TM I N FORM . I NS P I R E . E DUCAT E . EMPOWE R .
The Next BIG Wave: Motel to Multifamily FUNDAMENTALS
STRATEGY The Greatest Retirement Plan: Creative Note Investing
Flipping the Script FROM REALITY TELEVISION TO REAL LIFE, JESSIE RODRIGUEZ HAS FOUND SUCCESS IN REAL ESTATE
MAY 2021 $5.95 U.S. :: $6.95 CAN
2 | think realty magazine :: may 2021
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PUBLISHER & CEO Eddie Wilson
EDITOR-IN-CHIEF Kelli White
SALES MANAGER Rodney Halford RHalford@ThinkRealty.com
FULFILLMENT COORDINATOR Blair Pierce
DESIGNER David Rodriguez
CONTRIBUTORS Grant Cardone Tamara Day Joe Dyton Ellis Hammond Fred Heigold III Ben Luxon Bruce McNeilage W.J. Mencarow Aaron Norris Ben Rao Brian Snider
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.
Steve Streetman Glenn Stromberg Shawn Tiberio Michele Van der Veen Ingo Winzer Michael Zuber
Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty
COVER PHOTOGRAPHY Marika Beroukas
Are you following Think Realty on social media? Things move pretty fast in real estate. Don’t miss out on the latest trends, tips, insights and news from your trusted resource for all things real estate investing! Follow. Like. Love. Share. Comment. You can do it all with Think Realty’s social media channels. Join the conversations in Think Realty social communities and connect with like-minded members who range from first-time to seasoned investors. Check out all of our social media channels and connect with us - and other investors - today!
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4 | think realty magazine :: may 2021
FROM THE EDI TOR- IN-CHI EF
The theme of this issue is Creative Investing, and the Think Realty team has put on our cre-
t the time of this writing, I was
attending the Think Realty Conference in Houston while sitting in
my home office. That’s the beauty of today — you can be anywhere, virtually! Regardless of “Zoom fatigue” there are many positives to how people are creatively converging and continuing to learn. You’ve heard the saying, there is no such thing as luck. And, that luck is merely preparation meets oppor- tunity. While those notions may hold some truth, one speaker at the Houston event shared his own ideas about luck: that YOU can create your own. Grant Cardone joined attendees in a Live video presentation where he shared stories of how some of his failures led to his success. His mind- set about creating luck boils down to three simple steps: 1 Show up. 2 Have a great attitude. 3 Pay attention – What are you looking for? This advice can be applied to many life situations, as well as to your real estate investment strategies.
ative caps this past year to bring you hybrid events
when no one else in this industry was doing it; gift certificates to share Think Realty education with someone you care about; RE-Focus, a monthly video call with our CEO Eddie Wilson; and so much more! This month’s cover person, Jessie Rodriguez knows something about creative investing. The former televi- sion personality and long-term real estate investor has navigated the industry for decades. Read his story on page 16. And Think Realty Resi- dent Expert, Glenn Stromberg talks about “the best kept secret in real estate investing.” Find out what it is on page 62. I hope you enjoy the investor sto- ries in this issue and learn how to dive into a new strategy, or how to get creative in a strategy you’ve been practicing for years. No matter your real estate investing story, YOU create it. Make it lucky. •
KELLI WHITE, EDITOR-IN-CHIEF
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INSIDE THIS ISSUE
From reality television to real life, Jessie Rodriguez has found success in real estate by Joe Dyton
FLIPPING THE SCRIPT
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THINK REALTY 8 News & Events INVESTOR STORIES 12 Presidents’ Circle
60 Millions of Unsellable Homes Could Upheave the Housing Market What this mismatched market means for real estate investors by Ben Rao
62 Manufactured/Mobile Homes on Acreage: The Best Kept Secret in Real Estate Investing Properties that look better than the competition by Glenn Stromberg, Think Realty Resident Expert 64 Demographic Shifts Are Key to Creative REI Strategies
Featured Member: Kemra Norsworthy
15 Contributor Corner Meet Aaron Norris
FUNDAMENTALS 24 Investing Ideas That Work
Being mindful of societal trends can get you ahead of the curve by Bruce McNeilage
Stretching your mind is a no brainer in real estate investing by Michael Zuber
66 The Greatest Retirement Plan
26 The Next BIG Wave:
Getting creative in note investing gets you more returns by W.J. Mencarow
Motel to Multifamily Conversions A strategy to solve the affordable housing crisis by Ellis Hammond 28 Cardone’s Column: Creative Real Estate Investing Strategies Out-of-the-box options offer more ways to invest in real estate than ever before by Grant Cardone 30 Creative Marketing for Real Estate Investors
DESIGN POINT 68 Investment Treasures
Investigating potential can lead to surprising profits that others pass up by Michele Van der Veen 72 Hiding Places Creating usable space in unusual places adds intrigue to homes by Tamara Day MARKETS & TRENDS 74 Market Spotlight: Charlotte A high-octane market by Fred Heigold III 77 The Unusual Suspects A look at some different developments in real estate by Ingo Winzer 78 On the Radar: Accessory Dwelling Units An in-depth look at an up-an-coming investment strategy by Aaron Norris
Attract more customers and rank higher in search results by Shawn Tiberio
35 Investor Review 54 3 Steps to Improve Rent Collection Decrease late payments with these simple steps by Ben Luxon 56 Being Creative with Wholesale Deals How to provide your investors with more properties by Brian Snider STRATEGY 58 Three Reasons to Sell Your Real Estate for Cryptocurrency High return is possible with this creative strategy by Steve Streetman
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NEWS & EVENTS
Think Realty Honors Nominations Open! E ach year, Think Realty honors leaders in the industry who exemplify the best in real estate investing. Not only have the winners achieved great success in their own right, but they also demonstrate Think Realty’s mission of being trusted resources within the real estate investing industry. Know someone who fits this description? Nominate them today! Winners will be featured in Think Realty Magazine, on social media, and celebrated at a special awards ceremony with Think Realty CEO Eddie Wilson.
Nominations are open for the 2021 Think Realty Honors through June. Go to thinkrealty.com/honors now and enter your picks!
What Is RE-Focus? Think Realty is excited to announce a new benefit exclusively for our premium members. Each month, CEO Eddie Wilson hosts RE-Focus, a video presentation in which he shares business tips and strategies followed by a Q&A session. You can ask Eddie anything! If you haven’t joined this call, you’re missing out on REI info that could propel you to the next level. It’s your chance to have a one-on-one experience with Think Realty’s CEO where you will be inspired and empowered on your REI journey! Visit thinkrealty.com and click on RE-Focus under the Education tab for registration details!
8 | think realty magazine :: may 2021
Overheard from Houston The Think Realty Conference & Expo in Houston brought together (in-person and virtually) elite experts and dynamic personalities from all over the country to share their knowledge of and experience in the real estate investing industry. If you missed out, here are some snippets from this educational, inspirational event that really got attendees thinking:
You can’t make money and make excuses at the same time —Grant Cardone , Cardone Capital
Knowing your WHY has become so cliché, but it IS important to —Jason Engelman , Freaky Fast Home Buyers & Investments have a purpose and to know your purpose.
The number-one reason people don’t make it in this business: Put yourself in the position to be bankable. Liquidity. —Eddie Gant , Jet Lending There are rates of return, and then there is control and the ability to —Gary Pinkerton , Aligned Strategic Wealth take action and sustain.
Money is useless
—Grant Cardone , Cardone Capital until it is used.
—Marco Santarelli, Norada Real Estate Investments Don’t wait because prices are probably going up, not down. There’s no point in waiting—that’s just lost opportunity. If you’re going to invest, invest. don’t sit on the sidelines. If you’re thinking of getting into new construction,
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Filmed on location, Titan Talk is a one-on-one interview between you and Eddie Wilson, CEO of Think Realty and the American Association of Private Lenders. This personal endorsement carries extensive publicity, marketing opportunities, and bragging rights, naming you as the exclusive Titan of your real estate sector for a year.
CONTACT SALES@THINKREALTY.COM FOR MORE INFO!
• A One-on-one, 20-minute video interview by Eddie Wilson filmed on location, with B-roll footage of your office shot for use in the video. • A featured article in Think Realty Magazine and Private Lender magazine, with the article publicized as a preview line item on the magazine cover and highlighted in the corresponding newsletter. • A Titan Talk web page dedicated to you as the exclusive Titan of your real estate sector for 12 months. The page will headline your video interview, profile, featured article, and other articles by you. • Your video interview posted on Eddie Wilson’s personal social media pages and website. • Your video interview posted on the Think Realty Podcast page.
• Six social media posts on Think Realty and AAPL’s Facebook and LinkedIn pages. • Presidents’ Circle membership for one year.
Brought to you by:
10 | think realty magazine :: may 2021
INVESTING STRATEGIES FOR DYNAMIC MARKETS SEP 18-19 BALTIMORE
Experience what the Think Realty Conference has to offer:
Network with top-tier real estate professionals at the Cocktail Reception. Meet 30+ exhibitors offering real estate investment tools, products and services. Attend sessions and specialty workshops on a variety of investment strategies. Access deal-making opportunities with the biggest names in the business.
Register at ThinkRealty.com/Baltimore.
Think sponsorship with Think Realty! Find out more at thinkrealty.com/sponsorship.
thinkrealty . com | 11
F EATURED MEMBER : Kemra Norsworthy
EO of Bull Funding, Kemra Norsworthy , has been in the real estate lending industry
since 2003. For the most part, she has remained on the lending side of REI but plans to buy a multifamily building soon and has had a couple rental properties in the past. But no matter the niche, Norsworthy said she enjoys it all when it comes to lending to real estate investors because she finds gratification in being part of their strategy toward financial freedom. Norsworthy started out as a residential lender with her own broker company being a net branch. She evolved with the industry and started to work for the large banks when the housing market crashed. “Residential is so emotional, so I switched to private lending. It’s pragmatic. The deal works, or it doesn’t. I got my real estate license in a tough market in 2011,” she said. “It wasn’t tough because there weren’t deals, but because it was a man’s world. I became an underwriter at a large bank and continued in residential and private lending on the side. Then, I decided I wanted to go 100% in with private lending and create a fund.” Recently, she joined other real estate investors and private lenders as the newest member of the Think Realty/AAPL Presidents’ Circle, a group of elite entrepreneurs, lenders, and investors who meet several times per year to network, collaborate, and learn from one another. “I joined the Think Realty/AAPL Presidents’ Circle to be with winners and to learn the most from the people that are high achievers. In this group, you won’t be the smartest in the room. I hope to gain knowledge of what I do not know and add to what I do know. Being with winners will create a bigger winner in me.” •
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Where will your network take you?
The top echelon of the real estate investment and private lending industries meet in one place: the Presidents’ Circle. Circle members build deep connections across the REI landscape, learn tomorrow’s trends from leaders driving the industries, and step into the spotlight via Think Realty and the American Association of Private Lenders’ powerful media outlets. Will you be there? aaplonline.com/presidents-circle
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We’re Your One Stop Shop
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The Contributor Corner
Meet Aaron Norris Aaron Norris, VP of Market Insights at Property Radar, has talents beyond being savvy in business, technology, and investing. This guy can act, sing, and dance! In college, Norris majored in advertising with a minor in music. When he saw an ad for a conservatory in New York City, he auditioned and got accepted. As a professional triple threat, Norris did shows in NYC and around the globe and said that in his 25 years in show business, he never missed a gig. Now, Think Realty members are lucky to be Norris’s audience. Check out his articles in Think Realty Magazine and his episodes on the Think Realty Podcast. Guaranteed, you will learn a lot!
A: There’s nothing more rewarding than hearing from someone you don’t know that something you’ve written has changed their financial future.
Q: WHAT DO YOU ENJOY ABOUTWRITING FOR THINK REALTY?
A: I am currently attempting a furnished rental targeting traveling nurses. I’ve already spent way too much trying to create the perfect “experience” with gigabit internet, curated interior design, and select smart home technology. I want those five-star reviews! I’ll let you know how it goes. A: Real estate has the power to change generations. When you realize friends and family are watching and that your success will have ripple effects, it makes success that much more meaningful.
Q: WHY ARE YOU PASSIONATE ABOUT REAL ESTATE?
Q: DESCRIBE A TIME YOU CHOSE TO BE CREATIVE IN YOUR INVESTING STRATEGY.
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From reality television to real life, Jessie Rodriguez has found success in real estate THE SCRIPT FLIPPING
BYJOE DYTON PHOTOS COURTESY OF MARIKA BEROUKAS
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IT’SALLABOUT LIVINGTO FIGHTANOTHER
MANTRANOW. AND I THINK IF YOU’RE BUYING RIGHTONDAY ONE, YOU’LL SURVIVE.”
JESSIE RODRIGUEZ OWNER CAL AMERICAN HOMES
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al American Homes owner and Claremont Capital founder Jessie Rodriguez didn’t just play a house flipper on television, he does so in real life. Over the course of 20 years,
they brought to that show so much, it offered them the chance to film a pilot episode of their own, which turned into a two-season run. “My wife and I live in a 1908 historic house in downtown Claremont (California) and HGTV said it liked the vin - tage concept and asked if I specialized in flipping vintage homes,” Rodriguez said. “I said, ‘No, I flip any kind of home that I could make money on. How many do you need in a year? I’ll do it.’” The homes Rodriguez purchased for the 22 episodes of “Vintage Flip” were in addition to the 20 to 30 houses a year he was flipping on his own time. It made for a lot
former HGTV host Jessie Rodriguez has found suc- cess in every facet of real estate including mort- gages, house flipping, investing, and fund raising. Rodriguez and his wife Tina co-hosted “Vintage Flip” on HGTV in 2016 and 2017. The couple would find classic, vin - tage homes to buy, renovate and attempt to sell for a prof- it. The opportunity arose after the duo guest starred on an episode of HGTV’s “Flip or Flop.” The network liked what
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Money is made at the purchase, not the sale.”
JESSIE RODRIGUEZ OWNER CAL AMERICAN HOMES
of work; Rodriguez was more involved in the hands-on duties on the “Vintage Flip” homes for filming purpos - es than he typically would be for houses he flipped in the “real world.” “I don’t lay tile,” Rodriguez said. “I run the financial numbers and make sure it’s a good deal. I know how to buy the right deal and manage a construction crew. On the TV side of it, it looks like, ‘Wow, Jessie did the demo, laid the tile and installed the wood floors.’ So, that part isn’t true compared to what it really is like flipping. But I imagine a TV show would not be too exciting to watch if it was me reading a spreadsheet, looking at comparable listings and then saying, ‘Go buy that deal.’” His construction involvement on “Vintage Flip” might have been a byproduct of the magic of Hollywood, but every other part of the process was as real as it would be for his actual house-flipping business. He found the deals, purchased the homes featured on the show with his own money, and paid the contractors. Just like in real life, there were no guarantees that the homes would turn a profit. “We bought real deals that either made or lost mon- ey,” Rodriguez said. “They don’t always make money, and that part I’ll say is real life. And that is real life on every TV show. If anybody ever says, ‘This is fake,’ it’s not. It’s real. What’s fake is me doing tile.” AREAL, REAL ESTATE LIFE To label Rodriguez as a real estate TV personality would be to diminish the impressive real estate reper- toire that he’s built over the past two decades. He owns
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the Cal American Homes real estate agency, which buys, sells, and invests in southern California residential prop- erties. Rodriguez also recently founded Claremont Cap- ital, his private fund that’s been created to acquire more homes to purchase, renovate, and flip. The real estate industry experience he gained years prior was what led HGTV to offering him a TV show in the first place. His guest appearance on “Flip or Flop” alone likely wouldn’t have landed him “Vintage Flip.” The combination of that appearance and his house-flipping background is what made HGTV confident in rolling the dice with him. The journey to co-hosting a TV series was a long and educational one, however. His interest in real estate goes
back to his childhood. Rodriguez’s parents own a few commercial buildings and some rental houses, so he’s always been in the real estate world. “My dad always talked about real estate and how you can become financially free,” Rodriguez said. “He defi - nitely put that into my head. It’s interesting because now my parents are 80 years old and don’t have a retirement plan or a 401k, but own a few million dollars worth of free and clear real estate that pays them a nice monthly income. It worked out really well, and I had that back- ground knowledge.” Coming from a real estate background got Rodriguez into the industry while he was still in college, work- ing in a loan office. At 21, Rodriguez got licensed and
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Mymodel is to get in and out so quick that if a market adjustment happens, I am beating that adjustment.”
JESSIE RODRIGUEZ OWNER CAL AMERICAN HOMES
became a loan officer himself. He started to do loans independently in the early 2000s and ran a mortgage company until the market crash in 2007. Unfortunately, the crash led to his real estate company going under and Rodriguez saw his home foreclosed and his cars repossessed. “It was a typical, first time, young guy making money, not saving, not being smart,” Rodriguez said. “When the market crashed, I took a step back and said, ‘Oh my God, what the heck am I going to do here?’” What Rodriguez did was analyze the industry and the market, and he recognized that mortgages were difficult to do, and real estate agents didn’t have much business at the time. Rodriguez also noted that banks were foreclos- ing a lot of homes and the only people making money in real estate in 2007 and 2008 were real estate agents who started to sell foreclosures to the banks. “I took all of the years of mortgage experience and the relationships I had and started to call different mortgage servicers and companies,” Rodriguez said. “I’d just ask around, saying I am a real estate agent specializing in the disposition of foreclosed properties. I just started marketing myself as a foreclosure agent. At that point, I had never sold a house—I was a loan guy for seven years.” Rodriguez might have lacked the knowledge at the time, but he had the real estate license, which was enough to get him started on his new path. He fully
immersed himself in the foreclosure agent world, which entailed cold calling mortgage companies, searching for listings online, and attending foreclosure conferences. His hard work paid off; by the first quarter of 2009, Rodri - guez had secured 50 listings with Wells Fargo and closed 100 real estate owned (REO) properties by the end of that year. That figure was closer to 500 in just two years. “It turned into this powerhouse of a real estate dis- position company on behalf of servicers and banks,” Rodriguez said. THE FLIPPING INVESTOR As Rodriguez was making his mark on the foreclo- sure world, he was saving more of his money. Between 2009 and 2011, he noticed there were a lot of distressed property opportunities and a lot of cheap deals to be had. He had a few clients who were house flippers to whom he was often selling deals and decided it was time he got into the arena himself. “After a couple of years of selling to them, learning the business and watching them do it, I decided to buy my first flip property in 2010,” Rodriguez said. “I bought a little house for $60,000, put $20,000 to $30,000 into it and sold if for $110,000. At that point I was hooked; I realized I wanted to be an investor and buy more houses and a rent- al property.” That’s exactly what Rodriguez did. He maintained his job as a real estate agent, selling properties for the
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Have the patience to say no.”
JESSIE RODRIGUEZ OWNER CAL AMERICAN HOMES
banks. When he came across a good deal, he’d purchase it himself, fix it and sell it. Initially, Rodriguez flipped two to three properties a year before reaching five and even - tually 10 annually. When the foreclosure market began to slow down between 2012 and 2014, Rodriguez decided to pivot and do more investing full-time. “I had a full-on real estate investment brokerage at that point that grew from the amount of houses I was selling,” Rodriguez’s said. “The investment side of my business was also growing. That’s when I jumped in with both feet into the deep end and said, ‘I’m going to become a real estate flipper; I’m going to move all of my money into this.’ Then I started raising capital.” Rodriguez’s first few investors were people he had been selling houses to as their realtor. When he stopped doing that and did more business on his own, they decided to partner with him. While they put up the funds, Rodriguez would find the deals, fix them and re-list the properties. It began as a 50-50 partnership before Rodriguez saved enough money that he no longer needed investors for his house-flipping venture. “I eventually said, ‘Well I don’t need you guys anymore because I have enough capital,” he said. “It was the nor- mal progression of (the fact that) I was giving out 50 per - cent of the profit but doing 100 percent of the work.” Rodriguez’s increased investing led him to creating Claremont Capital. The company, which is a debt fund, was built to help raise capital. Rodriguez currently pays out his investors between six and eight percent returns. What makes Claremont Capital unique however is it’s not a hard money company that just lends funds to others. Rodriguez created the fund for himself and is seeking capital, not partners.
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who emailed me that are just telling me they know what they’re doing. I guess somebody vetted you already.’” The tougher lessons Rodriguez learned during his real estate journey might not have been as joyful, but they helped put him on the successful path that he’s on today. When he first started out at 19 years old, he admits he didn’t know what he should be watching for. Now, Rodri- guez watches market trends, bond markets and every- thing in between. He’s also much more conservative when it comes to investing. “I know that probably sounds like an oxymoron com- ing from a person that buys and sells homes within four months,” Rodriguez said. “But it really is. My model is to get in and out so quick to try to make sure if a market adjustment happens, that I am beating that adjustment.” Rodriguez also avoids purchasing overleveraged prop- erties. His deals are so conservative that a 30 percent market downturn would not hurt him or his fellow inves- tors. Rodriguez also has no problem pumping his invest- ment brakes for periods of time if he doesn’t like what he sees from the market at a given time. For example, two winters ago, he decided his company would not purchase any houses during the fourth quarter. He just focused on unloading the inventory it had at the time. His instinct was wrong—the market kept increasing, but having been through the pain that comes from losing everything at one point, Rodriguez would much rather be safe than sorry going forward. “I have no regrets that I slowed us down,” he said. “It’s all about living to fight another day—that’s kind of my mantra now. And I think if you’re buying right on day one, you’ll survive. We definitely try to do that. I’m such a steward of my money—I’ll lose mine before I lose yours. I’ll be more aggressive with mine, but if you’re investing with me, I have to play it smart.” “I think I’ll be the guy that outlasts a lot of people by just being smart with my money. I don’t overleverage in my personal life or the properties I flip versus the first time around. I would have survived the first time around if I had had any savings,” he said. If there were any advice Rodriguez would share with someone entering the real estate industry, it would be to be patient. He’s noticed that aspiring real estate investors want their first deal so badly that they’re willing to take a bad deal, just to get one under their belt. “If you do your first deal and lose $20,000 or $30,000, that is the quickest way to never do a second one,” he said. “Have the patience to say no and the wherewithal to under- stand you have to know what your comparables are. In my opinion, money is made at the purchase, not the sale.” •
“I have the credibility and am the one who’s listed so many houses a year,” he said. “I’ve had people reach out to say they want to partner with me, but I don’t take part- ners anymore. I needed a partner in my younger days, but now if you want to partner with me, you can let me borrow the money and I’ll pay you seven or eight percent in six- to 12-month increments. You could be a part of that journey.” Claremont Capital investors are also made aware of where their money is going. Rodriguez has worked to generate more social media content that shows his investors the exact houses in which they invested through the fund. Thanks to his enhanced production background from his HGTV days, Rodriguez can output better quality content than most. Meanwhile, investors are excited to see where their money has gone and that they’re getting a nice return. “It’s a little bit different from just a normal fund that asks investors for $1 million, and then they have no idea what’s being done with it,” Rodriguez said. “It’s about 20 years of starting from regular loans to foreclosure real estate, to investment real estate, to flipping, to now back to a mortgage division. It’s a hard money, private money division that encompasses all of the investment knowl- edge that I have gained over the last 20 years. It’s been a heck of a journey.” LESSONS LEARNED The two-decade real estate journey Rodriguez has been on has afforded him a number of lessons—some positive and some negative. One of the more positive lessons he’s encountered is that there are benefits to having been on a TV show relevant to the industry in which you work. Since hosting “Vintage Flip,” Rodriguez has seen his credibility within real estate circles increase. Admittedly not a big social media user, Rodriguez embraced it more after he gained popularity through the show. He now has more than 200,000 Instagram followers. The enhanced following has made it easier for Rodri- guez to have his emails and calls answered as well as get materials from large hardware stores in exchange for some social media posts. Being on the show has also made it easier for Rodriguez to convince others to let him buy their property as opposed to the other people trying to snag the listing. “That part has been epic—it’s taking our finding a flip business to the next level,” Rodriguez said. “There are about 20 percent of people who want to listen because I was on TV and the other 20 percent who don’t care. The rest say, ‘Oh, I guess that’s better than the other 50 people
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Investing Ideas thatWork
STRETCHING YOUR MIND IS A NO BRAINER IN REAL ESTATE INVESTING
by Michael Zuber
hen I started buying rental properties, I assumed you had
I took this information to the sell- er and asked if they could help out. Maybe they would be open to taking most of their cash now but leaving 10 percent of their equity in the proper- ty via a second mortgage. I would pay them a fair interest rate and have a five-year balloon so they would eventually get all their money. This worked and Boom! we had another rental unit. On our second apartment deal we found a seller who owned the property free and clear. He had owned it 30+ years and was ready to live the good life. At the time we had never bought anything over $500K but there we were, standing
in this apartment courtyard staring at all these units saying we want it but we don’t have a huge down payment. The seller said he didn’t want a lot of money right then but instead wanted just enough to cover the real estate transaction costs, realtor fees, etc. and then monthly payments for 10 years. To say we were surprised was beyond belief as we had no idea about why sellers would want to car- ry such a large note. Later of course we learned why sellers want to do this—for tax reasons. After negoti- ations we agreed on a small down payment and interest-only terms for 10 years that would make him happy
to put at least 20-25 percent down to get approved for a loan. Saving mon- ey for a huge down payment is hard and takes a lot of time. I could have never built my real estate portfolio without expanding my thinking and getting more creative. Simply said, I wanted more rent- als and saving up 20 percent each time couldn’t be the answer. Here are few creative ideas I executed back in the day. On our second property I wanted to put only 10 percent down, but I could only get an investment loan at 80 percent of purchase (first mortgage).
24 | think realty magazine :: may 2021
Real estate investing is the perfect vehicle to get creative and really stretch your mind.
and allow us to cashflow our largest apartment building. During the depth of the real estate crash in 2010 we found an opportu- nity to get creative around another exciting real estate transaction. We found an office building that had been destroyed by homeless people breaking in. It was a total disaster— the worst of the worst we saw in 2010. We spoke with the seller who knew he had a problem. After asking some questions we learned that he wanted out of office rentals and back into single-family rentals. We thought “great news we have lots of those!” So, after running numbers we offered to trade him one of our free-and-clear rental houses for his destroyed office building. He liked that idea, so we gave him two houses to chose from. He picked one and we completed the transaction splitting all fees 50/50 to make sure agent and escrow fees were taken care of.
We then turned around did a mas- sive trash out, painted the outside and sold the shell of a two-sto- ry office building on owner-carry terms to someone who wanted to build out the office to their liking. In this deal, we put out about $20,000, gave up a house that produced about $200 in monthly cashflow and we created a note that produces almost $2,000 a month. The hardest thing to do today is find deals. Some folks spend gobs of money on mailers, texting, etc. They have huge spend and crazy overhead none of which I want or care to ever have. Instead, I thought what if I cre- ate an office building full of inves - tors, wholesalers, flippers, agents, contractors, etc. What If I charge ridiculously low rent, offered to fund some marketing, and just asked for first right refusal on any deals we bring in. I didn’t know if this idea, which I called The Hub, would work in the beginning but thankfully after
remodeling a building in Fresno, CA, and filling it with tremendous com - panies, I can say it has exceeded my expectations. Now to be clear, I lose money every month on the building as rent doesn’t cover monthly cost, but the deals it has brought me make this idea a no brainer! I will gladly lose a little money every month to have the opportunity to secure deals that can put $20K-100K in my pocket. Real estate investing is the perfect vehicle to get creative and really stretch your mind. •
Michael Zuber worked in the Silicon Valley since graduating from Santa Clara University 20+ years ago. After wasting time and money in his 20s, he
began investing buy and hold rental properties and never looked back. Michael grew his rental property portfolio from a single rental house to financial freedom in 15 years. Now that he no longer has a day job, he shares his story via his self-published book and YouTube Channel, both called One Rental at a Time.
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The Next BIGWave: Motel to Multifamily Conversions A STRATEGY TO SOLVE THE AFFORDABLE HOUSING CRISIS
by Ellis Hammond
ne of the biggest lessons I learned early on in my career is that an entrepreneur gets paid in relation
to the size of problems he or she can solve. One of the major problems happening in the U.S. econ- omy today is the lack of supply for affordable housing. Home prices across the country are at an all-time high with no slowdown in sight, making it virtually impossible for the majority of Americans to buy a home. There is also an alarmingly low supply of new inventory coming to mar- ket in terms of new homes being built to accommodate this demand. This opens the doors for problem-solving entrepreneurs to look outside the box and determine a solution that can meet this growing demand for affordable housing. INTRODUCING THE MOTEL TOMULTIFAMILYCONVERSION. COVID-19 has devastated many middle- and low- er-class families as well as many industries across the country. One of these industries is the hotel industry. While many of the big brands will come out just fine, thousands of mom-and-pop owned motels across the country will have to shut their doors in 2021. Although sad that many of these motels will go out of business, many multifamily investors are saving them from losing it all by offering to purchase the motel with a
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Ellis Hammond manages a private network of investors seeking passive investment opportunities in multifamily syndications across the United States. Ellis is passionate about the intersection of faith and capital and hosts a weekly podcast show, Kingdom REI, in order to educate and inspire other investors and entrepreneurs to see capital as a means for greater Kingdom influence. To learn how you can invest alongside Ellis and this community, visit EllisHammond.com. housing and helping the lower and middle class as a huge priority over the next four years. These types of projects have a likely potential to earn favorable tax incentives and government spon- sored vouchers. There is no doubt that with such a massive problem like the lack of affordable housing, and an incredible buying opportunity on the horizon due to the pandemic, the stage has been set for a game-changing, impactful investment strategy. • affordable housing and no one else has a solution. Cities and municipalities are likely to provide support for these projects. NO. 2 Many mom-and-pop owned motels will face foreclosure as the stimulus money dries up later in 2021, creating great buying opportunities for investors. NO. 3 As cap rates compress in large multifamily, there will be a huge demand from investors for higher yielding assets which these motel conversions can provide. NO. 4 It is much cheaper and much faster to convert an existing building than start from scratch. NO. 5 Our current administration sees affordable plan to convert the existing motel into a long-term, multi- family living facility. This is a great solution for many developers who no longer see it viable in terms of cost to build affordable housing. It is also a great solution for investors who live in cities where much of the red tape policies make it hard to get their projects off the ground. By converting these motels into long-term rentals, thousands of affordable units will be created over the next three to five years for a portion of our population that desperately needs it. Here are five reasons why I see this as the next BIG investment opportunity: NO. 1 There is a massive tenant base that needs
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10X Living at Sawgrass
CARDONE ’ S C OLUMN :
Creative Real Estate Investing Strategies
OUT-OF-THE-BOX OPTIONS OFFER MORE WAYS TO INVEST IN REAL ESTATE THAN EVER BEFORE
by Grant Cardone
OPTION 1: BUY AND HOLD Buy and hold means buying a rent- al property and finding a tenant to rent it. This is how I first got started and I’ll tell you that being a landlord is not everything it’s cracked up to be. That’s one of the reasons I creat- ed Cardone Capital—to give everyday folks the opportunity to invest on a large scale without needing a lot of money and without the hassles of personally managing property.
OPTION 2: FIX AND FLIP The other way to go is a fix-and- flip strategy which you’ve probably seen in action on a lot of real estate reality shows. This strategy involves buying a distressed property, fixing it up, and selling it for a profit. For the longest time, that was it, but recently things have gotten a lot more interesting with more opportu- nities for people to get into the real estate market.
ack when I was first getting started in real estate invest-
ments, I had two strategies avail- able to me. I could buy-and-hold or fix-and-flip. That was it. Thankfully, these days, there are a bunch of new out-of-the-box strategies for invest- ing in real estate that fall into the new category of “creative investing.” When most people think about real estate investing, they figure they have two ways to go.
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Now what separates a creative investment strategy from the tradi- tional methods can usually be found in one of the three major aspects of the process, which are finding a property, arranging for financing, and the actual purchase. Up until now, buyers had to go through a real estate agent who would find potential properties by doing an MLS search. The agent would then schedule showings until the client hopefully found the right property. However, in the age of creative investing, buyers are not limited to going through a real estate agent. Now they can interact with wholesalers or work directly with the seller. There are even numer- ous apps that let purchasers bypass everyone in the middle. Then when it comes to financing, you’d think that there’s not much room for creativity, but times have changed and so has this part of the process. Normally, financing involves saving money to go towards a down payment and going through a bank to apply for a loan. Then there’s the documentation like tax returns, pay stubs, asset statements, etc. Finally, a would-be buyer had to cross their fingers and hope they would be approved. With creative real estate financing buyers can get financing from the seller directly or turn to alternative lending channels, like a private money lender or transac- tional funding. In most cases like this, the documentation process is different and more often than not, a lot simpler than with a bank. Lastly, we come to the purchase and the close. Here is where cre- ative investing gets really interest- ing for potential investors who can’t or don’t want to operate within the framework of traditional real estate
“More people than ever before can now successfully invest in real estate. It just takes some creative thinking.”
Before crowdfunding, those types of properties were limited and were only available to the giant firms and financial institutions. Now, investors can earn interest on the amount that they invested while experts do all the work. Plus, crowdfunding gives buyers access to properties outside their market and that’s just one of the advantages of this type of cre- ative investment strategy. It’s easy to do, you don’t need a lot of income to get started, you don’t have any long- term responsibilities, and you’ve got the buying power that comes with having crowdfunded a record-setting amount of money which measures in the hundreds of millions. For obvious reasons, I am partial to one particular type of creative investment strategy because it has paid off so well for my investors and me. However, all of the new out-of- the-box investment techniques being introduced into the market have their advantages. With a small amount of capital, some due diligence and some work, more people than ever before can now successfully invest in real estate. It just takes some cre- ative thinking. •
investment. Before creative invest- ing, a person or family would pur- chase a property and a real estate agent would oversee the process, which was how they would earn their commission. Now, creative invest- ing methods make it possible for a group of everyday people to combine their finances to purchase a property together which would otherwise be out of reach for them individually. There are a few variations on this strategy including investing in a REIT (real estate investment trust) or with a fund like Cardone Capital, where we do all the work from locating a property to closing on it, so all the investor has to do is sit back and wait for their monthly check. With out-of-the-box options like owner financing, rent-to-own homes, house hacking, wholesaling, and REITs, there are more ways to invest in real estate than ever before. Thanks to technologies, no lon- ger are interested investors forced to choose between the two major investment strategies. Instead, it is possible to earn money while sitting behind your computer. Another creative investment strategy that has become popular (and I should know) is crowdfunding. This involves using an established real estate investment platform to invest in current projects being run by an experienced real estate management team. My real estate fund allows people to invest small amounts of money in the same multifamily rental units I invest in.
Grant Cardone owns and operates seven privately held companies, and a $1.8B real estate portfolio as the Founder and CEO of private equity real estate firm,
Cardone Capital. Cardone is also the founder and leader of The 10X Movement and The 10X Growth Conference, which is now the largest business and entrepreneur conference in the world. Moreover, Cardone founded the Grant Cardone Foundation, a non-profit organization dedicated to mentoring underprivileged and troubled youth in character and financial literacy.
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Creative Marketing for Real Estate Investors
ATTRACT MORE CUSTOMERS AND RANK HIGHER IN SEARCH RESULTS
by Shawn Tiberio
s Real Estate investors, the goal is to find the motivated sellers before the competition does. One thing many sellers are looking for is answers to their situation. Content is rapidly becoming one of the most basic forms of marketing. Not only does consistent content marketing positively impact customers’ experience, but it also promotes your website’s placement in search results. A
You need quality content to reach a broader spectrum of customers. People trust a brand when the content and message they broadcast are consistent. And it is easier for search engines to display your website if it has a con- siderable amount of material that is compatible. Are you looking for a way to attract more customers and rank higher in the search results? Here are eight key content marketing strategies that grew in 2020. These are shaping up to be even more common in 2021.
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LIVE-STREAMING VIDEO CONTENT
USER-INTENT TARGETED CONTENT Targeting a searcher’s intention when looking something up is a sure way to keep ranking higher in the search results. If your title and keywords do not match what the heart of your content is referencing, users will quickly leave your page. That damages rankings. TOPIC-FOCUSED CONTENT Search engines are getting smarter. They are now able to identify the theme of a page or website based on more than keywords. Google can correlate similar subjects and pages to search, topically.
Live-streaming allows the current viewer and speaker to have a personal connec- tion while the video broadcasts. That cre- ates a kind of trust for the viewer. They are seeing and experiencing what the
speaker is doing right at the same moment. It produces a similar effect that speaking to a small audience does.
PODCAST CONTENT Podcasting content allows people to hear
what you have to say anywhere, any- time, and at their leisure. That encour- ages your audience to listen to you and get what you’re saying. It also makes the experience feel more personal because it involves a human voice.
Finding the heart of what a page is saying allows it to give the user what they want. Focusing on covering a whole top- ic enables your audience to discover your relevant content.
CONVERSATIONAL MARKETING CONTENT
RESULT-FOCUSED CONTENT A result-focused content marketing strate- gy requires a deep understanding of your target audience. To attract followers, you need to know what they want. That creates an effective method of reaching out and sympathizing with your audience.
Customers feel appreciated and heard when they get a personal response. For instance, they are much more likely to wel-
come a person responding to their inquiry than a chatbot. Content personalized by the seller is much more likely to catch the eye of someone looking for an honest transaction.
PERSONALIZED CONTENT Making content relevant to the customer is paramount. Also, addressing them by name and creating messages and emails that are more welcoming and human makes a connection with them. Without personalizing content to the customer (in
DATA-DRIVEN CONTENT Data used to the fullest is a powerful tool. You can analyze your competitor’s con - tent, compare your content and success, respectively, and decide what should change or remain the same to attract
more people. Essentially, data-driven content marketing is a precise method of spearheading your audience and goals at once. •
a respectful way), they may not feel the need to respond to you. There is a 20 percent sale increase when sellers use personalized marketing.
Shawn Tiberio is a Marine Corps veteran, serving 10 years of honorable service in the United States Marine Corps. With multiple deployments over the years and extensive training as an Ironman distance triathlete, entrepreneurship and mindset has become a must for Shawn. He is co-owner of Top Results Consulting, where he helps businesses and entrepreneurs grow and succeed. Check out his free master class and learn exactly how to target the correct prospects for your business at topresultsconsulting.com.
Think Realty members receive discounts at Top Results Consulting for services like these through the Think Realty Supplier Program. Check out the Discounts page on the Think Realty website for more information!
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