Realtors' Guide to Creative Real Estate Financing: Expanding Options for Your Clients

[Mike Mills] (0:12 - 3:15)

 

Well, hello, Internet. So hey, look, Mavs won last night and now are up 3-2 against the Clippers, and the Game 5 winner in those series typically goes and wins the series 80% of the time, so that is good. The Stars have also clawed their way back and have taken a 3-2 series lead over Vegas, so all is right in the North Texas sports scene, but you did not tune in to the North Texas Sports Center.

 

 

 

So you've tuned into the Texas Real Estate and Finance Podcast, and I'm your host, Mike Mills, a North Texas mortgage banker with Geneva Financial, and I come to you each week with expert guests in and around the world of real estate, finance, and so together we can pick up little nuggets of knowledge on how we can get better and better at this game of real estate. So I thank you for tuning in each week to go on this journey with me, and if you are – oh, by the way, if you're looking for a lender to help you with your clients, I do that also. So give me a shout and let's have a conversation.

 

 

 

I am always happy to help. Now today's episode is all about finding all the ways you can to make a living in this ever-changing landscape of buying and selling homes. Now most of us typically think of doing our jobs as just helping buyers and sellers in your standard one-to-four contract, but there are many ways to make your way around real estate, and I hear this often these days where agents are looking for other jobs because they're getting frustrated and concerned about their business, or they're trying to do other things because they feel like it's just getting too hard. And I often like that mentality of being a plumber for 20 years and specializing in fixing, say, residential home issues almost exclusively, and then having that business slow up for whatever reason and then deciding to look at being a carpenter. So instead of looking at something like commercial plumbing or sprinkler systems or septic systems or whatever, it's all still pipes and it's still fittings, and as a plumber, you know that like the back of your hand.

 

 

 

So just because one facet of your business has maybe slowed down a little bit doesn't mean that there aren't ways to use your special set of skills to find ways to expand your businesses, your business to other aspects of what is still within the industry that you're great at. So you just have to get a little creative and you have to know where to look. And today we're going to share some strategies with you that might help you down that road a little bit.

 

 

 

But as always, before we get rolling, if you enjoy what we're doing here each week and want us to help us keep things rolling, please tell the internet that. I need the AI algorithm to know that you like this, so Skynet will share it with the rest of the planet. So do me a favor, like, subscribe, comment and share, you know, the LSCS of the world to your entire network so we can keep this thing growing and spreading our message to the awesome real estate professionals just like you.

 

 

 

I greatly appreciate your support, your support for my little science experiment here. So any help you can get, I would greatly appreciate it. Now, today my guest is a North Texas real estate broker, but he is so, so much more than that.

 

 

 

He has a balanced he's balanced out his book of business in such a way that whether times are good or bad, he's he's out there still doing deals. Now, he has multiple income streams and multiple business and is a great example of how you can add to your business, even if you just think outside the box a little bit. And he's here to share strategies with us.

 

 

 

So please welcome to the podcast, Mr. Mark Hewitt. How are you doing, Mark?

 

 

 

[Mark Hewitt] (3:16 - 3:17)

 

Hey, how's it going?

 

 

 

[Mike Mills] (3:17 - 3:27)

 

Doing well, my friend, doing well. So thank you for popping on with me here. I appreciate your time.

 

 

 

I'm sure you're a busy guy. You got a lot of you got a lot of balls you're juggling in the air these days. Yes.

 

 

 

[Mark Hewitt] (3:27 - 3:29)

 

Yes, sir. Yeah.

 

 

 

[Mike Mills] (3:29 - 4:03)

 

So I want to kind of get right into it just as far as, you know, what right now in this market, you know, everything has slowed down a little bit to anybody that's out there listening to this, you know, to to say that things have declined a little bit since the last couple of years would be an understatement. But there's plenty of people still thriving and pretty people still making money. I'm curious from you for you because you have your, you know, your toe in so many different things.

 

 

 

What right now is a is a segment of the market that is really kind of, you know, keeping everything afloat for you, really kind of generating the most business for you right now?

 

 

 

[Mark Hewitt] (4:04 - 5:05)

 

Yeah. So right now for us, like I will say, there are a lot more people that are in the market to obviously sell their home. Right.

 

 

 

The problem is with a lot of those people that want to sell is they're not necessarily looking to go the listing route. They really they want options. And so for us, you know, we're purchasing properties, fixing them and reselling them because they just want the easy but they want to be done with it.

 

 

 

Maybe they can't afford it. Keep up with the repairs. So there's that that kind of segment.

 

 

 

But then there's also people that we're finding that want cash flow and they want to be able to their their asset that they have. Maybe it's paid off or they owe a little mortgage. They want to be able to keep that and generate cash flow, you know, for future spend for themselves without giving up all of it.

 

 

 

Right. So, you know, so the owner financing part, doing the creative financing is also another segment that we found great success in as well.

 

 

 

[Mike Mills] (5:06 - 5:19)

 

Now on the owner financing thing, are you like structuring the deals for the buyer and the seller? Are you finding the the sellers and then listing it as owner? Like, how are you how are you finding your way to kind of be a part of that contract?

 

 

 

[Mark Hewitt] (5:20 - 6:20)

 

Yeah. So there's a couple of different ways. So usually if they have a very small mortgage or they own it free and clear, you know, free and clear is great, right?

 

 

 

Because then we don't have to worry about paying off anything. But we want the property to be free and clear if we end up purchasing it from them on a note. And so what that means is basically what we'll do is we will actually offer them terms as if they were the bank themselves collecting the monthly payment every month, not having to worry about repairs, not having to worry about vacancies, not having to worry about any of that stuff.

 

 

 

It's just basically what I always tell them. It's like, hey, it's mailbox money, right? You're going to wake up on the first of the month.

 

 

 

You're going to get your check. You don't have to worry about taxes. You don't have to worry about insurance.

 

 

 

You don't worry about any of that stuff. And so we'll structure a deal with them where we're paying them a certain interest rate over a certain period of time so that that way they don't have to have the stresses of actually being a landlord.

 

 

 

[Mike Mills] (6:21 - 6:48)

 

Do you ever leave options in there as far as like being able to buy out of that contract should you want to like when you put together the financing? Is there a is there a place in there where you can say, hey, look, if we can negotiate on a proper price or whatever the case, you know, buy out of this agreement, you know, we will at some point or do you kind of leave those, you know, not open ended because nothing's open, I guess. But do you kind of leave them to where you're just going to hold it as long as they want?

 

 

 

[Mark Hewitt] (6:49 - 7:44)

 

Yeah, so basically for us is I mean, we can sell it at any time. Right. So so we if we get an end buyer that ends up just buying the property and we pay off the entire note, we can do that at any time.

 

 

 

But I will tell you, one of the things that we've done is in there, we get the first right of refusal to buy the note back. So let's just say, for example, we owe them one hundred and forty thousand dollars and they're like, you know what? I don't want to wait another twenty five years.

 

 

 

I want to just collect the rest of my money that's owed to me now. What would you all pay for? Well, typically that's about a six to eight year cycle of when people will look to cash in.

 

 

 

And if right now note buyers at the moment are paying roughly about eighty eight cents for a really good note, eighty eight cents on the dollar. And so if we have the first right of refusal, we can go buy our own note back at a discount, which in turn is going to again make us more money.

 

 

 

[Mike Mills] (7:45 - 8:32)

 

Yeah, yeah. No, that makes a lot of sense. So you're you're you're giving yourself the ability to to get the option if they do decide they want to cash out their their equity and just move on down the road, then you get the ability to not have someone come buy it out from underneath you.

 

 

 

So so that makes a lot of sense, too. Are you finding the segment of the market for that? I would think, correct me if I'm wrong, but I would think that that would be a lot of your boomers out there that are kind of looking for that mailbox money because they're getting towards retirement.

 

 

 

Maybe they own some real estate, but they don't want to pay out gobs of money in capital gains tax because the moment they sell that property, they're going to owe, if they haven't lived there at least, they're going to owe a pretty good pretty good chunk there. So is that one of the benefits for the seller financing for the seller? Is that they're actually getting away from that tax liability?

 

 

 

[Mark Hewitt] (8:33 - 9:26)

 

A hundred percent. So, yeah, not having to pay that all up front, pay it over time, but also at the same time, too, like we're finding exactly like you said, people that, you know, they just want that retirement type mailbox money. Right.

 

 

 

And they just that's something that that's important to them. And then also they're in that phase of their life where they don't want the hassle. They want to be able to go on vacations and not necessarily worry about, is my tenant destroying the house?

 

 

 

Yeah. But also at the same time, the other kind of person that seems to be a good fit for this are the people that have tried landlording and they realize that, hey, I'm paying taxes, I'm paying insurance, I'm having to do repairs all the time and I'm really not cash flowing as much as I thought. Right.

 

 

 

Because it's right. Let's face it. Landlording is not easy.

 

 

 

And so they're like, hey, you know what, if I can just collect a certain amount of money every month and not have to worry about anything, then then here you go.

 

 

 

[Mike Mills] (9:26 - 10:11)

 

Yeah, yeah. That's the thing that sometimes, you know, it sounds good on the investor side of things when you get that, you know, those properties, that cash flow. But, you know, I think anybody that has been in that game, at least even for a short amount of time, I mean, don't get me wrong, there's certainly money there and there's certainly a way to to to to make it a profitable venture.

 

 

 

But, you know, you got to kind of know what you're doing because there are a lot of pitfalls involved and it's not easy. You know, it's it's definitely there's a reason that property management companies exist because the the general landlord is not exactly fired up about feeling phone calls at nine o'clock at night with the tenant telling that the fan's too loud and they need to, you know, whatever the case may be.

 

 

 

[Mark Hewitt] (10:11 - 11:16)

 

So, yeah, you know, the thing is that I mean, I'll be the first to tell you, like I had a deal that I ended up buying. It was like I'm trying to remember. I think it was like six six properties on one, like six actual single wides on like one one lot or two lots, whatever it was.

 

 

 

And and I looked at Bill and I was like, man, I'm going to pay this amount of money, but I'm going to make this much cash flow. And this is a no brainer. Like I would do this deal, you know.

 

 

 

So I ended up doing it, of course, because it was no brainer. Right. We've all had those.

 

 

 

And then and then the Texas freeze comes and and then all of a sudden, like all the plumbing is above ground. Yeah, exactly. Yeah.

 

 

 

And so then I get a phone call. Hey, so like the toilet broke, the pipes all froze, they disintegrated. And I I was like, dang, man.

 

 

 

So all that cash flow gone, like gone out the window. Yeah, exactly. So, you know, it's just that's just the way it is.

 

 

 

Right. So needless to say, I don't own those properties anymore. I did luckily make money, but I was quick to get out because I realized like, hey, this is actually not going to be as good as I thought it might be.

 

 

 

[Mike Mills] (11:17 - 12:05)

 

You know, I'm curious, since you were diving into that market a little bit, I could see with the prices being so unaffordable these days, you know, for the average person. Right. I mean, there's there's still deals to be had.

 

 

 

But, you know, when you're trying to buy a house in, you know, Frisco or you're trying to buy a house in Grapevine or whatever, you're you're paying out the nose for it. And there's not a lot of you know, there's not a lot of properties for sale. So even with the high rates, are you seeing or do you pay much attention to the growth of the manufactured market as far as, you know, where you're the land as you get a little bit outside the Metroplex here in North Texas, where you may have a little bit more opportunity for more affordable housing just because of the fact that you have a little more space and you could look at manufactured housing as like a as a segment that could have a little bit of growth? Are you seeing that at all or are you paying attention to it?

 

 

 

[Mark Hewitt] (12:06 - 12:57)

 

Yeah, 100 percent. So I will tell you this, like one of the things that we do is we'll buy vacant land and then we'll go in there and develop the land and actually put mobile homes on the land and resell those because there's definitely a need for affordable housing. And the more that the housing prices continue to rise like they have, there definitely needs to be that option.

 

 

 

Right. So that's something that we do. The other thing is, too, is we've bought plenty of used manufactured homes that needed a little lipstick or needed a full remodel just depending.

 

 

 

And we've turned those and flip them onto the market. We've owner financed them. I mean, there's just that there's that big need for that.

 

 

 

And so one hundred percent like that's a market that I will just tell you I fell into. But as I started learning more and more about it, I was like, man, I kind of I kind of enjoy this a little bit. But there is a lot of nuances that go with manufactured homes, too.

 

 

 

[Mike Mills] (12:58 - 13:42)

 

Yes. Yeah. Yeah.

 

 

 

Well, especially when it comes to financing anybody that's doing traditional financing and not going through hard money or going through whatever. I mean, I obviously know that, you know, just due to the fact that if we want to do a man home, in most cases, it's got to be a double wide. It can't be a single wide.

 

 

 

You have to own the land, obviously. And then you've got septic inspections and foundation inspections and it can't have been moved. And, you know, it's not it's really not that hard to do, but it just it just eliminates, you know, several properties from that.

 

 

 

And I see that especially I had somebody call me the other day, actually, that was asking about manufactured housing, but they were wanting to buy a manufactured house that was on a that was in like a, you know, what do they call it, like a neighborhood. But it's none of the land was owned by the owners.

 

 

 

[Mark Hewitt] (13:43 - 13:43)

 

Yeah.

 

 

 

[Mike Mills] (13:43 - 14:33)

 

Yeah. It was all the lots were rented, but they owned the the the houses on the lot. And I was like, you know, we can't we can't finance those as a traditional mortgage company.

 

 

 

And I also kind of told her and I don't know if you could tell me if I'm if I'm killing your business model here. But I kind of told her I was like, look, if I was buying a property, I would certainly not want to purchase something that I don't own the land underneath it because that creates all kinds of problems for you down the road because we're like, well, we can just move that manufactured house. It's like, well, you can, but the cost to move it and then, you know, from compared to what you paid for it is it's not that different.

 

 

 

And then you run into all kinds of issues moving it because now you have issues getting financing that way. So so are you do you see that is that you know, do you see that piece of it, too?

 

 

 

[Mark Hewitt] (14:33 - 15:18)

 

But yeah, so we won't buy anything that's not on own land like it has to be on own land. And, you know, quite honestly, like we've got a deal that we're closing on in about a week or two. It's a single wide.

 

 

 

It's been moved more than one time. But the thing is, is it's under a hundred thousand. It's on a half an acre.

 

 

 

And, you know, we're getting it for a price that will allow us to actually turn around and owner finance that for a very affordable price. And it'll move extremely quickly. Yeah.

 

 

 

You know, so even if it's been moved more than once, there are other options, but you can't go, you know, let's just say pay two hundred thousand dollars for a property that, you know, not moved at all is worth 210. Right. It doesn't.

 

 

 

Yes. There's nothing there. You've got to have a big enough gap.

 

 

 

[Mike Mills] (15:18 - 15:18)

 

Right.

 

 

 

[Mark Hewitt] (15:18 - 15:47)

 

And that's going to work out. Correct. But we have people that call us all the time and say, hey, I want to sell my manufactured home.

 

 

 

And I go, great, you own the land. They go, no. And so I'm like, OK, well, let's do this.

 

 

 

We can always find a piece of land to put it on. So let's just see what they want for the trailer first. And if it's a really good deal, then maybe we might consider buying it and moving it.

 

 

 

Right. But then you run into the risk factors of if it's older and you go to try to move it. I mean, you just pray it doesn't fall apart.

 

 

 

[Mike Mills] (15:48 - 16:40)

 

Yeah. Yeah. Yeah.

 

 

 

You got all kinds of issues if it's starting to collapse on you. Well, and I guess in that case, too, it kind of you win in both ways in that that gives you a good opportunity for owner financing because, you know, you not many traditional banks can be able to touch that. And so you have the opportunity then to put it on that property, give someone good term, you know, reasonable terms, I should say that way.

 

 

 

That way it's another cash flow generating property for you as well, which is which is great. Now, I'm curious, you had mentioned that, you know, you had you have people call you. So how do you well, you know what?

 

 

 

Let's back up. So start with, you know, let me know how you got into this game. So you obviously a real estate broker.

 

 

 

You have your real estate license. Did you start there or did you start with some of the other stuff like the investments and property flipping and hard money and then, you know, get your real estate license? What was the evolution of all that?

 

 

 

[Mark Hewitt] (16:41 - 17:15)

 

Yeah. So so actually, so my dad's been in the business for like 35 years. And so for me, like I never wanted to really get into real estate.

 

 

 

It was never my plan. I was actually, you know, I was I was on the medical path. Right.

 

 

 

I wanted to be like medical sales or be a plastic surgeon, something like that. Right. And so, you know, basically, for me, it's like I had a hard time finding a job like people are like, oh, you're overqualified or oh, you know, sorry, you don't have enough experience.

 

 

 

I'm like, man, how am I going to get in the workforce? So, you know, of course, my dad's over there like you got to get real estate. You got to get the real estate.

 

 

 

[Mike Mills] (17:15 - 17:17)

 

Yeah. All right. Yeah.

 

 

 

[Mark Hewitt] (17:18 - 17:42)

 

So so anyway, so what I did is I started, you know, doing my classes and everything, got licensed and basically started as a retail real estate agent. Right. Working with buyers and sellers.

 

 

 

And I didn't know what I didn't know. And I also had like an extreme like tunnel vision. I was just so focused on finding sellers and buyers that I didn't even think about anything else like outside of that.

 

 

 

[Mike Mills] (17:43 - 17:52)

 

Right. Right. Because when you come into the business, that's and that's the vast majority of the game.

 

 

 

Right. You sell their home or help people buy homes that are listed for sale. I mean, that's that's normal.

 

 

 

[Mark Hewitt] (17:53 - 18:46)

 

Exactly. So, you know, and I started basically calling cancels and expires. Right.

 

 

 

So I was working with people that were already usually overpriced, didn't like their other agents. So I had to like, you know, here I am like, hey, you guys pick me, you know. So anyways, but but so real quickly, I got that experience and then, you know, other people in my life had started saying like, hey, have you thought about this?

 

 

 

Have you thought about that? And so that's kind of what Trey transitioned me into. The investment game was, OK, you know, what's this assignment stuff?

 

 

 

What is you know, when they talk about wholesaling real estate, like what does that look like? And so we started going into that space and then like everything we do is in parallel. Like, can we add it on to what we already do without changing anything?

 

 

 

Yeah. Because otherwise, if it doesn't meet that, then it's like you're saying with regards to going from plumbing to a whole different. Yeah.

 

 

 

[Mike Mills] (18:46 - 18:47)

 

So it's all good.

 

 

 

[Mark Hewitt] (18:48 - 18:49)

 

Yeah. It makes no sense.

 

 

 

[Mike Mills] (18:49 - 19:28)

 

You know, and real quick, I don't mean to cut you off, but can you because, you know, I think I had this experience in all things where people will talk about stuff related to their field and other people that are in the same field, they are like nodding and they're like, yes, yes, that makes sense. I understand that. And then they'll say things where inside that person's mind, they're like, I have no idea what that means, but I'm going to pretend like that I do.

 

 

 

And so that way, I mean. So will you just explain? Because I don't think a lot of realtors understand the difference, understand really what wholesale means.

 

 

 

So can you explain what when you say you got into wholesale real estate, explain exactly what that means and why that's different than the normal retail?

 

 

 

[Mark Hewitt] (19:29 - 20:37)

 

Yeah. So basically for us, like we go and we'll find properties that are off market that's and believe it or not, like this baffled, this baffles me even today. But there are people that don't want to list their home with the realtor.

 

 

 

They don't want the hassle. They don't want to deal with it. And they're willing to take a significant discount to not have to do it.

 

 

 

And so, you know, somebody had told me like, hey, here's what wholesale real estate is. You're basically going to go find an off market property for, let's say, a hundred thousand. The house completely fixed up might be worth two hundred and fifty thousand.

 

 

 

But what you're going to do is you're going to go contract it for a hundred thousand and then you're going to go find an investor that's willing to take on that project for a different price. So let's say one hundred and fifty. So you're basically going to now have a assignment agreement with the investor for a price of one hundred and fifty.

 

 

 

And then they're going to close on it on the closing date that you've already negotiated with the seller. And you're going to make the spread between your hundred thousand dollar contract and what you assigned it to the investor on. And by the way, you didn't come out of pocket with any money to fund the deal.

 

 

 

The investor did. You just got a check from title when it closed.

 

 

 

[Mike Mills] (20:38 - 21:49)

 

See, I think that I think that that's a such a segment of the market that that not many realtors understand exists. And I've had this conversation with others before, too, about this. And we don't talk about it often, but there's an entire industry of what you call middlemen, which is all your job is, is to go find the deal and find someone willing to put the deal in place and or pay, you know, take the deal.

 

 

 

And it is it is insane in any industry, honestly, when you have people that the person that can connect two parties willing to transact with each other because it's such a big world that we live in, that that role, it's it's a grind like you're calling your email and you're you know, it's a numbers game. You're out there just hammering away at it. But all it takes is time.

 

 

 

There's not a lot of risk. It doesn't seem like typically. And because you don't find the best, you don't get the contract, you find the investor, I think usually.

 

 

 

But, you know, you can explain that. But I mean, it's such a big piece as as a realtor. If you have a license and you understand values of homes, neighborhoods, you know what house could go for if it was fixed up and can run all these scenarios, there's a lot of opportunity there still.

 

 

 

And I just don't think most people realize it.

 

 

 

[Mark Hewitt] (21:49 - 23:53)

 

For sure. And yeah, I mean, basically for us is if we go like if we go meet with a seller. So I'll just give you an example.

 

 

 

I had like my first first deal ever. I remember it to this day. I don't remember all the details because it's been a while ago.

 

 

 

But basically, I called a guy and I said, hey, you know, I'm interested in your property. Are you interested in selling? And they said, yes.

 

 

 

I said, great. You know, would you be interested in a cash offer? He said, yes.

 

 

 

I'm like, OK, what do I do next? Right. So then I'm like, all right, well, great.

 

 

 

Let me come out and take a look at the property. Let me see what we can do. He's like, well, hey, it's vacant.

 

 

 

Nobody's living there. So I show up. It kind of didn't like I wish I had like a taser on me or something because I was like, man, this kind of seems a little bit scary for me to like go just open the door and go inside a vacant property.

 

 

 

Right. So I take a look at it. I give the guy a call back and I'm like, hey, I'll tell you what.

 

 

 

We'll pay all your closing costs, no realtor fees, a hundred thousand. And he's like. OK, deal.

 

 

 

And I was like, hey, I'm going to send you the contract, let me go ahead and get this typed up, let me go find my contract real quick, you know, and stuff. And so anyway, so we end up contracting on this deal for like one hundred thousand. And then I didn't even know any investors that bought property.

 

 

 

I had no idea. I just started making calls. I started reaching out to people.

 

 

 

I started networking as fast as I possibly could. I even went to investor meetups to get, you know, as many investors as I could. And then next thing you know, I end up selling that property for one hundred and twenty five thousand and assigned it to that investor for one hundred and twenty five.

 

 

 

So at closing, the title company cut us a twenty five thousand dollar check. And the only amount of money that I was out of pocket on the front end was my earnest money that I was protecting myself with, with an option period that gave me the option to back out to get that earnest money back. So really, when you're talking about no risk, I had no risk in that transaction because worst case scenario, if that deal fell through, the investor was giving me way more money down as a non-refundable deposit that they would have had to give me had they backed out than if I would have just backed out of my original contract.

 

 

 

[Mike Mills] (23:54 - 24:33)

 

So on that deal, I'm curious, what was the actual timeline from when you when you got the buyer or the seller to agree to when you found an investor and got them contract? Because just you saying like, you know, I went to meetups, I went, I called everybody I knew, you know, to get out because that's the that was the other aspect of this that I don't think, you know, that people don't realize is that in order to do this, you have to have a network of people that you can fire an email off to and say, hey, I've got this property, here's what it is, who wants it? First come, first serve, you know, come on out.

 

 

 

But if you don't have that network, then you've got this house, but you don't have anybody to buy it. So how did you how did you mitigate getting up, getting to that? And how long did that take?

 

 

 

[Mark Hewitt] (24:34 - 25:25)

 

So so basically for me, from the time that we had it under contract to the time that we closed, it was 30 days. But basically, but yeah, but basically what I did is it was just a mad hustle on the front end. Like I found a buyer within two weeks.

 

 

 

Okay, so yeah, but but really, it was basically going through looking at, okay, who are all the people that have people they represented that bought properties in that area within a three mile radius for cash. Yeah, so then we pulled all those realtors, okay, we're going to send them information and reach out to them and say, Hey, do you have anybody? And then from there, you know, going to a meetup gathering as many cards as I could, you know, adding them to our email, hey, here you go, here's a property reaching out to title companies seen if they have cash buyers, hard money lenders, I mean, you name it, it was just a mad dash to get that thing sold.

 

 

 

But it was so cheap that I was like, I know we can get it done. Right? It's like, you just you just knew it was a deal.

 

 

 

You know?

 

 

 

[Mike Mills] (25:25 - 25:38)

 

Yeah. Now, if somebody listening to this is like, Yeah, well, Mark, that sounds great. You bought $100,000 house and you sold it for 125.

 

 

 

But that's like a needle in a haystack today, because you can't find $120 or $100,000 house. So what would you say to that?

 

 

 

[Mark Hewitt] (25:39 - 26:58)

 

So that was my thought, too. So like, you know, I thought, Oh, man, this is no way this is gonna work. But I'm gonna tell you this, we have done over 300 deals just like this.

 

 

 

And I can guarantee you that they're out there, you just have to find them and you have to do the work to find them. So you know, we've done flip projects we've done, you know, I, I did a house, I'll just tell you, like, there was one that we did, this was a this was my, like, best house that I've ever done yet. Okay, as far as profit wise.

 

 

 

But we had bought this house, the guy actually called me, we didn't get it the first time. And so he contracted with somebody and then that fell through. And so he calls me up, he says, Hey, Mark, do you still want it?

 

 

 

I said, Yes, I'll take it at the price that we agreed upon. We closed on it ourselves. So we actually didn't even sell to anybody, we closed on it ourselves.

 

 

 

We went in there and removed all the junk. So we paid about three grand to get a trash bin and people to haul off all the junk. And then I paid another $400 to get it professionally deep cleaned.

 

 

 

I slapped it on the market for double what we paid for it, and sold it and made about 100 grand net in our pocket within less than 45 days. And I mean, those deals are out there. You just it's a limiting belief to think otherwise, you know, it's and you got to comb through a lot like you do have to come through a lot of stuff.

 

 

 

[Mike Mills] (26:59 - 29:11)

 

Yeah, yeah, it's not just gonna jump out at you. But I mean, and then you got to make a lot of phone calls. So you got to contact a lot of people, because you know, they have to be willing to do it.

 

 

 

But that's, so that again, goes back to the whole idea of, if you're a real estate professional, you've been doing this for any amount of time, you know, two, three, four years, you see properties, you know how they should be priced, you know where they should be as far as the market's concerned, because you have the comps, you have the knowledge, you have the data, right? It's all there if you just do the work. And but what you have to understand, and it's not, you know, I, when I say this, sometimes people like, Oh, well, you're taking advantage of people saying no, look, what you're doing is you're reaching out to somebody and saying, Hey, I'm willing to buy your house for this price.

 

 

 

Okay? Are they willing to accept it? Or are they not?

 

 

 

Because you don't understand what their situation is, you don't know, if they have debts, they have to pay, you don't know if this process, this product is just, there's no way that they could put the 10,000, it may be, it may only cost 10 grand to get you 60 or 70. But that person that owns that house doesn't have 10 grand, and they can't put it into it. So they're stuck.

 

 

 

And so they're willing to give it to you or sell it to you for maybe less than what it's worth. Maybe it's because they don't understand the market very well. Or maybe it's just because they don't have the resources to be able to put the improvements in there.

 

 

 

But you're helping them because you're giving them the money that otherwise they wouldn't have gotten. So, you know, just spending the time and doing the research, because I think that's where a lot of agents lose sight of the fact that, you know, well, I can't find any buyers, and I can't find any sellers. It's like, I mean, you can, they're just not calling you like they were calling you back in 2021.

 

 

 

In 2021, you got in your car, went to go get Starbucks, pick the kids up from school, and your phone rang three times with people like, hey, I want to buy I heard your realtor, give me a call. And today, that's not happening. Today, you have to go earn that business, you have to do the searches, you have to contact people, you have to get networked with folks, you have to do all of that stuff in order for this to occur.

 

 

 

And there are ways to get deals done. But the more you communicate with people, the more you network with people that understand how to do these things, you will learn it. And it's, I think you can speak from experience on this.

 

 

 

Once you get into it and do it, and you understand how the mechanism works. It's not that tough other than doing the work right and finding the people.

 

 

 

[Mark Hewitt] (29:12 - 30:39)

 

The work is the hardest part, right? Yeah, but deals on in the deals, finding the deals. Yep, doing that is the hardest part.

 

 

 

But once you actually go in, and you know, so we started with the wholesaling, right? So we started down that path. And then I realized, you know, okay, now we're going to go into actually buying some properties and flipping them ourselves.

 

 

 

So we're going to go into that aspect of the business, because it was just an easy transition. But then what I realized is not everybody wanted to necessarily sell for cash, and they didn't want to list it. So there's another option, which is then okay, owner financing, where we're going to buy it from them and create a note with them.

 

 

 

And so basically, what's happened over the years, because of the way that the markets change, people want options. Yes, that's all it is. And if you like if you're like me, when I first started in real estate, and you're just putting yourself in this box of just, hey, let me list your house, let me list your house, right?

 

 

 

Give you give an example, had a house that we closed on that we went against another agent. We went in the other agent was trying to list it just trying to list it. That's it.

 

 

 

Well, I can get you I can get you a buyer, I get you a buyer. And we went in there, we said, Hey, we can list it for this, or we can pay you this cash. Well, guess what?

 

 

 

We got the deal cash, the other agent didn't get it because we have an extra option. Right? Yeah.

 

 

 

And that's, that's what people want. And we're in that environment today, where that is going to win all day long.

 

 

 

[Mike Mills] (30:40 - 33:08)

 

Yeah. Well, and especially to you know, I imagine that even helps when you reach out to folks when you're looking for these deals when you say, Hey, would you like to list your property for sale? And they're like, I mean, I don't want to, I want to get rid of it.

 

 

 

But I don't want to go through all that crap. Like, I'm not willing to mess. Okay.

 

 

 

How about we pay cash, but we lower it to this amount? Well, I really was hoping I could get a little bit more out of it than that. That's, that's kind of below my number.

 

 

 

Okay. What if we do owner financing, and we can do it like this, and you can get this much money, and we can buy it from you that way. So now you have cash flow.

 

 

 

Okay, well, maybe that's a little bit better option, I could be willing to do that. Or what, you know, but if you're, if you get to start the conversation, and then like you said, you can give them what we have one option, one, we have option two, we have option three, we have option four, they may still not be interested in what you're doing. But if anything, you're probably planting seeds.

 

 

 

And that's where I think a lot of people miss too is like sometimes just having these conversations with and I, I know this from personal experience, I talked to people, and I'll give you an example of how it works, because I have people that call me. And they'll say, Hey, Mike, you know, we want to buy a house, we want to check out and see how we qualify what our numbers look like all this stuff, but we're not looking to do anything for another six to 12 months. Like we're just we just want to get all of our ducks in a row.

 

 

 

So in six to 12 months, we'll be ready to go like, great, no problem. So we go through the whole process about what kind of loans are available, payments, cash, all these kind of things. And I'm like, if you wanted to buy a house today, this is how much it would cost you.

 

 

 

This is what it would be blah, blah, blah, blah, blah. Well, human nature is and I even tell people I say I tell them this, like, if you're wanting to wait six to 12 months, then stay off the internet. Okay, don't go to Zillow.

 

 

 

Don't go to Redfin. Don't look at homes. Don't click on that house that shows up in your Facebook feed because they know that you talking to me looking for homes.

 

 

 

Okay, because if you do that, then you're going to start down this rabbit hole of houses and you will find something that you want to buy. Okay, now I'm always going to be here when you're ready. But if you truly want to wait six to 12 months, then don't start looking.

 

 

 

Well, inevitably 90% of those people within a week or two are calling me like we have we found a house we want to make an offer on. I'm like, Hey, what? What happened to six months?

 

 

 

What do we do? Because the idea is like, once once they know that there are options, even though it may take a minute to digest it, you know, they may not be ready for you right that minute, right. But when that person that you reached out to, and you ask them if they want to list their home, and you gave them all the choices, and they something happens to them in their life a week or two or three weeks later, and they still got your number, they're gonna call you and they're gonna be like, Hey, I'm thinking that this might work.

 

 

 

I need a little more information. And that's that's the beauty of how all this stuff works.

 

 

 

[Mark Hewitt] (33:09 - 33:59)

 

Oh, 100%. And I will tell you this, like, I will give you an actual example that happened like 30 days ago. This is like a textbook perfect example.

 

 

 

You know, went went on an appointment and said, Hey, look, if you want to list this property right now, as is condition, we can list this thing for you for basically like 100 200, maybe 190. It'll sell for right. And if you want a cash offer, we can give you 120.

 

 

 

Because we're gonna have to put a little bit of work into this thing. They're like, well, we don't want the cash, we don't want the 120. But I said, we can buy this from you at 165.

 

 

 

If you decide you want to finance it to us, because you have a small balance, we'll pay off that balance, right? So guess what they are, they opt for the middle one, they wanted us to go ahead and just give them the cash flow. But they knew all three of the pricing they knew, you know, and so and that's why I'm saying is this options are so key for people, you know, in this market.

 

 

 

[Mike Mills] (33:59 - 34:50)

 

Yeah, now not to give away your secrets. But you know, that's why I brought you here. So again, you said and I agree with you.

 

 

 

And I've said talked to many people that do this kind of things. And the hard part is finding the deals. How do I find these deals?

 

 

 

Where are they? How do I get them? So so give me some if you have there we go.

 

 

 

If you can have any of those go to resources that you use, whether it be like you mentioned title companies, you mentioned you know, if there's do you are you calling expireds? Like what is the process for you guys to look for these deals? Is it calls, emails, texts, like, you know, breakdown kind of how you go about finding them?

 

 

 

Because look, yeah, this always tell people is like, they're like, well, I don't you know, my seat, nobody 10% of the 2% of the people in the world are going to do it. So but you know, the information is great.

 

 

 

[Mark Hewitt] (34:50 - 36:13)

 

100%. So we're sending, we're sending a mail out to people. So we send out mail campaigns, postcards and, and making sure that you know, they're bigger than normal, right?

 

 

 

So that way they stick out. We're doing a lot of pay per click advertising. So basically, when people are like, hey, I want to sell my house for cash, you know, those sort of things.

 

 

 

And then the other thing is we are also we are heavy, heavy callers, right? So we are calling people asking them if they want to sell for cash. Yeah, that's just one of the ways that I feel like we find a lot of deals that way.

 

 

 

And people go, Oh, well, you know, sometimes you'll talk to people, they're like, good, a real job. And I'm like, Hey, man, you'd be surprised. This is actually my real job.

 

 

 

And people want to sell this way. You know, because sometimes what happens is they start talking about it. But then all of a sudden, it's like, well, this dude just called me and we just talked about it last week.

 

 

 

And actually, let's have him come out and see what we can do. You know, and then the other way, of course, like we do send, yeah, just plant the seed. Yep.

 

 

 

And the bottom line is for us, I will just tell you from the time that we make contact to the time that we lock in the deal and get it under contract, it's about a 90 day process. So from start to finish for us to get it under contract is 90 days. So we're at least getting the seed out there.

 

 

 

And then from there, it's the constant follow up, and then getting it locked up.

 

 

 

[Mike Mills] (36:14 - 37:04)

 

So those are our main I'm sure you've developed quite a process in a system. And I think that's another thing that's so important and crucial to this is that, you know, whenever you're going to take on a new endeavor like this, or you're doing something, you know, that's, that's requires a lot of legwork apart, you have to build a process to it, you have to, you know, this day, I do this, this day, I do this, or step one, we make a call, then we send an email, then we send a text, then we do a follow up and, you know, and all that kind of stuff. And people will just start doing it. And they're like, I'm gonna call and then you know, they don't really have a, what do I do next?

 

 

 

You know, what do you got to follow up with them? Because it takes time. Like you said, it's a 90 day deal in most cases.

 

 

 

So it's not something that you can just make a call one time and be done, you have to have a pretty dialed in process that you do it. So have you been developing that over the years? Do you have people that help you with it?

 

 

 

What's your what's your mechanism?

 

 

 

[Mark Hewitt] (37:05 - 38:31)

 

Yeah, so our process has has developed so much since when I started it, right. But basically, when a new lead comes in, they get three calls, recommended three calls on day one, no voicemail until the last call, two text messages, one, one email. And then day two, we drop that down to two calls, one text, one email.

 

 

 

And then day three, it's 111 for the rest of the seven days, because usually what happens for us is if we don't get ahold of them within seven to 10 days, or one of our sales reps doesn't, then it goes into like a generic bucket. And so basically, they don't have just single solo access to that lead anymore. And so that because here's the thing, I mean, even if somebody doesn't pick up, we don't give up on them.

 

 

 

Because we've had people pick up 60 days later, like, Oh, I'm so sorry. Now I'm ready. You know.

 

 

 

And so that's the note for us, I will say is that I have fished out and our team has fished out so much money in deals that we had 1000 days ago, six months ago, whatever it may be that we never gave up on. Yeah, we brought them back to life at a later date, because they just weren't ready at that time. Whereas the old me in the past, when I first started, I might just say, Well, they're not interested.

 

 

 

I'm just gonna throw that lead out. And we'll keep moving on. But no lead is dead to me until they tell me that, you know, basically, they're dead.

 

 

 

[Mike Mills] (38:32 - 38:49)

 

So once you get a real job and stop calling, yeah, yeah, yeah, yeah. But I guarantee you, I would be willing to bet even some of those people that gave you that, like Kurt response, you know, a few months later, they're like, Hey, remember when you called me? And you know, I'm sorry, I was kind of rude at a bad day.

 

 

 

But just a little bit more.

 

 

 

[Mark Hewitt] (38:50 - 38:59)

 

Well, exactly. So when they hang up on when they hang up on me, that's always my cue to call them back. And I'm sorry, we disconnected, you know, yeah, sorry about that.

 

 

 

Yeah.

 

 

 

[Mike Mills] (38:59 - 41:39)

 

Well, you know, it's hard. It's a really difficult thing. And so like, I, when I do the show, you know, we talk about all kinds of stuff related to real estate.

 

 

 

And we talk about marketing a lot and advertising and putting your, you know, promoting your business. And, you know, obviously, the biggest channel to do that these days is social media, that's a big player in it. And some of the pushback that we always get from folks when we talk about this stuff is, you know, well, you know, I just don't want to anybody to yell at me, or I don't want anybody to not like me, or I don't want bad comments, or I don't want, you know, people judging me or whatever the case may be.

 

 

 

And I, my response to that a lot of times, like, you know, if you're in sales, and that's what you do, like, that's your job. I mean, you have to develop thick skin, or you're not going to survive. And it doesn't matter what kind of sales it is.

 

 

 

Because every type of sales that you do is going to involve people that don't want whatever it is that you're selling. Like they just don't. And, and some people are rude about it.

 

 

 

And some people are nice about it. And I think that the biggest shift that's occurred, and I said this earlier from where we were in 2022. And or, you know, 2021 2020, is that sales folks in real estate now have to sell like you really have to sell.

 

 

 

And before you just had to take orders, you just had to answer your phone a lot of times because you're everybody you knew was trying to buy a house because interest rates were 2%. Now that they're seven and a half percent coming down, by the way, but seven. You know, that's, that's not as an appealing thing anymore.

 

 

 

And so you have to be able to explain to somebody why there is still value in in what you do with real estate. And it's and it is funny, we have such, you know, short term memory or amnesia, whatever you want to call it when it comes to real estate, where you know, if you go on Twitter right now, you would think that the markets crashing in the world's coming down. And I'm like, look, here's the reality.

 

 

 

Yes, we are. As far as volume and units sold, we are at some of the lowest points that we've had in the last 40 years. I mean, that's just the truth.

 

 

 

Okay. But even with that, home prices have gone up. They've gone up 5% because we don't have enough houses.

 

 

 

So there is wealth to be had in real estate, there is, you know, income to be made working in the real estate industry. And just because you go through these slow periods of time, because we just came out of this like, insanely never happened again, real estate market that just was nothing like anything we've ever seen before. But because our memory is so short, and that's all we remember, we don't remember what it was like even two years prior to that when you were still kind of grinding out deals.

 

 

 

And, you know, it when things get hard, people look for other things to do. They're like, well, this is too hard. You know, I can't do it anymore.

 

 

 

So now I'm gonna go, you know, drive Uber or whatever. And it's, it's a shame. But in a way, for guys like you, it's a good thing.

 

 

 

[Mark Hewitt] (41:39 - 43:02)

 

Yeah, no, I mean, and here's the thing, too, like tough times, like, if you know, I mean, I can't tell you how many times we've had to pivot, like, we've seen everything on the horizon, like we knew what was coming, right? We were planning ahead for that. But the thing is, is even in it, when you're in the trenches, and it's happening, you're like, man, we have to pivot, we have to change this, we have to, you know, and so even like, one of the things that we've changed in general is, we've had to look at like our deals that we're going to assign to investors.

 

 

 

And we're like, man, if we can only get X on this deal, let's say we can only make 20 grand, but I can go fix this thing up, and sell it and make over double, we need to squeeze every bit that we can out of these deals. And so that's kind of a change that we've kind of made on a lot of our stuff, you know. But I mean, just and then, you know, obviously, the owner finance, we've started getting into the rap game, where we'll, you know, get in and finance with somebody and turn around and rap it.

 

 

 

Yeah, you want to, here, hold on one second. Let me get my, let me get my beats out. Yeah, so, but yeah, I mean, it's tough times like these, though, that when you're in it, it'll, it'll make you better, it'll make you more efficient, as long as you're asking the right questions, and you're not trying to do things the way you've always done them when it was always working, you know.

 

 

 

Yeah.

 

 

 

[Mike Mills] (43:03 - 43:42)

 

Well, even for you, you said, you know, now, you're, I'm sure even for you guys, the deals are fewer and far between than they were just a few years ago. But you're now evaluating each deal with maybe a closer eye, because now you like you said, you need to squeeze out every dollar you can out of that one. Because the next, you know, the next two or three or four, whatever that come are going to be harder, you know, harder and harder to get as long as the market stays where it's at.

 

 

 

So you even even though you have deals to be had and deals to be made, you're evaluating those deals at a greater level, because now you can't just, you know, because you got 20 going at once, you're like, Okay, yeah, that's enough on that one, go ahead and see what we can do there. And let's move on to the next one. You don't have that luxury anymore.

 

 

 

So now you have to change how you do it as well.

 

 

 

[Mark Hewitt] (43:44 - 43:44)

 

Yeah.

 

 

 

[Mike Mills] (43:46 - 44:16)

 

So, I mean, that's, I'm, I'm curious, you know, with anybody in the real estate world has been paying attention to what's happening with all the lawsuit stuff, and what's coming down the pipe on that. So anytime I get agents on, I always like to know, you know, where how they see it, what they think about it. I obviously have my own opinions on this.

 

 

 

Anybody that's listened to this knows kind of what those are. But generally speaking, like, how are you? How are you taking, you know, these changes?

 

 

 

And what are you looking at? You know, as far as where you think things are headed, you know, over the next five years?

 

 

 

[Mark Hewitt] (44:18 - 46:23)

 

Yeah, so basically, for me is like, you know, I always think it's funny, because, you know, these attorneys will come out, and they'll go, Hey, you know, like, let's just say, for example, the HOA, like you guys in this community, we're gonna sue the HOA, because you guys deserve to have all your decks replaced, and all the siding on your homes replaced, right? And so they're like, yeah, let's do it, you know, and so they go after the HOA, they win, they get their decks replaced, they get their siding replaced. And then all of a sudden, next thing, you know, all their HOA dues go up.

 

 

 

And then, you know, people are now starting to sell. So it's driving prices down, because there's more competition, because everybody wants out. But they did it to begin with, for the homeowners, but it ended up affecting the homeowners, right?

 

 

 

Absolutely. And so I look at, I look at the lawsuit that's happened. And again, if the argument's been made, like, hey, this is for the consumers.

 

 

 

And, and I look at this, and I'm like, you know, ultimately, at the end of the day, I feel like who it's going to affect the most is the consumer. Yeah, I don't think it's going to be the realtor that's going to get affected. Yeah, our business is going to change a little bit in terms of how we do it, or getting agreements up front, or having to field phone calls of what the seller's willing to pay commission-wise, or whatever that may be.

 

 

 

But, but the thing is, the consumer at the end of the day, they're going to get the ones that get affected from it. Yeah, they're going to get the trickle-down effect. And it's unfortunate, but you're kind of seeing that riding on the horizon.

 

 

 

I mean, it's coming. Yeah. And with, you know, I mean, right now, agents will go show a house and open a door without anything in place.

 

 

 

You know, and so they won't get a buyer's representation agreement, they'll usually just go out there and get in front of the consumer. But now, the commission needs to be negotiated up front, the buyer representation agreement needs to be negotiated up front. So now it's like, if you want to go see a house, like in the days of just calling an agent, and getting them to go open the doors out, now you got to agree to the commission and not even knowing the house that you're going to buy, what the seller's willing to pay.

 

 

 

So you're going to be on the hook for the rest of that money. Yeah, in terms, yeah, I mean, it's just, it's, it's crazy.

 

 

 

[Mike Mills] (46:24 - 51:37)

 

Yeah, it's, I haven't read into it, because I saw I've seen it in a couple places. But Zillow apparently just released something, I think it was yesterday, about like a seven day, you know, free showing, you know, no obligation buyer rep thing, you know, it just kind of in response to this, again, I haven't, I don't know all the details. I haven't read into it.

 

 

 

But, but I will, I could see or I can see things like that, there's going to be different methodologies in which people come up with, we're going to try this, we're going to do it this way. No, let's try to see if we can do it this way, or whatever. But I agree with you, at the end of the day, the consumer is the one that gets hurt.

 

 

 

Because, you know, the thing that, that the MSNBCs and the CNNs and the Foxes of the world don't tell you is that when they're talking about this thing, and they say it's a boon, you know, for for buyers and sellers, because they're going to make so much more money. And somehow they think prices are going to come down from this, which is to me is insanity. Because you guys don't even understand how it works.

 

 

 

You don't understand comps, you understand comps, right? comps are what all the other houses in your neighborhood have sold for, you know, recently, well, you think that a seller is going to go, well, that house that paid the buyer's agent commission sold for 400,000. But since I don't have to pay a buyer's agent, I'm going to sell mine for, you know, 320 or 380.

 

 

 

Yeah, it's not how this is going to work. Like it doesn't have. So and then the other side of it is, is that, you know, we've always lived in this system that I mean, you know, obviously, we're in the business.

 

 

 

So we have bias to this, but it seems to have worked pretty well. Because the number one path to real estate or the number one path to individual wealth in this country has always been real estate and equity to retirement and having enough money to take care of yourself when it's all said and done. And the way the game was always played is that as it's like the the pay it forward thing, I'm the seller, I have the equity, when I bought the house, when I didn't have the equity, and I didn't have the cash, the seller paid my agent, so I was able to get this home.

 

 

 

And now I'm going to do that for the next person. And that's kind of how it always went. And, and now we're saying seller, you don't have to do that.

 

 

 

Now. I agree with you. That at least for the time being that that's still probably going to happen on many cases, that sellers are still going to pay buyer agent commissions, because especially right now with homes sitting a little longer than they have been, and when people get into certain circumstances, we're like, I got to sell now like one way or another.

 

 

 

Yeah. And they have a ton of equity still that they're gonna go, Hey, look, I'm fine with it. And, and you're going to see that happen more often than not, where it's going to flip is when we get to the market, which we will just a matter of when and how, where interest rates come down some and now the the appetite for buying real estate has increased across the population to a greater extent.

 

 

 

And now sellers are going to be in a place where they can really decide Do I want to pay a buyer agent or do I not, depending on how many offers they get, and who wants to be the most competitive and all that kind of stuff. Yeah, that's when the consumer really starts to get hurt. Because at that point, there's a lot of buyers out there.

 

 

 

You know, first time homebuyers, younger folks that just don't have access to the money for they barely have access to the money for the down payment closing costs, much less to pay, right. And so then you get there'll be a market part of that market will be filled by, you know, I had some money on before it's like the the turbo tax of realtors where you know, you'll go online and you'll sign up and you'll pay 500 bucks or something and they'll represent you and help you fill out a contract and do all these things using AI or whatever. And that'll work for a segment of the population, but they're not going to be that buyer is not going to be well represented.

 

 

 

They're not going to, they're going to run into problems. And we won't feel the real effects of it probably for years because once somebody buys a house, and they didn't have a professional representing them in the transaction, and then, you know, they have issues with the foundation, or there's problems that come up inside the property itself, or the neighborhood goes to crap, and they didn't realize it because it was almost to that point. Now their house is worth less than what they paid for it.

 

 

 

And all these things that go into play when you're using a professional that can tell you these things, they're not going to have that. And then we're going to have a generation of buyers that are going to be like, I got screwed on my real estate transaction, because I didn't have representation, whether they realize that or not. And then the then the appetite for owning a home goes away.

 

 

 

Because then it's like, if 20% of buyers are getting hosed in the deal, because they got they got bad advice on what to do, then why would you want to buy just go rent, you know, and, and that's where my little tinfoil hat that I wear on the show all the time. I think this is very much a coordinated big money deal. I think that there's there's large private capital firms behind a lot of these lawsuits and getting them rolling and getting people, you know, in a frenzy about this, because that makes real estate less accessible, that makes their money more valuable in the market that they can now purchase it up.

 

 

 

And, you know, the largest expense that we have as homeowners in America is or anybody is your living expense, rent or your mortgage. And why would you not want to have access to that, you know, flowing in your bank account every year or every month. So, you know, it's, it's a shame.

 

 

 

But, you know, we can't do anything about it. You know, we can talk about it. And we can have conversations about it.

 

 

 

But the changes are coming. So you just have to learn how to thrive and adapt in it and figure out where your niche is and where the opportunity is. No, for sure.

 

 

 

[Mark Hewitt] (51:37 - 51:54)

 

I mean, it's kind of like, when you even talk about that, it's just it reminds me of like, when people go and they buy new construction without a realtor, because they think they're going to save money, right? And then they go back and they're like, man, I should have used a realtor. Like I got, you know, I mean, it's the same.

 

 

 

It's gonna be the same situation. Yeah. I mean, it's just, yeah.

 

 

 

[Mike Mills] (51:55 - 52:56)

 

It's already played out like that. And in multiple, in many other facets of what this is, and you know, and unfortunately, I think that's going to also be where we get to at some point. I do think, you know, it's going to stay status quo for a little while.

 

 

 

The only thing that would throw a wrench into all this is if they decide that, you know, sellers cannot pay buyers, agents at all. You know, if that becomes I don't, I think that's, at least right now, it seems like that's less likely. But I, I've heard so many things coming out of the Department of Justice when they talk about steering, and you know, they're, they use the word steering a lot.

 

 

 

And so whenever that kind of language is being used, I always have concerns that, you know, they're going to come on top of this and just go, yeah, yeah, we like everything that you guys are doing here. We can buy your agent, but we're going to just say that no matter what, you know, sellers can't pay buyer agents. And I hope they understand that that's the dumbest thing in the world to do.

 

 

 

But you know, politicians don't always make good decisions with this kind of stuff. So no, it's a struggle. But you know, what are you gonna do?

 

 

 

You just got to find the opportunities.

 

 

 

[Mark Hewitt] (52:57 - 52:59)

 

That's right. Just just adapt. Yeah.

 

 

 

[Mike Mills] (53:00 - 53:14)

 

You guys have also dabbled into the hard money side of things a little bit. Can you can you kind of explain what y'all do there? Do you do your own lending?

 

 

 

Or do companies or where where you guys kind of find your place in that market?

 

 

 

[Mark Hewitt] (53:15 - 53:28)

 

Yeah, so basically, what, what we did is that we saw a need when we had investors buying off market properties from us, a lot of these investors are buying it, not necessarily with all their cash, but they're using hard money, right? So they're using that and there we go.

 

 

 

[Mike Mills] (53:29 - 53:36)

 

Sorry. Hey, Mark, I lost you there for a second. I think it's my side right now, actually.

 

 

 

So not you. But anyway, go ahead. What have you seen about hard money?

 

 

 

[Mark Hewitt] (53:37 - 55:22)

 

So so with regards to hard money, we found a need for investors that were buying from us to have access to the capital because they all didn't necessarily have the cash. You know, so they were they were leveraging hard money as the cash, right? So we went ahead and added that as a secondary type source for us to be able to fund deals, not only our own deals, but basically bring people in that had other deals that they wanted to fund.

 

 

 

And so for us, like in terms of the hard money business, we have so we've got lines of credit set up with different banks on like generous terms that obviously work well for the business for us. We've deployed our own capital into the hard money space as well. You know, so it's it's basically those two things that allow us to keep going.

 

 

 

But of course, just like anything, you know, we do hit a max, we max out on what we can do, you know, what we're willing to loan. But I will tell you this, we literally when we opened up that company, we maxed out within about four months. So that was how popular and how Yeah, but what we do is we we look at I look at it a little bit differently.

 

 

 

A lot of people are very concerned about the borrower. But I'm very concerned about the debt. Like what is the property that I'm actually loaning my money for?

 

 

 

Do I ever want that property back if they don't touch it? And that's so yeah, so I've had some properties that I look at and I go, I don't think I want that back if you don't do anything on it. You know, I don't want to mess with that.

 

 

 

So I want good. I want a good asset for me. And minimum, everybody has to put a 20% down payment for me to be willing to loan money because I want them to have their own skin in the game and I don't cover their repair costs, right?

 

 

 

So they've got to fund their full rehab, right?

 

 

 

[Mike Mills] (55:22 - 55:28)

 

So you're willing to give them money, but only under under your terms, which is I mean, that's what hard money is with anybody. Yeah, that's, that's why it's there.

 

 

 

[Mark Hewitt] (55:28 - 55:57)

 

And if it doesn't work for them, and they want to go somewhere else or whatever, I mean, we can refer them to other hard money sources that they can use the capital and borrow from them. It may be a cheaper rate, you know, but I mean, for us, it's like this, we're going to exercise, you know, our option first to try to get the deal done. And then worst case scenario, we'll just send it out somewhere else.

 

 

 

But it's been very well for us. We've had no, nobody default, nobody not pay us back. You know, and I mean, that works out real well.

 

 

 

[Mike Mills] (55:57 - 56:07)

 

Yeah. So did you was that just learning with hard knocks? Or did you like, you know, did you take a seminar, Mark?

 

 

 

Hard money lending?

 

 

 

[Mark Hewitt] (56:07 - 56:53)

 

Yeah, so no, no seminar. Luckily, for me, I mean, the biggest thing is, is I've been able and fortunate to network with individuals that know more about different aspects of the business than I do. And then based off of learning from them and asking them questions, and just kind of going about it that way.

 

 

 

I've been very, I've been able to actually understand how it all works. That's the same with creative financing. It's the same with the wholesaling and flipping and, you know, all of that.

 

 

 

And so really, like, the biggest thing is just network with people that are already doing it better than you are. And then you will have to have some hard knocks. Yes.

 

 

 

But yeah, but the thing is, is once you start doing it and implementing it, you know, then I mean, it's like, Okay, I've got this down, you know? So, so yeah.

 

 

 

[Mike Mills] (56:54 - 57:01)

 

Well, and, you know, if you're ever the smartest person in the room, then you're in the wrong room, right? That's that. Isn't that what they say?

 

 

 

[Mark Hewitt] (57:01 - 57:04)

 

That's, and it's 100% true. I mean, that's, you know, yeah.

 

 

 

[Mike Mills] (57:05 - 57:07)

 

Surround yourself with people that know more things than you do.

 

 

 

[Mark Hewitt] (57:08 - 57:26)

 

Oh, yeah, exactly. Excelling at a higher level. And, you know, and you'll, you'll learn a bunch, but you can't.

 

 

 

The thing is, though, the one thing that really irritates me, and it probably irritates you as well, but is if somebody comes in and they think they know it all. That, I cannot, I cannot stand, right? Yes.

 

 

 

[Mike Mills] (57:26 - 57:41)

 

Anytime someone tells me how long they've been doing something, or, you know, how much, how much they sold or how much whatever, I'm just, I immediately shut off because I'm like, Okay, yeah, you know, everything already. So cool. Great.

 

 

 

Sounds awesome. Good for you. You know, like, yeah, I'm definitely out at that point.

 

 

 

[Mark Hewitt] (57:42 - 57:56)

 

Oh, 100%. So, so yeah, always be willing to learn, always be willing. And even if you're already doing something, I'm still open to suggestions.

 

 

 

I'm still open to input. I can do it better, right? Or maybe there's another way to do it.

 

 

 

[Mike Mills] (57:56 - 58:23)

 

Well, there's always people, I mean, you can always learn something from every individual, like even people that you may think that you know more than and I say think because often, you know, you may know more in certain aspects of life. But there are certain aspects that they know way more about life than you do. And so whether or not on the aggregate, you feel like you have a bigger wealth of knowledge than somebody, you can still learn something from every single person that you come in contact with, if you're open to it.

 

 

 

If you're not, then yeah, forget it.

 

 

 

[Mark Hewitt] (58:23 - 58:27)

 

Yeah, exactly. Why even bother? Like, don't waste your time.

 

 

 

Don't waste theirs.

 

 

 

[Mike Mills] (58:28 - 58:44)

 

Before we go, is there anything that you know, any new avenue or route that you're seeing out there that you're kind of interested in when it comes to real estate that you're a new a new business model or different, maybe an adjustment on what you're currently doing that you're kind of like, I'm dabbling into this trying to figure out what's happening.

 

 

 

[Mark Hewitt] (58:45 - 58:52)

 

So one of the things that's out there right now that I don't know exactly how popular it is, but there's this term called novation.

 

 

 

[Mike Mills] (58:53 - 58:53)

 

Okay.

 

 

 

[Mark Hewitt] (58:53 - 1:00:07)

 

Right. And so basically, yeah, so basically, what what happens is you've got people that will they will go under contract with the seller to sell their home. But they will go take care of like getting the property ready to sell, like maybe it needs for financing purposes, it needs like the siding repainted, or it needs a new HVAC or whatever it may be.

 

 

 

And so they'll contract with the seller to, as for a set price that they agree upon, they'll go ahead and take on the repairs of getting it ready to put on the market. And then they'll have somebody list the property for them on the market at a higher price. And they'll make whatever the spread is after it sells between what they agreed to pay the seller and what they ended up selling the house for.

 

 

 

That's something that the reason this has come about is because there's states now that are requiring people in order to do wholesaling to have real estate licenses. And so now this is a new kind of thing that's coming out that people are now starting to do to get around that. You know, granted, there's more to learn about it.

 

 

 

But that's something that definitely like we're, we're attuned to, and we're, we're researching and trying to figure out more about.

 

 

 

[Mike Mills] (1:00:07 - 1:00:38)

 

So basically, if somebody, let's say was a general contractor and knew a ton about repairs and had good costs on getting all their labor and equipment and could go in and fix a place up at a relatively reasonable price, but then doesn't want to mess with all the aspects of listing, and selling it and doing all that, but they made the contact with homeowner to do this, then they're contracting out the sale of it to a somebody that's licensed, because they don't want to mess with that piece. And then making a spread. And then what that agent just gets their commission on the sale or something like that.

 

 

 

Is that?

 

 

 

[Mark Hewitt] (1:00:39 - 1:01:28)

 

Yeah, exactly. Exactly. Yes.

 

 

 

Yeah. So anybody, anybody, basically, you know, your house could be vacant, right? Your house could be just on the cusp of being able to be financed.

 

 

 

And you've moved out of your house, you're like, dude, I'm done with this. All the cash offers I'm getting are too low. But I don't really want the hassle of having to deal with, you know, realtors and all this stuff.

 

 

 

I just want to be done. Right? And you maybe you don't want to put the money into the house either, because you don't have it or whatever.

 

 

 

So somebody comes along and says, Hey, Mike, I'll tell you what, I'll just I'll pay you instead of you know, the 100,000 cash you've been getting offers for, I'll pay 150. I'll come, you know, do whatever needs to be done to get it financing. I'll do all the repairs that are needed that the buyer negotiates.

 

 

 

I'll pay the closing costs, I'll pay the realtor fees, and I'll net you 150 grand. And then they go turn around, do the repairs, everything, whatever. And they slap it on the market for 225 or 200.

 

 

 

[Mike Mills] (1:01:29 - 1:01:29)

 

Right?

 

 

 

[Mark Hewitt] (1:01:30 - 1:01:41)

 

And they make the difference between the 150 they Yeah, so yeah, anyway, so that's, so that's something that's coming out or I've seen a lot about and it's just, you know, it's just a matter of just learning more about it.

 

 

 

[Mike Mills] (1:01:42 - 1:02:38)

 

Again, just another way to, to go about making money inside of real estate. And you know, there's there's so many facets to it. And there's so many ways that you can take your knowledge that you've gained over the past 20 years and buying and selling homes and then, you know, use it in other other ways that isn't just representing a buyer selling a transaction.

 

 

 

And I think that, you know, anybody that's struggling right now trying to find deals to close, you know, this is a great opportunity for you to start looking at other ways to go about it. And, and you can't do everything at once. So pick one, you know, find find somebody that's smarter than you that knows how to do it.

 

 

 

You know, pick their brain, ask questions, follow them around, whatever the case may be, and then start your way down that road and see what you can do. And I think there's even, I mean, there's a lot of ways that you can do. I mean, the wholesale thing, you don't need any money, you just need to go work, you have to contact people and get on the phone and, and get them to agree to sell their house and then go find an investor.

 

 

 

And you can literally do that with no money out of pocket. So or, you know, very, very little, very little.

 

 

 

[Mark Hewitt] (1:02:38 - 1:02:39)

 

Yeah, very little.

 

 

 

[Mike Mills] (1:02:39 - 1:03:11)

 

So the opportunities are there. You just can't give up on it. You got to keep looking for it.

 

 

 

And that's, I think that's the moral of all this is, you know, you just got to go find what you can and hopefully, you know, you can, you can keep grinding away because the market will turn. We will get into a better place where there are going to be more buyers and sellers, it's going to happen. It's just a matter of when and, you know, this particular string of downturn has been a little bit longer than most people expected and or as typically seen, but this too shall pass, you know.

 

 

 

[Mark Hewitt] (1:03:12 - 1:03:45)

 

No, for sure. And I tell people I said, Look, you know, like a lot of a lot of the people on our team and whatnot, I said, Look, you've got to get the number of contacts you have will equal the amount of appointments you get will equal amount of contracts that you get right. If your contacts are far down, your appointments will be down, your contracts will be down.

 

 

 

And the bottom line is, is like you have to sift more dirt now to find the same amount of gold that you would find back in the day. Like now we're just just get a bigger bucket and start sifting more dirt. I mean, it's the bottom line.

 

 

 

You know, numbers. Exactly 100%.

 

 

 

[Mike Mills] (1:03:46 - 1:04:33)

 

Well, Mark, I appreciate your time, man. Thanks for hopping on with us today. This is great information.

 

 

 

I think, you know, sometimes you just have to be presented with the different opportunities because it's hard, you know, if you don't, if you're not used to thinking outside the box a little bit, then you need a little bit of inspiration. And I hope that that's been the case for for anybody listening to this, that they have an idea and understand that, Hey, look, it's not just because one route is a little slower than you want, there are other routes, you can go, you just got to look for them. And you got to do a little work.

 

 

 

And, and the bottom line to all of it is, is you have to work. And that's the part that, you know, some people can very do very well, like yourself. And some people that, you know, maybe doing DoorDash soon may not be able to.

 

 

 

But I hope I hope that's nobody hearing this stuff. So anything you want to leave with us before we go?

 

 

 

[Mark Hewitt] (1:04:34 - 1:05:09)

 

You know, just just basically, the biggest thing is, is just be willing to try. That's it. Like just even if you don't have all the information, because you're never going to have all the information, just be willing to try.

 

 

 

Right? If you're, I mean, that's once you it's like when I bought my very first rental property, I remember like, you know, I basically was kind of scared. I was nervous, like, man, am I making the right choice?

 

 

 

As soon as I inked the paper, and executed the contract, I was like, I know I made the right decision. But again, if I didn't do it, I wouldn't have known it. And so it's just you got to take that one step forward.

 

 

 

You just got to try.

 

 

 

[Mike Mills] (1:05:10 - 1:05:28)

 

Yeah, there's always fear involved in any big decisions, especially when it comes to money and support your family. And you know, that's very normal, very natural. But if you don't try to do things, and you don't put yourself out there anything, then you're never going to have, you know, big success, you're just going to be working for the man for the rest of your life.

 

 

 

And nobody wants that. So you want to be the man, not work for the man.

 

 

 

[Mark Hewitt] (1:05:28 - 1:05:30)

 

Yeah, exactly.

 

 

 

[Mike Mills] (1:05:31 - 1:06:26)

 

So, well, thanks, everybody that stuck around with us. I appreciate it. We'll be back on Tuesday with another market update, diving a little bit more into that Zillow deal that they did.

 

 

 

So I'll give a little more detail about that. And we'll also be talking about hopefully some rebounding in rates, job markets, not necessarily looking as strong as it may seem, although tomorrow's numbers, I'm sure are going to show that the economy is doing fantastic. And there's so many jobs to be had.

 

 

 

But I don't know how much of a reality that is. And we have a lot of companies putting out earnings right now that aren't as exactly stellar. You know, Starbucks is down, McDonald's is down, Walmart's down.

 

 

 

The only one that's up right now is Amazon. And you know, they're they're feeling strong, but that's because they offer the cheapest things and deliver it to your door. So anyway, but I'll have all that information for you guys on Tuesday.

 

 

 

I hope everybody has a fantastic weekend. I hope the rain doesn't get you up here in North Texas, and we will see you later. Thanks, guys.