Lynn Fredericksen

adminAugust 9, 2022

Quick Facts:

Profit Strategy: Buy, rehab & hold, AirBnB
Number of Units: a duplex and a lakehouse
Prior Experience: Some single family home flips, but no prior multifamily experience.

Lynn’s Call to Adventure

Like many people, Lynn worked in a field unrelated to her degree (psychology) and decided to work for FedEx. She loved the fast-paced environment and driving. She retired less than a month ago.

Lynn inherited her parent’s property, which is how she got into real estate investing. Before this, her financial situation was bleak.

Her parents passed away just three months apart. She was able to pay for her mom’s funeral cremation with money from her mom’s modest 401K. But when her dad died three months later, she didn’t know how she’d afford to finance his funeral. Her solution was to have a friend’s son move into the home and pay rent. She says it was strange because he had to live amongst all her dad’s belongings. She hadn’t even had time to clean. It was a situation of “help me, and I’ll help you.'”

The house was owned free and clear, but you inherit property taxes, utilities, insurance, and other expenses along with a home. She needed education on managing property immediately. She needed to learn how to manage cash flow.

She found the Fortune Builders mentorship program and started doing fix-and-flips because she loved the rehab process. She did her first one with her own money — got a loan, and then used her savings for the rehab and paid for contractors.

She experienced nightmares common to others with the unreliability and expense of contractors. But she completed that project and rolled into another one with a partner. But the partnership didn’t end well.

She decided to switch gears, acquire properties and pursue long-term renters. She already had a long-term renter in her parent’s house. Next, she purchased a property and turned it into an Airbnb.

COVID hit.

She continued quietly marketing the property for a couple of months. To her benefit, because it was in a rural area, people started renting it. As a result, the property did well during COVID.

She decided to pull money out of her parent’s house and use the money as a down payment for another lake home. She turned this into another Airbnb and bought a duplex simultaneously. The coordination of the financing didn’t happen quickly, so she borrowed private money for that down payment.

After refinancing the lakehouse, she paid back that private money loan. Her next project is to turn her parent’s home — on a beautiful lake as well — into an Airbnb. She loves sharing the experience of the great outdoors with vacationers.

Her Realization

Her reason for pursuing multifamily investing developed from learning that small apartments offered economies of scale. She realized having more units offsets a vacancy.

Her upcoming retirement led her once again to seek guidance and education. She is learning how to do multifamily investing with Lance’s training. Another exciting change unfolded from her mistakes and hurdles she’d already experienced — she had become skilled at remodeling properties without the aid of contractors.

Lynn’s Mission Unfolds

She got clarity on a mission she hadn’t previously developed: she could use multifamily investments to help others. Her first step was to join forces with the Salvation Army. “They have a program that assists people in rough situations — be it physical abuse, mental abuse, or victims of violence — reestablish their life.” So far, she’s been able to help two individuals and their kids restart life.

This program is similar to Section Eight, she explains. “They provide grants through the Salvation Army. They take an assessment of people’s financials. Then they help with the security deposit, the first month’s rent, and sometimes even the second month’s rent. In addition, they subsidize whatever is needed. It’s a one-to-two-year program.”

This organization offers other community-based programs that provide financial assistance, education, and support groups to help the participant transition into a better life.

She’s now considering purchasing a commercial building to turn it into a four-plex. That might become her next project. She anticipates using the same program. She reveals, “I’ve discovered this is what I need to be doing.”

While her financial goal is to earn $10,000/month in passive income, her dream extends far beyond this. “I want to help more people — not just myself and my family.” Sure, she wants to travel the world, but her bigger goal — her “why” — is to help families and animals in need. “I’ve always had a passion for animals. So that’s one of my significant driving forces — to set up a ranch to rescue animals.”

And she wants to influence people in other ways. “I’ve taught people the AirBnB model. I will be fixing a neighbor’s property so they can maintain it. I like providing knowledge and building others’ confidence to move forward.”

The Importance of Community

Building a community becomes vital to her, and it starts at home. “My wife and I joined fortune builders together. I got hurt at work which enabled us to accelerate quickly through the course. We had our first rehab in two months. I like to do the numbers, so I underwrite many of our deals. I find the private money. She is good at fix-and-flips. I feed her those deals and venture off independently to make more income and have a bigger impact.”

She recognized her goals would be achieved even faster by bringing in outside partners. “We have new partners down in Phoenix, Arizona. We started doing fix-and-flips there, and one of my partners also has a huge heart for helping people and animals. So perhaps I will form a partnership for that purpose.”

She marvels at how the partnerships in Phoenix sped up progress. “We’ve got one property rehabbed, and now we’re under contract to purchase the house next to it. Last night one of the partners brought me in another deal in Scottsdale. We’re also looking to purchase something in Georgia. Things are now moving quickly. Originally I had doubts, and I wanted to take things slow. But once that momentum starts, it just keeps going.”

Investing in real estate has changed her life in so many ways. “I’ve gotten healthier. In the last six months, I’ve lost 20 pounds, and I’m in a better relationship. We are meeting incredible friends. They are truly incredible people. We are forging relationships with people who have the same mindset. Before, I associated with less inspired people, and I wasn’t accomplishing things that were important to me.”

Her Advice

“Don’t do what I did, ‘analysis paralysis.’ I was afraid of making a mistake and not having the answers. I have learned that you learn by your mistakes. It’s okay to make mistakes. A body in motion stays in motion. If you’re sitting around, you’ll stay there.”

She muses, “I haven’t hit the big one yet, but many little wins add up. I keep plugging along and don’t give up. I think without the community, I may have given up. But the support of that group is so tremendous it has kept me propelling forward and not giving up.”

She suggests others surround themselves with like-minded people. “Build a community that will help you succeed and give you knowledge and confidence.”

“Get the education, but don’t get stuck in the minute details of it. Take action, and get a mentor. Enlist the support of partners and find an accountability partner. And never be afraid to reach out and ask for help.”

FIND. A. PARTNER. BUILD. A. COMMUNITY.

Tonga Nfor

adminAugust 4, 2022

Quick Facts:

Profit Strategy: Buy & hold
Number of Units: 3 building package (30 units total)
Personal Money Invested: 20% down payment
Prior Experience: Dr. Nfor, a cardiologist, had limited experience prior to Lance’s training. He had previously invested in 3 deals that worked out that he described as “okayish”.

Here’s his story:

As the father of four young children (three boys and one girl) ages 6 to 11, nothing matters more to Dr. Tonga Nfor than building a legacy for his family and amassing a substantial nest egg that includes a large college fund for the kids to draw from when the time comes. Over the past three years, even before reading Lance Edwards’ book “How To Make Big Money in Small Apartments” and enrolling in Lance’s boot camp, he began working on his goal by investing in real estate, with a focus on small apartments.

“I felt like that was an easier place to start accumulating wealth because I wouldn’t need a ton of capital to get going and in trying a new venture, it made sense to start small before working my way up to something bigger,” he says. I knew enough about investing in small family homes to realize that it wasn’t worth the amount of work I would have to put into it dealing with a single tenant at a time, especially compared to small apartments where you spread your risk over six, 10 or 15 tenants.”

As eager as he was to build a portfolio, Dr. Nfor’s extremely busy schedule as a cardiologist (specializing in cardiovascular disease and interventional cardiology) limited the amount of time the Milwaukee area physician could devote to this sideline passion. So his initial forays into small apartments were passive investing through other people and with a partner. He was part of a group that would pool their money to buy buildings, but was not directly involved in the purchases. Prior to discovering Lance’s book, he had invested in three deals that worked out, in his words, “okayish.”

Dr. Nfor was impressed by Lance’s way of breaking things down simply and the explaining the role of mindset in achieving one’s goals even before embarking on the math involved in doing a deal. He enrolled in a virtual boot camp during COVID – preferring the convenience and saving money and time compared to attending live – and, as a numbers person, took immediately to the crucial process of analyzing the figures quickly via the Doable Deal Generator to determine whether a deal will work or not. He also liked the boot camp’s quick immersion into finding and analyzing deals.

“It was also important to learn that I could generate and complete a deal all by myself,” he says. “Previously, I always assumed that I would have to go through an agent to be able to make an offer and close a deal. It was liberating also to know that I could negotiate directly with a seller, without any representation. By the time I left boot camp, I was already online looking for deals and analyzing them.”

In line with his desire to start investing in properties “in my own backyard,” the first deal Dr. Nfor closed on involved three small apartment complexes about 30 minutes from Milwaukee. Browsing realtor.com, he zeroed in on a 16-unit complex and reached out to the realtor. As they were discussing the numbers, the realtor revealed that the seller had two other buildings that he was considering selling that were not on the market yet. After some discussion, Dr. Nfor agreed to work on a package deal that would include smaller properties of six and eight units. All were “C class buildings,” meaning older structures that might need some upgrading, cosmetic work and repairs – but crunching the numbers, Dr. Nfor felt overall like the bundle was a solid deal that would generate good cash flow.

He made his close to full price offer during a boom time in the market when there was a lot of competition and many others showed interest in the original 16-unit property. The numbers were $600,000 for the 16-unit (down from the original asking price of $650,000), $350,000 for the eight-unit, and $250,000 for the six unit – for a total of $1.2 million. During inspection and due diligence, Dr. Nfor was informed of some repair issues with the roof and also cracks in the exterior of the eight unit, which led him to go back to the seller and seek a $30,000 price concession, which led to a renegotiation on that building to $320,000.

“At that point, the seller was very invested in having the deal for his three properties go through so he didn’t object to changing the selling price,” says Dr. Nfor, who closed on the properties in January 2021. “I know Lance extols the value of seller financing but this seller was not interested in that. He wanted cash to roll into another deal he had going, so I personally put up the down payment from money I had and was able to secure 80 percent via bank loan. This was fine for me because my primary purpose in making this deal is to build equity and value over time.”

By mid-year 2021, he had mostly positive things to report. In line with Lance’s teachings, he has found an efficient and reliable property management company to take care of the buildings and help with marketing efforts to draw good tenants to consider living on the properties – which has resulted in a current 90 percent occupancy. However, the enduring effects of the pandemic on rentals have resulted in a major cash flow challenge, which Dr. Nfor says, “no training or prep could prepare anyone for.”

One of the biggest overall problems, he says, was that the market during the pandemic was crazy, and hot properties were overpriced. A second issue – and one that had a major impact on him and his properties, was that some buildings had tenants who lost their income due to COVID and couldn’t pay rent. Yet because of a state moratorium, they couldn’t be evicted. Dr. Nfor is hopeful that when the moratoriums end, the rent collection challenge will disappear and over the next few months, everything will bounce back to the numbers he envisioned when I bought the properties.

“For a first time small apartment owner,” Dr. Nfor says, “this kind of issue can be quite discouraging, and I freaked out a little bit because of the prospect that I might lose money. During this time, my goal was to simply stay afloat, pay the mortgages and other bills and not worry about profit. But I am optimistic this will pass and everything will settle down. The main thing I have learned through the ups and downs of this process is to trust my gut and trust the numbers that the deal analyzer gave me. You can lean on your feelings and intuition, but ultimately it’s the numbers that should guide your decisions.

“I would urge anyone thinking of getting involved in small apartment investing to educate themselves, formulate a plan and then execute it to the best of your ability – understanding of course, that unexpected setbacks are part of the learning process along the way to success,” he . adds. “Once you have the baseline knowledge, it’s all about taking action. I feel like I have a strong vision for what I want to achieve and am excited to start building on the foundation I have in place.”

Dan Tripp

adminAugust 2, 2022

Quick Facts:

Profit Strategy: Rehab and hold
Number of Units: 3
Personal Money Invested: 20%
Amount Earned: $200 profit per month
Prior Experience: Politics, advocacy, financial services, etc. with some single family home investing in 2021.

Dan had a problem to be envious of. His business paid him well, and he was frugal. By 2021 he needed a place to invest the money he had accumulated.

Dan ran a thriving political advocacy business. The path to this success started when he was elected to the state legislature at 24. He served in this role for 12 years.

Now he does advocacy projects around the country. He incorporated his business in 2011, and after a couple of great years, he generated cash that needed to be invested.

Dan’s Call to Adventure

But that isn’t the start of his story. His life wasn’t always financially abundant. He was married when he was younger to a woman who fancied herself a high roller. He recounts a story about the end of their relationship. “The last month we were together, she wanted us to look at a million-dollar house. It was a stately house on the top of a mountain. I was doing okay financially, but there’s no way I could have afforded this house. She was doing well financially, so we went to see it. I pooh-poohed the idea of buying a million-dollar home. It made no sense whatsoever financially. She looked down on me because of that. When we separated, I left feeling down on myself. I engaged in a lot of negative self-talk.”

He had some liens and a business loan that went bad. The unpaid debt and his ex-wife’s opinion made him doubt his ability to do “big things.”

He has “been at the bottom.” While he never went through bankruptcy, there was a time when he “didn’t have two nickels to rub together.” His credit score was “in the tank.” Less than ten years ago, he was “at the bottom, looking up.” He shared, “I just had to get up every day and not let the bad stuff drag me down.” The key to this ability was his introspection. He was committed to self-exploration and self-development.

Dan began asking himself, “how can I improve? How can I add value to people? That’s what life is all about. Zig Ziglar said it best, ‘you can get anything you want in life if you help enough people get what they want.'”

So that’s what he did. He worked hard at uncovering what others needed so that he could provide value. He explains, “when you do that, you start snowballing goodwill and fortune.”

That is probably the secret to his business’ success. But first, he had some weeding to do. With his divorce, he was freed of the burden of his ex-wife’s spending habits. Next, he had to clear his mind of the resulting negative self-talk. His blossoming business then took priority. The final move was to get out from under his looming pile of debt.

Perhaps the start of his quest for financial freedom came when he began following the teachings of Dave Ramsey. Getting debt-free became the objective.

Dan’s Quest

Dan and his wife were true teammates, tackling their finances together. “One of the reasons we are in a healthy financial position today is because of decisions we made early on as a young married couple. We worked in unison to be debt free. We were both fans of Dave Ramsey.”

They worked tirelessly to pay off their mortgage and erase all their debt. Dan and his wife were finally 100% debt free. The position they were now in was powerful, but to achieve financial independence, they needed to make a mental adjustment.

Dan’s Mental Shift

He began the process of researching investment vehicles. “Do I put our savings in the stock market? Do I invest in real estate? Should I buy another business? What do I do with this money?”

He suspected inflation was inevitable, so “it became ‘mission critical’ for me to find where to put these funds. I settled on real estate. I did a bit with the stock market, but it felt like Las Vegas. It didn’t seem wise to bet on my family’s future.”

He and his wife decided to go the real estate route. His dad and brother were realtors, but Dan had never been interested in real estate.

“When I decided to invest in real estate,” he explains, “one of my mentors suggested I buy ten books on the topic. He advised me to immerse myself in real estate before I purchased my first property.” In Dan’s research, he learned to look for a single-family residence in a nice neighborhood. “Not the best house on the block, but not the worst.”

His goal was to build passive income — the specific objective was $20,000 per month. He bought a couple of single-family homes. “The cash flow was great. They were good properties that didn’t need a lot of repairs.” But he’s an intelligent man and did the math. After the first two investments, he realized, “this is going to take me 20 years to scale this process.”

He shared the predicament with his brother, a Lance Edwards graduate. His brother advised him to read Lance’s book “Big Money in Small Apartments.” The name captured him.

When he read it, “the lights went off.” He realized this would be how he would scale. He loves Lance’s quote, “single families are ‘feel estate,’ not real estate.”

He quickly learned that apartments are all about numbers and scalability. He has an MBA, so that made sense to him. He decided to start Lance’s program.

His lessons continued.

After focusing for years on paying off debt and living frugally, he and his wife faced the challenge of understanding leverage and the risks and rewards. They wanted to remain free of consumer debt but quickly learned the value of leveraging their assets. He clarified, “we realized that if we didn’t leverage, we’d have very little bandwidth.”

Dan’s Why

Lance’s teachings advocate creating a vision board and uncovering your “why.” Dan emotionally shares what he discovered while creating his board. “I’ve got two young children, and COVID amplified my need to be self-sufficient. It taught me that the government will not always be able to come in and solve my problems.” He continued, “I’m a country boy. I grew up on a farm and now live in the city. My ‘why’ is to get back to my roots.”

He says it’s become a game for him of how frugally he can live so that he can “spin off more cash to buy more properties. The goal is always to increase the passive income.” His vision board has him achieving the goal of $20k/month of passive income within the next 3 years. He’s on track to do that.

The Results

Following Lance’s training, things happened pretty quickly. It only took four and a half months from starting Lance’s program to his first multi-family closing.

Now he has an incredible pace going. He writes offers often and closes deals frequently. He’s pursued some “big ones” that haven’t happened yet, but he is confident they will.

The Vision Develops

Dan was taught by his parents, “if you do something, go all out and do it well.” He feels that real estate is a “fun, fun thing to do. There are days I wish I could just do this full-time.”

Dan is familiar with Operation True Potential — Lance’s movement to enhance communities by improving small apartment buildings. Dan agrees that this mission is essential. “What’s your purpose for being in real estate? I’ve got personal reasons that we’ve talked about. But, I am on the county commission here in Greenville, South Carolina. We hear a lot about the need for affordable housing. A segment of society can’t afford houses at the prices they’re going for today.” Operation True Potential resonates with Dan. He wants to be part of the solution.

His Mindset

Dan has always been strong-willed and capable of overcoming obstacles. But he attributes Lance’s mindset training as a part of what has sped up and increased his success — in all areas of his life.

“Something about Lance’s program helped supercharge my mindset.” He describes his morning routine. “I’m in the office most mornings at 4:30 a.m. I go through my vision board and do all the exercises that Lance taught us to do. This mental training has spilled over into other areas of my life.”

His Advice

“Small apartment investing is easy if you put your mind to it.” He recounts a story about his early days with Lance’s program. He talks about how he went through the “assignments” before attending the Bootcamp. He religiously used Lance’s scripts to talk to brokers. He noticed opportunity flow sped up because the brokers would send him listings — and pocket listings, too. He realized Lance’s process works exceptionally well. “I’ve learned that anything is possible if you jump in with both feet with a good, positive attitude.”

He quotes Winston Churchill about “never ever, ever, ever, ever, ever giving up.” He advises, “You’ve got to take the good with the bad. Life will throw you curveballs, but you must keep going.”

He expands on the need for a process that anchors you to a positive mindset to ensure you keep going. He’s developed a robust daily routine. “I do affirmations. I’ve got pictures of my family. Every morning, I look at these pictures, which make me smile. I read my affirmations and my statement. When you do it repetitively every day, it changes your mindset and anchors you to the affirmations you’re talking about or the concepts you’re thinking about. Five or six times a week, I’m in my office going through my affirmations and photos and thinking about my “why.” That process anchors me through the good and the bad.”

He continues, “when I read my statement every day, it feels like it has already happened. I live my future every day. I go online and look for that perfect piece of land I will buy. In my mind, it’s already happened.” He sees himself sitting on “150 acres with my kids. I have a tractor, so we can plant food, and we’ve got a house we built. The kids are running around on ATVs and fishing at the pond. It’s an idyllic life where time is slowed down.”

His morning routine — the affirmations, visualizations, and connection to his “why” — has “supercharged” his mindset. “I see the benefits of that in my real estate business. I see the benefits in my home. I see the benefits in my advocacy business. A positive mindset changes your outlook on life. That’s been a huge benefit to doing this.”

Dan’s Final Advice

“You have to look for your North Star. You have to think big and dream big. Realize that if you just stick with it and work hard, you will get much further than you ever thought possible. Take action. Be bold. Develop a positive mindset. Every day you need to work proactively on ensuring your attitude is helping you, not hindering you. And then you just never, ever, ever, ever, ever give up.”

CREATE. A. MINDSET. ROUTINE. AND. NEVER. EVER. GIVE. UP.

Paul & Mary Lindner

adminJuly 29, 2022

Quick Facts:

Profit Strategy: Rehab and Wholesale (using owner finance to their buyer!)
Number: 20 units
Amount Earned: They estimate they’ll make $87k within 2 years
Prior Experience: Mary is a longtime real estate professional in Dallas, TX

Here’s their story:

A Certified Property Manager with nearly 40 years of experience in the multi-family realm, Mary Lindner has the distinction of being the only person who attended a Lance Edwards boot camp to do a wholesale and an owner finance of a property in the same deal. She and her husband and investment partner Paul had two essential requirements for their first deal: that the property be small and require a minimal down payment, and that it be in Texas because, as a longtime real estate professional in Dallas, Mary had easy access to Texas Association of Realtors form.

Paul found a suitable property in the border town of McAllen, some eight hours away, on Loopnet, and the couple reached out to the daughter of the owner, whose family had owned the ten unit single bedroom apartment building for 30 years without spending much time on upkeep and leaving the rent without increases. Checking comps in the area on Apartments.com, the Lindners learned that all the rents in the area were higher. The property also clearly needed some rehab work.

They also engaged in several of the strategies they learned from Lance, including using Google maps to start “driving the streets” around the property to make sure it’s a decent neighborhood. The property was very close to the bus line and close to buildings and businesses that were part of a downtown revitalization project. Mary raves about the success they had using Lance’s famed “Doable Deal Generator,” which she describes as “five year pro forma projection of income and expenses on the property. The beauty of this spreadsheet is that not only can you plug in actual numbers off the financials from the seller, you can also compare those to expenses you expect to incur.”

The McAllen property was listed at $280,000, and once the Lindners saw it was in a decent neighborhood they realized they could increase the rent, and once they did some rehab on things like faucets and fixtures, maintenance expenses would go down for the person they would be wholesaling it to. They negotiated the price down to $250,000.

“We had never done a wholesale deal before, but knew how it worked,” says Mary. “We put together the pro forma in the Doable Deal Generator, which came up with numbers for us in three different potential scenarios, an all cash deal, an owner finance deal and one that fell somewhere in between those two. Based on the numbers, which included the money we put into rehabbing the property, we marketed it like Lance told us. Someone found it on his website and contacted us. The prospective buyers knew that if they could buy with owner financing, they would be able to pay us more for it. We worked with our coach Hoku, and Lance helped us with some of the nitty gritty questions we had and helped us structure the deal.

“Ultimately we sold it for $330,000,” she adds, “and we got almost $10,000 at the closing table since we owner financed. We loaned the buyer $70,000 at 5% interest, and they are currently making monthly payments of $305 – with a balloon due in 23 months. By that time, we estimate that we will have made $87,000 on the deal. Our plan is to do wholesaling for a while to gain more capital for more permanent purchases down the road.”

Mary Lindner brings a dynamic background to her current endeavors as a multi-family investor. In the early 80s, she started out in as a leasing agent in multifamily property management, overseeing a 350 unit property. Over the years, she worked her way up to assistant manager of a 440 unit property, and then manager of huge properties ranging from 264 to 500 units. She later became a regional manager supervising eight apartment managers handling a total of over 2200 unites – and became one of the few women in the 90s to attend the Institute of Real Estate Management and receive a CPM. All of these experiences opened doors for her as far as learning the financial end of multi-family housing.

All told, Mary has been a realtor for over 30 years and became a broker six years ago. She and Paul became investors some years ago via their involvement with one of the local investment clubs in Dallas. Despite her background in managing apartments, their investments were limited to single family properties. Because they were focused on work and raising their children, they only had so much time to devote to these endeavors. Several years ago, she met Lance at an investor club meeting where he spoke.

“I really liked what he had to say, and quickly decided that if we were ever going to get into small apartment investing, he would be the person I wante to learn from,” she says. “He had made a lot of money for many investors and I knew he could help us do the same. Once the kids were out of the house, we knew it was time. We saw he was having a boot camp, and decided to sign up. Our March 2020 sessions were moved online because of the pandemic, but we still found them very informative. We also loved the fact that he and his staff are there to help us every step of the way.”

Like many families, The Lindners’ interest in investing in small apartments is legacy-related, based on their desire to leave something to their two children – which they adopted from Russia many years ago – and two grandsons. But their vision also extends beyond family to buying properties they can convert into specially equipped homes for disabled veterans and single parents struggling to get to the next phase of their lives.

“Many of our family members are in the military, and I feel sad when I hear things about disabled vets being forced to live in undesirable places because they have no other options,” Mary says. “It’s something I have been wanting to do for many years and now with small apartment investing, I see a path to do that. Just recently I took a course in this type of thing to learn more. We want to set things up where we would have a small apartment property and maybe a large house we could make modifications to for those in wheelchairs.

“Likewise, we’ve always had a vision to own a small apartment property as a place where single parents can live till they get back on their feet,” she adds. “We could help these single parents get schooling and learn how to interview for jobs. It would also be an opportunity to employ elderly people who could come and take care of the children as their parents go for interviews and start working. Sure, we would all like to have more money to live on, but we don’t have to be rich in the conventional way. Helping vets and single parents stay off the street and get back on their feet is a very worthwhile goal to us. With Lance’s help, we have laid a foundation to eventually achieve that goal and are currently looking for the right deals to take the next step.”

Mark Chornahus

adminJuly 18, 2019

Circle of Champions Winner

Mark was flipping a 13-unit small apartment building, hoping to make $15,000 in an assignment fee. He accomplished this within 90 days of getting started.

What you’ll learn in this episode:

*Mark has been doing real estate on and off for six years, recently deciding to take it more seriously and do it full time

*He found that with other mentors and seminars, he always left wanting more information. He found Lance’s boot camps to be one of the better ones. He believes if he had upgraded his mentorship, he would have gotten all of his residual questions answered

*He chose small apartments vs. single homes because of the bigger potential returns. If you have one unit and it doesn’t rent out, you’re losing money. With apartment buildings and multi-family you have a bunch of units, so you have better cash flow possibilities

*He found his deal on the net and contacted the realtor who had it listed. The list price was $420,000 and gave him the three offer LOI he learned from Ron Legrand in his boot camp. The seller would not owner finance at all. So he wouldn’t accept the offer. He countered at $382 after Mark submitted $360

*All communication was through the broker. Their negotiation process was very easy

*For $420,000, Mark put together the three offers and he accepted cash at $382,000 and then put together a buyer flyer and did the marketing through Lance Edwards

*He got it under contact with the realtor and submitted the contract to customer service and they told him to submit it with the flyer and a summary

*He got around ten calls from the flyers buyer generator, but everyone was asking for owner financing and he couldn’t make that work. He again tried to convince the owner to self-finance, but he would not

*Mark’s sale price was $399,000. He was aiming to profit $17-18,000

*Every potential buyer wanted financing and had no cash to worth with

*Mark put down $10,000 in earnest money

*He is moving on to the next deal, using Craigslist and Loopnet. He has since closed another deal in Branson, MO

*The most important thing he learned is how to calculate income and expenses. Also, post ad for property for sale. They always have like 15-20 percent expenses. With Lance’s program, they give you the formula and show you actually what it’s going to be. So even when you think you’re getting a deal, you’re not actually getting a deal. You can pretty much call out the seller right away. Another thing is you just have to stick with it and keep going

*His family has been involved in real estate purchases mostly in California and Arizona, mostly single-family units

*When he learned about Lance’s small apartment program, he started thinking about how much better the number in buying and selling would be in other states

*He did the “plug and play” and he found this deal through one of the postcards about three or four months in

*He was presented with three triplexes in Indiana but rejected the third one because it was in bad condition and in a bad area. It was the seller’s decision to x out the third one from the deal because it needed too much work

*The owner was interested in selling so he could “go bigger” and find 10-15 unit buildings that he could invest in with friends

*In about two or three weeks, the owner and Ryan agreed on a number that worked for them. Ryan says, however, “we were not able to sell our financing because they wanted to get out and go big.”

*Ryan used one of Lance’s buyer flyers to help build his potential buyer list

*After the team made sure the summary Ryan created was legit, Ryan started marketing the property. In about two or three weeks, he started getting hits and found a very interested person

*It was nerve-wracking in the beginning with the buyer. The first person who called was from a buyer group that the Atlantis team had found, and it was a big investor who had hard questions Ryan couldn’t answer. He got good advice from Lance’s team but the potential buyer ultimately decided he didn’t want to buy in Indiana

*The second buyer was friendly and he and Ryan struck up an immediate rapport. He understood the numbers and had an additional unit down the street. He was excited but it was still nerve-wracking for Ryan since he was so new

*Ryan did a conference call with the seller and buyer. The seller was skeptical, but his objections were overcome and they signed up for inspection dates

*One of the two buildings was great, and the photos Ryan got in the beginning from the cellar and the ones the buyer received at the inspection date were the same. The other building, unfortunately, was “like a D-minus building.” The outside looked the same but the second was in horrible condition and was going to need such a huge overhaul that the deal as is no longer made sense

*The buyer backed out of the deal, and the seller cancelled the deal too, realizing how bad it was after never having really been in the building

*Ryan had only put down $100 on each complex before getting them under contract

*Despite the setback, Ryan liked the postcard method and the fact that the intake team did all the work on the front end. So when he called the seller he had all the answers. “It was as if I had a fellow employee call everything in there, with me as the boss, kind of verifying before giving him a deal number.”

*Realizing that the seller wasn’t completely honest about the bad building was an eye opener, but Ryan saw some positives in the process and says it helped him build his confidence

*He currently has five deals in the negotiating stages. He’s calling on postcards, trying to get seller financing, get terms and get the deals done

*The single most important thing he learned is that you need to work on this like it’s a math problem from school. You need a number of surefire things to call on and to inquire about or you won’t get far because you can’t just rely on a single deal. You have to have 15, 20 or 30 of them, and then they will start closing. It’s crucial to keep getting more in the pipeline.

Orna & Gary Interview

adminJuly 18, 2019

Circle of Champions Winner

Orna and Gary are business partners and they flipped a fourplex (quadplex), a four unit small apartment building, earning $14,000, achieving this in 90 days

What you’ll learn in this episode:

*They started with small apartments about three years ago. First, they attended Ron Legrand seminars. They assumed the right path was graduating from single family homes to multi-family homes, but after reading Lance Edwards’ book, their attitude started to change. They were heavily involved in single family homes and wanted to see if that could work. They were doing this in Los Angeles and found it difficult because of the prices and other roadblocks.

*Another reason they made the switch to multi-family buildings is because it would be difficult to do a rehab on a single family house in another state without being there – having to trust people they didn’t really know to help them

*Orna moved to Los Angeles to be a filmmaker and entered real estate because the film industry is so volatile

*Gary feels that the main objective in doing multi family is having the ability to build income on a continuous basis rather than having to look for another property to flip all the time. You need a combination if you really want to do well. He doesn’t believe you can get rich just flipping properties

*They had their direct mail marketing done by Lance’s people. The person who responded to the postcard that led to their first deal called Gary’s office. He had a productive discussion with her and hearing the preliminary numbers as far as expenses and income led him to decide it was wise to make an offer. Their offer was accepted

*Orna and Gary sent the seller an LOI with the three offers. They chose the cash. There was a discussion about the $250 “door thing” and Gary was able to talk them into leading that into the contract. He considered it a very good deal. The title company did all the paperwork and Gary just received confirmation that it was going to close soon

*Orna thinks it’s good to have a partner. It can be scary doing everything by yourself when you’re embarking on something new. She likes the idea of splitting up duties with Gary and complementing each other’s strengths and weaknesses.

*She remembers their marketing started in mid-January and by mid-March Gary got the first call. The tag team concept worked perfectly, with Orna following up Gary’s call and getting more details. It’s a great way to build rapport with the seller or buyer.

*The purchase price was $150,000 minus the thousand dollars for the repair

*Gary says the property had a lot of plusses going for it, but admit they had considered offering less. Their starting offer was $150,0000 and the seller left it right there. The big plus was over $400 per door per month profit of cash flow. It had a master lease that would be in place for another year and a half that guarantees income even if the apartments are empty

*Gary admits they were teetering between buying the property and utilizing the income from it or selling it to provide a possible cushion moving forward

*Their buyer answered an ad on the Who’s It buyer generator. They did the buyer flyer, executive summary. They got 21 total responses

*A guy named Alex called Gary and made an immediate offer. They negotiated a bit and landed on what he and Orna were looking for a $15,000 profit. They wound up with $14,000 after a few days of negotiation. They had bought it for $150,000 and were asking $165,000

*The first offer was full price but they wanted Gary and Orna to pay $3500 towards their closing costs. Gary responded no. The buyers returned and said they didn’t realize that Gary and Orna were wholesaling, they thought they were the owners. The buyers’ counteroffer was worse than the first. They went from $3500 to $500 on the closing, with a purchase price of $164,000.

*Gary explained that the buyer was getting equity in the property and $400 per door per month cash flow

*An explanation of their work as a “tag team” and how they discuss and plan for different potential scenarios (including if the buyer pulled out of the deal) in the buying and selling processes

*The bank’s appraisal came back lower than what the bank was willing to lend compared to what the original amount they would lend to the buyer. It was $159,000 to $164,000

*The bank originally thought Gary and Orna were real estate agents

*Gary says the most important thing he’s learned is the importance of sticking with it. He believes you don’t fail until you give up. There are a lot of things to learn. He urges newcomers to the multi-family word to be patient and utilize any avenue you can to fill the gaps. He reads a lot about financing multi-family properties and how to work deals he doesn’t yet understand

*Orna says you need to have a good foundation on how things work and then keep the momentum going, reading articles and books as well as researching the marketing to see what’s going on in different places. Understanding trends is important, as is patience because everything happens step by step