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Real Estate Investing School Podcast
180. REAL DEAL: The Path to a $100k+ Pay Day with Morgan Broderick
00:18:20
Welcome to the Real Estate Investing School Podcast! In today's episode, host Brody Fausett interviews Real Estate Investing School student and new investor Morgan Broderick. Morgan shares her and her husband's experience with their first real estate...
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- [00:00]
A
Because I'm assuming that's good amount of money for you or is it like just pocket change?
- [00:05]
B
No, that's like everything both Darren and I make from both of our jobs in one transaction.
- [00:14]
A
What's up, everybody? Welcome back to the Real Estate Investing School podcast. This is your host, Brody Fawcett. And this is a real deal episode. So we have these episodes once a week that come out. They're a little bit more short. Sweet. To the point. We're talking about one real estate deal so that you can learn from it. And today's going to be pretty cool because I feel like it's just going to be real and raw from a standpoint of someone who has recently got more into real estate and just kind of like the real raw journey of that. And we're going to talk about a deal that they are doing. And it's not just an average deal, it's an above average deal, I feel like. And so it's going to be a fun one and just the power of one deal and what that can actually do. So tune in, it's going to be amazing. With that being said, Morgan is in the house. What's up, Morgan?
- [01:09]
B
Hey, we're excited to be here. I'm excited to talk about our deal.
- [01:12]
A
Yeah, I'm so excited. Do we get your husband too, or is it just you?
- [01:15]
B
It's just me. He's on kid duty tonight.
- [01:18]
A
Sorry, that sounded so negative. I was like, do we get your husband or is it just you?
- [01:23]
B
That's okay. He's a whole part two.
- [01:26]
A
Good, good. Well, we're excited. Excited to hear from you. So give us just kind of an overview of this deal, what it is. We're kind of just looking at it and then we'll dive in a little bit deeper. Just kind of start with that 30,000 foot view.
- [01:42]
B
Yeah. So this deal is actually, I don't want to say lucky because we worked for it, but it kind of is lucky that it came. So we started our real estate journey just in December. Like we just started doing real estate. So we have been looking with our coach Jaden to find anything to even get our foot in the door. Right. We actually looked at this house clear back in February and it was listed for way more than what we were interested in. But we just kept trying to put offers in on other things that didn't work. And then this house. So to kind of give you some context of it, it's a four bedroom, two bath house here in Carbon County, Utah. So we just followed it on Zillow and just liked it and it would send us updates every so often. And it came up that the house actually went into short sale. We had our real estate agent keeping an eye on it too. So that's kind of how we found it. Just kind of waited until it fit and then we worked with our real estate agent. We tried a whole different lot of different avenues on how to fund this and we made it work. So we closed on it on July 1st and now we're currently working to flip it and hopefully get it sold by October is our game plan. So. Yeah.
- [03:20]
A
Yes. So good. So talking a little bit just about numbers, what was it initially listed at? What was your initial offer and then what did you end up getting it for? I guess it's been how many months? Four months later. And then. And then also touch on. Yeah, the rehab and then the ARV.
- [03:37]
B
Okay. Yeah. So originally it was listed for 210, which in price Utah. That's a lot. I know it doesn't sound like a lot, but it's kind of a lot. So that was in October. Then we waited and waited and it dropped to 190. The numbers still didn't work on it. We weren't interested. Waited, it dropped to 170 and that's when we were like, okay, like maybe we could really work on the numbers and we can get it as a long term rental. That was our main goal for it was a long term rental. So we reached out to our real estate agent. She put in the offer at 165 and we didn't get it actually. So we waited, we waited, we waited and then it dropped to 165. Actually we put in another offer at 165 and our offer got accepted. So we got it at 165, started at 2:10. Then we did an inspection on it. We noticed that there's a lot of work on it. So we put in a counter offer after our offer had already been accepted and it was accepted at 1:59. Since it's a short sell, that's the lowest that they could go on the property. So 159 is kind of where we were stuck.
- [05:02]
A
Love it. There's. There's a. And I want to get into the rehab and what you guys think it's going to be worth when you go to sell it? Because I think that's the plan. Right. Is you're going to flip it and sell it.
- [05:13]
B
Yeah.
- [05:13]
A
Before we touch on that, I just want to bring a couple things that you said because I Think it's, I think it's so good. One, it's easy to be like, oh, I put an offer in at this. And we almost get like this ego, I think sometimes when we submit offers and we're going back and forth to the seller. And like, I've even had it where it was a difference of $5,000, which it was on like a higher purchase price. And so really, like, it wasn't that much money, especially when you're talking about being financed over 30 years. Like, it was, it was fractions of the actual payment. Right. But like, I was kind of getting an ego with it. The sellers are getting ego. We'd been back and forth and I'm like, well, like you're saying, why don't you just fix this? This is what you should fix. Because this is part of the, this was part of what you put in the listing anyways. And then it doesn't work. So, like, it doesn't make sense. You're false advertising. And they're like, well, if you want it, then you pay. And it was just like this ego driven thing. And then finally, like the realtors just like. And it didn't, it wasn't like crazy or didn't get, get, get bad or anything, but it was just kind of like, all right, I'm cool to walk away. And they're like, all right, you walk away. And the realtor's like, you guys, it's, it's 5,000 bucks. Like, just, just be the bigger man and just do it. And so that's what ended up happening. And so grateful that, you know, I was able to see past that ego. But aside from that, I think it happens a lot. And so it's cool that one, you guys are able to be like, okay, we already submitted the same offer. And instead of looking at it, like, why didn't you just reach back out to us? Because we already said we would pay that much for it, but instead you just lowered it and then now you went forth with it. And so I think that it's. I had the conversation today just in general, where it's easy to feel like, oh, if the realtor wants to sell it to me, then they'll, they'll do their job. Or if the seller wants to sell it, then they'll do their job because they're lowering it and they want to sell it to me. When it was just kind of a conversation of at the end of the day, like, yeah, they probably should have done that if they're going to be a good Seller, they really want to get rid of the property. But also, if you don't do your job and go above and beyond and making sure that that transaction happens, then at the end of the day, it hurts you because you don't get the deal done. And so I just wanted to point that out because I think it's cool that you guys are like, oh, we kept an eye on it, like, we didn't give up on it, and we came back and ended up getting it, even though they lowered it for that same amount. So tell us what the plan is. You're going to rehab it, what's the budget for that? And then ultimately what. What's the plan? To. To sell it?
- [07:39]
B
Yeah, so the rehab, we're thinking is about $20,000. And then so keeping numbers in mind, we actually had someone finance for us the down payment and the rehab stuff. Okay, so $20,000 for the rehab. And then this is the exciting part. This is fun part. The ARV for the home is at minimum, 280. At maximum, 350. So, like almost $100,000 in profit once we take out all of our loans that we have to repay.
- [08:18]
A
So, yeah, that's extremely exciting for you guys. Is it like, I mean, I want to go through like the mindset process of it of just because you said you're brand new to real estate, right? Or like, you're just kind of getting into it, you're working really hard, you submit a different offers, you're hustling. Especially after talking, you know, to your coach as well, he's like, yeah, like these guys are dialed there. They. They book all their calls, they show up, they're prepared, they're actually putting in the work and not giving up. And so it's cool to see such a big win. But like, what has that been like on your guys's end of. Because I'm assuming that's good amount of money for you or is it like just pocket change?
- [08:59]
B
No, that's like everything both Darren and I make from both of our jobs in one transaction.
- [09:06]
A
Amazing. That's. That's makes me so happy. So, I mean, I guess. How does that feel?
- [09:12]
B
It's crazy. It's crazy to think that something that we found on Instagram, right? Because we found the real estate investing school on Instagram, we thought, hey, we might as well try something. And here we are six months later, and we have a house that can support our W2 salary, yearly salary in one transaction. Like, it's huge. It's crazy. But like, you're saying and what Jaden has said, too, it's taken a lot of work to get here. It didn't just come overnight. It wasn't just something that magically happened for us. Like, we definitely had to work for it, which I think is a good thing because we've learned a lot about it, too, about the real estate process. So it's been awesome. Stressful, but awesome.
- [09:56]
A
Yeah, absolutely. Well, I think it's good to have a little bit of that, you know, stress in a good, good amount of dose. That way it forces you to kind of like, all right, I want to get. I'm a little uncomfortable. I want to do something about it. But it's cool to see you guys do that and get over that curve of like, all right, this is difficult. I'm not going to give up because I think that's what happens. A lot of people is they just kind of throw in the towel and this doesn't make sense. This isn't for me. But it's just getting that momentum and really, like, going through the hard stuff that a lot of people aren't willing to go through to learn to get educated, to, you know, submit the offers. And then it's so cool because you get momentum and you get to roll off of that momentum and this deal rolls into the next deal and the next one, and it's so, so cool to kind of see it happen.
- [10:40]
B
Yeah.
- [10:41]
A
So tell me a little bit about just, like, funding it. I know you mentioned, like, you. You are using someone else's money for the down payment and for the rehab. What's kind of the process of. Of you funding it in general? Because I think a lot of people. It's just good for people to hear that there's options out there if they're like, oh, I don't have this cash sitting around to be able to cover the rehab. Or I think it's easy for people to just automatically make excuses on why this doesn't make sense or it doesn't work for them and it only works for. For Morgan.
- [11:13]
B
Yeah. So what is the main thing that's funding our pro. Our project, I guess, is we just have a conventional loan, just a normal plain Jane loan. Right. And then to fund the. The rehab and the down payment, we had the money. However, it would totally wipe us out if we used our own money to use that. And we were thinking, I mean, we have two little boys. We were like, no, we don't want to do that if it's totally going to wipe us out. That's just Too risky for us right now. Right. So the original plan was to get a second mortgage on our existing home. We have tons of equity in it that would have funded the down payment and the rehab costs. However, this was one of those hiccups, right? That or those speed bumps, right. That you just have to keep plowing through for some reason, like other companies, we were waiting for other companies to get the documentation to this company to get it from this bank to. Anyways, it was just a mess. And we kept having to push our, our closing date out with the home. And finally I was like, this is just kind of ridiculous. We gotta find something else. So we called family members, we called neighbors, we called anyone that we could think of who would be willing to support us and kind. We fundraised pretty much for that money and we found someone, just one. It was actually Darren's parents. So Darren's my husband. It's actually his parents who were like, actually we would love to support you and fund this project for you for this amount. And we came up with a plan for that. So again it was, it's kind of like a partnership with them. How that funding goes is they're giving us that money for the year once the year is up. So we have till next July. Once that year is up, if we don't have that loan repaid to them, then it will start accumulating interest at a 1% interest rate, which is kind of silly. 1% is like nothing, right? But I mean, we'll take it. So. And plus with our loans.
- [13:28]
A
So good.
- [13:29]
B
Yeah, with our loans and everything, it should be paid off especially once we sell the house by October. So we shouldn't even accumulate interest on that?
- [13:36]
A
No, I think that's awesome. I think that, I think more people, like it's easy for people to hear that, be like, oh yeah, that's nice. I wish I had a parents that would do that. But I love you too. Like talked about, hey, we, we like hustle. We're working this angle and asking around and doing this and we talk about real estate investing school all the time. But just like leveraging the fact that like you're, you've invested in your education, you've invested in a one on one coach. Like you're like, I am, you know, compared to you feel like a beginner, you're just getting started. But compared to 99% of the world, like you are an expert because of the, the things that you're learning and doing and taking action on. And so it's cool to like Leverage that from the standpoint of, like, hey, we're doing this thing. This is part of our vision. This is our goal. This is what we want to do. And I liked how you even almost said, like, fundraising, because I think that people get behind this, this vision and the passion behind, you know, what we want and what we were chasing. And it's. It's cool to see. Like, I think there's a lot more people that would have more opportunities for funding or different things like that if they had that hustle muscle of like, all right, I'm gonna go figure out a way to make this thing work and not just throw in the towel.
- [14:46]
B
Yeah.
- [14:47]
A
So good for you guys. That's awesome on this one. Like, so I. It's cool, like, seeing it just like I said, from your perspective of hustling to, like, seeing it all the way through and actually, like, investing in your education and taking it serious and putting in the work and being a beginner and then getting such an awesome, like, first. First deal in your guys mind, like, what was. What was the thing that stood out that you feel like, allowed you to. Maybe there's not just one thing, but that allowed you to get a deal like this. Like, if somebody's asking you, Morgan, if they're like, hey, I want to do what you guys did and replicate what you did, what advice would you give them?
- [15:26]
B
I think the biggest thing for us would be, like, you gotta meet people. I know it's really hard sometimes, but, I mean, we found this deal because we heard from one of our friends that she was on a walk and she noticed that this house was abandoned. And so we figured, oh, okay, so it has to be coming on the market soon. Sure enough, it popped up in October. Later, you know, and then someone else told us about this deal. Someone else told us about funding that they had for this. Anyways, like, it was all just because we knew people and we had a great real estate agent, too, who all had their hand in getting us this deal. Right. It wasn't just us. It was lots of other people that we had talked to and created relationships with that got us the deal and who will help us during the renovation, during the selling process and everything else. So it's all about people.
- [16:17]
A
Yeah. What advice do you have to somebody that's like, hey, I'm just getting started. I don't know a lot. Like, it's kind of intimidating or scary for me to go talk to people or to network. What's your advice there?
- [16:29]
B
Pretend like you know what you're doing. Even if you don't know what you're doing, people will talk to you about it. Right? Like, that's what we talk about in some of our real estate investing classes and stuff. Fake it till you make it almost, you know, like, if you come up to someone and you're like, I'm a real estate investor. I want to find a deal, they're going to be willing to help you. Well, most people are, right. There was a few that were like, we're not going to take you too serious until, because you don't have any deals behind you. But there was a few who were like, yeah, let's do it it. Let's figure out what we can do.
- [16:59]
A
Yeah, that's so good. I love that. I love that answer. I love that advice. I think that if we were to do a study and this isn't just real estate investors, but really any successful people across any category, any platform. But if we're talking just real estate investors, I would venture to say that the ones that are naturally just more confident tend to do better. Like, it's a, it's an overall trait of successful investors and doesn't mean you have to have all of the answers or you have to lie and fake that you know every single thing. It's not about that either. Right. And I like, I like the combination, like, humble swagger. Like, you got to have this humble swagger of, like, hey, I have humility. I'm willing to learn. But, like, also, like, I got this swagger of, I know I'm here, I know what I want out of life, out of real estate, and I'm going to go make it happen, even though I don't have all the answers. So, like, let's roll. We'll figure it out at some point. Awesome. Well, thanks so much, Morgan. We'll, we'll, we'll attach kind of your, your info so people can connect with you in the, the show notes here. But thanks so much for jumping on and thank you guys for tuning in and listening and learning with another Real Deal episode. We'll catch you guys on the next one.