Part 2 of 3: Real Estate Investing for Beginners- Exploring 3 Investment Strategies with Sandra Holtmeyer

🔑 Unlock the Secrets of Real Estate Investing

Join Sandra Holtmeyer from First Freedom Properties as she guides you through three powerful real estate investment strategies. Perfect for women eager to dive into real estate, even with limited funds or experience.

🏠 Wholesaling

• Low Cost Entry: Start making money without a hefty upfront investment.
• Quick Sales: Ideal for sellers needing swift, discreet transactions.
• Legal Security: Learn the importance of collaborating with title companies.

🔨 Fixing and Flipping

• Financing Insights: Discover why private money lenders are often better than traditional bank loans.
• Rehab Strategies: Understand the process and benefits of property rehabilitation.
• Community Impact: Learn how your investments can positively affect local communities.

🏢 Buying to Rent

• Steady Income: Explore the benefits of owning rental properties for long-term income.
• Evaluation Tips: Get strategies for finding and evaluating the best properties.
• Agent Relationships: Build strong connections with real estate agents to streamline your investments.

💡 Additional Tips and Strategies

• Motivated Sellers: Find out how to identify and approach them.
• Education and Networking: The importance of partnering with experienced investors and attending local meetings.
• Actionable Advice: Gain practical tips to start your real estate journey without breaking the bank.

Tune in to gain the knowledge and confidence to achieve financial freedom through real estate investing!

Thank you for all of your support.

If you like what you hear, please go check out more episodes at https://womeninthearena.net/

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***Last thing- This is my WISH LIST of interviews:

• Joan Jett
• Dolly Parton
• Viola Davis
• Ina Garten

Maybe you can help a girl out...***

Go check out all of our episodes on our website at: https://womeninthearena.net/

If you'd like to connect, reach out to me at audra@womeninthearena.net

***One last thing...I have an interview wish list because a girl's gotta dream

• Viola Davis
• Dolly Parton
• Ina Garten
• Joan Jett

Maybe one of you can help me out!

Thank you all for supporting this show and all Women in the Arena!

Transcript

Audra : 0:31

Welcome in everyone and thank you so much for joining me again. This week we are back with segment two of a three-part series, and this is for investing in real estate. And, if you joined us for the first segment, we are talking about investing in real estate specifically geared towards women, but not necessarily exclusively for women, but the reason why we feel this is important is because this is still truly a great way to ensure financial freedom. Once again, sandra Holtmeyer joins me and she has a thriving organization with First Freedom Properties, and she's here to share her knowledge and get you started on your journey. It is my pleasure and honor to once again to welcome you to the show, sandra. Thank you for being here and welcome to the show. Thank you, I appreciate being here. This is great, sandra. I am so excited for you to be here once again.

Audra : 1:31

We spoke in our first episode about the overall what is investing? Why is investing? How you basically get started, and today we're going to break down the types of investing, because there are three different types, and there may be the three different types available to you in your state depending on where you live, because not all types are available to you and so you need to check what is legal and what isn't in your state, because it does vary from state to state, but there are three different types. So we will talk about wholesale, fixing and flipping, and buying to rent out. So let's start with wholesale, which is one that isn't necessarily legal in every state. That's one that you have to check with your local municipality. Would that be something you would check on the state level or on county level?

Sandra : 2:30

The state level.

Audra : 2:31

On the state level? And where would they check? Would they go to the board of realtors?

Sandra : 2:36

You know that's a good question, since it's legal in my state. I'm in Missouri, probably, probably, or the secretary of state, you know, for the most states, I, as I understand it, texas is one state that does not allow wholesaling. You have to buy and sell a home through a licensed realtor, and I don't know what other state. So, just as always, good to check. And things do change, you know, laws change.

Audra : 3:02

Give us a definition of what is wholesaling.

Sandra : 3:07

Really it's very simple Just buying and selling houses off market like any other wholesale industry. A wholesaler is the middleman between you know, think in other industries between the manufacturer and the consumer. So if you buy groceries wholesale or liquor wholesale or clothing wholesale, that's that middle person. So wholesaling real estate is working between the seller and the end buyer. So we're in the middle and in the state of Missouri and most states you do not have to be a licensed realtor or agent to help facilitate that transaction. So you know, it's kind of like a matchmaker. We're matching up the buyer and the seller estate.

Sandra : 3:51

I tell people it's like selling your car. When you buy a car and you go to sell it here, we don't have to go back to the dealership and resell it back to them. We can sell it in our driveway to the neighbor and just do a bill of sale. So same thing as with houses. Now I still go through title companies because I want everything legal and I want deeds recorded. I want everything done on the up and up and and I think my buyers and sellers appreciate that that I'm still doing things. You know the legal way and it's all reputable. Money doesn't come to me directly, it bypasses me from the title company to usually the same title company. You know the title company handles the whole transaction, but that's it, just off market. Off market sales.

Audra : 4:37

And this would be something maybe. I'll pitch you an example. Perhaps you have a family member that has a need to go into assisted living and the home is no longer manageable and nobody wants to maintain this property and you know of an investor in your area. You can call that investor and say hey, we have a property, we don't want to necessarily put it up for sale, but we'd like to offer it to you. Would that be considered wholesale?

Sandra : 5:26

Yes, yes, and think of it like a homeowner doing a for sale by owner. They're selling it themselves. They're not going through an agent they don't have to at least here they don't but they're doing the work themselves. They're putting the sign in the yard, maybe posting it on the internet, the neighborhood page, whatever. As a wholesaler, I'm not doing that and I might be working with a for sale by owner, but many times I've received the lead or been pounding the pavement to look for the leads. I'm looking for someone, like you said, and that's most of the deals I get.

Sandra : 6:00

An elderly person has moved on, either passed away or gone into a facility or moved in with a family member and the family's left with this house. That's probably still a very good, solid house, but grandma lived in it for 60 years and it needs updating and no one has the time or money to update it. And many times people understand that the house is in some sort of condition and they really just want help to get rid of it quietly, privately. There are so many people that don't want the house listed or on the market. They don't want photographs of the home. Maybe someone passed away or they're just ashamed of how sick mom and dad were, and you know what the house is left looking like after medical equipment's been in there, maybe just repair, or it's dirty. You know they couldn't keep up with it. Many elderly people can't clean the house like they once did and maybe there's been animals or you know just different things, things. So that's probably 75% of the houses I get, because most families have an elderly parent in a home that's moved on.

Sandra : 7:04

So if people understand that the house needs to be fixed to sell whether they sell it or someone like me buys it, someone's got to do the work, because many times the city won't even give you occupancy if it's not good repair. They come and inspect things, so the work has to be done. So I help people through that process by explaining to them. They've contacted me, I come over and first of all I find out what they want to do with the house. If they do want to list it, absolutely I can do that. I'm a licensed agent.

Sandra : 7:35

But more times than not they don't want to. They're looking for an alternative, something quiet and private and just, easy and quick. And putting a house on the market is not easy and quick. I can take weeks, months by the time you start the process and get it ready and cleaned out and inspections and offers and going through the financing process and get to closing. I can, and many other investors like me that are what you would call a cash buyer, either. I have my own cash and we can talk about that a little bit more, but it's just I'm not waiting for a mortgage company to inspect and approve everything, approve everything.

Sandra : 8:11

So I if really speed and eases their focus, then I go in, I evaluate the condition of the house, what the repairs would cost, and I make them an offer. And I've warned them usually that this is not going to be a full price offer. You know it's based on the current condition of the home, not what the one across the street sold for that had a pool and you know it was fixed up beautifully. So I I just try to gently warn them because some people are shocked at the number, you know. But if a, if a house fixed up is worth 200,000 and this one needs 80,000 in repairs, you know I can't even offer 200 less 80. I can't offer 120 because I'm going to take the time and the money to do the repairs and I need to make a little profit on that. So I try to gently ease people through that conversation and warn them and if they don't like it then I do offer. You know I've got contractors if you'd like to do the work yourself or you want help doing it. You know I kind of lead them down that path and I'm very open and transparent with people. I don't really necessarily share my repair costs, but you the process. They don't need to know how much profit I'm going to make and that I get discounted prices this or that and the other.

Sandra : 9:20

It's a process and so many people are just so grateful that someone's willing to buy the house in this condition and just take care of it and take it off their hands, because many times they've spent weeks and months cleaning it out. It's very emotional to go through mom and dad's stuff or their spouse's things. I tell them they can leave anything behind they don't want. Once they've taken everything they want, they're grateful that I'll take care of the trash or the donations or furniture or whatever's left. It just really takes a little off their mind and they've probably been paying taxes and insurance and still having to keep up with the lawn mowing because the city will cite you in certain places if the grass is too tall. So it just really eliminates all of that. And they're so grateful that most of the time they give me a hug when it's over. Even if they get, you know, like a small amount for the house, they're just grateful it's done, it's over, someone took care of it.

Sandra : 10:11

And that was surprising to me. When I started I really didn't expect that. And that was surprising to me when I started, I really didn't expect that. But that's the reality of it. If people are stressed out, everybody's working. Not many people have the time and money to do a renovation, a full rehab. It also sounds like it quick and easy. You know it takes the right kind of seller with the right kind of motivation. Not everybody's going to be up for that. Some people want and need top dollar, so that's a different conversation. But if they're really looking for something that's simple and easy and they're open to talking to an investor, just a cash buyer who's going to come and take it off their hands, those are a little goldmine and the sellers are happy too. So it's a win-win for everybody.

Audra : 11:02

Having just gone through this with a friend of mine whose father could no longer maintain his health or his property and had not been able to maintain his property for a very long time due to his health, they had very few options and sold the property to a wholesaler, and there were many things in the home that had been uninhabitable for a while. And let's just say that there were some things that he should not been living in those conditions and they did not realize they had. They were as bad as they were because these these are very proud individuals, so they hide how bad it has gotten until there are no other options. So these companies like yours are very compassionate and come in with compassion and they take care of everything.

Audra : 12:09

I can attest to this by watching this from an adjacent point of view. They took care of it with respect, compassion and did a beautiful job. There was no shaming, there was no guilting, it was, we will take care of it, and the end result was stunning and you would never have guessed. So there's definitely a need for wholesaling and it definitely fits a purpose. There's definitely a need for wholesaling and it definitely fits a purpose. It is definitely a service, for sure.

Sandra : 12:41

I really feel like it is a service, like you said, and I've had a couple of clients tell me flat out they don't want to deal with an agent Like. They just don't want to feel like they're being sold, they just want to deal with somebody like an investor. I actually showed up to one one time and there was an agent already there and I walked up and a little awkward but the family was trying to tell her no, we don't want to list it. And she came back and just happened to show up when I was there and the family, you know that was their choice. Yeah, consumers do have a choice.

Audra : 13:11

And you had mentioned before we start telling the difference between that and fix and flip. You had mentioned about using funds, and sometimes you use your own funds, and then what other sources of funds do you use to purchase these properties?

Sandra : 13:29

Right, when you're wholesaling you're not usually buying it, but you can. Many times we're just in the middle, so the money doesn't come to us. We've just matched up the buyer and the seller. But if I'm going to buy it wholesale, so I can still buy it that way, but I close on it. I'm either the end buyer or I'm going to sell it to somebody, maybe at a later date, or maybe we couldn't get in the house for some reason. So I said I'll go ahead and buy it, and then this person wants it later.

Sandra : 13:58

So I have several ways I do that. I do have some of my own cash, but not a lot. It's usually tied up. I try to leave that for unexpected things or last minute purchases negotiating at the last minute.

Sandra : 14:08

I have a line of credit. I have one bank loan that's like a construction type loan they'll do on rehabs, and then I use private money lenders, which is my absolute favorite way to borrow money for these rehabs, because it's just. I mean, there's a lot of advantages, but just real quickly. It's way simpler than going through the bank and most of the time these are people I have a personal relationship with a family member or a friend, and it's someone that has money sitting in an IRA or 401k or a CD that's getting ready to mature and many times I'm paying a higher rate of return than what they were getting. Maybe they were getting four or five, 6% and I usually pay nine.

Sandra : 14:47

So for people that know me and trust me and see what I've been doing, they like to lend that to me, even if they take it out of that account and are still paying 4%. But they can lend to me for 9%. You know that's 5% gain on that. So they're doubling their return. So that's my favorite way to do it. It's easy for them, easy for me. And again that all goes through the title company, just like buying a home. We, you know, close that, as we say, through the title company a deed gets filed, so the county's aware there's a lien on the house for that. You know that person gets protected like a banquet. So those are the four ways that I use cash line of credit, a bank loan and private money loans.

Audra : 15:26

So just to recap, just so I understand, wholesaling is you have finding off-market houses to purchase and you are already, a lot of the times, finding sellers to match up with the house, and then you are the middleman in between, without them even ever having to go to market. And with ever having to go to market and going with ever having to go through go through a realtor, even though you are one, you may not even have to go through a realtor, although you are using title companies to make sure that all of the paperwork and everything is done correctly, so the title is done correctly, deeds are done correctly and that there is no issue with titling and nothing of the sort down the line.

Sandra : 16:15

Right, and that protects the seller too. Absolutely yeah, so they're. They're completely cleared from the title, cause if it's not done correctly, it can come up years later and they find out they're still on the hook for that thing, you know, if it wasn't done correctly.

Audra : 16:27

So that's a problem. And then you used you're using sometimes your own cash or hard money lending to do some of the rehab that needs to be done.

Sandra : 16:41

Yeah, I didn't mention hard lending, so I'm glad you said that I prefer a private lender, but I have used hard money before. So the difference between a hard money lender and a private lender is neither. One is a bank typically, but a private lender is someone I know privately that's going to lend to me, probably at a lower rate. A hard money lender is usually a company. It's not a bank, but they're working with investors maybe hedge funds or people with a lot of money and the process is more like a bank. They are going to want credit checks and tax returns and all of that because they don't know me. They're a business and their rates are typically higher. In my area those rates are usually anywhere from 12 to 18%, with points and closing costs and origination fees and all these other fees.

Sandra : 17:30

A private money lender. That person and I have agreed on a. Usually they just want a simple flat rate, just simple interest, with one payoff at the end. They're not fancy but they're just grateful because I'm usually doubling their rate of return on where their money's now. So hard money is a good option if you have no other options and I have used hard money before, but it's expensive so I try not to use it unless I really need to and there's enough money in the deal to support that high interest payment, then I will do it. So, but I'm just more selective than that. But it's a good way to start for people that have never done it and don't have access to other money. Just make sure there's enough money in the deal to cover, you know, up to 18% interest, that's like almost credit card interest so be careful with the money you use.

Audra : 18:14

Yes, what's the difference between that and fixing and flipping?

Sandra : 18:26

Fixing and flipping is if you are going to purchase the home and do the repairs and then sell it later. So you may have acquired it through a wholesale deal through another wholesaler or your own efforts at buying properties off market, but you're actually buying it doing the work. You know you're having the rehab done and it's going to be sold. Luckily I have a good CPA, because it can be very confusing. Sometimes my houses go through all those processes I buy it wholesale, then I rehab it, then I list it as an agent. So the same address, you know, hits all my businesses and all the accounts. So the rehabbing, flipping and some people call wholesaling flipping because you're just flipping it to another buyer. Some people use that term interchangeably, but rehabbing is I'm going to buy it and I'm going to have the repairs done and then put it on the market later, the retail market. So I'm probably buying it off market, making it pretty again and then selling it to a great family.

Sandra : 19:22

And the thing I love most about that, aside from it's fun and I like doing it, but the neighbors are so grateful when you take probably the crummiest house on the street or one that's been vacant or abandoned or neglected and the weeds are crazy and we come and fix it all up and then you know it gives the neighborhood a sense of pride and they're happy to have, you know, new neighbors again. And I can't tell you how many times people have like driven down the street and like stopped and got out of their car and said thank you so much for fixing up this house. We're tired of looking at it. Or we know the family didn't know what to do with it. So it's that's. You know, I get great satisfaction out of that.

Audra : 19:58

And in that case, in the fix and flip ones, since you are a realtor, you, you are usually listing it yourself, correct? I am yes, yes, and but that's not necessarily always the case. You could partner with a realtor to list it for you.

Sandra : 20:15

I could yeah, you don't have to be an agent to do this. One of my very best friends who does what I do. She didn't want to get her license and be an agent, so she has two agents she works with. They also help find her deals. So their arrangement is if they help find her the deal, they get to list it too. So that's been very successful for her.

Sandra : 20:33

I wanted to get my license. I didn't want to pay commissions, but it also gives me a lot of other advantages, like access to the MLS and some things like that, and I just enjoy helping people get their house ready to sell. Since I do have the contractors, since I do this all the time, I like that. But you don't have to be a licensed agent to rehab a house. You can definitely hire an agent and if you're an investor that starts doing this repeatedly, find an agent that likes to work with investors, because that's a great source of easy referrals for them and you might even be able to negotiate a better commission rate doing that. You know if they know they're going to get repeat business from you and probably not the first time or two, but over time, if they see you're doing this and you have a good working relationship and they kind of know what your MO is like and you know theirs. It's a lot less work, so think about that. That's a good way to partner with an agent.

Audra : 21:28

Now everybody is seeing those shows on HGTV and it seems glamorous. I know that it's not. I know that, walking in, done many home improvement projects on my own home. I know that it is always more expensive, more time and more problems than you think going into it. I can't imagine rehabbing an entire house. So what? What would you advise if you're rehabbing a home that you're planning on fixing and flipping.

Sandra : 22:08

Well gosh, there's a lot so um. So are you talking about just time and managing the project, or yeah, time and managing the project yeah.

Sandra : 22:17

I mean, I do this full time. I know people that work full time and do this on the side and I personally don't know how they do it. I tell you what I hand it to them. Hats off to them, because it is very busy and things come up at the last minute inspections or contractors have a problem or need to meet you, or you know it's limited availability. It can be. You know, I can have some hectic days when I don't know if there's some unknowns, like you're waiting for the county water company to come out and do something. You know, just that can be hard but it's all manageable. And if you have a partner on a deal or an assistant or a family member that can help, that's great.

Sandra : 22:54

I have learned a few things. Like at different points of the rehab, when it's going to be busy, like when the plumbers or electricians are going to be on site, I know to be around, make myself available, because I want them to call me if they run into something. I don't want them to just arbitrarily decide, hey, we're going to cut open this wall or we're going to change the design plan. So you know, making yourself available, having trusted contractors, is huge and that's probably the hardest part about this, besides getting the house, is getting reliable contractors who are going to do what they say. Show up when they say not charge you. You know nickel and dime you as you go along in the project. So I highly recommend doing a contractor agreement like a contract with them, so everybody knows the scope of the work. If there's going to be changes, are there charges or what's the procedure for changes, because there's always going to be changes. Things always come up. You open a wall or the county requires something different, whatnot? That's always going to happen. How payment terms are going to work and I do not recommend giving money to a contractor upfront.

Sandra : 24:00

It just happened here locally. I know an investor that knew a contractor that even I had worked with before, but he spun off and started his own company failed miserably quickly. This person had given them the deposit upfront because we'd worked with them before. You know, had that level of trust, but as his own business owner he couldn't manage the money. There's a problem there. That's the risk and that's always the risk. So don't give them money upfront. If they need the money and they're begging or insisting on the money upfront, you know to me that's a red flag. Do they not have the money themselves? Are they not financially solvent, you know? Are they using this money to pay to finish that job? And that's usually what happens.

Sandra : 24:38

The only thing I will do is the day they start work I will give them money or pay, you know, for them to pay for materials to start the job. I'll do that. I will pay them each week if they want that, but it has to be Friday. I validate the work is done and then I'll pay you. But I work all that into the contract. And then I have incentives and penalties If they finish the job early before our agreed upon date. And we usually pick a date and then I add two weeks because things just come up, they just do like it's rainy season and we keep having delays because of rain. I mean, nobody can help that. So we agree on a date and a price and if we finish before the date, sometimes other incentives, like if it sells for over asking price or it passes inspection with no problems, I might pay them a little bonus.

Sandra : 25:25

But if they run over, or it doesn't pass inspections, there can be penalties too. So I make that a two-way street. You know it's not all one-sided, so that's just what I do, and I would recommend getting some sort of contractor agreement drawn up with your own attorney. You know, cause if you ever need teeth behind it, you're going to need that attorney. So, and there's a lot of ways to do a contract that ends up working against you. So always get an attorney. So I don't know if that really answered your question, but scheduling and then just protecting yourself, I would say, in case people don't already know this, it is recommended and again, talk to your attorney. But it is best practice to purchase the homes at an LLC and do all the work out of the LLC instead of your own personal name, just for liability reasons. Talk to your attorney about that. If you buy it in the name of your own name, it's just a little riskier if something were to happen, like if there's a lawsuit. That's something that people should talk to their attorney about.

Audra : 26:20

Okay, good, all good information, very good information. And then the last type of investing is obviously buying to rent out, and I know this one is a little bit more straightforward, but not everybody may know about it. So what are the types that you could buy to rent out?

Sandra : 26:41

Yeah, some people will call that buy and hold. So that's what that means You're buying it to hold it for a long-term investment so typically a rental property and it could be a traditional rental property where someone moves in and leases it for a long-term investment so typically a rental property. And it could be a traditional rental property where someone moves in and leases it for a year at a time. It could be a short-term rental like an Airbnb. A lot of people are doing that in certain parts of the country, but make sure it's allowed where you're buying it, because some municipalities in some cities are banning it or they limit how many are allowed or things like that. Some subdivisions don't allow it. Some communities don't want an Airbnb next door. They don't want Spring Breakers party. And then midterm rentals are getting more and more popular, and that would be like for traveling nurses or corporate executives that need a short-term stay, or at least in our local market. With the housing shortage, people are selling their home but there's not as much to buy, so they need a place to live in between or while their house is being built. So they don't need a one-year lease, they might need three, four, five, six months. So that's becoming a really popular thing to do and there's a lot of advantages of that you may be familiar with. If someone's home burned down, god forbid. But they need a place to stay while their house is being fixed, and so that's probably, you know, less than a year for the most part, and in that case the insurance company pays the rent and they're usually going to pay premium and do a huge security deposit because the insurance company is on the hook if there's damages. So that's a really good one to get in with. If you can get in with some insurance companies and kind of be listed as like the local you know, midterm rental. So those are the types of rentals I deal with single family homes and I don't currently have any duplexes or four families homes. But many people prefer those because it's just one roof and many doors. So a lot of people like that. But I don't do apartment investing. That's considered commercial, so I'll just be talking about residential here. But that is where you buy the home and if you do it correctly, the rent is higher than what you owe on the home by the time you add together your mortgage taxes, insurance, maintenance costs and a property manager, if you choose to have someone manage the property. I manage my own. But if your rent's over above that, that's what we call cash flow, positive cash flow. So that's where rental properties can be lucrative. And the longer you hold them, I mean real estate goes up On average. Real estate values double every 15 years. I mean real estate goes up On average. Real estate values double every 15 years.

Sandra : 29:12

I know someone that has a rental. They bought it was before COVID, probably five or six years ago, and their rent rate has not quite, but nearly doubled. We keep up with market rent but the house payment hasn't gone up because they had a 30-year loan on it. So they're paying the same mortgage but the rent has increased with the market. Now, to be fair, taxes have gone up, insurance prices and repairs have all gone up, so we justify the higher rent. But that person, for instance, is cash flowing and it's a house, so there's no HOA or condo fees with it. They're cash flowing $900 a month on that and when it started it was like two or 300. So you know that's the long-term play there, the advantage of holding real estate long-term, at least in the rental world. Rent rates do go up over time but the property will appreciate too.

Sandra : 30:04

I sold some of my rentals because in just two or three years after COVID they'd appreciated so much they were worth almost double what I'd paid for some of them. So I went ahead and sold them. So they'd been rentals and I was cash flowing the whole time, but then I sold it for this huge appreciation. And that doesn't always happen. Covid was a little unique but that does happen over time. I say I like to have my cake and eat it too. I want to buy rentals that are going to be in areas that do historically appreciate and where I'm going to get positive cash flow. So I'm getting a nice chunk every month. And when I go to sell it or if I want to loan against it and I've got that equity there, it's appreciated to the point where I've got cash and I have taken out. I do have a line of credit that's my line of credit is on two of my rental properties. They and I have taken out. I do have a line of credit that's my line of credit is on two of my rental properties. They've appreciated enough that I have a pretty nice little line of credit on them I can use.

Sandra : 30:55

I look for rental properties in good areas. You know, if you want them to appreciate they need to be. You know the old adage location, location, location, but just good school districts, and you know I say anywhere I feel safe going at night. That's kind of how I start my search and then I start figuring out what homes sell for there, for the values, and then what typical rent rates are. You know. Then you're going to know what your mortgage payment would be if you know what the house you know house is worth and what you might pay for it. And so I work my equations backwards what's my rent, what's the rent in that area? If I know in my area an average three bedroom home rents for $1,500 and I know the average home price is this and my mortgage payment would be this, I do it backwards and that's how I shop for my houses.

Audra : 31:43

So for the beginner investor and you've walked us through the three different types what's the easiest one to start with? And the way you describe it. They all sound like, they all have their merits on the easy way to start, but if you have a beginner beginner in your opinion where would you point them to? This is the easy way to start. This is the easy button.

Sandra : 32:09

Right, I would say wholesaling, because the first thing you're going to need to do is find a house. So you need to start looking anyway and even if you don't have the money to rehab it or don't know how to rehab or make it a rental yet, you still need a house. So you can get a house and sell it to an investor, assign the contract to the investor, so they're the end buyer. So it doesn't require any money. You don't, like I said earlier, you don't need money to wholesale a house. You're just finding the seller and the buyer. You could be the buyer. But if you don't know what you're doing at first, I would start with wholesaling. Find the house and then you can make a fee off of it and start banking some money towards rentals or your purchases of rehabs or whatnot. That's where I would start. But the trick is, with all these, you got to find the house. So finding the house is the first hard thing you're going to run into. But it takes no money. And really for wholesaling you need to learn the home values and the areas you're looking in, and that's pretty easy to do. Just start going on Zillow and seeing what things have sold for. Don't look at this estimate, because that's an estimate. Look at what they've actually sold for. Or you could go on, you know redfin or realtorcom or whatever and look at the solds. So once you start, I would pick one area to start with, maybe the area you live in or the adjacent you know community that's maybe more affordably priced and start seeing watch them. What are the two bedrooms selling for the three bedrooms? Does it have a pool or not, or a garage or not? And just start looking at what we call the comps. Doing that.

Sandra : 33:40

My first wholesale deal I found on Craigslist. I was just swiping through my phone one night on the couch and I saw this house. I'm like well, that's a cute house and that seems like an awfully good price for that area. So I called the lady and said hey, I saw your house on Craigslist, I'm interested, can I come see it? And I didn't tell her I was a wholesaler and investor and I wasn't hiding it from her, but I just I was interested in wanting to see it. So you know, sometimes we can overshare and scare people away. But I went and looked at it and that was one of those cases where they were selling it as a two bedroom and it was on the county records as a two bedroom. But I walked through it and I said to her this is a three bedroom, right? Was it a two she's like? Well, that's what the county records have.

Sandra : 34:23

So it was an older home in an area where they had finished the attic at some point. So that was the two bedrooms upstairs. Well, there was a main floor room that was with the house when it was originally built. I mean, this house was like 80 or 90 years old but it didn't have a closet, so they weren't counting as a bedroom. Well, I called the city because they're going to have to do occupancy on it in that area, and I told them the situation. And in that city they didn't require the older homes to have a closet to be considered a bedroom.

Sandra : 34:49

So, boom, I've got a three bedroom house and I was able to make her an offer that made her happy and everybody was happy. So you know that that's how I made that deal work, because she was trying to sell as a two bedroom. But once I realized it really was a three, I could make her a better offer. She was happier. I got a house, boom. But I had to know the approximate home values in that area, swiping through on the couch at night and just go oh well, that looks like a pretty good price. So you know, it just takes some time and practice. But if you're on Zillow or the other websites, really I think in a few evenings you could start really, you know, getting the feel for what homes are selling for in the area.

Audra : 35:29

So you can teach yourself, so start educating yourself. Start educating yourself with the area that you want to shop for and look at what houses are worth.

Sandra : 35:42

Start there? Yeah, absolutely, and that's, you don't need any special software or anything to do that. You know, just go on the internet. If you do know an agent you can ask, you know, tell them what your goals are and ask them if they'd be willing to partner with you. Would they send you lists of what's available? Would they help you determine values in the area? Would they send you leads? Would they be willing to list the house if you get one and want to sell it? You know like I think that's a smart play for agents. A lot of them don't want to work with investors, but my friend that I mentioned earlier, that is not an investor. Those two agents. She feeds them deals all year long. She gives them probably five, 10 deals a year just from her. So who wouldn't? What agent wouldn't want five or 10 extra deals for no money? Like they're not having to pay for leads and it's just the easy button. So talk to agents. They can. They can help you with some of this. The right agent will.

Audra : 36:35

Right, I mean. And who who wouldn't want the an easy lead that's already qualified?

Sandra : 36:42

I know it's so easy, especially once you start working together. It just you know it's, you know it's. It's just an easy relationship. They know what you're looking for, you know, you know how they work. And agents are feeding me more deals than I'm getting on my own right now. And there are other agents. People are afraid to work with agents, but just call around and you'll run into some that are not really interested in working with investors or don't want to look in the area you're willing to buy in or whatever. But just keep keep calling. See who the. If you don't know an agent, see who other agents are in the area that are working in the area. Give them a call, drive by, see the signs and call them. You know I mean. The worst they can do is say no.

Audra : 37:18

This is all possible. This is just take some elbow grease, that's it. As you just heard Sandra say, it doesn't even take any money. It just takes some ingenuity, some time and a little bit of investment of your brain power. That's it. That is it.

Sandra : 37:38

And if you listen to the first one.

Audra : 37:40

Yeah, I started on the couch at night. I'm sorry, go ahead.

Sandra : 37:42

Sandra, yeah, no, sorry, I just get excited. I started on the couch at night, like everybody does, I'm swiping through my phone, but you're absolutely right. I mean there's a lot of you know, training and experts on YouTube and you know people that come to town and will offer classes and some of that's good. Some of it is a lot of it Not so good, like you know. You'd have to trust the source, and some of those folks are making more money selling courses than actually you know, than what experience they may or may not have. So check it out. I mean, I've had coaches, I've taken several classes myself. I've spent a lot of money on education and some of it was good, but less than half you know. So you just you just have to be careful and you know, I did take a wholesaling course years ago because I had a friend that was that kind of taught me how to wholesale, because I never even heard of it. I know what it was. So I'm like, yes, I'll take your class, and I was so excited about it I signed up for the next wholesaling class Such a waste of money and I already learned it all, but I didn't know enough to know that I already had the information in my hand. But I mean, I just gave you a one-on-one on wholesaling that it took me a weekend bootcamp to learn most of that and it's not that hard it's. You know it takes time and practice. But yeah, I mean, you're exactly right, you can look for deals on your own. You can learn the house values on your own. There are ways to find out what repair costs are. You know, that's something could probably get off the internet pretty easily and I would get it from more than one source and kind of take an average. Yeah, you can work with agents. You can talk to other investors. Many parts of the country have local investor meetings or clubs or meetup groups that are wonderful to go to. In our area most of them let you go the first time for free, and we have several around here in St Louis. We have probably eight or 10 groups that meet so you can kind of go around and see what you like, what you don't like. That's a great way to get free or semi-free information and network with other investors.

Sandra : 39:39

The first rehab deal I did, I partnered with an experienced investor. The deal was he said if you find the house and we evaluate it. It's a good deal. He said I'll partner with you and we each paid half the money for the rehab. I brought the deal, he brought the expertise and boom, I'm off and running. So did the first one and we split it 50-50. And that was a good deal for both of us. I brought him a deal he didn't have and he taught me something I didn't know, and we split the money. But I've done that with people. I just actually closed on one.

Sandra : 40:07

I had a friend that found a deal but didn't have the money or the experience, so we partnered on it. I had the money, I had the experience, but she brought the deal. So we just worked out, you know, an arrangement that we felt like it was fair for us, because she wants to learn rehabbing. So that's a great way to do it. Find somebody who's willing to partner up with you. But if you have the funds, that makes it really easy. So if you can get the private money or you have a line of credit at least for rehabbing and rentals, partner with someone.

Sandra : 40:31

It's a great way to learn it for free. It's just a partnership. But wholesaling a lot of the local clubs have them and sometimes watch their agendas, because they'll have some nights where that's the topic of the night and they'll go through and do a whole case study so you can see the math from the beginning to end, and yeah, so there's lots of ways you can learn this on your own. You don't have to pay for expensive training and coaching and it's out there and some people find it very helpful, but you don't really need it. I've spent a lot of money I really didn't need to spend.

Audra : 41:02

So the bottom line is that this is possible and you did this. When you started learning this, you were a working single mom, and you did this with no experience, no background, no nothing. And if you can do it, anybody can do it. That's the whole point of why you and I wanted to do this series in the first place, because we wanted to at least put down the groundwork of a level of education that, if people wanted it, they could create a pathway to financial freedom. That's it. That is the whole purpose, because it is so important to both of us that there is an avenue for you to do it. That's it. It's a whole point. So I hope that this gives a little bit more information to at least give you guys a little bit more intrigue on hmm, maybe I can do this, maybe this is something I can do and I now have a little bit more information. At least you know where to go dig. Maybe this gives you a little bit more. I think I can go do this. I can go look on YouTube or look in your local area for a club or whatever it is. Start investigating, because you can do this, you absolutely can do this.

Audra : 42:24

So give it a shot, literally start with wholesaling. You've got nothing to lose Nothing, absolutely nothing. Look on your phone while you're scrolling watching Netflix. You've got nothing but time to lose. Sandra, thank you again for being with me here today to share your time, your expertise, your experience, your mistakes, your wins, everything. Thank you so much for being here and sharing all of that with us, my pleasure. Thank you for having me, and I wanna thank you all again for listening. I hope this gives you something more to go on. I'm really rooting for all of you. Thank you all again for being here and thank you for listening, and we'll see you again next time.