Expected Air Date: 04/26/18

Opening

Your success ultimately begins with your sense of Purpose. We will explore that today.

Hello everyone. It’s a beautiful spring Thursday here at our studios on Peachtree St in Atlanta, GA. We’re going to talk real estate investing for the next 60 minutes, but we are going to approach it from a slightly different angle. Over the last few shows we’ve been talking about a Place to Begin, Hitting Your Stride, and The Next Steps. 

Today we will continue with some thoughts about Purpose. What drives you today? And I’m not talking about that driverless car you may be in. And I’m not asking you what drives you nuts! I’m asking you to think a bit about your motivation in life. We will dig into that in a few minutes. I also have a stack of questions to answer, including a ton of questions about our Mentoring Program. 

Our next Three Day training camp is coming up May 9-11 and it’s not too late for you to join us. However, since our program is invitation-only, you have to jump through a couple of hoops in order to receive that invitation. Hey it’s not like getting into law school or anything but we just need to talk. You can schedule a call with me by going to your web browser and typing this in exactly: 

bit.ly/TalktoRoger

When you do that you’ll have access to my scheduler and you can pick a time. Then you will be given instructions for accessing a conference call you’ll need to dial into at the appointed time. It doesn’t matter to me where you are. I look forward to helping you in any way that I can. 

VIP lunches at FlipStarter – Lunch with me every Wednesday at Baraonda. 

How to Reach us

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question. 

Announcements:

• My upcoming speaking engagements:
  • I’m off the road for a couple of weeks while we plan for our next Mentoring Training here in Atlanta May 9-11.
• Monday – the Flipping America App debuts in the Apple Store. Already in the Android Store. 

News!

• https://www.bloomberg.com/news/articles/2018-04-25/ford-ceo-plans-11-5-billion-more-cuts-pulls-ahead-margin-goal
• https://www.bustle.com/p/dark-chocolate-reduces-stress-in-humans-according-to-a-new-study-8895145
• https://www.newsday.com/business/long-island-home-prices-1.18259160
• http://www.jhnewsandguide.com/jackson_hole_daily/local/real-estate-market-shows-signs-of-improvement/article_5e2c0ad0-c249-580f-8e0f-afccd58c270e.html
• http://flatheadbeacon.com/2018/04/25/real-estate-market-trends/
• https://www.usatoday.com/story/money/columnist/2018/04/24/real-estate-best-investment-bear-market/530470002/
• http://boisestatepublicradio.org/post/state-idaho-real-estate#stream/0

Topic – Understanding Your Why 

Why are you doing all this?

Ask the question.

Keep Asking until you get to an emotional level.

Drill down to the core of your motivation.

Why? Because this brings

Focus

Determination

Clarity

A sense of purpose will guide your business plan, your short term goals, and even your daily schedule. If you are constantly aware of your underlying motivations and life goals, they will inform many of your difficult decisions with guidance.

Motivational Thoughts for the day

• “Never Give Up, Never Surrender”. -Jason Nesbitt, Captain, Galaxy Quest.

Comment Line calls and Questions

Call 404-369-1018, press 1 and leave your message!

Emails:

Questions@flippingamericaradio.com Tell us where you’re from!

• Carl, Oconomowoc, WI, “Do you still use other people’s money in your own flips? If so, why? Wouldn’t it be better to just use your own cash at this point?”
• Cindy, Westchester, PA, “I heard you talking about the advantage of leverage in real estate deals. How do you reconcile this with Dave Ramsay’s teaching that we should never borrow money – ever – especially for real estate investments?” 
• Chastity, Birmingham, AL  “How do you calculate the cost of a hard money loan?”
• Scott, Lancaster, PA “Have you ever been in a multiple bid situation when buying? Is this a time to break the 70% rule?” 
• Joe, Fredericksburg, VA “My wife and I are a bit at odds with a rehab we are doing and wonder if you could help. We agree with the idea of a ‘wow’ factor in the house, but she has ideas for the kitchen, the master bathroom, and the deck in the back yard. My argument is this is basically a first-time home buyers house and we should focus on just one of these. We want to make it great but we also want to make as much money as we can. We both would appreciate your thoughts.”

Questions@flippingamericaradio.com Tell us where you’re from!

Transcript

[0:00] Music.

[0:28] Time for flipping America the show that teaches you how to make money in real estate wherever you are whatever your situation there is an opportunity for you.

Flipping America is brought to you today,

Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital solutions.com and now

you’re sad flipping America guy Rodger Blankenship Street in Atlanta Georgia.

We’re going to talk real estate investing for the next 60 minutes but we’re going to approach it today from a slightly different angle over the last few shows we’ve been talkin about a place to begin.

Hitting your stride

and the next steps today I want to back up maybe lift off the plane and fly over our own lives for a little bit and continue with some thoughts about.

Purpose what drives you today.

[1:29] And I’m not talking about the driverless car you might be in and I’m not talking about those things that drive you nuts I’m thinking about what is your motivation in life in other words we’re going to ask the question,

why are you doing this why why are you.

You know leaving your W-2 job in and remember now I’ve got to say and we don’t encourage people to drop what you’re doing and flip houses like you season doing on TV but in spite of me saying that on every show hundreds and hundreds of people.

Come to me and our are right in,

and this is what you want to do and so we are committed to helping you and and it’s okay keep the cards and letters coming we appreciate that and the even the phone calls to we’ve been waiting through the messages and

and books hang on I promise we will call you back.

And I work but it says there’s been a rash of them this week so we will get to every call and we’ll get to every email but this is what people are asking about how they can

get into this business and that’s okay and we’re pretty good at it and so we’re going to help you but I want you to take some time to think about why you want to do this.

[2:42] Because it can get to be a real chore

and owning a business has its share of challenges and lot of people that are riding in are playing to leave their W-2 job where someone else has the challenges of owning a business and has to think about a lot of things that.

Employees never have to consider so as you get ready to dig into this I want to make sure you know why you’re doing it and I want you to get.

Down to in kind of an emotional level and we’ll talk about that in a few minutes I also have to stack a questions to answer including a ton of questions about our mentoring program

and I appreciate all of those questions and keep them coming to questions at flipping America network.com we answer every question that comes into the show now here in the past 7 to 10 days,

it’s been so many it’s taking us a minute to get all the answers out but we will

answer you I promised some of them we answer on the show and if you haven’t heard back from us via email that’s because probably you’re

your question is in the queue to be answered on the show and I had some in the queue for the last show but we ran out of time and so we’re going to take those first today.

Alright well talking about the training.

[3:59] Our next three-day training camp is coming up May 9th through 11 it is here in Atlanta Georgia and it’s open to people from all over the country I mean you can come from anywhere if you want to and it’s not too late for you to join us but I do want to say,

this is an invitation-only program why do we make it an invitation-only program because we want to make sure.

Our training is a good fit for you,

that you are going to actually be able to use the information that we provide we we never want to take someone’s money for training when they’re actually just trying to buy a shortcut.

Because this is not a shortcut and this is not a get-rich-quick type of skiing,

you can grow wealthy but it’s a get rich slowly if you want to call it that and you have to be prepared so we want to make sure through an interview that you have the right mentality,

that you bring something to the table that indicates that you’re going to be successful with this that you’ll do well and it will go well much better for all of us.

And up that that my friends is an attempt to protect not only our program its reputation and integrity but also to protect you to help you.

[5:10] Make sure that you’re getting into something that’s going to work for you okay

so you have to jump through a couple of Hoops in order to receive an invitation and you know it’s not like getting into graduate school or even getting accepted to some of these high price colleges

do you know the bar is not that high but there is a bar and.

[5:33] You need to talk with us so you can schedule a call by going to your web browser and typing this in exactly bit. Ly.

[5:42] Slash talk to Rodger or if you go to flipping American network.com at the top of every page on the,

on the website there’s a big blue button that says click here to schedule a strategy called when you click that button to schedule a call it’s going to take you into our scheduler and you can pick a time that works for you.

[6:01] Then you’ll be giving instructions for accessing a conference call and it’s just the phone number that you need to dial into and there’s a six-digit pin it doesn’t matter to me where you are

we’re going to help you in any way that we can now because of the volume of calls that are coming in,

you may be talking to me you may be talking to someone on my team but

this team member is highly trained and will help give you the guidance and we look forward to hearing from you so just hit the button all right

I want to remind you that coming up May 10th if you’re anywhere near the Atlanta area we have Mall Harbor God

and he is going to be at flipping Atlanta our local networking group

and mother is a truly interesting fella I love the guy he does great rehabs and he’s he’s just a terrific investor and a good friend will have him at flipping Atlanta and course that will be a show coming up

but I’ll be the following Saturday the May 12th show,

okay that’s the big thing that’s coming up we do lunch every week I’ll give you a few more announcements after the break but then here comes the music and so we’ve got to go to work.

[7:12] Music.

[7:29] What’s around the corner

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For you or your family for your business Legal Shield is the solution for your legal needs just go to Rodger b helps. Com right now just signed up that’s Rodger b.

Dot-com Legal Shield protection for every part of life.

[8:56] Music.

[9:18] How to reach us find us on the web at flipping American network.com we’re on facebook.com flipping America media,

on Twitter and Instagram at flipping America and we’re on YouTube the flipping America channel on YouTube and you can see us on LinkedIn and Pinterest in Google Plus so,

pretty much everywhere our national comment line is 404-369-1018.

And if you want to leave a message or a question for the show it’s extension one that’s the national comment line 404-369-1018 extension 1.

[9:57] Alright well in terms of this is the spot where I give you the announcements of where I’m going to be over there a few weeks but I’m off the road for a few weeks,

well we really zero in and plan for our next mentoring training here in May 9th through 11 I’ll be back on the road,

toward the end of May and in June that we’ve already got some dates schedule in June July and August and will be announcing those little later on as we get closer to it.

[10:24] I’ve got a big announcement for you folks we’ve been working on this for a while and I’ve been so tempted to tell you about it

and I’d I just had to hold off because I was unsure about the date but now I have final confirmation from our development team that the flipping America.

[10:42] Is going to be in the Apple store by Monday.

Show me looking for it in the Apple store if you have an iPhone and the other thing is this,

app is already available in the Android store so those of you that have Google phones or

Android phones you can go ahead and download the flipping America app what is the flipping America app it is simply a way that the we tried to make it as easy as possible for you to listen to the show and the show is

put together as a podcast and as we release and publish every episode then it’s available in the app

and you can listen to the show and access the show notes now,

we appreciate iHeartRadio and the fact that they have approved us and turn the show into a podcast

and it’s going to continue to be there but if you use the flipping America app you also have access to my show notes and when we do the News segment every day when we don’t do it every single time but when we do the news

you have access to all of the new stories the links are in the show notes Plus usually an outline of whatever topic I may give or biographical information or details about the person that we might be interviewing so you have access to the show notes

what is this app cost absolutely nothing it’s free.

We asked what your patronize our sponsors but the show itself the app itself is free and.

[12:09] We don’t have any in-app purchases we don’t plan any in-app purchases but we do plan to release some additional comment.

Content for those that are using the app and that’s that might be the only place it shows up because we want to encourage people to download it and give us a good review in the App Store.

Now the property great app is still out there if you answer 10 questions about any property you’re considering it gives you the numbers it tells you what you’re going to make it gives you return on investment and gives the property a letter grade.

So be sure to check that out it’s called property great okay let’s do the news and then we’re going to get to your questions and today stopping.

[12:50] Okay the first couple of stories are not necessarily real estate news but they may have an impact in

honest and so I want you to be aware forward is planning to an 11 billion dollar cut in their budget and they’re killing.

Off a couple of their now this over the next 3-4 years but they’re killing off a couple of their cars they’re not going to make the Taurus or the fusion anymore,

after a couple years they’re doing this to try to focus on the segments of their business that are more profitable that SUVs and pickup trucks.

So what does this mean for Real Estate Investors I’m not quite sure but.

[13:34] It’s just interesting to pay attention to what’s going on in other businesses and to think about.

How the economy is rolling along in general because that kind of inform some of the things that we.

Expect to see with real estate and now this new story just just for fun.

I picked this up in this is from bustle.com it looks like a pop culture website to me which is why I I guess I don’t spend a lot of time there but I had to.

Focusing on this one this is news for my wife hey Diana this is for you my love I new study shows that dark chocolate reduces stress in humans.

And it improves recall memory.

And there are many benefits to dark chocolate so go out there folks and get your candy bars but make sure that you get the dark chocolate and is supposed to have 70% or more.

Of the cacao powder and then that’ll be good for you okay.

And believe it or not we’re going to put this link on our social media and just a little while so you’ll be able to read the story about.

Dark chocolate.

[14:41] And hate as Real Estate Investors we want to concentrate well here’s your excuse folks we want to concentrate and we need to remember things better so start off your day with the cup of coffee and a chocolate bar right okay.

[14:56] All right in the real real estate news.

We’re going to kind of cross the country here we’re going to start in Long Island and Long Island is experiencing a similar theme to what we’ve been seeing all across the country.

Limited inventory Rising prices and when people who don’t live in that area think about Long Island well we don’t really.

Know much about Long Island around the country but a lot of people don’t realize because we don’t teach geography in our schools these days but they don’t realize that it when you talk about the Hamptons that’s out on Long Island and as matter fact Brooklyn,

is also on Long Island but that is really it’s so close in the Manhattan that you know it is one of the boroughs in New York.

[15:42] So I’m.

But with the rest of Long Island it it’s a long island about 90 miles and I was up there once on a business trip and had a rental car

and I thought well I don’t know when I’ll be back here and so I got on the main road and rode all the way to the Eastern tip to Montauk Point and

on Long Island just so I could say I done it and I seen it and there’s a bunch of little small towns on Long Island and so.

It’s worth considering what’s going on with the real estate out there and what’s going on is home prices are up and then Tori is tight.

Not a lot of new construction going on and so they’re saying the same thing that we’re seeing around the rest of the country.

People are reluctant to even list their home because I had to try to move up because they’re afraid they’re not going to be able to win the bid on the move up.

Is this good or bad it’s neither one if you have an opportunity to buy an undervalued piece of property on Long Island I do I want you to know that this is a good chance based on the market conditions you’re going to sell it and you going to make your money.

[16:44] Music.

[16:58] Flipping houses I want to show you how to flip houses and there’s probably no one in the country better qualified than me to show you I’ve looked hundreds and hundreds of them,

and I also have some training and degree and experience and education so I could show you how to do exactly what I’ve done hundreds of times don’t believe me.

Head on over to flip starter event.com but in the meantime Give a listen to Pat caywood.

[17:24] Cleveland Tennessee and I’ve been.

Doing some flipping since about March of this year and had started with a Nationals program that was very expensive I spent today with Rodger Blankenship.

Learning about his program and boy do I wish I’d met Rodger.

[17:46] He has a clear concise program and many tools that are going to be very hot.

[17:52] And starting and managing a program and the mentorship and Leadership and coaching that he saw frame are invaluable.

Thank you so much Rodger for your time and sharing with us license and certified Bank trainers,

teach you how to increase your sales up to 300% in less than 90 Second Bank the Revolutionary sale system Les Brown called a game-changer is now in Atlanta.

Call 770-648-3636 to schedule an introduction to bank training or visit us online at bank code.com M3 let us help you take it to the bank.

[18:40] Music.

[18:59] Next news story I want to share with you is from Jackson Wyoming that we phone good bit across the country here from Long Island to Jackson,

the headline in this is what got my attention real estate market show signs of improvement I’m thinking did it need to be improved and when you don’t drill down to the article what you,

we’re going to see is that this the authorities in the city have actually approve some developments to.

[19:26] Start creating some new inventory because right now in the valley it is almost impossible to build a new house for under a million dollars but just because of the cost of the land so.

[19:37] This is a good thing and if it would allow a little bit more of a balance Market in Jackson Wyoming moving on now too.

Kalispell Montana one of my favorite towns to talk about I’m just going to throw a link to this article up there.

Someone has done some research on market trends in Kalispell and those of you that are regular listeners to the show,

may recall a while back we did a little story on Kalispell Montana so this is from the Flathead Beacon

and it’s just real estate market trends and the reason I’m going to put the article up

in our social media is the market trends are what they are and these are pretty consistent what this person has done has compared the list price to the sales price month by month and.

Over several different price range categories

so when you read this you’ll get some insight into what people are getting offered on their homes compared to list no Kalispell is not one of the hot spots in Maine real estate across the country and sold most of the.

Sale prices are lower than the list price that’s not true in a lot of other places but you can see how he breaks it down according to price range.

And the time of year so you can kind of get a feel for it and what you’re going to see is that houses sell all year long.

[21:04] Houses for sale at a price relative to list pretty steadily all year long.

[21:09] There are a couple of dips and Dives but that I don’t think there’s enough data here to really say that there are any trends.

The important thing is real estate is a year-round thing.

[21:22] All right now I’ve got an article from USA Today entitled worry about the next bear Market real estate maybe your invent best investment really.

[21:32] Feather calling into memory the crash of 2008 and love people are afraid of real estate because of that when I was in real estate before that and.

Real estate

name of the crash of 2008 was kind of a once-in-a-lifetime experience if you’re worried about another crash like that happening relax no one can fully,

the future but it’s very unlikely and we are watching for the danger signs,

we are seeing some signs that the market is going to turn but the market is always going to turn the market is always moving the real estate market is much less volatile than the stocks and commodities markets it it but it

does have its warp and woof and it changes and it turns and where we are on our way back to a balanced Market.

It I think we’re still.

[22:23] 810 months away from truly balance market and if you know it may be longer than that if we don’t get some new housing going there what they say in this article in USA Today is.

You should consider the fact that relative to stocks real estate is undervalued date they,

quote gray Cardiff the editor of Sound Advice newsletter and he saying that relative to Sox real estate is undervalued in fact Based on data back to 1896 he says that when compared to stocks real estate has rarely been cheaper

the last time the ratio is higher than today was during the internet bubble in the bear Market that accompanied the bursting of that bubble,

during which the S&P 500 lost nearly 50% the case-shiller home price index Rose more than 20%.

[23:11] Benny says unfortunately there’s no easy or straightforward way for you to invest in residential real estate as an asset class.

Most of us invest in real estate by owning our own home.

For another specific property and there are Myriad factors and affecting an individual’s property value that are independent of how the real estate category performs Nationwide

boy that’s true then they did the article talks about reach Real Estate Investment Trust and we’re going to talk about those a little bit more here with the next couple of stories

any suggest some reads that you might want to invest in and so that moves us over to the next Story the next story is which is best,

reach a real estate crowdfunding this is a pretty good story from US News.

I like it because they focus on the differences between investing in a Reit and crowdfunding reach for example.

[24:05] Requirejs.

Typically a lower minimum investment and you can get in and out a lot more quickly than you can was real estate crowdfunding the other thing about real estate crowdfunding in this is the

do you know kind of the new kid on the Block.

And there are several crowdfunding sites that you can go to weave mention them on the show before and if you don’t want these days we may do an entire show just on crowdfunding but for now.

[24:31] The difference between crowdfunding and reap really is the amount of work you have to put into it with a Reit you buy your shares of the Reit and then you know wait for your dividend checks to come.

You do your homework on the right before you buy but after that you’re done with crowdfunding you’re doing homework on every property that you’re thinking about

investing in through the crowdfunding platform so they they give you different options and you do your research and you kind of do your own diligence and you’re involved at this point a lot of people like it

a lot of people don’t want to fool with it the other thing about crowdfunding is this not as liquid as a receipt when you put your money into a crowdfunding platform you have to know.

They liquidity because everyone is a little bit different you have to know what is going to take to get your money out and pay attention to that so,

this article it kind of helps you sort through the differences and I’m linking you also to another couple of Articles from us news about rates and one of them is its title everything you need to know about investing in a Reit.

I also want you to.

[25:38] Pay attention to the Chart down at the bottom of the page on the article that we’re going to send out and it gives you some of the returns from the different rates.

The best one is 8.35% of 8 + 7 + 6 is 1 is 2/6.

I’m not in best I’m not excited about putting my money into something that’s making a .26 that is 1/4 of a percentage Point return you might as well put your money into the your savings account.

[26:12] Okay maybe that fun will ultimately do better but the point of it is the best they’re doing is 8%.

If you own your own rental properties that you can almost always beat an 8% return.

Now that’s more work yet so a lot of this depends on how much work you want to put into it.

When you start thinking about the fixing and flipping side of things you guys know what kind of numbers were talking about there if you’ve been listening to the show at all but again now that’s a job so.

[26:42] Really your return increases and decreases or should relative to the amount of time and effort that you’re putting into this,

but if you’re thinking about a truly passive form of investing this is a good helpful and informative article now let’s move on and take a look at the state of Idaho real estate.

And Idaho we’re seeing the same thing that we’re seeing all over the rest of the country.

[27:07] Real estate values are up on prices are up cash offers over list or common.

And inventory is limited because new housing starts are not matching the demand why do I bring this up.

Just to let you know that we’re paying attention to what’s going on everywhere and we’re seeing the same thing everywhere from Long Island to Idaho and all points in between okay will be back in just a minute folks and we’re going to move on to the questions in the topic for the day.

[27:35] Music.

[27:45] Are you one of the 70% of Americans living paycheck to paycheck and tired of the stress if so I understand as I used to be in that 70.

I start investing 2003 when my network was negative eighty.

Since then I’ve built a business that generates over $500,000 a month in income and allows me the freedom to do what I want I’m Brad Chandler and I tease people just like.

How to find Freedom through real estate investing using a tactic that doesn’t require credit or tons of cash for a free training on how you too can do this please visit Brad camel.com.

[28:16] Hey flipping America listeners have you ever walked into her property and said I have no idea what it will cost to repair this home,

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free annual subscription of only $79 create your account at ultimate rehab estimator. Com it runs on your phone tablet laptop or desktop iOS or Android Mac or Windows and works wherever you get the contractor in your pocket today.

Ultimate rehab estimator. Com.

[29:16] Music.

[29:54] And we’re back I’m Rodger Blankenship your host and I teach people how to make money in real estate on this show we want to give you the best information that we can talk about markets Trends demographics data,

style everything that we can to help you make the best possible decision for your real estate investing.

[30:17] We don’t encourage everyone to drop what they’re doing and start flipping houses like you see on TV but we do encourage everyone to have real estate as a part of a balanced Investment Portfolio and it’s to that end,

we are here to serve and to help and there’s anything that we can do to help you in any way.

Please don’t hesitate to write in or call and send your questions to questions at flipping America network.com.

I’ve got some questions that we’ve been holding for a little bit to get to on the show so we’re going to do the questions first before we even get to today’s topic because I want to make sure that we take care of you like we promised to do,

Carl from Oconomowoc Wisconsin says do you still use other people’s money in your own flips if so why wouldn’t it be better just to use your own cash at this point

well Carl the answer is yes I do the reason I do is.

And it’s not really out of generosity but on my part and maybe it is but involving other people and making money with other people’s money is the best use of my cash why is that well.

If we have to get into a conversation about leverage and return on cash but return on cash is one of the metrics that we use in evaluating every real estate deal.

[31:42] Let’s let’s,

think of it this way let’s say I have $100,000 cash to invest in a project and that project is going to make our desired gross margin and so it’s going to make $30,000 gross $20,000 net

okay so I’m going to make $20,000 I’m going to nip that out with my hundred-thousand-dollar investment and I’m going to turn that around in.

Well let’s just say 6 months.

Okay if I make $20,000 on $100,000 investment in 6 months and I can do it again in the next 6 months then in one year’s time I will have made $40,000 with my $100,000.

That’s a 40% return that’s killer.

That’s great who wouldn’t like to make a 40% return especially when you think about the fact that the best REITs that we saw in the previous segment we’re making about 8% now keep in mind the big difference here is.

The reeds are totally passive and your work on flipping houses is totally active so you’re in it and

but if that’s what you want to do that’s fine no complaints about making 40000 on a hundred thousand in those numbers are real that that happens all the time that’s the kind of spread that’s in there but let’s see.

[33:01] I were to do a deal that cost $100,000 but I want to do it with a hard money loan.

Okay to come up with the points for a hard money loan would be about

5 that month $3,000 probably and then to pay the closing costs on the loan and to do the debt servicing on the loan

over the next 6 months is going to end up costing me about another six or seven thousand dollars let’s just say that the cost of the loan is $10,000.

How many deals can I do with my hundred thousand dollars I can do 10 deals with my hundred thousand dollars.

Right now we’re I’m speaking in theory year and I’m also using nice round number so the math is easy for me to do in my head here in the studio and also for you to follow,

out there now I’m doing 10 deals I’ve got my my $100,000 spread into 10 deals each of those deals is identical to the other one so each of those deals is going to make.

A net of $20,000 in 6 months and then we’re going to do it again with 10 more deals and I’m going to net $20,000 on each one of those so how much money am I making now I’m making $20,000 510 times.

[34:18] And then I’m doing it again so I’m making $200,000 in the first 6 months and I’m making.

200000 more in the next 6 months and I know this seems crazy to you but,

instead of making 40000 with my hundred thousand dollars I’m making 400,000 with my hundred thousand dollars and that my friends is

a hypothetical theoretical introduction to the idea of using leverage when you use leverage appropriately,

and weighs like this now the numbers are never like this because first of all that you got the challenge of finding 10 deals and in finding another 10 deals and that’s hard enough to do but,

I use other people’s money and keep my cash on hand for the opportunities that arise when they do.

[35:10] And the things that I kind of like to do with my cash or to invest in cash flowing opportunities such as a rental opportunities.

So use other people’s money for flips and use my own money for rentals and that’s just kind of what I do there’s.

There are many different ways to attack this but that’s something that I’ve chosen to do.

[35:35] Cindy from West Chester Pennsylvania says I heard you talking about the advantage of Leverage in real estate deals while yeah actually I just did how do you reconcile this with Dave Ramsey’s teaching that we should never borrow money ever,

especially For Real Estate Investments send that’s a great question and I I would never be one to criticize Dave Ramsey in his teaching if you know about.

Dave story he was investing in real estate and he actually got burned.

Like a lot of us I mean I’ve been burned I’ve lost money in real estate deals from time to time as well and I’ve run into problems because of debt with real estate deals as well.

[36:17] I don’t have profound respect for Dave Ramsey and what he’s done what he’s doing and I I wouldn’t want to

this really take issue with him but you asked and so here goes

I still believe that the mistakes the problems that I ran into and honestly the problems that Dave ran into work at they came from.

Maybe a poor use of,

leverage in real estate in my own experience honestly I’m going to tell you came for my own arrogance I was over-confident because I had

unbroken string of success and so I took on too much and too much debt related to real estate and got myself in trouble

and that’s what Dave Ramsey did too.

But I’m not accusing him of arrogance because I don’t know what was in his heart however we all tend to get a little over-confident after a while once we’ve experienced some significant success in this business it just,

it just happens it’s happened to many people that I know so.

[37:19] How do I reconcile it well I don’t really reconcile it I agree wholeheartedly 100% couldn’t agree more with Dave Ramsey that you never ever ever going to debt for Consumer items don’t use that to buy a car,

don’t use that,

to buy a sofa don’t use that to buy your stereo don’t use that to buy wheels for your car no used it for any of those things but if you’re using debt in order to.

Make money and you understand the proper way to do leverage and bye-bye knowing your real cost the real cost of the dent and the real cost in the project then debt can be used appropriately and it is used all the time.

And it did you just have to make sure that you’re doing it right doing it carefully.

Falling sound financial wisdom and then you’re going to be okay we’ll be right.

[38:12] Music.

[38:25] Hi it’s got the Curtis here for the Whitestone Real Estate Investors Institute

we can start a new career for as little as $500 now I want to be upfront with you the programs cost more than that but the Institute offers financing for most of its programs,

the cool thing is that you’ll be able to pay off that financing quickly usually with the profits from your first deal

and you will do a deal because your coach isn’t going to let you go until you’ve done at least one I have Hayward on the phone right now,

Hayward introduce yourself and tell us what you think about the coaching so far,

actually stepped into this not really knowing anything about it to be honest with you but I knew it was you no money in it I knew it was something that I want to do

cuz I want to try and so I kind of got geared up to read a lot of books

read Lottery information and just do all of these things that was going to kind of set me off for six seven eight months in preparation but I got with my coach and you know he definitely

it got me out there I mean just from the get-go it was just holler at you know it wasn’t you know read up on this or read up on that you know he gave me a lot of information as one

put me out there and gave me a lot of action things to do physical and I.

That you know I couldn’t have learned two things that I learned in the way that I’ve learned them no other way.

[39:49] Hayward what would you say to your friends were thinking about signing up for this training.

I think without a doubt that anybody who has any kind of interest in dealing in real estate.

They need to join this course because like I say I mean I walked in I know any.

But immediately I was making offer in and just dinner with lenders and just back Torino,

checking out houses physically and just saw it was so much I was involving you know about myself with from the get-go and my coach he pushed me to do that.

I was kind of nervous at first cuz I didn’t know anything but you know once I start I realize that it wasn’t so bad and I and I learn quickly.

Quicker than I would have liked I say taking any other route so I would definitely advise anybody.

Not just my friends but anybody to continue to give this program,

friends here’s a chance to add another source of income for you and your family get out of debt pay for college or maybe even find a new career just go to www.wreg.com and get started today.

[40:58] Music.

[41:08] I got to throw this reminder out there in the way of a disclaimer if you hear anything on the show that sounds like advice just know that we’re not in the advice-giving business we are not accountants we’re not lawyers.

So we don’t get financial or legal advice on the show we answer questions and we illustrate them up for educational purposes.

How’s that sound okay Chastity from Birmingham Alabama says how do you calculate the cost of a hard money loan this also is a good question and this is one of the things that tends to confuse a lot of people about.

Making a decision on a deal because hard money lenders have a set of terms for their loans that you need to kind of wrap your brain around and.

[41:56] The hard money loan business is assuming a sophisticated buyer so most of the people.

[42:03] They’ve been to a weekend seminar and they’ve been to a boot camp somewhere and they’re not really a sophisticated buyer or sophisticated borrower and they’re not fully prepared for the actual cost of a hard money loan.

[42:18] So here’s what you need to do Chastity and everyone else who’s wondering about this you need to maybe create a little Charter some notes or something and you need to know,

the following information about the loan that you’re getting the loan is going to be based typically on the after repair value of the property now there are Exceptions there are some lenders that will make loans based on the total investment amount.

There are some lenders that will only loan toward the acquisition but.

Most of the hard money lenders out there now or going to loan a percentage of the after repair value that’s the arv does a little real estate investing.

Lingo at you so you need to know the arv and they’re going to verify the arv with an after repair value appraisal some appraisers can go out there and tell you what the property will be worth after you fixed it up in order to do that

they’re going to need your plans,

what is it you’re going to do to the property how are you going to improve it what are you going to fix what you going to update are you going to be adding square footage in that sort of,

based on that information the appraiser gives the lender,

and idea their opinion of the after repair value know most of these hard money lenders are going to be willing to loan you.

[43:36] 265 or 70% of the arv.

Let’s suppose they’re going to go to 70% of the arv in the suppose that the arv just to keep the math simple here then the arv is $100,000 that means that the most they would loan is $70,000.

So if you have a purchase price of $65,000 and Rehab of 20000 then your costs are.

[44:08] Maybe $85,000 the most they’re going to loan you is 70000 that means that in addition to the points in the interest payments that you going to make,

you’re going to come out of pocket for the last fifteen thousand of the repairs okay and there’s more many of the lenders have a down payment requirement.

And this varies according to lender from lender to lender and it may be based on your experience level and it may be based on.

Your credit worthiness so if you have a good credit score but a lot of these lenders are going to loan,

90% of the purchase price so you have a 10% down payment right from the beginning and then they mail own all of the rehab dollars up to that 65%,

alone devalue don’t you see how this can get complicated right let’s go back to this particular example that I gave you’re buying it for,

$60,000 and so they will loan you you have to put $6,000 down they loan you $54,000 for the purchase and then they will loan you

additional money up to their total limit of.

[45:18] 70000 this is why you kind of need to write this down because now you’re going to see that.

You’re going to get some of that down payment money back during the process of the loan but you got to come up with the money up front now.

[45:33] Now the next thing that you’re going to have to pay up front or the points this is the origination fee for the loan hard money lenders have these and they range anywhere from 3 to.

6 or more a point is 1% of the loan amount

that one this case the loan amount is $64,000 and so we’re going to pay and we’re going to say that this lender charges 3 points so if the lender charges 3 points,

then on 64000 that’s $1,920 you’ve got to come to closing with $1,920 for the points.

[46:08] You got to come with your $6,000 down payment that 7920 and you’ve got to pay the closing costs which can run a thousand or more.

So 8000 9000 dollars to do this little deal you got to come to closing with the you know.

8 or $9,000 and then you’re going to make the monthly payment of $693 at 13% and.

That means that your total loan is going to cost you about $6,000 just for the loan,

overtime and the cash to close to get the closing is 9120 now I have an advantage because I’m sitting in the studio with my quick calc spreadsheet open in front of me but that’s kind of how the math works you have to consider the.

Interest points down payment the loan to value and

understanding the amount of time you’re going to hold the property you can calculate what your interest payments are the big number that you’re looking for courses what you have to bring the closing

that’s the,

birthday gives most people pause and that’s why I a lot of people decide when they get into this business they just want to be wholesalers because there aren’t many hundred-thousand-dollar Prague

projects out there most of them are going to be in the two to $300,000 range and when you get into that range you’re talking about coming to closing with 35 or $40,000

unfortunately most of the people that I know that want to get into this business have a hard time putting together 30 or $40,000 just to come to a closing.

[47:36] I hope that helps and I know if it’s a complicated topic

and if you guys would like access to my quickcalcs calculator yourself all you got to do is right into the show and ask for it and will make it available to you okay will be back in just a moment

not too long ago we did a one-day flip starter in Chattanooga Tennessee and

lo and behold one of my old College friends came out to the event his name is Peter Faulkner and here’s what he had to say about the event.

[48:09] Peter Falkner here I tended a one-day flip starter training session led by Rod.

[48:16] And I was amazed to see what has happened in Rogers Live from the last.

[48:21] Flipping over 800 houses in Mendes one day training he told how he did it and what.

Falls the blessings the benefit.

And how to do it and I was so impressed with how well organized and how smooth the training Wednesday you’re tempted or in courage to go.

Not a bad price and if you get a chance.

[48:46] Music.

[49:05] And we’re back Scott from Lancaster.

Pennsylvania says have you ever been in a multiple bid situation when buying is this a time to break the 70% rule well alright.

The answer is yes Scott I have been in multiple bad situations when buying and no I generally don’t break the 70% Rule and what he means by the 70% rule if you I haven’t been listening,

are are new to this we want to be all in on a property at 70% of the,

after repair value this is what some people call the Mayo formula and it was funny when I first heard that term the Mayo formula I was thinking,

it does this involve eggs I didn’t know their eggs and all this business but no it has nothing to do with mayonnaise it’s the maximum allowable offer Mao.

Please show called Mayo formula says that we want to and you take the arv * .7 and then subtract your repairs from that and that your maximum allowable offer,

well I’m most of the time don’t go to my maximum offer when I’m making an offer I know that you have marker temperature to consider and if you’re in

a situation where you’re likely to get a multiple bid deal then sometimes I will just start out with my maximum offer.

[50:21] However if they come back with the they request a highest and best bid.

I will you know noodle around on a little bit and here’s the thing that affects my thinking who has this question,

Scott okay the thing that affects my thinking is if we’re in a multiple bid suit situation on the buying side maybe I was a little too conservative with my selling thing so I go back and look at the numbers again and this is a Time.

This is rare when I do this but this is a time when I will look at the actives on the market.

[50:52] To get an indication of where this community might be going because if there’s that much Demand on the

buying side maybe there will be more Demand on the shelving side now

I’ve been at this for a long time Scott and I’ve been buying bank-owned properties pretty much from day one and even in the crash years I would look at a property,

I bet it been on the market for 3 months sitting there and I would make a low offer on the property.

And the agent would send back to me saying that we had multiple offers and give him a highest and best and I’m sitting there thinking

yeah right this is one of those times where agents

don’t get in any trouble if they lie to you I knew that I knew that I knew that there weren’t really multiple offers out there and so.

I might not change my offer at all and there was a few times we’re out of spite

if I offer 230,000 for a property and they came back with a highest and best

because of multiple offers I would go back with $120,000 because I was insulted that they would think that I would believe them but that’s not the case now,

these days multiple offers are irregularity and be honest with you I don’t usually win the bed in fact I can’t think of the last time I did win the bid in a multiple-offer.

Situation.

[52:15] I just stick to my guns I resubmit the offer the best numbers that work for me like I say I look at the the neighborhood to see if maybe I missed the arv maybe I can increase the arv a little bit realistically

I don’t want to try to make a deal fit don’t ever do that but if there’s a realistic,

look at the arv and this is where two heads are better than one I’ll get back with my realtor on this one

I’m because usually I’m using a realtor to submit these bids anyway and we’ll see if there’s any room for us to have a better opinion of the final value and if so that may

affect our maximum offer so we’ll go to the maximum and then we’ll stick by our guns and if we don’t get it we don’t get it we just move on.

[53:02] All right I hope that helps Joe from Fredericksburg Virginia says my wife and I are a bit at odds with a rehab we are doing and wonder if you could help

we agree with the idea of a wow factor in the house but she has ideas for the kitchen the master bathroom and the deck in the backyard

my argument is this is basically a first-time home buyers house and we should focus on just one of these.

We want to make it great but we also want to make as much money as we can we both would appreciate your thoughts.

I never really thought that we would get into resolving marriage disputes here on the show then it doesn’t sound like you have a big dispute.

That I appreciate you writing it with this question Joe and here’s the thing and I see this happened quite a bit,

did the thing that you have to keep in mind is as you’re rehabbing these houses you’re not really having them for you to move into.

[53:54] So don’t do everything to a house that you would do

for yourself now I’m not saying that you need to Short Change anybody I don’t want you to do that I want you to fix everything that’s broken always

and make sure you take care of everything even if you find a repair that’s needed that you didn’t expect that is going to really hurt your bottom line you got to do those things and I do think that you need one while Factor.

And Addie and you are right your wife is right that it needs to be a while factor that appeals to if there’s a him in a her coming to look at the property it needs to appeal to her.

Because I don’t know exactly why this is but if you know the saying is true if mama likes it we’re good so.

And that means it needs to be in the kitchen or it needs to be in the master bathroom or master bedroom because that’s where Mom is going to be spending a lot of time right.

[54:49] I think that what makes a decision for me is by understanding my current market and talking with my realtor,

we make the decision where to put that while back.

Sometimes it is an awesome Master shower just mind-blowing great with the rain head and the and the body sprayers and all those things that you can do these days and sometimes it’s in the kitchen,

but when you’re dealing with starter homes you’re also dealing with the you know younger people who are little bit less experienced.

Who may not put that much of an emphasis on cooking.

In our starter home builds and and rehabs that we’re doing in the city of Atlanta my realtor is told me look you don’t have to create a gourmet kitchen because the people that are moving in here

probably don’t cook that much or don’t cook enough that it would make that much of a difference to them

put your wow feature in the bathroom but I do want something in every house

that just makes their jaw drop a little bit when they see it to say man this is awesome and it could be a great backyard a back deck but.

You know how I don’t want to pick sides your dough but.

[56:00] I think you’re right it just one of them all right don’t break your budget fixing the house up like it’s something that you want to move into.

[56:10] I hope that helps and I hope I’m not good you’re contributing to the argument but definitely do the right thing and.

You’ll be okay in the end.

[56:21] All right we said we were going to talk about why let’s talk about why why are you doing all of this why are you in this business why are you thinking about changing careers why.

Why do you want to do it a lot of times it has to do with money then I understand that and Financial Freedom

I get it so why do you want the money why do you want to plan for Freedom what are you going to do with it asked the question and keep asking a question for 10-year like a five year old

when my oldest daughter was 4 years old we were having a picnic in the front yard one day and we were laying on the picnic blanket looking up at the sky and be imagining all the shapes that the clouds were making you know the animals and so forth

she just said Daddy why is the sky blue,

that’s the one day this guy is actually the sunlight is actually all the colors but the particular aspects of the chemical nature of our atmosphere filters out all the color but blue so it appears to be blue to us.

She just looked at me and said but why and I said well because you know that’s the way God designed it.

And you said but why I said well because blue is a relaxing color and she said but why and I said well because I think God wants us to look at the sky and see a blue sky and just relax

and she said but why and I said well because God loves us and he wants us to enjoy what we see she’s at the sky is blue because God loves us.

[57:43] I said yeah that works for me right fast forward several years later on and my son was born and

we’re Trucking along and we’re out in the driveway one day playing basketball and we stopped and we got a little water break and we’re sitting there and it was time for my son who was 5 or 6 at this time to ask is why question I guess and he looked at me and said Daddy.

Why do people fart.

I thought oh man that’s the difference between having a boy and a girl right there and then I also wondered I thought back to that conversation was Rebecca and I thought to myself

now how am I going to get this conversation around 2,

because God loves us and so there’s your thought for the day folks were going to talk a little bit more about the Y life and real estate investing on our next show.

Will be back again Saturday see you.

[58:33] Music.

[58:48] Motivational quote for the week is never give up never surrender from Jason Nesbitt captain of the famous Galaxy Quest.

A movie that you really need to see this quote was brought to you courtesy of the foundation for renewal.

Working together with communities everywhere to improve an impact lives.

Find them on the web at foundation for Renewal or I’m sorry I found them on the head at renewal fund. Net got the other sites on its way renewal fun. Net your contribution an idiom.

[59:20] Music.