How do you actually know if you're looking at a good deal on paper that may
be in reality is not a good deal? Today, I'm actually going to be sitting down with
Lori. She's got a deal right now and she wants to know is this a hot one or is it
a flop. And today, I'm going to break it all down. We're going to show her how to like
read the numbers. Understand what they really mean. And we're going to find out
right now if she's on the right track or if she's just like this close an inch
away from making the biggest financial mistake of her life.
Hey are you doing? It's so good to see you. How are you doing?
-Good. I'm excited. -Why are you excited?
-Because I want to get into this house. I want the home. I want a home. I
really want to get to the real estate. So, this is good. -Yeah. How long have you been
wanting to get into real estate though? -Oh, for years, I've loved it. I've just
never... You know, you've given me the opportunity to try something that I have
a little more. What's the word? Oh... Security. -So,when you came
to us, you came to me and you basically... You went through the whole process. We've
gotten you under contract. And at this point, you can move forward on faith
saying, "Okay. Everything sounds good" but I know you've asked a couple of times.
"Kris, are you sure this is like... How can I really know?" I'm like, "You know what? The best thing I can do is
invite you come into the office. I'm going to introduce you to the man that runs
my entire acquisitions team. And we're actually going to dissect this property and
really find out if this is a hot one or if it's not." And something just happened
in the last couple of weeks that we found out that I think you should know
about. So, we're going to go be Tyler Bennett. Director of acquisitions and we're going to
get to the bottom of this. Alright, Tyler. Thanks for being here. I want to
introduce you to Lori. -Hi, Lori. -Hi, Tyler. -Tyler Bennett. Nice to meet you. -Here
pull out a chair. Her son was watching me forever on YouTube. -Yes. -And then
my wife and I... It was just kind of funny how we all kind of met each other. But
I've had a chance to meet Lori and her amazing husband Brent. We actually shot a
video about their game plan about like, "Well, what do I do?" And I was like, "You got
good news." Like, you guys have the ability to crush at real estate. But like any
smart person, she's texting me a few times I think with positive nervousness.
And that's because... Listen, we have so many tons. -And a few times I've done it
on my own has failed. -Yeah. -So, that's why I just want to make
sure that I'm doing it again with somebody who has the expertise that I
didn't have. I don't have to relearn the system and that's why I asked him. "Are
you sure?" -Before we dive into this property, I'm going to put up here on the
big screen. I'm going to have Tyler dissect it. His team researches thousands
of to find winners. My question for you is
what do you feel like in hindsight went wrong on the other deals that did not
work out? -The most recent flop was I had rented it because I was a teacher, so I
rent it to another teacher. And they destroyed the property. -So you have bad
property management? Were you property manager? -I was the manager.
I knew of her. And then I got 3 in a row that I had to keep going
back. And so, the third time I finally got a property manager, I said, "Okay, I'm going to
invest in this." And I got a property manager and he did great. And those
people also, they didn't trash the house but they... We left some things in the
house like this the porch swing things like that.
They took off with the stuff we left at night one time and just left. So, it
wasn't so great. And that's why I believe totally in 100% now I would
never do it myself again. I'd always get a property manager. Now, it's just more of
just a cash flow. -And truthfully, a lot of it was you just... You didn't know
what you don't know, right? With screening process, the background
checks, pay income verification, rent history. -And you get you get panicky. I
didn't had the time have the Sleep Well At Night fund. So, I've got a little panicky.
And I want to hurry up and get this rented. "Well, okay, let's get that rented!" And
so, I thought, "Okay, I don't..." I didn't do a huge background check. But thought, "She's a
teacher." -And you start cutting quarters without knowing that you're tell you them
because you're inexperienced. -Exactly. -Yeah. So, listen. Here's what you're going to
find out, Lori. I remember even on my first 50 homes, I was still making some
of the classic errors because there's a level of expertise to know how to run
that side of it. But that's just even a small part. I mean, you were doing real
estate in your backyard. And right now, we're going to show you the extreme
opposite. Right now, you're sitting in one of the hottest markets in
the world right now. And most certainly in America. And some things have happened
just as getting another contract. We know you're only a couple of weeks
away from closing. But Tyler's here to actually share some surprising news with
you that we think you need to know about. And also just help you understand... -Do I want to know about it?
-Yes. [Laughs] Well, one of the reasons we really like the Orlando Central Florida
market is because of the influx of the 55 plus. You have all these baby boomers
that are retiring. And many of them are attracted to Florida, particularly
Central Florida. The weather's great. Many of them are coming from States, New York.
Boston, Pennsylvania, New Jersey. This area of the country where (1) it's cold, (2)
state income tax, property taxes, property values. It's just a lot more expensive to
live up there. And it's cold. What they do is they're retiring. They're converting
their 401Ks and IRAs are starting to take income from them. And they come to
Florida where there's no state income tax, they use salt for margaritas instead
of the melt snow. And they they're attracted to Central Florida because the
prices are really strong. And this particular crowd isn't necessarily going
to the beach laying out all day, right? They want to be on a golf course around
the country clubs and just have a nice comfortable lifestyle where their
dollars go further. And so, where we're at right now with your
house in particular, we're benefiting from this massive inflow of all these
different people. This is just a little bit of what's going on in the market. And
then we'll talk specifically about your house. A couple things in the market.
I call them tail winds and headwinds. So, finishing up 2019, coming into 2020,
what's happening. We always have a very strong labor market. There are actually,
right now as we film this video more job openings than adult humans to fill them.
That is very, very unique. That doesn't happen very often. U.S earnings growth and
net margin. So, companies are making a ton of money. And the reality is the
stock market is up and everyone's hesitant to continue to invest in that
in the market. But the actual price that we're
paying for these stocks, the price per earnings is historically in our favor.
In other words, stocks could be up higher based on the amount of money companies
are making. Global economic activity is moving back higher. Low interest
rates. Interest rates are historically low right now.
Liquidity, cash is everywhere. The balance sheets of the average U.S citizen are
stronger right now than they have ever been. And people are sitting on cash. I
think a lot of them are a little hesitant about what's going to happen. It's
an election year and so there's just... There's cash everywhere. Companies are
sitting on more cash than they historically have ever sat on before. And
then you have a strong housing market, of course. Some of the headwinds. What
concerns that we potentially may have. Trade tensions and tariffs. Just recently,
we've made a lot of advancement and eased a lot of the tension with China.
But that is still out there. The election uncertainty. That is there. It's an
election year. Valuations are moving higher. Itchy trigger fingers. Just today,
people got out of the market because it was up and they sold and so we have
people doing that. Chinese economy, European zombie banks. We have literally
up banks with negative net worth. They're just being supported by the central
european banking system. But there's a lot of positives right now
in the market. Let's look at how that ties into your property. -So, this is
actually pretty exciting. So, you recognize this Performa, don't you? So,
this is the house that you have on the contract. It's a sweet house. It's a 1,300
square foot home built in this year. There's a 3-2 home. This is what's crazy:
In this particular area, it's 155,000 in ocala. And
ultimately, the total property investment for this one is very low for it --for
Florida. Here's what that's translating to. What I tell you that we found you,
like, all of my deals are always amazing good. But this particular deal, it's like
wow! This one... Well, let's just look at it. You know how to read the numbers. You
know about all of this. I always jump down to this part right here. Which is my
cash on cash. Florida, how how often Tyler do we see a Florida
house with a cash on cash over 10? -Hardly ever. -It is rare.
Cash on cash is really high. This is what's bizarre. I have never seen a 4-0
ever in that particular market. But Tyler, what's happened even since getting
this under contract in this neighborhood? -The Builder, this is a new build. Has
increased the price is about $10,000 on this exact house. So, by the time you
close, that same... The next-door neighbor's house is selling for at least
$10,000... -If I bought 100 more of these, I would, just not
all in the same neighborhood. Because there's only a certain percentage we
want to own in particular areas. I can ask that. This right here is just. It is
just a screaming winner from head to toe. So, in the economy everything is 100%
moving in this direction. But this is a house that I will buy again and again
and again and again and again and again. It's just a sweetheart deal. It's awesome.
-Because even though 165, it's a great deal. -Now, what questions do you have
about the information Proforma, where we're at in the process? I know we're set
to close in just like a few weeks. So... -You know what? I don't know that I have any
questions. You sort of answered one. I was going to ask. I know we have to do one at a
time because I don't have a job again. So, you
would never just buy it a bunch of those? -What I mean is Tyler has
very specific rules and our acquisitions team and our SOPs about how many homes.
Like for example, if there was an entire neighborhood for sale of that exact
property, we wouldn't buy them all because that entire market would become
a transient rental market. And ideally, you're looking for having a certain
distribution of homes that people live in and own versus rentals. So... -But are we
buying other houses that are looking similar to that? Absolutely. -Okay. -Yeah.
-I was going to say that looks so good. -Yeah. -I would like that again. I'm just going to double it,
right? -One question I have for you is do you understand how the property management
transition process works? -That's a good question. -Yeah. -Yeah. -It's going to come up in
about a week or 2. -Because I know that there's some things that you want to do
to the property to get it rental ready. And so... And I want... But I want rented
right away as well. So, we want to get that moving quickly so that when we are
done, we have a renter moving in. Right? -We want to also have super like realistic
expectations. So... -Yeah. -This home, they rent on average in about 4 weeks. Certainly
helps that it's new. That's kind of standard. I just recently had a home with
one of my partners it took 4 months. And that's like a one in a 200 home
thing. But that's what we have the sleep well at night account where it like, it's
not likely... It's actually super remote. But we're still prepared for it. But no, I
think this home is actually going to rent out in our typical timeframe. -Yeah. -That's what
we always shoot for 4 weeks. And then we just setup on autopilot and then
immediately go after the next house. -Our team goes in there. The second that you close,
we go, we get the keys, we rekey it. Any rent ready repairs... Yours is brand new.
Sometimes on brand new houses, we still need to go in and put in blinds or do
this. All of that is already in place. So, the second you close, we move in there.
Work done. Typically under a week, it's on the market for rent and then we have
that target of that 4 week-ish. -So, now, do you have to wait until
everything has done? And before the property manager starts... -Correct. We can't
mark it up for rent. Because we don't own it. -Not that. That week that we're doing all the stuff.
-It depends on that list is. Right? For your house, yes. Because it's new. It's still going to show
really, really, well. If it's an existing house... So, we want to go in there. Repaint,
do some things then we're going to want to wait for somebody to come through when it
looks good. Good questions. -Yeah. Because I just think I
was the quicker we get it moving. Because it's quicker we can get it going, then
the next we can do the next one faster. But remember, we're not going to sacrifice
time for quality. -Right. -So, we're going to always, always there on waiting
an extra week. Or taking $25 less than maybe the peak market rent to
get the right tenant in there. You know, that's going to pay on time.
It's more likely to renew it the 12 months and all that different criteria.
-Yeah, that's great. Yeah. -Tyler, does this home... Do you know in in Lauri's situation,
if the home has to be rented before they can get the next one on a contract? Or
the moment it's that purchased, can they start getting under contract? -For her
situation, it needs to be rented so that she's offsetting that new debt that's on
her credit. -Yeah. -And so you become stronger and stronger because the
rent is more than the mortgage. So, you get better and better as you go. -That's why
I think was we had our income was the issue. -Yeah. -But by the end of the que
one, I mean we're in the middle of January.
So, in March, hopefully we're looking for houses again. -Yeah. -I'm so
pumped for you. I'm excited. I just... I wanted... I just wanted to press the flesh
and get really face to face have you sit down with Tyler and just see. This deal, I
mean we can show you all the other deals that we're doing right now. And frankly,
any time we're sitting between 28 and a 32 percent ROI. I know we're freaking
banging. We're killing it. And we've got something more than. Considered lucky.
That's not the expectation becuase I don't know if we'll ever meet again.
It's hot. It's hot. -I'm going to try to have that expectation, right?
-Well, congratulations. And super excited for you. -I am, too. I'm really excited to get going. -I know. 4 or
5 houses. 6, 7, 8, 9 months from now and that is a good 2020. -That's the goal.
-Awesome. You know, it's weird. I sometimes sit down with people, they don't know
exactly what they have. But I do because I've done this so many times. And you
know, you should have confidence when you're buying a property. I always telling
people, "When you're doing this on your own, you want to make sure that you're at
least sitting at a 20% ROI." If you don't know how to do that, my lease
option class showing you how to do it in the backyard is a total possibility. But
this turnkey stuff hitting 40%, it's mind-numbing. It's nuts.
And it's honoring money. It's letting money work for you. It's creating maximum
leverage. If you want to know how to get your hands on deals like that, like the
ones that I've been showing you in these videos or today's video, do a couple of
things: Number 1, subscribe because I want you to be like up-to-date on
exactly what's happening in the market. Number 2, I want to make sure that you
know that there's a link below. You can talk to a member of my team and say, "Hey,
this Kris having the excess deals. Or does he have any opening spots for
partnering?" Because I only bring on as many partners as I have access deals. We
have some right now. It won't always be the case.
But if you're sitting there thinking, "Well, Kris..." Whether I do or don't have
money and I want to get in the game, click that link talk to my team and a
couple of things will happen. One, you can learn about partnering with me. 2, you
can actually access that document for free that actually shows you my track
record and exactly how I produce a 40% ROI even though it's typically
25 to 32 percent. So, my friends, thank you so much for watching
today. Subscribe. We'll see you tomorrow.