Well folks, it’s time for another episode of Real Estate Investing…Undressed.
This time it’s the systematic interrogation of a couple of guys who are currently extracting big profits out of one of the nation’s worst markets.
Meet Erik “MLS Sniper” Stark and Steve “REO Shotgun” Mills
This was a big, meaty interview, well worth hearing.
And just so you know, there’s nothing for sale inside. It’s an actual case study of how these two guys are tearing it up and bringing in 6-figure profits wholesaling in today’s arena.
Erik and Steve, Part 1…
[audio:http://reitips.com/audio/dealstories/04-09_erik_and_steve_pt1.mp3] Download MP3…
Erik and Steve, Part 2…
[audio:http://reitips.com/audio/dealstories/04-09_erik_and_steve_pt2.mp3] Download MP3…
One interesting point is that both of these guys are KISS Flipping members. 😉
Also, in case it’s helpful, I’ve pasted my own notes from our conversation below. Glance through ’em real quick and you’ll get a pretty good snapshot of what’s inside the interview.
Cliff’s Notes by JP:
Brief history of two “Average Joes”:
- Started as bad Realtors
- Been in the game for 3 yrs
- Teamed up as partners a year ago-ish
- First deal as partners: March ’08 (MLS find)
- First REI eduction: “Wholesaling for Quick Cash”
- Buys and sells 7-10 deals a month on average
- Average profit range: $6k – $15k per deal
- Make a point to PAY WELL for referrals, and get called first as a result
“As wholesalers, who are most of your buyers today?”
- Bargain hunting retail buyers (Wholetale)
- Average house price for 3br/2ba 1,200sf 2car: $120k – $150k, but recently dropped to $70-$80k; retail $90k
- Rental market (lower end) houses can commonly be picked up for $5k to $15k right now.
- Uncovered a unique niche recently selling to the parents of fist time homebuyers, who turn around and owner-finance it back to challenged end-buyer.
“How are you effectively selling your wholesaling services to area landlords?”
- Saving them time
- Saving them effort
- Finding better deals
2 Awesome Tips:
- The exceeding value of branding themselves locally as, “The guys who can close in 48 hours”
- The impressive impact seeing this as a “relationship business” has had on thier bottom line.
“What are your best working deal finding strategies today?”
- REOs (special broker relationships built as “the guys who can close”)
- “Mining MLS Loopholes” (I never thought of this before!)
“What’s your business overhead like?”
- Remodeling costs
- Paying bird dogs well
- Salary (to themselves)
“How’s your partnership structured?”
- Erik focuses a lot on marketing, closings, back office stuff
- Steve finds the money, negotiates deals, the “people” stuff
- “The Velocity of Money”: The value of putting it back to work as soon as it comes in.
- The Kiss of Death: Partnering with someone who’s too much like you
- Partnership Strength: Complimentary skillsets and genuine accountability
“What educational resources have had the greatest value to your business?”
- A local mentor (name not mentioned)
- Bob Norton
- Steve Cook
- Preston Ely
- Than Merrill
- Chris Daigle
- Cris Chico
Note: Only took from each guru what they felt they could apply to their current model. (i.e. never lost focus on their primary plan, but rather pulled from these guys to amplify and improve their plan)
“What advice do you have for others who want to follow a similar path?”
- Connect with local top dogs
- Get your first deal under your belt and LEARN from it
6 Profit Killing Mistakes Others Typically Make:
- Writing too much on your bandit signs
- Not ensuring others are well paid
- Trying to be a “lone wolf” and do everything yourself
- Disregarding “gatekeepers” or treating them poorly
- Don’t sweat the small fees/costs on a deal (pride themselves on taking a beating)
- Not having an ongoing hunger for knowledge
“How did you go from only 1 to 4 private lenders in an 8 month period?”
- Stumbled upon their first private lender b/c they were aggressive
- Some of their best lenders are their buyers
- Story of how they creatively financed a small apt complex with their buyer
- It’s not a secret formula, it’s taking action and money magnetism
My own private money-getting tips:
- Farming REIA connections
- Closing attorney’s client network
“How should wholesalers find buyers in this market?”
- Reverse MLS search for cash buyers in last 7 days
- Call every “for rent” sign in the n’hood
Hope you enjoyed! Please comment below!