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Episode 022 - Real Estate Talk with Expert Maria Giordano

re investing Jan 25, 2019

Find out more about Maria and her training at Real Estate Profit System.  You can pick up her free guide, The 7 Powerful Steps to Finding Motivated Sellers, there.  Also, remember to send Maria an email and ask her to register you in her free Webinar series coming up in January.

Find out more and register for our "Plan Your Portfolio Webinar," January 10, 2019, at 7 pm Arizona Time here.  


 Here is the book and audio book, as well as the Cashflow Game, that Michelle referenced in today's podcast. Note, these are Affiliate Links.  Plus, you can try Audible for 30-Days Free and get your first audiobook free.  After that, you can pay by credit or purchase a membership.  With a membership, you get 1 audiobook and 2 Audible Originals each month for only $14.95 per month.

 [00:00] Over the last two centuries nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave With less risk and Less capital while creating greater income, is your host, Best selling author and speaker, Michelle Russell.

[00:21] Hi this is Michelle the master of money mindset and this is the short term rental revenue podcast and in today's podcast I have a great interview with my friend Maria Giordano and Maria is an amazing amazing investor. She's been on ABC News's Nightline, Good Morning America, The Wall Street Journal, Investor's Business Daily,... just a variety of publications. She is amazing. And so I'm going to share her knowledge with you.

[00:49] But really quick first before I do, I wanted to let you know a couple of little news items. First thing was... My friend from rich dad called me and let me know that the cash flow game no longer two hundred fifty dollars. No. Guess what. It is 79 dollars and it's available on Amazon now. I know life changes but this is amazing that you can get this game for seventy nine dollars and I really want you to do that. We put an affiliate link in there so you could click and get the game right away it's in the show notes for last week. It'll be in the show notes again for this week. But what will be really cool is I've got full travel schedule this year and I'm going to be... I Live here in Phoenix. I also have a home in Florida so I'm going to be back and forth between those two places a couple of times this year, which will be really fun but I'm also going to be in Canada three times this year. I'm going to be out in L.A. at least two times and down in New Orleans as well. And one more place. Oh Nashville. And now I'll be in Nashville. So I find that... Either like the day before, I'll put an extra day in at the beginning of when I have to be at those places or at the end and we could do some cashflow games because cash flow is fun. But I want you to do me a favor you buy the game and you show up too with your game so that we've got enough games for everybody. I'll bring one but I can't bring enough for everybody but we'll sit and we'll have a cashflow night and it'll be a blast. You'll love it. It's great whether you're a first time investor or a seasoned investor. We have so much fun playing cash flow, so anyways we're going to do that.

[02:31] Second thing I wanted to tell you was that they edited out part of my dynamic pricing podcast because I speak really fast and I think it confuses a lot of people especially the people who are doing the transcripts. I'm always Giggling, because they're like, "why does she speaks so fast?" I don't think I speak fast but they think I speak fast. But when they did the editing, what they... when. You know, we were listening to part of it, just making sure that things were going right and checking to make sure that we had the right books that we were writing down. And I said hey where's the part about that dynamic pricing having limited service and they're like oh we didn't realize that was important. I'm like yeah that's important. So here's the deal. Dynamic pricing on most websites has like limited service and it's easy to explain why. If you go to Airbnb, they don't, they do dynamic pricing for everywhere, because they go by their site, their analysts look at the demand of, you know, this date this area. They can go buy their analytics of their searches and the search engine inside of their Web site. But other dynamic pricing use, uh they use so many more little categories to in order to gather all their information - their data - and to analyze it with. And so the bigger, you know, the companies that that's all they do or that's pretty much all they do, they usually have a limited service available. So they'll they'll do major cities and sometimes you know other little parts of cities but they don't do every area. So make sure that before you go and sign up for some dynamic pricing and pay for it, that they literally do your area.

[04:29] And the last thing I wanted to mention to you before we get into Maria's interview is the fact that we have on our Web site - we've had it there for several weeks - but you get a free smoke detector and carbon monoxide detector from Airbnb if you're an active listing host there. And we've had that information there for a while but I thought I would mention it to you because a couple of things happened in the past couple weeks with some accidents and there's no need for any accidents especially if somebody you know a heater goes off or something and carbon monoxide poisoning there is absolutely no reason that should ever happen. You can get a free carbon monoxide detector and I think it's a combo - smoke detector/ carbon monoxide detector - a free one, from Airbnb, if you're a host there. So just call and use that. Well you don't even have to call. Just go to our Web site. and right there, on the home page, scroll down a tiny bit you'll see a picture of a smoke detector and boom! That link right there takes you directly to AirBNB and you can fill out the form. They've got some restrictions on it. What you have to be, you know, maybe you have to have your listing for so many months or whatever It is but you'll find out when you fill it out whether or not you can get it. But most of the time, if you're an active host there, they give it to you for free. And that's a really great thing to have.

[05:58] So real quick I want to give a short introduction to Maria Giordano. Maria is a full time real estate investor. She initially got her start doing some flip properties but then she moved into buy and holds and later into spec builds and land development. But in a former life, Maria was a trauma nurse. She worked days, nights, weekends, holidays. She didn't get to see much of her family, But she's been a divorced single mother. She knows all too well what it's like to have more money than money. She learned early on that real estate was the answer - creating more millionaires and billionaires than any other industry. And Maria, along with her husband Gary, are authors of four books and they speak nationally all over the United States. And I am blessed enough to know them and love them and call them my friends. They are very, very dear friends of mine. So without further ado, here's my interview with Maria Giordano!

[06:55] Maria Giordano, how have you been? How was your Christmas?

[06:59] Awesome. It was super relaxing.

[07:02] Did you get to spend time with all of your kids?

[07:05] All five of my children. Maybe I shouldn't say it was awesome. It was like exhausting and awesome... And awesome at the same time.

[07:14] I think I touched on it when I was talking about you in some prior podcasts. I said Maria's has got five kids just like me. So I was going, I was going to kind of tease you and say...

[07:25] So together we have a basketball team.

[07:29] Exactly. What were you thinking? Same thing you were Michelle.

[07:34] Either that or honestly, we weren't.

[07:36] We're not thinking at all. But I wanted to see if you could tell the listeners, like, just give them a background on you because I did touch on the fact that you were a nurse and you were able to leave your job. How did you get started? Give me a little bit of your background and how you got started in investing in real estate.

[07:55] Oh gosh. So I grew up and my mom was an insurance agent and my father worked in construction. He was foreman for a commercial logical contractor. He did big things for like airports, power plants, that kind of stuff. And my parents had rental properties. They actually built their rental properties from the ground up. So that's where I got a little bit of my building bug from.

[08:20] Nice. That was in Wisconsin, right?

[08:21] That was in Wisconsin. Yep yep. In a little town called Sokville. They got their start with their properties and then later on ??? and Gainsville and stuff like that. But what I saw was back then you know we didn't have all these amazing tenants screenings and different stuff that we have now adays. Also, Back then. I mean people forget in the late 70s early 80s we had horrendous interest rates. I mean my parents said that... The reason why I knew never to do an adjustable, a three year ARM, is my... Having my parents when I was a kid and they just about lost their house and everything because it adjusted to 18 percent.

[09:01] Oh, my God. Awful.

[09:02] Back in the early 80s. And that left a huge... Actually that was 1980, and that left a huge, huge impression on me and I saw my parents' tenants would chew them up and spit them out. They'd say no pets, they'd come and the house was trashed, because of cat urine and dog feces.

[09:17] Yeah.

[09:19] I saw what happened when you had greedy city council people get involved in your... uh

[09:27] Sure, in the permitting and all the different things that they can, like, anything that they can put a tax on or a license or permits... They will do that. They'll go crazy. And they drain the guys dry, they drain the little guys dry. Big guys can take it, but little guys usually can't.

[09:46] Right. Exactly. Exactly. So yeah. So that was kind of like my intro to it and I didn't ever think I wanted to get involved in real estate at all. But I quickly learned that, you know, when you look at real estate is made more millionaires and billionaires than anything else in the world. And when I was a single mom, mother of four, I would do anything to make sure I paid my mortgage and stuff and I would go to people and I would talk to them about getting involved in real estate. And it was like, "yeah, yeah, yeah, Honey. You know, you can't do that." And then I met my husband Gary who also had a real estate bug as well - he built a house with this father and had done some fix and flips - and it was really like the perfect marriage as far as marriage goes. Obviously,

[10:36] In all ways.

[10:41] It's like, I went from, you know, having to work nights, weekends, day/night shift rotations, you know, telling my kids, "hey, can't open present. Mommy... You've got to wait for Mommy to come home from work or you've got to wait for Gary to come home from work. Which was horrible, but like everybody else, the market had crashed. I mean this was back around 2009 and we had lost all of our nest egg. We had just gotten married with two properties. Gary's was horrendously upside down. And, you know, you're big on the Airbnb stuff, and so our first property actually became a vacation rental, Because Gary's property... we didn't want to end up, you know, doing a short sale or foreclosure or any like that. But rentals were, I mean, we had a mortgage that was about $1400 a month and you'd be lucky if you could get a thousand dollars a month for regular rent. And so we were searching for other ways to do it. And we thought, you know what, let's try... And back then we called it VRBO, and thati site is still around, and so we did a vacation rental by owner.

[11:50] And my gosh, in like three - three and a half months, we got our entire mortgage, bills, everything for... all of our expenses covered. And I was like, wo, I'm in.

[12:04] Yep! Sign me up! Sign me up!

[12:05] Exactly. But I learned something really quick, doing that as well. We rented it, because it was a golf course property, it was on the 5th tee box of this little public golf course and stuff. We had a Chicago Cub pitcher that, with his family, that wanted to rent it out and we thought, this is perfect, you know, because we can do a 30 day and get more money and all that kind of stuff. Well, they trashed it.

[12:34] Oh, no!

[12:34] They trashed it.

[12:36] Not a Chicago Cubs player?

[12:36] And luckily... I know, hard to believe, Michelle. Right?

[12:42] We were from the Southside. So, we're like Sox fans. We hated the Cubs. But everybody is like, "Oh, you're from Chicago. You love the Cubs." No. No we don't. Not everybody does.

[12:54] Right? But luckily I had a big, huge security deposit.

[13:04] Good for you.

[13:04] And it literally took the five thousand dollar security... I think we had a hundred dollars leftover. After everything was settled. I mean, they had poop in the spa. I mean, who does that?

[13:14] Oh, come on!

[13:16] It was just, I mean they took this really expensive bedspread and laid it out in the sun and were using it as a giant, you know, beach blanket kind of thing. And ruined that. It was just... horrible. And, once again, I thinking, "Oh God. I am reliving my parents."

[13:31] (laughter)

[13:34] Oh, god. And not in a good way. So I turned around and, you know, thought, you know what? Let's rent to like the 80 percentile." So basically, in Arizona, that's your snowbirds - a lot of them from the Midwest, from Alaska. I want grandma and grandpa.

[13:55] Yep. Grandma and grandpa, I've said it on my show a bunch of times. I love snowbirds. They're awesome and they take care of your property.

[14:02] and they do.

[14:03] They really do.

[14:04] Uh huh. So that's what we started doing was renting, and we had that thing rented out all the way through mid May and then, quite by accident, I stumbled on, you know, when it be summer anybody wants to come to Arizona when it's like 115 out. Right? Well, where do we all go in Arizona when it's 115? High Country. San Diego. You know, well what happens when most people leave town. We don't turn off our water to our houses and we have hoses to our washing machines and stuff that are 10 years old and they spring a leak or we have a toilet that runs or pipes that breaks. And so I was approached by insurance companies during that period of time to do basically a modified long term. So it was like anywhere from 30 to 90 day rental with them during the summer time. So I cashflowed it in the summer, as well. And insurance companies are awesome because their checks always go through.

[15:03] Oh, yeah.

[15:03] And they pay in advance.

[15:05] Yep.

[15:06] And, obviously, insurance companies run it like a business. So it's awesome. So I had a great reputation with insurance companies so I would constantly get phone calls from them, as well. And so that's what our rental population would be in the off season. And so it just worked out wonderful and plus those people also took great care of the House and if they didn't, guess what?

[15:28] Insurance Company.

[15:28] There's an insurance company behind it.

[15:29] Yep.

[15:30] So, but then, what... And that was our very first and, as you know, most people have one property.

[15:38] So then I spent the next two years learning everything I could about real estate. And finally I got off the fence and we did our first fix and flip property. And I was a kid and I sent the... I had an Inspection done and I still recommend you have one done. Especially people first getting into it, that they always have an inspection done on their property. So we had inspection done and I sent that to my my father. He was in construction and he had just retired. Oh my gosh! My dad thought I had gone off the deep end because he's reading this inspection report. And of Course, he's from the construction industry and everything on it says, "wiring - substandard, roof - holes in it, you know, Skylights basically." I was, Honestly, short of the property burning to the ground and collecting the insurance money. There was nothing I might do.

[16:29] You did have a house that you bought that had a fire.

[16:33] Yes, I did have one of those, too.

[16:38] But it was funny because I was very like most people I was really chicken to get off the fence and once I did I had so many properties going within six months I was doing 4 to 6 properties per month and I quit my day job. I quit my job working for Scottdale health care as a nurse. So it was just awesome. So now I could like be the mom you know not have to worry about that. I mean, planning my vacation six months or a year or more in advance with the hospital no longer for worrying about working holidays and weekends and late shifts and all that other fun stuff that you know I'm so glad those people do it, because you know somebody needs to do it but. It just wasn't for me.

[17:26] And you know Michelle when you have little kids, telling them that you've got you know oh sorry I can't take you to the fireworks you know for the fourth of July or I'm sorry you have to wait till 8:00 o'clock at night to open up your Christmas presents. That kinda bites.

[17:40] It does. It's so sad when you see... Or even think about your parents and all the work that they did. How rarely you get to see them when they have that.

[17:49] Exactly.

[17:51] I mean, it is... It's such a great deal. It's such a great deal when you start doing real estate and you actually start making money and you see the opportunity in it. It sets something on fire inside you. Like your first really good rental property, where you really start making money, just goes "hey, wait a minute..." It's just like... This could be really good. This could be really awesome.

[18:14] You really did luck out with the... Well, I don't want to say luck out because honestly, people always say that people are lucky and that, oh they just had a lot of luck a lot of times. It's not really luck. It's more the fact that you were educated and you put a lot of time and effort into doing your due diligence when it came to your properties. But doing all that work, you were very lucky with your first properties, weren't you? You did pretty well.

[06:53] Yeah, I did really well. And like most people, I learned right away that, you know, that whole thing of, you know, make... it's easy, anyone can do it - which is true. Anyone CAN do it but it's still work. I mean when you're fixing and flipping. There's still a lot work here. You know, marketing... So I quickly learned I had to put systems in place. The other thing I learned is the value of using other people's money. And once you get started with using other people's money and other people besides the ones that you're using find out, the money you're making and that they can actually put their money to work on something that's safer than average.

[06:53] Everybody wants to invest with you. Yeah.

[06:53] But he wants to invest in there stock you get so many phone calls and I still use other people like I close a big deal in November and I use someone else's money. And people ask me why are you lying. Well I don't care if you're a billionaire. You only have so much money and you will eventually run out. I mean when you look at the real estate moguls of today I mean Donald Trump like him or hate him he got to where he is by using other people's money and the power of using other people's money because think of what your return is when you don't use your own money. Yeah exponential. I mean it just goes on forever. Exactly and you can do so many more deals especially when you're starting out.

[19:58] And the thing is to like you said when you when you do deals and you've made a lot of money and you have because your husband's a doctor and you guys were in the medical field you have a lot of doctors who invest with you. And when you do you make money for them you do a deal that works out for them. What do they do with the money that you pay them back. You get it all done. You pay them all of the money back. What are they saying.

[20:19] Oh they want to do again.

[20:22] Let's do it again!

[20:22] Do you have another one coming? And it's funny. It's interesting that you wrote that is a doctor and you know having more access to money. It's interesting that the first investors we got weren't physicians because they trust the stock market more and it's not until they see other people making money because you know doctors are very skeptical because everybody goes all the time with deals.

[20:45] Oh absolutely

[20:46] Constantly

[20:48] We used to have them knocking on our doors constantly.

[20:49] Yeah, as you know. And it's like. But. It's the a lot of retired people whose money is just sitting there or you know people got an inheritance. People who have socked away ten, twenty, forty thousand dollars or whatever. They want to find deals that they can invest in that are safer. And honestly you know you can't say real estate is safe because honestly investing is not safe. There's always risk involves

[21:15] There's always risks

[21:16] But at least with real estate you have a property you can do multiple things with the like I tell people my students I coach, when I look at a property I have multiple exit strategies for one property.

[21:28] Yep.

[21:28] You have to.

[21:29] You have to.

[21:29] If one thing goes wrong, at least I have a window or a door to another.

[21:32] Yep. Yep. We were talking about exit strategies on one of the episodes. And I was talking about that eight thousand dollars I lost one time and it was because I walked away from it. But I said, Man, one thing you learn is you have multiple exit strategies. I mean, that's it.

[21:53] Um hum.

[21:54] It's like, now, I make sure that it's like, I've got this if this happens, then I can do this. If this doesn't work then I can do this. Absolutely you have to do that. But using other people's money is crucial. And a lot of people when they first get started in doing a short term rental, what they do is they use their own property a property that they got from somebody or a room in their house or something. There are very few people who do properties the way that you know we're teaching people and it's to go out and rent from another landlord. Now if you do that, what's really cool and what I love about you and what I think you're brilliant at, among anything, Maria is a kind of person - just so you guys know - Maria's the kind of person that makes men shudder when they hear her talk. They just tremble in their boots, because her knowledge and her expertise just. I mean she reeks of it. And when she starts to talk even experts will back down. I mean, they just shudder. She is an expert negotiator which is I just love to listen to her and all the different deals she does. But what I thought would be really beneficial for the listeners was to bring you on. And have you talk about how they can go from being just owning one property of their own or renting one property of their own.

[23:15] How can they take this and then move into literally becoming a real estate investor like you. I mean because you you've worked out ways where you've done lease purchases or sandwich leases and you've wrapped things around. You've negotiated deals and terms. Once you know what you're making on a property how much easier is that and how did how did they get from A to B. How did they get from just one little property and feeling like OK just testing the water to that to the next step of really taking taking that dive and saying I'm going to be an investor.

[23:51] Well first of all I mean it's you know wanting to really do it and understanding that you know this is a business. It's really not a hobby kind of thing and you want to take that plunge and go ahead.

[24:02] Now if you're like most people and the biggest number one objection or concern I get is, why I don't have the money. Well who says you can't go out there and you can't do lease options and lease options are an excellent excellent way and there's several different types of ways to structure to structure a lease option. You can also do. And you mentioned you know different types of seller financing, be it subject to, be it straight seller financing directly with the home seller or you know wrap around mortgages, where you're wrapping it and and doing all sorts of different ways. But for those of you who don't have the money to put down and start with these options and you can also do wholesale and to to get quick cash but with a lease option you're going to lease the property from the landlord whatever for an option fee, and your option fee can be anything from a hundred bucks, five hundred, five thousand. Whatever you decide you want it to be.

[25:00] And that all that option is doing is giving you the option to purchase that property at a later specified date, be it one year, two years, five years out you decide how far out you want to go. Well, once you lease that property, you need to do one of two things you can either decide that you're going to make it into a vacation rental and rent that out and therefore you're making the spread and the spread is the difference between so say your lease or your rent to that seller is a thousand a month. Well you say your renting it out for three or 4000 a month and that's pretty small potatoes for a vacation rental. As we all know to let's say 5000 a month to keep it simple.

[25:42] Well your take is going to be the difference between the one thousand and the five so that's four thousand dollars. Just make sure there's enough that covers all your expenses and everything that you need to. So say your expenses might come to, you know for cleaning and all that other stuff, another two. You're still making 2000 dollars. Chances are that property you're probably getting it below market for the rent so your market might be twelve hundred. But even if you're paying full market for your rent you're making twice that.

[26:13] Right.

[26:14] And that is where it is just so awesome and you've locked in that option to buy that property for say it's a five year term.

[26:22] So you take that money and put that money away and start having your down so you know if you were to get a conventional mortgage later on but you actually a lot of your. What I love about Maria is she she will actually get a mortgage. The owner to carry the mortgage a lot of times

[26:41] yeah yeah.

[26:42] So I just did one the in November, a couple of months ago, actually not even, that was -and you're going to love this- It was basically going to go to foreclosure, bad divorce and you know going after people who are in divorce is a great tool or great you know group to go after

[27:01] yeah, it's a strategy.

[27:03] We're, people forget, they think, oh I'm stalking them I'm you know Dirtbag... NO. You are in the people helping business. People have problems. And if we're not there to help them, you know what are we going to do?

[27:18] You, you are... I honestly, you can do something better and more beneficial for somebody than some shark who would knock on their door and ask them and really get it for like the same thing with people who deal with people who are going through deaths in their family and try to help out families that way. You go. You can be as good or as bad as you want. We always prefer to be on the up and up. So yeah it's not a bad thing. So, tell us about this deal.

[27:47] So this was an amazing deal.

[27:49] the divorced couple.

[27:50] Yes. you know divorce can be really really ugly. I am fortunate that you know, I'm on speaking terms with my exes and the one you said stay at my house when he was in town. And that kind of stuff but unfortunately not all divorces go that well. And this woman had been divorced from her husband for about six years.

[28:08] But he kept taking her back to court and just draining her. And she didn't have the money for her mortgage payment. And finally she just like, you know what, I need to leave this town. I need to go back to the other state where my family is. You know a few hours away to just you know cut these toxic people out of my life kind of thing. Well her property went into foreclosure. She hadn't paid on it for about 10 months.

[28:35] Oh, wow.

[28:36] Yeah, nine or 10 months.

[28:38] It must be a Big or a bigger property because even if it takes that long and they still haven't foreclosed on it, it usually is.

[28:46] Well, she's in a judicial state. She's in a judicial state. States like

[28:51] Well, Arizona is a non-judicial state so you can foreclose pretty quickly on a property. Your judicial states, like Wisconsin, Pennsylvania, New Jersey, a lot of the east coast are judicial states. Well, what are you doing? You're paying for a lawyer. So what happens when you pay for lawyers? They want to take as much time as possible.

[29:10] No. (laugh)

[29:11] Quite honestly because that's how they get paid.

[29:13] Exactly, by the hour and by the page.

[29:16] And by the page. Exactly. So when you're doing that, it slows things WAY down.

[29:24] Well her. She was going to be probably kicked out end of January and what I was basically able to do is she had two mortgages. They were combined. It was almost worth what the property was. So 650 and she had a friend that was a realtor and all... you know, realtors are very much about getting paid, getting their commission. And they should. I mean they do perform a service. However I think you and I have talked about this, Michelle. A friend of mine comes to me and says, oh my god, I don't know what to do, I'm going to be foreclosed, I'm going to lose everything. I would be offering my services. I would be like, Honey, this is what we can do. Actually very often realtors don't know what can be done and if they don't take a commission they're not going to help. And if the realtor realized that she did a short sale she could have gotten the bank to pay her her commission as well as the buyer's commission.

[30:15] But instead her friend told her, I can't help you. So I I found this. I'm always doing searches. I have different searches you can set searches and Zillow and redfin and trulia and all those different free sites because I'm not a realtor. I do not use the MLS, although I do have some access to it. But so I rely on basically what I teach you know using public sites like Zillow and Trulia. So the property came across one of my Zillow searches popped up as a pre foreclosure had an auction date one in October and another one in November. So what I started to do is I sent the woman a letter didn't hear back. In the meantime my husband went and door knock didn't get it and and a response from our house door knock down the neighbors. Well the neighbors informed us that she was up at her parents house in another state and that they think she wants to leave the area and they didn't know she was in foreclosure. We didn't bring that up because it's not our place and I don't want to tick anyone off and talk about other people's business. What they offered to do, you know my husband said, well you know my wife and I are looking for a property in this area.

[31:22] We may be interested in purchasing her property and we just wanted to see if she'd sell. Could you give us or would you be willing to give us, give her our names

[31:33] Yes. Thank you. I can't image our holiday here. They took down our number and she called Gary that night or the next morning I think it was actually and then Gary got in touch with me because of course they always call when you're at work. Yeah your way to work in this case. And so Gary had her call me. She called me immediately and she was very forthcoming about her situation. Look my property is going to auction you know all this stuff I was like oh OK well let me see, maybe I can be of help. Oh no, you can't help me. There's nothing you can do. And I said, well actually, I think I might be able to. And this is what I'm thinking but I still need to know a little bit more about your property what are the problems. And she's like just telling us all this stuff. Well she hasn't really been able to maintain the property for five years.

[32:23] Wow.

[32:24] And so it was also slightly distressed. It was dated most of the stuff looks like it's from the 1990s or so. So it needs some updating and whatnot. And so basically I set up a time for Gary to go by and see her property. And Gary went by. And I had originally seen her property on Skype actually FaceTime time. The Skype or face time which is my latest thing now and they have realtors now, they go all over the country now that that's what they do when they go look at a property for me they put me either on their face time they have an iPhone or Skype and show me the property and they're going through it. That's also why I met the seller of this property was through Facetime.

[33:04] Oh cool.

[33:05] And I told her...

[33:06] Technology is amazing.

[33:06] I know, isn't it? I told her, I said well right away, you know, I told her that you know I like to go in very low and so I went in and around 300000 for her property less than 300000 actually I think it was like 279 or something like that and she didn't care.

[33:26] You said it was something like $650k, right?

[33:27] Yeah, she owed approximately 650 on the property which was pretty much what it was worth.

[33:34] But she's 10 months behind.

[33:34] Yeah,She's ten months behind. So she had about 53,000 in arrearages.

[33:41] Oh yeah. They ream you in the fees and fines and all the paperwork.

[33:46] Oh, yeah. Plus... it'a a judicial state. So she had tens of thousands of dollars in lawyer fees that the bank was of course passing on to her. All that stuff. So right away. I'm calling up the mortgage company the second and I find out. Well no I called the first for first thinking that usually it's your first mortgage are going to foreclose on you. Well in this case I found out it was the second that was foreclosing first. Also her mortgage her first mortgage, had just been sold to another company.

[34:19] Oh my gosh.

[34:21] So it got pretty complicated. And so I negotiated the second and I agreed to go from, I think she owed $315,000 on the second. Somewhere around there. So I negotiated that down to like $74,000.

[34:41] So what that means is, guys if somebody has a mortgage sometimes they have one mortgage but a lot of times if it's a bigger home especially or if they've been in a while they might have two mortgages and they may call them first and second meaning the position of the mortgage. Who's going to get paid first. And if if the House ever goes in foreclosure the person who usually is in first place. Well first the first place is always like the state government. But the mortgage company that's in first position gets their money first. There's a big award. Right. So it's usually them who foreclose is what she's saying is it's the second. And when she said she negotiated with them let's say she owed you know. Well what did she know on that.

[35:24] So she had about $315,000 to them.

[35:28] Can you tell us what you negotiated that 350 down to?

[35:30] I want to say if was like 74000 or so. I think it was $74,000.

[35:36] So that means that they agreed because they knew they were going to lose out. We knew that that building was probably going to be foreclosed on, meaning it was going to be a bidding war and it was going to go for a low price. So the second mortgage company knew that they probably wouldn't get probably anything for it. So sometimes they say a bird in the hand is worth two in the bush. They're saying we'll take 76 rather than nothing because she owes us over 300. We'd rather have this 76000 in our pocket.

[36:04] And the other thing is they had done like a BPO which is a broker's price opinion, which is basically somebody drives by your house, decides it looks nice, fair, bad, whatever and assigns a price to it. Well, the outside of a property looks much nicer than the inside.

[36:19] And they also didn't know something that I knew was that the septic top needed a new cover. And of course, I made it sound a lot worse than just need a new cover and the whole new septic which is like twenty thousand dollars.

[36:31] Somebody drives over a septic it'll crush it. You might need the old thing dug out.

[36:35] Yeah. So when I was negotiating with the bank I said hey you can't even see the inside of the property that geothermal needs work, because that's heating and cooling out there, and septic is gone, tractor is, da da da

[36:50] Oh, that's terrible!

[36:50] I'm like, because they came up with a BPO of 590, which actually was not bad. And my fear was if it went to auction this was the million dollar property as was obvious after repair value is about $950,000. And I knew that if this property went to auction, some savvy investors was going to snap that puppy up.

[37:11] fix it up and then sell it

[37:12] Exactly. So they quickly negotiated, because they're thinking in their head oh wait. The first is for 350000. So close to 350000. So the way I made it sound so bad they were thinking they weren't even going to get a hundred thousand for the property, maybe 50000. And my first lowball offer to the second position mortgage company was 20000.

[37:38] Oh wow.

[37:40] I like to go in there pretty low.

[37:42] Yeah, but even coming up to $70, I mean, c'mon. That's amazing! That's an amazing price.

[37:49] Yeah yeah.

[37:49] I mean I like to play games my negotiations. I wanted it honestly around 50 55, but I'll take 70s. It's not bad.

[37:58] So... In this case, what you did is exactly what we were talking about is having them carry the mortgage, she's going to carry, she's going to keep the first mortgage, right?

[38:10] So she's carrying the first mortgage so I took the first mortgage "subject to" coughed that up, used other people's money and I paid off the second, because if I didn't pay off the second, my price that I negotiated was going to expire by actually the end of this month. I had till December 31st, I think it was, or December 30th. to pay off the second. So after that it wasn't my offer was no good. And they actually had reset a new auction date in January.

[38:42] And the thing your listeners need to understand is when it gets to be close to the end of the year banks want to clear the bad debt off their records.

[38:51] yes, they do.

[38:52] So, the best time to negotiate is towards the end of the year. I started negotiating on this property in September. It took me just under 60 days to negotiate the first and the second.

[39:03] Wow. But that's awesome though.

[39:05] Yeah.

[39:05] So you picked up this amazing property, beautiful, with acreage and a horse barn.

[39:15] Seven bedrooms, four baths. And it has a whole other wing I can use as a vacation rental.

[39:20] If you guys can see the pictures, she showed me the pictures of the house and I was like oh my gosh. It's like Dynasty.

[39:28] It's a very very cool property. My purchase price on it was around I think $460.000.

[39:37] All, when I figure in the first mortgage and the second. And I put down about a hundred thousand on the property again using someone else's money and I know a lot of people out there and I don't out 100000.

 [39:52] Let me let you in on something, when you have a great deal like this, People you have never heard of before start coming out of the woodwork and remind you I'm in Arizona. This property is in Pennsylvania. People are calling me asking if a wholesale the property.

[40:05] Yeah.

[40:06] So, or I also got asked by people to become one of my investors on this property because you're looking at several hundred thousand in profit.

[40:16] Yeah, there's equity in there, too.

[40:19] Because it only needed about 150,000 in rehab. So I'm at six we sell it for 950 even 900 say. I mean that's a few hundred thousand in profit there.

[40:31] Wow. That's amazing.

[40:33] Yeah. So even if you don't have the money don't be discouraged. Negotiate like you do. And if it's a great deal like this, other people will fund it so easily

[40:43] and they do that with even short term rentals, guys. I mean, if you're, if you want to pick up a short term rental and you don't have, you know, the money behind you - the five thousand or more that you're going to need, because you're going to need first, last (if you're renting it.) OK. But if you're buying it. Think about this if you buy it from someone you can negotiate all kinds of terms in picking up that property especially if you rent a first for the first six months or so and see how much you're making you'll know how much profit and how much money you have to work with. And you can negotiate all kinds of terms on these properties.

[41:19] I mean, I've told you I have another subject to property that's a little townhouse that I picked up for 13 hundred dollars.

[41:28] Is that the one in Tempe you were talking about?

[41:32] Excuse me. That is my Tempe townhouse. And like I said that one. It was an architect who was sick and tired of tenants because he didn't run his rental business like a business.

[41:44] Like a hobby. Yeah.

[41:44] Yeah, he was a nice guy. Exactly. And they chew him up and spit him out. Let me tell you people, my tenants do not know I own the buildings. They do, I always prefer that wall. "We all have to check with the investor."

[41:56] And that's all that is crucial to do that. If you're gonna do long term renting in your life.

[42:01] I mean, because One,

[42:03] They will tell you every horror story. Oh my mother's got cancer...

[42:06] And you don't have to be the bad guy. That dirt bag investor who owns it is the bad. It just so happens that's my alter ego. It's great because when you have to evict somebody and I rarely have to evict someone or when somebody wants to renegotiate maybe you are doing a lease option and they want to renegotiate their terms. Guess what? You're never the bad guy. And you can commiserate with you and you can empathize with they have to move out. You get your properties back in better shape than when you gave it to them because they don't trash it because they feel for you.

[42:44] That is amazing. And that's I mean that's literally the truth. That's one of the best. Who taught you that? Because I remember... Not... Robin never taught that.

[42:53] No no no no.

[42:55] I always do that... I think, because I got that from Kenny McElroy and that is he.

[43:02] He used to work for, well he still does work for rich dad but he's got his own company and he he wrote this book, "The ABC's of real estate investing" and one time, we were going back and forth with horror stories, the rental horror stories when we were all doing rentals. You know, going to the door and people are naked, having people die on you, you know, like there's all kinds of stuff. But those are the horror stories that led us to short term rentals. The reason I love short term rentals are because the majority of time when you're just doing like somebody is going to be in there a couple of days. You're not you're not getting the wear and tear on your property that you get when you do the long term rentals. You don't have the same problems that you have when you have long term renters in there. You know, you get paid for ahead of time. You get your money right away. You know, the properties are easy. That's why I love doing short term rentals. I just I like the easiness of it. The older I get, I like easy more.

[43:58] Oh absolutely. It's so easy. I mean and that's the beauty of it is that you know your cash flow is a lot more and it's much easier to grow your real estate empire as I like to call it nice or whatever because you're getting more money. And if you're really growing as a business, you're putting aside you know that 10 percent whatever for repairs, you're paying yourself a management fee, which I typically pay my company 5-8 percent. I like 8%. You're putting aside your vacancy factors and then the rest of that money you're putting back out there. It's going to work for you. And that's how you are gathering up.

[44:37] Exactly. Maria teaches at the AzREIA and I talked about the REIAs. REIAs are real estate investment associations. They have them all over the country and Maria is in charge of the women's AzREIA here in Arizona, which is the largest REIA in the country. We have more investors out here than anywhere. But mind you ladies, we, we.. It is a boys club when it comes to investing.

[45:02] Oh, sure.

[45:03] But not, not with short term rentals. A lot more women are involved in this area. But what you have to do is, you have to go to these meetings. Tell them, tell us why you think it's so important for people to go. Even if you're just doing short term rentals.

[45:18] Oh, well, there's several reasons. First off, if you're new to real estate you can get a ton of both free and paid for education. Like the REIA I'm at, And I do a lot of their drill down teachings and stuff. You know you're taking some of the stuff is free or your pay or it's covered under your annual dues which for us is like nothing. It's like a hundred thirty five dollars like nothing and you're getting a ton of education. Some Classes may be $35. Some might be more. You're getting a ton of education but even more important you're meeting other people like you. You're getting so much that networking opportunities and that is huge. And if you want to wholesale properties that maybe don't are in your wheel house or you know are in a different area of town than what you'd like to go because I don't like traveling all across town for my properties.

[46:13] So I like to keep them kind of in a certain radius so I'll wholesale the rest. Well you can wholesale all day long in that room. And the networking, I found contractors that way, I've found handymen that way, painters, I've found real investor friendly Realtors which is really important that understands how to make these more complex offers that I want to do and they never say, "oh you can't do that" or "oh, that's illegal." That's my favorite. Show me the statute that says that's illegal to do. It is so important. And as women it's really a great place to meet other like minded women and you know talk about what your strengths are what you need help with. Who do they use that kind of stuff. And that's just amazing. And also, they will fund your deals.

[47:04] Women share that. They're not... the women are way better. Like the first time I went to the AzREIA meetings I kind of felt like standing out there, like you are, you know, the flower. What do they call it? The Wallflower at the dance. Yeah, you know you just didn't feel like you were in, but the very first time I went to the women's meeting where it was nothing but women. Boom. Those walls were down. Like every one was talking to everyone else. And so if you're just getting started, I mean, there are people who will take you and they love that, they love sharing their knowledge. Women are a little different than men. Men have that... What do they call it? That, that scarcity mentality. "If I share what I know with you, you're going to take it and use it against me and you're going to make more money than me and there's not enough to go around." But women, we understand that there's always another house, there's always another deal. If I can't get my stuff done here in my area and I can help somebody else, then someday, they'll turn around and help me. I mean we have a totally different mentality than men do when it comes to investing.

[48:09] I love your your meetings. I love the women in there. They're really sweet. They're very. I mean they're all different areas and they want to help everybody else. I love that about them.

[48:19] Exactly. And the other amazing thing is if you have a problem they may know somebody they can't help you somebody else who has who can help you. That was phenomenal. And nobody is entering into these meetings. I haven't witnessed or seen anybody going to these meetings with the mentality of, "I'm only in it for myself."

[48:38] Nope.

[48:40] Which is just, you know, fantastic.

[48:42] It is. It's so great. Well you have courses that you teach people. I mean you've got a bunch of information. You have, you have an amazing web site. I always love it when you're like, "hey look at this new picture." Because you've got the most adorable son, and she'll put him up there and we'll all be like, "oh, look. He's so cute." Her website is great. She's got great free information on there for you. She also has courses and everything. Where can we, can all my listeners get more information about you?

[49:13] Sure. So if you want to go to my Web site I have a great free downloadable for you. Especially for people who are trying to find properties. And you know I like to think a little bit outside the box and these are probably my seven best tips. So basically it's seven different ways to find motivated sellers without having to Cold Call. Because most I know do not want to have to cold call. So go to my Web site which is

[49:46] and I'll put a link up to that, guys, too.

[49:52] And right there at the top I have a link for you to click on and just put in your e-mail and write to your inbox. You will get a free guide book, " Seven ways to find motivated sellers without having a cold call." I have waysin there that most people just never even imagine. And if you want to be part of what I'm doing in January my way of giving it back because I kind of didn't have my women's means for the holidays. So in January I'm doing a series of 3 free webinars called Web Clinics.

[50:30] Oh. Yeah. Even for your women there in Arizona, it doesn't matter if you're on the webinar, they can be anywhere in the country or even out of the country and listen to your webinars!

[50:37] Exactly.

[50:38] How can they sign up for that?

[50:39] So for that one just send me an e-mail. I don't think I have the link yet on my Web page. But if you send me an email to [email protected], That's I-N-F-O at real estate profits system dot com I can shoot you had a link for the Webinar and it will be three of them. I'm going to be covering things like creative deal structuring negotiation and marketing,

[51:08] Awesome, because, guys, this is how you pick up these properties. So if you are if you're looking for another property and you're like oh I don't see anything for rent. Well how about you buy it! How about you find these people these people who really want to get rid of their properties and Maria is so awesome at this. Because here's the deal that we haven't had that advantage as women. We'd like to hear people we like to listen that Maria listens to everything the the buy or the seller has to say and she she hears what they are saying what their wants and their needs are and it's not always money is it, Maria?

[51:43] No and it's interesting because very rarely am I the highest offer, unless it's some type of creative deal structure I might pay actually over asking. But you know what? When I'm getting it at zero percent interest, do I care? When I'm awesome terms. But otherwise it's like very rarely am I the most amazing offer, but what I am is somebody who's listening to them and building that rapport and negotiating with them on what suits their needs and mine.

[52:14] Exactly.

[52:14] That's key. I will never replace a seller in the quicksand, in the quicksand, but I'm more than willing to help them and if I can't help them, I'll send them maybe in a direction or recommend some things that can potentially help them and then I get referrals that way as well.

[52:29] Exactly exactly. I've seen some of your testimonials and they're like oh my gosh she helped me do this and she helped me to do this. And I was like Wow. She's amazing and I love that.

[52:41] It's so much fun.

[52:43] That's literally how and that's why we're here to pay it forward. I mean honestly it is not. There is more than enough. It is not this little tiny pool you know pond with just a few fish in it. It is the entire world of an ocean and there are all. I mean c'mon there's plenty of fish out there and you know you guys can do this too. So I really really encourage you to reach out to Maria. Get on that webinar. I'll make sure that when you get that link Maria we'll put that up on this episode's Page, too, so that we can link right right to it, so they can sign right up because free information is good information if it's coming from an awesome source like Meria. I really think you need to do that but I want to thank you so much for giving me your time today and talking to me. Thanks for talking to me. Especially after Christmas. This is such a busy time. I know we should be cleaning and cleaning up papers and taking down trees and stuff but instead we're sitting and talking.

[53:52] But now this is awesome I love talking about real estate and to you and tell your viewers and I really hope this helps people realize you really can do.

[54:00] And that's why I invited Marie on. She is definitely the person you want to get to know when you want to do these strategies when you want to learn how to negotiate when you want to learn how to expand your business because it is a business you need to treat it like a business. I've said it before. Treat it like a business and it will take care of you in the future and you too can quit your job your day job and be home with your kids you know. And no more calling them and saying you know I won't be home. Hold on hold dinner you know.

[54:30] Right. Exactly. Think about it if you're looking at your retirement years what an extra five hundred, one thousand dollars, whatever be for you in a month you know, some people. You know that's that's a huge difference.

[54:43] Exactly.

[54:44] Exactly. But man, I'm telling you. You're, you're the master negotiator. That's why I wanted to have you on, because I like, I go only... I've only met one other person that I think negotiates like you. That's Larry. And he's too old and too far away.

[54:58] Larry is great, too. Yeah, I know who you're talking about.

[55:03] I think, you know what? I think Marie is sneaking up on him, it's not like oh no you listen way better than than even he does. And you know you give people exactly what they want and what they need and what they're looking for the answers that they're looking for. So it's always a win win situation with you and that's what I love about you is your fairness because you know the banks were gonna make all that money not that woman so it wasn't like you were taking anything away from her she was losing it all she would have walked away with nothing and bad credit. You saved you saved her credit. You put money in her pocket and you actually you're building her credit up when you know that that negotiation was a great negotiation. It really was.

[55:48] And the thing that we didn't think about is that you know for many of you that House means a lot to them. She raised her children in that house. She's owned that house since like 1990.

[55:57] Yeah, you let her stay there through the holidays, too.

[56:02] Yep, Yep. She wanted to have one last Christmas with her kids who are all adults. I was like, Hey, no problem. I totally get it.

[56:11] You closed on it And then you let them say and I think you're wonderful.

[56:14] Yeah. So you know she'll be at the end of the month which I'm totally fine with. And you know she loves the fact that her property is going to be made pretty again.

[56:24] Yeah and that there will be another wonderful family in there who gets to build memories too. Exactly. And that'll be amazing.

[56:32] yeah.

[56:33] Well, thanks so much for sharing your knowledge and expertise. I'm sure we're going to have you on over and over again because this time... We'll make it, we'll make all that work. We'll get all the tech stuff down completely first.

[56:48] Yeah, right?

[56:50] It was like OK I can see the little thing moving. I cannot hear you.

[56:55] Right. As we're texting back and forth. I can't hear you. But, I can hear you. It was like a sprint commercial.

[57:02] Can you hear me now? Can you hear me now?

[57:04] Exactly.

[57:07] Well thank thanks again for being on the show. And everybody I'm going to share all those links with you know that Maria shared with us and you'll be able to go and get her free information. I'll have all that in the show notes for you guys and you can click right on them and go right there. So thanks and thanks for joining us. And guys thanks for tuning in. And you guys have a great day. God bless. Go and grow.


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