other thing that I use is QuickBooks, obviously, for accounting purposes. No, it\u2019s strictly RentRedi.<\/p>\n
All right. You\u2019re rocking and rolling making some momentum, solving for your mistakes probably feeling pretty good about yourself, and then COVID hits. Tell us what happened there.<\/p>\n
Up until COVID hit my target market was bank-owned or real estate-owned properties. These are properties that have already been foreclosed on, went to the sheriff\u2019s sale, and the bank ended up buying them back. And once the bank buys these properties back they make very minor repairs to the properties. That\u2019s usually just enough to either winterize them and make them safe enough to put on the market. Well, during COVID there was a foreclosure moratorium which provided relief for federally backed loans and this caused a drastic decrease in the supply of real estate-owned properties on the market.
Here I was faced with a choice. Do I say, \u201cOh, well. I guess I\u2019ll start investing again when the market corrects. Or, do I dig one step deeper into the foreclosure process and try to catch these things at the sheriff\u2019s sale? The cool thing about sheriff sales is that instead of waiting for these properties to hit the market and basically be open to every investor that has access to the MLS, the only competitors you have are the 10 to 20 people that show up at the courthouse that day to bid on these properties. Also, another pro is you can typically buy these houses for 20 to 50% less than if you were to wait for them to hit the market.
But anyway. There is cons to the sheriff\u2019s sales, and one of them is that you cannot physically enter the property because that is trespassing so you\u2019re pretty much buying these things sight unseen. Also, another con to it, you have to show up with a cashier\u2019s certified check within four hours after the conclusion of the sale. So there\u2019s no saying, \u201cYes, I want to buy this property,\u201d bid on it, and then go get a loan, and then come back to give them the money, it just doesn\u2019t work like that, you have to be very liquid. And also, there\u2019s a good chance that a tenant could still be living in the property or the previous owner could still be living in the property. And if that\u2019s the case you have to go through your local eviction process to get them out.<\/p>\n
I think, Hunter, you come crawling out of the Louisiana swamp dripping wet looking for the sheriff\u2019s sale like I\u2019m hunting deals, my name\u2019s Hunter. I think that\u2019s for sure the shtick.<\/p>\n
On that note, Hunter, how do you find these sheriff sales? I have no experience in this. Where do you even go to find out about these auctions?<\/p>\n
I think every county does it a little bit different. In Louisiana we have parishes for some odd reason. Here in Caddo Parish they advertise the sales on their website which used to be strictly in the newspaper but now they advertise them on the website. And what it looks like when they advertise them on the website \u2026 It\u2019s very unclear because all they provide is a suit number, who the plaintiff is, who the defendant is, and a legal description of the property. If you can\u2019t take that legal description and go to the assessor site and figure out the address yourself you\u2019re not even going to know the address to this place. Which I love because it pretty much takes out a lot of the competition because a lot of people are pretty timid to try to figure it out themselves.
That being said, whenever you walk into the sales it can be very intimidating as a rookie. Whenever you walk in all the veterans, all the guys that have been doing it for a long time they look at you like you strictly came there to take money out of their wallet. And I know that now because now that I\u2019m experienced in it, whenever I see a new face I\u2019m like dadgummit somebody else that I got to compete against. When the sale starts it\u2019s like this perfect storm of nervousness and excitement.
And at 10:00 on the dot bullets are flying so you better be locked in. The lady up front will read off the suit description in the most softest, quietest yet talking as fast as a rapper. She\u2019s like suit number 632756, yada, yada, yada, yada, yada, yada, yada. A lot of times you can\u2019t even hear what she said. She\u2019ll ask if the plaintiff would like the place a bid. Plaintiff usually raises his hand, \u201cI\u2019d like to place a bid for $5,000.\u201d And the plaintiff who\u2019s representing the bank will go back and forth with a third party until there\u2019s a winner. Typically, the bank will give the plaintiff a top dollar that they\u2019ll take for the property. And after they get past that it\u2019s a third party just a third party.
The cool thing about it is there\u2019s an art to it. The more you go the more you recognize tendencies that these other bidders have. So if you come in there like a rookie like me and your voice starts to crack just a little bit, that\u2019s like a shark smelling blood to some of those older guys, they just know that they\u2019re about to get you. If my top dollar\u2019s $70,000 and we\u2019re getting up to \u2026 I\u2019m like 68,000, they know that they\u2019ve got it in the bag.<\/p>\n
They just have to go a little bit higher. And they\u2019ve gotten you beat.<\/p>\n
Yes, exactly. It\u2019s very intimidating because if you\u2019re bidding against somebody else and they\u2019re just like \u2026 You can\u2019t even get the words $68,000 out of your mouth and then they\u2019re already like 69, 60, 75. They\u2019ll try to big wig you and go like $5,000 ahead and you\u2019re like okay, this guy\u2019s serious.<\/p>\n
Is there a strategy that you\u2019ve come up with when it comes to the bidding where you know, all right, if I go up 1,000 they\u2019ll go up 1,000, the other guy will now feel emboldened so he\u2019ll go up 1,000? But if you go up 6,000 in one moment, psychologically it causes pause and they\u2019re not quite ready to make the decision to go up higher. Do you think about that or is it just something you feel in the moment?<\/p>\n
It\u2019s something you feel in the moment. At the same time, you don\u2019t want to be silly about it because you know that if their last number was \u2026 If their top dollar was $70,000, and then you just said $75,000, and then they didn\u2019t bid again you\u2019re like I just lost $5,000 for trying to be a big dog here.<\/p>\n
I mean, it\u2019s similar with the MLS listings where a buyer wants to be the highest bid but they don\u2019t want to be higher than they had to be to be the highest bid. So there\u2019s always this awkwardness where the buyers will ask the seller, \u201cWhere do we have to be?\u201d And the seller will come back and say, \u201cWell, write your highest and best.\u201d And then the buyer will tell their agent, \u201cI don\u2019t want to\u201d \u2026 \u201cWell, how high do I have to go?\u201d And there\u2019s an awkwardness. That\u2019s probably just amplified even more in the auctions. Do you just walk in there with a number and you say, \u201cThis is the highest I\u2019m going to go and then this is a number where I would like to be at\u201d and take it from there?<\/p>\n
Yes. I\u2019m glad you asked me that because yes, there is a number that I walk in there with. And I will say that I have went over that number every single time I\u2019ve bought a house just because the excitement of going along with it. And you\u2019re like I know that guy I don\u2019t want him to get this house. There\u2019s a lot of high stakes, high emotion. It\u2019s very important that if you do go to these sales that you do stick to your top dollar. I\u2019m a sucker for it.<\/p>\n
How many of these deals have you actually purchased from the auction?<\/p>\n
I have bought eight houses from sheriff sales.<\/p>\n
And what has that time span been over? So you started this in 2020, is that when you bought your first one?<\/p>\n
Yeah, 2020 is when I bought my first one. I\u2019m happy to say that the roofs weren\u2019t falling in at any of these houses, I\u2019ve had to make pretty minor repairs to most of them. I do have friends that have bought houses that literally did not have a ceiling in them. You got to be really careful and know what you\u2019re buying.<\/p>\n
Are you able to see the properties before you bid on them?<\/p>\n
Oh, absolutely not, no. It\u2019s illegal to even go walk in there. It\u2019s illegal to go on the property much less actually peek through the window.<\/p>\n
What\u2019s the logic behind why the seller wouldn\u2019t want you to see what you\u2019re buying so you feel more comfortable buying it?<\/p>\n
Well, number one, it\u2019s really not the owner of the property that is selling the house I guess the \u2026 They\u2019re getting foreclosed on. So I guess up until the point when that sale actually happens, the previous owners still has possession of the property. So therefore if you are getting on that person\u2019s property you are technically trespassing on what he owns.<\/p>\n
So it\u2019s not that they\u2019re trying to stop you from seeing it it\u2019s just that the bank doesn\u2019t even have title yet to let you see it, it\u2019s still the person who\u2019s being foreclosed on that owns the property and they\u2019re not giving you permission to go look at the property.<\/p>\n
Exactly, exactly.<\/p>\n
What are some reasons that these sheriff sales would take the property, for example? You were talking about the bank is competing against you to actually bid it if they do have a loan on the property. But what are some reasons a property may go to sheriff sale? Are there maybe other liens and judgments on the property to that you have to find out about beforehand?<\/p>\n
Yes. The only way it makes it to sale is if they were to actually just stop paying their mortgage. And I know that there\u2019s multiple notifications that the bank has to give out before that even can make it to the actual sheriff sale. A lot of paperwork, a lot of time has to go into that. So it\u2019s not like you don\u2019t pay your mortgage one time and then boom, the next month it\u2019s going to sale, it\u2019s a long-drawn-out process. But as far as other liens that could be on the property, it\u2019s very important that you do thorough research. And I would recommend hiring an attorney to do title work for you before you bid on these. Some properties will have mechanic liens that won\u2019t show up on the clerk of court or the courthouse documents, but most of that stuff gets wiped clean before the sale. But you have to also be careful because sometimes if you go to a sale you might be buying a second mortgage on the property and it\u2019s not even the first mortgage so you would really only be a \u2026 Have a second position on that property.<\/p>\n
I ask because I have an investor friend that he bought this piece of land from a sheriff\u2019s auction but it wasn\u2019t foreclosed on it was \u2026 His wife sold cigarettes illegally from the Indian reservation to New Jersey and didn\u2019t charge sales tax, and they took that property as almost like his fine or whatever for his wife doing that.<\/p>\n
Restitution.<\/p>\n
Yes, restitution. And then they resold it at the sheriff\u2019s auction too. So I didn\u2019t know if any of the properties had things like that happen.<\/p>\n
Wow. I haven\u2019t heard of anything like that. The only houses that I bought were because people didn\u2019t pay their mortgage. I have seen partitions at the sheriff sales was basically like one person, one heir owned a certain percentage of a property and they didn\u2019t want it anymore so they had to basically take it to partition because them and the other owner couldn\u2019t come up with an agreement on what they wanted to pay each other for the property or if they even wanted to sell it. Whenever that\u2019s the case they partition it to court. And whenever they do partition it to court it\u2019ll go to a sheriff sale.<\/p>\n
Okay. It\u2019s definitely worth mentioning this. When people hear, \u201cOh, I want to go buy something for $42.000 that\u2019s worth $100,000,\u201d they\u2019re all going to be rushing in there. There\u2019s a reason that it\u2019s \u2026 You can get that deal is you\u2019re taking a lot of risk. You\u2019re buying something that you don\u2019t get a home inspection on, you don\u2019t know what condition it\u2019s in. Like you just mentioned, there could be additional liens or money that is owed that that property is used as collateral on that doesn\u2019t have as much equity as you thought. You think you\u2019re buying it free and clear but there\u2019s a mortgage on it or there\u2019s two mortgages on it. That you could theoretically be buying title to something that already has debt on it that\u2019s more than what you paid for the deal.
And then there\u2019s the whole element of well, is it going to have bad smells? There\u2019s just a lot you don\u2019t know about it and so that\u2019s why you\u2019re able to get these margins is because you\u2019re taking this risk. But clearly, you\u2019ve jumped in with both feet similar to what you did when you left your education and you said, \u201cHey, I\u2019m going to go start a business I\u2019m going to figure this out\u201d and you\u2019ve done well. How were you able to scale eight of them? Were you just selling that many crawfish that you were able to get to the point that you could buy this many houses? Or were you refinancing these things and pulling money out of them and reinvesting it into the next deal?<\/p>\n
With the original line of credit that I had told you guys about previously \u2026 After I bought that second house it was $38,000 and I think it ended up appraising for somewhere around 75 or some odd like that. So what I did was after I bought that second house I rehabbed it and I rented it out. And then what\u2019s the next step, David Refinanced it. Whenever I refinanced it they basically took the equity I had in the home and used it to pay down my line of credit. And now I have a mortgage on that property, property number two, with a freed-up line of credit. And I would basically snowball that over and over and over. And eventually it would get to the point where if I had three properties mortgaged separately I would bundle those on the next time that I would do a refinance that way everything doesn\u2019t seem to scattered out everywhere and I had 15 different mortgages.<\/p>\n
Would that be a portfolio loan you did with a small community bank did you use?<\/p>\n
Yeah, I used the same local bank for that. The way I did it, I usually did three to five properties at a time. And as I started to do that they increased the amount of my line of credit as that started to snowball.<\/p>\n
I want to touch on your mobile homes real quick too. With the financing on that, was it hard to get financing on a mobile home? When you switched to buying these other single-family properties was that easier?<\/p>\n
No. Financing for the mobile homes wasn\u2019t very difficult. I have worked with buyers before because I also am a real estate agent on the side. So I have worked with buyers and they have ran into some struggles, especially single-wide homes. If those homes are older than a 2000s model they make sure they\u2019re retrofitted before the bank will even lend them any money on it. So you run into different struggles like that. But as far as me using my line of credit to buy this house I pretty much bought it cash if you look at it on paper. Bought it cash. And then by that time whenever the bank refinances it\u2019s usually just a drive-by appraisal so I haven\u2019t had any hassle on it as far as them not lending money on it due to being a mobile home.<\/p>\n
A drive-by appraisal, I\u2019ve not had one of those in a very long time.<\/p>\n
It\u2019s beautiful. It\u2019s beautiful.<\/p>\n
Especially because appraisals are so easily changed and challenged. They\u2019re so subjective as it is this idea that well, if it\u2019s a drive-by it\u2019s not going to be accurate, but if they walk in the house and they can feel the carpet under their feet they\u2019re going to give you an accurate appraisal. It\u2019s such a joke when you actually see. And then not to go too far on a tangent, but all these appraisals in 2005 that showed a house that was worth something were worth absolutely nothing, right when the market ended up crashing later. In my opinion, it\u2019s always been an appraisal as a false sense of security. It\u2019s not like they\u2019re bad, they do give you an idea if you can look at the comps of other sales. If you\u2019re basing your decision off of an appraisal you\u2019re already doing things wrong. This is a fascinating story, Hunter. I can see how you have pivoted into the WWE and you have such a big fan base behind you. I mean, I\u2019ve been riveted this entire time.
You got into self-storage. You just keep on figuring something out, dominating it, and then moving on. You are like the BiggerPockets poster child of what we want people to follow. And here\u2019s what I love about your story more than anyone else, we didn\u2019t talk about it a lot. You\u2019re still working a job. You\u2019re like hey, I\u2019m making good money, I\u2019m doing good with real estate but it\u2019s an investment it is not a career. So I\u2019m going to keep doing what I do, keep working hard, keep bringing value to the marketplace, keep making money, and then I\u2019m going to use that money to invest in a real estate to set myself up for the future, not retire on the beach and drink Mai Tai\u2019s. So well done to you. I just want to give you your props, man. This is such a cool story, I hope a lot of people take inspiration from this. Everyone, we have the perfecter of the pivot, the DIY destroyer, the deal, Hunter Lawler. Thank you for being here, man. Ashley, any last words before we let him get out of here?<\/p>\n
Yeah. Hunter, I want to know, what is your monthly cash flow from your investments on average? I\u2019m sure it changes but what\u2019s that number?<\/p>\n
I have it pulled up. Yearly cash flow from my single-family homes is 45,000, and the storage facility yearly cash flow is at 65,000.<\/p>\n
Awesome. Congratulations.<\/p>\n
Thank you. Thank you all for having me. It\u2019s an honor to be on here with you titans<\/p>\n
The honor is ours, my man. Thank you very much for doing this. If you guys would like to learn more about Hunter and connect with him check out our show notes where his contact information is there. Mine and Ashley\u2019s is there as well. Hunter, we\u2019re going to let you get out of here because you probably got another deal to hunt. This is David Greene for Ashley, my new co-host, Kehr signing off.<\/p>\n