\n<\/p>\n
Off-market real estate deals<\/strong> allow you to avoid the multiple listings service (MLS)<\/strong> and find RARE properties often at a sizable discount, but many rookie investors<\/strong> are hesitant to send mail or pick up the phone. If that sounds like YOU, we have the tips, tools, and templates to make your life easier!<\/p>\n Welcome back to the Real Estate Rookie <\/em>podcast<\/strong>! Today\u2019s special guest is Brett Long<\/strong>, a rookie investor who managed to build a valuable portfolio in just three years. At a time when all of his friends and family members told him to avoid real estate investing<\/strong><\/a>, Brett went all-in\u2014flipping houses<\/strong><\/a> for a HUGE profit. Little did he know that the money he would bring in from this strategy would help him fund buy and hold<\/strong><\/a> properties<\/strong> as well.<\/p>\n In this episode, Brett talks about his experience driving for dollars<\/strong><\/a>, as well as the \u201cpersonalized pitch\u201d<\/strong> he included in his direct mail campaigns<\/strong><\/a> to generate a TON of interest from sellers. Of course, once the calls started coming in, he still had some convincing to do. Brett provides the template for these productive phone conversations<\/strong> and shares how he was able to turn hesitant homeowners into willing sellers!<\/p>\n Ashley: Tony: Ashley: Tony: Ashley: Brett: Ashley: Brett: Tony: Brett: Ashley: Brett: Tony: Brett: Tony: Brett: Ashley: Brett: Ashley: Brett: Ashley: Brett: Ashley: Tony: Brett: Ashley: Tony: Brett: Tony: Brett: Tony: Brett: Tony: Brett: Ashley: Brett: Tony: Brett: Ashley: Brett: Tony: Brett: Tony: Brett: Ashley: Brett: Ashley: Brett: Tony: Brett: Ashley: Brett: Tony: Brett: Tony: Ashley: Brett: Tony: Speaker 4: Tony: Brett: Tony: Brett: Ashley: Brett: Ashley: \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 Real Estate Rookie, episode 354. My name is Ashley Kehr and I am here with my cohost, Tony J. Robinson.<\/p>\n
And welcome to the Real Estate Rookie podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And, boy, do we have a story for you today.<\/p>\n
We have a special guest, Brett Long on today, and he\u2019s actually going to give us some great tips about flipping. We\u2019re going to be talking about writing letters to find deals. We\u2019re going to go through the process that Brett uses. And just to give you an idea, you don\u2019t need a lot of money to actually do the process that he does to find houses to flip.<\/p>\n
We\u2019re also going to touch on Ashley\u2019s biggest fear, which is talking to off-market sellers. How do you approach those people? What do you say? And how do you actually make it a conversation that both of you end up enjoying?<\/p>\n
So, Brett, welcome to the show. Thank you so much for taking the time to join us today to share your advice and your experience.<\/p>\n
Yeah. Glad to be here and thankful for the opportunity to come talk to you today.<\/p>\n
We understand you\u2019ve been investing since 2020. Can you give us an overview of what your portfolio looks like today?<\/p>\n
Yes. Today I\u2019ve got three single family homes in my smaller market, and then I\u2019ve got another triplex that\u2019s a little bit closer to home. And between those six doors, total value is just shy of $1.5 million and the monthly cash flow is right around $2,200 a month.<\/p>\n
First, congratulations, man. That is amazing to be able to achieve those numbers in a relatively short period of time, man, so I\u2019m super excited to dig into how you made that happen. But before we hear more about your marketing and what steps you\u2019ve taken, what are you doing right now that\u2019s working in this day and age? There\u2019s a lot of folks, Brett, who are on the sidelines waiting for the perfect Goldilocks situation to get that first real estate investment. So what are you seeing this working right now for those people?<\/p>\n
Three main things that are working, right? Targeted lists with specific buy box and knowing exactly what you\u2019re going after and being very specific about it. Two is personalized mailers, getting very specific with the language and information, and basically knowing who you\u2019re talking to. And then third, taking that whole process at their pace. I think a lot of people realize that most people don\u2019t like to be sold to, and so making sure that the whole process works for them in taking things at their pace.<\/p>\n
Let\u2019s break that down real quick. What is actually a buy box, and what are some general things that you should include when building your buy box?<\/p>\n
Yeah. So, to buy box is exactly like it sounds. You want to put certain things in the box for what you\u2019re looking for. That\u2019s property type, location. That could be square footage. That could be a very specific type of real estate, whether that\u2019s single family, small multifamily, apartment buildings, really just getting very specific with exactly what you want to invest in and being able to paint that picture of, \u201cThat\u2019s what I\u2019m looking for.\u201d<\/p>\n
So, Brett, I want to know, what was your buy box when you first started, and what steps did you take to build that out? Because I think for a lot of rookies that are listening, they maybe can understand the concept of buy box, but it\u2019s like, how are people coming up with these boxes? Is it just arbitrary? Are there certain questions you\u2019re asking yourself? What steps did you take to build out your buy box initially?<\/p>\n
For me, it was more of an emotional decision, but also an economic decision. So starting out, I knew I wanted to get into real estate, didn\u2019t know where or how, and like a lot of people, I thought my direct market that I live in was too expensive because everything\u2019s always too expensive. However, I grew up in a smaller town about an hour down the road and realized, maybe that\u2019s an easier way, a more comfortable way for me to enter into real estate investing. I\u2019ve always loved driving to and from school through some old historic neighborhoods back in my hometown.
We\u2019ve got 100-year-old homes, and I drove through those back and forth across town for 15, 20 years and always saw these beautiful houses. However, over time, they started getting run down, and those are, to me, kind of a historical element of our town and one that I didn\u2019t want to see go away. I think at that point I realized it all comes together, this smaller market that I felt was a little less risky, a little better entry point, but also being able to own and work on and improve these houses that I loved so much growing up.<\/p>\n
Brett, you\u2019re a much more admirable real estate investor than I am because your buy box was emotional and data-driven. Reminds me of our friend, actually. I have a friend named Katie Neeson. Katie develops on Instagram, but she\u2019s on a mission to revitalize her downtown, so a lot of her buy box is built around this desire to bring her downtown back to life. But for me it was very much economical. I was just thinking, \u201cWhat\u2019s my budget? What can I actually afford to purchase?\u201d
So that puts a cap typically on purchase price and size of property. What zip code do I want to invest in? Where have I seen the strongest rental data to support what it is I\u2019m looking for? And then also just condition the property. What kind of rehab project am I willing to take on? And when you think about those things, your ability to purchase, location data and project scope, usually those are things that you put together to build out your buy box.<\/p>\n
Yeah, absolutely. I can definitely speak to more of the economic side of things as well. So starting out, like a lot of newbies, don\u2019t have a lot of money to invest as well, so looking for a lower price point. So looking for something probably about $120,000 all in when I was starting out. That includes purchase and rehab costs and holding costs along with that. But also, to your point, getting smart about places of population growth and economic drivers. I think that\u2019s something that keyed me on to my hometown because, when I was growing up, the city was pretty much the same for what seemed like 20 years.
I left for a long time and came back in the area more recently and realized a lot had changed. There were a lot of industrial parks being built, a lot of life sciences and manufacturing companies who were coming to build in Sanford. It\u2019s a more affordable market than the Raleigh area that I\u2019m based in, Raleigh, North Carolina. And I think one of the biggest things that hit me was, I was driving through probably late 2019 and saw a Starbucks in my small town and realized, \u201cWait a second. Starbucks? Starbucks is putting something in this town?\u201d And realized if they were willing to make the investment, it was probably a good signal for a growing area.<\/p>\n
So, Brett, I want to get more into the market, but to clarify, you are actually flipping homes to buy rentals?<\/p>\n
Correct. Correct. So, a mix of both. BRRRR has always spoken to me, but flipping to be able to continue to generate that revenue, to be able to continue to buy and hold. Basically want to have multiple exit strategies with any property, but it\u2019s got to make sense on both of those ends, whether that be a BRRRR property or being able to flip and sell at the end of the project. I\u2019ve actually got two properties, two single family properties, that I wanted to have buy and hold originally, but they just made too much sense as flips and so let those go.<\/p>\n
I\u2019m very curious to hear more about this market where you\u2019re able to make that last-minute decision because that\u2019s not always the case in every market where you have to plan and strategize ahead of time before actually purchasing the property. But before we get into that, let\u2019s take a short break and we\u2019ll be right back.
Okay, and welcome back. Brett is going to talk to us about the market where he is able to make a last-minute decision whether he is going to flip a house or turn it into a rental after doing the rehab. So, Brett, let\u2019s get into that market. Can you tell us a little bit more about it and how you found it and decided that you could actually do this in your market?<\/p>\n
Yes. Like I said, grew up in the market so have an intimate knowledge, and also still have a lot of friends and family that live in that market. So, even though I\u2019m not there-<\/p>\n
And what market is it, Brett?<\/p>\n
Sanford, North Carolina.<\/p>\n
Okay.<\/p>\n
Sanford. And just to give us some context, Brett, Sanford, what\u2019s the nearest big city?<\/p>\n
We call it a big city, but the capital of North Carolina is Raleigh, North Carolina. That\u2019s where I live, and that\u2019s about an hour away. But Charlotte, North Carolina, is also probably even bigger from a population standpoint, but that\u2019s about two hours away to the west.<\/p>\n
Tony still doesn\u2019t know where that is. He doesn\u2019t-<\/p>\n
Yeah, absolutely. I got to open up the maps right now to see where that\u2019s at. But-<\/p>\n
Not too far from the North Carolina mountains.<\/p>\n
There you go. When you say smaller city, how many people are actually in that city? What\u2019s the population?<\/p>\n
Yeah, the city population is probably around 30,000, and there\u2019s only one real city in the whole county, and it\u2019s the smallest county in North Carolina. But 50,000 people across the entire county. It\u2019s not a one stoplight town, but it\u2019s definitely not a really large area from a population standpoint. But I think that\u2019s definitely going to change over the course of the next three to five years with all the industry that\u2019s moving in, especially with, one of the ones I hadn\u2019t mentioned, a company called VinFast is an electric vehicle maker out of Vietnam.
They just announced last year that they\u2019re going to be probably about 10 minutes down the road from Sanford. They rezoned part of this area to include it in the Sanford city limits for tax purposes. And again, it\u2019s right between where I live and the Sanford market. So Sanford\u2019s definitely a path of progress opportunity.<\/p>\n
Just really quickly, Brett, you just said an important word. What do you mean when you say path of progress? And what are some of the indicators a rookie should maybe look for to know if the city they\u2019re thinking about is also in a path of progress?<\/p>\n
In a lot of different markets, especially over the past three years with how much real estate has boomed, a lot of markets feel too expensive. And when you feel that way, a lot of other people feel that way as well, and there\u2019s a lot of different ancillary markets that live outside of those major areas, and companies and corporations understand this as well. So, they\u2019re moving slightly outside of that range in order to be able to capitalize on lower prices from land and development standpoint, and still be close enough to these major markets that they can be there in a short amount of time. The path of progress is understanding where those company industries are moving to and getting in the path of progress before the major population growth happens so that you can catch that tailwind.<\/p>\n
Great explanation, Brett. And honestly, I\u2019m seeing a lot of the same things in the short-term rental space as well in the Airbnb industry. A lot of our strategy right now is moving away from some of those big vacation hotspots that everyone across the country knows because those markets are a little overheated in terms of purchase price, and there\u2019s more competition. And we\u2019re looking for more of those secondary, tertiary markets that are outside of those big metros that we can go into.
We\u2019re actually going to be closing in a couple of weeks here on a 13-unit motel, and it\u2019s very much in a tertiary market. But we\u2019ve got big goals for this property because one of the benefits is, A, lower purchase price, we\u2019ve got an amazing deal, but, B, that lack of competition means that if you just do a little bit better, you\u2019re really setting yourself up to stand above the competition in that market. So I love to see that it\u2019s working both on the short-term side and the long-term side as well.<\/p>\n
Absolutely. And that\u2019s a great point is the competition piece. That\u2019s not something that I mentioned when I was talking about it. When you start going to these secondary and tertiary markets, if you\u2019re getting there before a lot of other people, there is a lot less competition. And especially if you\u2019ve got a narrow buy box, the more focus and specific you can get from both a location and a buy box perspective, the less competition you\u2019re going to have.<\/p>\n
So, Brett, once you identified this market, what was the actual process you took or you are taking now to source your deals?<\/p>\n
Yeah. The first deal that I got was actually an MLS deal, and it was right at the beginning of 2020, right when they were shutting everything down. We had just had our second daughter and I convinced my wife that now was the best time to get into real estate during the beginning of a pandemic and just having a new baby girl. And so, got that under contract right at the beginning of the COVID lockdown and spent a lot of blood, sweat and tears working on this house in a very high traffic area of Sanford, and transforming what was an all-brown house, like a 1920s all-brown, two-story house that blended into the background and worked on transforming that into the former beauty that it had.
Now it\u2019s a beautiful, light blue house on the corner that generated a lot of traffic and conversation in the community because people have driven by this house for so long, and that was the entry point of, \u201cAll right, I like this buy box. This makes sense.\u201d And Ashley, to your question, as I was working on that house during nights and weekends, I would literally just drive around the neighborhood and drive for dollars. Not anything fancy, literally, with a notebook and my phone camera and taking pictures of these properties and writing down addresses and dropping pins. It doesn\u2019t even have to be a long process, 10, 15 minutes at most, and just doing it where I found time. That eventually built up. It\u2019s not a large area, but it built up a list of 77 different properties that fit my buy box.<\/p>\n
So, Brett, just to clarify here, you said that you were spending 10 to 15 minutes at a time, you built up a list of over 70 properties for you to target. How much did it cost you to do that?<\/p>\n
It cost me $0 to do that. It\u2019s time and energy. That\u2019s it.<\/p>\n
Gas money.<\/p>\n
Yeah, essentially gas money. But it was essentially where I was going to and from anyway. So, to your point, not very much money at all, if any. Just, it\u2019s the energy.<\/p>\n
And the reason I ask that question, Brett, is because there are so many rookies who are listening right now that are not taking action because they don\u2019t have the capital, they don\u2019t have this, they don\u2019t have that. But what you just said is that you built a list of over 70 ideal properties that fit your buy box 15 minutes at a time with zero money.<\/p>\n
Yes.<\/p>\n
That means there\u2019s no reason for any rookie that\u2019s listening to not replicate what you just said, to go out there into their own backyard and start searching for deals that same way as well.<\/p>\n
Exactly. And it provides a good training ground if you haven\u2019t done any marketing, if you will, or direct mail, and doing it on a smaller scale and getting your feet under you and understanding that process and how that looks and how it works to really be able to succeed or fail on a small scale and then be able to tweak that in the future for any other future marketing campaigns that you might want to do.<\/p>\n
Tell us a little bit about your branding strategy in the marketing. Were you sending out handwritten letters? Did you get logo design? What are some of the important pieces that somebody should do for their branding? Is it yard signs? Give us some examples.<\/p>\n
Yeah, absolutely. It honestly started with an overall plan that I was committed to doing this and I bought this on-market property, and that I wanted to do off-market properties, and listening to the BiggerPockets podcast for so long and getting a lot of different ideas and understanding where you want to go ahead of time so you can be thinking about how to prepare and plan for where you want to be. So during that first project, I realized, if I want to continue doing this, I need to be visible and have people understand who I am and what I\u2019m doing, even without having a one-to-one conversation with them.
So one of the first things I did was go online and create a yard sign with no logo or anything, just colors and company name. And at that time I realized I should probably have a website as well, drive them somewhere so that they understood. So over the course of about a week, ordered these signs, bought a domain, went online and created this website to provide information about who I am and what I do, and provide communication and inbound if anyone had questions about what was going on. And so stuck this yard sign right out in the middle of the yard.
I was up late afternoon on a hot July painting the side of a house so people could associate this color scheme and this website with that guy that\u2019s up there on the ladder doing this work and improving this house. That was the initial phase of planning for the off-market campaign. And so that second phase was collecting all of those leads for me to create a list out of. And literally, again, to what Tony mentioned earlier, zero cost to find those mailing addresses and literally went on our city tax site and cross-referenced those properties to find the mailing address of the owner so I could create this list.<\/p>\n
Which, to clarify, to break it down even more miniscule as you\u2019re going, searching your county that you\u2019re in and you\u2019re looking for the property tax bills, and usually you can just type in the address and it\u2019ll pull up a copy of the tax bill and it\u2019ll show you the owner\u2019s name and the mailing address where the property taxes are sent to. So that way you know, okay, so the person doesn\u2019t live here, or maybe they do live there, but that\u2019s the mailing address where they receive their mail, so even could be a PO box sometimes, too.<\/p>\n
Exactly. And you can find out a lot of information on these free tax sites because they tell you the mailing address, when the last sale was, what the tax assessment is. Sometimes they provide a drawing of the property itself and when any sort of improvements were made to the property. So a really good space to get to learn more about the property itself for free.
And so in doing that process, I built out an Excel spreadsheet with all of the property owners\u2019 names and mailing addresses along with their property address, and started to create a mailer piece that I could send to each of these people. I definitely wanted personalization involved in this to speak to these people directly because I was letting them know who I was and wanted to make it more of a personal touch and not a cold, like, \u201cHey, I\u2019m just looking to buy a house. Just looking to buy a house. Will you sell me your house?\u201d<\/p>\n
So, Brett, what exactly did you say? Give us the template of, hey, how do I create this personalized mailer to send out to folks.<\/p>\n
I paired that from a branding perspective with what I put on my website as well, to kind of echo this sentiment that I was going to be communicating to people, which is like, \u201cHey, I\u2019m just a regular guy. I grew up here. I want to help improve the community and save some of these houses that are in maybe ill-repair or people just can\u2019t keep up with, and yours caught my eye.\u201d
And at that point there\u2019s a lot more nuts and bolts into the personalization, but literally taking all the information from the spreadsheet that I built, and including their name, the actual property address, and talking about the property with the information from the sheet so it isn\u2019t just a, \u201cHey, so-and-so,\u201d or, \u201cHi there, I like your property at X,\u201d and really putting a personal touch on there. But essentially introducing them to who I am and what my company is about, and if they\u2019re interested in selling I\u2019d love to have a conversation with them.<\/p>\n
I got a question for you, Brett, on that. If an LLC owns the property, how do you make it personal without just saying, \u201cHello, Ashley LLC?\u201d<\/p>\n
Yeah, great question. In those instances, and, man, I\u2019d have to go back and check, but finding a warmer way to do that, or not even addressing it in a personalized manner at all. So you might start something with, \u201cHi, Tony,\u201d or, \u201cHi, Ashley,\u201d in a letter, but build that list out in such a way that, if it is an LLC, you can go in and remove that so it doesn\u2019t look terrible. Like you just said, if I wrote a letter that said, \u201cHi, Lee County LLC,\u201d they\u2019d be like, \u201cWell, clearly they don\u2019t know what they\u2019re doing. I\u2019m just a number.\u201d
But literally building these out was a simple mail merge with Microsoft Word and using that Excel file, so when the mail merge is complete, you can go and customize each one of those letters. You can go customize the text within those individual letters in this large file, this Microsoft Word file that has 77 letters in it. At that point you can go in and delete. \u201cAll right, this is an LLC. I\u2019m taking out the whole top of that.\u201d The same thing with some of the property addresses where you can tweak it a little bit and format it so it looks better and there aren\u2019t any mistakes.<\/p>\n
And just to clarify what Brett\u2019s talking about, a mail merge is basically, you can take data from an Excel file and automatically populate a Word document with the data from the Excel file. So instead of having to manually type out 77 letters, you just type the letter once with the mail merge notes and then it\u2019ll do it automatically. Anyway, Google mail merge and you\u2019ll get a pretty quick and thorough explanation on that.
Now, Brett, I want to transition to what I think is going to be my favorite part of this episode, which is getting Ashley over her fear of talking directly to sellers. We\u2019re going to get to that in a second, but before we do, let\u2019s hear a quick word from our show sponsors.
All right, Brett, so we are back and I want to get into, your phone\u2019s ringing, people are responding to these letters you\u2019re sending out, someone actually calls, and now you\u2019ve got to talk to someone. So what are you saying when you\u2019re actually having these conversations with the sellers?<\/p>\n
Yeah, it\u2019s a great question. And to back up a step. For me, personally, as a screening effort to understand when is a call coming in from one of these mailers, I created just a free Google Voice number that separated it from my personal number, so that\u2019s the number I put on all these letters. For several different reasons that\u2019s a good idea, but one of the main ones is to segregate that inbound traffic so you really understand, \u201cOkay, this phone call I\u2019m about to answer, I need to answer as, \u2018Hi, I\u2019m Brett from Team Long Properties,’\u201d and have a professional sense to it as opposed to, \u201cI don\u2019t know who this number is. I\u2019m not picking it up.\u201d But, yes, once they answer, it\u2019s typically just a warm greeting like, \u201cHi, I\u2019m Brett from Team Long Properties. Who am I speaking with?\u201d
And they\u2019ll tell me who they are and usually they\u2019ll give a brief introduction, but one of the first questions I ask them is, \u201cSo what made you pick up the phone today? Why are we talking right now?\u201d And that\u2019s when they typically go into a little bit of, \u201cHey, either your letter spoke to me. It was very personal and I understand, and it meets my expectations for who I\u2019d want to purchase my house.\u201d Or, \u201cHey, I\u2019m in this situation that I don\u2019t know if I want to sell, but I definitely might, but I have some questions first.\u201d And basically that one question of, \u201cSo why did you call me today?\u201d can open up a lot of different pathways for where that conversation could go. You always have a call sheet for specific questions you want to know about the property itself.
But I think it\u2019s very important to take that initial phone call, and the first part of that phone call at their pace, and letting them dictate the beginning of that conversation because that\u2019s how I want to brand and personalize what I do in real estate investing. This is not a fast, pushy thing. This can take as long as we need. I want to make sure that when we\u2019re doing this process at the end of it, whether it ends in a transaction or not, that you feel good about how things went and I feel good about how things went, because if either of those things is not true, then this is not going to work for anybody. And this is something I want to continue to do in this market. So I want to make sure that people are treated right and they know that it\u2019s more than just a quick sale, fast-money approach.<\/p>\n
Love that approach, Brett. And just one thing I want to share, this actually comes from Brett Daniels. I don\u2019t think we\u2019ve had him on the Rookie podcast before, but he has a lot of great content around wholesaling and specifically talking to people on the phone. What he encourages folks to do is to get four things. You want, condition of the property, their motivation for selling, the timeline, and then their asking price. And if you can get those four things, typically it allows you to have a really good dialogue around, \u201cHey, can we actually make this deal work?\u201d So, Ashley, let me ask you, hearing that, does it make you less nervous, more excited about talking to people?<\/p>\n
Well, I\u2019ve done two batches of mailers and both times I did Google Voice, which I think is a phenomenal tip to give out, is to do that because you know that it\u2019s somebody calling who got your mailer and it\u2019s separate from your cell phone, but on your cell phone I guess, but not your cell phone number. And my immediate reaction\u2026 So, it was linked to me and my business partner, and he would take all the calls, but I still had it linked to my phone so I could see what\u2019s going through and everything. And my immediate reaction would be, \u201cDon\u2019t answer, don\u2019t talk to anyone.\u201d And my job would be, I would Google the phone number real quick and try to find their address before he even answered the phone and said hello.
But we had Nate Robbins on the show and I think he talked more about cold calling. Where, Brett, you already have a warm lead where that, I feel like I would be way more comfortable with because you already know they\u2019re calling because they\u2019re interested about something, or maybe they\u2019re just curious, they want to know what you would pay for their house. But either way, it\u2019s not the, we\u2019re just reaching out out of the blue and cold calling them. But Nate was episode 326, if anyone\u2019s interested in hearing that side of talking to people on the phone, because I did learn a lot from him, too. So, Brett, when you\u2019re on the phone with people, how are you being transparent about your process of purchasing their home?<\/p>\n
Yeah. Very, very good question. And, Tony, what you mentioned, I actually dug up my old notebook that has my screening questions that I would use, and I\u2019d carry around this everywhere, just in case somebody called, I could wrestle it up real quick so I would remember, \u201cI need to make sure I hit all of these things,\u201d like you mentioned. Or, \u201cDo you live there? Is it rented? What\u2019s the condition of the house? Has any work been done on it recently? Do you own it free and clear?\u201d A lot of different questions that lead to that next step in the process to where you figure out, by the end of the call, \u201cIs this something that we should take the next step on? Is this something you\u2019re still interested in?\u201d And that\u2019s the kickoff for asking what you asked about, which is, what does the rest of this process look like?
At that point you\u2019ve got a go-no-go decision, right? After talking with them, they\u2019ve felt me out, I\u2019ve felt them out, and usually by the end of that conversation, either I realize this is maybe not something I want to pursue, or they realize, maybe I\u2019m just not willing to sell. But if they do, I ask, \u201cIs this something you\u2019d like to continue with, move forward and move on to next steps?\u201d And if they say yes, I start to explain what that whole process looks like and take it high-level start to finish to let them know like, \u201cAll right. Well, the next step after this would be me finding some time to come on-site and actually see the property and walk the property and verify some of the key things that we talked about today, and just verify the condition and understand the property itself.\u201d
After that, I need to go back and understand, all right, if there are things that need to be done to the house, I need to run some numbers to figure out, is this something that\u2019s going to make sense from a purchase and rehab standpoint? And just being very honest with them and letting them know, like, \u201cHey, I understand that you may be interested in selling, but if these numbers don\u2019t make sense, this is not something I\u2019m going to be able to move forward with either. But if for some reason we can\u2019t move forward, I\u2019m happy to help you with the information that I have and figure out what may be the best direction for you to go in.\u201d
But talking them through that whole process of, all right, after the on-site, I may need to get an inspection to understand the property itself even more depending on what we see. And then at that point we\u2019ll talk final numbers, and if we both come to a price that makes sense for both of us, then I start to explain what the actual closing process looks like so that they have a high level of how the whole thing works up front.<\/p>\n
Love that, Brett, and I appreciate you walking us through that. I think a lot of folks, they get the idea of sending the mail, but what happens afterwards is where they get a little nervous. And, guys, I\u2019m going to put a little Easter egg at the end of this episode if our producers will help us out, but I have a hilarious voicemail from a very angry property owner that called me back a few years ago, and I\u2019ll tack it on the end of this episode if you guys want to listen.<\/p>\n
Hi, Sarah. My name\u2019s (beep). I call bullsh*t (beep). You weren\u2019t randomly driving around here with cash. I get one to two calls a day for the last two months. I\u2019m an individual who enjoys privacy, but I\u2019ve been getting one to two calls a day for the last two months of people who think they want to buy my (beep) property and make money off of it. I\u2019m also a real estate investor, but I\u2019m not stupid, so (beep) don\u2019t call me again.<\/p>\n
So Brett, what I want to ask you is, for all these deals that you\u2019ve done, about how much did it actually cost you to get started? Ballpark. What was the total investment for these seven deals?<\/p>\n
Geez, for the seven deals? Let\u2019s see. I think the first portion, a few hundred dollars and rounding out a second marketing campaign, a few hundred dollars more. Funny, but probably just under $700 for the seven deals, and it\u2019s not anything extravagant. Literally, the most expensive thing was I bought a printer so that I could print these letters. I found all the letters so I could print these letters out, and there\u2019s some more of the personalization where I sign each one. And printing envelopes and stamp and return addresses, but that\u2019s literally the most expensive part of that. Outside of that, it\u2019s stamps, it\u2019s paper. It\u2019s not a lot of money to get started.<\/p>\n
Brett, I think you\u2019re a shining example of just taking action, not being super fancy about it, not being worried about step 20 when you\u2019re on step one. It\u2019s just like, \u201cHey, what can I do next, and how can I keep making progress, and how can I stay consistent?\u201d I think it\u2019s a super important lesson for rookies that are listening. So I want to finish off, Brett, by asking you, and we touched on this a little bit at the top of the show, but there are a lot of people right now who are worried about investing in real estate. Interest rates are climbing, you\u2019ve seen prices going up, prices going down. We\u2019ve been on this rollercoaster ride, and a lot of folks are just waiting. So, what\u2019s your take? Is it risky to flip homes right now, today?<\/p>\n
It can be if you\u2019re not prepared and you don\u2019t have a plan. I think now is a great opportunity to get into the market because of that fear and uncertainty. That\u2019s the environment that I got started in with COVID. I can\u2019t tell you how many people told me at the time, \u201cDon\u2019t do this. This is not a good idea. Everything\u2019s going to go crazy.\u201d And lo and behold, it was actually the best time to get started. And I think that\u2019s another opportunity coming here soon. But back to why it\u2019s a good time, you have to know what you\u2019re doing. You have to have a good buy box, you have to buy properties at the right price. You have to understand the rehab costs and what you\u2019re doing, and underwrite effectively upfront so that the numbers don\u2019t lie.
You may have less opportunities now. Things may not pencil the way that they used to, but I think going in with a very specific plan and understanding very specifically what you want to do and what those numbers look like, I think it\u2019s a great time, and especially now with off-market deals. There\u2019s a lot of people who may want to sell but just can\u2019t, and that\u2019s where that conversation can go to where they feel like, \u201cI can\u2019t put my home on the market. There aren\u2019t enough buyers out there.\u201d Or, \u201cI\u2019ve wanted to sell my home for so long, but interest rates went up and I just don\u2019t feel like my property is marketable enough to compete.\u201d So, yeah, there\u2019s definitely a lot of opportunities. You just have to be very specific about how you\u2019re going about it and know your numbers, stick to your numbers.<\/p>\n
Right. With your profits from the flips, we talked a little bit about how you\u2019re flipping to buy rentals. Can you tell us a little bit of how those numbers work out? What are you making on average profit from the flips, and then how are you using that to buy the rentals?<\/p>\n
That first property, it was listed at 100,000 on market. I offered 60 and got it under contract for 70. We ended up putting, probably, let me see where that number is. Yeah, we put $47,000 in renovations into it and we had conservatively estimated that the ARV was going to be 160 and it ended up appraising at 181. So that\u2019s a lot more money that we can take out and then reinvest into the next deal. So basically taking those profits from either a BRRRR and pulling that money out, or the revenue from a flip and then rolling that into the next deal.<\/p>\n
Well, Brett, thank you for coming on and taking the time to share your process for creating your list, creating your buy box, and working us through and making me overcome my fear of talking to people. And I think Jody was too kind when he said it was talking to sellers or potential sellers. I think it\u2019s just people in general, answering the phone. But if you want to find out more information about Brett or about Tony or I, we are going to link Brett\u2019s website and our social media handles into the show description. You can find that below if you\u2019re watching on YouTube or your favorite podcast platform.
I hope you guys learned a ton as to how you can take action today with building your buy box, doing driving for dollars, building that list out, and sending out those personalized mailers and waiting for the phone to ring. And I know it\u2019s around the holidays and this is going to be released into January I believe. But I will tell you, last year I sent out mailers and I didn\u2019t realize what I was doing and they got delivered to everyone the day before Christmas Eve. And I thought, \u201cThis is the worst timing.\u201d
You have no idea how many times my phone rang that day. And so, don\u2019t worry about waiting until the perfect time to send the mailers either. Just start taking action. You can always send another round of them a month later, two months later, three months later. Well, Brett, thank you very much. I\u2019m Ashley, and he\u2019s Tony, and we will be back with another guest and we\u2019ll see you guys at the Real Estate Rookie podcast.
(singing)<\/p>\n