Lou Brown
00:00:00
We’ve been doing a series, just started it. It’s called “10 Steps To Your First Real Estate Deal,” and today we’re going to be talking about ‘Finding your right criteria.’ Okay.
All right. Well, hopefully you are having a great week so far. And if you’re one of our graduates of the Pittsburgh Millionaire Jumpstart, we gave you a bunch of stuff to do last week so that you could come out of that event and hit the ground running and create some amazing things. So hopefully you have followed your calendar, follow the things that we gave you to do, and you’ve got some great things going. All right. So, I wanted to talk about wins of the week.
All right. So is that showing up? You betcha! All right. So I was at the Memphis Investors Group. It was a great reunion. It was a great chance to meet some old friends, no doubt about it, of 20 years. I’ve been speaking at that group. We had a marvelous experience there about 20 years ago, and it was just fantastic. And ever since then, we’ve had some great relationships over time and they’re promoting folks coming to our Wealth-Builder Workshop this Saturday. We’re so excited about that. But one of the things I wanted to share with you as one of the Wins of the Week was this is how they marketed me to their group. And to ask me to come to their group and what have you, I didn’t ask them to do this. They did this on their website.
They did this in a big header, big signs at the entrance of the event. And what have you, it says “Lou Brown: The Man, The Myth, The Legend.” Well, how about that? “How To Create a Multimillion-Dollar Business.” So that was a lot of fun. And thank you, MIG. It was a great experience. You have some great members there, and definitely, we were able to inspire some folks to take action in their lives. And so we saw some of them on the Sunday night call, which is one thing I do every week is a Sunday night training, 9:00 PM Eastern Time. So it was great to see our new MIG members there. And definitely, there was someone there that I have to tell you about, and that is Pablo. Now, Pablo was there and he is a vendor. And in fact has a company called 901 Mortgage, 901 Real Estate, 901 this, that, and the other thing, insurance, I think, was another thing.
He got up in front of the group to promote because he’s one of their business members. And he says, “I am just so glad and excited that all of you could be here tonight.” He says, “Because that man that you’re going to learn from tonight, he changed my life 7 years ago and he made a huge difference in my future, and I’m just so glad you guys could say. Well, I’ll tell you what, Pablo set me on fire. He didn’t understand that that’s exactly what I live for, is to make a difference in other people’s lives. And when he shared that with the group, it was just so phenomenal. So thank you again, Pablo, for that wonderful endorsement and really letting people know what had happened for you. So, thank you again for that. Thanks, Pablo. Yeah, baby. All right. Now, the other thing I wanted to share with you in Wins for the week is we’ve moved in a new client, into one of our properties and, hey, $8,100.
What I teach you is that, if you’re a landlord, you’re missing some great opportunities. What do you get when a tenant moves in as a landlord? Well, you get the first month’s rent and you get security the well deposit, security deposit you cannot spend, that’s not your money. You have to put that in the bank. Many times you have to tell the tenant what bank it’s in. You have to tell them what account number it is. And in some states you even have to pay interest on the money. As the contrast to the Path To Home Ownership, where we help deserving families end up with home ownership and they purchase the right to purchase that property. Now, I want to tell you something, another win that’s occurring today is one of our clients that purchased the option to purchase his property 3 years ago, 3 years ago, September the 25th, it’ll be 3, years that he purchased his option to purchase the property that he’s in.
Well today he’s moving up to his agreement-for-deed level. So in other words, I’ve got the rent, the rent-to-own, the owner-finance, the cash sales, so we’ve got steps in the process to help people move up. Well, sure enough, he’s moving up from the option to the agreement-for-deed, which is our in-house financing program. And what’s so cool about this is he had options to purchase that property 3 years ago. And we had a price point on that property 3 years ago. And there is an escalator, after the first year, it begins to appreciate a by half percent per month. Well, sure enough, he has diligently paid in some additional funds. He’s earned his credits because one of the things we do at this level, which is the silver level, is we give our clients credits towards the purchase of the home.
So in other words, every month that they pay on time and take good care of the property, they actually earn another hundred dollar credit. So he earned about $3,000 worth of credits just because he did what he agreed to do in the house, just because he agreed to do what he did. And the original option fee they gave us also credited to moving him up the Path To Home Ownership. And so what’s so cool about it is today, he is exercising his option to buy the property at around $116,000. Well, here’s, what’s really exciting is that property is worth about $165,000 now. So he was very smart to take advantage of our program and to purchase his option, to purchase the property. Exactly what we sold him is exactly what he took advantage of. We sold him the option to be able to purchase that property at a later date at at a pre-agreed upon price.
So just know that that is a wonderful thing and he’s very excited. He and his wife and his daughter came in yesterday and they’re completing their paperwork today. So just know that you’re doing some noble things out there in the world when you’re helping others to help them get what they want, but maybe we’ll have their picture next week. But I thought this was good to share with you guys and way to go, Janice, my wife, she handles our options and our clients, our new clients that are our membership clients. So know that when people join the membership, there is something happening. There is an opportunity that happens. By the way, if you have not gotten my book, “Buy, Hold, Sell,” we’re running a special on that. You can get it StreetSmartWiz.com/book. All right, let me see if I can switch back to my screen. That’s there we go.
So we started a series last week on creating your first real estate deal and what you have to do in order to have success and have the best possible deal that can come from that. Well, sure enough, today, we’re talking about your criteria. What is your criteria? What are you going to focus on? Now, there’s many things to focus on in real estate. That’s one of the beauties of real estate is there’s so many things you can do. You can focus on single-family homes, duplexes, quadraplexes, multi-family properties, commercial properties, land. There’s just so many things in real estate that you can focus on. Now, if you’re like me, you like income-producing properties that are going to produce income every month, month after month. Well, land, doesn’t do that. And developing property does not do that. Building homes does not do that, but in our world, when you purchase a property that’s already existing and you can put one of your clients into that property.
Well, now you have hit Nirvana and now you’ve hit the great opportunity that does exist with real estate. So we’re so pleased that we have the chance to share with you that ideas of criteria, because criteria is several things. The criteria of the types of property you’re going to buy, as well as the location that you’re going to buy it. Well, another criteria can be. And one of the things I teach is to build your target market within 5 miles of where you live. So, literally, for most people, depending on the population of your area, there’s plenty of deals that can happen right in a geographic area. So all we need is enough population and definitely, there’s things that are repeating themselves throughout that community. There’s people that are passing away. There’s people that are getting married. There’s people that are moving away. There’s new babies being born.
There’s breakups, breakdowns, move out. There’s so many different things that occur within a community. And every time one of those things occurs, it’s a possibility that a home can be bought or a home can be sold. So what I advise you to do is, literally, to target a market and do all your marketing inside that target. Now we’re going to be covering a lot of detail on that this coming Saturday. In fact, I have a Wealth Builder Workshop coming up. And what I want you to know about what we’re doing is that we are approaching real estate from a different point of view. So when a traditional real estate investor is looking at a real estate deal, well, they’re looking at it with a point of view, “Okay, I’ve got to go find a property. And then once I find that property, then I’ve got to go find a contractor.”
And then once I find a contractor, I’m going to get the job done sooner or later. And in the meantime, earning zero income off of it. And then the next thing that occurs is now that I’ve got my property and I’ve got it all fixed up. Now I have to market that property to find my buyer or my renter.” Well, our approach completely turns that, flips the script, so to speak. It flips the script, looks at things from a completely different point of view. Where is the buyer? Let’s find a buyer. Let’s find a buyer when. First, let’s not only find a buyer first, let’s find a lot of buyers. In fact, let’s create an inventory of buyers. And when we create that inventory, they have some of the downpayment or all of the downpayment, or they’re willing to do some work in exchange for some credits towards the necessary downpayment.
So all of that to say that the first thing we do is turn on our marketing machine. We bring those customers in, we vet them. We determine exactly where they’re at financially, how much money they have to work with, how much they can afford on a monthly basis. And then we go find a property for them. A.) In inventory; or B.) A whole new property that we have that’s not in inventory yet. And see, our buyer can actually help us find the property that they want. So there’s a lot of different options. Now I’m going to be going deeper into this. But the point of today was to say, there are certain things you can do in building your criteria. So that is, you know, what type of property you’re going to focus on – A.) What location you’re going to focus on; B.) And then what method you’re going to focus on.
So, like I say, once you identify those things, well, the world is your oyster. Now I want you to keep in mind – criteria. I want you to keep in mind that one of the things we love to do is to give our customer the opportunity to have what they want. So I call it a customer-driven company, a customer-driven company. So you may be thinking, “I got to go find a house,” and I’m thinking, “I gotta go find a customer.” That’s the only thing that matters to me. Why? Because my customer may say, “You know what? All I want is a 1-bedroom, 1-bath condo.” And I’m saying, “Man, I can make good guilt on a 1-bedroom, 1-bath condo,” because there’s not a lot of buyers for them out there, so I could buy them really well-priced. And my customer, based upon their income and their down payment, is going to be very happy to pay our price for that.
So we can make a nice spread on. Well, I would have never bought that 1-bedroom, 1-bath condo, but it didn’t have that customer for, so, think the same way. What does your customer want? Do they want a 3-bedroom, a 4-bedroom, a 5-bedroom? What do they need? And then let’s go fill that need. So, hopefully, this has been valuable to you to think to yourself, what is your criteria? Now, we’re going to be going into depth on that custom-buying houses for your customers, what I love, is now that when you have that customer and you have that opportunity, well, you, literally, can go on the MLS. You literally can go in the MLS and purchase a property. Now, what do we look for? We look for properties that have been on the market for a while.
Now, I’m going to be going into a lot of depth on this. On Saturday, we are going to have a Wealth Builder Workshop. This is an all-day training. We are going to start actually earlier than that, a lot of people get together and start networking before then, but I’m going to start at 10:00 AM Eastern Time. That’s 7:00 AM Pacific Time. Get some coffee, come on, let’s go. And we’re going to have so much fun. We love doing these all-days because we have so many great clients come from it. People that just get so enthralled and excited about their future. So just watching what I’ve shared with you today. Now, imagine, we expand that out throughout the day, and I give you a lot of detail about how to identify that target market and some detail on what to do and how to do it, as well as the marketing that we are going to do to attract these customers.
What marketing approach are we going to take? What marketing pieces are we going to use to attract these people? What kind of marketing budget are we going to need it in order to do that? Well, I’m going to cover all of that while we’re together on Saturday. So that’s called the WealthBuilderWorkshop.online, WealthBuilderWorkshop.online. And because you know me, and because I would love to serve you, and give you, and pay it forward, then I’m doing that for $1. So, imagine, you’re going to get someone who’s been in the business for over 40 years, buying, holding, and selling property. I’m going to be teaching you all day long for $1. So, hopefull,y you can be there for the entire time. I encourage you to be there for the entire time, but if you can’t be, at least you can be there for some of the time, I encourage you to do that.
And then in the afternoon, I’m going to get into something on the other end of the spectrum. That’s not the buying of houses end of spectrum. It’s the protecting all that you create using trusts, land trusts and personal property trusts. And, man, is that a great way that we can absolutely serve yourself! Your family, your parents, your grandparents. There’s just so many good things that come from your knowledge of trusts. So I’m going to focus on land trust and personal property trust. I’m going to give you some details about what it is, going to teach you some of the benefits of trusts. And I’m going to show you exactly how we implement these trusts. Now there’s a bonus in there because I’m also going to teach you about another amazing way that we fund our properties. And the way we fund our properties is to take over existing financing on the property.
So when we’re purchasing it, if there’s existing financing, when the seller sees that there’s something in it for them, there’s a great benefit for them. Then they will actually allow you to take over that property and take over those payments. So we show you what to do and how to do it. So definitely you want to be there on Saturday, one day for $1. Take advantage of it. WealthBuilderWorkshop.online. Yeah, baby. Now, I’ve got some more goodies for you. Now, I know we always have a lot of questions. I’ve talked about “criteria” today. I’ve talked about some of the things about the Wins of the week, of winning and some of the things that happened there. You might have some questions about that. You might have some questions about what are covered on establishing your criteria. You might have some questions on what I’m going to cover on Saturday. Might have some questions about finding the buyer before you buy might. Have some trust questions, whatever it might be. You’re welcome to ask those questions while we’re together here on this Facebook, YouTube, social media live that we’re doing today.
Scott Paton
00:20:04
All right, Lou, we do have some questions. Great job.
Lou Brown
00:20:20
Thank you.
Scott Paton
00:20:21
And the first question, and it’s one that happens often is, you know, okay. Lou, it’s from Tony. It’s okay, “Lou, I I’m looking to, you know, getting started in real estate, that sort of thing. I understand that if I can find the customer and then I can find the perfect house for the customer, that’s a really good way and kind of the opposite to what I’ve been taught, but how do I find the money to buy the house that I sell to the customer?”
Lou Brown
00:20:51
Okay. That’s a great question. Well, let’s take a look at what opportunity comes down the pike. So if you were buying it from a bank, if you were buying it as a foreclosure, then about the only way you can buy those properties is for cash. So where do you get the cash from? Well, throughout my whole career, I’ve gotten the, whenever I needed cash to be able to do a deal, I’ve been able to get that money from private money sources. So that means someone’s IRA, 401K, or personal funds right out of their checkbook. And they’ve been interested in lending to me for a very good reason, for actually several reasons. One is that they love the idea of their money being used to help a deserving family end up with home ownership. So, Tony, one of the things I do when I’m talking to a potential lender is I talk to them about what we do.
We help people to end up with home ownership regardless of credit or financial background. So lenders absolutely love the idea of doing good while doing well. We give them the book and another thing, now, that’s for cash deals. And then when I’ve got a property that I want to buy and I find out that it has existing financing on there. One of the things I want to do is incentivize the seller, pay them more for the property if they’ll allow me to take over the existing financing on the property. Now we all know that money costs money. You don’t get money for free typically. So what happens is that when I’m going to the bank, I might have to pay 3 points to the lender to be able to purchase, purchase that money, borrow that money is what you’re really doing. But when you do that, that’s their profit center.
They get those points. Well, I would love to give that to the seller. And so what I teach you to do is what to say and how to say it, to be able to give that to the seller and actually increase your offer price on the property because you would have been spending that money anyway. Now you’re giving it to the seller. And since our money typically comes from hard money sources, then there’s an expense to that. Well, we can give that to the seller if they allow us to take over their existing finance. Now, another way that we do it is if they have equity in the property. So let’s say that, you know, by the time we do our cost-to-sell worksheet, we come up with a final offer price on the property and the property’s worth more. And they’ve got a spread, they’ve got money coming to them.
That’s called equity. Well, many times sellers don’t actually need that money right now. And sometimes they’ll let that money actually ride with the, in other words, that you could pay them later, or you could pay them annual payments or semi-annual payments or quarterly payments or monthly payments, whatever works for that seller, whatever helps them, is what we’re willing to do. And as long as we can scratch that itch, as long as we can solve that problem that they might have, then they’re excited to give us the opportunity to do that. And of course they have security in the property as well. So there’s a reason for them to work with you on allowing you to borrow so to speak their equity from the property, and actually earn an income off of that. So, Tony, that’s a great question and absolutely, positively, I do not go to banks and I do not qualify for loans.
So, that might surprise some people to hear that, but actually, that’s exactly. I have a clean record from day one of buying rental property. Even my first property that I purchased at 18 years old, all the way through to today, I’ve never been to the bank. I’ve never qualified for a loan on a single-family or small multi-family property. And the reason is I found out that the seller could be the bank. So, Tony, that was an awesome question. And I love when I can show others that the seller can be the bank. By the way, the seller loves it too, because they love that additional payment that comes in every month that helps them with their bills and other expenses.
Scott Paton
00:25:21
Good job. Good answer there. And Erica has a question for us, a newbie question. “What do you mean when you say ‘my market?’ ” And I think oftentimes we’re thinking of the general, national real estate market than the state market. Then there’s also, I don’t want to answer the question for you, but we’ve got luxury homes versus starter home. So I think it’s great if we can delve into this a little bit.
Lou Brown
00:25:49
Well, Erica, that’s a great question. So a market is actually an area, it’s a place. So you think that you go to the grocery store, a lot of people call that the market, right? Well, it’s the market of a whole bunch of different goods. And in fact, they have to have it all laid out because there’s so much stuff in there just to help you even get organized going through the market. Well, in our world, we have a market and we’re looking for a certain type of buyer and a certain type of seller. And there’s certain things going on in their world. And as a result of those things going on in your world, they may be interested in selling today. Well, the market area that you will be looking at is what I call the “target market.” And that market is where you’re going to spend your energy to focus on people coming.
So let’s think about your area of grocery store. Your area grocery store does not advertise across town unless they’re a chain, but your area grocery store, what are they doing? They’re advertising to their markets. So sometimes they have flyers that are put in people’s mailboxes and they have local advertising that only goes to the local market. Why? Because they want to attract people locally to their business. Well, we want to do exactly the same thing. So we do our marketing within our target area and we bring in our customers from there. And what’s so great and amazing about that is the opportunity to connect with the community in very profound ways. In fact, that’s one of the things, Erica, that I’m going to be covering at the Wealth Builder Workshop is ways that we connect with the community that get what we call, “no competition deals,” meaning that nobody else is bidding on that property. Nobody else knows about that property. That property is not on the MLS. And so we love buying properties that way. And I’m going to be teaching you that on Saturday. Great question, Erica.
Scott Paton
00:28:00
Awesome. Well, I think, Lou, that brings us to the end of our questions. Yeah. So we’re ready to wrap it up. Any last words or advice for someone who’s looking at just, you know, beginning their real estate career.
Lou Brown
00:28:18
Well, whether you’re just beginning or whether you’ve been doing this business for a long time, there’s always more to learn. And what I’ve learned is that even though you may think you have a concept down, and even though you may think, you know what there is to do, there’s always additional things you can learn. So I just encourage always everyone, myself included, to go get educated, to get more education as much as you possibly can. Now I welcome you to go to my YouTube channel. We call it the “Lou Tube” and you can go there, StreetSmartWiz.com/LouTube. And you can others, I hold myriad of videos there. That lots of information you can pick up at any time. And this Saturday from 10:00 AM to 6:00 PM Eastern Time, I am going to be given you multitude of details and information that you absolutely should know whether you’re just getting started or whether you have been in the business forever.
And yes, if you are just getting started, there is a lot of things to learn and quite frankly, there’s some mistakes you can make that can take you out of the game. And I just know that this is too good of game to be taken out of. So I always encourage people to get the proper education and to embrace a system and a process that actually protects you. So you should always be thinking about and have the fear. I could lose money doing this, and what method am I going to adopt to make sure that I have safety in this process. Now I’m going to not going to lose everything I’ve got while I’m in this journey of learning. So definitely coming to the one-day for $1 would be a brilliant thing for you to do. And I’m going to always encourage you to get as much education as you possibly can. We’re not hearing you. Scott.
Scott Paton
00:30:30
Ah, mute button. That seems like an awful lot of money, Lou, for $1, who’s really holding onto all the risk in this deal?
Lou Brown
00:30:42
It’s all my risk. But you know, I look at it, Scott, as paying it forward, I’m giving others the opportunities. I had great people that I learned from. I had wonderful. In fact, I keep it right here. These are, these are some of my mentors. I keep it right here to remind myself of what a big difference these guys made in my life. We’ve got over here, Jack Miller, Jimmy Napier, both of them have passed away, but here is Pete Fortunato and John Schaub. These are people that I learned from in my early days that I got so much benefit from knowing them. And, hey, I am inspired by them. They taught me some great things. I want to pay it forward and give people the opportunity to learn some of the great things that we’ve developed over the years as well. So yeah, I’m taking all the risk and I’m just giving it away, but that’s okay because when you come, you’re going to have some paradigm shifts that can put you in a very safe mode.
And I think this is an important time to be in a safe mode because our industry, the markets, the economy are about to take an incredible upheaval. I already know it’s coming because we’re going into my fifth real estate cycle. So I know what to expect. I know what to do about it. I know how to avoid the pitfalls. And that’s one of the things I want to do at the wealth builder workshop is just give other people the opportunity to not have the same and make the same mistakes and lose the same money that I have lost in the past, because I didn’t have this information.
Scott Paton
00:32:27
Awesome. So that’s a good time to wrap it all up and thank you, Lou, for taking time out of your busy day to share with everybody has been pretty cool. And Brad, he left real quick, he left a comment before we went off the air. I want to share this, “Wealth Builder Workshop can change your life. One buck to change your life is a no-brainer.”
Lou Brown
00:32:53
Thank you, Brad. I appreciate your say in that. Awesome. Yeah, absolutely. Take advantage of it. Hey, what do you got to lose $1? No way we promise you that you’re going to get maybe a thousand times that value while we’re together on the Saturday. So just take advantage of that and I’m looking forward to seeing you soon.
