Real Estate Investing: Episode 8

Jason Bramblett Real Estate Show Podcast 

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Jason: Good morning, Triad.  You are listening to Jason Bramblett Real Estate. Hope everyone is doing great today. We are live in the studio, doing all things real estate. Digging in, diving into selling, buying and well, we have been talking about investing for several weeks.  We are going to continue our series in real estate investing, digging in a little bit deeper. Going into some of the questions that we have been getting via phone, email, all those things.  Keep those coming. You can go to Jason Bramblett dot com. Click on the email icon there. Shoot us a message, and we will be more than happy to answer your question. But also, if it is a question in which we know there may be some folks out here that have the same question, we are going to fire that off out here on the radio and get that in. We have just been selling like crazy in the Triad, which is awesome. Another great month has been conquered, and we are very thankful for all the families and clients that use us throughout the entire Triad region.  We do service about a 70-mile radius from the center here of Greensboro. Mecca, if you will. So if you took a circle, drew it around the airport, go out 70 miles, that is where we are. Except that would take you to Virginia. We do not work in Virginia, but we have some fantastic partners that we can set you up with in the Virginia market. We are going to dig into the nuts and bolts and just go a little bit deeper into our investment strategies.

So last week, just to recap, we talked about the failed landlord experience and how that is, it is one of those things, what is the saying, it looks good on paper. Right?  That is the key.  Looks good on paper. Sometimes when you get into the experience, it does not necessarily go just the way you had thought. We had a lot of people give us a call and say hey, I am that guy, I am that gal. We bought a rental two or three, and it was a lot different than what we thought. So we are helping some folks through that.  Whatever it is. If you are in a rental situation where it just did not pan out the way you thought, we have got multiple options. Some of those properties, we are going to help them manage. We do have a property management division of our company, and they just simply need some help. Some of those we are actually going to buy and take over the property 100%, and there are a few that actually we will sell.  They decided it is just not a good fit period, and they just want out, and we are able to help them do that as well. It is just, there are always options. So we know in real estate it is not one size fits all. You have got to have multiple layers and multiple options out there because just selling the house sometimes is not the right answer. Sometimes it is we need to look at it from a different viewpoint. So we have the ability to be able to do that. You can touch with us at the office. It is 553-0796 or go to Jason Bramblett dot com.  Joining me in the studio today, Mr. Keith is pushing all the buttons, making stuff happen, and we are going to go a little deeper into our conversation on real estate investing. It is good to have you with us today, sir.

Keith:  Thank you, I am excited to be in my new home.  Thank you to you guys for all the things that you did with us and my wife and getting us in that new home.  It was a great experience.

Jason: Good deal. Good deal.  Yeah, Keith, is one of our new clients from one week ago. Right?

Keith:  Yeah. Closed last Thursday.

Jason:  Closed last Thursday, and it is a whirlwind. His muscles are bigger today.

Keith:  I am sore.

Jason:  All the fun stuff with moving.  The first thing he said to me is I am sore in places I did not even know could be sore. Right?

Keith:  That is absolutely true. I was listening to the show the other day. You were discussing dead money being money that I have saved and maybe even invested, but with the current market and everything it is just not really doing anything for me. You talked about being able to partner with you. How is that money secured so I know that that money is going to be safe?

Jason:  Absolutely. Just to kind of recap. Dead money, what is dead money?  Well, whatever.  Maybe you have got a hundred or $200,000 just sitting around in a very low-performing account. It could $50,000.  It does not matter.  The money is just not doing what it needs to do. Dave Ramsey is one of my mentors. He has got a great program of helping folks get out of debt, and one of the things that he teachers, one of his foundational things is you have to tell money what to do. If you do not, it just disappears.  It just leaves. Money without any kind of plan it just vanishes.

Keith:  Especially now.

Jason:  Yeah.

Keith:  It is cray.

Jason:  It is. It is. It is just like pixie dust. Especially when you buy a new house. If you do not tell the money what to do, and you do not have a plan, all those little trips to the Lowe’s and the Home Depot and these other places, it adds up.

Keith:  $7 at a time.

Jason: That is right. That is right. Before you know it, $700 is –

Keith: That is right.

Jason: Because you probably will make 100 trips.  It is amazing.  Really what we are looking at is savings account rates.  .000025 nothing. Even if you have money sitting in a CD, maybe you are committed for 6 months, a year, 18 months, whatever, you are still looking at 2%, maybe just a touch over. It is still dead money. Even at 2% you are not even keeping up with inflation. So you are basically, if you are very fortunate, you are getting to zero, and zero is not a good number. It is not a good number.  We have many ways that we secure our investment partners. So all the funds that we, we really just follow the process the banks do.  It is pretty simple. We do a promissory note. It is for a certain period of time. Most of the time it is eight months. Some projects may go a little bit longer, but we keep right to the eight months. We record a deed of trust that is your security.  It securitizes that note to the property just like all the banks do.  It really is the exact same method. I am all about not creating the wheel, Keith. It is out there.  It is simple.  Real estate has been around a long time. Why do something different?

Keith:  Well, there are so many things out there that are difficult to understand, so that if you make it simple enough that everybody understands what they are getting into, that just makes it a whole lot easier.

Jason: Absolutely.  It is just a very, very simple process. So now you have a securitized lien, a deed of trust against the property. Then what that prevents us from doing is anything with that property as far as a transfer goes without you being 100% cashed out of the deal. If we sell the property, obviously whoever buys it does not want to have you tag along just like the bank doesn’t. So when you sell your home, the mortgage is paid off.  The bank is paid off. That deed is cancelled. They get their money, and it moves onto the next owner.  It would be the same way with us. Or if we refinance the property. So a lot of properties we keep in our portfolio.  We will buy them, rehab them, fix them up, rent them out, and then we will refinance our investors out of those.  Or we even refinance ourselves out of the deal. We put our own cash into every single deal that we do, just as the bank, so that deed of trust would go away.  You get your money back, and then you have options. You can go put it back into the dead vault or you can reinvest it with us, which many of our investors do. Some of them have been with us well over ten years, and we just keep that partnership going.  It makes sense.  They love real estate, but they do not like the phone calls at two o’clock in the morning when the toilet backs up or whatever it is. So we have a whole entire division that just deals with that kind of stuff, through our property management company. Maybe this is something you might be interested in.  If it is, you can shoot us over some information. We are happy to share anything we can with you. Go to Jason Bramblett dot com.  Again, click on that email icon. You can shoot us a message or give us a call.

We have had many, many folks, a lot of our investors are past clients and listeners just like you.  People that have been with us on the radio for over a decade now on the radio, talking about real estate in the Triad. We have developed some friendships with great folks out there, and it is just another vehicle for you to be investing in, what I love about it, too, is you are investing locally. With the stock market, and not to say that it is a bad thing, but it is very intangible. You cannot drive by Wall Street and see your investment. You can see a building, but you will not see your investment. And a lot of times that money is not reinvested in the community that you live. We buy property in every single city in the Triad, so you are helping promote and prop up and keep going our local economy, which is always a good thing to do. It is doing pretty well right now.

One other added protection we do is attorneys handle everything. We pay for all the legal fees. You have no costs in that. We take care of that. We do not touch the money. The money goes straight to the attorney just like the banks do. They do not pass it to the buyer and then the buyer passes it to the attorney. Right?  They want to make sure they just kind of cut out that little trail, so money goes from the bank straight to the attorney, you get a house.  It is the exact same with us. We do not touch the money either. That is just an extra level of security. That way they have one person that goes straight to the trust account in North Carolina, and that attorney is responsible for that money to make sure it goes exactly where it is supposed to, as agreed by all parties. Just like all the big banks do.  So again, we have not recreated the wheel. This has been around for as long as real estate has been around to be honest with you. So we just utilize the tools that are there, and this allows us to fix a lot of things. One great thing about that formula is it is nothing I created. It is just something, like I said, that has been in real estate forever, and a lot of real estate investors, everybody from Dave Ramsey to Robert Kyosaki to all these different well-known people out here that are in the real estate world, it is a formula in which they use, and hey, why recreate the wheel.  Right? Just follow the proven system.  That just makes life easy. Right? It is kind of like sit ups.  If you do them, you will get abs.  If you do not, you will not.

Keith:  Well, you mentioned the local thing.  I think it is also nice because I can actually know where my money is.  Sometimes unless you are really, really smart or really financially educated, you can invest in certain things and not really know kind of what it is. It is this enigma, and you just kind of sit and look at the newspaper every day and hope your money went up.

Jason:  Just up and down and up and down and up and down.  One thing I do like about real estate is the constant.  We do not buy anything for the short term.  Even our flip properties we approach them as we will keep it as a rental should we need to.  Really a lot of times now, we look at it as we will keep it as a rental first, but does it make sense to actually resell the property.  Sometimes it does, but a lot of what we do we are looking at holding those assets for a certain period of time. So who would do this?  Who would want to do this?  One thing that is interesting is about 30% of Americans want to sell their home but they do not want to do it the traditional way. They do not want to call a real estate company, put a sign in the yard, have their home and all the photos put all over the world and the internet. Right?  Because that is how we get the word out. And just for many reasons that does not appeal to them.  Maybe they are a private person. They do not like strangers walking through their house, whatever the case may be. 

And there are some houses out here that simply will not qualify for bank financing due to lack of maintenance. We have run into situations where it is a couple that have run into financial struggles and all they have been able to do is keep up with the payment but not keep up with the maintenance. That is okay for probably a short period of time, but when you do that for a decade, it becomes issues.  And now you get a home that may not qualify for most traditional-type bank financing, which is where we can step in. We can pay cash for the property, and we do not have those hurdles. They could be that they are physically just not able to do the things that need to be done to a house. One of the largest segments of our population, the Baby Boomers, are getting older as everybody knows, and probably some of you are feeling today. They are just not able to keep up with the things like they used to be able to do. We find that these folks are great candidates for our program in that they want to sell, but it is just exhausting to them to think about getting the home ready. Getting the home in a condition in which they may want to appeal to the masses, if you will. They have a tremendous amount of equity in their home, and they would just prefer the convenience of selling the house, having one showing, one person come through it, and be done with it.

Some of them are hoarders.  We have a few of those out there, too. It is interesting. I have been in some homes where this has certainly been a circumstance that we have run into.  They know it, and they are embarrassed, and they do not want anybody to know. That is fine. It is your home.  You live the way that you want, but we can help you in that situation. We have looked at homes. It does not matter the price range. It could be $150,000 or a million five. One of the largest homes in Greensboro in one of the most, I guess, prominent subdivisions in Greensboro was actually featured on Hoarders.  Amazing, amazing property. It has been a few years back, but it was one of their episodes, and the person that owned the home was just that.  This house was completely slam-packed with stuff. And it was a massive home.  So it really does not matter. 

The economic status, the price point, none of those things make any difference. It is just simply some folks get into a situation where they like to collect things. But they realize that is not going to appeal to just anybody walking through the home, and they do not have the energy really to go back out there and empty it out and do what needs to be done. Maybe you are one of these heirs that have inherited one of these properties because that does happen a lot.  We deal with a lot of estates, and almost all of them have some element of this, and we are able to step in there and just really help out the heirs.  A lot of them do not live here. They are out of state. They are out of the area, and they just do not have the local connection and time it takes to deal with getting a home ready when they are living in whatever Texas. So we are able to step in there and help them through that process.  It really does not matter to us what the situation is. We do have a solution for every single one of them out there. It is one of the benefits to being in business for 20 plus years is we pretty much have seen it all.

Keith:  Well Jason, I have some questions about some of these things you were talking about. Do you want to take a quick break and then come back –

Jason:  Yeah. Let’s do that. Then we can hit a fresh topic right out of the break.  That sounds good.

Keith:  That works.

Jason: And welcome back to the Jason Bramblett Real Estate Show. So we are digging into all things real estate investing today. If you have any questions, you can give us a call at the office at 553-0796 or go to Jason Bramblett dot com. Click on that email icon and shoot us your question right over.

Keith: You were talking before the break. You were talking about 30% of people would prefer not to sell their home through the traditional route, and I can tell you from experience that about a year ago, the house that I was renting at the time was up for sale. I just remember that we wanted to do right by our landlord, but you could be out in two hours. Somebody coming through. It did not matter what you were doing. I was joking that all of our stuff is still on the internet and will be on the internet for the next 10 years. There are a lot of different people that would have an issue with that, I would think. I am shocked that it is not higher than 30% to be honest.

Jason:  Yeah, it is.  It is growing actually to be honest with you. It is interesting. With social media and video and everything that everybody does online that says hey, look at me, right. People are actually getting more and more reserved about that now. So I do not know if it was, maybe some of the excitement of that is starting to wear off.  But it is amazing the stats and the statistics of what we see.  You are exactly right. There are many, many other reasons that people want to just sell their home. A lot of times it has to do with what we talked about.  The maintenance.  Simply, the traditional way of selling is not the best route for them.  It could be that they financially just do not have the money to do the repairs or get the property fixed up or whatever. Some people just want to be done with it. They just love the fact that look, I know that I am going to get a different price than opening the home up to the entire free world to get to the highest bidder, but I am okay with that because I just do not want to have that experience.

Keith: Convenience.

Jason: And convenience. It is the bottled water.  You go to the gas station. You buy a bottled water for $1.50 or you can go to the big box store and you can buy 50 of them for $3.  Right? So you pay for the convenience of getting your gas, walking in, having that glacier cold ice water in that perfectly contaminated plastic bottle. Right?

Keith:  Yes.

Jason:  Yes, that is what some folks would say.

Keith:  It is cold though.

Jason: It is cold, and it is right there.

Keith:  It is easy.

Jason:  It is easy. Absolutely.

Keith: We pay for convenience all the time.

Jason: All the time. Fast food, everything. It is all convenience.  We have purchased many homes, all shapes, different sizes, whether they are in perfect condition, in horrific condition.  It really does not make any difference. We have some folks that have a perfectly fantastic property. They simply just like their privacy, and do not want folks walking through it. That is perfectly fine.  It is one showing to us. We will make an offer. If we have got a deal, we will move forward.  We will close, and actually the great thing is you can actually pick when you want to close. Close anytime you want.  It does not matter. We do have one requirement. You do need to leave when we buy the house.  That is still one of the requirements. But outside of that, if it is maybe, maybe it is something where you need to close quickly. But what we find is a lot of times, people really do not really need to close quickly.  They need to close in 62 days to make everything work out perfectly for whatever is going on in their life. That is very easy for us to do. Convenience is certainly something that we recognize that the public wants, our clients want, and we are there and ready to offer that. So we can definitely help you out.

Keith: So just to be clear. So if somebody wants to sell their house the traditional way, you can absolutely help them out. This is just another service that you can offer and a value that your group can offer to somebody.

Jason:  100%, yes, that is correct. We still sell homes every single day. Our goal is always to push on the top dollar through using our home-selling system, and yeah, this is just one arm or one option that we have. There are a lot of companies that do not have the ability to do that. That is one of the benefits of us not being a franchised cookie cutter-type business that we can actually adapt and change and move much quicker than some of the more traditional real estate companies simply because well, we can change the rules.  Right? We can change with the client and service the client where if you go, let’s just say to McDonald’s, and you go down there and I do not think they have one on the menu, but maybe they do, and you say hey, I would just like to have a Philly Cheesesteak, it does not fit their franchise model.  Right?  No, we do burgers, we do fries, we do shakes.  This is what we do.  And there are real estate franchises and companies out there that they do not have these other options because that is just what they have. Right? But maybe you need something different.

That is where we have the flexibility that, you guys have heard me for years on the radio talking about our guaranteed sales program. Simply it is our corporate relocation program, if you will. I did that for a decade, and again, not trying to recreate the wheel, but I observed corporate relocation properties sold for more all the time than the traditional real estate sales companies were selling them for. I would look into it and say what in the world are they doing that helps them achieve a greater value for the house? And really what it came down to was the preparation and the steps in which they basically put out there to get the property ready to go to where they had buyers that would walk in with really great confidence knowing they were buying a great house and they knew exactly what was right and what was wrong with the property. The great thing about the re-lo companies is they had never seen the house, and so they had to do a bunch of investigative work to figure out what they were selling.  Right?  They got that information typically from us. We would share it with them, and they said okay, now let’s just be transparent. They would just share what was right and wrong with the property with the consumer, and they would pay more because the element of surprise was removed. You can do that, and a lot of people do this with a home inspection. Right? You buy a home. You get it inspected. From the buyer’s standpoint, that is a very smart move, and we highly recommend it. From the seller’s standpoint, you should actually get that done first because if you do not, now you are in a reactionary mode to anything that may come up. And when you react to things typically it costs more money.

Keith:  That makes perfect sense because it might be cheaper to fix something yourself as opposed to have it found out in inspection and then have to barter back and forth with –

Jason:  Either bartering or maybe with something very, very simple, but let’s face it. I do not know Keith. I do not know what his abilities are.  Even though it is a 5-cent washer that any human being could fix, I do not want to trust that because when the house floods, it will not be Keith’s home anymore. It will be mine.  So I want a licensed, quality plumber company or whoever to go over there and do this. So going from a 5-cent washer and a $7 trip to Home Depot, now we are at a $200 plumbing bill, and it costs the seller more money. These are things that we looked at and we adapted into there. So if you would like to get more information about selling your home, you can go to Jason Bramblett dot com or be one of our investment partners, click on that email link icon over there.  Shoot us a message or give us a call, 553-0796.  Everybody have a safe and wonderful Labor Day weekend, and we will be back here next week.