How To Buy Foreclosures From Banks: The Thread Is Breaking

Yeah, they were like, oh, you moved off, what's the office in there? So I didn't answer to tell them that we have finally moved, but they were like, that's $150 for us to come over and verify everything's fixed up correctly. Because I was like, I'm just not going to respond just in case that's not what we want to do, because I don't want them to send me an invoice.

Yeah, yeah, so we can find another maintenance company, but it's probably what we did.

Send me— um, I got a PDF from them, so I'm gonna see if really makes sense. Okay, here's a list of the properties that he has.

We live.

We are working. We are working. There we go. You're live. Can you hear me? But nobody—

yeah, I can hear you.

Can you hear me?

Absolutely.

Then I'm in. Somebody is in.

Who? Well, okay, person. Tate's not on. See, there's people in the waiting room. Oh, oh, right now, as of now, it just looks like everything works good. Yeah, the camera should be here tomorrow and then you don't have to swap back and forth. Yeah, and I knew that. I mean, that Even then, it didn't even take that long. But that's the one thing I don't want happening. I want it all set up. I can walk in and rock and roll. We did the live this morning.

Oh, you did? While you were working out or not working out?

So I filmed it last night, scheduled it for this morning on StreamYard, and then it posted to Facebook and LinkedIn as a live stream.

How long was that one?

It was only like 9 minutes. I just did a short one just to get the feel. There's some, uh, doctoring of it I need to do, um, to make it look a little better. Um, because like I can have our unshakable.com. Yeah, I've never seen that in that. Yeah. Um, and I kept saying click the link below, but then I didn't have a link. So, oh well.

Well, I mean, we could probably comment it.

I did. I went in and commented through it. Yeah, but we got to change it off of our website because the website still shows at $99. So what I want is $99 marked out and then promo, uh, a year-end promo, 1995 limited.

Yeah, I'll get that. I'll get that changed today.

Yeah, I don't know why I have to micromanage you, but I guess that's why I have a good job security, because I gotta always stay on top of everything.

Well, no, I just thought it was a special offer for—

yeah, people go to that link and they're hearing about it, then we're— we'll get— we'll get a lot of flack. Put them all in. So, and that's why if we show it $99, but now you're in special limited time offer, all that hype, then we're good to go. Will you go tell Angie and Rochelle to quit talking and get on the call, please? Good morning, Rick.

Morning, Doc.

Hey, did you get a hold of, uh, Todd?

First, right after this meeting.

Okay, great. Let me give you— let me give you a little background on Todd. So Todd and I did a co-authoring of a book with Kevin Harrington. Uh, earlier this year, and we met, uh, in Florida for the book signing, got to know each other really well. He, um, then went to Nashville about 6 weeks ago for a, uh, Shark retreat for Kevin and the guys, and he met with Brenda and, um, We talked a bunch and we're, we're looking at potentially bringing him on some of our stages. He's just a lot like me. He's got really big portfolio of real estate. He's got some car washes. He's got his hands in several different businesses. He's looking to, you know, continue to expand. But he also wants to get on stage and speak and coach and all that with me. So We're working that side of it, and I know he may be a good partner for you. I gave him a little bit of insight about your franchise program, all that, and, and said that you, you two may have a good synergy to roll that out together.

I thank you so much, buddy.

It's what I do. It's what I do. Tate, my man. Good morning.

Hey, good morning.

So tell me about our property. Are we ready to put it on the market?

We're getting there. He has started to, uh, sir, mom, it's only been like 2 weeks.

How long?

It's only been like 2 weeks.

All right, I'll give you 2 more weeks to go.

Thank you, I'll take that.

Uh, where were we at?

He hadn't even had a mortgage payment yet. First mortgage payment's January 1st.

So, uh, look like he got the, the subflooring replaced. Um, he got the paint done. What else did he get done, Ang?

Uh, just the paint on the ceiling. So they're prepping the walls.

We've only paid for the paint so far.

Yep, the ceiling paint, the ceiling.

Okay. Um, so paint on the walls, what's next? The—

so this week they're doing a paint on the walls, and then after that it'll be, uh, installing the, um, laminate flooring.

Okay.

And we're pretty much done after that. Uh, I went down there and actually did the, the landscaping, the pressure washer myself. There's a few items in the house that I need to take out, uh, and clean it up, but for the most part it's moving along pretty well. Um, we've had, uh, I'm not sure if you're tracking, but we had, uh issues with getting the power turned on. So that should be done today, and that will allow the contractor to really kind of speed things up because now he's not running off that small generator that he's been doing. But he's—

yeah, I did hear that you had to go down, uh, inspector showed up, and we had to go pull permits and all that to get that turned on. So you got that all resolved, or they should have it turned on today?

Yes, sir.

Awesome, awesome. Good job, buddy. Good job. Um, So with this, when do you anticipate— are you thinking 2 to 3 weeks completion? What's your timeline looking like?

Probably about 2 to 3 weeks completion. And I've already, as we discussed earlier, I already let my agent know that we want to— obviously I'll give her photos to do the coming soon type scenario as well. So I'm definitely trying to push this thing at least by the first year, have it back on the market.

Sooner.

Great. Um, all right, perfect. We've got 1, 2, 3, 4— I got 5 properties that you're working on. Let's go through them real quick. Okay.

Okay.

So we got 5672 Rosemary Place. What's going on with that one?

Uh, waiting to hear back from the, uh, the seller on that. Um, I spoke to my agent yesterday regarding that one. Um, We're kind of close on that one, but they want it like a 1%, I guess, deposit on that. But the bottom line is I'm just waiting to hear back if we can come close to the numbers. I think we're there, but yeah, so as soon as I, as soon as I know something, obviously you guys will be the first to know.

And Rochelle, we're good with all that Tate's doing on the numbers.

You signed off on it? Yeah, I've looked at them. As long as we're staying within, nothing changes based off of the contracts I've viewed. We're We look good so far.

Okay. Um, 71 Verde Street, Kenner—

uh, Kenner, that one's dead.

Dead. Okay.

Yep. 7 Yosemite Street, that one's dead. 1205 Breckenridge, uh, that one's dead for the time being. The agent let me know that they're probably going to drop that down about another $220,000. Uh, at that time, I will resubmit our original offer, which is like $183,000, and see if the the bank will play ball with us.

Was this the short sale?

It is.

Okay. And so we're just waiting for the bank to realize that their asset's not worth what they think it's worth.

Yes, sir.

Okay, great. Um, and then 5542 Sandalwood, the, the bank didn't play ball on that one.

That one would have, in my opinion, would have been a nice project, but that one's dead.

Tell me about it.

Uh, it was to me a very straight cosmetic flip. It needed the paint, the flooring, um, just a really good clean out, um, some landscaping, and that was about it. So it would have been like really kind of easy to get in there and get out of.

But why is it dead? Why aren't we moving forward? Tell me the numbers.

I don't remember the numbers off of my head. I can—

let me look them up real quick since I'm on it.

Uh, Sandalwood Corp.

Yeah, I'm just pulling through his real quick.

245 asking, 115 offer, 275 ARV, our analysis.

So, uh, they're asking 240— 245, you said? So they're asking 245. We went in around 115. But you're saying it's a 275 ARV. So, so let me ask you this, Tate and Rochelle. If we went back at 200, how much are you thinking? You thinking 15, 20 grand on the rehab, paint, flooring? No. Oh, 80.

Oh, oh yeah, I've got a rehab of $78,000.

Um, well, that's not a quick Carpet clean and paint tape.

I'm saying it's cosmetic, like there's like—

okay, yeah, it's just cosmetic. So look through the pictures real quick.

And yeah, the, the kitchen on that one, um, just me.

Okay, that's fine. I'm looking at the photos that Nick's pulled up real quick. Okay, I didn't have any interior. Yeah, okay, uh, so, um Yeah. If you've got $80,000 in rehab, then that deal, you got to buy that $150,000 max.

Yeah, we have a $139,000 max offer on this.

Yeah. Okay. And they're asking $243,000 on a $275,000 house. So the $75,000 or $78,000 rehab, what do you— what's involved in all that? Paint?

Paint, flooring, making sure the kitchen is updated and the bathroom.

Cabinets, countertops, a big rehab. So it's a pretty good rehab because you're right.

Yeah, it doesn't look like we're doing any, um, actual repair to the structure in any way. It's all just update it, paint lipstick, and make it, uh, look good.

Countertops, cabinets, appliances. Yeah, correct. Okay, okay. Foreclosure auction. Yeah, foreclosure. So, um, who's, who's carrying it? Who's carrying the foreclosure? So this is a foreclosure. Are we able to bid on it, Tate?

And talking to the agent doesn't sound like it. I can certainly circle back.

The bank has had it, um, itself for, um, almost 600 days, so, um, I don't think they took it to the steps.

So, Tate, it's on Zome, Z-O-M-E, which is an auction site. Okay, you can register for that. Auction is December 17th, is that right? Uh, so, uh, let's get registered, um, keep an eye on it. There usually is a 3-day auction on those, so once it goes live— did it say on there what time? Well, what, how, how long the auction was. So, uh, sometimes those are like a 2 and 3 day auction. So it'll go, let's just say it goes live on the 17th, and then you'll have, you know, bids coming in, and then we'll get down to the last wire. Let's be on that to see where it's going to end up at. Okay. Okay.

Yeah, you want to make sure you do your buyer name, um, the way you're going to close, because they Generally in the auctions, they won't let you change that. They will— it'll— they won't let you do anything once you put in an offer.

Okay, so you can put it under GII if you want, um, and then we can go from there. But, um, let's get registered on that. XOMEZone, uh, is a good auction site, and you'll see some of the— and you'll be able to go through a lot of these deals like this also. One of the things that we are seeing in the market is economy hasn't changed the way people thought. Interest rates definitely haven't come down as fast as they were supposed to. So people who were hanging on by a thread, that thread's about to break. And so you're going to see a lot more foreclosures, a lot more short sales and all that on the market. So let's get plugged into all those portals. Tate, and have your eyes and ears on all that. Okay.

Okay.

What do you have for us today?

Following up on 3807 North Shore Drive. So when Rochelle took a look at this, the ARV was at 570. I submitted again yesterday and AI rejected it. So I'm asking that you guys take another look at it. The reason being is we are— I offered $320,000 and I think we can get it done at $330,000 with like $120K in rehab. But, but the ARV— so I'm trying to make sure that the ARV is there to support it. I think Lotzide brought it down.

I think Lotzide killed it to what, $400,000?

It's probably in the $500,000s.

500.

I'll re-review it and see.

1,800. And you're thinking how much on the rehab? Take 100, 120.

120.

Yeah.

To, to— it needs HVAC, water heater, roof repair, and then like, you know, just all the other stuff inside, a garage door. So yeah.

Okay, let, let Rochelle go back through it again today and rerun it because that house is going to be a complete gut out. That's going to be a 6-month project. So we got to make sure that our timeline— because you're— so this will be a 6-month in purchase, rehab, put back on the market if everything goes according to plan, which it never does. So you're looking at 9 to 12-month carrying on this one. So we need to make sure that our ARV gives us the spread that we need because that one's going to need a lot of work. How, how is your relationship coming with this contractor that you use? Good.

Oh, so far so good. Um, he's just small, and that's, that's the thing that concerns me. He's just small, but I, I— his, his professionalism, I, I think, is there. Uh, and he wants to show me, you know, that he can do the work.

So, um, well, I will tell you, when we first went back to rehabbing in 2019, I found a gentleman. He was a two-man shop. and he rehabbed, uh, 12 or 14 houses in one year for us. Um, but he found the crews that— he found crews to do the jobs once he saw the potential. And he basically, um, worked exclusively for me, rehabbed all our houses. And because he was small, profitability was, was good. I didn't have to worry about big overhead, office space, warehouse space that he had to cover. He just had to cover his living expenses. So it worked out really, really, really good for us. And then he got big, and we tried using him on one of our apartment complexes, and he, he just— he got a little lazy too. Uh, when we started, when we first used him, he was like your guy, boots on the ground, swinging the hammer and cutting the boards himself. And then he got a little bit bigger, had a crew, and now he doesn't do anything but kind of drive around and pick up material. Gotcha. So, uh, I like the smaller guys. They're, they're more, uh, workable, um, because they're looking for a solid gig. They're looking for something that they can have pretty much a guaranteed paycheck coming in with, uh, revolving work. So that's not a bad thing. Okay.

And lastly for you, the, the Reed Boulevard apartment complex. I'd seen your email regarding that one.

Yeah, um, I looked at it again when you sent that email yesterday. I just don't have a good warm fuzzy feeling about it. So I'm gonna tell you, I'm gonna pass at this time. Now come the first of the year, if it's still there, it may be something that we relook at. But right now I'm gonna say no. Okay. Okay. I know you want to get into apartments bad and I want you to. I just, I gotta dump some of my apartments. We have 3 apartments I'm trying to dump right now. And so, not dump, but sell. And so I want to get those off the books and then we can then revisit. I don't think that thing is gonna move. Here's what's really funny is I had a young lady, another one of our legacy members called me yesterday about a 24-unit in Kenner, Louisiana. Half the units were occupied. The other half needed rehab. $1,180,000 purchase price and about $200,000 in rehab. And I swore it was your deal, but it's not because yours is in Baton Rouge, right?

No, this isn't. And it's in like East New Orleans.

Okay. But not Kerner, right?

No, not Kerner.

Not Kerner.

Yeah.

So I was like, man, this is way too coincidental that she's got one just like what you're working on. So I needed to— when I cross-referenced the address, it was a different address, but almost identical. Almost identical. So I think valuation is there. 5% interest rate is a good deal. If I promise you this, if it's still available at the first of the year, I'll come out and we will, if the weather permits, I'll come out and we'll go walk the property. Okay. Okay. Okay. All right.

What else?

That's all I got. Just, just waiting on you guys on the other deal in West Palm. So, Rochelle, thank you for taking another look at that and hopefully we can get on them. So, well, that's about it.

I gave Rochelle 4 days off. She took a 5th day off. So, you know, You give them an inch, they take a mile. Because it was her birthday. Uh, oh my gosh, it just— when you're her age, birthdays, I guess you do need to celebrate them when you're her age because you don't get very many more. Uh, Randy, you got anything for Tate?

I do not.

Okay, Rick, you got anything, buddy?

Uh, I have a friend who, uh, is just coming on. He'll be on in about, uh, he was just admitted. He'd be video on in 5 minutes, so I'll introduce him. He's, um, my guy out of Toronto. Yeah, wants to do flipping here, has done some. He's a realtor also, but he wants to start attacking, uh, the States.

Okay, is this Ariem?

We're, we're going to work together. I'm going to help him out and Nice. We're going to include you.

What's his name?

Ray.

Ray. What's his last name?

Uh, starts with an M. Yeah, he's on.

He's been on for a little while.

Yeah, yeah. It's just not his video. So as soon as his video comes on, I'll properly introduce.

Perfect, perfect, perfect. Um, one of the things we talked about, or I alluded to, interest rates haven't come down the way they were projected for the fourth quarter. I don't think Trump is going to— or the Federal Reserve is going to do another drop this month. They have projected that they would. I'm— there's too much noise going on at the State House, negative noise. I don't think the Fed will make that move. We can hope that they will the first quarter of next year to stimulate the economy, to start the year off strong. But no promises. This year has been one jacked up year in real estate projections. In 30 years of being in real estate, we've never been this far off of what's going on in the government, stabilization of rates and just the economy in itself. So tariffs have caused a big ripple in everything. Shutting down a lot of opportunities, continuing to raise the cost of labor and materials. Economy is not boosted the way everybody had projected. And so because of inflation, interest rates have to stay where they're at. But that's a positive. So one of the things that I've learned over the last 30 years is that any time there's a disruption, any time there's an economical crisis in the United States, real estate becomes a goldmine. It becomes something that you start just accumulating as much as you can, as fast as you can, because most people are— most of your institutional investors that are buying 100, 200, 300 units a year are holding out. They don't need the properties and the profitability or the cost is a little higher than what they had wanted. So they hold out, which helps us have better inventory as a smaller group to be able to be selective and to really negotiate. So especially we'll take like what you've got with a couple of banks. Your realtor obviously has an in to the one bank. So these are the times that you really want to enhance those relationships, enhance those communications, and really expand upon availability of properties. Get on to the auction sites—HubZoo, Auction.com, Xome. Those sites are residential foreclosure sites, and this will show you what's going on in neighborhoods And every now and then you'll come across a pretty sweet deal that a bank just needs to dump, uh, and then you just start negotiating. Uh, and, and, and good news is when, like, she was showing that one property, the bank has had it for over 600 days. That's almost 2 years. They're losing their butts on it. So if your realtor's communicating with the asset protection manager at the bank, The next question may be, what is it going to take to get this off your books? Where do we got to be and why? And that would be the conversation that I would be having with that manager is, you know, you guys have had this thing for 2 years. You're not drawing any interest. It's in— it's going to— it's been written off. So you've already gotten your tax credits and tax breaks. What's it going to take to get this off your books? And here's where we're at. Here's why we're here. Like I've always shared with you, if the, if the seller, bank or individual doesn't know your why, they can't wrap their head around why you're lowballing them. And so it's vitally important that we share, look at this, needs X amount of work done. This needs $80,000 worth of work on it. Here's what all has got to be done to get that $275,000 valuation. So if I buy it at $200,000 and put $80,000 in it and carry it for 9 months, I lose my ass. But if I buy it at $150,000, $145,000, put the $80,000 into it, carry it for 12 months, I can make $15,000, $20,000, $30,000. And that's to be— when you explain that, it now gives logic the room. And that's where people just need to understand. So have that conversation with the realtor, see if she can have that conversation with the bank and then see what happens. Okay. Will do. All right. All right, Rick, your buddy's on.

Hey, good morning, everyone. Thank you, Rick, for inviting me to this. Sorry I missed the first 10, 15 minutes there. You're good. But yeah, I kind of heard a little bit about what's going on. I'm a realtor from Toronto and yeah, just looking forward to working with Rick and seeing what this can turn into.

Tell me a little bit about— so you're a realtor in Toronto.

How long have you been a realtor? I've been a realtor for over 10 years in 2 different cities. So I started out on the West Coast in Calgary. Yeah. And then made my way over to Toronto. Okay. And I've done a bunch of investment properties, like very mini flips. And then this year I met a really good team of renovators, contractors. Nice. And then I started to do renovation jobs for clients. And then I really got into the design things. And, uh, this whole thing about venturing into the US, um, is pretty new but, uh, really exciting. So, um, learning more about it, having really good conversations with Rick about it. And, um, yeah, it's, uh, so my wife and I, we're both realtors from Toronto, okay? And, uh, we're just looking to grow our portfolio and, uh, get into the US. Like, I think the goal for us is to to be in the US one day, like Florida or California, and move down there.

So you don't want to ever move to California. Florida's fine. You do not. I'm telling you straight up, do not move to California. We have been waiting for 50 years for California just to slide off into the ocean. Eventually it should happen, but hopefully it'll take all that government and, and political nonsense with it. There's Texas, there's Florida, there's Georgia, there's the Carolinas. If you want a really beautiful state that is real estate strong, economically and financially stabilized, those would be your top 4 or 5 states. Okay. California is a nuthouse that doesn't know if they're coming or going. And you just, I know it has a lot of reputation of being an amazing state, but it's going south fast. There's more people moving out of California in the last 3 to 5 years than— it's just record setting right now. And they're all moving to Texas, Florida, North and South Carolina.

So is it, is it bad for real estate? Like, for— yeah, it's very overpriced.

It's very overpriced.

And here's what happens. And here's 30 years of being in real estate lending. Right now, if you were to sell a property in California, you're going to make really good money. But the problem with it is, is when California hits a recession, which happens about every 60— not about 6 months to 9 months, it doesn't just trickle down, it tanks. So let's say you have a property that's worth $1.2 million today, and I'm talking a 1,200-square-foot house worth $1.2 million today. And when that, when that recession hits, because they're very much roller coaster. Now that property is worth $500,000 just overnight. And so now you're sitting on a property like, wait a minute, and you can't move it. So, you know, you got to wait for that appreciation to come back. It's very cyclical and it's all because of the politics that just drives the economy nuts in that area. So and it doesn't matter whether you're up in Davis, California, which is Northern California, or down in Los Angeles in Southern California, it is just statewide. Big valuations on property, but most of them, like I said, the 1,200 to 1,300 square foot house is going to cost you over $1 million. And you can buy that same house in Florida, Carolinas, Texas for $300,000, $400,000. And it's— and then you're going to either convert it into a rental or like what Tate was talking about, buying a property for $200,000, put $80,000 into it, I buy it for $150,000, put $80,000 into it and sell it for $300,000. And that's a, that's a decent size house. And that's your demographic of buyers. When you're looking at being a real estate investor and as a realtor, you probably know this, but you want to make sure that you have the largest bucket of buyers for your property. And if you get into the million, million two, million five, million eight, $2 million, that's a small demographic of people that can afford that house. And in California, you have a big gap. You have that ultra-wealthy that pays $2 million for a shack, and then everybody else rents. Um, in the Carolinas, in Texas, in Florida, you have the biggest majority is blue-collar workers that can afford a $300,000, $400,000, $500,000 house. Um, they've been on their job for years, they're making $100,000, $150,000, $200,000 a year, and they're, 2 to 3 family, uh, 2 to 3 people families. So they need that 3-bedroom that's worth $300,000, $400,000, $500,000. And this is your biggest demographic of buyers, and that's what you want. You want to be able to move them fast. So California is, in my opinion, a no-no. Um, okay. I just— there's just so much more. Georgia, uh, is a great state. Mississippi, Louisiana, Louisiana right now, Louisiana, Mississippi is a hotbed for real estate investors. So much is going on, so much infrastructure being built up, a lot of federal money coming in to really because of the hurricanes and all that that's happened down there, they're just really cleaning it up and dumping a lot of perks in for real estate investors to restabilize the neighborhoods and help stimulate the economy. Okay, well, welcome to the group. Thank you. We'll talk, uh, later on. Uh, do you have any questions for us since you're a newbie here on the, on the, on the call?

Uh, I mean, no, I guess, I guess first time coming in here, I'm just, I'm just gonna listen in and, uh, see what I get from it.

Yeah, smart man, smart man. Two ears and one mouth, so we listen twice as much and talk Absolutely. So, all right, anybody else? All right, guys, take— keep hammering down. Let me know. Rochelle will get you some numbers on that other deal and then keep working that bank on that short sale. Keep working the bank.

This one will do. This one's for Rachel. Can you check the chat, Rachel, please?

Rochelle, I'm in the chat and I don't see anything, Rick.

How do you direct the message to her?

Have you found it? Yeah. So when you want to know what to fill in, are you looking for like for an app or I don't know.

Could you just send me an email with all of the areas of the questions that have to be answered submitting a house because that way we can be properly prepared. Yeah. So I can come into the computer system. We've got all the answers. I just enter it and there's—

Perfect. Okay. I just wanted to understand what you were asking me there. Okay, perfect. Yeah, I will.

I rambled a little bit, but that's okay.

Imagine that. Rick ramble. Who, me? Yeah, that's right. That's right. All right, guys, hope everybody had a good Thanksgiving. I know yesterday's call was an amazing call. Appreciate everybody that was on it. We've got so much more to come and we're really excited about the year-end wrap-up. We've got a few more legacy members going through the introduction and training, so they'll be joining this call later on. But keep hammering down, Tate, and let's get— we got to get you some more properties. Okay. One's not enough. One little bitty one ain't enough, buddy. I'm completely in agreement with you there. Trust me, I'm looking. We should, we should have 3 or 4 under your belt by now. Exactly. I'm with you. All right, let's do it. All right, guys, appreciate it. Thank you.