Wichita Real Estate Blog

Real Estate Investing Webinar

Transcription:

(00:09):

Hello! Everyone. Welcome to today's training. Really excited to be with you guys today. My name is Tony Javier. And we are gonna talk about the three ways to invest in real estate today. So I'm gonna use my 19 years of experience to train you guys on how to invest in real estate. Today, there's many ways to make money in real estate. Been doing it for a long time now and want to show you guys some secrets of real estate. I've got probably half of you guys are in real estate, real estate agents brokers and maybe just want to add that to what you're doing now. I've got some actual real estate investors, that I can help you get some nuggets to help scale your business. And if you're new into real estate, then perfect. I've got some really good stuff for you, stuff you probably didn't know about.

(00:58):

And some different ways you can get into real estate. So for those you know, me, I don't mess around. I'm going to jump right into it. So let me share my screen here and we will jump right in. If you guys have any questions throughout the presentation, please put the questions in the chat box. We are live on Facebook as well. For those you guys on Facebook, I've got my other computer over here. I will take some questions during the presentation. I'll try and answer as many questions as I can during the presentation. If I can't get to them, I will answer them at the end if we have enough time. So me, I've been in the business for, 19 years now started in 2001. And if you see on the screen, there no down payment system. That's how I got started.

(01:48):

I actually bought this course on TV one night, late night, infomercial, uh, and taught you how to buy properties with no money down. That was back when real estate investing wasn't nearly as popular. So there wasn't near as much competition. And within about five months, I found my first property and found my second property pretty quickly after. And just built a business out of it, ended up dropping out of college with nine years have to graduate, believe it or not. And did not look back and just been doing real estate since I love real estate. It's been something that has been a passion of mine and something that I will continue to do for the rest of my life. So in my career I have flipped over 500 houses. Sorry, my there we go flipped over 500 houses in my career. I've been on the INC 5,000 list of fast in growing companies twice.

(02:42):

And I'm fortunate to say I have a self managed company which allows me to do things like this. Self-managed basically means that I am not in the everyday operations of the business. So I manage things from a far and I've got a great team on the ground that looks at properties, puts them under contract. Pretty much does from a to Z. And I just kind of, you know, have an arrow you'll aerial view of it and manage it from afar. I've got a great team in place. I look at probably one out of every 10 properties we buy. If that fortunate enough to say that. I don't say that to brag. I say that because I worked hard to get there. In fact, the first 10 years of my career, I did everything. I did marketing. I did acquisitions. I did project management.

(03:29):

I did everything from a to Z. And from that, I can tell you, now I know what I love to do and what I don't love to do. Fortunately now I'm able to do what I love to do, which is still work on the marketing. The creative side of it, starting new companies, doing things like this, where I'm educating people and helping people to financially better themselves, and also working with business owners to help them to hopefully get to that self-managing level. So again, first 10 years I struggled did everything myself unfortunately by hiring a coach by attending mastermind events and doing some high level things. I was able to get to that business automation within a few years. And now I'm starting other businesses like coworking. I've got a coworking space for those of you who are in Wichita probably knows strategic workspace.

(04:21):

We started the first classic Co-working space in Wichit. We've got private offices. We've got conference rooms, we've got 17,000 square feet of greatness where entrepreneurs can come. They can work in a creative space. They can go to events and network or used to be able to. We're not, we'll be able to do that again soon. But this is one of my secondary businesses and looking to grow this business as well. So I've done residential. I've done commercial. Most of what I'm gonna talk about today is residential, but it can apply to commercial as well. And let's jump right into it. So what to expect today, like I said, I'm going to show you three ways that you can invest in real estate today. I've got some hands on approaches where you can actually be hands on and manage the everyday operations.

(05:14):

I've got hands off approaches where you can invest and be completely hands off or 99% hands-off. I even have some things that are going to show you guys how to do to get fixed returns on your money, which is something that most people do not know about. I don't want you to buy anything today. I'm not selling anything today. I'm not gonna pitch a product at the end or anything like that. I just want to educate you guys and see if there's a way for us to potentially work together. And if you stick around to the end, I'm gonna offer you those ways that we can work together. I've got some great things that I want to present to you that, you know. I'm not, again, going to sell your product. I just want to work together. I love doing this and I want to help other people invest in real estate.

(06:01):

So my goal is to put you in anybody that I talked to train in a better financial position and help better their business. And this is for experienced investors as well as investors with no experience. So it doesn't matter what experience you have. Hopefully there's something, there will be something in here that's going to help you financially, whether it's helping you with your current business or something that you can get into that you didn't have before. So real quick success stories, been doing this a long time and I've made a lot of money for people in real estate. So Kim and Randy, right now they live in San Diego. I met Randy at a Tony Robbins event. Believe it or not. He's invested hundreds of thousands of dollars in real estate, potentially. I think it's maybe over a million by now.

(06:49):

Actually it's well over a million now that I think about it and they've made money on every single deal that they have done. Another Randy and Mark. I met Randy hiking in Switzerland, met some really cool people, doing cool, a lot of cool, different, a lot of different, cool things. I've worked with them. They've invested millions in real estate with 100% success. They invest with me and they invest with other people as well have done very well in real estate. Lesley E and I'm using abbreviations to not disclose their information. But Leslie, she is just a blue collar worker in Wichita. She invests in deals hands-off and gets consistent checks. She gets fixed returns on her money. She's not a real estate person. She just has a busy blue collar worker, has money to invest in instead of putting into a checking account and earning less than 1% of her money.

(07:44):

She invested in real estate. And I show her showing her how to do that and have gotten into quite a few deals. Andrew from Naples, Florida invest passively on rentals and flips and gets consistent returns as well. And then someone that I've worked with somewhat hands on a friend of mine, Brian 10 years ago, I, uh, he was investing in real estate and he was making about $5,000 a deal. And, uh, we got really close within the first couple of years we met, I taught him a lot of great things and, uh, eventually he started, I showed him some things and I said, you can make way more money. And eventually he started making 15 to 20 grand a deal. And now he makes up to. I'm thinking some between 30 and 50 grand on some deals. So he's someone that I've taught to work on his own deals and some of these other I've had into my deals.

(08:35):

So, disclaimer, I don't know. I've got many more by the way, but disclaimer, I have to say that these results are not typical. They are actually typical, but I have to say they're not typical for, uh, legal reasons. So I do tell you to consult an attorney or a financial advisor before you make any decisions in real estate. All right, cool. So why do people fail? I have to throw this out there because this is something that you kind of need to know. Sometimes it's better to avoid, failing than it is to try and do things to succeed and then fail and not know what they were. Right. So a lot of people fail because they pay for properties. This is mostly on the flipping side. If you know, if you buy rentals, which we'll talk about later. You don't necessarily pay for equity.

(09:21):

You pay for cashflow. So we'll talk about that. But a lot of people overpay for properties when they're flipping them. And we'll talk about that. That's probably the number one thing that I see people do. I look at the numbers and I'm like, why did you buy the property for this price? Right. So that's probably number one. Another one thing is they try and do everything themselves. I told you, I have a team now that does 90, some percent of the business for me. You know, I know what I'm good at. And now I do what I'm good at. And I hire out the rest. You know, if you're flipping a property, you've seen the flipping shows where they go in and they try and do all the work themselves. You're not an expert at everything you do or everything in your business or everything.

(10:03):

Yeah, everything you do, I guess I should say. So try and find other people that can help you out. That is like the number one rule of business that I tell people when they start one is don't do everything. Yourselves find people that can do things as good, if not better than you. And if you say that people don't do things as good at you and everything. Then you're probably missing the boat. I hear that from a lot of, a lot of business owners that they say, if you want it done, right, do it yourself, which is, which is right first for some things. But you know, what, if someone can do it 75% of what you do, that's kind of my rule of thumb. Sometimes even 50%, depending on how crucial it is. But if someone can do its, definitely 75% as good as I can do it, I hire it out.

(10:46):

And I've realized that a lot of people, or way better at some things than I am. They hire the wrong people. You need to find people that are good people. I used to hire the cheapest of the cheap and that's what I got. And now a high I've hired much higher. I have hired a lot better people and I've gotten much better results. They choose the wrong type of investing for them. If you are not a detail person, if you are not someone that wants to get your hands dirty, you're probably not going to want to flip houses. You're probably gonna want the hands off approach. So I'm going to show you the different types of investing that you can get into. And you guys can decide what kind of investing that you want to get into, or they invest with the wrong people.

(11:31):

You know, some of the things I'm gonna talk about are hands off real estate investing, which means that you need to invest with people. So you need to find, you need to make sure that if you are going to invest with people. You know them, you trust them. They've got the experience, they've got the work ethic, they've got the track record. You know, that they know what they're doing. That's the worst thing you can do is invest with the wrong people. Because if things go awry that are out of our control. Then you need to make sure that they're going to do what it's, what it takes to get things done and make things happen. Right? We've lost money on properties and we paid our investors back. That's just kind of the way we do it. You know and so if you're investing with the right people, even if things don't go right, which sometimes they're not going to. If you invest with the right people, they are going to perform for you.

(12:20):

All right. Things you need to know to succeed. Learned from those that have been there. like I told you, the first 10 years I had a lot of struggles and one of the biggest mistakes that I made was not getting a mentor with not getting a coach and without, and not learning from people that had done it before. You know, 10 years into the business. Again that's when I hit a breaking point. I had to fire my whole staff. I think I had four people working for me at the time three of them were living in my properties, were stealing from me. I had to evict them and it was a huge learning lesson. And if I could go back and do one thing differently, starting my business is I probably would have either worked for someone that is doing what I wanted to do, or at very least. Have a mentor or someone or a board of advisors that I could go to consistently that I could ask questions of and not have to reinvent the wheel.

(13:16):

I put my head down for 10 years and thought. If I ask questions, if I ask for help that I was the weak one, when it's actually the other way around, if you don't ask questions, you're going to be weak. You've got to ask questions from other people. You can learn from other people in their mistakes. So you don't have to make nearly as many constantly learn and ask questions, build a great team around you. I'm probably gonna say that many times you got to have great people around you and processes and systems. You know, we, I flipped hundreds of houses and you know, the first. You know, five, 10, 15, 20 were probably somewhat the most painful. And as time when I just had to build processes and systems, when something went wrong, build a process and system, if something goes wrong, build a process and system.

(14:06):

And so we had, I just, over the years had to build really good processes and systems. So now when something happens, we know how to handle it and we are much more efficient. All right. So I'm going to jump in the types of real estate investing. There's a couple of things in the chat. Generally I will answer your question here a little bit later. But yes, we do have a way to build a board of advisors, like I said. And you're welcome for, you said thanks for doing this. Absolutely.

(14:41):

So let's jump into a types of real estate investing. So the first one is Fix and Flip. So you can see some before and after pictures is actually a property that we just did. We put it on the market and sold it in a day. You can see the before and after it, you know, these properties that we buy are pretty horrific. Some just need carpet paint, a little bit of remodel properties like this just need pretty much a whole gut job. So this is a property we just sold. I'll show you the numbers on it to give you an idea of how this worked out. We just sold it for, we actually ended up selling it for more than this. But with closing costs and everything netted out probably around a hundred thousand was called 99,000. We purchased this property for 21,000. I know for a fact that some of you are in San Diego, that are listening to this. Yes, there are properties that you can buy for 21,000. For 21,000. You can buy probably a few specks of dirt in California. That's about it, started a house here is 500,000 and that's actually one of the beauties of investing in the Midwest.

(15:44):

These are properties in Wichita, by the way that I'm going to show you. And so yeah, you can buy cheaper properties in the Midwest. So we bought this one for 21,000, we put $42,000 into this. We spent twice as much on renovations and we did the purchase. And between closing costs, holding costs, real estate commissions, all of that good stuff, we paid 12 grand. Now that's one of the biggest mistakes that people make. And this is why they overpay is they don't look at their costs to sell the property. So there's going to be between a three to 6% real estate commission. You're probably gonna need to pay 3% to the buyer for their closing costs. You're going to have a principal interest taxes, insurance. You're going to have utility costs. So someone might look at this deal and say, man, you're only gonna have 63,000 into it.

(16:37):

You're going to net 33,000 or better yet someone may say, we will shoot. I can, I could pay. What is it, 40 some 50,000 for this house. Because they're not calculating in their costs. So you've got, I've got a really good spreadsheet that if you guys need this. And if got my email address, you can shoot me an email and I'll send this to you. But I plug in numbers in the spreadsheet, and this is something, honestly I didn't come up with until probably three to five years into the business where I really started understanding my cost. But now we plug in, we plug it in and this is the reason that I can be hands-off is my team can plug numbers into a spreadsheet and it populates how much we're gonna make on a property. And we try and make a minimum amount on a property.

(17:20):

So we plug in what we think we're going to sell it for. We plug in our renovations. We plug in, um, a few numbers and will calculate all of our holding costs. And then it'll, it'll show our net number if we buy it for a certain price. And then we adjust the number to go with what we need to make on a property. So a property like this, we probably want to make at least 15 grand on a hundred thousand dollar house. We used to say 20, but you know, with competition. We Buy we now buy properties with a little less margin. So this deal, we made $24,000. This Russ is a simple flip. We can get this rehab done in 30 to 45 days. Beause we've got great contractors over the last almost 20 years that know our systems.

(18:04):

And I would say if someone's newer to the business, I would probably estimate closer to three to four months for a deal like this, because you're going to need to find contractors. You're going to need to probably go through some learning lessons. There's going to be some issues you didn't you know, didn't think about, for the most part, these deals take us about 30 to 45 days, and we usually sell them within a week. Typically because we do what you see there. I mean, the houses look almost brand new. It's hard to find a house under a hundred thousand dollars. Looks brand new with two car garage. And those are the kinds of deals that we like. We'd like deals that are hard to find in a price range. And if we can make them spank and brand new pretty much. And we're competing with properties that are outdated. Our houses are gonna sell very quickly or we gonna sell for a very good price.

(18:52):

So that is the first time you guys have seen the flip shows you guys have. You know, you guys probably know this a little bit. Hopefully we have some nuggets there that I shared with you that if you get into fix and flips that. You don't make some of the mistakes that I made. And hopefully we can continue the conversation outside of this on the fix and flips. So pros and cons of Fix and Flips. I'll go through these real quick. They can have big returns. You can walk in with a lot of equity because you are buying them in distress. That equity can go away very quickly if you don't do it right. So there's gotta be some processes and systems in there. And you need to make sure you have some of those in place before you start. It can be automated, meaning that if you get a marketing system down, if you can kind of build it the way that I've built it, to where the marketing goes out, you've got the people in place to take the phone calls.

(19:40):

You've got the contractors, you've got the acquisitions team. It can be automated. You can be, you know, either as hands off as I am or still hands on, but still very automated. Where you can still be in the process. But a lot of it's automated for you. The cons of fix and flips. It is harder to find deals, especially right now, there were a lot of people looking to get into real estate. And it's been much bigger in the last five years. The great thing is, is that we are kind of going to be in a downturn. I feel like. So hopefully it's going to be easier to find deals and there's going to be a lot of rookie people that get out of the business. So we'll see how that works out. It is more work than other methods. So you are gonna have to be more hands on. So you are going to have to do some work. But there's some big returns that can be in it. And I duplicated that. I did not mean it can be automated. So that is not a con that is a pro. Sorry about that. All right. So we're gonna move on to another type of real estate investing. And some of you guys probably don't know these last two methods. So hopefully I'm gonna shine some light and get you guys some good stuff that you've never seen before.

(20:51):

Turn Key rentals. So I've seen people buy rental properties and the mistake that they typically make when buying rentals is they try and manage them themselves. Turn Key rental properties are properties that already have a tenant probably have already been renovated and are professionally managed. So we sell Turnkey rentals. We don't do a lot of it, but if someone comes to us and says, Hey, we want to buy a property. We want a rental. We want, we don't want to have to fix it up. We don't want it to tentants in place. We will sell turnkey rental properties. So these are properties that you buy. Well actually, I'll just go through 3 step process. So you purchase occupied property. Someone else manages the property before you. So for us, when we sell the property, we already have already have a management team in place. So we will manage it for them. If someone else wants to manage it, that's fine. They can manage it themselves. But for small fee, we will manage it. And it's well worth it for someone professional to manage it. Reason being is that, especially if you don't have the time, we've got the people to do maintenance and repairs quickly. We've got a great marketing system and we've got a team that's dedicated answering phone calls, showing properties and getting them rented. So for us, it's a no brainer. But again, if someone wants to manage the properties, that's fine. They can do that. But if you're gonna buy a true turnkey property, someone else manages it for you. And you get a check each month, as long as disclaimer, as long as the property is occupied. They are paying rent. And there's not too many repairs on the property, right?

(22:33):

So this is a typical property, three bedroom, one bath, one car garage. Again this is, these are Midwest prices. This is Wichita, Kansas. We're talking about. So if you purshace a property for 65,000. There's something called a 1%, rule? If you can rent a property for about 1% of the purchase price, that's probably the minimum that you want on rent for a property. So property like this, you wouldn't want to pay 80,000. You could pay 65, 60 and still make it worthwhile. So I'm going to show you numbers on a $65,000 purchase. So taxes and insurance on this are about 110 bucks management fee. We charge an 8% management fee. You might be able to get a little bit less, um, some charge, a little bit higher for us. We charge 8%. That's kind of our standard. Again you can find probably six or 7%, but you gotta make sure that those are good management companies.

(23:29):

But assuming you pay an 8% management fee. If you pay cash for this property, then as long as again, there's no repairs or maintenance and the property is occupied. Then you will receive $488 in the mail. So for us, I like to keep an over 90% occupancy. I think right now we're at like 90, I have over a hundred properties. So I think we have like one or two vacancies, usually at a time. So we keep over 90% occupancy. So assuming again that you've got an occupied property, they're paying rent. There's no repairs. This is your income. Now, if you don't have cash and you want to buy this property with financing, you can put 20% down. So on an 80% mortgage at a 30 year term at 6%, which are pretty standard terms right now, you could probably get that lower if you've got a good relationship with bank and really good credit.

(24:24):

So 300, $318, your CashFlow is $177 . Return on that. If you do the math at 20% down, I think is like 16% return. Again that's if it's fully occupied, with no repairs. But this is also is not including when you're paying down that you're paying down the mortgage, as well as the appreciation on the property in Kansas. We don't have huge downturns, but we don't have huge upturns either. So you're looking at about a one to 3% appreciation rate in Kansas and other places. It could be less, it could be more for Kansas in the Midwest. I would recommend. And I'm not just saying, so you buy properties for me. We don't have a lot of properties to sell. So I'm not pitching it, Kansas because of that. But for me, Midwest makes more sense. They are good cashflow properties.

(25:14):

They're very affordable. They don't see big upturns and then they don't see big downturns. So if we have a downturn, which I think is coming here pretty soon. We shouldn't see a big significant turn. So that $65,000 property may still sell for 65. It just takes longer to sell. If we have a dip, it may sell for 63, maybe 60. But I've been in two different downturns. And I can tell you that through those two downturns, we did not see a significant price drop, especially in this price range. There's always people in this price range. So you know, 200, $300 thousand price range. Those are the types of properties that usually take a little bit bigger of a toll because there's not as many buyers. And those buyers that normally would buy those properties may not be in a down return.

(26:04):

So if you're going to buy properties, I would buy them in the Midwest and I would buy him somewhere in this price range. You know, somewhere between 50 and 80,000, because those are the properties, no matter what happens. They still gonna sell. There's still always a buyer for those types of properties. All right. So pros to turnkey, rental, very hands off. You can collect a check each month, again, as long as they pay. And there is not a lot of repairs and maintenance, no management of contractors. There may be you know, there may be some, you know, repairs and maintenance, and you may have to, if you're managing, managing them yourself, you may have to hire out repairs. But for the most part, you don't have like huge construction budgets. You don't have to manage tenants as long as you have the management company, do it for you and you get appreciation and mortgage pay down.

(26:57):

So for me, I started buying rentals almost 20 years ago. And so you know, properties that I've got paid off have appreciated. And I've had tenants pay for those properties over many years. And as time goes on, I'm still paying down a huge chunk of principle every single month. And then as time goes on, I'm gonna be paying more properties off. And then all of a sudden that's a hundred percent cashflow. So, so many great things with turnkey rentals or just in rentals in general. If you can be patient and you know, buy the right properties in the right area and consistently pay the principle down cons of turnkey properties, it is hands off. So it means you have to depend on others. That means that you don't control it as much. Now again, you can manage the properties if you want to, that's completely up to you.

(27:46):

But if you really want to turn key experience, turnkey experience, you have to let others manage it for you. Typically you don't have any equity walking in. You may have a little bit of equity reason being is that. You know, they're occupied, they're cash flowing. So if someone's gonna sell those kinds of properties are probably going to sell them close to retail value. And if you're buying turnkey rentals, you're probably buying for cashflow anyways. So really if you're gonna keep them longterm, equities not as big of a deal. It's more the longevity of it.

(28:19):

And then tenants could damage the property. We have you know, tenants every once in a while, the damage the property and we have to spend a few thousand bucks to get it, get it up to speed. We have systemized our you know, paint colors and carpet and stuff like that. So when people do damage properties, it's much easier for us to just, you know, paint a wall and it matches up or just replace carpet in a room or something like that. So for our properties, it doesn't take nearly as much to rehab. But if you're buying a property brand new and you don't have the color schemes or the, you know, the colors of carpet, it could be a little bit more. So that is a con there's a possibility that tenants could damage the property and you have to go in and rehab it.

(28:58):

Alright, so we are going to move on to the last but not least hype of real estate investing. This is truly hands-off. This is where you can earn consistent returns. So a lot of the examples I showed you earlier, success stories, a lot of them do private money lending. And I'll jump into it and show you how that works. So this is also a three step process. So step number one, Investor finds a property to buy. So the investor what I mean by investor, the investor is the person that's going out there and finding properties to buy. They need money to buy and rehab a property. So they're going to go to someone like yourself, if you're a private investor to fund that deal. So investor presents the details to you. So for us, we just send out a quick email to our investors.

(29:45):

We will say, here's the purchase price, here's this, here's what we think it going to sell for. Here's the rehab budget, just some basic details. And within 20 to 48 hours, we have, we have money to buy properties. So that's how we do our private money lending. So those are the details that we present to our investors. And then our investors will approve and fund the deal. Very rarely do investors ask questions to us this time we've been doing, I've been doing this a long time, done hundreds of deals. Some of our investors have done millions of dollars of deals with us. So literally if I send an email within, in less than 24 hours, most of them will say. Yeah, when do you need, when and where do you need the money? And bam it's approved. So let me show you a little bit better, how this works. So private money lending. So I showed you that, that property earlier, El Monte house, the fix and flip house. So we bought that property for 90, for 21,000, and we put 42,000 in renovation. So you can see the two numbers that are highlighted there on the left.

(30:44):

So when we went to our private lender, we said, okay, we're going to purchase this for 21, put 42 in rehab. We need $63,000 to buy and rehab this house. So we went to our investors and said, Hey, we need 63,000. We're going to pay 8% interest. So we're going to pay you $420 a month. So the investors are very happy with that. They've got a $63,000 loan on a potential, a hundred thousand dollar house. They're getting an 8% fixed return. And it doesn't matter whether we screw up and mess up. You know, mess up the property or I say, mess up the property. It doesn't matter whether we screw up and, you know, things happen to where we lose money, which we've luckily in the hundreds of deals we've done, we've only lost money on probably a handful of properties.

(31:27):

But it doesn't matter whether we lose money or not. They get their principle back. And their 8% return before we're getting out any of our money, another option on this, for someone that says, Hey, I don't have $63,000 to invest in a deal like this. There's a way to do second mortgage lending. So if someone says, Hey, we've only got, you know, 15, $20,000 to invest. We can actually go to a bank for this and we can have the bank fund, 80% of this and then have an investor fund, the other 20%, it's called gap lending. So you would invest in the gap between what we can borrow from the bank and what we need on the entire project. And then we pay principle, interest, taxes, insurance, we pay all those holding costs and utilities and things like that.

(32:16):

So we still do have skin in the game. So you know, people will say, why do you know, why would you borrow money at 8% when you can go to the bank and get, get money at five to 6%? That's a great question. Reason being is time is of the essence. If a seller knows that we can close very quickly on a property. They're gonna be able to take more of a discount. So even though we're paying more interest, we're saving money by being able to close quickly, we're saving money on appraisals. We're saving money on junk fees from, from banks or other lending sources. So I'm willing to pay that extra a few percent to be able to have quick, easy money where we don't have any kind of hiccups with appraisals or, you know, banks, you know, something happened with banks where they can't loan money anymore and they changed their guidelines and things like that.

(33:08):

I actually do private lending, private money lending myself. And so people will say, well, Tony, you gonna lend money to me. Why do you have private lenders on your deals? Reason being is that we've built a really good track record of doing deals so we can borrow money at 8% from private lenders. And for me, when I lend money out, I'm probably doing it with someone that doesn't have near the experience. Maybe they've done a deal or two, maybe they've done five or 10, or maybe they've never done a deal. And I just trust them as a person and I trust the deal. So I'm willing to lend money on those deals and I'm going to get a much higher return. I'm going to get a 12, 15, 20, 25% return. Just kind of depends on the deal. So you know, for those of you that are doing deals right now. You can not only borrow money on the private lending side, but don't, don't forget.

(33:59):

There are other options on the other side of doing private lending and I've actually even done it to where I've had my money tied up in deals. And someone brought me a private money lending deal. And I brought in my private lenders that invest in my deals and said, Hey, do you want to invest in this other deal? I'll partner with you on and all manage, making sure the money is collected and all that. And then I arbitrage it if you will, and receive a return in the middle on it, sorry that might've been a little bit confusing. But for those of you that again, knows some people with money and have some people that need money. There's a way to be that arbitrage in between where you can either put them together and earn a fee or be a part of the deal and earn an interest rate.

(34:39):

So a little more integrated than I probably wanted to get into, but I wanted to share that with you because that is an option. All right. So private money lending on rental property. So what I showed you was a fix and flip. So the typical deal we do is we ask for a 12 month term so that, you know, just in case we do rent to own. After we fix and flip the property. We put a tenant in it and they're working on their credit. We have 12 months to pay the investor back. And there's all kinds of other things that can obviously happen that, we just want that 12 month cushion. So we ask for 12 months our typical deal. We pay our investors back within about three to four months, because we can turn and burn.

(35:24):

But if someone said, Hey, I want to invest longterm in property. I don't want to manage tenants, but I want to invest the money. There's, what's called private money lending on rental properties. So the same deal right here. If we were to say, Hey, we want to buy and flip this house, but we want to keep it as a rental. Then we would ask our private money lenders to fund the 63,000 the same amount. And we probably do, you know, through your term five-year term, that's negotiable to base based on what the lender wants. And so, because it's longer term because they're going to be getting interest consistently over a number of years, the interest rate will be lower. So we'll pay a 6% interest rate and that investor will get $315 a month. So that's a way for us to be able to buy more rental properties, but also a way for investors who want to do private money lending to be able to earn money longer-term consistently, right? So pros and cons of private money, lending pros are pretty obvious get fixed returns. I think I forgot to put that on a con my bad. It is safer. It is duplicatable because once you build that trust with someone you're doing deals with, they can just continuously send you deals. So for me, when I, when I meet a private investor, typically they send me one deal, right? And then I send them a check. I send them two checks. Usually after about that third check, they're like, wow, I really like this. Do you have another deal? You want that you can get me into. So we'll get them into another deal. They get a few checks from that. And then the first deal will cash out. And then they want to put that money back in. And then all of a sudden, you know. I've had investors where I met them at a gym and within about six to 12 months, they had a million bucks invested with us. So it is duplicatable.

(37:13):

Once you find someone you can trust, you can duplicate that process. And same thing with those that are wanting to raise money for their deals. I had a question I posted on Facebook yesterday. What are some questions you guys would want. You know want to learn is how to find private money lenders, how to find money for your deals. Just talking to peoples, building relationships. When people get to know you, I mentioned earlier. I've met my investors at a gym. I've met an investor at a seminar. I've met investor hiking in Switzerland. Like I just talk about what I do. People are interested. I build trust with them. They invest in one deal with me. And all of a sudden they just start investing in more deals. That's just kind of how it works. And when you take really good care of them, they will send you to their friends and their friends will start investing with you, which has been a great source of leads for us, for private lending lenders.

(38:04):

The only cons are, you may have to take the property back. If you invest in a deal, like. I just talked about $63,000 on a hundred thousand dollar house, as long as that investor fulfills their, their end of the deal by renovating that house. You've got a 30, some thousand dollar cushion. So I've done a couple private money lending deals, last year. One of them, I had to take the money, the property back, and I ended up making more money by taking the property back and selling it than I did if they would have just sold it themselves and pay me back my money. I've got another one right now that, is I don't want to say going South, but they haven't paid me off. They haven't communicated. It's just been one of those deals where there have been really difficult to deal with, and we're getting ready to take the property back.

(38:50):

And I've got like $30,000 equity in that house. So I know if I take that property back. I can make 30 grand on it. Whereas on the private lending side. I probably would made five to 10. So even though you may have to take the property back, there's still an upside that if you take that property back in the right condition. Then you can actually make more money on it. So it could be a positive as well. Investing in money lending doesn't come through and you know, something happens. They don't do it right. They don't do the right renovations to the property. They don't pull permits. I mean there's all kinds of things that can happen. Especially with an inexperienced investor . Your money is in play usually for less than a year. That's like 90, some of the 90, some percent of the private money lending deals that I have seen are less than 12 months. They're usually about three to six months. So, you know, you may have to turn the money over your money. If you say, yeah, I've got a chunk of money. I want to put into this. There could be a little bit of a leeway in between deals as someone's flipping them for us. We do high volumes. So, you know, typically if someone says. Or we cash and investor out of a deal. We can put them into a property pretty quickly, but there's actually chance to invest with someone they cash you out. But they don't find you another deal for a while. So that is a con or a potential negative.

(40:08):

Alright. So those are the three types of real estate investing. So we're about 40 minutes in making really good time. I should have some questions here should be able to answer some questions here. So one of the reasons that I do these, is not about help people. I really I'm really passionate about helping people not only get started in real estate investing but more importantly, taking the real estate investing business. Because it can be a stressful business when you're fixing and flipping and helping them to automate it, helping them to get in front of the people that they need to learn processes and systems, to really systemize what they're doing and take their business to the next level. Right there are people that, again are not in real estate that they just want to get started, but they don't necessarily want to be hands on with the business, whatever it is. I've got three different ways that we could potentially work together that I think could work for any one of you guys. And again, I'm not selling you a product.

(41:02):

I just want to sell you or present you some ways that we can work together. So the first way is help you flip properties. I do not do coaching. I do have, I do have some different groups and things like that that I can get you into. That can help educate you on how to flip properties. They get you in front of people that already flip properties that you can tie into and you know, utilize their five, 10, 15, 20, even 30 years of experience in real estate so that you don't have to make a lot of those mistakes. And I'll talk about that here in just a little bit. I can find you turnkey rentals. Like I said, I don't have a lot of rentals that I sell myself. I've got actually a package of about 30 properties that I could probably sell to someone right now.

(41:53):

So if someone's looking for turnkey rentals, I've got a package of properties I would be willing to sell. If I don't have what you're looking for. I've got other turnkey rental providers in other Midwest type areas that do sell properties. So if I don't have something for you, I can definitely find you a property somewhere with good returns. Find you private money lending deals. So if you're wanting to get into private money lending, that's something that I can do to guide you through the process. It's not brain surgery. It's actually pretty simple. There's just some principles that you kind to need to know and learn and, and kind of some intricate details. You need to kind of understand the knows to make sure that you're investing in the right deals. AndI do have an earner circle mastermind group.

(42:47):

This is kind of like a board of advisors. So you know, about 10 years into the business, like I mentioned to you, I did. You know, business mostly by myself and did not ask for advice about 10 years in, I hired a coach. I hired a coach. That was where I wanted to be. Meaning he had a real estate investment business that ran without him. He did not look at deals anymore. He ran his other businesses, ran a coaching business and is super successful in the coaching world right now. And so by being in his coaching program, I was able to learn his systems. I was able to. If anything just get the vision of what I wanted my company to be. Couple years later, I found mastermind groups men. Then completely changed the game again to where not only was I able to get in front of one person that I would, that I would pay to guide me through the process.

(43:48):

But now I had at the time, let's say the first mastermind group I joined had 10 people in it. And then I ended up joining one that had 30 people in it. So now I have 10 to 30 people that if I need something, rather than only having access to one person, I could bounce ideas off of 10 to 30 people, either individually or all at the same time. Because we'd meet, we'd meet periodically and share challenges and talk each other through different things that we need in our business. And so anytime that I've got something that is you know, really challenging in my business, I love being able to present it to multiple people. At one time, this person may have this perspective, this person have another perspective. And then all of a sudden it's like, okay, I can take these different perspectives.

(44:35):

And then one of them grabbed. And say, okay, that's the one that I want to take and run with. And you can use years, decades, you know, decades. And sometimes even centuries of experience in one room to be able to solve challenges. And not only that, but I get to see other people's challenges. So when someone else presents a challenge. They're like, Hey, I need to find more deals or, Hey, I need to hire a person here. You've got all of these high level people that are talking about how to solve these challenges. And even though I don't have that challenge right now, it's like, wow, I can pick up that nugget and I can use that. Oh, wow. They have that challenge. I can use that as well. So I put these groups together now myself because I've joined these high level groups and gotten so much value that I like to bring them to other people.

(45:21):

So if you want to apply to be a part of one of these programs. So as you can imagine, I've been in the business a long time. I get a ton of people like weekly. That will message me and say, how do I get into real estate? How do I raise money for deals? How do I, and they ask all these questions. And I just, I don't have time to be able to one-on-one just to be able to go out and handle all the inquiries. So what I did was I'm putting, I put together these mastermind groups for those that want to invest in real estate, or for those that want to take the real estate investing to the next level. And not only use, utilize my experience, but utilize the high level people that I have recruited to be in this group that flip a hundred properties a year that flip 50 flip 50 properties a year that have been in the business 15 to 20 years that I've seen downturns.

(46:14):

And right now with potential downturns, this is the time to actually be a part of that group, because collectively you can get perspectives from different people on what's going to happen. Now it's not a crystal ball, but still to be able to bounce ideas off of other people of what's gonna be happening and navigate and make decisions before. You know, maybe it's too late is so, so powerful. So again, you can apply to, um, to, to learn how to flip properties. You can apply to buy turnkey rental properties from us. You can apply to be a private money lender and for us to help you in that again, I want to qualify, qualify the people that I work with. Because if I, again, if I answered everybody that messaged me and said, Hey, I work with you, I would never get anything done.

(47:04):

So what I want to do is I want to work with a small groups, a slight group of people that I know are qualified, highly motivated that I you know, that are going to do something with this. Because that's the problem with that course, actually, that I showed you at the very beginning that no down payment system, I've probably met a hundred people that have bought that course. Me and one other person that I've met the only two that I've ever seen that program. And those are the kind of people I work with that are going to take something that I provide to them, utilize that. And I want to provide as much value to you guys to take your guys's business or whatever it is to the next level. So I appreciate you joining me. I'm going to answer some questions. Now there are a few questions. That I see, and I've got some things that some other people have asked on Facebook.

(47:53):

So do I offer coaching was one? I think I mentioned that earlier. I don't offer coaching. I actually like mastermind groups better. Because I can only coach you from my perspective. And I feel like I can give you a lot of value in 19 years of experience. I've been flipping houses, but to be able to get perspectives from multiple people in a room that is where the magic really happens. And you can, you can, you know, ask question any time from those people. We usually meet in my mastermind groups once a month for about half a day for about three to four hours. Some mastermind groups will meet once a quarter for a couple of days. I've been a part of those as well. Those are awesome. But for me, I like the more frequent meetings. Because if I've got something or if somebody has something, I don't want them to have to wait two to three months to be able to get answers and get perspective, but not only do they meet in those groups, but there's also face group, Facebook groups and mass emails and things like are shared within mastermind groups they can help you in between.

(48:53):

So to answer your question, I don't offer coaching. But I do offer these groups to help you, um, get in front of the people you need to, uh, are your turnkey rentals for sale and property management in which Donald like, yes, they are on Wichita only. That's where I was born and raised. That's where I have my team. I live in San Diego right now for somebody who don't know. But yeah, all my properties are in Kansas. That's where I love to invest. That's where I know the market. And that's where we find our deals. Do I need to find owner finance or find finance my own properties? Yes. If you buy rental properties, I'm guessing that's what you're talking about. When you buy rentals. You can or you do need to get financing. If you can't pay cash, usually it's 20% down is what you're gonna need.

(49:41):

If you've got a local lender, that's probably gonna be your best terms. There are national lenders you can get pretty good terms terms with too. If you don't have a lender, that's something that I can hook you up with. Excuse me, if you need a lender. Do you find private investors for your properties? Yes, we do find private investors for our properties. I kind of mentioned that earlier. Do you need to have a real estate license with any of these steps, new, um, at least in Kansas, you don't, um, there are some regulations in some other States where they are starting to require you to have a license, um, to invest in real estate. And the reason being is that there's been some shady stuff with some different real estate people around the country, um, that are just getting into it for a quick buck.

(50:29):

So there are some places in Kansas, you don't, uh, check your state to see if, uh, if your state needs that if you are not in Kansas. So instead I have lenders that would do 15% down on investment properties. Awesome. That's great. Um, most of most, uh, required 20% down. I use 20%, 10% down as an example. There are actually some that will do 10% down just depending on the price points and what kind of relationship you have with them. What happens to rentals when the market has a downturn? like I said in the Midwest, um, there's typically and I'm guessing you're talking about prices. Typically there's not a huge variation in prices. And like I said, if you're holding longterm, then the dips in the market should not matter because you're betting on cashflow. And when there are downturns in the market, you may have some potential tenants that don't pay, but at the same time, the demand for rentals could go up dramatically because people aren't buying houses as much and they need rentals. So therefore your rental rates may actually go up. So there's some advantages there, even in a downturn. Uh, let's see some other questions here. I'll just answer probably one or two more. Not just in comments saying they're here. Let's see. How do you find your properties? That was a big question that I got up probably in, on this one. Um, there are a lot of ways we find properties and I've been doing this 19 years now. We started with newspaper. If you guys remember the newspaper, I used to go in the newspaper and call myself and say, Hey, I saw you have a deal in the paper. And that's actually how I did my first deal. I called out of the paper. It was a real estate agent they have deal ended up buying a property from her ended up. She ended up talking me into getting my real estate license, and that's kind of how things started going. So now, I'll kind of go in different directions here.

(52:29):

So TV, for those of you in Wichita pricing, our TV commercial, that's a great source of marketing. So for those of you who are doing real estate now, and just want to take your marketing to the next level, TV advertising has done a tremendous value for us. And it helps all of our other marketing. So when someone gets a direct mail piece or someone gets something else, they're like, man, I've seen you on TV. It builds credibility. Um, so we do TV. We do a little bit of Facebook. We don't do as much Facebook as some people, but there are, there are, um, there are areas where Facebook works better for us. We've tested it and it doesn't work quite as well in our area, but it can work. And we do a little bit of it still. Google ad words, uh, pain for, uh, pain for ads on Google for you to, um, basically when someone types in sell my house or something like that, that your ad will pop up.

(53:18):

That's been a good source for us. Direct mail, the downfall with direct mail. When I say direct, that's kind of a general term for either sending them a letter in an envelope or sending them a postcard for me, I like postcards. Because they have to open them . I mean, they're already open. So that's, that's been a pretty good source for us. It's very competitive. You need to find a niche that most people aren't going after, if you're doing foreclosures and things like that, there's dozens of mail pieces people get for that. So that's very competitive. Um, so I don't know that a hundred percent recommend that. So again, TV, Facebook, Google direct mail, bandit signs, which in our area don't work as well as some other areas, but those can work. And I could probably go on and on about just, you know, lead sources here and there, but that's the main, main way that we find our properties.

(54:13):

I actually will get one more question here. What kind of people are in your mastermind groups? Typically the mastermind groups I get together. So I've got two different kinds of groups. I've got general business owners that are in one group. That's, that's something that's kind of separate from what we're talking about here, but if you want to be in that group, we could talk about that for real estate. People, I have mortgage brokers, investors I have, if anybody is within a real estate within the, within the real estate real estate. There in that community. And there are some that are just real estate investors for me. I like it that there are different perspectives from lenders, from mortgage brokers, from different areas within real estate. We all know real estate, but, um, there's different niches within that you know, within that group in real estate.

(55:04):

So those are the kinds of people, um, that we get in our groups, uh, or the types of people I like to have as high level people in my groups as possible. So again, there is an application. I do qualify people. If I feel like someone is not going to provide value to the group, if I feel like someone's just gonna come in and take from the group, those are the people I typically don't like in my groups. But if I feel like that they are going to give good value. I love bringing those people in. Because really it's about the collective of the group. It's not just about me. It's not just about an individual person. It's about a collective of the whole group. Alright, I'm gonna answer one more question. What types of single family houses do you prefer in what areas of Wichita are best?

(55:48):

So just for the Wichita people, I like properties in the Southwest side of town. It's blue collar kind of town. You can get, um, pretty decent deals on properties in the Southwest and they rent very quickly. Um, so even if you're not in Wichita, you do research, you could probably find pockets in your area that, um, have higher demand that when you put them, like, I just had one recently we put it, we put it on the market and I felt like we put it on for. I don't say high price, but kind of the top of the market. And we had just floods of applications on that property. So there are areas of town that are more popular. If you're familiar with Wichita, Andover is a good one Derby there's those pockets that when you buy properties, those could be more expensive by the way.

(56:35):

But there are pockets that, that rent very quickly that if you can find properties in that area, they are going to go very quickly. So all right, so we are about out of time. I just want to thank you guys for spending this time with me. You know, go to tonyjavier.com and it will forward you to an application page where you guys can fill out an application to work with me and my team. And it will take you to a calendar to schedule an interview, to be a part of what we're doing. So hopefully there's a way I can help you out. And if not, I hope I've provided tremendous value to you today, whether you're just getting into real estate or whether you just want to take your real estate business and get to the next level. So again, I appreciate you guys have a phenomenal day and hopefully we'll talk to you again soon some time. Have a good one.

Leave a Reply