Podcast 116: Successful Flipper, Landlord, and Agent Shannon Denniston

InvestFourMore Real-Time Stats (as of 11/2/17)
22 flips currently in progress. 134 flips completed. 18 rentals properties.
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On this episode of the InvestFourMore Real Estate Podcast, I interview Shannon Denniston. Shannon has been an extremely successful real estate investor, entrepreneur, and real estate agent. Shannon had always planned on a career in the real estate industry and even majored in real estate in college. Things do not always go as planned, and Shannon ended up starting a very successful technology company in college, which delayed his entry into real estate. After making a lot of money and paying a lot of income taxes, Shannon’s accountant told him to buy rentals. He started buying rentals, became a real estate agent, and now is even flipping houses. On the show, we talk about how he got into the business, why he thinks he has been so successful, and what new and exciting things he is working on now.

Click on the green button below to listen to the podcast

How did Shannon get started in real estate?

Shannon grew up around real estate. His father was a real estate developer. He fully intended to be a real estate agent when he graduated college. However, during college he created a website that provided direct marketing services for real estate agents. He did extremely well with that website and was making a lot of money at a very young age. Consequently, he was surprised with a huge tax bill and needed to figure out how to reduce his tax liability. His accountant told him to invest in real estate because of the fantastic tax advantages.

Shannon bought a couple of duplexes in Kentucky (where he was from) and started his real estate career. After buying a few duplexes, he bought single family homes, and kept buying properties. Shannon now has over 40 rental properties and has a goal to buy 100.

Why did Shannon become a real estate agent?

Once he owned a couple properties, Shannon realized he loved real estate. He got his real estate license to help with his investing and to make extra money as well. Shannon says he has been very successful as an agent in his area because he is willing to go the extra mile for his clients. He will hire professional photographers and videographers to market his listings. No other agents in his area provide those services, which gives him a huge advantage. Being a real estate agent also saves Shannon money when he buys his own deals. It also gets him more deals.

How does Shannon find awesome deals?

Shannon does not buy just any property on the MLS and turn it into a rental. He looks for great deals so that he can maximize his equity and cash flow. He finds many deals on the MLS but also buys off-market properties. When buying from the MLS, Shannon will make a lot of offers that never get accepted. However, he is able to buy many properties well below asking price when he finds the right seller. He bought his personal house for $420,000 when it was listed for almost $600,000! In the podcast, Shannon tells us about many other properties he was able to get deals on.

Case study on a flip bought with direct marketing.

How can you get in touch with Shannon?

Shannon is an agent in Mount Sterling Kentucky, and you can find him here:

Sales: http://dennistonproperties.com
Rentals: http://kyapts.com
Contact Shannon: http://ShannonDenniston.com

Update on my Facebook group for finding awesome deals

I started a Facebook group to discuss how to find awesome deals through the MLS, direct marketing, auctions, networking, and many other sources. The group is up and running and teaching me a ton! We have some really awesome people in the group who are very knowledgeable and willing to share everything. Because there is a lot of proprietary information shared in the group, there is a cost, and it is private. If you are interested, let me know and I will include my new coaching program on finding deals for free as well. [email protected]

EPISODE 116

 

[INTRODUCTION]

 

[0:00:13.9] MF: Welcome to the Invest Four More Real Estate Podcast. My name is Mark Ferguson and I am your host. I am a house flipper. I flip 10 to 15 houses a year, I own 13 rental properties, with a goal to buy 100 by 2023. I’m also a real estate agent. I’ve been licensed since ’01, I run a team of nine and we sell close to 200 houses a year.

 

So on this show, we like to interview house flippers, landlords and the best real estate agents in the business. So stay tuned for some great shows, if you want more information on my rentals, on the numbers, how I buy properties, check out investfourmore.com.

 

[INTERVIEW]

 

[0:00:58.3] MF: Hey everyone, it’s Mark Ferguson with Invest Four More and welcome to another episode of the Invest Four More real estate podcast. Today I’m speaking with Shannon Denniston who is a real estate agent, real estate investor with flips, rentals and also an entrepreneur. He’s got some different things he’s working on and has worked on in the past. Shannon and has kept in touch over the years, kind of helped each other out with our businesses since we’re very similar. I’m super excited to talk to Shannon. See how he got started in the business, how his career progressed and what he’s doing now.

 

Shannon, thank you so much for taking the time out for this. How are you today?

 

[0:01:32.2] SD: Doing fantastic. Thanks, Mark for having me on the podcast. It’s a huge honor.

 

[0:01:36.5] MF: Great to have you on. I always start everyone from the very beginning. Can you tell us what got you interested in real estate and how did you first get started in the business?

 

[0:01:46.1] SD: Great. I got started back in the early 2000s. I had a meeting with my accountant and I had to write a really large check to the government and I asked him, I said, “How do people minimize their tax liability and avoid having to write checks these large?” He said rental estate.

 

I come to find out he actually owns some properties himself and he said just to go out and buy some houses or duplexes or apartments or something. He said — and then a depreciation schedule. He said it’s amazing what you can do with those things. How they offset your income. Of course, that was all over my education level at the time. They don’t teach this stuff in school and even though I went to college and take a degree in real estate, bachelor of business administration major in real estate. Anyways, this is just kind of above my education so I leaned on him a lot in the beginning, but that’s how I started.

 

My CPA advised me to buy rental property and I went out and I bought a duplex and then I bought another duplex and I think we bought three new construction duplexes after those two. At the time we thought we were — We actually named our company Denniston Duplexers and I thought I was just going to acquire a few more duplexes. I didn’t think it would get as large to the point where we are today, but we branched out since that time. We started buying some single family residences. We since change the company name to Denniston Properties and everything has gone up and up. I love single families. I love duplexes. I’m sure I’ll probably love apartments too or I’m thinking I will because of the scalability. Right now we’re working on building some new duplexes and possibly a fourplex new construction.

 

[0:03:12.2] MF: Wow! You jumped right into the business from the start. I’m curious, how long did it take you? How difficult was it to start buying investment properties to figure what was a good investment, what made sense? Was that a long process? Did it happen fairly quickly?

 

[0:03:28.0] SD: Well, I started a lot of questions. I did my due diligence. I did not just jump into it. I tried to seek out and find people that already had and had more than just a handful of units because it was my goal to buy several. I didn’t plan on just buying one or two. I didn’t really have a goal in mind. Right now, my goal is to have a rental, a hundred rental units, but I started listening to your podcast and other podcasts and people are having thousands of units. One person I follow I think has 20,000 mobile homes or something. Just kind of crazy, scalability, it’s interesting to see what we each do in our businesses to scale it.

 

The cool thing that I like about it is you can learn as you go. It’s one of those things — It’s real estate, right? As far as you don’t buy it terribly wrong, you have a pretty good exit strategy which is just to sell it. If you buy a decent property — But you have to buy it right. I cannot stress that enough. You have to buy it right.

 

When you’re out looking at properties, make sure you realtor has rental property. Make sure that they hopefully are a home owner and don’t rent. Hopefully they own where they live and hopefully they have some rental property.

 

That’s a common mistake people go to a realtor that doesn’t have experience working with an investor. They have tons of experience obviously working with home owners, but as investors we’re a different animal. We have to buy it right and sometimes I’ve talked to realtors and they say, “There’s no way you can buy this property for that.” I said, “Well, who knows? Let’s just make an offer and see where it goes.”

 

A lot of times, numerous times, I’ve had realtors tell me, “That’s a low ball offer. It’s going to get you a bad reputation. They’re not going to accept it.” Then an hour or two later I just bought tens of thousands of dollars’ worth of real estate for pennies on the dollar. You never know. There’s one thing I discovered that people sell stuff just to get rid of it. I call them the yard sellers, but they actually sell a house and just come to find out just to get rid of them. Some people are just in horrible experiences. They’ve got a bad renter in there and they don’t know how to get them out or they haven’t had any success in getting them out. Maybe their property has just has all these deferred maintenance and it’s just overwhelming to them. You want to seek out and find deals like that, some ones where you put in some elbow grease you can buy them right, you can pick some up and be profitable at the end.

 

Some of the worst advice I got early on was you don’t make any money in this business. You just buy the properties, you put 20% down and your residents pay your mortgage. That’s how I thought the game worked. I thought you just bought property and you place tenants and they paid your mortgage and you did all these work for free for 15 years. Come to find out the wrong advice. There’s a lot of work involved in this business. There’s a lot of risk involved in this business and you want to make sure that you’re paid for both of those. You have to buy the property right. The metric I use is 50 times rent. That’s the perfect deal in my opinion. If you can purchase a nice property, not a rundown property, but a fairly somewhat nice property for 50 times the rent.

 

Now, I guess most of our properties rent somewhere in the six to 1,200 range. We live in a community with about 28,000 people in our county, small town, and we’re able to see rents of around 600 to 1,200 per month. The stuff that rents for 8, 900 a month today, 10 years ago, 15 years ago was renting for $200 or $300 a door less than.

 

We’ve noticed also soma appreciation in values, but that’s only part of it if you’re going to sell the property. It’s not my intention to sell the properties at this point. Come to find out a good metric is 50 times rent. Every now and then I’ll go a little bit higher than that. The deal still works out usually if you went up to 100 times rent, but the only case I would do that in is brand new construction.

 

[0:06:55.9] MF: You’re in Kentucky, right, so you’re in a market that has generally lower prices in east, west coast, some other areas of the country.

 

[0:07:04.3] SD: Correct. Our typical deal here is about, let’s say, a $40,000 home that needs about five or $10,000 worth of work. We end up with about a $50,000 property and hope to rent it for a thousand. Usually we get somewhere around 850 or 900 which is pretty close.

 

Our construction stuff that we’re looking at building, we’ve got these seven duplexes, that’s 14 units, and then a fourplex and a couple of homes that we’re hoping to build this year. The year is a little over half way finished, so it’s going to be a tight squeeze, but I think we can pull it off. That’s the numbers I’m looking at on those, my construction, everything. I think I’m going to be somewhere closer to that hundred times rent, probably it maybe 85 times rent. I don’t like to go up to 100, but when I started out, that was kind of my metric, was a hundred times rent.

 

If something would rent, say, a duplex, 650, it’s by 1,300 a month. They’re paying their own utilities. I would expect to pay up to 130,000 if it is brand new. Today, I’m looking to acquire properties at about half that price that produce the same return. If I can buy a $30,000 home, put 10 or $15,000 into it and get that home to rent or 8 or $900 a month, that’s a perfect deal. If I get the $30,000 home, 15,000, and I have 45,000 in it and it rents for, say, 700, I still think that’s a pretty fair deal.

 

[0:08:25.0] MF: Those are great numbers. What do property taxes look like in your area, say, on that?

 

[0:08:29.0] SD: Property taxes, they’re a very hot topic around here. There’s been a lot of miscalculations on our property taxes and we’re paying 1.21%. It’s pretty high for this area. In Lexington, Kentucky, which is about 30 miles to my west, their property taxes are a little bit less than that and they’re a large city.

 

We’re a small community. I feel like they’re kind of charging higher rates than what they should be. I was actually a plaintiff in a lawsuit, a class action lawsuit against one of the local government agencies for miscalculation of tax rates. We had a verdict in our favor, and then actually it was appealed. They were granted an appeal and they went on an appeal and then we were not granted an appeal. The judge pretty much said that since it went on for so long, they’re like 30 years where the tax rates were calculated improperly that because it had went on so long that it would be detrimental to try to reverse that.

 

It’s kind of like — Well, he was acknowledging that we’re both robbed. It was kind of a setback there. There was a lot of us that owned property in the area and bonded together and tried to fight the thing, to try to sort it out, fix it. We certainly don’t want to see any less services, government services since we didn’t want to put anything out of business, but we were just asking for a fair taxation.

 

That’s something that I think maybe a landlord into, especially if you acquire more properties, because property taxes, they can add up to a whole lot of money and so can insurance. Those are two things that you might not feel like you have any control over taxes, but you do as a tax payer. The other thing is insurance. You have a lot of options in the insurance. There’s all kinds of insurance companies and the more properties you have I think it opens up even more options.

 

[0:10:13.2] MF: That’s great. Yeah, depending on what your state you’re in and even , like you said, the county or city, property taxes can range quite a bit and make a huge difference on your returns. Colorado has super low property taxes on a 200,000 house. We might pay 1,200 a year in property taxes. Yeah, you can go to taxes and you’d be paying $4,000 on a property and go to New York and be paying $10,000 in a property. It’s kind of crazy. They fluctuate.

 

[0:10:38.6] SD: I was going to say, New York is another state. It’s like 6% I think. Isn’t it?

 

[0:10:43.8] MF: It’s really high. I don’t know the exact percentages, but I know it’s just — It’s really hard to have profitable rentals in those areas, because taxes, they’re just so high.

 

[0:10:54.1] SD: Also, they say what the maximum rent you can charge.

 

[0:10:57.1] MF: Yes, in some areas, in some of the cities. Depending on where you’re at, they have the rent control, which it makes it — Yeah, really tough. Like you said, insurance can vary too based on — We have a lot of hail in Colorado, so our insurance rates can be kind of high as compared to other areas. I don’t know what insurance rates are like where you’re at, but I’m sure you have storms and things that come through in Kentucky as well. Yeah. It’s different everywhere.

 

[0:11:19.9] SD: It’s a learning experience. When you get in, you think you’re getting a good deal and then you talk to other landlords and they open doors for you. There was an issue, I bought a property with an abandon home on it and I purchased it because I owned an adjacent property. This one I purchased did had two big trees in the front yard and one was lingering over my property over the home that I owned on that property and then the other tree was landing over the neighbors’ homes.

 

I went and talked with the neighbor to see if they wanted to buy the property to get these trees laid down and just maybe clean up the neighborhood a little bit. They didn’t want to go through the expense of demoing the home, so I was able to work something out with the land owner and purchased a home, but the problem I had was getting it insured. No one seemed to want to insure it where it had this abandoned home on it.

 

I was able to actually find coverage for that property for about $12 a month and liability only I didn’t want to insure the structure, but there’s companies out there that will just let you insure just for the liability side of it.

 

Now, when we go and we purchase for a land, I still insure that with a liability policy and I found a company that does it for $12 a month per parsing. If I can help anybody with that, please reach out to me.

 

By the way, I’m on Facebook under Shannon Denniston. I have a couple of pages on there, personal page and then a fan page, but either one of them I try to check pretty regularly. If anyone has any questions, I’d love to help. I think you’d agree, Mark, that those of us that have been around the block, we want to give back, because people certainly helped us get to where we’re at.

 

[0:12:45.6] MF: Oh, yeah, very true. I think a lot of people can be scared to ask for help or talk to people who have been successful thinking they don’t have time or don’t want to reach out. Time can be an issue, but at the same time a lot of people will help out there, and a lot of successful people have to help others who have been through the same thing they have and realize they can make the trip a lot shorter with the right information. Cool.

 

Shannon, you had duplexes and you hasd single family homes, I’m curious what is your take on the advantages of a duplex or the advantages of a single family home?

 

[0:13:16.7] SD: Each has their pros and cons. With duplexes you can scale your business faster, so you’re picking up two units per transactions, versus one. The cons to it are single family. There’s a larger buyer pool. If you’re going to be flipping properties or you’re going to be buying and reselling them later, the buyer pool is significantly larger for single families. It’s easier to sell those properties.

 

For a lot of people their end game is to buy everything, get it paid for and then sell it off. I’m not sure if that’s my end game. I know that my end game probably involves a private island somewhere and some exotic sport cars [inaudible 0:13:47.4]. We all have these things called goals and that’s what drives me right there, but behind me in my office I’ve got a goal board and that has that thing for 20 plus years. My very first mentors told me, “Buy magazines that have things in them that you want.” This is the before the internet got really popular and you could just Google it and print off a picture.

 

I was out buying duPont REGISTRY and all these other magazines. I actually became a subscriber to duPont REGISTRY and I’d cut out pictures of vehicles I wanted and trips I wanted to take and put them on my goal board. It’s been fun over the years to take those pictures down or replace some with other pictures.

 

I’m very goal driven. I’m very goal focused. I’m proud of my goals. A lot of people are scared, I think, to set goals because what happens if we don’t hit it? It’s okay. There’re these things called adjustments. You can adjust your goal down. If you’re not hitting a goal, just make a series of smaller goals and work your way back up to that goal. Don’t let it turn into a source of overwhelm or something where it feels like it’s hurting you. It should be a fun exercise to have goals and to achieve them.

 

One of my goals was to purchase a new Cadillac Escalade, and I looked at a picture of it on my goal board for about 14 years. I’ve bought a brand new Chevrolet Tahoe and I actually had a picture of that on my goal board and I was driving a Chevrolet pickup truck and wanted a Tahoe. My goal after that vehicle was a brand new Cadillac Escalade. Like I said, I drove that Tahoe for 14 years before I bought that Escalade, and I could have bought it many years sooner, but there’s this thing called delayed gratification and it’s a muscle that you need to flex a whole lot in your life.

 

I think a lot of people, they rush up and they buy things prematurely. Even though you can afford it, maybe the timing maybe even feels right, just delay a little bit longer, and I feel like that’s a muscle that we’re working called delayed gratification. It has a whole lot of benefit there.

 

[0:15:30.1] MF: Yeah. No, and it’s stuff to do too. There’s a tricky mix between setting those goals, making these big accomplishments and rewarding yourself the same time where you want to reward yourself and have fun and enjoy things and be happy, but the same time you don’t want to destroy your business or your savings or your credit doing it too soon. It’s a tricky little balance there on when to indulge on things. What to indulge in? How to soon to do it?

 

I think one great thing about rentals is they can provide that monthly income and kind of like a safety net. Once you’re in a property, you kind of know how much money you’re going to make with it over time. Even if there’s a disaster in your business — Yeah, your income declines, you know you still have those rentals coming in. How many rentals do you have now?

 

[0:16:15.8] SD: I have around 40 right now and they’re all, to my knowledge, rented. Obviously we have people on our team that help us with these things and we certainly, by no measure, do it all ourselves. I have a lot of awesome people on our team that helps on the different things as you do.

 

It’s very important that we delegate out the stuff that we don’t enjoy doing and that we keep time for family, for our friends and to keep our sanity. One thing I keep alternating back and forth on is whether or not to work weekends. It’s really easy to want to stay at home and spend all the weekend with your family. When you have these big goals staring in the face, it’s kind of a tradeoff. You might spend one weekend at home with the family and work those other three or four.

 

One thing I’d like to add is whenever you set these goals, before you rush out and buy that Lamborghini or Escalade, maybe buy the asset that are going to generate the cash that are going to allow you to buy that item. One thing I did, and I’m thankful that I did it, and I want to do it when I buy the Ferrari, is i went out and I bought four homes. There’s four homes, four particular properties that make my Escalade payment for me.

 

Unique story on these homes. There were two homes that were in the home books. For those of you that are new to investing. There used to be these books in, especially, I guess they’re maybe in all the communities, but our community, they start up black and white, then there were color. That’s was a big day when they all converted to color.

 

There were these books and you flip through them and you pick up the homes you want and you’d circle them and you’d call the realtor. You’d go look at it and buy it. On this home book there were these two not so nice homes. I say not so nice. They’re very, very tiny. I mean I guess you could even give them a label of a tiny home. They are very rundown. There were two of them listed and they were always in the book. I was looking through it. Every time each month a new edition would come out and something told me one day, they called the listing agent. I called them and I went and looked at, this is before I had my real estate license. I was still using realtors to represent me. Now, it’s a lot more fun because I can just go and let myself in and make the offer and hopefully get it bought before anybody else looks at it and finds out about it.

 

A lot of benefits I think is having your license as an investor. These two homes, they had sat on the market forever and I decided one day to look at them and made a mistake in taking my wife with me. She got out and she went in the first one and she immediately went back to the truck. I went over and talked to her and she said, “We’re not buying these.” I said, “Why not?” She said, “We’re not buying these.” They were that bad. They were bulldozer great quality.

 

There were two of them, so I stuck around. I talked with the owner and with the agent and I said, “Who owns these other two homes over here?” He said, “Mom owns those two.” I said, “Okay. Would your mom want to sell all four as a package?” He said, “Sure.” I said, “I can make you an offer today on all four and you all take it over and we can get back together.” He said, “What’s your offer?” I offered $14,000 for four homes. Maybe it will give you a clue of kind of the quality of these homes.

 

I bought four homes for $14,000, $3,500 a home. We went in and we spent probably $100,000 or more renovating these homes. Now we’re up to — What? 115. Probably 130 or something for all four properties, turnkey ready. Today those homes bring in approximately 2,100 a month after the taxes and the insurance are paid and the loans paid. It paid my Escalade payment, or it’s really close. There might be money left over, I’m not sure. It’s really close, okay? My whole goal was I talked my wife into it and there’s another strategy here too for those of you that are married, to get your spouse involved because you’ll get a certain, like — I call them plateaus and you kind of feel like, “Well, do we really need anymore? We have enough money to pay our bills. We have money left over. We have a pretty good life. Where do we stop, or do we stop?” I think life is pretty interesting, and I like to see how far I can go.

 

My goal is different than my wife’s. My wife would have stopped 20 properties ago probably. The way I was able to get my wife was on board was I started talking to her about her goals. What are some things that you would like? She likes things of quality just like I do. One thing might represent 10 things. It’s like the cost of one thing might represent 10 small items.

 

Our goals today are very high quality. Things that cost a whole lot of money, but we don’t have a lot of things that we want, if that makes sense. One of the things that my wife wants is an in-ground pool. I think I’ve got her back on board now to maybe buy the next 50 properties so we can get that in-ground pool.

 

There were some other things that she wanted and make milestones in our business to get those things. It just felt like she was more supportive of my goals because now that we were working towards not just my goals, but her goals as well, but I think that that made a lot of sense to her when I said, “If we buy these four homes, here’s what it’s going to cost approximately to fix them up and,” and of course, that was way less than $100,000 at the time. Once you get into them you start prodding them around and fixing them up to do it, right? It usually costs more than what’s your initial budget, strange enough.

 

Anyways, if all worked out, and got into the project and it was successful. She understood that I was wanting to buy these properties, fix these properties up to acquire my goal of the Cadillac Escalade, and that’s what I did. I like to share that story, because we could have went out and bought a new vehicle then. If we need to, we could have paid cash for it and they give you 1% interest. It’s kind of silly to spend your cash on an item that you’re getting a 1% blown on because you’re loan on your real estate is probably 4% or 5% or something, I’m guessing, or 9% or 10% if you’re using the hard money.

 

Whenever we want something, we try to acquire the assets and let the assets pay for it. That’s been a huge piece of advice that — I don’t know who gave it to me, but it’s just wonderful.

 

[0:21:54.1] MF: That’s great. I kind of did the same thing when I bought my cars, was once I reached a certain point with monthly cash flow coming in, it’s my rentals and even money the blog brings in, I thought, “Okay.” Then I can feel comfortable buying this car that — I don’t know how much it was, five times more than any other car I bought before, or something like that. Maybe it wasn’t that much. It really made a difference. It really kind of changed your whole comfort level once you realize, “Hey, okay. I’ve got this income coming in. I’ve got to be okay. It’s okay spending some money on myself.” You also don’t want to do it too soon like we talked about before too.

 

With these properties, you’ve mentioned financing a little bit. How are you buying them? Are you using banks to finance them? is it cash? What’s the process look like as far as paying for them?

 

[0:22:39.8] SD: Let’s start at the beginning. At the beginning, obviously we were blessed. We already had the cash, because we had — To get started with the first one, let me say anyway, because we had a really good year. With the technology-based business I had built and had a lot of cash come in my early 20’s. I need somewhere to park that cash. We had the cash to do the first deal, and then as we started getting to it, it’s actually when we started struggling because we ran out of the cash.

 

You might have a good year. It doesn’t necessarily mean you’re going to have a good year every year, but sometimes when you’re wrapped up in the moment, you think you’re going to have a great year every year and life has seasons just like the year has seasons. It’s very important that you allow for those seasons and don’t get the cart before the horse per se.

 

When we first started out, we’re able to — We still had to borrow some money, but we did have some cash in order to do the down payment. I think on the second deal we did a piggybank loan on it. I think they let us borrow the equity out of the first property to use as a down payment. I can’t recall. It’s been several years ago, but I think that’s how we did the second deal.

 

Then the third deal, that took a little bit more time. I think there were probably maybe 50 to 100 banks I had to go through before I got a year. Maybe some of you guys can relate to that. Don’t get discouraged. Somebody out there will give you money even though if you have to pay triple for it. You’ll find a source for the money eventually if you keep flipping over stones.

 

We found this source for it. It was through a bank, or through, I guess, a lending a company, and it was a little bit higher. I think we paid 6.5% interest for that. That was probably 15 years ago or so. It was around a $400,000 note, I think, so it’s like 6.5% interest. Then they told us that PMI was going to come off of it because we didn’t have whatever you needed down. There was PMI on the loan. It was pretty significant, and they lied to us. They didn’t took the PMI off even when we got below the threshold, I think it was 78% LTV or something, but we were down below that. They were refusing to take it off. They said, “We don’t have to take it off.”

 

What had happened is another bank or lender had purchased the note. It got really messy. That led me to refinancing and brought about the education on how does a refinance work, because I didn’t understand that.

 

A lot of this is just a learn as you go thing, just jump in — Don’t jump in. Do your due diligence. I want to share some more metrics here, I’m sure. You want to do your due diligence. You want to buy the property right then you want to make sure you finance it right, you insure it right and things like that, on and on and on.

 

I guess the thing that I’ve learned about financing is if the rates dropped tremendously, like we did see a few years back, that’s when we want to refinance. Now, the downside that I don’t like about refinancing is it resets your terms. You went from a 15-year term, we had them paid down and it was less than 15 years, back up to 15 or 20-year term. It also reduced our payment and the banks come to find they love that your payments are less. It makes it easier to get ongoing financing after you’re refinanced. Have you noticed that?

 

[0:25:34.3] MF: Yes, for sure. The banks will look at your debt to income ratio more than your total income or your total debt amount. If you reduce your payment from $700 to $500 a month, even if you increase your loan amount by 20 gran, it’s easier to qualify for a loan, because your monthly fees are lower.

 

[0:25:51.9] SD: It’s a lot easier.

 

[0:25:52.4] MF: Yes.

 

[0:25:54.4] SD: That was another lesson I’ve learned. You just learn as you go, buy the property right. Don’t go out and buy a whole portfolio if you haven’t ever done this. Start out with a small home. I’m sure there’s 5, 10, $20,000 homes that are fixing to fall down that you could buy and fix up or push or build something new on. Start where you can. There’s opportunities at all levels, literally, and you just have to look for them. They’re on the MLS. They don’t have to be a private deal. We do private deals, but we also a fair amount of our deals or offered to everybody, like those four homes I shared the story about. They were listed. Two of those four homes were listed I bet for six months or longer.

 

Just nobody wanted them and they were priced at $20,000 a house. That’s another lesson I learned. Realtors probably won’t like me sharing this. I don’t mind. Again, I love working with investors, but most realtors I came to find out don’t like working with us, because we’re low ballers. We’ll make a low offer. They’ll ask 20,000, we’re going to offer 2,000, or whatever. That’s extreme.

 

In my case it worked out. I bought four homes for $3,500 a piece. Two of the four homes that were listed for 20,000 a piece. I’m sure people were probably looking at these, maybe even driving by homes, maybe even looking at getting in in an investment game and seeing these properties priced at 20,000. They’re probably thinking, “I can’t even get half of that.” You don’t have to get half of that. I like to be told no at least once when I’m negotiating.

 

There were four lots this weekend that I tried to buy and ultimately bought them. We went back and forth a couple of times. I got told no on my first offer, and it wasn’t a low ball offer, but it was a little offer. They told me no, and then I countered and it all worked out. I like to be told no at least once.

 

On that one deal where I bought those four homes for $14,000, he just said yes. As soon as I said 14,000, he stuck his hand out, he smiled and he said, “Yeah.” The backstory to that, I was like, “Wow! Really?” I was like, “This is pretty —”Are they sitting on a landfill or something? Is it worse than what they really inherited?” I mean they’ve heard pretty bad. He said, “No. Mom’s in a nursing home. The nursing home is fixing to take everything.” He said — The realtor said he’s just basically trying to save face.

 

He was trying to help his mother out with selling off her property, because she’s in a nursing home. He didn’t want the nursing home foreclosing. 5,000, probably we would have bought the properties, but I didn’t know that until after the fact — I made this gentleman a cash offer and I said, “The best I can do. This is the best I can do,” and it was the best I can do.” He said, “No.” I was prepared to walk. I didn’t have to have them. They weren’t the greatest properties, but I knew what I could make them into.

 

I made the offer. I call these people yard salers. Some people sell things just to get rid of them. You never know. I bought homes that were priced at 30 and $35,000 for $5,000, because you don’t know the backstory. Try to find out the back story though before you go and you negotiate on these. You can find out — Some of the questions I like asking people is, “Why are you selling this? What are you going to do if you don’t sell it?” That will tell you kind of motivation, “Oh, well. I’m going to sell it.” Okay, well you know they’re motivated now. They’ve already made up their mind. They’re going to sell it regardless.

 

You want to ask some questions going in that will kind of help paint that picture, maybe their motivation behind it. Another interesting store, I start to stack up, and I’d love to hear yours sometimes. I’ve heard many of you over the years on the podcast. I love hearing stories. I think most people do.

 

One of the other stories was a family friend had called me and said she had this duplex. One side, you could see the ground. The floor was rotted out. There’s a leak in it and the floor is rotted out and it was just a burden. I could just tell it was weighing on her. She said, “I’ve heard that you’re buying some properties.” I said, “Sure.” I said, “I’ll come take a look at it. I’d love to take a look at it.” I said, “I’d love to see what you’re going to sell.”

 

It kind of worries me that you can see dirt from inside. I went in, I looked it and sure enough you could see dirt. It had this big gaping hole in the kitchen and she said my tenant had this slow leak and I guess didn’t tell me about it till they almost fell through the floor. They did fell through the floor it looks like [inaudible 0:29:37.8]. They did fall through the fall.

 

The backstory on this was that she had been married previously and she had divorced and her X-husband had forgot to take her out of the will. Years had passed and he passed on and this property she inherited and she also inherited a couple of tenants that weren’t quite working out for her. She had the burden of the deferred maintenance. She had the burden of a couple not so great tenants, but she had the luxury of inheriting a property that, I assume debt free, and she — totally unexpectedly.

 

She inherited this property and I asked her, I said, “What are your goals? Why do you want to sell this?” She said, “I want to take a cruise around the world.” I immediately pulled up on my phone how much is a world cruise cost, 30-day cruse, she’s got $30,000 or something like, $40,000. I offered a little bit more than that. I offered $40,000. I think it was $30,000 something, 35,000 for the cruise. I was like, “I’m going to offer $40,000. It’s the best I can do.” She says, “I’ll walk.” She can’t do it. She can’t.

 

I offered her $40,000 and she hugged me and started crying. Just gotten really excited and emotional over this. She said, “Thank you. Thank you. Thank you.” She’s so happy, just so relieved to get rid of the property. Had I not known the backstory, had she not inherited things like that, I might have made a mistake and offered too much. Negotiations, I love it. It’s the most fun part of the business for me.

[0:31:02.8] MF: That’s great. I love your story about the MLS too, because I think even Nick Young, my team, is surprised sometimes with the deals I get, like, “I can’t believe they accepted that offer. That’s just ridiculous.” You don’t do that on every property you see though. You can get a feeling for which one maybe it’s like, you said, you can see the ground to the floor. That’s a sign the house needs some work. Maybe they’ll negotiate more, and they’ve been for sale for six months.

 

There are signs on different properties that may negotiate, and those are the ones you kind of focus on and work on. It’s not like you make a low ball offer on every single house out there.

 

[0:31:36.1] SD: That’s right. There’s a time when you offer a market. If you really want it or it’s on your route. You know what I mean? We all had these. I’d like to think we have routes, right? We drive through them, we buy properties along our route. I call it my route.

 

I’ll give a little bit more maybe if it’s on my route. Also know when to offer my highest and best, sometimes I come out the gate with it. A lot of times I’ll just say the best I can do if it’s a private deal I’ll just look it over. I’ll run the numbers on it. I know what it cost to take stuff for the most part. I’ll give them a good, fair cash, no inspection, close next week type of offer.

 

There’s not so many people come to find out that can offer cash. There’s even fewer who can do it seven days or less, and there’s not very many that are wanting to do it without an inspection. When you line up those stars for people and you say, “I’ll pay cash. I’ll close next week, or as soon as title comes back, possibly this week, and then I’ll not inspect it anymore. I’ve already done my inspection today. I’m good with it.”

 

Whenever you make those, it’s like a sure thing. I’m willing to commit this to pay for when we lease here today, but my offer also leaves with me. I try to negotiate at the best I can while I’m there and try to leave with a deal. If I don’t, it’s fine too. If I go and I look at 20 properties, I’m probably making offers on 18 of them. I’m a little bit different. My offer is down. If there’s a property that I think I can get my numbers on but I don’t really want it, I’ll just make a lower offer on it. I make a lot of offers.

 

Of course, that means a lot of rejection, but that’s fine. There’s a lot of money in rejection. Another story, the home where we live, we live on a golf course, or it used to be a golf course. They’re having some trouble right now and they’re not open for business, but I think they’re going to reopen, hopefully. It doesn’t matter. I bought the home rights.

 

This subdivision, I used to drive through this subdivision. It’s on my way home and I drive through it and I kind of dream a little bit and say, “I’d like to live in this subdivision one day.” Sure enough, we live here and the homes in the back of the subdivision, my favorite lot in the subdivision is the one all the way in the back. I don’t want to live in the front of the subdivision, because I made that mistake once and that’s hard to sell.

 

Our former residence, we lived there 14 years and it was right on a busy roadway and it was very difficult to sell because the busy roadway. It was a nice home, probably 2,300 square feet. That’s a fancy middle-class type home, but people had children that would buy our homes. Usually the people who come look at it have children and they were concerned about the traffic. That’s another mistake that we mad. We bought it right, but — I don’t know, we lost money when we sold it.

 

Anyways, long story short. We were able to acquire to dream home in the subdivision and it’s a really nice high-end home. It’s about 6,000 square feet, upwards of a million dollars, and it was priced at 789 and they have reduced it over the course of three years to 589. We offered $400,000 and they said, “No.” Two months went by and I asked my realtor at that time, I said, “Can you go ahead and make —” They’ve moved out. I was kind of stalking the home at this point and I was like, “Well, I’ve already made an offer. I already kind of feel invested in it. I really like it.” I think that just something inside me kept me saying, “Go for it. Go for it. Go for it,” and I heard this voice. I guess we call it intuition. My wife, she said, “There’s no way. There’s no way they’re going to sell it for that. There’s no way.” She was over here saying, “There’s no way. There’s no way,” and I’m over here hearing this little voice saying, “Go for it. Go for it.” It was kind of a battle.

 

I contacted my realtor after they moved out. I said, “Let’s make the same offer.” They said, “Okay. Great. I’ll make the same offer.” That night he forgot to make the offer and he get a text message from their realtor. He calls me and he says, “I forgot to make the offer, but their relator just contacted me and asked if you’re still interested.” I said, “We just bought it.”

 

I said, “Make the same offer, 400,000.” He said, “No. She made it clear it’d had to be a little bit more, but she didn’t specify how much.” I said, “Well, let’s do $10,000 increments till we get it bought.” He said, “I don’t think that’s going to be enough.” He said, “I don’t think you’re going to anywhere for 10,000.” I said, “Well, 20,000 increments.” I said that we’re — I really don’t want to give more than X-dollars for it, a few dollars more than that, the 400,000.

 

We decided to come in at 420 and we bought it. In a matter of minutes he called me back and he said, “You just bought this house.” It was $589,000. We offered 400, and we offered 420 and we bought it. Why did not reduce this house to 499 or 525 or something? There would have been other people that would have got in and would have bought it, paid more than us. I know there would have. I hear that chitter chatter in a small town and people would have paid, maybe not 589, but they may have paid 500 for it.

 

I see that a lot and I’m curious if you see that too. If you’re going, you’re making offers, they’ll drop it significantly, and they could have dropped it a little bit less and sold it to somebody else for more money. Do you see that?

 

[0:35:59.2] MF: I do see it once in a while and it makes no sense. I think it’s either a stubborn seller or it’s a bad agent not pricing it right, because, yeah, it’s crazy to see somebody’s properties that are listed for, like you said, 20% more, 25% more than what they’ll actually take and they won’t lower the price. They won’t change it, but they’ll accept an offer if it comes in low. It’s bad marketing. It’s what it is, but we can use that to our advantage.

 

[0:36:24.4] SD: That’s right. It worked out. I also knew the statistics, I mean in our small town there’s not a lot of big homes being sold, and I asked my realtor. I said, “I’m just curious. How many homes you know are around $400,000 or so I’ve sold in the past few years?” He said, “I had to go back five years.” When he got back to me with the number, he said, “I had to go back five years.” He said, “There hasn’t been a home in your county sell for more than $400,000 without a farm attached to it in the past,” I think it was 4, 5 years. “The buyer pool is extremely small is what I’m hearing.”

 

He said, “Timing.” He said, “I’m surprised that they’ve had more than one or two offers.” He said, “Maybe not very many more than one or two showings in that three-year time period.” I said, “Well, let’s go for it. I think we got a perfect opportunity here. Let try to make it as easy and clean cut as possible. I couldn’t do cash on it,” but I said, “I can get the money fairly quickly hopefully in 30 days.” I said, “But we’ll wave the inspection.” I said, “I’ll inspect it. I’ll bring in a couple of my contractors. We’ll walk it and I’ll give you the go ahead. So you don’t have to worry about an inspector taking your home apart,” because inspectors find stuff wrong, just crazy stuff.

 

A typical inspection, I’ll have 38 pages of stuff wrong on a listing. It’s all minor stuff that they blow it up and they’ll put one or two issues per page. If it might be something like the knob on the faucet is lose. It’s like little minor petty stuff and they’re doing their job. I get it, but it really freaks out the new home buyer, but those of us that have been in the game for a while, it’s kind of like, “Oh, that’s nothing. That’s nothing. I’ll take care of this.” “Okay. Great.”

 

I don’t know. Do you do inspections on the properties you buy?

 

[0:37:50.3] MF: We do not. It’s pretty much me looking it over and that’s about it. We’ll have inspections done on some properties after I buy them just to kind of get that — To see what the next inspector is going to look at and the buyers, if there’s little minor stuff or things we missed that we want to fix beforehand. Exactly. Yup, but we don’t do it before I buy them. I almost never ask for an inspection close.

 

[0:38:14.8] SD: Like it’s wasted money. I’m sure that it’s probably — You might make some mistakes along the way by not doing it, but it really adds up. Especially when we’re talking about the volume of properties that we’re buying, not just the hold, but also the flip. If you had to pay 4, 5, $600 for each one of those, it really adds up.

 

I just got into flipping this year. I really hate selling. It’d be like selling my daughter. They’re like children. Whenever I buy one of them, there’s so much into them. I love them. I feel like I’m at home every time I walk in the door. I really put a whole lot of — I have a whole lot of emotion in every one of them, because every one of them has been a struggle. Well, not every one of them has been a struggle. In fact most of them are struggles, because I buy them and they’re like fixing to fall down or they have all these deferred maintenance and we’re spending month at a time there. Sometimes I’m there working till 3 or 4:00 in the morning. Sometimes I leave and the sun is coming up.

 

I’m listening to your podcast and that’s what’s getting me through the night. It’s very encouraging to hear these stories of others. I used to listen to a lot of music. I listen to a lot of alternative rock and things like that, but now it’s like less music and it’s more podcast. Really, I’m learning some more education. How can I go to the next level. I’m always thinking bigger, and how can I get to that next level. Who can lead me there?

 

It’s worthwhile. When I’m working on the flips, and I don’t want you to think I’m out here swinging a hammer doing the hard work. I’m doing like changing that outlet plate covers and stuff like that, cleaning windows, just tidying it enough, touching up the paint and things like that. I used to do a lot more of it, but now I’m just trying to break myself of that, trying to delegate it out. Our time is worth more than 10 or $20 an hour. Why are out here doing 10 or $20 an hour work, and that’s something that the sooner you can break yourself up the better off.

 

Now, in the beginning you probably have to do that work yourself. I know I did, but now it’s really enjoyable to provide these opportunities for others and when people call me and they’re looking for work, I could delivery to them. They’re very happy about that. That makes me satisfied too, because I know that they’re getting something out of it. I’m creating opportunities for others and then it’s going to come back. It allows me to extend my time in other areas, like negotiating and acquiring more properties.

 

Talking about flips I’ve done back home. With flips, basically I’ll go in, I’ll buy a property. Usually it’s on the MLS and I’ll just go in and clean it up, clean out their crawlspace maybe seal the driveway, scrape any flaky paint or drywall mud or anything like that and just clean it up and just try to make it presentable. A lot of times we don’t even care if the utility is on, we’ll just go in and clean them up, make them look good and then I’ll send a top-notch photographer and videographer in some cases or drone operator and we’ll package them differently than the previous agent. Now, that I have my license like that, I call it a rebate.

 

Whenever I buy a house, it’s like I get a rebate back. Whenever I sell it, I get another rebate back, which is pretty cool. Now, I’ll purchase a property. If the pictures look bad — Or I don’t know about your market, but there are some realtors here, it’s like I swear they just get — They don’t even get out of their vehicle. I swear that they’ll roll up and roll the window down and take a picture on their camera phone, and some of the folks they have still have a flip phone, and the picture is horrible.

 

Sometimes it’s like a picture of the picture, like somebody screen captured the previous agents like off of an expired listing, or they’re relisting it as a colleague. Really? Spend the money for a photographer and a videographer and do it right, because you’re talking about a commission with a comma in it. You’re making thousands of dollars if you sell a property. It’s a nice property, spend the money upfront to do it the right way, and that’s something that, today, when I get off the phone with you I have two listings to enter. Two brand new listening and I had a phone call right before we hopped on the call of another [inaudible 0:41:48.0] that I stopped in and talk to. She’s decided to list with me.

 

I’m picking up these listings that when I pick them up something is really helping me pick them up easier, faster than other agents is because I’m sending out a photographer. As soon as I get a new listing, the first two calls I make are to my photographer and my videographer and I schedule them. They go out and they take the pictures and they make it look like a million bucks. If it’s a million dollar home, they make it look like 5 million and they do their thing. They’re professionals. They’re a professional photographer. I’m a professional realtor.

 

They make it look better than what it really is. They make the rooms look like huge rooms. If I take a picture of my camera, it’s look like a bad room. I send these guys out. They take the pictures. They do the videos. They put the drone up in the air, and I found out that home sellers, they get excited when I say, “Hey, I’m going to put a drone up above your property and we’re going to fly it and we’re going to trace the boundary lines.

 

There’s one of the new listings I’m fixing to put on is a three-acre listening right in the heart of our city, yet it somewhat secluded. So I told the videographer, I said, “I want you to fly up and get a couple of two or three different angles and trace the boundary lines. I’ll send you the PBA map so you’ll see the boundaries. I want you to overlay it, and I just really want people to grasp how big three acres is in this area. You have all these surrounding homes and then they have these three acre track and it’s like magnificent. It really makes a huge difference.

 

Back to the flipping. On those, I’ve done several of them and usually I can make 10, $15,000 in 30, 45 days just by quick flipping, not even swinging a hammer, not even turning the utilities on, and I’m talking 20, $30,000 houses that I sell for 30, 40, $45,000, or 10 or $15,000 markup.

 

There was one that I bought here this year [inaudible 0:43:27.3] for my home and we got it for like half the price. Somebody called me and I was able to buy it and then that company was the company that owned it. They said, “We have one in Louisville, Kentucky. It’s about an hour and 45 minutes from Maine.” I said, “Well, it’s too far for me, but maybe.” I said, “But probably not.” I just kind of brushed it off. They emailed me and then they called me again and I said, “I’m going to a ballgame there this weekend. I’ll stop by and take a look at it if you’ll shoot me the lockbox code.”

 

I looked at it — A whole lot of word — I don’t know. It needed a lot of work, more than $10,000 worth of work, and that’s a little bit still out of my comfort zone. We started talking above, say, 20,000. It’s kind of like, “Wow! It’s a whole lot of money to put into it, to a used home,” or it is for my market when I’m spending 20, $30,000 for a home, but this one I spent way more than that, but there was enough margin there. I thought I could make about $80,000 on this as a flip just looking at the properties around it.

 

I went ahead and I bought it. I paid them a little offer and they said, “Well, our board of directors would like to try to negotiate the price up a little bit towards this other figure.” I said, “Well, here’s some pictures I took while I was on site.” I said, “Please share this with your board of directors and hopefully we can put this in writing and seal the deal, but our whole firm on this offer is my highest and the best I can do.”

 

Within a matter of hours I got a reply back and they said, “Board of directors is just authored the deal. Congratulations.” We’re able to acquire that property. I went down and I thought we were going to renovate it. I thought I had made like 60 to $80,000 on that deal, and went down there and I tried to meet contractors. It was just really stretching outside my comfort zone. I learned a great deal. Whether you win or you learn. Sometimes you’re lucky enough to do both, but usually you win or your learn. In that deal I learned a great deal, I also won at the end of the day. I think I cleared $38,000 on that deal. I held it about five months. I spent maybe $1,500 on it.

 

There’s some properties out there that you can touch a little bit or touch a whole lot. Yeah, you could flip and make money. The next thing I need to learn is 1031 exchanges. How do we keep the money that we make, because it’s no fun at all having to hand it over to the government.

 

 

[0:45:31.5] MF: Right. Another thing — We’re getting short on time, but you became an agent. What drove you to become an agent? How long did that take and what did that look like?

 

[0:45:41.8] SD: I graduated college in 2001. I’m 38 years old, and when I was in college I thought I was going to get out and be a realtor and open a real estate franchise type company. My plans changed. When I was in college, I started doing very well website development business and I was working. I kind of tailored it towards realtors, so I would stop, pick up their pictures. I do home and I’d scan them on a flatbed scanner and I would add the information from the home book they gave me and put those pictures in color on my website and I would charge per listing. That’s where it started.

 

Then I build a website where people could do that themselves and then I build a template and I sold it to a bunch of agents and these franchise companies and then we just kind of scaled up from that point.

 

I was kind of always working along agents and I would see how much time they put into it and what they were making. When you’re not an agent, you’re looking in you kind of thing that every agent is getting rich and they’re all making six figures and maybe seven figures. Truth be told, very few agents at least around here even break the six figure mark, but they’re putting in a lot of time, a lot of wasted time come to find out. That’s the thing I don’t like about being an agent, is all the wasted time that I spent that doesn’t go anywhere.

 

Sometimes you’ll go out and you’ll spend an hour and you’ll make thousands of dollars, so it all balances out. I just knew that at some point I needed to go ahead and get my license, because I was going to doing the buy and hold and whenever I buy it I could get a little rebate back on the front end. I could get in, look at properties without having to bother an agent. Then it would also bring me additional tools to my tool belt, such as PBA exists and surrounding counties and my country and meetings with other realtors. There’s a lot of chitter chatter like on a pocket listening as they’re called. It might not be in the MLS, but when you’re talking to other agents it seems like every agent has properties that they’re aware of that people would sell them and pay a commission but they don’t want to list them, myself included.

 

By being an agent, now I have all these inside information, and I call it inside information because if you’re not an agent, you’re not going to be in those conversations with other realtors. I see it as a huge benefit. I’m sure there are some downsides to it. I know the liability, you have to watch that, but I disclose everything. I tell everybody I’m an agent. I’m proud to be a realtor, and I meet with a home owner, it seems like that there’s already some level of built-in respect and trust when you say you’re a realtor.

 

I think it’s a big benefit, and I recommend that if you’re going to be an investor, an active investor and you’re going to buy, say, 10 or more properties, I think you got to get your license in my opinion.

 

[0:48:14.2] MF: Yes. I agree too. I hear all the time how not good to be an agent and an investor because of the liability and disclosure. I feel the complete opposite like you do. I think it actually brings you accountability. You can tell people, “Hey, you can look me up the state website and see I’m licensed. You can see I’ve been in business for so long. I’m not just some buy up the street who just took a wholesaling course and has no idea what they’re doing.” I think it helps, like you said, if you use it in the right way.

 

Speaking of agents, I know you’ve been starting kind of more entrepreneurial work as well, and I don’t know how much you want to talk about it, but do you want to tell us a little bit about some new technology you’re working on?

 

[0:48:50.1] SD: Sure. I’ve got to be careful when I say [inaudible 0:48:50.1] brand new technology. It’s going to be the hottest agent technology probably of the decade. I started sharing it with a few agents and, literally, half the agents I share it with decided that they want to deploy it in their business too.

 

When I thought it was a no-brainer, I said, “Wow! That’s incredible.” I actually got to see it in action, because this sounds almost too good to be true. It was one of those things. I’m really cautious when something sounds too good to be true, but I’m also very optimistic. I know that sometimes it really is true.

 

With this technology, what it does is — Let’s step back. If there was a way that you could put your marketing message and your website link on the phone, that people who come within 300 feet of you, your vehicle, your real estate sign, your for rent sign, your I buy houses for cash sign, or whatever type of sign you’re putting out, or your place of business, maybe you’re a restaurant or maybe you have a kiosk in the mall or boots at the local flea market. Whatever it is you do as an entrepreneur, whatever your business is, what if you have a device that you could put on your sign, a little small device that fits in the palm of your hands, that will fit on your keychain. What if there is a device like that that exists where you can put your marketing message and link on the phones of the people who come within 300 feet of you, would you want to know of that? That’s what I share.

 

Of course, everybody is like, “Well, yeah. Of course. Is that legal?” You start getting questions like that. Yes, it’s absolutely legal. There’s a new technology. It’s out on the market. A startup company I’m working with. It’s a direct sales or network marketing company, so I’m very fond of those as well. I’ve had some immense success in networking marketing in the past. I’ve also had some immense failures that most of us probably have, but far more failure than success. Successes are incredible.

 

I’ve learned that there’s a window for everything, especially with network marketing. Sometimes these companies, very, very extremely, very risky to get involved in a startup phase and I usually don’t ever do it. This was one of those things that it’s sold me as a customer, and when I saw it I said, “I’ve got to have that. We got to flip these on our signs,” because I want all the neighbors and anybody that drives by, I want them to get this message on their phone that there’s a property for sale on this street.

 

That’s kind of how I’m going to roll it out, but the other side of the coin is when I’m doing a listing presentation to be able to share this new agent tech with other people, with people selling property, whether it’s a home owner, an investor, or another agent that has client, that’s what really excites me. Imagine if you’re a home owner and someone comes and delivers an awesome listing presentation and then they talk about this technology that they have that no one else in the area has and that it does what I just shared with you.

It’s pretty incredible.

 

I think it’s going to help me get more listings. I think it’s going to help me add another six, hopefully six or seven figure incomes steam by rolling it out to other agent. I think the market could get saturated with it really quickly, but I’m very excited about it. I just want to be careful what I share about it, but anybody has any questions, you can send me a private message. I’m really quiet about it at this stage just because we’re working through some stuff, but it is working. I tested it out this weekend and it’s incredible.

 

I’m on Facebook under shannondenniston.com. You can just say, “Hey, what’s this new hot agent tech you’re talking about on Mark’s podcast,” and I’ll get you all the information. You can go to the website, watch the videos and check it out. It’s really inexpensive. They’re like $12.50 per month for the device. That might price might change when you’re listening to the recording, but that’s where we’re at right now. If you buy eight of them, you get them for $99 a month. You can really put one on your key chain. You can put one in your vehicle. I’m putting them on my children’s backpacks, and each one you can put a different marketing message. You’re limited to 40 characters. You can put some message and you can put a website. The link has to be a secure link, but you can use link tracking services like Bitly or [inaudible 0:52:43.4] to track so you can see the activeness of it. It’s just really, really cool.

 

Some will use it to get more listening than we used to make more money. I’m actually doing a promotional video shoot to the market the device and I’m going to put that on a landing page, or lead capture page with an opt-in form. There’s little secondary business there, but as investors I look at each one of my properties as a business. If I have 40 rental [inaudible 0:53:05.3], 40 businesses, and then there’s other businesses obviously that I’m involved with as well. This, with the agent tech, there’s another one, my company called SendOutCards that I’m with that we’re able to send out greeting cards and gifts to people when I buy or sell a home from someone. It’s just really nice to be able to have these tools and kind of treat people like loyalty and under-promise, over-delivery.

 

[0:53:26.9] MF: It’s very cool. Great information Shannon. I think we’re coming out towards the end of our time here. Anything else you want to share before we head out of here? Any quick tips or tricks or anything else you’ve got going on?

 

[0:53:38.2] SD: Make a lot of offers. Look at a lot of properties. Make a lot of due diligence offers and buy some stuff. There are so many people that I’ve seen that will come to me and they’ll say, “Shannon, can you help me do what you’re doing?” My first question is, “Which part? I do a lot, and I do. I do a whole lot.” I’m worried I’m going to regret some of the sacrifices I make, but we live a pretty good life and it’s because of the sacrifices I made early on. My friends would go out partying on the weekends and would sit at home and work on my business.

 

You have to make sacrifices. Understand that it’s going to be tough. You’re going to do things that you might not have a smile on your face. It’s not all roses. I remember laying on the ground, freezing to death, falling out pipes in the early days and just thinking about my goals while I was laying there half frozen. Just thinking, “Come on. Come on. Open up. Come on.” Then I decided, “Oh, I need to get some heat tape. I need to buy some $30 roll heat tape and not be so cheap on my business.”

 

You’ll learn. Sometimes you make mistakes, and that’s all part of it. What’s important is that you get started, that you don’t delay. Do your due diligence. Ask people like Mark and myself to help you run numbers and things, because that’s what we’re here for. We want to help you succeed. We want to see you succeed. There’s enough opportunity for everybody that wants some of it.

 

Whenever you make a dollar, you’re not taking a dollar away from somebody else. If you have that mindset, you’re going to have to read some books and do some things to break through, but we all have this mindset that either help us or hinder us. If they’re hindering us, we’ve got to get around the people that don’t have those bad mindsets. That have either never had them or that they’ve worked through them. I see so many people make a common mistake if they just sit there and they watch and they don’t do anything and they’ve could have already accumulated 10 or 20 rentals themselves and be out of their dead end job.

 

A lot of people, I think they feel like they’re in a dead end job, that they can’t go in tomorrow and make double the income. How hard is to double your income in a year in a job versus in a business? It’s incredibly hard. If you were to ask your boss to double your raise or to give you a raise that must double your income, they’re probably going to laugh at you. In business, you can do that because you’re in charge. You are the boss.

 

I’m very passionate about being an entrepreneur. I haven’t worked the job in many years. That was on my very first goals in life was to be able to stay at home. I’m at home right now and I haven’t even showered yet. It’s already half the day, the day is already half way through, but I’m sitting here doing what I love to do. There’s no other place I’d rather be than right now with you on this podcast. It’s amazing to watch how life unfold, but you have the vision of your life before you live it out  and I’m sure there are many nights you would fall asleep driving that blue Lamborghini and way before you bought it. I’m the same way. The car that really does it for me is a red Ferrari convertible Spider, and that’s what I’m really working hard towards and hopefully going to buy here very soon.

 

Those are the things. Big goals and it’s okay if they scare you. Don’t let them scare you too long tough. Set some small goals too so you have measurable success along the way. Don’t wait, just don’t delay. Get in. Do your due diligence. Buy something. Buy something that you can afford, and if it’s empty that month make sure it’s not going to break you, because that’s another question. I think a lot of people, they don’t get involved because they’re like, “What if it doesn’t rent? What if it’s empty for six month? It could be, you’re exactly right. It does happen. I can assure you, the more that you buy, that risk will become minimal.

 

Just last month, I think we had four or five people send letters saying that they’re going to be moving or call in and said they’re going to be moving. It sounds like, “Wow! Four or five vacancies. Wow!” That’ what 10% of our portfolio. If we only had four or five and all of them are moving, that’d be pretty bad. If you have a hundred units or if you have a thousand units and you have 10, 20 people moving in a month, it’s not a big deal and it shouldn’t be.

 

Buy stuff that you can afford, even if it’s empty, but don’t think that it’s going to be empty for months at a time because the rental market is really strong right now and I think it’s going to get stronger because a lot of people are shedding their responsibilities. They don’t want to have to worry about fixing things that break. They’re willing to pay a little bit more and I believe that people buy anything at the right payment. Everybody would buy a million dollar home if it was a dollar a month.

 

People are accustomed of buying things on payment and it’s okay to do, but just understand the rental market, it’s very, very strong. I think it’s going to get stronger as people seek retirement. I don’t think they want the worries of home ownership. I think they want to downsize and I think that we’re in for a big awakening. I think that the rental market has come to explode. I think we’re going to see significant growth over the next decade, decade and a half at least.

 

[0:58:19.1] MF: Great information, Shannon. I really appreciate it. We covered a lot of different subjects. We hit a lot of really useful information. I really appreciate you being on. I’ll include your contact information in the show notes that I do so people can reach you easily. Thank you again, and I know we’ll keep in touch and, yeah, hope you have a great rest of your summer.

 

[0:58:38.0] SD: Thank you so much, Mark. Once again, it’s a big honor to be on here. It was actually one of my goals to be a guest on your podcast. It’s awesome and it really as honor. I just want you to know how thankful I am for the opportunity. If I can help anybody, that’s what I really going to get kick out of, is give them back information, and bad information it was given to me because sometimes people don’t’ know what numbers or what’s a good price to buy it at and is that even possible? Absolutely, it’s possible. You just have to work a little harder.

 

Thanks again so much, and have a wonderful week and looking forward to meeting you in person one day.

 

[0:59:10.8] MF: Yeah. Same here. All right. Thank you again.

 

[END]

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