Podcast Summary
Engaging with industry experts for valuable insights: Leave comments and questions for podcast guests for additional insights, learn from experienced investors like Danny Johnson, and utilize resources like 1031 exchanges to maximize investment opportunities
Learning from this episode of the Bigger Pockets Podcast is the importance of engaging with guests and taking advantage of their expertise. The hosts, Josh Dorkin and Brandon Turner, emphasize the value of leaving comments and questions for guests on the show notes, as they often respond and provide further insights. Additionally, they introduce Danny Johnson, a seasoned investor and popular blogger, who shares his experiences and knowledge about house flipping, wholesaling, and buy and hold strategies. The episode also features a quick tip about investing with no money down through Rent to Retirement, and an advertisement for 1031 exchanges with First American Exchange Company to help investors defer capital gains taxes. Overall, this podcast episode highlights the benefits of engaging with industry experts, learning from their experiences, and utilizing resources to maximize investment opportunities.
Transitioning from a career to a new path brings greater happiness: Personal growth and seeking new opportunities can lead to happiness and fulfillment. Observing father's success in real estate inspired Danny Johnson to pursue a new career, emphasizing self-education and initiative. Danny found joy in his new career and recommends SimpliSafe for home security.
Personal growth and seeking new opportunities can lead to greater happiness and fulfillment in life. Danny Johnson, a house flipper and blogger, shared his story of transitioning from a career in software engineering to real estate investing. He felt trapped in his office job, lacking creativity and feeling unfulfilled. However, observing his father's success in real estate investing sparked his interest and inspired him to pursue a new path. Although his father provided guidance, Danny emphasized the importance of self-education and taking initiative to achieve his goals. This mindset led him to find joy and excitement in his new career, and it serves as a reminder that it's never too late to explore new possibilities and chase after what brings us happiness. Additionally, Danny mentioned SimpliSafe as a valuable investment for homeowners, offering peace of mind with high-tech security systems, professional monitoring, and a money-back guarantee. SimpliSafe's affordability and ease of installation make it an attractive option for those looking to protect their homes and belongings. So, whether it's through personal growth, exploring new opportunities, or investing in home security, remember that taking action and seeking out what brings us joy and security can lead to a more fulfilling life.
Learn from an ideal mentor but take action yourself: Educate yourself, start small, ask questions, and don't be afraid to make mistakes in real estate investing.
An ideal mentor fills in the gaps in your learning journey, but you need to put in the work and hustle to get started. Don't wait for someone to hold your hand and show you exactly what to do. Instead, educate yourself, take baby steps, and get out there and do it. Start with marketing to motivated sellers, learn techniques like direct mail and driving for dollars, and don't be afraid to ask questions or make mistakes. The first deal the speaker mentioned was a burned house with fire damage that they found through driving for dollars. They got a great deal on it, but the process of buying and making money from it was complicated. So, while an ideal mentor can help fill in the gaps, the real learning comes from taking action and making mistakes along the way.
Unexpected opportunities from being open-minded and adaptable: Being flexible and open to new opportunities can lead to profitable deals, even if they differ from initial plans.
Being open-minded and adaptable in real estate investing can lead to unexpected opportunities. The speaker shares an experience of buying a burned-down house for $25,000, which was significantly less than the owed amount. After encountering resistance from the sellers, they ended up buying the note from the bank for the same price. The sellers, who had accepted insurance money, didn't intend to pay or fix the property. Later, an investor offered to buy the note for $50,000, allowing the speakers to sell it and make a profit of $25,000. This "no repair needed flip" was unplanned, but it taught them the importance of being flexible and seizing opportunities as they arise. If they had stuck to their initial plan, they might have missed out on this lucrative deal.
Starting a fix and flip project with minimal costs: Profitably invest in real estate with a fix and flip project, using bandit signs and permits, while targeting $65k profit per property
Starting in real estate investing with a fix and flip project can be profitable, even with minimal upfront costs like using bandit signs. However, it's important to check local regulations regarding sign permits. In this example, the investor bought a house in need of only paint and carpet for $20,000, spent an additional $5,000 on repairs, and sold it using owner financing and note sales for a total profit of $25,000. This strategy was popular in the mid-nineties but may not be as effective today due to lower note buyer offers. The investor's current business model focuses on buying and selling properties with FHA loans for buyers. During busy times, they handle 8-13 properties at once, buying from $30,000 to $60,000, fixing up for $5,000 to $30,000, and selling for $80,000 to $130,000. The investor aims for a 65% profit margin instead of the typical 70%. Remember, always asking for less can lead to missing opportunities, but it's essential to find a balance that works for you.
Negotiate and stick to your numbers for successful real estate investing: Determine property value, know market, and negotiate effectively to secure good deals, while marketing and finding motivated sellers is crucial.
Successful real estate investing involves negotiating and sticking to your numbers. Negotiating is crucial to getting the best deal possible, and not being embarrassed by your offers is a sign that you're not offering enough. It's essential to determine the after-repaired value of a property and know your market to make informed offers. Offering too much for deals can lead to financial trouble if you don't have enough leads coming in. Marketing and finding motivated sellers is a key aspect of securing good deals. While some may seek the newest techniques, the basics of finding motivated sellers and negotiating remain effective.
Effective House Buying Strategies: Websites and Direct Mail: Use a high-ranking house buying website for leads and direct mail campaigns targeting absentee owners with low equity. Aim for 3-4 touches per series with 3-4 weeks between communications. Yellow letters generate high response rates but may yield lower quality leads.
Successful house buying involves a multi-faceted approach. The speaker emphasizes the importance of a well-ranked house buying website for generating leads, as well as direct mail campaigns using postcards and letters, particularly to absentee owners. He suggests targeting those with 50% or less equity in their properties and prefers out-of-state or out-of-area owners due to their potential motivation. Conversion rates for mailings can range from 2-5%, with yellow letters generating high response rates but potentially lower quality leads. Mailings should be sent regularly, with 3-4 weeks between communications, and the speaker aims for 3-4 touches per series. While some sources suggest that response rates increase with more letters, the speaker's experience shows that results can still be obtained with fewer touches. The size of the team was not discussed in the conversation.
Leveraging Expertise for Maximum Profits: Focus on strengths, delegate tasks, and leverage expertise for time and energy savings in real estate investing. Hire professionals for contracting, sales, and property staging to maximize profits and minimize workload.
Focusing on your strengths and delegating tasks to professionals can lead to significant time and energy savings in real estate investing. The speaker shares his experience of learning this lesson the hard way by attempting to do contracting work himself, only to find that the opportunity cost of his time was far greater than the potential savings. He also mentions the importance of having a real estate agent to handle sales, as well as the value of staging properties to increase their marketability and sell faster. By recognizing the value of expertise and outsourcing tasks, investors can maximize their profits and minimize their workload.
Marketing to Motivated Sellers in Competitive Markets: Focusing on marketing to motivated sellers, especially those with inherited properties, can help new investors find good real estate deals in competitive markets. Traditional marketing methods and websites with lead capture forms can be effective ways to generate leads and close deals.
Finding good real estate deals in competitive markets can be challenging for new investors. However, focusing on marketing to motivated sellers, particularly those with inherited properties, can be an effective strategy. Motivated sellers are often not in foreclosure and may not even owe anything on the property. Traditional marketing methods like yellow page ads can also be effective, but it's important to track leads carefully to understand their source. Websites with lead capture forms that allow sellers to negotiate prices can be an efficient way to generate leads and close deals. Remember, reaching out to motivated sellers is not taking advantage of them, but rather helping them navigate their unique situations.
Creating an Effective Property Website: SEO and Paid Advertising: A successful property website requires patience, SEO consistency, paid advertising, and long-term approach to attract and engage potential clients.
Creating an effective website for buying and selling properties involves a combination of patience, search engine optimization (SEO), and paid advertising. The speaker emphasizes the importance of not being overwhelmed by the initial form and using it as a filter to gather more detailed information later. For SEO, she suggests staying consistent and persistent, as ranking in search engines takes time. Additionally, she recommends utilizing pay-per-click advertising, such as Google AdWords and Bing ads, to generate traffic and gain insights into the keywords potential clients use to find similar services. The speaker also mentions the importance of having a Facebook fan page linked to your website, which can help with SEO and potentially attract more leads. Overall, the key takeaway is that a successful property buying/selling website requires a long-term approach, combining various strategies to attract and engage potential clients.
Real Estate Technology: Streamlining the Journey for Investors: Real estate tech platforms like DealMachine, PropStream, Redfin, and Fundrise offer valuable data, filters, and funding opportunities for investors, making it easier to find off-market deals, generate accurate comps, and access funding.
Technology is revolutionizing the real estate industry, making it easier for investors to find leads, generate accurate comps, and even access funding. DealMachine and PropStream are two platforms that provide valuable data and filters to help investors find off-market deals. DealMachine offers unlimited access to high-quality contact information and phone numbers, while PropStream allows users to search over 155 million properties using 120 search filters. Additionally, Redfin provides personalized home recommendations and efficient transaction processes, and Fundrise offers a new private credit strategy for investors looking for funding opportunities. Whether you're a seasoned investor or just starting out, these tools can help streamline your real estate journey.
Real Estate Strategies: Long-Term Rentals vs Wholesaling: Focus on exclusive deals with minimal repairs for wholesaling success. Choose a strategy based on individual goals and resources, and build strong relationships in real estate industry.
Real estate investing comes with various strategies, each with its unique advantages and challenges. The speaker shared his experiences with buying rental properties for long-term income and tax savings, as well as wholesaling properties to avoid dealing with repairs and selling hassles. For those interested in wholesaling, the speaker advised focusing on finding exclusive deals that require minimal repairs and hustling to build a network of reliable buyers. Additionally, successful investors prefer not to receive unsolicited deals through email blasts but rather through personal connections or targeted outreach. Overall, the discussion emphasized the importance of choosing the right strategy based on individual goals and resources, and building strong relationships in the real estate industry.
Exclusive access to potential buyers increases chances of success: Building relationships with top prospects and securing exclusive access to deals, along with utilizing hard money lenders, can be effective strategies for new real estate investors.
Establishing exclusive access to potential buyers can significantly increase the chances of a successful real estate deal. Experienced investors often ignore mass marketing efforts and instead focus on reaching out to their top prospects with exclusive notice or right to buy properties. This strategy creates excitement and urgency among buyers, leading to quicker transactions. During the conversation, Danny shared his personal experience of investing in real estate while still working as an engineer. He emphasized the importance of having a deal to secure financing and partnered with other investors to fund his initial investments. The key point here is that if you have a good deal, the money will find you. Hard money lenders can be a valuable resource for new investors, as they can not only provide funding but also offer valuable industry experience and expertise. In summary, focusing on building relationships with top prospects and securing exclusive access to deals, as well as utilizing hard money lenders, can be effective strategies for new real estate investors.
Pricing deals correctly and having a large buyers list are crucial for successful sales.: Properly pricing deals and maintaining a large buyers list increases the likelihood of finding quick and profitable sales.
Having a properly priced wholesale deal with the right buyers is crucial for a successful sale. If a deal is priced too high due to incorrect numbers or wishful thinking, it may be difficult to find a buyer. Building and maintaining a large buyers list is essential, as having enough and the right buyers increases the likelihood of finding a quick and profitable sale. Decision-making speed is also important, as it allows for efficient communication and the ability to move on to the next potential buyer if necessary. Finding active cash buyers who have recently purchased bank-owned properties is an effective method for identifying reliable and profitable buyers.
Effective Communication and Preparation in Real Estate Deals: Personalize your approach, provide access, be reasonable with earnest money, secure ample time, and make property access easy to effectively communicate and prepare for successful real estate deals.
Successful real estate deals require effective communication and preparation. Here are seven key areas to focus on: 1. Approach buyers correctly: Instead of mass emails, personalize your approach and provide exclusive access to the deal. 2. Handle property access: If someone is living in the house, provide plenty of pictures, videos, or other means for potential buyers to see the property. 3. Be mindful of earnest money: Don't demand excessive nonrefundable earnest money, instead, be reasonable and let the title company handle it. 4. Give yourself enough time: Secure as much time as possible in your contracts to find a buyer and close the deal. 5. Handle property access correctly: Make it easy for potential buyers to view the property, especially if it's vacant. 6. Don't demand too much earnest money: Be reasonable with the amount of earnest money you require and consider letting the title company handle it. 7. Give yourself enough time: Secure as much time as possible in your contracts to find a buyer and close the deal, while also considering the seller's needs.
From Contract to Marketing: The Importance of Immediate Action: Securing a contract isn't the end, immediate marketing is crucial to avoid delays and seller frustration.
Successful real estate deals require dedicated effort and immediate action. Making hasty promises without a buyer can lead to unnecessary stress and potential deal failure. Proper marketing involves more than just checking tasks off a list; it requires consistent effort and follow-through. After securing a contract, it's crucial to start marketing the property immediately to avoid delays and potential seller frustration. Brandon's book, "Flipping Houses Exposed," available for just 99¢ on Amazon, offers a real-world look at the process, from lead generation to deal closing, providing valuable insights for aspiring real estate investors.
Consistency and persistence are key in real estate investing: Successful real estate investors stay consistent, don't give up, and take calculated risks.
Real estate investing is a numbers game, and consistency and persistence are key. Even for experienced investors, there may be a period where deals are hard to come by. However, if one keeps marketing and doesn't give up, deals will eventually come. A favorite non-real estate book recommended by the guest is "Mastery" by Robert Greene, which emphasizes the importance of finding what one is inclined to do and putting heart and soul into it for success. The guest also mentioned that flying is his favorite hobby, and he recommends it as a way to clear the mind and focus. For those looking to get into house flipping, the guest believes that successful investors are not afraid to take risks and are consistent in their efforts.
Starting small and taking action despite fear and uncertainty: Take action and learn from experience, balance learning and doing, and seek advice and network in real estate investing.
Success in real estate investing often comes down to taking action despite fear and uncertainty. Danny Johnson, a successful real estate investor, emphasized the importance of starting small and making progress, even if it means making mistakes along the way. He encouraged listeners not to get stuck in the learning phase and instead, take action and learn from experience. Johnson also suggested a balance between learning and doing, and recommended seeking advice and networking with others in the industry. Overall, the key takeaway is that fear and uncertainty are common, but those who take action and learn from their experiences are more likely to find success in real estate investing.
Investing carries risks, use good judgment and consult advisers: Always prioritize financial security, research thoroughly, and seek professional advice before investing.
Investing always comes with risks, and it's crucial to use your best judgment and consult with qualified advisers before making any investment decisions. Only risk capital that you can afford to lose. BiggerPockets LLC disclaims all liability for any damages arising from reliance upon information presented in this podcast. It's essential to remember that every investment opportunity carries its unique risks, and thorough research and careful consideration are necessary before making a move. Don't let the potential rewards blind you to the potential risks. Always prioritize your financial security and seek professional advice when needed.
