On this episode of House Flip Masters Holly is joined by guest Larry Goins. Larry if from North Carolina and has been investing in real estate for over 30 years.
Larry first got started in real estate when he saw a seminar on TV, this seminar is what got Larry to catch the real estate bug. Larry has his real estate and general contracting licenses, he has done stoke brokerage. Larry has dabbled in all areas of real estate but really loves residential. Larry says that there two things that he hates in real estate which are: rehabs and tenants. Larry is currently doing 21 deals and says that the deals that he seems to lose money on are the rehabs. Larry also doesn’t prefer to deal with straight tenants because he prefers to do lease options or seller financing for tenants which he refers to as ‘Home Owners in Training.’
Holly asks Larry to share with listeners about HUD houses; which Larry is said to have wrote the book on. A HUD house is defined as Housing and Urban Development which FHA has insured a home loan on - FHA does not give the loan but they insure the loan. Part of your payment goes to HUD to insure that home, if the home loan goes into default HUD buys that home back.
When asked why he likes HUD homes so much Larry says because there is no marketing that goes into it he does not have to make any calls or put out any bandit signs the homes are already listed and they are generally listed below market value. He also likes HUD homes because they have a PCR, Property Condition Report. A PCR basically lists the major issues with the home - a PCR will not list cosmetic issues with the house it will tell you if the pipes need to be replaced or the roof needs to be replaces. He also likes that a HUD house will already be cleaned out before it’s sold, for example if there were animals in the home and the carpet had an odor HUD will remove the carpet. Larry also likes that there are no deed restrictions on a HUD home and he loves that there is a lot of data available on these types of homes.
Holly asks Larry to share with listeners where he finds his HUD homes. Larry says that all the HUD homes to be bought can be found at www.HUDHomeStore.com and each home that is listed on this website have an realtor already attached to them and the only people who can place a bid on these homes are licensed agents with a NAID, Name Address Identification Number, or a non-profit with an NAID number - HUD is a daily auction. When asked home the HUD home auctions work Larry tells Holly that all HUD homes go through this website, any agent that wants to place a bid on these homes has to be licensed in the state where the home is located as well.
Larry informs listeners that HUD homes for the first 15 days can only be purchased by an owner who intends to occupy the residence, investors cannot even bid on these homes within the first 15 days. Once those 15 days have passed investors can have their agent bid on the HUD homes if the investors agent submits a bid and does not hear back from HUD the next day the bid will automatically expire. When bidding on a HUD home Larry advises that it is vitally important to check the box that asks to keep the bid or to use the bid as a backup if the current offer falls through. If you place a bid HUD has the opportunity to counter your bid, when that happens you have 4 options: you can do nothing about the counter, you can counter back, you can submit a new bid, or you can accept their counter. Lastly, the third that can happen with a HUD home is that they accept your bid and now you own a HUD home.
Holly asks Larry how good the deals are on HUD homes; how much of a discount is he getting on these homes. Larry says that he has bought homes 20 to 103% a list. Homes are already listed very low which allows for a large profit margin. When asked how many of his 21 deals are HUD homes Larry says that of those 21 homes 16-18 of them are HUD homes - HUD homes are a large portion of his business. Larry utilizes virtual assistants in the Philippines to help to automate his HUD home buying process.
When you are submitting a bid for HUD home you can specify your days for escrow but you typically have 2 business days to get your paperwork and money in. HUD homes are not subject to contingencies that being said if you do not get your part of the deal done in a timely manner you will lose the money that you have put into that deal.
Holly asks Larry to share his best advice for someone interested in getting started in HUD homes, Larry advises that listeners should get his book “HUD home half off” - this book is available wherever books are sold but for listeners Larry is offering this book for free at his website www.LarryGoins.com/HouseFlipMasters
On this episode of House Flip Masters Holly is joined by guest Mark Walker. Mark is founder of Luxmana Investments, which focuses on residential and multifamily investments. Mark was able to go from being a part-time investor with a full-time job in high tech, to someone who quit the corporate rat race in pursuit of his passion and now thrives as a multifamily investor.
Mark’s real estate journey started in 2004 when he bought his first property in South Denver where he earned 36.5% cash on cash return. After the sell of his first property Mark sat the business out for some time because he was having a hard time getting deals. Mark admits that had he known what he knows now he would have not sat out the 5 years that he did, because he says that there are always ways to find deals if you keep looking for them.
In 2010, Mark partnered with a general contractor and they scrapped a couple single family homes in a trendy part of Denver, they bought in an area that was getting a lot of investment and built a three story duplex in place of the original house. Before this first project was even done Mark and his partner started another project. In 2011, Mark started to reinvest the gains from his partnership projects into buying single-family homes.
Mark reminds us that as long as you have a formula for success you need to stick to it. Holly agrees that you need to create rules for yourself and live by them otherwise you will be all over the place.
Mark discusses how his journey has been much like the game that many entrepreneurs are inspired by, CASHFLOW. In the game you start off doing small deals and you graduate to doing larger deals. Mark says that is how he has structured his journey; in 2013 he purchased a small deal which was bought from him shortly after. He moved from his first property in Colorado to a complex in Texas.
In 2015, Mark had enough passive income built up that he was able to start focusing on his investments. During this transition Mark had a family member who allowed him the opportunity to job shadow in the market that he wanted to be in. He job shadowed for around 9 months until he started to venture out on his own.
Mark enjoys working with multifamily properties and shares with listeners how you can increase the value of your multifamily property. When you acquire multifamily property you want to increase the revenue and decrease the expenses, if you can do those two things the net operating income goes up and so does the value of the property. You can increase your income by utilizing the utility bill back. You can also reduce your expense by implementing a water conservation plan; in states like California where water conservation is crucial you can hire someone to come in to help you figure out how to reduce the amount of water being used – toilets can be changed out, faucets can be adjusted to reduce the flow of water coming out.
Mark shares advice for those who are interested in getting involved with multifamily investing; he advises that you get a sponsor or a mentor to help you get the education and knowledge to get into the business.
If you are interested in learning more about Mark and what he has to offer you can visit www.Luxmana.com If you are interested in learning about multifamily or maybe you already invest in multifamily and want to learn ways to boost your income, Mark is offering a free guide that he has written to our listeners.
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Luxmana Investments Company URLs:
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