Jay Conner is joined today by Dan and Crystal Mewhorter.
Dan and Crystal used to both work full time, Crystal was in the healthcare industry and Dan was on call 24/7 supporting software for the coast guard. A few years ago the couple stepped away from their careers and entered real estate investing.
Now after four 4 years since the couple have met Jay they have raised millions of dollars in private money and private funding for their own business.
Dan and Crystal business model in real estate investing focused on a combination. Meaning 80% to 90% of their portfolio have some terms deals and the predominant piece of that percentage is in “rent to own status”. While ten (10) to twenty (20) percent are in “fixed and flip” by which are all in private funds.
An estimate of the couple’s average profit and equity is seventy two thousand dollars ($72,000.00) per house.
If you want to learn more about the recent deals that Dan and Crystal have done, how they found, funded and all the work that needed to be done to make a successful deal, just continue watching this video.
Real Estate Cashflow Conference: https://www.jayconner.com/learnrealestate/
Free Webinar: http://bit.ly/jaymoneypodcast
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:00):
Well, hello there and welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority and your host on the show. And that this is your first time joining us. We want to give you a very, very special welcome. We talk all things real estate here on the show. We talk about investing in single family houses, commercial deals, land, self storage, any way you can think about carving up a real estate deal, we talk about it. We talk about how to find deals, how to fund deals, how to rehab them. If you’re into rehabbing, how to sell them fast, how to automate your business and actually work in the business list and 10 hours per week and make a lot of money while you’re doing it. And if you’ve been tuning into the show you know that I have amazing guest come on the show you’re with me, and today is no exception, but before I introduce my guests today, by the way, the reason you should stick around is we’re going to be talking about actual deals that are going on right now.
Jay Conner (01:13):
And my guests are going to talk about how they’re finding these deals these days and what the numbers are looking like, and you’ll be able to duplicate it. But first I’ve got a free gift for everybody that is tuning in. And that is, I recently launched my membership, which is called The Private Money Academy. And in this membership we are live on Zoom coaching calls at least twice a month, and we have phenomenal content and teaching inside the membership sites. So if you’re remotely interested in getting more funding for your deals, without relying on local banks or mortgage companies and not relying on hard money lenders, cause this has got nothing to do with hard money, this is private money. If you want some more funding for your deals and not have to worry about your credit score and verification of income and all that mess.
Jay Conner (02:04):
Well, get right on over to www.JayConner.com/Trial. And that’s going to give you a full month’s free access to all the benefits of the Private Money Academy. So again, that’s www.JayConner.com/Trial. Be sure and take me up on that free offer. Well, it’s now time to bring on our guest today. Oh, one more announcement. I really appreciate for you to be if you’re tuning in, on iTunes or any of the venues like that, be sure to subscribe and share and like and review particularly review of being a whole lot to me as well, I’d appreciate that. So now on our guests, my guests today are up in Virginia and we first met oh somewhere around four years ago or so, and it is amazing what they have accomplished in such a short period of time.
Jay Conner (03:12):
They’ve raised millions and millions of dollars in private money and private funding for their own business. And they’ve massed a huge wealth and equity and cash since doing deals. In fact, in just the past four months up there in their market, they have purchased 16 additional houses bringing their portfolio to almost 100 houses that they have in their portfolio and their inventory. And I’m going to bring them on here in just a second to share with you how they’re finding these deals these days, how they’re getting them funded and what their business model is looking like. So with that, welcome to the show, Dan and Crystal Mewhorter.
Crystal Mewhorter (03:55):
Hey Jay.
Dan Mewhorter (03:55):
Hey Jay.
Jay Conner (03:57):
Hello, good to see you. And didn’t we have just a fantastic time last week here in Eastern North Carolina at my live event, The Real Estate Cashflow Conference.
Dan Mewhorter (04:09):
Absolutely
Crystal Mewhorter (04:09):
So much fun. It was so great to be in person with all the students.
Dan Mewhorter (04:13):
Yeah.
Jay Conner (04:13):
And we had our Mastermind meeting last, let’s see a week ago last Monday and Tuesday, two full days. That’s our top elite group Mastermind members from all over the nation. So yeah, we had us a full week, Monday through Friday for sure. Didn’t we?
Crystal Mewhorter (04:30):
Absolutely.
Jay Conner (04:31):
So, Crystal and Dan, whichever one of y’all wants to do the talking I’m sure you all want to go back and forth. Why don’t you tell our audience how it is that we even know each other.
Crystal Mewhorter (04:46):
So I had, I have the great privilege of actually running into Mr.Jay Conner. So I was at a Real Estate Investing event and I was running down the hall as I’m known to do. I generally don’t walk very slow. So, just wasn’t paying close enough attention, ran smack into him we were at the elevator up, he was delightful, surprisingly pleasant. I had no idea who I was talking to at the time he introduced himself asked me a couple of questions. I went back to the event, you know, had my head hanging just a little bit, cause I was really quite embarrassed and not moments later he’s introduced as the next speaker which much to my surprise. From that point forward, I had the great opportunity to get to know Jay and Carol Joy and then ultimately attended their events sometime later. Dan and I did, and got to know them a bit better.
Crystal Mewhorter (05:39):
And I think the really special part was obviously spending time with them at their events and getting to really know them and, what a family it really is. So signed up to be members of the Platinum Program and we worked the entire program. And as Dan had said, we did what Jay said, that is his rule, Jay said to do it. So we have to do it. And we really credit that to our success. And in the end of it all have the absolutely awesome, awesome pleasure of getting to assist with coaching, your students that are in the program at this point. So we’re very, very blessed.
Jay Conner (06:16):
Absolutely. So I sort of spilled the beans, but the kind of results that you and Dan personally have achieved so far and not to be personal or too specific, but how would you describe, your results?
Dan Mewhorter (06:36):
Phenomenal. And it is far out exceeded or exceeded my expectations and we just continue to keep growing. So we continue to do what we do and it works for our market and we’re still using the basis of it as your structure and it’s been great.
Crystal Mewhorter (06:55):
And I would chime in life changing. So we’re both incredibly fortunate. We both worked full time, many, many hours. So I was in the healthcare industry and also in leadership. So I worked well over full time. Did activities required, nights, weekends, things like that. And was raising two small children and actually stepped away from that career a few years ago now and are able to enjoy a lifestyle we could have never have dreamt and Dan was able to step away from his way over full time career. Cause he was on call 24/7 supporting software for the coast guard and in their search and rescue program. So the two of us has an incredibly different life than we could ever have imagined. So life changing would be the best word.
Jay Conner (07:47):
So you’ve been both of you been full time working together husband, wife team in The Real Estate Investing. And how long have you all been full time now?
Crystal Mewhorter (07:59):
I’ve been three years.
Dan Mewhorter (08:01):
And two and a half for me. Just a little less than two and a half.
Jay Conner (08:04):
That’s awesome. So tell everybody, what does your all’s business model look like? And what I mean by that is, you know some real estate investors focus heavily on terms. And I know you all do a lot of terms deals. Some investors rely on hard money as far as funding their deals. Some investors buy and hold, some buy and flip, some do a mix. So what’s just the overview of your all’s business model look like?
Crystal Mewhorter (08:36):
Our business model is focused on a combination. So by all means we do a lot of terms deals. That’s one of the things that we specialise in and really enjoy the benefits of. So at any given time our portfolio has about and it, of course it changes cause it’s goes through evolution. So 80 to 90% of the portfolio may have some sort of terms in that and or predominant the predominant piece of that is in a rent to own status. And though all of those deals, whether they’re owner finance, subject to you or any other level of combination of creative financing may have some private money on that as well. And then anywhere from 10 to 20% at any given time are fix and flip directly all private funds.
Jay Conner (09:25):
What’s your average profits looking like these days? And when I say average profit, you may have, you know, you sell a lot on rent to own, so you haven’t cashed out on selling it rent to own, but you got a big chunk of equity. So, either in cash out profits or equity, what’s your average profits looking like?
Crystal Mewhorter (09:45):
Average, when we put it together I guess about two weeks ago, we revisited that to see what our numbers look like. We’re averaging 72 as our profit margin, obviously they vary.
Jay Conner (09:57):
Yeah. Just to make sure everybody understands that $72,000, not separate, we’re not talking $7,200 in wholesale fees. We’re talking profit and equity of $72,000 per house. What’s the median price, a house in your all’s area.
Crystal Mewhorter (10:16):
250,000.
Jay Conner (10:18):
So you’re 250. So obviously for you to be getting these kind of average profits, you gotta be finding these in very, very deeply discounted being able to buy them deeply discounted, right?
Crystal Mewhorter (10:30):
Yes.
Jay Conner (10:30):
Yeah. So I asked you to come on the show today and talk about a couple of recent deals that you all have done. So let’s talk about your first deal and let’s tell them everything, you know, from how you found the deal? How much you paid for it? How did you fund it? What kind of repairs if any, were required? What did you sell it for? Or how did you sell it? What kind of marketing you use to locate it? And just sort of from start to finish,
Crystal Mewhorter (11:04):
Do you want to talk about long lap or do you want me to start? Okay. So a purchase that we just recently completed within actually, I guess, about two weeks we found the deal. It was actually someone that identified us on Google. So we can attribute that to all of the SEO efforts that we’ve put in place. So search engine optimization for those that aren’t familiar with that term, having had companies that have assisted us with that as well as really working that organically. So making sure that we’re reaching out to our customers asking them to share when they have a good experience and so forth. So this was a Google search.
Jay Conner (11:47):
Let me ask you all this. What are just I mean, if someone wants to other, I mean, it’s always best to hire an Expert, but if someone’s wanting to increase their organic results of people just searching to find them. What’s a couple of tips you can give people on increasing their exposure on the internet and people finding their website.
Dan Mewhorter (12:12):
So, I mean, we do a lot of free advertising, free SEO, organic SEO, if you will, Facebook and the social medias. So whether it be Twitter, Instagram whatever else we get out there, I don’t know, we’ve got a ton of them out there, but Facebook, primarily we do a lot of advertising on our Facebook business page to get the word out of that. When it comes to Google searches though, when you put on your website, if you have a website and you should have a website if you’re a business, you should be putting in a lot of keywords in there that when people do a search for say, buy my house fast, or sell my house fast, or sell my house in X city, putting those phrases in there will allow them and on your Google my business page, which you should have as well, putting those in there, those allow people to find you on a Google search.
Dan Mewhorter (13:08):
So understanding what people are looking for when they do searches is really critical. I would highly suggest that you do some research on that. There are websites you can go to. To identify what people are looking for in your area.
Crystal Mewhorter (13:22):
And another really simple tip is send your link, your Google link out to people that you’ve done business with. And it doesn’t have to even be necessarily a buyer or seller. It could be somebody that’s had a really good experience with you in terms of working with them on something where you’ve supported them or assisted them, but sending them the link so that they can go in and give you a Google rating. And a review, those things help a great deal. And those are really simple things to do. Not always easy to get people to reach out and complete those things. But if you send people a link, they’re generally more apps to get that done for you.
Jay Conner (13:58):
Excellent. All right, well go ahead.
Crystal Mewhorter (14:01):
Okay. So, Oh, so he found us on a Google search. We had a conversation, this is a three bedroom, two and a half bath in Virginia Beach. So it’s a good area desirable. The current CMA is 185,000. We were able to negotiate with him to 1225, and he did not want to accept terms. So actually I’m going to give you probably for the first time ever when we’ve discussed deals, I’m going to give you two that aren’t entirely cash, which is a little unusual
Jay Conner (14:42):
Now, what was his motivation? What was his hot button?
Crystal Mewhorter (14:47):
He got a job in Louisiana and this is actually a second house. So, he was trying to rent It, have had a terrible time with it. Last thing you want to do is be renting this house, when he just gone through a not great situation, and move to another state far, far away.
Jay Conner (15:07):
We can never know for sure why other people decide to do what they do, but do you know, or do you have a guess as to why this particular seller was willing to give up so much equity?
Crystal Mewhorter (15:20):
I do actually. He’s done, and he did not want to have to go through the process and try to get a realtor he’s been down that road felt like that wasn’t a very comfortable road either. I.e, getting what he wanted and for him to get to know that the sale was complete and we we’re going to hand him the cash, He was fine.
Jay Conner (15:42):
Gotcha. So repairs, are any rehab required or is it a, just a beautiful house?
Crystal Mewhorter (15:50):
He actually completed all the repairs from the previous tenants, even putting in new carpet and painting.
Jay Conner (15:56):
So you don’t have to touch it. All you gotta do is put it on over to disposition. So the numbers again were the after or the as is value.
Crystal Mewhorter (16:06):
The as is value Yeah, it’s 185,000, we bought it for 122,500
Jay Conner (16:11):
122,500 Okay, nice.
Crystal Mewhorter (16:14):
Yeah. And so, and of course we’re selling it rent to own, so we’re going to be able to increase that sales price. But as it stands right now, if we were to take it to market and, you know, sell it ourselves, we obviously could make 62,500 on it just directly as it sits today. We won’t do that. It’s in too good of an area and it’s and it’s also a townhouse, so it’s like fairly ideal for a rent to own status.
Jay Conner (16:49):
Right.
Crystal Mewhorter (16:49):
And so it really fits the bill. So our monthly going out to our private lender is $883. Actually, It’s 1550 all day, every day to rent to own it. We might even be able to push that a smidge, but like on a really, you know, fair day, we can do that. So it’s already cash flowing $667 for all intent and purposes as it sits now. And so we’ll actually go ahead and carry it for a little while and watch what the market does and sell it from there.
Jay Conner (17:12):
Well, you know, for the long term selling rent to own is the most profitable.
Crystal Mewhorter (17:16):
Yup.
Jay Conner (17:16):
Because when they get ready for a mortgage, your rent to own buyer they didn’t negotiate with you on price.
Crystal Mewhorter (17:27):
Uh-huh.
Jay Conner (17:27):
They and when it comes time for them to cash out, you’re not having to pay realtor fees on selling.
Crystal Mewhorter (17:36):
Yup.
Jay Conner (17:36):
And, you typically don’t have to go through the painful process of the buyer hiring their inspection company and nitpicking you to death. Right?
Crystal Mewhorter (17:48):
Absolutely.
Dan Mewhorter (17:50):
Yeah.
Jay Conner (17:50):
So you just closed on it two weeks ago and just to make sure everybody knows what we’re talking about. When you say you funded this deal with private money, does that mean you went to a broker or how did you, what do you mean by, in your case? It’s funny with private money.
Crystal Mewhorter (18:09):
Oh, so one of our private lenders that has their money in a self directed IRA. So somebody from our warm market.
Jay Conner (18:16):
Right.
Crystal Mewhorter (18:17):
Directly our warm market, it’s not even a conversion from a cold to warm there’s somebody that was in our warm market. It was actually somebody that Dan worked with when he flapped all the CDs on the desk when he walked out the door.
Jay Conner (18:29):
So Dan what’d you tell folks about that CD is.
Dan Mewhorter (18:33):
Okay, so we, Jay.
Crystal Mewhorter (18:36):
What’s the CD?
Dan Mewhorter (18:36):
The CD is The Private L ender CD.
Crystal Mewhorter (18:38):
The 16 minute stress free investing.
Dan Mewhorter (18:42):
Right. It’s the intro.
Jay Conner (18:44):
Right. And so what is it? And how’d you use it and how did it work?
Dan Mewhorter (18:48):
So, when you’re in Jay’s world, Jay will help you create these CDs. But we thought it would be great if my beautiful wife with her lovely voice would create one as well. So we locked her in a closet for about, I think it took about an hour really to get it what you wanted. And it walks through the introduction of what a self directed IRA is and how it can invest for you and how you can make a profit off of it. And it’s kind of like a 10,000 foot introduction into it, to get you interested in it, and get you to kind of understand that there’s other ways that you can invest in real estate. You can buy and sell and do what you want to with your own money and not be a slave to somebody else.
Crystal Mewhorter (19:28):
It’s the teaser,
Dan Mewhorter (19:30):
A teaser,
Crystal Mewhorter (19:30):
And what do you do with it?
Dan Mewhorter (19:32):
So, when I decided that it was time for me to leave my job prior to being escorted out of the building, which is what they do on a government job, I took probably about 50 CDs, about 50. And I distributed them to everybody’s desks within a hundred feet of my cubicle. Everybody got one. So they all started calling me up and laughing and saying, that was the funniest thing they’ve ever seen. And now they’re all starting to call us up saying I was funny, but now I’m interested because the mark has been doing the whole roller coaster thing for him. So, Yeah.
Jay Conner (20:10):
Right. So that’s the gives everybody an introduction to what Private Money is. So the funding that you got on this deal was actually from an individual using their retirement funds. And of course you probably had to train them on how to get their retirement funds moved over from wherever they had them, to a self directed IRA company, and then that, and then they could fund your deal or deals by using their retirement funds.
Crystal Mewhorter (20:36):
Absolutely.
Jay Conner (20:38):
So, have you already got a buyer for this rent to own home?
Crystal Mewhorter (20:41):
He had, how many did you have on this one last week?
Dan Mewhorter (20:44):
700.
Jay Conner (20:47):
700 inquiries.
Dan Mewhorter (20:49):
Yeah. 700.
Jay Conner (20:50):
Wow. I think you might have it sold.
Crystal Mewhorter (20:54):
Think so.
Dan Mewhorter (20:56):
Weeding through them all, finding the best qualified one.
Jay Conner (20:59):
Right. So you’re still working through all those inquiries,
Crystal Mewhorter (21:02):
Correct. Cause we were gone last week, so yeah, so we took communications and talked to people that we in sent out potential applications. But we don’t have them firmed up. I.e, we haven’t run background checks or confirmed their exact funds, So.
Jay Conner (21:24):
Right. What did you price the house at?
Crystal Mewhorter (21:28):
What did we price the house at.
Dan Mewhorter (21:29):
A monthly?
Crystal Mewhorter (21:31):
No, we priced at 1550. What did you sell it for? Did you do.
Dan Mewhorter (21:35):
200 even? I think I put that on my 200,000, even as what they put out.
Jay Conner (21:40):
Okay. So back to the point, when you sell on rent to own, you’re able to raise the price above what it will appraise for today. For at least two reasons your rent to own buyers are not negotiating with you on price per se, but they would be in the multiple listing service. And the other reason is how long are you going to give them the cash out 12 months? 24 months? How long is the term?
Dan Mewhorter (22:03):
On this? On this one is a 24 month one.
Jay Conner (22:08):
Right.
Dan Mewhorter (22:08):
But again, the way that I communicate with them is that obviously I’m looking for the most qualified people to go in there, the ones that A, can afford it and not be eating beans and rice the entire year or two years, Right? And not be housed for. And then B, the ones that their credit, while it may not be the best credit to be able to get a mortgage. It’s not the worst one either. So if they’re in there and they’re sitting at, you know, 500 X, whatever it may be, I know I can get them qualified because we have, we’ve got a great credit repair program that we sponsor as well. So I know I can get them requalified as long as they follow through. I also look at their record of where they are renting at before and make sure there’s no addictions, things like that. And if they match that 700 dwindles down very quickly to probably about 75 of those 75, I have a conversation with them. And if I feel good about that, and Crystal feels good about it because we’re pretty good about judging people’s personalities by conversations.
Dan Mewhorter (23:06):
Then we decide, okay, these are the top five. Let’s get them in there. And we know that they’re most likely going to qualify well before the two years. So we do explain to them if you’re able to qualify quickly and you don’t want to rent it the entire time, just let me know when you’re ready to qualify when you’re ready to get you on mortgage. And then we’ll shut it down. So, we can get them qualified as quickly as three months, or it may take the entire two years.
Jay Conner (23:29):
Gotcha. Well, those numbers work. Let’s say your $200,000 is the option price that you’re selling it for. You bought it for 122.
Crystal Mewhorter (23:40):
Uh-huh.
Jay Conner (23:40):
Yeah. You probably didn’t have to take that one to the committee, did you?
Crystal Mewhorter (23:43):
No.
Jay Conner (23:43):
That’s awesome. Look, I know you all came prepared to talk about another deal, but we’re out of time on this show. So will you all come back on another episode very, very soon.
Crystal Mewhorter (23:55):
We would love to, anytime.
Jay Conner (23:58):
Awesome. I’d love to have you come back and talk about the other deal or deals that you had lined up. Well, I know the audience wants to hear it. So any parting comments before we wrap up this show,
Crystal Mewhorter (24:10):
I just want to say, you know, thank you for all that you’ve done for us. And it’s really great to be part of this world and everybody that’s out there, just listen and do what Jay says. So anybody that’s getting ready to join us on the journey. We’re super excited for you. If you’re in the early part of your journey and looking at either the membership or you’re following the podcast listen up and look for your opportunities, cause there’s just so much out there and we are so blessed and fortunate and really excited to be able to give back.
Jay Conner (24:40):
Well, thank you so much, Dan parting comments.
Dan Mewhorter (24:43):
If you can make it to one of Jay’s events, I highly suggest that you do so. The networking alone there is incredible, but getting to meet Jay and the family in person and not just virtually here, which is great, but in person is absolutely phenomenal. Again, I wouldn’t trade it for the world. Jay, it’s been a heck of a ride and we look forward to seeing where we’re going and sharing it with you as well.
Jay Conner (25:04):
Thank you Dan. Thank you Crystal, Carol Joy and I love you guys, and I love your servant’s heart. You’re making a big impact in a lot of people’s lives so that you have it Folks! That wraps up another show. I’m Jay Conner, the Private Money Authority wishing you all the best and here’s the taking your real estate investing business to the next level. I’ll see you on the next show.
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