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SHOW NOTES FOR EPISODE 275: REAL ESTATE DAY TRADING FOR $100 PER HOUSE
Real estate day trading involves buying and selling houses without leaving your home. In many cases, the investor can close on a house and resell it the same day – spending no more than $100 on an earnest money deposit. In today’s podcast, returning Old Dawg guest Larry Goins (episode #127), educator, author, mortgage lender, mortgage broker, real estate broker, and general contractor, explains how he uses day trading for wholesaling properties to other investors, retailing, lease options, short sales, foreclosure investing, and more.
What You Will Learn
- Why are there different investing strategies used for a buyers market vs. a sellers
- What is Real Estate Day Trading?
- How you can make an average of $15,000 per home through Real Estate Day Trading
- What the top marketing strategies Larry uses to attract motivated sellers
- How you can buy and sell homes online without leaving the comfort of your home
- What real estate investing strategy can you start with little or no money and/or no or poor credit?
- How you can build a rental property portfolio through wholesaling
- The best US markets to find inexpensive homes
About Our Guest
Larry Goins
Larry Goins has been investing in real estate for over 30 years. Previously, Larry served as president of the Metrolina Real Estate Investors Association in Charlotte, NC, a not-for-profit organization that has over 350 members and is the local chapter of the National Real Estate Investors Association. Larry is an active real estate investor and travels throughout the United States speaking and training audiences at conventions, expos, and Real Estate Investment Associations on his strategies for buying and selling houses. Larry has also written several books on real estate investing that are available wherever books are sold. Larry and Kandas Broome are also the hosts of the BRAG Radio Network. BRAG is all about investing in real estate and is an acronym for – Be Rich And Generous. Larry also has a podcast on real estate investing called Brain Pick-a-Pro, where he interviews experts from real estate and give his own expert advice. Besides speaking engagements and mentoring other investors, Larry oversees the daily operations of his investing business that wholesales properties, seller finances properties and holds properties for investment.
On a personal note, Larry and his wife, Pam, have two children, Linda and Noah. He also has a granddaughter, Ember and grandson Keegan. They are members of New River Community Church in Lake Wylie, SC. As a husband, father, businessman, and real estate investor, Larry holds true to his core values and moral integrity. His personal and business motto is, “People and principles before profits.”
Real Estate Business vs. Real Estate Investing
- There are two main ways to make money in real estate – as a business or investing
- Real Estate as a Business
- Buy-sell-buy-sell-buy-sell
- Generating checks for $15K, $10K, $20K, $30K and up with each transaction
- Real Estate as an Investment
- Buy and hold real estate for long term
- Larry does both without using any of his own cash
- Larry has multiple businesses
- Does buy ‘n hold investing
- Holds notes
- Buys commercial properties
- Dollar General Stores
- Shoney’s Restaurants
- Mobile home parks
- Land development
- His two main businesses
- Wholesaling (Real Estate Day Trading)
- Gets a property under contract for $100
- Markets the property
- Finds a buyer
- And sells it in the same day
- Buy ‘n Hold – Rental Properties
- Wholesaling (Real Estate Day Trading)
His Wholesaling Business Today
- It’s a sellers market currently – There’s more buyers than there are properties
- A few years ago it was a buyers market and there were a lot of foreclosures, HUD houses, many low priced homes listed on the MLS. It was easy to find sellers
- Today, we have a sellers market and it requires aggressive marketing to find sellers. Some of the marketing techniques include:
- Craigslist ads
- Facebook ads
- Pay-per-Click ads
- Bandit signs
- Bird dogs
- Property locators
- Does about 10-15 deals a month
- Does all negotiating over the phone
- Knows if there will be a deal within 10-15 minutes
- Most of the time there are multiple calls involved
- Buys a lot of cheap houses – houses for $5K, $10k, $15K – and he only invests $100
- Recent transaction from a seller
- Bought two houses for $9,000 ($4,500 each)
- Sold each house for $15,000 each
- Made $10,500 profit on each property or $21,000 for both
- The way a typical transaction looks:
- The basic steps are:
- Search online for potential properties to make offers on, using specific techniques for finding the right ones.
- Once an offer is accepted, usually within 1-2 weeks, put it on paper using clauses included in the book
- Get the property inspected by a rehab contractor to get a free estimate of how much the repairs will cost. This is done by finding reputable contractors online and through referrals from realtors and through auto-responders.
- Order an appraisal.
- Sell it fast! Using the buyers list you have built on the internet through email marketing groups, social networking sites, blogs, free classified sites, bank-owned property sites, and more, send an email with the details of the property and instructions on how they can get the property under contract.
- Usually within two hours several potential buyers will reply.
- Set up a closing to buy it and to sell it on the same day; closings are about 30 minutes apart. By it at 10:00 and sell it at 10:30, for example.
- There are many ways to fund and close on the property.
- Larry’s book will contain step-by-step, easy processes for assignments, options, flex options, simultaneous closings, using hard money, private money, cash partners, and credit partners, none of which will require an investor’s own cash or credit.
- To summarize:
- Finds a seller
- Looks up the house and “drives the neighborhood” on Google Maps
- Looks up similar properties on Zillow.com and shares the prices with the seller
- Estimates the amount of work needed
- Makes offer
- If they say “yes,” he sends a mobile notary service out to their house
- Gets the property “under contract” by giving the seller $100 “earnest money” deposit to buy the house
- He then finds a buyer and “assigns the contract to the buyer.” By getting the property under contract and assigning the contract to the buyer, he avoids to pay 3 sets of closing costs
- His buyers typically are going to fix ‘n flip it, fix it and rent it out or they are going to fix it and move into it.
- The buyer pays him the asking price, which includes the price he paid for the house, plus whatever extra he adds on to that price
- With the right documentation and right knowledge, you can buy and sell a house on the same day without investing any more than $100
- He averages $10-12,000 per deal
- Entire process can take 30 days
- The basic steps are:
Day Trading for Retired Folks on Fixed Incomes
- Wholesaling is the “lowest barrier to entry” in real estate investing and is a great place to get started for anyone with limited funds
- Steps to getting started
- Download a free copy of the book
- Pick a market (southeast or midwest U.S.) – not a “hot market” where it is very competitive but one where you have a good chance of finding good deals and where you can buy houses cheap. Good markets include:
- Indiana
- Illinois
- Ohio
- Pennsylvania
- Arkansas
- Tennessee
- Alabama
- Georgia
- Carolinas
- He likes to buy houses for $10K, $20K, $30K, $40K, $50K. He buys lots of houses for $15K and sells for $29,900
- Set up your marketing systems
- Build sellers list
- Get in touch with mailing house
- Order bandit signs
- Get phone numbers set up
- Make sure you also have a live answering service if you can’t get the call yourself
- Set up CRM software
- Set-up a website
- The above is for a more serious established person
- But you can get started with just a direct mail program and a phone number
- Direct mail
- Usually gets a 1% response rate
- If you mail out 1,000 pieces, you can expect 10 responses
- Sometimes it takes talking to 15-20 call-backs before he can get one deal
- List criteria (who to mail to)
- Looking for distressed situations
- Absentee owners (someone who owns a property but doesn’t love on the property)
- Probate
- Inherited
- Delinquent taxes
- Code violations
- A new one: People who own a property but were recently arrested or have legal issues
Making Sure the House Isn’t a Dog
- Arrange to get pictures taken, inside and out, of any potential repair areas, every room, all mechanicals, all outside areas of house, street views – both ways (50 to 100 pictures)
- Hire outside services ($40-50) to take pictures:
- Attorneys or title companies will check out things like liens, unpaid taxes, or other major issues attached to a house
Getting Good Terms
- You need to get a house at a greatly discounted price or at really good terms
- Recently had a seller who wanted to sell for $82,000 (Larry needed the price a $65,000 to make sense)
- The guy didn’t really need the money so he talked about seller financing
- He told the seller how he could get steady monthly cash flow and and also reduce his tax consequences
- He set up an “installment sale” where he can breakdown the payment so the seller doesn’t have to pay taxes on a lump payment amount
- This way, the seller gets his price, he gets interest on the payments and doesn’t have to deal with capital gains
- Terms:
- Price: $82,000
- Down payment: None
- Term: 20 years
- Interest rate: 5%
- Monthly payment: $541
- First payment didn’t start for 91 days
- He sold it for $99,900 and received $18,000 down and Larry’s buyer paid the seller the $541 monthly payment
The Importance of Good Negotiating
- “To be a good investor, you need to be a good negotiator”
- He records many of his calls with sellers and shares those calls with his students
- With his book, there is an online link to scripts, contracts, forms, etc. that you will need to negotiate and make deals
- To get a good discount, you need to be able to talk with and communicate with people
Building a Rental Property Portfolio Through Wholesaling
- Many of Larry’s students use real estate day trading or wholesaling to build their rental property portfolios
- They will wholesale 2, keep one, wholesale two and keep one, etc.
Larry’s Educational Programs
- Home study courses
- Partner Program – High level mentoring program where students pay $15,000 to work one-on-one with Larry, travel to his office to jump start their real estate business, teach them to close deals
- If you have no money, no or bad credit, you can still get started today
Other Resources
- Where to buy HUD homes online: HUDhomestore.com
- For good list companies and anything else you may need, call
To Get Larry’s Book for Free
- To download a free PDF electronic version of “Getting Started in Real Estate Day Trading,” click here: RealEstateDayTrading-ebook
- To purchase a hard copy of the book and have it shipped to you, click here!
How to Reach Larry
- His website: LarryGoins.com
- He has free webinars, resources and training at his website
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