A lot of people think there is only one way to analyze a deal. In this episode, Larry and Kandas talked about wholetailing, analyzing a deal as a rental property, seller financing and many more.
Larry: Hello, hello, how is everybody doing? Welcome to the show. We were just a couple of minutes late because we were trying to get the camera dialed in. It took a minute, didn’t it?
Kandas: Larry’s new toy.
Larry: Yeah, it’s the Logitech. I would show it to you but it’s my handy camera.
Kandas: I missed you guys. It’s been like a month that feels like since I’ve been able to be on a show.
Larry: Can you tell about her voice? She had the flue.
Kandas: Still trying to fight, but I’m getting there. I’ve got some laryngitis hanging around. Still not 100%, but it wasn’t any fun at all.
Larry: It wasn’t was it?
Larry: I hear you. So, guys we have a lot to cover today. First of all, if you’re viewing us for the first time, if you want a free Investor’s Kit, you can call Zenobia at 877-LARRY-GO. Tell them what they get.
Kandas: With 877-LARRY-GO, whenever you talk to Zenobia, you’ll get free digital copy of Real Estate Day Trading, she’ll send that out in the link and then also the digital copy of HUD Homes Half Off as well as some other links to some of our deeper trainings, Filthy Riches training webinar, an asset protection webinar I believe and just some other information like that. So, there’s a bunch of stuff included in that link. We changed the stuff out all the time, so make sure you give a call to 877-LARRY-GO and Z can make sure to get that out to you.
Larry: Awesome. Awesome. The other thing is we’ve got a 3-day event coming up this weekend if you’re anywhere near the Carolinas.
Larry: We have 3-1/2 seats left.
Kandas: It is in the Charlotte area. We do have just a few seats left. We are keeping the event capped at a certain number. We’ve been doing that for a while now. So, we already ran out of seats that are available, but you can go to LarryGoinsLive.com and be sure to register to that or you can give the guys a call at 803-831-2858 and they can get you registered for that too.
Larry: That’s really cool.
Kandas: That starts on Friday. This one is a Friday, Saturday, and Sunday. We’re going back to that model, Friday, Saturday, and Sunday.
Larry: It’s this weekend in Charlotte, North Carolina. Terri’s husband wants to attend. Well, come on.
Kandas: Terri you better have him call the guys or go to LarryGoinsLive.com and get one of the last seats that’s open. I think we’re going to take registrations until tomorrow. That way I’m able to make sure everything is set up with the hotel.
Larry: And everybody has a name tag.
Kandas: Yeah. That would be ideal.
Larry: That’s good. That is good. So, what else are you doing? Earlier she broke my desk.
Kandas: I did. I did. I chipped the glass off a desk.
Larry: I have these behind my glass.
Kandas: When I get bored, bad things happened.
Larry: So you can spin it in your hand, right? And she dropped them right on my desk.
Kandas: It was right on the edge.
Larry: I know and that’s what was broken.
Kandas: Those were right on the edge.
Larry: It was.
Kandas: It doesn’t do for me to get bored. I should not get bored because then I just start looking for stuff to mess with.
Larry: Look, Terri is signing her husband up right now. He’s at a closing.
Kandas: Good job.
Larry: Yeah, baby. We’ve had 4 closings in the last 4 days.
Kandas: For us, yeah.
Larry: Friday, we had 2 and 1 or 2 yesterday or Monday or Tuesday or something.
Kandas: One yesterday and one Tuesday, yeah.
Larry: Yeah. We have 4 closings, buy-sell, buy-sell, buy-sell, buy-sell and we had one buy because we’re holding onto it for a smidge.
Kandas: For a smidge. Got some stuff to do to it.
Larry: Just enough and clean it out and go to the good stuff. That’s all we are doing. It’s a nice house.
Kandas: It is a nice house.
Larry: It’s just enough to go through all the stuff to see if there’s any valuables there.
Kandas: Well, not only that but it’s not gonna show well, right? With the neighborhood that this house is in, with what we are trying to do it to sell it, it is not gonna show well in the condition that’s in, so I had to get a landscaper out, I’ve got to get some dumpster out and we’re gonna clean it out then we’ll be able to get more around what the neighborhood market is calling for.
Larry: There you go. We paid 65 grand for this house. And 2 or 3 houses up just sold for 180. These are about 30 or 40 in work.
Kandas: 35 yeah, 30 to 40, I’m saying 30 to 35.
Larry: Okay. Good. Awesome. So, Terri is registering her husband. Terri, you need to come too.
Kandas: She already just came to the last one though.
Larry: Oh, okay.
Larry: Your husband didn’t get to come to the last one?
Kandas: No. It will be great to see her again too, but I mean I understood.
Larry: I’ve updated a lot of stuff. Now, I have over 700 power point slides. When you were there, it was under 700, it was 600 or so, right?
Larry: So, it’s content only. Full of content. I’m the only trainer there teaching and training all 3 days. So, anyway, the next thing I wanna share with you guys is 6 ways to analyze the deal. A lot of people think there’s only one way to analyze a deal, okay. One way to analyze a deal that’s, ARV times 0.7 minus repairs, minus closing calls if you want to, and then minus what you want to make and boom there’s your number.
Kandas: That’s a very popular method. I mean that’s what we start with.
Larry: It is a very, very popular method.
Kandas: And it works.
Larry: It does work. It does work.
Larry: The second way to do that is also very, very, very similar. However, instead of doing 0.7 ARV (after repaired value) times 70%, you can take after repaired value times 0.75 or 0.80 and it’s what is called wholetailing. You can take times 0.75 or 0.80 and that’s what’s called a wholetail deal. Now, a wholetail deal, it cannot be a house that needs a ton of work. It can’t make $35,000 of work, right?
Larry: It’s got to be, maybe cosmetic, right? Paint, carpet, may be a couple of little things but for the most part, just paint and carpet is about all it needs to have done, right? Because wholetailing, you want to sell a house that is financeable, okay. Now, I don’t like to do financing, I don’t like for buyers to have to get a loan but you want a house that probably would qualify that would give you a good idea. Plus, it’s got to be a decent house in a decent area. You’re not gonna wholetail a 2-bedroom, 1-bath house in a wrong neighborhood. That’s not it. An ideal situation would be a 3 bedroom, 1-1/2 bath or 3 bedroom 2 bath, maybe a brick ranch house. We have a lot of those around here. We got 3 or 4 that we are buying right now. We will buy it and maybe sell it for, you know 69,900; 79,999; 89,900, something like that, right? That would be a wholetail deal like this house Kandas just told you about needs 35,000 in work, now we pay 65 for it, we can wholesale it for 99,900. Somebody put 35 in it, they’ll have 135 in it and it’s worth about 190, maybe 200 depending on how nice she fixed it. It’s got a pool, corner lot, 2 double garages and all that stuff. But we could probably wholetail that for 129,900; 119,900, maybe even 139 once we get it all cleaned out, right? So, that would be a wholetail deal.
The next way I wanna share with you is the third way to analyze a deal is as a rental property, okay. If it’s got a tenant in it or it’s a tenant-type property, a rental type property, an ideal type property would be a house built in the 30s, 40s, 50s, two-bedroom, one-bath, 900-square feet, rented out for $400 or $500 or $600 per month in our area. So, you can sell this based on the income. That’s what I tell my sellers as well. I say, look, the value of your property, I don’t care what the tax value is, I don’t care anybody told you its worth if it’s got a tenant in there and their paying is worse and I use this depending on who I am talking to and the quality of house, but it will be worth somewhere between rents are 1.5% to 2% per month minus repairs. Let me give you an example. Let’s say the house is rented for $500 per month. Well, $500 is 2% of $25,000. In other words, if you take 25,000 times 0.02 that’s gonna give you $500 a month, right? Now, let’s say the property needs $5,000 in work. It’s got a tenant in it but it needs maybe $5,000 in work. So, you take that $25,000 and you subtract $5,000 and then boom, there’s your number. $20,000 is about what you can pay for because I know if I’m selling a house that’s rented out for $500 a month, I can probably sell that house for 29,900; 34,900 maybe even 39,900.
Kandas: It depends on the condition of the house.
Larry: Right. Now, another thing you can do is do that times 0.15 instead a 0.2, okay. Now, that’s gonna give you a little higher in value that you can pay for the property. I like to use 2%. There’s some areas like a good area would be probably Indianapolis, Indiana. Is that where that is?
Kandas: I think so.
Kandas: In Indianapolis.
Larry: In Indianapolis. Yeah. Okay. I’m geographically challenged, okay.
Kandas: And he is asking me.
Larry: Yeah. So, anyway, Indianapolis or Birmingham, Alabama or some of those good cash flow markets, St. Louis, you would use 2% minus repairs, minus what you wanna make as a wholesaler if you’re wholesaling the property, right?
Kandas: You got to put your profit in. Sometimes you will forget that.
Larry: They do.
Kandas: I mean honestly, we have students that, you know, are like, hey, run this deal and this is what I think. Okay, but where is your money?
Larry: Where is your profit? How are you gonna make money? Right?
Kandas: It happens.
Larry: It’s funny. I tell that to people on the phone. You know, they say well my house is worth 80, so I’ll take 78. Let me ask you a question. If I buy your house and put it back on the market, how am I gonna make any money?
Larry: We’re gonna make $2,000. Yeah, but come one.
Kandas: Come on.
Larry: I’m gonna have to do something and I’m gonna list it with the realtor, they’re gonna take 6%.
Kandas: And I’m gonna have holding calls, right? It is more than likely it’s not gonna sell super quick.
Larry: I’m gonna have a realtor commission, closing calls, got to do work and all that good stuff. Anyway, look Caroline is in Indy, Indianapolis. That’s what the locals say is Indy, right?
Kandas: I’m not a local.
Larry: Maybe she’ll tell us. So, anyway, so that’s the second way to do it. That’s the second way to do it is you got wholesale, you got the wholesale rental. Now, you got the wholesale rental and then you’ve got the wholesale seller financing type deal. In other words, you’re gonna seller finance this deal. Now, this is one thing that I teach my students and I shouldn’t say a lot of it, but yeah, wholetailing. So, with the rental properties, another way to analyze this deal is if you’re gonna get seller financing, but you’ve got to structure your financing low enough to where there’s cash flow.
Larry: For example, let’s say instead of analyzing this deal for a cash sale, I tell my seller, look, I can pay you a price if you finance it for me. But you’ve got to give me 100% owner financing and 100% is not the interest rate. That means no money down. Okay, right?
Kandas: No money down. That’s right.
Larry: So, somebody said--
Kandas: Wait, that came up yesterday I think when you’re on the phone.
Larry: You know, there was at some point I said 100% financing because I was telling somebody else I would finance it. Kenny Culver is in the house. What’s up buddy? Congratulations, he’s got a new baby on.
Kandas: I just got Myles’ registration, Terri.
Larry: Kenny, how are you sleeping at night these days?
Kandas: With the baby.
Larry: I know right.
Kandas: The baby.
Larry: That’s awesome. That’s awesome. So, anyway, with seller financing, I negotiate seller financing with my sellers. I say I’m giving you your price if you give me terms.
Larry: You know, no money down. I mean I don’t even talk about the money down. I just say how much do you want and I’ll start figuring it out on my financial computer or calculator, right? And they say, what about the downpayment? I said, well, look if I’m giving you your price, you’re gonna make it up in interest, right?
Kandas: Half the time they don’t even mention the downpayment.
Larry: They don’t. They don’t. But if they do, I say, look, that’s how I’m gonna get paid. You’re gonna seller finance it to me. I’m gonna turn around and find somebody else that’s gonna buy it for me and they’re gonna give a downpayment. Hey, they’re better credit risk that I am. I’m not giving you anything down. They are. Right?
Kandas: “An hour a night.”
Larry: An hour a night. Kenny, man, that’s brutal.
Kandas: And so it begins.
Larry: Better you than me, buddy. But you’ve got a beautiful baby. That’s awesome. So, you wanna structure your terms low enough with the seller financing deals, so you can make sure and get enough cash flow. For example, if that house will rent out for $500 a month, if that property will rent out for $500 a month, you got to keep their payment at least around 300, right? Because you got taxes and insurance. That’s probably another $50 per month each. So, now you’re up to 400 and you’ll get $100 per month cash flow. It’s not a lot but it is owner financing. There’s no bank qualifying or anything like that. Now, here’s the next way. The next way to do the deal is to get seller financing, but you can structure the payments a little higher so somebody can live in it. In other words, let’s say your seller says okay I’ll sell it to you 100% financing, no money down but I’m not gonna take $300 payment. I want $500 payment. Now you know you can’t sell that deal to a landlord, you’ve got to sell it to somebody that’s gonna live in it, right? Sell it to somebody that’s gonna live in it. Does that make sense? Does that make sense?
Kandas: Are you asking me?
Larry: Yeah, I’m asking you.
Kandas: It makes sense to me.
Larry: That’s good. That’s good. So, the other way to do it, okay.
Kandas: One thing I would say like Terri you have on there, yeah, “because if they set the price and we set the terms,” yes and no. You still have to make sure that the price they are trying to set is in line with what the market is gonna call for. You can’t just accept their price if it’s unrealistic or unreasonable and then you set the terms because you’re not gonna be able to sell it still.
Kandas: The price that they set still has to be line with the market. Just want to throw that out there.
Larry: Exactly. Exactly. And you got to make sure you keep to that. And the last way I mean we got wholesale, we got wholetail, we’ve got a rental property and then we’ve got seller financing rentals, seller financing OWC and then we’ve got Subject To. Now, I don’t like Sub2 deals,
Kandas: I don’t like Sub2 deals.
Larry: I don’t do Sub2 deals, but they come up. Let me tell you what a Sub2 deal is so people will know.
Kandas: And people can make money on them.
Larry: You can make a lot of money on Sub2 deal. I personally don’t wanna be tied to a seller or buyer the rest of my life. Okay. For the rest of the life of the mortgage with anybody. So, what a Sub2 deal is you got somebody that has a mortgage and they’re upside down, maybe they owe what the property is worth but you can’t pay that unless you could take over their loan. Now, I say take over, you’re buying the property Subject To the existing mortgage. In other words, their mortgage is gonna remain in place on the property. If they’re gonna deed you, it’s still in their name and they’re still liable for that. But you have agreed to make the payments, right? So, then what you do is you turn around and find somebody else that wants to live in that property, they’re gonna give you a down payment and then they’re gonna make the seller’s payments for them. I don’t like those kind of deals. Anything can go wrong. The buyer can quit paying and then the seller is gonna come back to you.
Kandas: You’re on the hook, yeah. You just take care of your seller, you’re on the hook for those payments.
Larry: Now, even if you’re not on the hook for the payments, even if you got all kind of disclosures and paperwork and you know, it’s between them and you’re just putting the two of them together, even though all that, the reality is they’re gonna come back to you.
Larry: I don’t like that. But here’s what I do. If I get a Sub2 deal, I’ve got about 2 people in my area and my market that do Sub2 deals. Here’s what I do, I say look, I’ll send you all my Sub2 leads, all of them, okay, here’s what I want you to do. If you do the deal, when you sell it, give me half the down payment. Right? If you buy a property and then you turn around and sell it and you get $10,000 down, send me $5,000.
Kandas: Fair enough, right?
Larry: Yeah. There you go. You can negotiate whatever you want to. If you want 20%, 25%, 50%, you know, a flat $1,000 whatever it is you want. Right? Whatever it is you want. Eugene, “very informative”. Good. Thank you. I appreciate you. Are you coming this weekend?
Kandas: Yeah. You think this is good.
Larry: That’s right. 700 plus slides and you can get all the slides as well. There’s a $97 seat reservation. So that’s the 6 different ways that you can analyze a deal. So, there’s no reason in the world, right? There’s no reason in the world that you can’t put some kind of a deal together or at least present for some kind of a deal. I mean I’ll try to remember all the stuff too. I’m on the phone every day. I’m on the phone every day buying deals. And I’ve even got here a post it note on my thing. I got to remember to get their email and to ask for seller financing on every single one of them. Sometimes I forget so I put it on my monitor right there so I don’t forget. So, there you go. “Can’t you land contract the Sub2 deal and wrap the mortgage?” Yes, you can. But you know what Terri, that’s a whole another Sub2. So, you can do a wrap. You can do wrap on seller financing if you won’t stay on the deal. You can do a wrap with Sub2 if you won’t stay in the deal. With the Sub2, it’s gonna get even a little more tricky because you’re stuck in the middle of that deal so you are married to that seller and buyer forever and ever amen. They’re paying you and then you are paying the seller. So, it might even be safer if you’re confident and comfortable that you’re gonna make the payments regardless. So, you could wrap it. You could wrap seller financing as well if you wanted to do that.
Kandas: There’s a ton of different ways that you can do real estate. I mean a ton of different ways. We talk so much about the ways that we do real estate here is what works for us, is what gets us the best return for the time investment that we want to put in. There’s different things just like Terri was bringing up. There’s a lot a lot of different ways that you can do real estate. There’s a lot of pitfalls that can come with those different ways to do real estate. So, make sure that you get educated. These BRAG shows are I think an awesome way for you guys to get education.
Larry: That’s a little bit.
Kandas: Yeah. It’s the tip of the iceberg for the depth of education and information that you can get into. Our 3-day events are very informative. Our mentoring program, there’s just such deeper levels that you can get into depending on which way you want to take your real estate investing but be sure to get educated for yourself. You don’t always have to take the word of somebody else, you know, just do the research and put the time in to make sure that you’re aligning yourself with a company or with somebody that you know, like and trust that can help you avoid some of the pitfalls. A lot of the times that we’re on here, we tell you guys, ask us how we know. It’s because we failed. But you fail forward and if you haven’t registered for the 3-day event, there would be more information like what Larry covered today included in the 3-day slides with that event. He goes into and answers all types of questions just like Terri brought up for different areas of real estate. If you’re just getting started, it can be overwhelming but get the slides. So, you have a reference point to go back to and you know, that you can reach back out to our company for deeper education and things like that with our course material and stuff.
Larry: Guys, I learned something every single day and I’ve been doing this for 30 plus years. Let me tell you what happened today, just today. We sent a mobile notary up to a lady’s house to sign the contract, it’s the second time I’ve sent a mobile notary out. I tried to buy it about 6 months ago for 15 and she decided she will not sell it for that then I recently renegotiated it to 20, she wanted 25, I renegotiated it to 20. Now, the last house we bought in that area, very similar to this house, 2 or 3-bedroom brick house in the same area, we bought it for 15 and sold it for 49,900 wholesale, okay. That was a wholesale deal. So, this one we are buying for 20 and I have no doubt we can wholesale it for 49,900.
Larry: So, anyway, the mobile notary goes out there and the lady refuses to sign the contract. Now, when I send the mobile notary out, they have specific instructions. Call me before you leave the house.
Kandas: Do not leave without it signed.
Larry: Do not leave without it signed. Call me. My number is in there. I’ve got a tracking number and it will pop up and say mobile notary. I know I’ve got a notary in a house and they’re having a problem. But this notary never called. So, they are fired.
Kandas: They’ve been were.
Larry: Whether or not they’ll do anymore of our deals, right?
Kandas: They’ve learned it from us.
Larry: Exactly. So, I finally got the seller on the phone today. This happened Monday. I got the seller on the phone today and she said, Larry I told you I had to have $20,000 for my property and your paperwork said, balance do it closing $19,900. I said, Juanita, that’s because there’s $100 deposit. She said, they don’t say that deposit goes to me. It says it’s to be held in escrow by buyer’s attorney. I said, yeah, but it goes to you. She said, they don’t say that. She said, it says I’m gonna get $19,900 at closing. I said, so what you’re telling me is the only reason you didn’t sign because it was $100 short. She said, yeah. I said, here’s what we are gonna do. I’m gonna re-write it, send you another one, I said, I’m not paying a mobile notary to come out again because it cost me $100 every time.
Kandas: And they went out twice.
Larry: In the last 6 months. So, I said, here’s what we’re gonna do. I’m gonna mail you another contract. It says I’m buying your house for 20,000 and $1. There’s a $1 deposit and the balance to at closing will say $20,000. I said is that what you want? She said, yes. I said, okay. I’ll send that out. So, now instead of $100 deposit, she has $1 deposit, right?
Kandas: But it is what it took to make her happy, to make her understand the contract and that’s what you have to look at is if your seller is confused on what the contract says then figure out like Larry did, a way to reward it to accomplish what their objection was and work out for both us.
Larry: That’s exactly right. Darrell says “can’t pull the trigger.” I’m not really sure why you can’t pull the trigger. If you’ve got the education, you got the information, you know what to do, you just got to do it. You got to take action. You’ve got to take action. Now, right now you’ve got to go direct to seller. Direct mail, bandit signs, bird dogs, Facebook ads, whatever it is. You got to go direct to seller and that’s where all of our leads are coming from right now. So, you’ve got to do that. So, thereof, you’re not getting any deals, chances are you’re not getting any leads, you’ve got to generate some leads, right?
Kandas: Well, I don’t know if it’s that or if it’s just the actual action behind--
Larry: He says “you can’t pull the trigger”, now what?
Kandas: --doing that. Yeah. Then it sounds like you need a mentor. It sounds like you need somebody that’s gonna reassure you on your numbers and we’ve got a mentoring program for that where Larry walks through deals with people in our mentoring program. We will partner with them on deals if we need to as well.
Larry: That portion actually goes to charity. That portion of the partnership which is about 25% goes to charity, okay.
Kandas: But it’s for people that need that extra line that they’re just not sure yet. They haven’t been able to do it yet. It’s that accountability and that reassurance factor behind it. So, maybe that’s an option for you.
Larry: So, Darrell, go to LarryGoins.com/Apply and we will get on the phone and you know, we will help you.
Kandas: There you go Ron. That’s what I said.
Kandas: Late to the party, Ron.
Larry: Call Ron. Ron will help you. Ron is right down the hall.
Kandas: LarryGoins.com/Apply, we will get you started but yup the guys are right down the hall.
Larry: Ron can call you in just a few minutes as soon as you apply.
Kandas: Yup. And then also, yeah, Terri you’re right. Everybody, just what I was speaking on earlier, everybody is not at the same level of investing and you’ll see that at our events. We have people that are just beginning, that have never done a deal before. We also have people that have a portfolio properties already. Whether it is something for everybody there. Now, Larry does have to kind of get everybody on more or less at even scale or even plain field, right? With understanding some stuff initially at the beginning part of the event but then there’s some deep stuff that happens too that’s over the beginner’s heads but that the other people need. So, in an event environment like that, in an atmosphere like that, it’s just what he has to do. If you guys are looking for stuff that are more tailored specifically to where you are with investing, our mentoring programs gonna be the best option. Hands down.
Larry: There you go. There you go. Derron working with the seller on... what?
Kandas: Wait. We got Michelle here, she wants to know if we do multifamily using seller finance.
Larry: You know what, you can do multifamily using seller finance. I’ve sold like mobile home parks and stuff like that with seller financing but typically depending on the number of units, okay. For example, you’re not gonna find somebody that has a 50-unit or 150-unit complexes typically gonna do owner financing, okay. They are at the point they are doing 1031s, they are moving into a bigger project or something like that. But 4 units, 5 units, 10 units something like that, yes, you can get seller financing because you find small landlords that are just tired of being the landlord but they love the cash flow. So, yes, you can do. Michelle, you can get seller financing on small multifamily properties. Occasionally, you can get it on larger deals but for the most part you’re gonna raise some equity capital for that.
Larry: Okay. So, Derron, “Larry working with a seller on a luxury house. Zillow said 1.175 million.”
Larry: “Asking 750, 4 to 5 bedroom, 3 car garage, heard it’s a teardown but pics look good. It needs over 100,000 in repairs. Is this a deal or not?” On the surface, I would say no.
Kandas: Yeah. I was gonna say, we need more information to really dig into it. This is not really how properties are submitted to us for analyzation at all.
Larry: Here’s what you need to know. You need to know the real ARV (after repair value).
Larry: You said, Zillow said.
Kandas: We don’t ever trust that.
Larry: Zillow, the zestimate means zilch, ignore the zestimate. No need to look at it.
Kandas: Don’t ever, ever trust that.
Larry: If one of my guys brings me the zestimate, I’m like nope, nope, I don’t even want to hear it. I don’t even look at it. The zestimate means nothing. Here’s the other thing, luxury homes, you don’t need to be an ARV times 0.7 on a luxury home. You need to be ARV times 0.5 on a luxury home, okay? I know that sounds low but on this house right here, 1.175 million, you can get 2 appraisals, one might say 1 million and a half, the other one might say 1 million. That’s a huge spread, right? Plus, as the market turns down and it will turn down, okay.
Kandas: It has already started.
Larry: It started to slow. The first part of the market that start slowing down is luxury homes. And the way they do that, they don’t start with the price going down. They start with the days on the market getting longer. Then the price starts going down. So, forget the zestimate, you know, if you wanna really know what it is worth, talk to several luxury home realtors that have sold, not listed, but sold multiple luxury homes in the same area and talk to them. If somebody said it was a teardown, you need to listen. Why is it? Is it asbestos? Is it mold? Is there something else going on you don’t know about?
Kandas: A foundation issues.
Larry: You got to be very careful. And I don’t know Derron what’s your strategy is but if your strategy is wholesaling, there’s a lot more people running around with $50,000 then there are people running around with a million dollars, okay.
Kandas: Or 750,000.
Larry: Or 750. I love the small properties. A lot of our deals, we are buying for 10, selling for 20 or 30. We’re buying for 15, sell them for 30 or 40. One of the closings I think I mentioned earlier we bought this week for 35, we sold it for 65. We made 30 grand, right? We made almost as much as our seller made.
Kandas: And didn’t have to touch it.
Larry: Now, another one we bought for 3 and sold it for 15. I made four times what my seller made. Hope he is not watching. I made 4 times what my seller made.
Kandas: Here’s the thing. With your sellers, as long as you fulfill their need, they really should not care what you make and I think that we do a good job upfront of making sure that we find the motivation for their sell and we meet them where they need to be. That’s the whole reason we get the contract in the first place and when we have to renegotiate it is for valid reasons and it’s just like with that seller, we were able to fulfill the need that he had even with our buy at 3,000.
Larry: Well, I renegotiate it from 12 down to 3 and then we sold it for 15. That’s what we ended up selling it for was 15. It was a good deal for my buyer. It was already rented out and it had a tenant in it paying close to 300 a month.
Kandas: Yup, 275.
Larry: There you go. But the guy was out of town, live over the coast about 5 hours away.
Kandas: It had it for years.
Larry: He didn’t care.
Kandas: Couldn’t keep to check on it.
Larry: He was done.
Larry: He was done. So, guys I hope you got a lot out of this. I hope that you really enjoyed it. If you wanna work with us with our partner program, it’s not education, it’s application. We are gonna give you all our education if you work with us on the partner program.
Larry: We’ll just give you all the education and then we will work on actually doing deals. “Are you using assignment contracts for your wholesale deals?” Yes and no.
Kandas: Most of the time.
Larry: It depends.
Kandas: If we can.
Larry: If we can, we do. For example, if you’re buying a house for 3 grand and you’re selling it for more than 4 times what you paid for, you don’t assign that kind of contract.
Kandas: You’re gonna double close.
Larry: You’re gonna double close.
Kandas: Another example, if you have a contract and your seller has multiple siblings, there are 7 or 8 people that are gonna have to sign on the sale then you’re gonna double close. Ask us how we know, right? You can’t assign stuff like that.
Larry: Because one of them will review the assignment.
Kandas: Out of 8, out of 7, out of 3, you could have a potential for a problem.
Larry: Multiple heirs always has to do the double close.
Kandas: Yeah. And we have a BRAG episode about that I believe, assignment versus double close. It’s a few episodes back maybe like 2 months back but I know that we’ve talked about that. So, you could go back and watch that whole episode on that as well.
Larry: There you go. That’s good. Thank you guys so much for watching. We really appreciate it. I hope you got a lot out of this. Kinda turn in to some Q&A which I love that. I love that. In our events, we call it stump Larry, right?
Larry: Come on stump me. That’s all you got. Yeah I have been doing this a while.
Kandas: It has happened twice.
Kandas: One of them was me.
Larry: One of them was her. And it was really an attorney question.
Kandas: Sure. He’s gonna play it however he can to make sure.
Larry: Shut up.
Kandas: Anyway, if you guys are the once that are coming to the event this weekend, that’s great. We will see you on Friday morning, early for registration at 8:00. If you’re not, you need to try to get a seat. If you can’t then hopefully we will see you at a future one. Although this is the last one for this year.
Larry: It is?
Kandas: That’s it.
Larry: Awesome. Sounds good. Thanks Terri, I appreciate that. Thanks everybody.
Kandas: Bye guys.
Larry: I appreciate you guys. Have a great day. Thanks.