SWAT Cop Success in New Real Estate Mentor Student Program
Dave: Today we’re here with Richard Lemons, Richard and his wife, and they are in Central Florida, in an area that’s, I’m not going to say sparse but there’s fewer investors and homes sell much more slowly. Richard has been in the mentoring program for a few months.
Dave: And I didn’t realize you had actually done a couple of houses before.
Dave: OK. I didn’t know that until recently. But one of the reasons you joined the mentoring program was because you saw the size of our spreads.
Dave: OK. And that paid off, didn’t it?
Richard: Oh yeah, big difference.
Dave: OK. So I’m going to talk about two of his deals or he’s going to talk about them more so than myself. The first one, a woman said to him, “Just take it. Take it off my hands.” Well, it sounded pretty good, doesn’t it?
Richard: Yes, it did.
Dave: I don’t want to interupt you, but what’s ironic is Jim and I looked at it and we said, “It’s not fair to not give her money for it.” So remember this, no good deed goes unpunished. So tell us what happened?
Richard: She didn’t even realize she owned the property when I found her. But once I talked to her, she was all about just, “Hey, unload it. I don’t care. Just have it.”
Dave: Take it.
Richard: Take it. And she said she would expect maybe on a good day, maybe a thousand dollars just to relocate. And I said, “Well, let’s see what we can do.” And I spoke to you guys. You guys said, “Hey, let’s sign it up for 15.”
Dave: Yeah, give her $15,000. More than she wanted.
Dave: How bad can this be? Well, let’s go.
Richard: Well, it went there for a while. We’re trying to get the closing scheduled and everything and we lost track of her and she disappeared. She ghosted on us and stopped returning our calls and stopped answering the door when we went to go knock on the door. And finally, we realized that she had another investor come in and back door us basically.
Dave: Yeah, stole the deal frankly is what it came down to. And he was fairly sophisticated.
Dave: But we tried legal manueuvers on him and he was up to par for sticking to us. And it came down to we could have gone forward with a costly legal battle but was it really worth it in the final analysis? So we said, “Let’s go to the next deal.”
Dave: And Richard was gracious enough to come down the club meeting tonight. So let’s talk about that one. Where did you find it? Your wife found it, didn’t she?
Richard: Yes, my wife actually did bandit signs.
Dave: This is the powerhouse right here.
Richard: Yes. She actually gets a whole lot better results than I did. She placed bandit signs out. We got a text off of one, which eventually led to making contact with a guy who was very motivated to relocate to Jacksonville from our area. And he had recently lost his wife to cancer so when his father fell ill out there, it was important for him to be close to family. So he just wanted to unload his house and get up there as quick as possible. And I asked my good friend, Freddie, how much he would offer for the property.
Dave: Freddie is the algorithm and subroutine we have in our Reifax program.
Richard: And went with his idea of what would be a good offer and printed out a contract and Leia hand delivered it to him.
Dave: Way to go.
Richard: Yeah. And he had not been focused on the price at all. He more or less wanted to negotiate with the closing date. He wanted it to be sooner than we had offered. And I was like, “You know, we’re all about that. But at the same time, I’m still trying to balance what we could do to get it to unloaded with a buyer.”
Dave: What we are trying to do is sell it during the inspection period. But I think what’s really important in what he said so far is the fact that he didn’t care about price. He cared about a solution to his problems. That’s what we could offer. A Realtor® would come in and say, “I can get you a lot more money.” The reality is, had he waited forever, maybe he could and maybe he couldn’t. But it didn’t come with a free and clear title. It came with problems.
Dave: Yes. What were some of the problems?
Richard: He had some liens that he had just totally ignored through the years. In fact, one of them was he erected a fence around his property that was improper and Code Enforcement slapped a lien on his property. They fined him for it. And he just ignored it. This was in 2008 when they initially recorded it. So he had accrued all that interest through that time.
Dave: Nice speech. Yeah, thanks for walking in front of the video. We appreciate that.
Richard: He had another lien where when initially he and his wife purchased this property, it was on well water. And throughout the years that he owned it, the city ran city water for that street and offered everyone to hook up to it. He did. And I guess he was on a payment plan for that cost. And the realization of, “OK, well now, I have this payment plan,” plus the incurred water usage cost was just too much for him. So something happened there to where he had a big battle with the city where they shut off his water, he cut the lock. They took the meter and he got himself back up to well water.
Richard: We’ve seen that many times. The city will literally turn the stop cock off on the water because he hadn’t paid the water bill and they lock it. And what happens is the homeowner usually cuts the lock off and opens it up again. And the city sees it. So eventually, what the city does, they actually take the water meter off. Smart homeowners have a bypass pipe they put in on both ends. But nonetheless, as an investor coming in, we’re responsible to put a new meter on the property which can be 350 bucks or so, it depends on where you are.
Dave: So he could have mitigated some of those fines and he would have made more money.
Richard: Yes, he would have.
Dave: But he just said, “Let me out.”
Dave: So the bottom line was, you paid 40 what?
Richard: Well, I signed up for $44,500. So we rounded being with the date that we closed like $41,000, $42,000 I believe.
Dave: OK. And then you sold it for $59,900 I believe.
Dave: And when all the smoke cleared, you netted $16,000 and change.
Dave: I’m glad your wife did all that work for you.
Richard: I know. She did awesome. Thank you. Go and get another one.
Dave: So let me ask you this. I don’t know what you did before in terms of the program you took, but what was the difference in what you did before where you were getting small profits and what you’re doing with us?
Richard: You know my biggest thing that was the big change is now I actually can be comfortable representing myself as a cash buyer when I go in as buyer, when I sign these up. And initially, I was doing strictly assignments. And everything was up to par until full disclosure even though everyone says, “Hey, only a few investors would care. As long as the numbers make sense, they don’t care what you make.”
Well guess what? I must admit everyone that those few investors had been to my market because I’ve had deals, they just fall to pieces once I found out I was going to make – how much I was going to make.
Dave: Yeah, it’s sad because their attitude is, “I’m going to make 50,000 or 60,000 bucks but you’re not entitled to anything.”
Dave: And they will steal the deal from you if it comes to that. So we don’t do that. We work the other way.
Richard: And the market I’m in, you know, with doing assignments, it’s a unspoken rule even though nobody ever sat me down to tell me but it’s almost like a rule of thumb that, “Hey, expect 2,000 – if you get 6,000, great or somewhere in between.” I had profits of 1,700 bucks. I’ve had 2,000. I was able to squeeze 3. When another wholesale investor brings a buyer, maybe I can get a little bit more if we split the deal. But you know, there is – he found it down, hands down. Double closing is the way to go. So that way, I don’t have to worry about all this.
Dave: You’re a retired Marine?
Richard: No, I was in Navy.
Dave: Navy, OK.
Richard: Yeah. Right now, I’m a SWAT cop. And the amount of profit we made on this one deal is about 14 paychecks of take-home.
Dave: Oh great!
Richard: So, a little over 6 months of take-home pay.
Dave: I say this to all servicemen and officers, thank you for your service.
Richard: Well, thank you for what you do. And I appreciate you being grateful for that. But really, I mean what you do, I think it’s going to make a difference in a lot more people’s lives.
Dave: Well, thank you very much. Does your wife always talk so much?
Richard: Yes, she does. Actually, just let her going here. In a minute, it will be over with.
Dave: Thanks very much, guys. Have a great day.
To learn more about my New Real Estate Mentor Student Program, click here http://www.davedinkel.com/mentoring-program/ or click below.