60k on his first deal to 5 deals a month with Michael Pinter

What is going on, Investor Thrive Nation? This is the Painless Flipping Podcast, where our goal is to help make your journey in investing as painless as possible, because it's going to be painful. Anything is when you got to learn, but our goal is to help you throughout that. And I got Michael Pinter. Is that correct? Michael Pinter?

That's correct.

Got him with me today. My man went— we're going to talk about how he did his first deal, and he says it took him a little bit to do it, but it was a good deal. We're going to talk about how he got his first deal and where he's at right now and how that first deal helped him get started. He said he remembers it like it was yesterday. So we're going to introduce him. Uh, glad to have him on the show. But everybody, if you're watching this, hey, give it a little like, give it a thumbs up, you know, help us share this because again, my goal is to help you guys get into real estate, to grow and get, get deals. I mean, what's the point of doing this if you guys aren't seeing success you want? So let's learn from Michael. We're all students of the game. Let's learn about how he got his first deal and what he's doing right now. Michael. Tell us a little bit about yourself and let's dive into that first deal you did.

Sure. So, um, I was in the mortgage business for this, working for the same company for 17 years from 1997 to 2013, and then I was dabbling a little bit in real estate investing while I was there. And then 2013, I left mortgage industry about 5 years too late, and I decided to go full-time into, into real estate investing. And I had some experience in this city. It's called— it's— city's called Elmont. I'm, I'm in— I'm located in, uh, I operate in, uh, Long Island, so Nassau and Suffolk County, New York City suburbs. Um, and Elmont was my area. I bought another property there. I like the area. I thought it was a misunderstood area where I could take advantage of some of that misunderstanding. And there was a property that I kept driving by that I really—

you're talking about your first deal right now?

First deal, yes.

Okay. Yeah, no, so just, just so I can understand, you were doing mortgages, is that what you said?

Yeah, I was in the mortgage business. I, I did everything in the mortgage company, uh, secondary marketing. I ran an office. I did a lot of things. Things were great for about, uh, 11 years, and then everything hit the fan in 2008, 2009. I sort of stuck it out an extra few years, which was a huge mistake. I should have left earlier. I really should have gone into real estate investing earlier, but, um, I got out of it completely in 2013. In the beginning of 2013, I went into full-time real estate investing.

Nice. Okay. Okay. Because I wanted to clarify, uh, when you said you got it too early, I didn't know what time, at what time point you did that. Okay, cool. So, so let's dive in this first deal. You said, hey, it was a— it took a while. And I think, I think just from you telling me a little bit before we hopped on, it sounded— seemed a little, a little complicated. It wasn't just a wholesale deal where you just get it and then you, you sign it.

So So a couple things really. For the first 4 years I was in business, from 2013 to 2017, I didn't even know what wholesaling was. I, I had heard of it. I thought wholesalers were like knuckle-dragging Neanderthals who try to make like $500 on a deal. I thought rehabbers were the guys who made the money. So I didn't really understand the whole concept. I didn't do any marketing direct to seller for those 4 years. I bought everything at live— I went to live auction in my county every single week. I bought at online auctions and I bought from REO agents, so real estate owned agents, bank owned property. And there was a lot of that then because a lot of the crap from 2008, 2009 in New York, everything takes a lot longer than every other place, and that was coming out at the time. So, um, and in general, we can get into this more if you want, but New York is dramatically different than all the other 49 states. Everything takes longer, there's attorneys involved in every, in every, uh, transaction. Um, there's even more. Um, but I wasn't wholesaling, right? So this property I, I bought, um, I had a partner, we bought it, we borrowed money for it, and, uh, we took it down. It was a house that I kept driving by, and it just, it just was in the area that I really liked. It was an ugly looking house when we got inside. So what happened was I was always dreaming about buying this house, and then one day a for sale sign showed up, and it was a bank-owned property. So we, we went inside. The roof in one section, it was caved in completely, and, um And we bought it. I think we bought it for some, you know, high 2s. And it really did— crazily, it didn't need that much work. It needed that roof fixed and the flooring underneath the roof, but it didn't need that much. But it was a single— legally a single family that was taxed by the county as a 2-family, but it was set up as a 3-unit. So it happens to be in this area of Elmont, there's a lot of illegal units, a lot of basements being rented illegally, and, you know, as they would say, ADUs, right? Accessory or additional dwelling units. But most of them are illegal, and The township doesn't like it, but we bought this property, um, we fixed it up without spending a lot.

And then I asked a question: does that make it more valuable if it is, uh, 3 units, 2 units versus just 1?

So it's funny, for some people, yes, right? There are people who will look at that and say, this is a dream come true, right? I can live in one of the units and I can pretty much have my mortgage paid by the others. But for other people, they're scared. They're scared because somebody might complain to the town. They may have to, uh, kick somebody out, or their attorney might say, oh no, you have tremendous liability. The truth is, this is a game that's played all the time, but it depends on the buyer is really the answer.

Okay, makes sense.

So we bought the property and we tried to sell it, and shockingly, no one wanted to buy it because of the things that we just discussed— the extra unit. And we really didn't do a lot of work to it, it really wasn't in great shape. And we didn't— and we had a hard money loan on it. We got raped on our first hard money loan. I think we paid 16% with 6 points, some crazy number. We were so happy to get anybody to fund the deal that we, we just took it, and we used all of our own money for the rest of it. And we didn't know what we were doing, so, uh, couldn't sell right away. So we immediately rented it. We made— we got it rented in 3 seconds, and, uh, we were cash flow positive. So it was working out.

You rented one unit, or did you do—

rented all three? Rented all three to three separate people.

Congrats. Okay.

And then one of the tenants, uh, that we rented said that she was interested in a rent-to-own kind of situation. So we did a rent-to-own where we gave her a number. Um, I think that number was like $425,000. We paid like $280,000 and everything.

Did you take— did you get a certain amount of money down from her?

We didn't. We just— we took We raised her rent a little bit, and then we let the additional rent go towards her down payment.

Okay.

We asked her for an extra $200, and in the lease it said $200 a month if they execute this option to buy it was going to go towards her down payment. Got it. And then after about a year, and again, we were cash flow positive the whole time, so it was great. She executed and we sold it.

And she refined—

I'm assuming she got a loan, uh, and she got a purchase loan on it. She, she took money out. We probably made more than $60,000 if I'm thinking about it. We probably made more. Yeah, it sounds like it might have been $80,000. Um, but it was hard to figure because we were so cash poor that we were taking all that additional cash flow and immediately spending on, on all of our operations because we, you know, we needed the money at that time.

That's how it works, you know. So looking back at that deal, what would you, what would you have done differently? Or what do you feel like you executed on it just like you probably would now, uh, except for the hard money loan? You probably know somebody else would probably give you a better deal, but you feel like you did what was right at that time, right?

And by the way, we refinanced that hard money loan. We got a regular Fannie Mae loan.

That probably helped a ton.

Yes, that helped a lot. But, uh, what would we— what would I have done? I don't know if I would have done much differently. I probably would have taken an unrefundable, um, a bigger deposit when she moved in. I don't know if she had the money. Oh, I don't know.

When she did a rent-to-own, you mean?

Yeah.

Okay.

Like, I don't think she had a lot of cash at the time.

Was she— sorry, was she a current tenant at the time?

And then she was like, hey, no, no, before she moved in, she mentioned she was interested in rent-to-own, and we looked at it as this may be the only person that's ever going to buy this. And, uh, that's what we did. That's what we did.

That makes sense. I'm sorry, I thought she was already living there and then approached you guys, said, hey, you thought about selling this? No, but this was a new— and then you, um, you know, you had that option of flow. Okay, right.

If we weren't cash flow positive, we probably wouldn't have, wouldn't have done it. But it, you know, with 3 rental incomes coming in, it probably would have been better. The only thing I can think of is that maybe, maybe we should have kept it because like every property, values have gone up so much and the rents have gone up so much that it would have been a tremendous cash cow. Short of that, I think, I think we did, I think we did most things right on that. I don't think we really screwed that up too bad.

Amazing. So let's talk. So we talked about your first deal, and it seems like you maybe you might had a little bit more experience, or I would say a lot more experience than like the person that just dives in, doesn't know what they're doing. Sounds like you had experience on how to navigate those situations. So for someone that's listening that doesn't, what do you think, um, like if they're in a situation like that, would you recommend like they buy it, it's not— they can't resell it, you would rec— would you recommend renting it out?

Um, I guess you'd have to see the situation, but I think any, any situation where you can't sell a property and you can be cash flow positive by renting it, um, and you can— if you have a hard money loan, you can refinance it, you know, the basically the BRRRR method, right? Um, then I think it's a good plan. In, in my area, single-family homes are almost never cash flow positive because my price points are much higher, right? I'm buying stuff for $300,000, $400,000, $500,000, and the taxes here are very high. But if you're in most parts of the country, if you have a— if you, you become a— what's it called— an accidental landlord, right? If you can't sell the property for whatever reason, you could rent it and then figure things out. Hopefully it appreciates, or you figure out what to do with it later.

Yeah, unfortunately we, we were doing that because of the pandemic. Uh, a lot of the interest— when the interest rates rose, we weren't able to sell our flips, so we had to take them down, you know. Oh, crazy. But, um, let's talk about where you're up to right now, because I think a lot of people that are newer, uh, that are watching the podcast or watching this live, they, they say, okay, he did his first deal, how did he get to the point where he's at right now? And I think you're telling me you're doing about 5 deals a month, right?

Right.

So tell us about that right now.

That's 7 years ago in 2017. Um, I— we had grown the business pretty well to the point where I think I was doing 17 rehabs at one time. And when I got to that point, I wanted to kill myself. I was ready to blow my brains out. I mean, the materials were going to the wrong place. Contractors were lying, contractors were disappearing, and I was starting to lose money on deals, and that's not good. And it was only— and it was almost always my fault. And I had a conversation with a guy named Brad Chandler. You know Brad?

I love Brad Chandler, he's awesome.

And Brad, he was trying to sell coaching then, but he basically told me, you gotta, you gotta move to wholesaling and you gotta start marketing direct to sellers, right? And he really put me on the right path. And since then I've been marketing direct to seller. That's had a huge change in my focus on my business. The parts of the business that I hate, and I still do some of them, are construction, dealing with contractors, dealing with building departments. Very hard by me. There's a million different building departments. So my goal is really to get to zero construction. I'm never going to get there, but if I could wholesale every house, I would. Very often I can't, either because I'm at too high of a price point and investors won't buy it for me, or because it's occupied and I can't show it. Um, so I, I do close on probably half the deals that I go into contract on now. I find half and I close on the others. I usually try to wholesale them, but sometimes I, I do end up bringing up rehabbing them, doing a rehab now.

So that's interesting. Do you feel like if you had a more robust buyers list or a better different— I guess knew more other investors like you that would want to buy these, you could wholesale them all? Or what do you think stopping you from being able to wholesale?

No, I think, I think my buyers list is pretty good. I think it's just that if I want to continue to buy at the level I am, very often I'm faced with a seller who needs a certain price, and at that price I don't have room to wholesale it, but I can close on it and just wholesale it. So maybe just clean it out and sell. That also allows me sometimes to pay more than my competitors because they're looking at is this is $100,000 rehab, and I'm looking at is this is a $4,000 cleanout and I'm not looking to hit that top price in the market. I'm just looking to get— find the bargain hunters who are going to pay a lot less in that area than others.

Have you heard of the strategy of the retail buyer program or novations where they, uh— have you tried that instead of wholesaling and closing on it? So you don't—

I do, I do. I've novated a few deals. I think it's a brilliant strategy. Um, there are certain additional challenges in New York, of course, to it. Because the seller is always represented by attorney, and attorneys don't understand what novations are. Novations are only like 8 years old. Yeah. Um, my attorney didn't understand them. I had to sit down and teach everybody what they were, right? Um, but there are huge advantages to doing them in New York also because closing costs here are so high. So a typical hotel deal like the one I'm doing now, I bought it for like almost 4 and I'm putting it out for 500. So in most parts of the country, that's a massive home run deal. I'm probably gonna have to pay $50,000 to $60,000 in closing costs on the buy, on the sale, and my holding costs. It's just a crazy part.

Yeah, the whole cost is of listing it, right? Because you got to bring the buyer and—

yeah, I got to pay a buyer's agent, I got it, I got to pay a lender, uh, the closing— I might pay $20,000 in closing costs on the buy. It's insane. But I'll still make $35,000, $40,000, so I'm happy to do it. But if I could novate that deal, in theory— this case it didn't work then I can save myself all of that, everything except the buyer's agent's, uh, commission, and I can buy properties with a smaller spread. Another issue with New York— I wouldn't get into all the differences in New York, I could talk to you for an hour—

deals in New York, it takes forever.

And there's no, there's no contingencies in here. When I go into a contract, every time I have to either close or I have to assign it. That's it. So I don't have any way to get out of the contract. So even on an ovation I don't have any way to get out of the contract. So I have to pick a price point where if everything goes bad, if the buyer that I novate to, uh, flakes out of me at the last second, I have to be able to buy it. And I figure that I'm going to— I've never had— it's never happened to me yet, but I figure I'm going to probably lose a little money here and there on, on those deals. But overall, it's allowing me to buy deals I never would have bought before.

Get the lump sum, right?

So, so I think, uh, I think novations are amazing. I really think they're, they're great. Did Eric Brewer invent it? I think he did.

No, I don't really know. I know he's talked about it the most, but I'm not—

you know, I think he invented it, and I got to tip my hat to him. It's, it's, it's, it's one of the most brilliant strategies I've ever seen.

Yeah, if he invented it, that's, that's awesome. I do know that, you know, one of— a lot of the people here in Utah had learned about it. Like, I have some mentors that learned about it like years and years ago, so I think it's been around. But if he, if he invented it Congrats, brother.

I think, I think, I think it's amazing. Should we explain what it is to the people here that never heard of it?

Yeah, if you could explain a little bit, uh, layman's terms, like what, uh, it took me a very, very long time to get my—

wrap my head around it, like months and months. I actually, I'm friends with Eric Brewer's, uh, ex-employee who also does it, Eric Lacha. It was also in the York, Pennsylvania area. So this is how it's— this is how I finally figured this out and got my head around it. So when we wholesale a deal, right, we go into contract with a seller and then we have to get a cash buyer to sign the contract to, because an ordinary buyer who's going to move in and get regular Fannie/FHA financing cannot buy the property from us because the basic language of all Fannie and Freddie and FHA paperwork is that The seller has to be on title at the time of contract, and we, us being the assignee, are never on title, right? So what Novation does is you go into contract, you are basically telling the seller— I'm, I'm, I'm, I'm, uh, I'm making this very succinct— but is that I'm gonna go out to the market and try and find someone, some way that I can make some money on this. And then what you do is a new buyer uh, novates you, which means replaces you, and they go into contract with the seller. Now, when the, the new— but so instead of A to B and B to C, it's A to B and then A to C. You're taken out of the, out of the transaction, but you have an agreement that says anything that, uh, the seller makes above this certain level, you're gonna— it's gonna come to me, to B. So now it's a straight contract from A to C. They can go— you can theoretically wholesale or novate to the entire world, to anybody, to an end-user buyer. Who's always going to pay more than a cash buyer, right? Because they're not an investor, they're going to move in. So it allows you to make the most money. There are companies out there who really have become straight novation companies. They don't even assign, they'd rather novate because they believe— and I think it makes sense if in certain areas you make more money if you're theoretically— if you're wholesaling to an end-user buyer.

Yeah, because cash buyers, uh, flippers need that spread. They need, you know, they need 20%, 15%., you know, return on their investment. And, um, which it really kills, I would say, majority of deals right now, right?

So the novation allows you to really get the full value of the property and make the difference from whatever, whatever price you, you're in there for. The only expense you'll have is maybe buyer's agent commission, buyer's agent commission, right?

Or if you put any money into the property, right, right?

Or if you have to fix up any repairs. I mean, that's how I sell it to people. Yeah, I'm like, listen, I'll any repairs, any fees, any cost, any commissions fall on me. So yeah, and I'm looking to agree on a specific price, of course, right? It works best for somebody that just has a number in their head, right? I want $300,000, that's their number. And you say, you know, I can, I can sell this thing for $340,000. So then you can say, okay, but you got to let me go out and try and find someone with some way to make money.

And how do you pitch that to them? You say, let me go out and find some way to make money, or do you say, let me find someone I can work partner with or work with that can get you that.

So what I say is— and this isn't like 100%, uh, I would say truthful— but I say, I'm gonna try and find somebody that wants me to do custom work to it after we close. I'm gonna say, I'm trying to avoid paying the closing cost because it's very expensive in New York, and they know that in New York. Um, and I'm gonna go out there, I'm gonna, I'm gonna list this, I'm gonna try and find a buyer that wants me to do the work after I close. Okay. And you can always fall back on me, so you know you have me at this price. So if the buyer flakes out, I'm still going to buy it. If the buyer has any repairs they need, I'm going to pay for it. If there are any costs, fees, commissions, I'm going to pay for it. And for somebody that just has a magic number in their head, if that number— if there's a decent spread between that and what you can go out into the market on, then it works great. They're like, I don't care. I've heard it from a— you know, I probably does it— done it 6 times, um, and they've said, you know, I don't care as long as you give me my number. I don't care what happens. And as long as I don't pay any fees, I'm fine.

And let's say you try to novate it, nobody's interested. You, you still close on it at that price that you, you, you say?

I have to pick a price where I'm gonna not take a beating, or, you know, if I have to close on it.

Got it. Um, last question I have about that is, um, you get paid on these, I'm assuming, in New York through filing the affidavit of memorandum or the notice of interest and then releasing that, or how do you get paid on the So there are a lot of negative, uh, challenges in New York, but one of the greatest things about New York is that you don't need to file any of that stuff.

There's no way to get out of contract in New York. It's a bitch to get into contract, but a seller is never getting out of contract. There's no 'I'm changing my mind.' If a seller calls me, and it's happened a few times, and say, 'You know, I don't want to sell it to you,' or 'I want more money,' I just say, 'Call your attorney.' Because here's the truth. Number one, I can file lis pendens on the property, which means they'll never sell to anybody else. It's a lot stronger than an affidavit or a memorandum of contract. Same as if I was foreclosing on him. And number 2, I can sue him for specific performance, which means I can sue him for the entire purchase price if he won't sell to me. So there is no getting out of contract. You are locked in, like, uh, in like a— in a cage. That's wild. That is, that is an advantage to New York, but it is, it's a pain to get in, but no one's getting out.

Okay, so, so that means then you don't need to file any of that. And but I'm just saying, how do you get that difference? Do you—

is it on an ovation?

Yeah.

Yeah, so there's— so the way it works is they sign a rider to the contract that says that they, they're going to allow me to market the property, that they allow me to novate the property, whatever I want to do with it. Um, as soon as I find a new buyer, then we sign a novation agreement. And the novation agreement says, hey, um, my company, Real Property Buyers, is out of the contract. John Smith is in the contract. But any, any fees, cost, commissions that come into play fall on Real Property Buyers, my company. But any additional proceeds above the agreed-upon price also goes to Real Property Buyers, and then they're bound— they're bound by that.

Got it, makes sense. Okay, yeah, because I've heard, you know, there's different ways to do it, right? But some people, they release the, the cloud, um, for the, the fee.

And again, there's no cloud. If I wanted to even go to any of the counties here and record like an affidavit of contract, they, they they'd laugh and throw it back in my face. Like, it's just not done. Well, it never gets recorded. That's— but it doesn't need to be because the contract, the contract is, is, is like ironclad.

There's no way. Is that the state, the RepC upstate contract? Because I remember I did a contract in New York and it was my contract I used nationwide. And the, the—

where, where in New York was it?

Uh, it was actually Jersey City, I think it was.

Uh, that's New Jersey.

Yeah, it was Jersey. It was right on—

it was right on the border, but that's Jersey. Yeah, so Jersey works like the other 49 states, so you can work with them.

I had this smoking deal and it was kind of like the seller's like, oh yeah, let me get out. And now I'm like, dang, maybe I could have kept it. But no, agreed, I understand. Um, Facebook user saying $60K, what market?

It was Elmont, New York, in Nassau County.

Love it, love it. Okay, um, Amazing, amazing. So tell us, uh, you know, to— because we kind of want to wrap it up, but I've enjoyed chatting with you. Tell us what you're doing right now and to do 5 deals a month. Where are these deals coming from? Because a lot of people, they're probably like, how's my— how's he doing 5?

I can't even do 4. I'm still a huge fan of direct mail. This is like my return mail from today.

What is that, by the way, like 32, 40 cents a postcard?

Almost 50 cents now, postcard. The postage just went up. So I send a lot. I probably spent— I spend 5 figures a month on direct mail. That's my number one source. I also do pay-per-leads now. I use Need to Sell My House Fast and iSpeed to Lead, which I, I sort of shifted from pay-per-click to pay-per-lead, which I like.

I like that too, if, if you do that model.

Yeah, I think it's good. You have to just understand how it works. Some people get, you know, get, get disappointed with it too quickly, and I think, and I think leave too quickly. Um, and I do a little bit of, uh, RVMs, ringless voicemail, and I do do some cold calling. I have a service that cold calls for me, but really direct mail is really the base, the base of my, of my business. It's really the most, the most deals that I get.

So interesting how direct mail, I feel like it ebbs and flows, like sometimes it hits, sometimes it doesn't. Is that what you've seen?

Absolutely, it goes up and down. But I, I, you know, when I speak to newer people in the business and they say direct mail, they look at me like I, I have 3 heads because they don't read their mail, they don't believe in mail, they don't check their mail. You know, the millennials think mail is, is like, it's like I told them I was, I was sending a contract to a seller via Pony Express. But the truth is, most of the people we buy from are older, right? Are, I would say, my, my age skew is probably over 60 for sure, maybe over 70. So older people do read mail.

So, so to me, I read my mail. I'm 32, so I don't, you know Right, well, you're in the minority.

Um, but, but mail works, and it's— but it is, it is really expensive. It's— and, but, but that sets you apart today because most newer investors cannot afford mail. Maybe they'll mail once, which is stupid.

Yeah.

And I'm gonna mail every list I have like 5 to 7 times.

So I think that's the key, is the consistency of the mail. Like, a lot of people think— when I first started, they're like, mail? So I just spent $10K on one, one blast, and I'm like, why didn't I get a deal? Well, you shouldn't have spent all your money on one blast. 100%. And you said all your lists, so are you a proponent for specific lists, or are you like, hey, you just got to hit them all?

So I, I, I, so I operate— I don't shop in New York anymore. I operate also in El Paso, Texas. So in El Paso, I, I can get niche lists from the county clerks. In New York, they don't really give a lot of public data, so I, I pay for the Audantic list, which is expensive, um, but it's, it's a predictive data list, and It works. It doesn't work great, but it works. And I don't have a lot of options, so I'm happy to use the Odantic List. And, uh, they, they give me targets every, every quarter.

And I'm sure the El Paso is a lot less strict than New York.

Yeah, it's a, it's some, it's a, it's, it's a great market. It's a, Texas is amazing.

Yeah, I, I love, you know, the different— because I've done deals all over the country and it's just awesome. Like, some, there's some areas that's just like This was so easy. Everyone's on board. The title company knows what's going on. We just got it done. But yeah, it's not always like that.

Correct.

Well, Michael, where can people reach out to you? I know you said you're doing some JV deals. You got going on. Well, how can they reach out to you if they like your vibe, they want to learn more?

Sure. So I have a YouTube channel and a website called biggerflips.com. My YouTube channel, I think every post, every single— I've got you know, over 1,000 videos. I've been posting pretty much every day for years. And, uh, my phone number to my office is on there if you want. Um, I'm on, uh, Facebook at Real Property Buyers or Michael Pinter. I'm on Instagram at Bigger Flips also. So I'm, I'm all over social media.

I'm everywhere.

Omnipresent right here.

Yes. Cool. Well, everybody, you heard it here first. You can reach out to him. He's got a YouTube channel. That's probably— I bet you'd like some more subscribers. So go check that out. Reach out to him. And Michael, it's been a pleasure. I think, you know, obviously we're going to stay connected. I always like learning and I learned a lot today about what's working for you. And obviously if I have a deal in that area and I need a buyer, I'm going to hit you up.

Thank you very much, Nathan. I appreciate it. All right.

Talk to you guys later. We'll see on the next one.