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0:11 – Introduction – “ What’s Going On in the Real Estate World?”
1:17 – Cause your Business to Occur
2:26 – Concentrating on Relationships as Affordable Housing Provider
2:55 – Path to Homeownership Program
4:50 – Types of Clients Agents Represent
11:04 – What is a good way to open the door with real estate agents so they don’t feel threatened?
13:07 – Can we name our LLC as a trustee of our trusts?
14:09 – Do you think using an RMLO would be a good source of buyers?
15:41 – How do you qualify the buyers?
16:39 – Is it beneficial to have an entity or LLC in this business?
18:12 – Will the wealth-building seminar be recorded, and sent to the people who can’t make it?
18:46 – How to find great deals in today’s seller’s market?
20:49 – Do you send out mailings to sellers?
22:37 – Can you address how the Path to Home Ownership approach blends with the ‘Pretty House’ terms business of the higher end properties? Here in Greater Seattle, the median price is approx $700K. Opinion?
24:53 – What happens if you wrap a sub-to, to an end buyer and the original seller files bankruptcy?
27:15 – How many agents do you need to connect with to get one deal?
27:53 – I’d assume door-knocking pre-foreclosures would do well?
29:32 – “Knowledge is Power & Money” – Lou Brown
Listen to our Podcast:
Lou Brown (00:02):
Hi, it’s Lou and welcome aboard for our Wednesday afternoon 1:05 PM. Hello, welcome Facebook. Welcome YouTube. Welcome everyone to another installment of what’s going on out there in the world. One of the things I’m going to challenge you with is right here in the middle of the week. Yes. Hey everybody. Gosh. Yes. I see all the, the hands being raised in. Hello! Thank you for being here. Absolutely. That’s some good stuff, so excited. Hi! Good. All right. Well, I’ll tell you what, this is an interesting week. An interesting, let’s say spring, an interesting year. There’s been a lot of things go on over the last year. No question about it. And it has caused some opportunities. And what we’re looking at is that things are shaping up to be an interesting and incredible year. I know that one of the things that I always teach is to cause your business to occur, so that you’re not waiting for the next thing to occur.
Lou Brown (01:25):
You’re not waiting for the next opportunity to show up. You’re not waiting for the next crash. You’re not waiting for the foreclosures or the pre-foreclosures. You are just looking at the market and being present to it. So one of the things I always talk about is what are you doing today to cause your business, to cause it to occur, to have a result that can pay forward for potentially the rest of your life. And that’s one of the things I love about real estate is it’s extremely resilient and it gives you an opportunity to have a ton of freedom because the number of hours that you put into the business, my gosh, if you actually put in a 40 hour work week into buying, holding, and selling real estate, you’d have an amazing business. There’s no question about it because the number of hours can be concentrated dramatically.
Lou Brown (02:25):
And one of the ways I look at concentrating our business is concentrating relationships. So in your local community, you are an Affordable Housing Provider. That’s who we are. That’s what we do. And as a result of working with sellers, we’re showing sellers the opportunity that their home, that they lived in, that they raised their kids in. Their home can be used in a program called The Path To Home Ownership, where we help deserving families, regardless of credit or financial background to end up with home ownership and what a great thing, what a great mission to have, right? To cause other people’s lives to be impacted and improved as a result of who you are and what you do in the community. So, once you are clear on your mission, once you are clear and embrace what the possibilities are, then people are drawn to you.
Lou Brown (03:34):
So when I say, what are you doing to cause your business? One of the questions is who are you talking to? Who are you talking to to cause your business to occur? And one of the folks I always remind you that you should cause yourself to connect with is real estate agents. Now, back in the day, we used to run away from real estate agents. We used to not know what to say or how to say it. We used to think that real estate agents would think of us as competitors that we’re trying to buy properties that they would like to list. And that were selling properties that they would like to sell on the open market. That’s understood, but once they truly understand who you are and what you’re doing, the result is a perfect partnership, a perfect relationship. Now, a perfect partnership is when run party brings something to the table that the other party doesn’t have, and what you bring to the table is the opportunity to change people’s lives, the opportunity to lift a burden off of the agent and off of the agent’s client.
Lou Brown (04:50):
Now, there’s two types of clients that the agent represents potentially. They represent a seller and a seller who may have challenges, may have issues and may cause that property not to sell quickly. And of course, one of the favorite things for a real estate agent is for that property to sell fast, right? They want that baby to move. And they also know, that if they don’t list it at the right price, in the right condition, in the right market, with the right funding, then that property is going to sit there for awhile. What any of those elements can be missing in a transaction. And that’s where you come in. And that’s where the agent’s understanding of who you are and what you do comes in. So, we always want to remind you to connect with these real estate agents in the market. Now, the other thing that you bring to the table is a solution for their buyers.
Lou Brown (05:53):
People that cannot qualify for a loan, agents are approached all the time by people that simply don’t have good enough credit or good enough down payment in order to be able to purchase a property right now. And they, the banks have restrictions on the types of loans they can make. And on the certain credit scores that are necessary, the certain take-back guidelines that the bank has to follow. If they don’t do the proper underwriting, then they literally have to buy the loan back. So, there’s many issues that banks are faced with in making these loans. Well, we are faced with the same issues. And so as a result of that, we can take on more risk. And that means that the agent is finding people that can’t qualify for loans. So, when they are finding people that have less than perfect credit and less than the full amount of down payment necessary, then the opportunity is perfect.
Lou Brown (06:58):
So get connected to your community, get connected to real estate agents, get connected to mortgage brokers, cause your business to occur. Show them who you are, what you do and how you can help show them how you can eliminate the issues that they have, that they are faced with from sellers and from buyers. Now, once you connect with them and show them exactly what solutions you can bring to the table, amazing relationships can result. And I’m working with many right now. In fact, it’s like a spicket. If you turn that spicket on, get ready because they do have sellers. They do have buyers. And if you’re not getting those results, it’s only because you haven’t connected with those agents recently. So cause yourself to go out there and get reconnected with those agents. Now we always do this Wednesday afternoon, 1:05 PM, as an opportunity for you to ask questions as well. And one thing I wanted to let you know about is this Saturday coming up, I am going to be doing a very special workshop.
Lou Brown (08:25):
That’s right. It’s the, www.WealthBuilderWorkshop.Online not .com, not .net .online. And I’m going to be teaching you for a whole day. That’s why 10:00 AM Eastern Time to 6:00 PM. Even a happy hour. After that, we’re going to be addressing all of what we do and how we do it. I’m going to roll out for you details. I’m going to show you examples of what we do case studies. You’re going to completely understand the who, what, when, where, why and how, of how we do our business. One of the greatest things I came up with years ago after the other crash is, that we find the buyers before we even buy and finding these buyers is a powerful thing because they have significant down payments and they have significant amounts that they can pay on a monthly basis. And we can literally go custom buy a property for them at the right price.
Lou Brown (09:30):
And I’m going to show you how to do that. Now that’s going to be this Saturday, 10:00 AM Eastern Time. Now, to register for that it’s www.WealthBuilderWorkshop.Online and to really, truly incentivize and bonus you up. I’m going to let you come to the whole day training, not part of the day, not a teaser part the whole day non-stop for $1, just $1. So, it’s www.WealthBuilderWorkshop.Online you get a whole day of Lou, a whole full training. And I’m going to teach you about some interesting things about finding the buyer before you buy the tools, the training, the technology of how to do that. And then I’m going to show you about the comparison between wholesaling and the long-term hold strategy. And then finally, I’m going to cover trusts, land trusts and personal property trust. And you’re going to hear things at this one day that I do not cover in my three-day Millionaire Jumpstart. So definitely, this is a great opportunity for you to get a full day of training, understand what to do and how to do it. And Hey, it’s only a dollar, so why not take advantage of that? And that’s the opportunity that exists. Now, Scott, you had some opportunities for me to answer some questions. Do you have some questions?
Scott Paton (11:04):
Yes, Lou, we’ve got a couple of questions. The first one’s from Erica, what is a good way to open the door with real estate agents? So, they don’t feel threatened. Why do real agents feel threatened?
Lou Brown (11:18):
Why? Well, they throw, first of all, if they don’t really understand who you are and what you do, that’s the reason they would be threatened. Because as I said, one of the things that they’re looking at is are you a competitor of theirs? Are you there to take their, a credit buyers and go channel them into another direction? Or are you there to take their willing and able sellers and channel them into a different direction, selling to you? Remember this, you want to approach a real estate agent with that in mind. And you want to say, I only want your leftovers. I am not looking to take your candy. I am not looking to take your a credit buyers. I am not looking to take your sellers that are ready, willing, and able to sell. I want all the leftovers, anything that can’t qualify for a loan now, a seller, excuse me, a buyer that can’t qualify for a loan right now.
Lou Brown (12:16):
They don’t have good enough credit. They don’t have good enough down payment, whatever the case may be. Bring those my way. And by the way, you’re going to get paid a commission up to a full commission on the deal. And don’t forget to bring me your sellers. Now these are sellers that can’t sell the traditional way. Maybe they’ve got a title issue. Maybe they’ve got a timing issue. Maybe they’ve got a condition issue. Maybe they’re hoarders. Maybe there’s some kind of issues that the normal marketplace just would turn their nose up at, but we would absolutely love to be able to help you with. So give us an opportunity, give us a shot. You can stay involved in the transaction all the way through. You can see what we do and you can earn up to a full commission on there. Great question, Erica
Scott Paton (13:07):
Carlton has a question about trusts and the question is, do you think using an RMLO would be a good, sorry, wrong person. Can we name our LLC as a trustee of our trust?
Lou Brown (13:20):
Well, Carlton, that’s a good question. It depends, is the answer. Certain States require that if an entity is going to act as a trustee, they have to register with banking and finance because they’re actually seen in the role of a typical bank that might come in and take over trust responsibilities on an estate. So, they have to be registered in some States and other States, an entity can be an trustee. However, I want you to think that one through, it’s not my favorite thing. I think it’s much better. If an individual is acting as a trustee rather than an entity. Now, I am going to be covering that in a lot more detail on Saturday.
Scott Paton (14:09):
Great. And then this is the one I got a little bit ahead of myself on Matt Smith says, do you think using an RMLO would be a good source of buyers? So first of all, what’s an RMLO?
Lou Brown (14:20):
Right. A Registered Mortgage Loan Originator, an R M L O is a good and helpful person to have on your team. And yes, indeed, they have people that they turn down all the time that can’t qualify the traditional way. They either don’t have good enough credit or they don’t have good enough down payment. One just happened to me in the last week where we had someone purchasing a property and guess what they at last minute, which is typically how this happens, the lender comes in and says, we’re going to put some new underwriting criteria on this loan. And they said that he was going to have to not only qualify for the loan, but his father was going to have to become a buyer and going to have to sign for the loan as well. Well, needless to say, that blew the transaction up, and that is a perfect person to bring our way when that RMLO has that situation happened so that we can now take on that individual without the father having to be involved and put them into a home through our Path To Home Ownership Program and import, to note that the RMLO will be paid for that referral
Scott Paton (15:38):
Oh, And we have a follow up. How do you qualify the buyer?
Lou Brown (15:45):
How do you qualify the buyers? Well, one of the things we’re definitely looking at is their income and not only income today, but what’s their historical income. And is that verifiable? Is that provable income? So we’re looking at a minimum of three times what our monthly housing payment would be. So they have to, we want them to have a good amount of money left over after they pay us. So, they’re not going to be struggling with paying us for example. So we like three to four times the amount of their income has our criteria for qualifying them. Now, when I say three to four times, we’re looking at their other bills as well. So if they have a couple of car payments, well that three to four times needs to be after those payments are taken into account.
Scott Paton (16:38):
Cool. And Carlton has a follow up question. Is it beneficial to have an entity or LLC in this business? And I think Carlton you need to come on Saturday and get all the details, but over to you,
Lou Brown (16:51):
Carlton, well, first of all, Scott, you’re exactly right. That is something we’re going to be talking about Saturday. Something that isn’t brought up by attorneys, isn’t brought up by just about anybody out there in the world that espouses that you should get an LLC Corporation Limited Partnership. Those are entities that are creatures of the state. They were created by the state. And there are certain requirements, restrictions, and responsibilities that come with those entities. And then, I’m going to be sharing with you on Saturday, a whole new entity to consider. And that is this concept called trusts. Now, trusts were around long before these other entities came about. So, what happens with trust is that it’s a, it’s one of the best entity secrets in the world. This is a remarkable entity that almost nobody knows anything about. So I’m going to share with you the bits and pieces and hunks and chunks all about trusts on the Saturday. And I strongly encourage you to get there so you can do the comparison between LLCs Corporations Limited Partnerships and the, my favorite called trust.
Scott Paton (18:12):
Cool. Now, Shivon has a great question. Will the Wealth Building seminar be recorded and sent to people who cannot make it?
Lou Brown (18:21):
Well, Shivon, that can be arranged. Go ahead and get registered for it. If you cannot make it, or maybe you can make it for part of the day and then we’ll have the rest of it for you. So definitely, go ahead and get yourself registered and then, we’ll do a follow up with you after the event.
Scott Paton (18:40):
Okay. We’ve got a whole pile of questions coming in here.
Lou Brown (18:45):
Scott Paton (18:45):
Una has a great one. Your thoughts on how to find awesome deals in a sellers market. Of course, everyone knows prices are going crazy and over lifts. They’re getting paid out and two hours to sell a home. If that’s wild and I would add to this question, Lou, do you think this insanity, this feeding frenzy is going to continue for the next three or four or five months? Or is it going to be longer term or shorter term?
Lou Brown (19:10):
That’s a whole different question, but Oh no. Oh my gosh! I haven’t seen you in years a long time or a friend from years ago. Fantastic, to hear from you. No doubt about it. So, I have some words of wisdom for you, and I gave them to you earlier in this broadcast, and that is get connected with real estate agents and mortgage brokers, because they are the funnel. They have the very people that they cannot serve. The very sellers, the very buyers that they cannot serve. Guess what? You can get those. And this is a favorite. Now I’m not telling you something in the life like theoretical out there in the world. I’m telling you what I do. And I’m telling you that this is a way that you become the only bidder at the auction, because literally, they’re bringing you someone on a silver platter that may not even be on the MLS.
Lou Brown (20:08):
And I even joke with not really joking with the agents. And I said, how would you like to have both sides of the commission? You can bring me the, you can list a property and get the listing commission, and then you can sell it to me and get the selling commission. And you don’t even put it on the MLS. So what I tell agents is look, as soon as you list a property, give me a shot at it. Give it a rest for 24 hours before you put it on the MLS. Let me come out and make an offer to your seller. If that works for them, we’re done. You don’t even have to put it on the MLS.
Scott Paton (20:44):
Great. And here’s a, Jean has a interesting question. Do you send out mailings to sellers?
Lou Brown (20:53):
Yes. Jean, that is a one of the ways, one of the ways that we generate our leads. Now, one of the things that you want to do when you’re operating this like a business is you want to have multiple streams of leads, not leads from one source, multiple sources. So, in the world, there’s actually multiple lists of potential sellers. So for example, people that, someone in the family died. Well, that would come from people that died with property in their name. All right? So that is a list. Another list is evictions at the courthouse. Another list is people that are, that have high equity in the property. Another list is out of area or out of state owners. So, there’s about 13 different lists that we tap into, Jean. And so answering your question, we actually have at our StreetSmartWiz.com we have for you a MailWiz, and that is our postcard mailing service. And if you don’t find that there, just call us at +1 800-578-8580. And they actually help you to obtain the list. They look at your Marketplace, they see what is being sold in that area. Meaning lists that are being sold in that area, mailings that are being done in that area. And then they help to guide you to not be mailing the same people that everybody else is mailing. So, that’s our, StreetSmartWiz.com/mailhomeWiz to find out more about that program.
Scott Paton (22:35):
Great. And we got a question that I skipped over a little while and I meant to bring it up sooner from Jeff. Hey, Jeff can. And the question is, can you address how The Path To Home Ownership approach blends with the “Pretty House” term business of the higher end properties and here in Seattle, the medium price is a, you know, is expensive. So, what is your opinion on the expensive markets?
Lou Brown (23:00):
Well, Jeff, you know, that’s the cool thing about the house monster and about the Street Smart approach. It doesn’t matter what the price point of the homes are. There are buyers in all price points of the strategy. So in other words, there are people that can afford 700,000 million dollar homes, how however they can’t qualify the traditional way. Now, that doesn’t mean they don’t have down payment. They have significant down payments. That doesn’t mean they can’t afford the monthly, they can afford the monthly. So, it’s simply redirecting your efforts towards those kinds of folks. Now, what am I talking about? I’m talking about business owners, business owners make money. Business owners have money. They have down payment in many cases. So, those are the kind of folks that can’t qualify the traditional way that we absolutely are attracted to. And Jeff, I’ve got good news for you. I’ve got people doing it right there in the Seattle area.
Lou Brown (24:02):
So, I know for a fact it can work and all over California, New York and high end markets. So, you know, we just recently sold a house 425,000, the gap put $42,500 down. And he’s been making us payments ever since then. We’ve got another house that we sold for 599. I’ve got one of my clients that sold a house for over a million dollars recently using this program. So definitely, there are plenty of opportunities out there. If you kind of shift your thinking and your approach to the market and get out your house monster. Now on Saturday, I am going to be covering the house monster. I am going to be covering the approach to the Marketplace and how we are finding our buyers before we even buy.
Scott Paton (24:53):
Great. And we’ve got a few questions from Matt and I think I had, yeah, here’s the first one. We’ve got three from Matt. We’re going to do them right out one after the other. What happens if you wrap a sub two to an end buyer and the original seller files bankruptcy, and almost seems like a trick question.
Lou Brown (25:13):
It’s not a trick question at all, Matt. And guess what? If you’ve been in this business for over 40 years, there’s some things that you’ve learned. And that’s me, I’ve been in this game for a long time. And one of the things I’ve found, and that certainly happened to me early in the game. And it was like deer in the headlights. What do I do? I’m responsible. And I’ve been paying on this mortgage. And now my seller has filed bankruptcy. Is that going to infect or affect me? The answer is Matt, not at all. So, when they filed bankruptcy, as long as we can show that, Hey, we were a third-party arm’s length transaction. We’re not their brother-in-law, we’re not somebody that is involved in helping them to avoid the have their cake and eat it too. Suppose in terms of what somebody might be doing in a bankruptcy.
Lou Brown (26:07):
All the bankruptcy trustee wants to see is that it’s an arm’s length transaction, and that you are continuing to make the payments, because after all that is the bankruptcy trustee’s responsibility is to have the creditors made whole if possible, if not, then to have the creditors, get whatever is left in the liquidation process, their piece of the pie. Well, good news. Yours is not part of that, even though your property would be named in, and that loan particularly, would be named in the bankruptcy. That doesn’t do anything to you because here’s what happens. A bankruptcy divorces the person’s debt from themselves. That doesn’t mean the debt goes away. That means the debt is divorced from the individual that borrowed in the first place. The debt stays with the house. So if you are making the payments on that debt, not a problem, no harm, no foul. The lender is not damaged in any way. In that fact, the lender is enhanced with your involvement in the transaction and making the payments.
Scott Paton (27:14):
Great answer. So, he talks a little bit once and over a little more about when you were talking about real estate agents, how many agents do you need to connect with to get one deal?
Lou Brown (27:23):
One, one is the answer. Seriously. You’ve got to get started somewhere and letting them know who you are and what you do. Now. I’m going to be covering this in more depth on Saturday, but definitely having them understand about your business model and having them understand how it fits absolutely hand in glove with what they do. They absolutely love it once they understand.
Scott Paton (27:51):
Great. And here’s the last question for today from Matt? I’d assume door-knocking, pre-foreclosures would do well.
Lou Brown (27:59):
Absolutely. Matt. All right. Here’s the thing, one of the things I teach is creating a target market and I don’t mean the entire Metro area. I mean, within five miles of where you live, I want you to create a target right there, close to home that you can work regularly. And what that means is yes, indeed. Now you’re not splattered all over the place. You’re focused in a certain area. Literally you can take a map, you can go door knocking from place to place. First of all, I’m going to have you driving for dollars before I have you knocked for dollars. But definitely finding opportunities within that target market is one of the key things that I teach. And I am going to be covering that on Saturday as well, teaching you about the target market and how to identify that target market.
Scott Paton (28:53):
Awesome. So we’re getting close to the end of our time today. Lou, great answers to those questions. If we don’t get to all of your questions, we’re going to be live this Saturday, May 1st, and you can go to www.WealthBuilderWorkshop.online It’s only a dollar you get Lou all day and also come back next Wednesday at one o’clock Eastern. I just had to check the time zone. And we’ll be back here again to answer your questions and talk some more about some of the amazing people that have been working with Lou, helping others to get their own homes. So Lou, any final remarks,
Lou Brown (29:33):
Absolutely Scott and thank you for being here. Thank you for making this possible for everyone to cause themselves to learn more about real estate cause your business, as I was saying it to begin with. cause your education as well, knowledge is power and money. I discovered that when I was a kid and I also discovered when I was raised by my single mom with no money at all and raised in apartments, no house, no background, no money, no education per se, it was the opportunity to take advantage of what is available to you. And real estate is the most resilient and amazing opportunity that I know of. Now. Here’s the thing on Saturday, you’ll be doing yourself a favor. I would suggest put all other businesses aside, know that you’re going to be sequestered with me all day Saturday, doing it Saturday so that you could have a group of time together to really focus on what I’m sharing, because it will be life-changing.
Lou Brown (30:43):
It will wake you up. It will show you what’s available to you right in your own backyard. So, I strongly encourage you to take advantage of that. We will be giving you an opportunity to ask questions. We are going to have a lunch and learn. So while you’re eating your lunch, you’re asking me questions. You’re going to be present with all the other folks that are coming. We have a big group coming on Saturday. We’re looking forward to it. You’re going to be able to connect with them as well, because it’s going to be online. It’s going to be a zoom experience. Love for you to attend with your camera on, ready to learn, raise your hand, let me know, take notes. We’re going to have a great time together.