How a Hamburger Made Mike a Successful Real Estate InvestorReading Time: 8 minutes
You’ll never believe this!
Up until Mike became a real estate investor, he NEVER had a three day weekend. Mike worked in the grocery business for 40 years…always working on holidays and never having the time for weekend trips.
He hit a wall. He was sick and tired of the corporate environment and his lifestyle.
Does this sound like you?
Mike decided to do something about it. He took his real estate investing friend to lunch to learn more about the business and before Mike finished his burger…he joined a team of investors!
After about 1.5 years of doing deals, Mike still loves working with a team. They learn from each other and lean on each other when they need to. Mike reads a ton about real estate investing to keep up with trends. He’s a decision maker and the eyes in the field…and loves both aspects of his new career.
Listen to our conversation with Mike to find out more about the deal he found on MyHouseDeals, lessons learned, and his future plans, plus…
MyHouseDeals.com Success Stories
- Pitfalls to avoid when pulling comps
- Benefits of getting a real estate license
- Unique tips for finding good contractors
NOTE: Since Mike is a Premium Elite member, he received a FULL refund of his up-front membership fee for simply doing a deal! Find out more about our Premium Elite Membership here.
Tell us about yourself…
How did you get into real estate investing?
Before this I was in the grocery business for 40 years as the store director for a major supermarket. After a while I didn’t want to be in that business anymore. It was just getting too corporate. I wanted to get away and do something for myself.
A friend of mine who I’ve known forever through the grocery business has a company that flips properties. I asked him to go have a hamburger with me for lunch one day so I could pick his brain about it. All I wanted was to work on 3 or 4 houses a year and get a cash fund started for me.
By the time we got through eating that hamburger I was on a plane to Memphis because he hired me.
Why were you interested in real estate?
About 12 years ago I had a little remodeling company and I dabbled in real estate. It just didn’t work out for me back then—I would get a rent house and make around $4,000 in 3 days, but then I wouldn’t make anything else for the rest of the month. There were just too many people doing what I wanted to do.
When that didn’t work out I went back to the grocery store but eventually I just had enough. That’s when I decided to go talk to Kent…and the rest is history. Now I’ve been with the company for about year and a half and I have my real estate license.
What does the company do?
We pay cash to purchase a property, then we renovate it. We have a sales team in Memphis of 4 or 5 people and 60 investors lined up. Each week we’re turning out 12 to 15 fresh inventory for these guys to choose from.
An investor will buy the property and one of our in-house property management teams will lease the house to a tenant on a minimum two-year lease. Then we manage the property for the investor. We’ve got full-time project managers who are each working on many, many properties at a time.
What are some of the benefits of having your real estate license?
I get access to more resources than the average person. It’s nice because I can get into pretty much any property, not just the ones that wholesalers have lock boxes on. My real estate license lets me access properties faster and jump into deals.
I’ve also become more educated on pulling comps and finding deals. I can find my way around and I’m pretty handy with the MLS and pulling comps and quick comparable market analyses. It’s been an ongoing education—I still learn stuff every day.
How else did you build up your education?
We have a lot of books in the office. I like to look at the real estate pages in the paper on Wednesday and Sunday and read different articles. It’s even good to look at the stuff that people post on LinkedIn or Facebook. I also talk to a lot of agents and a lot of wholesalers. Like I said, I still learn stuff every day.
How has joining a team been beneficial to your career?
It’s just awesome. On a team you carry each other. We each have goals for how many properties we’re going to buy every month and we’re always jabbing at each other until we reach our goals.
Everybody in-house is awesome. You’re not going to work for this team and not be awesome because you will be weeded out. It’s not because of our boss. It’s your peers, your co-workers, who aren’t going to allow you not to perform. There’s a lot of teamwork and a little bit of competition among us. You don’t want to be the guy at the bottom of the pole.
Tell us more about the deal you found on MyHouseDeals…
How did you find this deal?
I have some wholesalers that pretty much know how I do an assessment on a property. They send me an address if it’s pretty much along the lines of what I want.
I looked at the numbers on MyHouseDeals, which tells you how much it should cost to rehab the property and then a ballpark ARV.
If a property interests me I make sure that it’s not in a flood zone and that it’s in our buying circle. We have a huge radius here in Dallas/Fort Worth but I have to stay inside it.
What’s your criteria for a deal?
Well first it has to catch my attention. I know that if somebody’s putting something out for $58,000 and they say the ARV is $90,000, then there’s probably not going not be any profit there. Generally, I won’t even deal with something like that. I also know how much our rehabs generally cost based on the age of the house. We definitely need at least enough to do the renovation.
If the ARV looks good I pull it up on the MLS and do a little homework on it. I’ll make a printout of the property and see what taxes there are. Then I check to see where it’s located and see if there’s any other activity going on at that house. It takes a few minutes with each one of them.
What repairs did the property need?
When we take on new properties we start with a foundation report. If we need to do the foundation, we do it. If it’s built before 1980 we re-pipe it. We take all the cast iron out and put new PVC in.
This deal needed all new flooring. If it needs a roof, it gets a roof. If it needs an AC…say the AC’s over eight or ten years old, we replace the AC. New ceiling fans, knobs, and doors will be put in. It’s a complete overhaul.
If it’s a property that’s going to sell for $160,000 – $180,000 we’ll even do granite countertops. We put in all stainless steel appliances, including the refrigerator in the homes that are in higher markets. It’s a very nice package when we’re finished.
What tips do you have for finding contractors?
It’s hit-or-miss on those guys. I think the majority of them are pretty straight-up. When I’m looking for somebody, I go to Home Depot or Lowe’s. If you can’t find your vendors out there buying materials then there’s something wrong.
I’ll take pictures of vans driving down the street that say “remodeling” on the side. We call a lot of plumbers and handymen and they’re always advertising right there on the road.
What are the benefits of using cash for your deals?
We close fast—we get in and we get out.
A lot of what we buy comes from wholesalers. They want cash and we want their house, so we just make it as quick and simple as we can. As soon as there’s a clear title, we’re done and we’re starting on it.
What do you like about what you do?
I get to travel. Most days I’m on the road. I can be in 6 to 12 houses each day, all over the metroplex. Basically I’m the eyes in the field for the company—I go out and do assessments.
In what ways has real estate investing changed your lifestyle?
I never had a three-day weekend in the grocery business. Now I get to go to Austin and San Antonio and take little two day trips that I’ve never been afforded before. I’ve never been off for Thanksgiving or Christmas or New Year’s Day. We always worked. I mean in retail that’s what you do.
This has been awesome. I’m always available and I’m always looking for deals. Even on weekends. Like tomorrow, I’m going to go and do an open house at one of our properties that we’re trying to sell. That’s something I do because I want to, but it’s not mandated.
What advice do you have for new investors?
There’s a lot to learn. There are so many things to look at and I’ve definitely made mistakes, but I’m very comfortable with the business at this point.
Just learn all you can learn. I’ve gained a lot of wisdom from my boss who started this company. He’s self-taught– he reads a lot and goes to seminars and is always on different websites. Ever since he became an entrepreneur in 1983 he just never looked back.
He’s failed at many things, but just never gives up. He’ll tell you. He just keeps fighting and now he’s very successful.
This is fun. I enjoy it. If you don’t enjoy what you’re doing, go do something else.