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Real Estate Investing School Podcast
87. REAL DEAL: How To Find, Force and Fund Game Changing RE Deals
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- [00:01]
A
What is up, everybody? Welcome back to a Real Deal episode of the Real Estate Investing School podcast. I'm your host, Brody Fossett, and I'm excited to jam with you guys today. As you guys know, in these episodes, they're quick, down and dirty. We talk about one deal that is a real deal that someone's done with the whole intent of how can you take some stuff out of it? You can go and apply and go to your own deals, go build your own cash flow, go build your own freedom. And specifically, we're going to talk about how you find a deal, how you fund a deal, and how you force a deal. And we're going to dive into a special guest deal today. His name is Mr. Ty Jordan. Ty, welcome to the show, brother.
- [00:48]
B
What's up, man?
- [00:50]
A
How are you, dude?
- [00:51]
B
Great. Just hit the gym. Pumped to be on. Pumped to talk about this deal.
- [00:55]
A
This is cool because you actually do all of our video content. Ty's videographer slash camera master, and so he's kind of like, behind the scenes on a lot of this stuff. Even this podcast, you help edit and get out there and push out. So I love that you're also doing deals, which is super exciting. I asked him this morning, you ready for this? He's like, yeah, which deal do you want to talk about? That's what I love to hear. That means you're doing multiple deals, but with this one's cool, too, because you've kind of been through the school, been through a lot of the trainings over the last, like, I don't know, really six months to a year. And I think it's been cool just, you know, seeing you being exposed to different things. And it's funny, yesterday we were. We were filming some stuff. I'm not always in Utah, but I have been this last week. So we got together and I asked. I was like, have you been pretty busy? Do you remember what you said to me?
- [01:47]
B
Yeah, I was. I don't even remember exactly what I said. That's how busy I've been. I forget crap super easily. But, yeah.
- [01:55]
A
Well, I was asking if you were busy with, like, like, videography stuff, because I was like, it seems like everybody's using. You seem really busy these days. Like, how's everything going? And then. And then you directed it back towards real estate. Do you remember that?
- [02:07]
B
Yeah. Yeah. I've just been trying to spend a lot of time finding deals. I've kind of fallen into, like, the real estate rabbit hole where you get kind of addicted to searching for deals and running Numbers on everything. And so I've been using a lot more time lately to try to focus on adding some properties to the portfolio. So definitely in that regard, too.
- [02:30]
A
Yeah, I love that. Well, we're going to dive into your deal, but touch on that really quick. Why is that important to you? Why do you feel like you're spending more time adding to your portfolio versus just building that active income?
- [02:44]
B
Yeah. So to start off with the deal, I'd been trying to get into a house since I own my own business, Since I'm a business owner, most of you know that it's kind of hard to get that initial funding and financing under your belt if you haven't owned your business for more than a few years. And in my case, I only had two years of tax returns. My first year of business, I didn't do, you know, very much. My second year of business, I did really well. But you have to have two years of income to qualify. And in St. George, I just, I wasn't going to qualify, you know, for, for anything that made sense to house hack. I was. My whole goal was to do a house hack. Because, you know, I hear you talk about it. I literally, every big real estate investor that I've heard talk about, you know, they say your first deal should be a house hack. And so I kind of had my mindset on doing a house hack. I wanted the numbers to work. And as, as most of you know, rates are high right now, home prices are pretty high right now. And so, like, a lot of people out there for some reason have this, like, misconception in their head that there's like, no deals out there or there's. There's nothing that's going to work. Numbers won't work on anything. And in my case, I knew that wasn't true. I didn't know through experience, but there was just like, I have enough people around me telling me there's deals out there. Like in the real estate investing school, you know, you hear all the coaches and you hear Brody talk about, if you look, you'll find a deal. And ironically, I was doing some content stuff on the real estate investing school page, and I scrolled across an old video Brody posted. It was probably posted like, it was posted over a year ago, and it was just the, the Zillow hack. Well, actually just we'll throw the video up up here so you guys can see it. But it was a Zillow hack where you can go in and you can search certain parameters. And in my case, I, like, I've Always wondered how you go find a seller finance deal. Like I hear people talk about them. I know there's email lists you could get on and I just couldn't find them. But I came across Brody's video and it literally walked me through how to find a seller finance deal. And so I started going on Zillow, you know, a few times a week. I was pretty, pretty diligent with my searching and I ended up finding my house on Zillow through Brody's method of like finding a seller finance deal. And so, so my house was. It's a four bedroom, three and a half bath. There's two master bedrooms in it. It's in, it's in pretty much like a brand new development, desert color in St. George, Utah. Super nice area, super nice townhome. I picked IT up for 475 with a 5.5% interest rate on, on seller finance. I got kind of. I, the, the seller had originally wanted 20 down and I had the 20, but I was like, let me see. Like, like I want to negotiate this deal. And so I actually negotiated him down to like a 12 down. And so I put 60,000 down on the deal. I got it for 475 at a 5.5 interest rate. And right now I'm pretty much it just like I'm, I'm even, I don't have, I don't cash flow on it, but I also don't have a mortgage. Like my rooms are rented and I'm not making anything on it. Whenever I move out though, I'll cash flow 850 on it. So all around just given like the current market and everything, it was a perfect deal. It was like the one deal I was looking for. And yeah, I mean that's kind of like the baseline of it. It all sounds a lot easier whenever you can explain it.
- [06:18]
A
And that's a wrap. That's it for the. Thanks for. Thanks for sharing. And no, dude, that's super cool. Super cool. I mean on so many different levels. We can kind of unpack that really quick just for the audience and for everybody. I mean, I love like how you started out kind of with the mindset component because that's something so many people miss. And it's like you said, had you not been exposed to different things and different people or real estate investing school, just the ideology of like, no, there's deals out there. You just have to know where to look. You have to know how to find them. I was having this conversation a lot last week with a lot of Newer investors. And at the end of the day, you don't know what you don't know. And that goes for all of us, every single one of us. And it's like, imagine not knowing algebra and trying to solve for X. There's no way it is going to happen because you don't know the strategy of algebra, right? And so as soon as you learn it, then all of a sudden you see that math equation and you're like, oh, that's how you do it. That makes sense. And so what once was like just so blurry and didn't make any sense. You learn those strategies in real estate investing and then all of a sudden it's like, okay, there are deals, they're like, okay, that is how you find them. And so I loved how like, because you were open to it, then you started diving into it. And I think a lot of people, they don't even get to that point. They have those, those limitations first. Cause they just take what everyone's saying, like, now's a bad time to buy. So I don't look for a house, right? Everything's overpriced, so I don't do it. Or like in your scenario, like I'm a business owner, I don't have, you know, the average of the two year tax returns to get me qualified. So like, I'm just gonna wait till next year. But you didn't do any of that. And I love that, love that, love that. And then you found like a super cool deal from actually like learning and applying the stuff that you, that you were learning, which is cool.
- [08:17]
B
Yeah, for sure. Oh, go ahead.
- [08:19]
A
Sorry, go ahead.
- [08:20]
B
I was just going to say I think the biggest thing is like, like putting yourself in proximity to the like, content and information. Like we have like, dude, you could go throw a YouTube or one of the podcasts on every day and if you spent 15 minutes listening, you would learn something. And I think that proximity, one, like with content, but two, also you like, if you put yourself around other real estate investors, you'll probably have opportunities and deals presented to you that you wouldn't, you know, have before. So I think a lot of it is you, if, if you do want to get into the game, you have to actively seek it out. It's not just going to, you know, a deal's not just going to fall in your lap. You're not just going to wake up and you know, hey, here's this deal right here. Like the, the deal I found was on Zillow for like 160 days. And it was just deep in there. Like, no, like the, the deal was on there and it just took some digging. You know, the, the agent didn't put good pictures of the house up. And so I think it sat because there weren't good pictures. But yeah, if you go seek them out, dude, there's tons of deals on Zillow right now. Like, I was just looking last night. There's. There deals everywhere right now.
- [09:31]
A
Everywhere, dude. And you're in, you're in the middle of, you're about to close on a four plex that we'll talk about, you know, again at some point, which is super exciting. But, but I even remember like before you, you know, even bought your, your first deal that you live in now, like, it was an intentional effort on your end. And I remember talking multiple times and like, as you're looking and we're like, what about this property? And like, so I think that's important to point out too. It wasn't just like, oh, randomly you opened up Zillow and like, like, oh, cool, here's a, here's a deal. You know, it's like, no, it was, it was something you were like intentionally planning on doing for a while.
- [10:06]
B
Yeah.
- [10:06]
A
And so talking about like the financing side of it, like, obviously we know that, you know, you're able to get great terms, five and a half percent interest rate, which is great. You know, seller finance. Lower, Lower down payment, 12%. Explain to listeners if they don't know what seller financing is, maybe just touch on it really quick what that means as well as, like, maybe you touched on it a little bit already. But why, that's why that's important, like as a new investor or just as a, as an investor in general.
- [10:40]
B
Yeah. So seller finance deal is basically. So I'll use Brody as an example. So say Brody has a townhome here in Utah that I want to buy. Brody owns the house outright. So Brody, you know, the house is his Brody. And Brody's like, hey, you know, I, for whatever reason, you know, I don't, I don't, I don't need this house right now. You know, I'm going to sell this house on seller finance, finance terms. So a seller finance deal, I don't go directly to the bank to get a, to get a loan. Brody is essentially my bank. And, you know, we can come to whatever terms we want to do. Brody could say, hey, Ty, I'm going to give you, give you the loan for the full amount on the house and I want 10% on the loan. The loan terms can really be anything in a seller finance deal. And you can get super creative. What's interesting on my deal is the agent was like, this guy that owns this house. He's willing to get super creative. He's been wanting an rv. So if you went out and bought an RV that he liked, he would probably take that as a down payment. And so that was an actual thing that happened in this deal. The dude was like, you could literally go buy an RV and use it as your down payment if you wanted to. And which is crazy because, like, I've. I'd heard about, like, you listen to enough real estate stuff and you hear about these crazy, like, seller finance deals, and you're like, yeah, it's not really true. And then you go out and they're like, yeah, we'll take an RV on seller finance. It's just like, it's just absurd. But anyways, back to the seller finance is you're not using a bank. Basically, the owner of the property is acting as your bank, and you make the payments to them. The terms are a lot more flexible than a bank. The benefit of a seller finance is the seller might want to run your credit, but, like, in my case, seller didn't run my credit. So, you know, your credit stays good. If you're worried about that, you can get in with a lower down payment. So it's just like, overall, if you can find a seller finance deal, everything is more flexible. And I'm sure I took the super complicated and confusing route to explain it, so Brody could probably explain it a lot easier, but it was money. You're just using the seller as a bank, and you make your payments to the seller and, you know, you write out your terms and when you get ready to refinance, you can go refinance with the bank however you want to do it. But there's tons of seller finance.
- [13:00]
A
I love it, dude. And you probably have a good chunk of equity in your house too, with how you bought it and whatnot, which is a whole nother thing, you know, not even diving into. But the other cool thing with seller finance, a lot of people ask, like, why? Why would the seller do that? Like, aren't they getting, like, the low end of the stick? Every time I tell someone about a seller finance deal, I did, like, why would they do that? That's not very smart on the seller's part. And it's a win win, like, all the way around. Obviously, they wouldn't sell it if it wasn't worth it to them. Right. And obviously wouldn't finance if it wasn't worth it to them. And so I think that's important to point out that, like, you can't look at it as, hey, this. I have to find a seller that's willing to do me a favor in order for me to sell our financing. Like, you did this guy a solid, you know, like. Like he's collecting money every single month. He doesn't have to stress about his house, doesn't have to worry about tenants, doesn't have to worry about anything that happens or breaks on it. And he's collecting a consistent paycheck. And if you default on it, guess what, you can go get his house back. And so, yeah, like, for him, like, it's. It's probably this amazing situation. And for you, you're able to look at it and go, and maximize the opportunity, rent it out by the room, charge a little bit more, whatever, to where your cash flowing a lot more on top. And so I love how it's just kind of like everybody's winning.
- [14:16]
B
Yeah, for sure. Yeah. That's another part I left out is if you, you know, default on the loan, then they take. They take everything. There's no downside for them on it. You know, they still have the house. But yeah, I'm super pumped about the seller finance deal, and I actually. I kind of prefer that I bought it off seller finance, so I got lower terms. You know, everything kind of worked out in that. That regard.
- [14:42]
A
Yeah, dude. So good. And we talk a lot about how you force the deal, and we've touched on so many of those aspects already, but is there anything else that. That you would say that came down to how you. How you forced it or how. How you're gonna cash flow on it? Anything you, I mean, running by the room, it sounds like, which is big deal. Anything else you would add?
- [15:06]
B
I mean, one thing is in this. I don't know if this has to do with force. I guess I forced myself to do the deal, but there was a lot of times, like, during the buying process that I, like, tried to talk myself out of the deal for some reason. Like, you and I were talking about it yesterday. There's a lot of people that are, like, scared to do their first deal and, like, scared to pull the trigger on something. And I was, like, thinking about everything that could go wrong in the deal, and I was like, you know, what if this happens? I was, like, playing the what if game, and my brain was essentially, like, talking me out of the deal. And so there were Like a couple of moments where I was like starting to get cold feet and I'd like get really nervous about it and then like I'd kind of like come back to reality and time I was renting a two bedroom, one bath apartment for 1800 bucks. So you're paying 1800 bucks a month for essentially nothing. Like I look back at the last year and a half, I paid that every single month. And you know, now I look at it and I don't pay anything on my mortgage. That's just another 1800 bucks I have paid back to me. And it's essentially like an eighteen hundred dollar raise. Have an extra eighteen hundred dollars to go and deploy. And so I would say on the force side of it, I literally had to force myself to do the deal because a lot of the times what I've noticed any. And this is something I noticed with the current deal I'm doing like numbers make sense and everything, but naturally as like humans, we want to find everything that's wrong and we look past like all the upside and all the good things that are right, you know, with the deal. And so that's one thing I would say is, I would say sometimes you actually literally have to force yourself to do the deal. And I also learned the most just from doing a deal. Even on the deal that I just did, the fourplex, I learned more from doing that deal. Like I learned things I never even knew about properties and things that go into buying like multifamily and stuff. But yeah, with my house right now I'm just renting out every single room. I've been kind of picky with roommates. So that side of it's been interesting learning how to properly venture vet people and like find roommates. But you know, overall I'm super, super satisfied with the deal. And truthfully, I don't know if I would have. I know I wouldn't have found this deal if it wasn't for real estate investing school. So that's what's super cool. And sounds like I'm like plugging real estate investing school like crazy. But it like the information is super applicable. It's all legit. And if you apply yourself, you can go find a deal like it's, it, it's, it's easier said than done. But the truth is, is like it's not that hard to go find a deal.
- [17:47]
A
Yeah, dude, it's so good. I love that, I love that. And I'm excited to dive into that, that other deal at some point. Cause I think on that One, I think you're the one that found it, right? And you use kind of like your, your knowledge to go take it down and then you bring it on a partner and stuff like that. So that's just like, goes back to learning those principles. They're. They're going to pay you for the rest of your life. Just understanding how to put things together and do it. And I think that's probably one of like the biggest, like, takeaways is like, like doing it scared. Last night we had a, we had a live with real estate by school students. I just went over a new deal that I'm doing. It's a pretty big deal, like how I underwrote it and, and how I found partners and all that stuff. Just kind of peeled it back. And one of the things he talked about, like, I was like, hey, who, who's scared right now? Like, let me know in the comments if you're scared to take the next step. Maybe it's buying your first property. Maybe it's buying your, you know, second, third, fourth, fifth, whatever. Maybe it's just going to the next level. You don't need to go to the next level. Who is like, there's some fear involved right now that you feel like you need to get over and like the chat just blowing up. So many people like, yeah, yeah, yeah, me, me, me. And it was so, like, reassuring and I think it was good for everyone else to see. And even hearing you talk about it, like, that's okay to be scared. Like, it is okay. And there's certain ways to overcome that, obviously. But it's like you said, you're gonna, your body's gonna like, naturally just talk you out of it. Talk you out of it, talk you out of it. Because it's trying to, you know, protect yourself against that stuff. That's why most, most people don't end up investing in real estate, right? And so I love that you did it anyways. And there's a difference in like, doing it, doing it stupid and doing it scared, right? Like, you shouldn't do it stupid. You shouldn't do it stupid. Like, if someone's telling you don't do it and it doesn't make sense, then don't do it. That's doing it stupid. But you should do it scared. Like, a lot of times you need to do it scared. And so anything else, Ty, if somebody said, hey, how can I go replicate a deal like this? Or kind of do what, what you've been doing, like, what's the biggest piece of advice you, you leave them with and then we'll wrap this thing up.
- [19:50]
B
Yeah, it goes back to like the action thing. Like, I, I hear you talk about action a lot. And you know, the biggest thing in anything is action. Like, unless you take intentional time to go after something, you're not, you're not going to get it. And then another thing, just a random thought on my head is like, I remember like a year ago, two years ago, I would think to myself, like, will I ever buy a house? Like, I'd like, I would imagine buying a house, like what it'd be to like walk through a house and stuff. And there were times where I felt like I would never find a deal or like never buy a house. But if you, you just have to take the action to go out and seek it and it'll happen like a lot faster than you think. Like now I start to think about it. I'm, I'm about to have five doors and now all of a sudden this like, idea of having like, passive income and like, you know, a step towards like freedom is like, it just seems so much more achievable once you go and do your first deal. And a lot of people say it like your first deal. And then everything else becomes easy. And I don't 100% believe that yet, but I do believe that like once you get your first deal, dude, like the, the, like the idea and the dream kind of become, it just moves up, it's closer. And so I guess advice for anyone out there is just like, if you want to get into a house, there's no reason you can't do it. You can go find partners, you can go find seller finance deals. Like it's, it's 100% possible. If you put in the, the time and the effort, 100% guaranteed that you'll find a house if you. Yeah.
- [21:28]
A
So good, man. So good. I love that. And just remember, guys, like, it's one deal can make all the difference. Like, like your next, your next level success is really one deal away. It's always just one deal away. One deal can change everything. It can shut up, set the course of everything. It can buy you back so much time. Like, literally one deal can make all the difference in the world. And so if you need help doing that one deal, if you need help getting over the fear of that, if you need help with the education and like understanding, hey, how does real estate investing apply to me and my situation right now? And what are the best strategies that I need to deploy? And if you just need help with accountability. I say this all the time, but, like, there's a difference in information and implementation. Like, if you need help applying stuff that you might already know, you might already know a lot about investing, but you need somebody to help hold you accountable. Come see us. Come book a call with us and see if real estate investor school is a good fit or not for you. With that being said, thanks for tuning in, Ty. Thanks for being here. Dude. Learned so much. Hope you guys all take what you learn and go and apply it and make something happen. Signing off for real deal episode of Real Estate Investing School. We'll see you guys next week.