Mitch Stephen – Investor – Author – Coach
Resources mentioned in this show
Books
* My Life & 1,000 Houses: Failing Forward to Financial Freedom
* My Life & 1,000 Houses: 200+ Ways to Find Bargain Properties
* My Life & 1,000 Houses: The Art of Owner Financing
Podcast – REI Investor Summit – Click here
Blog Post – Why I Borrow at the Terms I Do – Click here
Links – Livecomm
Here’s the full show transcript (coming soon)
Julie Clark: Hey, everybody. Welcome to The Seattle Investors Club Podcast. Today … This is Julie Clark leading the show. My partner Joe Bauer is with us in spirit and in chat. But his audio is not working well. So you guys just got me today and our awesome guest Mitch Stephen, who’s gonna join us here and jump on in a second. But first of all, welcome. Again, this is the nuts and bolts of real estate investing. Our awesome podcast here with Seattle Investors Club. So, hey, everybody, what’s up?
Julie Clark: Joe, I think, is often … What are you in North or South Dakota, Joe? He’s typing in the chat. He’s in South Dakota. And Mitch and I were joking that he’s in some Indian sweat lodge out there. We don’t know what he’s doing, but his audio is not working. He’s either hanging off a cliff-
Mitch Stephen: No actually right now they have him strapped down to an ant pile. That goes on. They pour honey on him, and then that goes on for a little while. And then they send him out into the woods with nothing but a pocket knife for like six months. And if he lives, he comes back and he’s a member of the tribe.
Julie Clark: There you go. That is something that Joe would probably put himself … He’ll record it. If you guys are watching, you guys know. Joe’s a marketing guy. He says he’s near the Wind Cave NP. What’s NP with the honey and pocket knife? I don’t know what NP means. But-
Mitch Stephen: National Park. Everyone knows that. Everyone knows that, Julie.
Julie Clark: Oh, national park. Oh, sorry. Well that’s what you get, Mitch, when you’re sitting in your kitchen and your partner’s off traveling the national parks around the country. You get a little stupid here. But … awesome. Well I’m gonna jump right in today. We thank you guys all for listening today. We have a spectacular guest on our podcast today, somebody that I’ve been hounding on Joe to reach out to and try and get on this podcast and educate us, and hopefully at some point come on and visit us over here in Seattle and host one of our meetings at Seattle Investors Club.
Julie Clark: But today we have Mitch Stephen on the podcast who is a very experienced real estate investor. I think many of you listening already know who Mitch is. So this is gonna be a real treat for us today. He is also the author of a three book series, “My Life in a Thousand Houses” series. So it’s a series of books, and Mitch is gonna tell us more about that today in the podcast. He of course is a real estate educator. I’m sure most of you already know that. A coach, and he himself also has a podcast, don’t you Mitch? What’s the name of your podcast?
Mitch Stephen: It’s the Reinvestorsummit.com podcast. So RE Investor Summit is the podcast. But you can get there at Reinvestorsummit.com.
Julie Clark: Awesome. And then you also have several websites. Is there any website in particular that you use as your main website? I know you have a whole bunch of them.
Mitch Stephen: Well the main one is 1000houses.com or one zero zero houses .com. And there’s tabs there to find my books or tabs there for free stuff. I have a ton of free stuff, webinars, hour and forty five minute recording of how my group coaching sessions go so you can kind of listen in and hear how that goes. But all kinds of stuff there. People say I give away the farm, and that’s just fine with me.
Julie Clark: Awesome. Well we’re gonna circle up when we get towards the end of the podcast. We’re gonna give some more details about all of that stuff and where people can reach you and engage with you even further. But before we do that, let’s just kick it off with a simple question, or maybe not, maybe it won’t be so simple, but just tell us, what’s your backstory? Who’s Mitch Stephen? How’d you get started in real estate investing and coaching and being an author? Let us know a little bit about the history of the guy with two first names.
Mitch Stephen: The guy with two first names. Well actually none of it was planned or foreseen. I didn’t plan to be here. I don’t know. I failed at everything else in the world, so the last thing left to do, to try, was real estate investing because I had failed at everything else. I always managed to keep my good name. I always managed to keep my good credit, but I fell on my face in a lot of businesses. I have a stack of business cards somewhere about six inches tall. And they all … I was excited when I started those businesses and I was not so excited when I shut them down.
Mitch Stephen: But it took me until I was about 36 to find what I wanted to do. Until then, you know, I wasn’t downtrodden or anything. But I was living pretty much paycheck to paycheck more or less. And then something tragic happened. Well I got into real estate investing because I accidentally bought a rent house and then I accidentally made more money on the rent house than I did all year at my job, which says one of two things. Either it was a really good rent house or I had a really crappy job. And I had a really crappy job is what it was. But I made more on the rent house than I made at my job for the year. So I started to think, well maybe I better look into this a little bit.
Mitch Stephen: I read a book called “Nothing Down” by Robert Elliott who had the audacity to suggest that I could buy real estate with no money and I had so much no money that I figured I could buy the whole town as broke as I was. So I went out and it took me six years to really understand the concept in my heart, you know what I’m saying? I read that book and I understood, I mean I could read english and I knew that he was saying that you didn’t need money to make money. But it took me a little while to own it in my heart.
Mitch Stephen: And again what happened is, I accidentally just took one of the things he said, “Never let the deal die on your side of the table” kind of thing. And someone presented me with a fourplex and I didn’t have any money and I just made them an offer that I could live with, which was, I’ll take it and I can’t have any payments for a year. And they said yes. Then that’s when the light bulb went off. That’s what Robert’s talking about. I don’t have any money. So-
Julie Clark: You don’t get what you don’t ask for, right?
Mitch Stephen: Right, right. And then, so I did about 1500 house, I mean my first year, full time, I did 45 houses. I did 65 houses my second year. I did 150 houses my third year. This was in a whole different time. It was in a time when you could get in the classifieds if you wanted to buy a house and by 2:00 in the afternoon, you’d have a house under contract and it was over. And if you really screwed up, you’d buy two or three houses in one day and you’d be wondering how the Hell you’re gonna pay for them.
Mitch Stephen: But, it’s much different today, a lot more competition. But that’s how I got started.
Julie Clark: And where are you, you’re out of what, San Antonio or … ?
Mitch Stephen: San Antonio, Texas yeah. San Antonio.
Julie Clark: And do you currently and have you always done all your investing in San Antonio?
Mitch Stephen: I went outside. I went to Houston and Corpus and tried to open up offices there and then just figured out that there was more houses in San Antonio than I was ever gonna be able to buy and everyone’s culture and government and local government, it’s all different. You know, I went down to Corpus and I bought a bunch of houses real cheap. A lot of them needed roofs. But I missed the roof estimate by eight grand because they need hurricane straps down there. I didn’t even know how to spell hurricane, you know what I mean?
Julie Clark: Yeah.
Mitch Stephen: So then something tragic happened and I didn’t know what I was doing at the time. Later on, my doctors, who are my investors for decades, would tell me … and they’re also authors. But they’re the kind of authors that get paid like $150,000 in advance to write a book. So I called them up one day. I was actually getting a checkup because my doctor, he likes to do all these things to me because I have a lot of his money. He says-
Julie Clark: I don’t know if I wanna go too deep on that question.
Mitch Stephen: It has a lot to do with rubber gloves and the prostate. But anyways, I told him, “Why did I write this book? Because everyone asked me would I write this book and I’m saying things, but it’s not true. What I’m telling them, the reason why the book’s not true and I don’t know why I wrote a book.” I said, “Is it possible to write a book and not know why you wrote it?”
Mitch Stephen: And then he explained to me that it wasn’t unusual when you suffer a tragedy in your life like that, to want to catalog your life. And so, “My Life in a Thousand Houses: Failing Forward to Financial Freedom” was how I was grieving and part of what made that book work was, I didn’t give a crap what anyone thought at that point.
Julie Clark: Right.
Mitch Stephen: I was really upside down and hurting. And I told a really honest story about what happens after the get rich seminar, about what they didn’t tell me and how I learned it and how I was figuring out how to deal with it. And I actually had people, editors and everyone saying, “Are you sure you wanna put this book out because you make a lot of mistakes? And you’re falling down and you’re making some really big, bad moves.” And I said, “Well, it’s the truth of what happened, so I’m just gonna put it out.” And honestly, I didn’t give a crap because-
Julie Clark: I find that interesting because I think people wanna hear about people’s failures because it allows them to relate to them more, right? Because secretly, everybody has tons of failures-
Mitch Stephen: Well that’s what happened. That’s how the book took off. That’s how I got here as a coach and a mentor and author. I didn’t mean to be this. I was inadvertently cataloging my life trying to get over this bomb that had been dropped in my life, and I got over it through writing. The only thing I knew to write about was houses because when you buy 150 houses a year as pretty much a one, two man show, there isn’t anything else in your life. So when I was talking about my life, it was all getting related back to what I lived, 24 hours a day.
Mitch Stephen: So, but there was a lot of life lessons in there, too. But there was always tied to something, to real estate, because that’s the way my life is.
Julie Clark: Right.
Mitch Stephen: We can be doing something, but it’s always, if you follow the trail back even just a couple of steps, it’s touching the real estate industry somehow.
Julie Clark: You know, I’ve got a question for you. We have a lot of friends that do a lot of deals and stuff like that, and I’ve had one of our friends say, “I don’t even like real estate. I do real estate, but I really don’t even like it.” And this is somebody that does a lot of deals. Do you, after all this time, do you love … Like I love real estate. My kids know, my kids have asked me, and this is even sad, “Mommy do you love real estate more or us more?” Yeah.
Julie Clark: That’s usually when they’re just setting me up because they want something.
Mitch Stephen: You just look them, Julie you just look them square in the eye and you tell them, I don’t know yet. It depends on how many houses y’all are gonna buy.
Julie Clark: That’s right. I remember rolling down the street when they were just in their car seats, because I have twins. I have twin girls. And the windows would be down and we’d be rolling around town and they would yell, “There’s one, Mommy! There’s one! There’s a good one!” They’re talking about ugly houses, right?
Mitch Stephen: Yeah vacant houses.
Julie Clark: As we drive by.
Mitch Stephen: Actually, the kids catch on faster than the adults because it’s just not that complicated. But us adults make it complicated, but the kids get it real quick. .
Julie Clark: But my question to you is, do you love, what do you love about real estate? Are you doing it because that’s what worked after all the failures and you figured it out and it’s working, or are you passionate and enjoy it still every day? Or what part do you love? Like I personally, I fell into the coaching. I never thought I’d have a podcast or coach anybody or do anything. And I don’t even think about the money. I mean, that sounds weird, but I just enjoy it. It’s like having a whole new set of friends that like what I like to do. And of course I wanna make money at it for sure. Don’t get me wrong. But I also, surprisingly, found myself in a role of coaching and educating and all that stuff and I never would’ve thought I would’ve had that skillset and I love it.
Mitch Stephen: Well I think it goes through phases. And I think if you follow me here, I think you’re gonna agree with me 100% because I think you’re going through those phases too. So the first thing that we need is we need the money. We’re doing this for the money. Whether we like it or not, we’re trying to find a way to separate ourselves from the rat race, right?
Mitch Stephen: So the first thing was doing money. Well when I flipped my first couple of houses or did my first couple of deals and I made $20,000 when I was making $35,000 a year at my job 40 hours a week or 45 hours a week, you know. I’ve always been like overly responsible so even if I had a job that was eight hours a week, I always put in ten because I give a crap.
Mitch Stephen: So I start out like that. Then I’m all on fire with it thinking, I don’t know if this window’s gonna change or when it’s gonna change, so I need to make as much as I can. So I’m running as hard as I can, doing as many deals because you know, certainly this is gonna end somehow, some way. I need to get as much of it before the window closes as I can. And then you figure out that it’s not gonna end, that there’s always another deal tomorrow. But you’ve kinda got yourself in this habit now of burning candles at both ends and stuffing, gorging yourself on houses.
Mitch Stephen: And so you go for awhile and then it becomes apparent that you can’t keep running at that pace. And while you still like the industry and everything, you’re starting to get really burned out. So then there’s this next challenge of like, how do you systematize this? And I tried five times to systematize it and it didn’t work. I finally paid $30,000 to be in a mastermind group where there was 80 people that had already systematized and were buying way more houses then me and they were never at the office. And they taught me how to do that.
Mitch Stephen: And then so what happened was, I didn’t fall in love, I’m not in love as much with real estate as I am with growing as a person. And real estate can take me through all these different phases. There was a phase where I was working in the business, and then there’s a phase when I was doing everything but the sales and I had hired that guy and I had grown up a little bit. Then I was hiring some acquisition managers and I’d grown up a little bit more. And then I had a whole office and some staff and I wasn’t ever going into the office anymore. Like, I haven’t seen the last 300 houses that I’ve bought or the last 300 people that bought my houses. I have not. That’s how I got here. I had some spare time. I had a lot of people calling me and I thought, I gotta do something because here’s the honest to God truth, people say, “Well if you’re so independent, why are you still doing all of this?”
Mitch Stephen: And this is the honest to God truth, Julie. A relatively, energetic, not horrible looking, 57 year old man with a whole bunch of money and a whole lot of idle time is a recipe for freaking disaster.
Julie Clark: I hear that. Yeah.
Mitch Stephen: So I decided, after about two years of doing whatever I wanted, whenever I wanted, I started looking at what I’m doing every day. I’m sitting around. I’m getting lazy. I’m getting fat. I’m starting to drink too much. I’m starting to smoke too much. It was like, man I need to get engaged again. What am I gonna do? And everyone keeps asking me, “Can you show me how you did that?” And I keep saying no. And I just quit saying no.
Mitch Stephen: I started with exactly no expectations of coaching and you know, I’m about to make well over a million dollars this year in coaching. No expectations, nor did I really start my house business with expectations. My goal is to try and prove my systems and my companies and myself every day, every month. Just get better than you were last month. And let’s see where it takes me.
Mitch Stephen: Well it’s taken me way beyond what I would’ve set my goals at. Maybe I’m a small thinker, but anyway … did I answer the question?
Julie Clark: No, you did. You more than answered it. I’ve experienced a little bit of that myself, not necessarily probably as consistently and as long term as you have. But I’ve been around the block. I’ve been around a long time and I’ve had a million dollars wired to my account on several occasions. And what happens is that, yeah, you can … I find that if I’m not engaged fully in something and, I almost will do nothing. I used to be a big tennis player before I had my kids. That was my life. I loved tennis, and I always thought man, if I had a whole bunch of money and could relax or do the four hour work week or whatever, Joe loves systems, so if it was up to him, we would roll where everything’s running and all our employees or whoever else is running the show for us. And we continue to try to pursue that.
Julie Clark: It’s always a challenge, especially in the market that we’re in now or are coming out, I guess I’ll say. I found that when I was feeling fat and happy like that, I didn’t do shit, you know? And so I think it takes a little, I think all entrepreneurs also have a fear of failure. And I definitely have drive in me just on the pure fear of failure. And it’s not failure in anyone else’s eyes, it’s just, again, what I wanna achieve for my personal self or my family or how I wanna live my life.
Julie Clark: So I relate to you brother and God, I hope we get to hang out with you a little bit more sometime. Maybe we’ll come visit you out in your neck of the woods or jump on one of your tours or something like that. But, I’m gonna jump in now. So here, we’ve pretty much summed it up everybody who’s’ listening. Mitch is a normal guy with all the troubles and, he’s just like us. We’re all the same and we’re all not perfect and we all fail. And honestly, anybody who hasn’t failed, I don’t actually believe that they’re actually able to succeed. I mean, we can talk about that until we’re blue in the face on failure, how failing actually allows you to learn and grow and eventually succeed.
Julie Clark: But I’m gonna move on. So hey Mitch, what is, I know you are a seller financing guy and a private money guy. But what is your number one favorite investment strategy? Is that buying distressed property with buyer money and then seller financing it to a new buyer? What’s your, if you were gonna-
Mitch Stephen: That’s an easy one. My favorite strategy of all time, and I do believe it’s one of the greatest strategies of all time, although everybody’s got what they like. But I love buy it, don’t fix it, owner finance it for double and watch someone else go over budget rehabbing your collateral, making your deal stronger and stronger and stronger with every dollar they put in. You know, think about that strategy, Julie. You buy it.
Mitch Stephen: Look, you can buy a house for $40,000 and then you put $20,000 into it. So now you’ve got $60,000 into it. So now you’ve got to owner finance it for $120,000. Or you could just buy it for $40,000 and don’t do jack with it and owner finance it for $80,000. You’re still doubling your money, but guess what? You didn’t spend any time doing the rehab. You bought it one day and it was up for sale the next day. Bam. And then you’ve eliminated all the risk because all the risk was in the rehab. I invented not very much in my life. I invented maybe two things. I invented the OFV, the owner finance value, which is a value unto itself that we arrive at by backing into the rents. The general theory being that a person who’s paying $1,000 rent would rather pay $1,000 to own.
Mitch Stephen: And then I invented this other end of the bumper sticker, which the beginning of the bumper sticker, I didn’t invent, which was, and you probably know the saying. “You make your money when you buy”. Have you heard that?
Julie Clark: Yes.
Mitch Stephen: Yeah. Well I invented the other thing, “and you lose it in the rehab.” Well when you don’t do a rehab, you can’t lose it. And everybody goes over budget in the rehab. How many people in the audience go over budget when you do a rehab? Raise your hand. Everybody who doesn’t have their hand up is a liar, or you don’t do any kind of stringent rehab at all because if you’re doing-
Julie Clark: Buddy even raised his hand. This is our sidekick buddy, my labradoodle.
Mitch Stephen: Golden retriever? Yeah. He’s raising his hand. He goes over budget.
Julie Clark: He’s raising his hand.
Mitch Stephen: So what I love is, I owner finance it to the guy and I say, “You know it’s probably gonna take $20,000 to rehab this house.” And the guy always says, “No. I can do it for ten.” And $25,000 later, he’s struggling to get the last 2,000 to finish up. I love it watching them go over budget instead of me. I bought the house for $40,000. They put 20 – $25,000 in it. They make it worth $100,000. They owe me 80. They make it worth 120 or whatever, and I’m just, I take all that time that most people spend on rehabs … and I’m not saying that I don’t ever rehab a house because that’s not true. There’s houses that demand or there’s price ranges that people aren’t gonna go fix their own house.
Mitch Stephen: I have a rehab going every day of my life, but my favorite strategy of all time is buy it, don’t fix it, put it up for sale right after the closing, like seconds after the closing, it’s being posted for sale. Owner finance it to someone and watch them go over budget fixing up my collateral.
Julie Clark: Right.
Mitch Stephen: Piece of cake.
Julie Clark: Do you ever get the house back? Or how often do you get the house back, meaning they failed?
Mitch Stephen: Or are you talking about in general in my life when I owner finance houses? Last year I bought 88 houses. I usually buy about 100 houses a year, but it’s very competitive right now. There’s a guru on every corner. Everybody who watches Flip that House is at least a house flipper for one house until they figure out that it’s work.
Mitch Stephen: So last year I only bought 88 houses. I whole saled two of them. I retailed 24 of them, just because most of those houses, I need to retail because someone in my organization needed a paycheck to make it another quarter so we could live to buy more houses. And then I owner financed 62 of them. Right now, I collect on over 300 houses. My foreclosure rate is .08% right now, but we’re in a good boom time.
Julie Clark: Right.
Mitch Stephen: I suspect, in the recession, it’ll go up to 10 or 12%. But those numbers would’ve been higher. But because of my 22 years of experience and my 1500 houses of experience, I have learned to vet my buyers a lot harder and demand so much more out of my buyers, including down payment. I average 12% down this year so far on the last 100 houses. 12%. So on $100,000 house, I’m averaging 12,000 down. And I’m even throwing out some absurdly high down payments so it didn’t skew the thing. You know what I mean?
Mitch Stephen: Sometimes I get $40,000 down on $100,000 house. I just threw those out. I moved those out of the way because I didn’t wanna skew the truth. And so, I’m gonna say that I can keep it down to 8% even if we hit a recession right now. But the other thing is, this owner finance strategy booms in the recession.
Julie Clark: Right.
Mitch Stephen: And what a business to be in when you do good in the good times and then in the recession, you boom. That’s like a dream come true.
Julie Clark: What, do you think we’re headed towards a recession then?
Mitch Stephen: We’re always headed toward a recession until we’re in one. There’s a cycle, so you’re always headed to one. The question is, is it 10 years from now? I mean, 10 years from the last recession or is it gonna be 12 years or 15 years? The cycle suggests, history suggests that it’s about every 12 years. Give or take a couple.
Mitch Stephen: So depending on when you wanna say the last recession ended, I don’t think the last recession ended that long ago. I think we’re probably eight years into it. I think it ended in, no I’m sorry … I think the recession started clearing up around 2012 – 2013. Certainly by 2014. So we may only be four or five years out of the recession on this cycle.
Julie Clark: Right.
Mitch Stephen: The other thing that’s really messing things up is the optimism that the current presidency brings to business. I think we would’ve already had a recession had things not gone the way they went. But the optimism that the business people take from this current administration may be pushing a recession out a long ways.
Julie Clark: Interesting. So let me, it’s funny that you say you don’t, like you like to skip the rehab. I don’t know what houses cost in San Antonio, Texas. But out here in Seattle, I mean, you’re paying anywhere from, I mean, 250 in the less desirable neighborhoods to 550 to buy flip houses. You know what I mean? It’s expensive out here-
Mitch Stephen: Yeah. Let me address that. So there’s, I mean there are, the owner finance strategy works best when you can substitute the rent payment for a house payment, give or take a hundred bucks, you know?
Julie Clark: Right.
Mitch Stephen: Like if a guy’s paying $1,000 rent, if you can buy houses where you can set them up that if they have a 10% down payment or better, you can move, they can use that same thousand dollars to make a principal, interest, taxes, and insurance payment.
Julie Clark: Right.
Mitch Stephen: Okay, that happens in houses that are generally $150,000 or less. And so that’s the sweet spot for the owner financing strategy. However, there is a way to owner finance more expensive houses. And I’ll tell you about a student I had in California who had a beautiful house three blocks from Berkeley University. Three blocks from Berkeley. It was a million two. We got it appraised or we figured it was worth 1.25 million. But then when the appraiser came out, it was a manufactured home. It’d just been disguised so well you couldn’t tell. But it was still a manufactured home.
Mitch Stephen: So it knocked the price down a mere $850,000. So she sells this, she says, “I really don’t wanna take the cash because I’m just gonna have to deploy it. I’d rather just, do you think it’s possible to owner finance?” I said, “Sure. But on that level, we need a really solid down payment, maybe more than 10%.” And I said, “Let’s just wait and see because I think the people that can afford that kind of house, I think there’s also people with huge down payments.
Mitch Stephen: Long story short, we waited around. We passed on a lot of people with $50,000 down and $100,000 down when someone showed up with $250,000 down. She financed $600,000 for 30 years at 7%. And so you can owner finance and you may not believe it, but somewhere out in Seattle is someone who doesn’t wanna deal with a bank, who can’t deal wit a bank, has to move faster than the bank wants to move, and they will owner finance your house with 30, 40, 50% down. You just have to ask.
Julie Clark: Right.
Mitch Stephen: [crosstalk 00:27:34] the population is though.
Julie Clark: I get that on the buyer side for sure. But tell us about how to deal with it on, so you come across a property on the seller side and then you’re having to take that down, right? So you’re taking it down, purchasing it, right?
Mitch Stephen: Mm-hmm (affirmative)-
Julie Clark: With private money, right?
Mitch Stephen: The thing is just with more expensive houses comes bigger risk, but there’s also bigger margins. There should be bigger margins. Where I get scared for people is with, they’re taking down $650,000 houses because they’re worth $750,000. That kind of scares me because there’s not enough margin for error there and you have a big number that can rack up pretty fast in interest and fees and stuff.
Julie Clark: I don’t think we have any dodo birds that are listening, that would do something like that. The only way I think somebody would do that is if they had, they wholesaled it to a retail buyer, that they had a retail buyer lined up or something like that.
Mitch Stephen: Yeah, I agree. But I get people sending me wholesale deals every day of the week that expect me to jump on that margin. Of course, I don’t. But you know, if I’m buying, if the house is worth $750,000, I wanna be buying this thing for around 400, maybe 450. Or I’m moving on.
Julie Clark: Right.
Mitch Stephen: One of the reasons we need a lot of margin is because there’s a lot of chances for things to happen to us that we sometimes can’t see or don’t, are not counting on. People say, “Wow. You’re greedy. You need all these big margins.” I say, “You have no idea what can happen to me. Let me tell you some of the things that have happened to me.” You know?
Julie Clark: Right. So let me ask you though, in this past investment climate that we’ve been in, I don’t know how it is out in San Antonio, but isn’t it hard to find, with it being a seller’s market these past few years, has that, finding these huge spreads to work that program, isn’t that getting a little tougher? Or are you not-
Mitch Stephen: Yeah, it’s been tougher. That’s why I bought 88 houses instead of 110 houses this year. But, just because it’s a hot market doesn’t mean people aren’t dying, getting sick, getting cancer, getting transferred, getting divorced, having health issues. You gotta live where the chaos is. I understand the economy and it’s a seller’s market and it’s really beautiful for this large segment of people there. That’s not where I’m hanging out. I’m hanging out where life sucks.
Julie Clark: Right. So what do you, where do you get your lists from or how do you develop your target list on your sellers?
Mitch Stephen: Now if I tell you that, I’d have to kill you.
Julie Clark: Okay. [crosstalk 00:30:18]
Mitch Stephen: I’m just kidding, no I’m just kidding. You know, you go, one of the things that happens in a hot market is, you have to get to lists sooner and you have to get to the decision maker faster. So like instead of getting lists where most of the people on that list are 60 or 90 days old, I’m trying to get the lists where people are one or two days on the list. And then I’m trying to get to them within two days.
Mitch Stephen: So within four days, they hit the list in two days, I’m at their house sitting in their living room in four days. That’s how I beat everybody. Speed.
Julie Clark: Speed to lead. Okay, but tell us-
Mitch Stephen: [crosstalk 00:31:02] and get off the beaten path. For one is, there’s some lists that you can get that are way more difficult to get than other lists. If everyone can get a list real easy, then that list is generally no good to me. Or I write it off. If everybody can get the foreclosure list on a certain day, then it’s no good to me. I won’t even mess with it.
Mitch Stephen: I’m looking for lists that are pretty difficult to find sometimes. Sometimes they’re not even on the computer. You have to go down to the courthouse to find them. One of those might be rid of possession. I don’t know what they call it in your town. It also can be called a forceful entry and detainer. It’s when there’s been a foreclosure. Or there’s been an eviction and the judge has slammed the gavel and said, “You have three days to get out,” and three days has come and gone and they’re still there and they’re not leaving, you have to call the sheriff to kick in the door and drag them out and drag their stuff out onto the curb.
Mitch Stephen: That’s the worst experience that an investor or an owner financier can have. This deal has run the entire gamut and I wanna find out who filed rid of possessions. Now I’m not looking for a rid of possession that when I kinda look into it, it’s a person like Julie who owns a bunch of properties because for Julie, it’s just another day in the life for you. I’m looking for the guy who inherited his grandmother’s house. He thought it’d be cool to put his brother in it. His brother never made any payments. He’s eight months behind. It’s cost him a fortune to get this far, and the house is tore up now and he doesn’t have the money to fix it. I just want out of this crap. And that’s the guy I’m looking for.
Mitch Stephen: And there may only be 15 or 20 of those per month in my city of 1.7 million. And they’re not posted on the website. I have to go down to the courthouse and get in the file cabinet. And even that was a challenge. Because when I went down there, they told me to shove off.
Julie Clark: Right.
Mitch Stephen: So I showed up with my freedom of information act, and they told me to shove off again. So then I had my lawyer go down there and show up with it and talk to the head guy in charge and they asked me what days would I be coming to check their file cabinet.
Julie Clark: Nice. I get what you’re saying.
Mitch Stephen: So lists that are easy to get are generally no good unless you can get on them the minute they’re put out and discern who you need to talk to right away, the most optimal prospect and get to them right away. But generally, I try to find lists that are very difficult to get. And another instance, who’s red tagging the meters? The electrical meters. Now that’s a really hard one-
Julie Clark: The what meters?
Mitch Stephen: Who’s red tagging the electrical meter on the house?
Julie Clark: Oh. Got it.
Mitch Stephen: Who’s assigned to pull the meters, that they haven’t paid in so long or that they payer of the electric bill is such a problem, they’re gonna go take the meter off the house, I want that list.
Julie Clark: Right. You’re going deep. You’re going deep.
Mitch Stephen: Yeah.
Julie Clark: Love it. I’m sure everybody here is enjoying, you know the thing is, it’s not like everybody doesn’t know that those are good lists. But you’re right, nobody’s gonna go do it. It’s a lot of work.
Mitch Stephen: It’s hard and I’ve [inaudible 00:34:15]. It took me months to get to the guy that pulled the can and explain to him that he wasn’t gonna get in trouble if he would just drop me a line. And then he got promoted or left and then I had to start over again after awhile. I still bought a lot of houses from it though.
Julie Clark: I like it.
Mitch Stephen: But you’re right.
Julie Clark: Super [crosstalk 00:34:31].
Mitch Stephen: So you’re right. I pick challenging lists to get and I make sure that I get into it and I hire, if they don’t wanna give me the information and I’m rightfully due for it, I go hire an attorney and I send him over to explain that if they don’t give me the damn list, I’m gonna sue them.
Julie Clark: Right. Because they have to, right?
Mitch Stephen: Well that’s the whole thing between the freedom of information act. Yeah they’re supposed to. But they’re government employees and they don’t even know, you know more about what you’re doing than they do. So it’s just easier for them to try to blow you off until they finally figure out that you’re serious and you get to their department head, and then my attorney gets to their department head. And then the department head says, “Whoa, you guys need to straighten up here and show him to the file cabinet.”
Julie Clark: Right.
Mitch Stephen: And then of course, I’m not very well liked down there at that moment. But then, the first week I come down to the file cabinet, I got tacos. And then the next week I got donuts and man they love me. They can’t wait for me to come look at that file cabinet again. And they’re all weighing 300 pounds down there.
Julie Clark: Nice. Well we appreciate that insight. I mean it’s not like, it’s just interesting because like I said, we all know that that’s the answer, but I don’t know. I guess it’s just, I think people don’t do it out of fear. I think people are willing to work hard, but they’re afraid to get a no. They’re afraid for that person at the front desk to tell them no or that they’re gonna, I think people are afraid that it’s gonna … Their name is gonna get on some blacklist or they’re gonna get in trouble somehow. Or it’s gonna mess them up. So they refrain from … I know there are some people listening now that are gonna go ninja, go down and do that kinda stuff. So-
Mitch Stephen: Well so you asked me if I loved real estate. I’m not sure if I love the real estate anymore as much as I just love the, it’s a game I play. Some people play video games. I play a little real estate game going, how deep can I drive down on some lists of some people that really need to sell me their house?
Julie Clark: Right.
Mitch Stephen: I also like to tell people, you know they’re playing video games all the time, and I see a lot of people that spend a lot of hours on video games. My God. They said, “Do you ever play video games?” I said, “Yeah. Well I don’t really play like video games, kinda sorta. I play a game on the internet. It’s called, how much money can I make my computer crap? And it’s called the educational sales business. And I can tell when I’m doing good when a lot of money’s going into my bank account.
Julie Clark: Right.
Mitch Stephen: And the rules are constantly changing, just like in your video game, except I get paid when I figure out how to get to the next level.”
Julie Clark: Right.
Mitch Stephen: And then I was gonna say one other thing. In my office, it is widely known that you don’t even come to me and ask me for help until you’ve gotten at least three no’s. And that means even, try it one day, call directory assistance, if anyone does that anymore, you know you used to call directory assistance and ask for people’s phone numbers. And they would say, “We don’t have a number for that person.” And I’d hang up and I’d call right back. And they’d say, “We don’t have a number for that person.” And I’d hang up and I’d call right back and they go, “Here’s the number.” And I go, “What the Hell?” I mean-
Julie Clark: Well that’s just the, it’s the same premise as follow up with your leads, right? You get a no eight times before you get a yes. It’s sort of the same concept. We even call the people that told us to F off from five years ago are like great leads right now.
Mitch Stephen: I just was gonna say, we just bought a house from four and a half years ago. The one before that was two and a half years. And they’re the ones that told us to get the Hell out of their house. And one of the things that we do all the time is, even if they tell us to F off and get out of the house, we still go home and we type up a hard copy, put it in a manila envelope and send it to them in the physical mail, our offer, the one that they were so insulted by.
Mitch Stephen: And it’s amazing because they’ll call us a year or eight months or six months later and say … And I’ll remember. I’ll say, “I think that was the guy who told me to get the Hell out of his living and was really pissed.” And so I’ll go up to them and I won’t, I say, “What made you call me,” knowing in the back of my mind that he was that guy. And the answer’s always the same. You’re the only one that really sent a real contract.
Julie Clark: Wow. Yeah. We get that, but it’s more, we get it on a regular basis like, I’ve had 40 of these investor contacts, but you’re the only one that’s been consistent about contacting me, so I’m going with you. We get that a lot, you know?
Mitch Stephen: Yeah well today, I have a company called Livecomm, L-I-V-E-C-O-M-M.
Julie Clark: I was gonna ask you about that.
Mitch Stephen: And it’s expanding in it’s abilities every day, but the goal is that it’ll do a voice drop. It’ll send a text message. It’ll remind your sales person that there needs to be a personal call made. It’ll remind the secretary that we need to send out a physical piece of mail. And it’s like a complete CRM that touches people in all these different ways from personal phone call to voice drop to text to physical mail to email. And that’s what I’m trying to bring it up to.
Mitch Stephen: Right now, what i use it for is to capture the incoming caller’s cell phone number. For example, I have, I only have like nine days on the market on my owner financed homes because I put 20 bandit signs around my house when it’s for sale and one in the front yard. And then I assign a livecomm number to each house. And then every time you call any of those numbers, you get a recording about that specific house on that specific number and then I capture their cell phone number.
Mitch Stephen: So right now, today, despite the fact that Livecomm does have a pre scheduling feature and every first of the month, I send everybody in my database a text that says, if you’re no longer interested in an owner financed home, would you please reply with the word stop right now and get removed from this list. Despite the fact that I send that out on the first of every month, I have 8,236 people that wanna know, wanna get a text the next time I have an owner financed house come into my inventory. So that’s-
Julie Clark: Right.
Mitch Stephen: That was the basis for starting Livecomm, but there’s so many more things to do and so one little function at a time, we are picking up on it.
Julie Clark: And that’s L-I-V-E-C-O-M-M, right?
Mitch Stephen: C-O-M-M. Yeah. Like live communication. L-I-V-E-C-O-M-M.COM. And If you just watch the video on the home page, you can go a long ways to see why I can sell, I never worry about selling my houses. Selling my houses is so easy. That’s how I got my down payments, up to 12%. And how I started finding such great buyers that my foreclosure rate is like .08 right now. It’s because I have people competing for my houses, to owner finance. And one of the big questions is, who has the most down payment? But I don’t always take the person with the most down payment. Sometimes I take the second highest down payment with the person that looks way more credible and-
Julie Clark: Well let me ask you, so this is, so you’ve obviously have the sales side down on finding the buyers who are gonna buy your owner financed or seller financed houses. On the front end, when you’re buying these houses, how are you doing it? Are you using private money from other investors, like your doctor, to take down these houses? Or are you just using, I mean, for the person that doesn’t have a million bucks in the bank, I know you’re a private money guy as well. You do a lot of education about how to raise private money. Is that your MO? Taking them down with private money?
Mitch Stephen: It is now. But in the beginning, when I didn’t have a reputation and I didn’t have a track record, I bought my first 100 houses on credit cards. Now I don’t know if you can, the houses here were cheap, so you have to understand. I was buying a house for, give me ten grand on this credit card and ten grand on this credit card. That would buy the house. Give me ten grand on that credit card and that’ll fix it. And then I’m gonna sell it for $50,000 cash and I’m gonna pay off the credit cards and keep the 20.
Mitch Stephen: I did that 100 times in a row.
Julie Clark: Right. But now that wouldn’t work today. I mean it certainly wouldn’t work out here and it doesn’t work with hard money because it’s too expensive and it’s too short term, right?
Mitch Stephen: Well that’s really not true. I mean it depends. You may have to partner up with somebody or you may have to get them to carry the note for a little while. But you could give them 50 or 100,000 down on credit cards. I mean I know, credit card companies, zero percent, there’s companies out there right now that’ll help you get up to $240,000 with zero percent interest credit cards or very low percent credit cards if you have a 720 credit score or better.
Mitch Stephen: And I’ve helped over 225 people get some of that money. Not all of them got all of it, but some of them, really sometimes you just need 100,000 because if you could give someone 100,000 to carry the note for eight months and then you cash them out, you may solve your own problem. You make the seller finance you. 100,000 different ways to do it. Today I have 13 million dollars worth of private money, 8% interest only, five years non recourse collateral only. And right now, on my desk, I have $850,000 worth of deals I need to close like right now. With another $250,000 pending. So-
Julie Clark: What are the terms that you’re offering your buyer on the seller finance? Are they, what are they-
Mitch Stephen: 10% 30 years fixed.
Julie Clark: 10% 30 years fixed. But how many years is the loan term? Does it balloon?
Mitch Stephen: No.
Julie Clark: No. So you’re, I mean I guess I’m saying, you’re keeping your … You’re not cashing out of that deal, right? You have funds.
Mitch Stephen: I can if i want, but I’m saying I have five year interest only money. Sometime in the next five years, and it’s non recourse. It’s collateral only loan.
Julie Clark: Okay.
Mitch Stephen: I’m not signing personally or guaranteeing anything.
Julie Clark: Right.
Mitch Stephen: I’m just saying I’m either gonna pay you or you can have this house. If this house isn’t good enough for you to loan me 50,000 on, don’t loan it to me because I have a choice every day of my life to pay you or to bring you the deed on that house. And I’m gonna hold my head high either way if you take this deal. So I usually borrow about 58%. So on $100,000 house I’m borrowing 58,000.
Mitch Stephen: And so people see the value of that, of course I’ve never given a house back in my life. I’ve never defaulted on a payment, but I have the right to, and I explain that to them. So what happens is I borrow $50,000 … Say I could get a house for 50, and I’ve gotta use my numbers.
Julie Clark: No problem.
Mitch Stephen: Just to understand the theory. $50,000 I can buy this house for all in. So I borrow 52,000 hardly over leveraging because the house is worth 100. And that happens quite often that I’m right around 50% loan to value and that I can sell my house for 100% over what I paid for it.
Mitch Stephen: So I borrow 52. The reason why I borrow the extra 2,000 is it costs me about $2,000 to find this person that sold me their house. And if I go around at 100 houses and leave $2,000 in 100 houses, I have $200,000 lying around. And if I do it five years in a row, I have a million dollars lying around. Who’s got a million dollars to leave laying around? Not me.
Mitch Stephen: So I borrow the 52, my interest only 8% payment is, let’s just say 350 for easy math. And then I owner finance it for 100 with 10,000 down. I put the 10,000 down in my pocket. That’s my today’s pay. I recouped my $2,000 when I borrowed the money for my advertising. So that money’s like a non issue. Once you have $2,000 to advertise with, you never need anymore because it just keeps coming back.
Mitch Stephen: And I created an incoming payment of 850, but I’ve got 350 going out. So I pay myself $12,000 to create $500 a month deposit of income where I have no responsibility that a landlord has. I have no liabilities hardly. I’m just the bank. It’s not my toilet. It’s not my roof. It’s not my hot water heater. I’m just responsible to get the payment. And once I receive that 850 and I pay the 350 to my lender that month and I have that 550 cash flow in my hand, there’s no place for it to go. If I was a landlord, I wouldn’t know if I could spend that $500 or not because of the air conditioner breaks tomorrow, apparently this money in my hand is the air conditioner man’s money.
Mitch Stephen: But because I don’t own the house anymore, I sold it on payments, it’s my money. And so the bottom line, people are always doing things on paper. The bottom line on the owner financier’s spreadsheet actually comes true. The bottom line on the landlord’s spreadsheet, you never know because it’s floating.
Julie Clark: Right. Now what happens at the end of the five years with your interest only money? You re up with them?
Mitch Stephen: Okay, but this is where wholesalers are making, are killing themselves though. The average wholesale, I’m gonna guess that the average wholesale, at least in my price range of houses around here, the average wholesale profit is between five and 10,000. Well I picked up 10,000 in my down payment. But if I was a wholesaler, that’d be the end of the story, I still have 360 months where they owe me $500. That’s $180,000 I’m still owed. That’s why, that’s the difference between making a good living and being a multi, multi, multi millionaire is that private money that I’m allowed to wrap. I’m allowed. My lender knows that I am gonna sell the house on payments not pay him off. He’s agreed to it, that he’s the underlying first lien and that I’ll sell it to someone in the second position and that’s how it’s gonna go for awhile.
Julie Clark: Well why don’t you tell our listeners what a wrappable mortgage is so they understand what you just said?
Mitch Stephen: Okay. So I borrowed 50,000 to buy that, 52,000 to buy the house from my doctor. And I gave him a first lien position. And then I sold the house to my owner finance buyer and that guy gave me 10,000 down and owes me 90,000 at 10%. So he pays me 850, to me, and I pay my underlying buyer. So the mortgage that I have on the house with my buyer wraps around the mortgage that my lender has with me. That’s why it’s called a wraparound mortgage. The 90,000 is wrapped around the 52,000. So that’s a wraparound mortgage.
Mitch Stephen: Now if you go to my blog, 1000houses.com, and look up the article, “Why I Borrow at the Terms I Do,” I’ll explain to you exactly why I chose 8% interest only non recourse five years collateral only loan. I’ll also explain to you all the ways there are to get out of that potential train wreck, right? Where I got a note for five years, but my buyer has a note for 30 years. One of-
Julie Clark: We’re gonna push people over there. So where should they go? And you should all, you guys this is such good information for you guys to know this stuff. I know many of you know who Mitch is, but where can they find that information again, Mitch? We’re gonna push everybody over there in case we [crosstalk 00:50:18].
Mitch Stephen: The only reason I’m sending you there is because I wrote six pages on this and I got it exactly right and I could explain it all to you here but it would take me 45 minutes, you know what I mean?
Julie Clark: Right. Yeah.
Mitch Stephen: So the easiest thing to do is go to 1000houses.com, 1-0-0-0 houses.com, and go to the blog, click on the tab that says blog, and then look at the article that’s titled, “Why I Borrow at the Terms I Do”. But here’s as bad as it gets. It’s never happened, but it’s as bad as it gets. If I get 12,000 up front and I collect 500 cash flow for 60 months, that’s $30,000 plus 12,000. That’s $42,000 and if I had to give the deed back to my lender at that point, which I have the right to do, with no recourse to me, then I made $42,000 off that house over a six year period. That’s as bad as it gets.
Mitch Stephen: Now I’ve never done that because I know the minute I give a deed back to my lenders, they won’t lend me anymore because they’re doctors and lawyers or retired people and 80 year old people. They don’t know what to do with a house. Hey don’t wanna deal with a house. They just want their payment. But that’s as bad as it could ever get for me.
Julie Clark: Right, but I mean the key to the whole success of the thing, I mean one big key, is the terms of your underlying loan with your private money lender. Those terms rule the show, right? I mean, that’s huge-
Mitch Stephen: Yeah. So if I went five years and then I just had to give the deed away to my lender, I mean, it’s still a great deal for me. I made 42,000. No one can sue me. I haven’t signed a personal guarantee. Now the downside of that is, I’d probably lose my investor.
Julie Clark: Right.
Mitch Stephen: Or maybe the investor would go sell the house fro 100 grand and have a party, I don’t know. And ask me to do it again. But how much are these houses gonna be worth in four years or five years? Can you sell the note? Can you pledge your note as a loan at a community bank? It’s called hypothecating your note. I just hypothecated 35 notes. The people in the houses owed me 3.2 million. I borrowed 1.8 million from my private lenders and the purchase price of my houses totaled 3.6 million. I just went to the bank and said, “I wanna borrow that 8%, 1.8 million dollars that I borrowed from private people at 8%. I’d like to pledge my 3.2 million dollars worth of notes and refinance that 1.8 for 4.5% in a 15 year advertised mortgage with a 10 year balloon,” and they said yes.
Julie Clark: Nice.
Mitch Stephen: So there’s a lot of ways to get out of this or to get through it. But what I wanna point out mainly is that the wholesalers out there, you’re leaving like 150 to $300,000 on the table every time you don’t have the private money to carry a note.
Julie Clark: You know I think wholesaling is, to me, it’s almost just people starting. I think people find quickly, or within a year or two, that wholesaling is a job. And it’s like the-
Mitch Stephen: A treadmill.
Julie Clark: The highest taxable income you could, you’re not getting anywhere with wholesaling. It’s a good way to get started and learn the ropes and learn how to talk to sellers and all that other stuff. But everybody needs to quickly move off that or use that tool only when you need to and expand your horizons as fast as possible beyond wholesaling.
Mitch Stephen: Yeah. I don’t know anybody who didn’t really start wholesaling something. You know? Everyone starts out wholesaling, especially if you’ve got a spouse that’s not on board. I call it hush money. You gotta do a couple of wholesales to get some money in the bank so you can tell your spouse to hush up now.
Julie Clark: Well let me ask you about a topic that’s a big deal to you and I know that you’re probably involved in legislation and stuff, but what about Dod-Frank, why do investors, why do we need to stay current on the topic? Especially if they’re rolling with any type of private money, seller financing type of stuff. And how does Dod-Frank affect your business right now or how do you stay in compliance?
Mitch Stephen: It’s a real simple conversation. I just hire an RMLO, or residential mortgage loan originator, to, we agree on a free. They tell all my people what they need to do and what order they need to do it in. And in what time frame they need to do it in. And we just comply. I can’t even tell you what it is that they do. I just know that my RMLO’s in control, and he’s monitoring my people and he’s making sure it’s getting turned in the way it’s supposed to. And I pay the fee.
Mitch Stephen: Now I used to be able to owner finance houses with zero closing costs. Now I have to charge all my buyers fees because of Dod-Frank. So Dod-Frank was instituted to protect the consumer, but just like every consumer protection law, it ends up costing the consumer out the ass and that’s no different here.
Julie Clark: Yeah. And so what is the fee that you have to pay an RMLO? What type of fee are we talking about?
Mitch Stephen: I think it’s regulated and I think it’s maxed at 850. So somewhere 850 or less.
Julie Clark: Okay.
Mitch Stephen: And I used to have zero closing costs and now I have $1500 dollars worth of closing costs because if I have to spend 850 for carpet, I don’t charge 850 extra for my house. I gotta make a profit off of the upgrade. So now my buyers have a $1500 worth of closing costs you know? Because if you’re gonna put me through all that hassle, make me do all that crap, and hire and spend more hours in my office, I gotta make a profit on it. So-
Julie Clark: How does somebody find an RMLO to work with?
Mitch Stephen: Probably just go to your local real estate investment club and find out who’s there. Because if there’s an RMLO in your state or city, they’re going to the clubs to get business.
Julie Clark: And so, again, tell, I mean, we got some newbies on the line and stuff today too. What exactly, so they know, what is an RMLO? Can you spell it out just for a second?
Mitch Stephen: Yeah. Residential mortgage loan originator. They are licensed to quote interest rates in terms and do qualifications and they have all the paperwork, truth in lending, all the disclosures that you need, that the government says that we need to give to be fair to our buyers and keep them aware of exactly what they’re doing.
Julie Clark: Could that just be somebody that is, works at the bank, that’s a loan originator or with a side hustle? Or they probably have rules on that. Or is this person a full time, outside-
Mitch Stephen: It’s a full time person that helps investors directly and it’s not the same as someone who helps you qualify for an FHA loan. Completely different set of requirements. It’s a whole different game.
Julie Clark: I got you.
Mitch Stephen: That’s the first tendency is everyone just gets in there and asks for an RMLO. Well most, 99% of the RMLO’s out there are people that help people get government loans, government-backed loans. That’s not what we’re doing.
Julie Clark: Right. We’re getting close to needing to wrap up here. But I wanna ask you, what do you think the hottest topic out in the real estate investment world is these days? What do you think? Is it Airbnb or is it, still, I mean always, obviously, list, getting good lists, what we talked about, ninja lists and stuff like that is always an important topic. But what do you think is a big topic these days out there?
Mitch Stephen: I think the biggest topics have to do with marketing because when it all boils down, we’re in the marketing business.
Julie Clark: Right. That’s why I love having a marketing partner.
Mitch Stephen: Right. That’s why you have him because you know that.
Julie Clark: Yep. Yes I would agree and I think that that never changes, right? No matter how many years you’ve been in this business, marketing is the number one topic. I always tell people, when they’re getting started, don’t watch videos about how to flip houses or wholesale houses or any of that stuff because none of that matters unless you actually have a house. So you need to spend all your time, all your focus, learning how to market and learning how to speak to sellers once you actually do some marketing. And then, if you wanna beat out all these big boys who are buying stuff for cash, and they are kinda one lane, one trick powerhouses … The way you can beat them, even if you’re new, is to learn about creative real estate, creative financing, creative deal structuring and if you can learn how to market and talk to sellers and learn about creative real estate, you can beat out anybody. No matter if you’re new or old or whatever, right?
Mitch Stephen: It’s the equalizer. It’s how, you know, and you can live off sometimes … I mean that’s what I did for years. I live off the big boys’ crumbs. The things they didn’t want, there was still enough margin for little old me.
Julie Clark: Yeah. Hey what do you think about the ibuyer thing? You know, Zillow and Offerpad and Opendoor and all the ibuyers, instant offers these days? What’s your take on that?
Mitch Stephen: I think they’re gonna go broke.
Julie Clark: Yeah?
Mitch Stephen: Yeah.
Julie Clark: I mean all they’re doing is they are using it as a tool to get sellers to raise their hand, right? To say I’m interested in selling. It’s a hook, as I call it. You don’t think there’s some, why are these guys getting billions or millions of funding for these, like Opendoor and these places? Are they in your market at all down there? I think-
Mitch Stephen: Yeah. Opendoor, Perch, all of them. They’re just trying to mimic the investors’ we buy ugly houses model.
Julie Clark: Right. I mean, your approach, again, out trumps everyone, I think in regards to how you operate your business. Again, if everybody’s listening, we’re back to, how do you beat the big boys coming into the market, whatever they’re doing? You learn about creative deal structuring, seller financing and creative real estate. That’s why it won’t touch Mitch, right?
Mitch Stephen: It always has some effect. But the question is, is there still enough room for me to proliferate? And there is. And I just find things they’re not doing and do them. I could probably pick up their crumbs if I go study exactly what they’re … Right now, I don’t need to because I’m fine. But if things get a little tight, I’ll just go figure out what they’re doing, and then I’ll figure out what they’re not doing, and I’ll start doing that.
Julie Clark: Right. Well you know what I find interesting is, sometimes off those types of sites or whatever action they’re taking, if you study what they’re doing. In some ways, they tip you off to where the deals are, or … You know what I mean? Just, there’s intel that can be gathered just by studying, like you said, what they’re doing or not doing or how they’re identifying … I think Zillow, because we run our business in Las Vegas also, which might be more exciting for us with the seller financing because the prices are so much cheaper down there, but Zillow is … Not everybody down there qualifies for an instant offer. And it says it right on the Zillow site if you qualify or not if you plug in an address. I find that sort of interesting. [crosstalk 01:01:28]
Mitch Stephen: Yeah. I’m gonna say this and I’m gonna leave everybody dangling and we’ll wrap it up. But there’s actually ways that I can get the name, I can find every person who even searches their name.
Julie Clark: Searches the name what, Zillow?
Mitch Stephen: Anything. Homevestors, Zillow, Perch. Not Zillow because that’s not specific enough. I can get the information on the person who, today, went and searched Perch in San Antonio, Texas. I can get their name.
Julie Clark: Okay. That is a dangler. A dangler. Well maybe you’re gonna share more about it on all your podcasts and website. So we are getting long here [crosstalk 01:02:10] I could talk to you forever-
Mitch Stephen: Julie, sometimes just save things for the top [inaudible 01:02:11] people because if everybody goes to piss in a pond, it’ll just be a pond full of piss.
Julie Clark: I hear you. Hey Joe, give me a shout out in the chat on what number we are on the podcast. So I know what’s up, so I can tell people. Joe’s-
Mitch Stephen: Oh that’s pretty cool. Oh here it is-
Julie Clark: Joe’s out in the silence land-
Mitch Stephen: 45.
Julie Clark: Number 45. So Mitch, as we wrap it up here, where can everybody find you and engage with you further? Let’s recap that one more time. If you are coming to Seattle Investors Club, which we all hope that you will do. We meet the second Saturday of every month, from 4-7 PM in Renton, and the Renton Technical College. You can go onto seattleinvestorsclub.com and you can register an RSVP for the next event. And we’ll tell you now that as we’ll be dropping Mitch’s podcast, whatever week that comes out, the SIC meeting that will be following that, we will be handing out and giving away a bunch of Mitch’s books. So you guys wanna make sure that you attend that meeting.
Julie Clark: We’re also gonna be trying to arm wrestle and get Mitch out here to Seattle at some point in the next six months or year, whenever we can get him out here would be awesome-
Mitch Stephen: Just promise me some of that seafood. I’ll be there next week.
Julie Clark: We got you. Well that and coffee we’ve got you covered on. Not a problem.
Mitch Stephen: All right. So you can reach me at mitch@1000houses.com. Mitch @ 1-0-0-0 houses.com. Watch my podcasts at reinvestorsummit.com. That’s probably good enough. You can go to my website, 1000houses.com and get a whole bunch of free stuff. There’s always a way to connect with me. I’m not too hard to find.
Julie Clark: Guys, this is a guy that we don’t talk about much as far as, we don’t talk to people that do what Mitch does. You need to have education from Mitch in your arsenal, in your tool belt. You need to learn exactly what he’s doing and figure out how to apply that to yourself. I know that Joe and I will be paying, jumping in on all this stuff with Mitch and listening, as we have, to his podcasts and things going forward.
Julie Clark: So awesome, Mitch, thanks for hanging with us today. If you guys want to get the show notes on this podcast, you can go to seattleinvestorsclub.com/45. This is normally the stuff that Joe says to you guys so I’m probably gonna screw it up a little bit. But that’s the answer there. Of course, if you like this podcast and enjoyed this, we would love to get a five star review from you guys so we can continue to get awesome guests like Mitch, high quality guests on our podcasts-
Mitch Stephen: Yeah, I’d like to say, you guys, I can’t tell you how important that five star review is. You might think it’s kind of, some kind of tiny little thing. But it’s really important. If you like what’s going on, please give the five star reviews because that’s how we can stay up above the surface and get some air.
Julie Clark: Awesome.
Mitch Stephen: This is a hard business, this podcasting and stuff, and your five star reviews make a tremendous amount of difference on how things go for us.
Julie Clark: Awesome, Mitch. I appreciate that. So thanks everybody. We’re gonna sign off now from Seattle and San Antonio and the sweat lodge of North Dakota.
Mitch Stephen: South Dakota.
Julie Clark: South Dakota, wherever he is in the wind caves.
Mitch Stephen: Tied to an ant pile.
Julie Clark: Covered in honey.
Mitch Stephen: Covered in honey with a grizzly bear like five yards away and he just needs to be able to run faster than the grizzly bear.
Julie Clark: That’s right. Well Joe is shouting out here, “You rock, Mitch. Haha. True.” Yeah, we’ll see, it’s my guy Joe Bauer. If you guys wanna follow Joe, of course, go onto any social media account and check out thefantasticlife.com and follow along with the good life.
Mitch Stephen: And Joe, I wanna know what happens and what your vision is after you have some of those shrooms up there those Indians are feeding you okay?
Julie Clark: Well, that’s right.
Mitch Stephen: At least, do they have a peace pipe at least? I’ve heard that’s pretty good too.
Julie Clark: Yeah, Joe, we wanna see some photos on the fantastic life of you eating shrooms and smoking a peace pipe. That’s right. Right on, everybody. All right, Mich. Thank you so much. We’re getting ready to sign off. Peace out. Have a good week and a good month, everybody here. And we’ll see you again soon. Bye.
Mitch Stephen: Bye now. Thanks for having me on.
Julie Clark: Thanks, Mitch.
Best quote, “… I find that if I’m not engaged fully in something and, I almost will do nothing. ”
PS Julie is hot like Steph curry from the 3 point line