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In this special case study episode, Jeff interviews Ryan, a client in The DEALS Workshop. Ryan recently bought his first rental property using the thoughtful approach he learned in The DEALS Workshop, and in this episode he tells the entire story of acquiring this excellent off-market duplex with Seller Financing.
Episode Transcript
Ryan
And then as I talked to him, I said, you know, I think this is a really good way for you to have residual income towards retirement, you’re going to retire in the next couple of years. You know, you don’t have the headache of this house anymore. You can focus on your farm and Philippi you know, you can enjoy yourself and still get get payments. And so I think that once he was able to look and see that I wasn’t scamming him, he, he really felt a lot more comfortable with it. So I think initial hesitation, but I think because of all the reasons I just outlined that that, you know, reasons why it wasn’t a forced pitch, right? You know, I didn’t force other financing on him. I gave him the option and told him what I felt it would really fit his his needs and lifestyle. And so after that, we were great. It was good. It was just getting getting the details down and closing the deal.
Jeff Stephens
Welcome to Racking Up Rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans, nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented deal makers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.
Thank you very much for joining me for another episode of Racking Up Rentals. Show notes for this episode can be found at www.thoughtfulre.com/e191. Please do us a big favor by hitting that subscribe button in your podcast app, it does make a big difference in helping other fellow thoughtful real estate entrepreneurs who are searching for a community in a message like this to find it. Alright, so onward with today’s episode.
And in this episode, I’ve got another treat for you. You know, I’ve said it before. And I’m gonna say it again. Because what else is there to say really, as a coach, just the absolute greatest reward happiest moments is when you see your clients just doing awesome things. And in this episode, I’ve got a sweet interview to share with you. With Ryan from the deals workshop, I sat down with Ryan A while ago, who had just bought his his first rental property using our method as an off market duplex with seller financing. And as soon as I met Ryan, I just knew he was going to be successful because I can just tell he was that kind of person. And so it was just a matter of him kind of putting in the work, going through a few tough conversations, but not getting discouraged and just keeping going. And he pretty quickly found the right deal with the right person. Solve the person solved the deal and got it done. So I’m so excited to share this with you. Without further ado, let me share with you my interview with Ryan. Okay, Ryan, thanks for joining me to talk about your deal. Congratulations.
Ryan
Thank you, sir. I appreciate it. Thanks for having me on.
Jeff Stephens
Yeah, no, this is really, really, really exciting. And I have my own thoughts about why it’s exciting. But I’ll save those for a few minutes. So for everybody watching, like just kind of give us a big picture like what was this property that you bought? How did it come to you just some of the big broad details.
Ryan
Yeah, this was a property that had come to me through a you know, targeted mailing list. And it was a duplex three bed, one bath. It’s about 2200 square feet, so about 1100 square feet on both units. And it was an exciting property because it is in a really unique location. So I live in Morgantown, West Virginia. So we have a university here we have a hospital here. You know, we have a football stadium here that people you know, come to for, for games. And the house set in a really nice neighborhood. For a student rental and a student rental location, which it’s in, it was very well taken care of, which is not the case for a lot of the student rentals you see around here. And it also sat within about a mile to a mile and a half of the hospital, the football stadium and the downtown campus. So it’s in a really, really good location. And so I got really excited about it when I saw it.
Jeff Stephens
Yeah, that’s awesome. So you were just sending your letters which you had been doing consistently, up to that point. So when this person contacted you, the seller? Did you kind of have a feeling right off the bat, like, oh, this seems more like the kind of person I can work with or did it not seem like that right away? Or what was the first What was your first impression, I guess?
Ryan
Yeah. So Dan, we’ll just call him by his first name. Dan is the seller that I worked with and he was a very, you know, he’s very memorable person, very personal person, but he was very meticulous. You know, he was asked a lot of questions and was very, you know, wondering why I was asking things or doing things and what my strategy was And as the longer and more I’ve got to know him, the more I just realized that’s his personality. He’s got a, you know, accounting background, and he does financial analysis for the university. And you know, he’s just very detail oriented, very meticulous person, which is, it’s funny because I, although I have, you know, I have to be detail oriented, I don’t naturally come to you tailor it. So, you know, the dichotomy between the two is a little interesting. But yeah, he seemed like somebody I could work with he was, you know, he was the type of person that once you explained it, and were open and honest and upfront with what your plans were, and kind of what you know, why you were doing what you were doing. You could get him to see the vision that I wanted him to see. But, you know, it came with a lot of explanation and a lot of of why’s, but yeah, he was he’s, he’s been a pleasure to work with.
Jeff Stephens
Excellent. So how long like when you think about when you first talked to him to the day you close? What was the overall kind of timeframe for that?
Ryan
I can’t remember when I first initially contacted him, I could probably go back in my notes and look, but it, I mean, I’m guessing and we’re, we’re sitting now around month, five, maybe even six from the time we began conversations, till when we finally closed last month. So it was a long process. There’s a lot of things to work through a lot of questions he had. But again, you know, as you know, you talk about pretty extensively. You know, that’s a lot of the work. It’s, it’s, you know, it’s filler relations, it’s it’s people relations. And it’s been beneficial, because it’s a it’s a lot easier negotiation. Now, as we’re dealing with this going forward, thinking, you know, as I’ve gotten to know him,
Jeff Stephens
yeah, absolutely. I often think that. Yeah, I mean, it could be, it could be weeks of kind of slow dancing with this person until you get, you know, even a signed purchase agreement. And then obviously, you got work to do after that. And I think that that’s what so I mean, one of the things that makes me proud when I talk to you is that a lot of people would sort of bail on that process, you know, and say, Boy, this slow dance is not sure this is going anywhere, or this is taking a long time. You know, if I repurpose this time, there’s opportunity cost to this time, right? Maybe I should be talking to more people differently. But you really invested in that, and that worked out really well for you. So can you tell us just like some of the broad strokes. So like, what did the final deal that you came to end up looking like the terms price, all that kind of stuff?
Ryan
Yeah, so it’s a deal that is actually like is a fairly fairly good deal. But it has the option to extend, which is my favorite part about it. So we, we ended up closing around, I got some notes here. So if I’m looking down, that’s why we end up closing in around 278, I would say that probably market value, the house is probably closer to 242 50 right now. But we went a little higher, because I got some terms that I was happy with. So we went 4% interest only payments, and 15% down. And we do have a two year term, which is very tight window. But we have an option to extend that out. And part of that came about from seller relations and the fact that you know, he is very much a person who is trusting once you earn the trust. And so he was very hesitant to have a longer term and out the gate. But he seems like a person who very much as we went through that process that four or five months is very I trust him a lot. And I think he trusts me a lot. And so we’ve come to a kind of an agreement that that and then the language in our deed and title that that can be extended out as we get to that point. And so I think the the term will go longer, and I was comfortable with that, because the language we put in, but but that’s that’s the those are the numbers.
Jeff Stephens
Yeah. Okay, fantastic. In the notion of seller financing, how did I’m guessing maybe he didn’t come to the table with that say, Hey, here’s what we should do that you guided facilitated the conversation in that direction, which is, of course, a major part of what we focus on in the deals workshop. How did that? How did that go? Like, how did it come up? And was he immediately sort of receptive to that? Or was there like a little pushback, or how did that go?
Ryan
There’s definitely pushback. And he was definitely curious. I’ve been wanting to look into it further. But he fit all the boxes, right? So he was he’s semi he’s not, you know, in a 70s or 80s. But he’s close to retirement age. He has a form that’s about two, two and a half hours away that he shares with his brother. And he goes down there, you know, every couple of weekends in a month to do some work in the farm. So we have this house and town which he used to live in, but he’s still having to go and maintain and take care of and he was taking care of the farm. He’s getting close to retirement age, and he really wanted to, you know, have some residual income but not the headache of the house. So he had he fit all these boxes, right. And so, you know, as we got down the road, and we got to kind of getting to putting something in a purchase sales agreement. You know, I pitched two options, the traditional financing and then the owner financing and then as I talked to him, I said, you know, I think this is a really good way for you to have residual income towards retirement. You can Retired the next couple of years, you know, you don’t have the headache of this house anymore, you can focus on your farm and Philippi you know, you can enjoy yourself and still get get payments. And so I think that once he was able to look and see that I wasn’t scamming him, he, he really felt a lot more comfortable with it. So I think initial hesitation, but I think because of all the reasons, I just outlined that that, you know, reasons why it wasn’t a forced pitch, right? You know, I didn’t force other financing on him. I gave him the option and told him why I felt it would really fit his his needs and lifestyle. And so after that, we were we were great. It was good. It was just getting getting the details down and closing the deal. Yeah.
Jeff Stephens
Fantastic. So when you think of the property itself now, like, Do you have a bit of a vision for what you’re going to do with it? What ways you’re going to run it better physically? managerially? What’s your plan?
Ryan
Yeah, I mean, some of the some of the things I’m getting up to speed on is my first rental. And so I’m trying to get some of that landlord, you know, my landlord legs underneath me. But I think I can be more efficient than he was. He’s very meticulous and detail oriented. But he was, he was a, I think Brandon Turner says, you know, firm, but fair, when you’re a landlord, he was he was just very fair, there was not a lot of firmness. So he had, he had markets that were half market rent. So I’ve already raised the market to have already raised the market rent, they were 506 100 Market Rents probably around 1000 to 1200. And I have as of right now, 859 25. So I’m stuck from where it was. And we’ll continue to as we go forward. Additionally, it’s zoned as a single family, but it’s grandfathered in. And so it’s a multifamily and a single family zoning. And there’s a two bedroom, I’m sorry, a two car garage that’s been unused, which would be perfect for like an efficiency apartment space. And with it being so close to the hospital, and the downtown campus would be a perfect spot to have a small efficiency apartment for people to come in and come out. So and then even at that, at a minimum, those are kind of my my vision. But even at a minimum at a baseline for what it is now. It’s a really great property, it’s well taken care of already. And in really good neighborhood with a good location. So even if nothing else happens with it, it’s it’s a good rental.
Jeff Stephens
Yeah, fantastic. So I wanted to shift and talk him not so much about the deal. But like your experience of going through this. This process, I guess, because I know, you know, just since we know each other like you, you’ve been very busy with other parts of life, as well yet at the same time, you were able to make this happen. So can you speak at all to just sort of that, that little bit of, of of your experience with this, like, Was it hard to keep going in the face of like, you know, demanding job and family, all that kind of stuff that a lot of people can relate to?
Ryan
Yeah, it really was. I came to one of your before I signed up for the course I came to webinar, you had the beginning of 2022, at the end of 2021. And a lot of what I had talked to you about is lack of consistency, I get that idea started. And I tend not to get that ball across the line on some of these bigger projects that are our side projects. And so one of the big things I really wanted to work on was consistency and finishing. So when we got to this point about, for some context, about the last month or two of the negotiations, I took a new job, which was very stressful and took up a lot more time than it had been on my old job. And I had to find a way to continue that progress. Right. And it was stressful. But I think the biggest thing is you talk a lot about it’s just, you know, what’s the next action, you know, what’s the next thing to do would do that. And then I kept doing that. And doing that. And sometimes it was a little longer gap than I wanted to between those. But as long as I kept doing something, I got it to the finish line. And so I was really proud of myself, I don’t want to be, you know, braggadocious. But I was proud of myself that I got it to the finish line and finished it and now I’m a property owner and and, you know, a real estate investor. So
Jeff Stephens
absolutely. And that, that speaks a lot to one of the main things I feel really proud of you about too is. So is that just to speak, from my perspective, I guess for a second, as coach, you know, when people come into a program, it kind of go into three buckets, like one is like, you know, they don’t really show up, or if they do it, they’re kind of invisible in the shadows. Then there’s people who have kind of like bursts and like they’re there, and then they’re not and then they’re there and they’re not. And then there’s other people and I put you in this third category who who show up and even when life gets in the way or slows it down, they did they kind of keep doing the reps, keep doing like investing in the process, kind of and when I see those people, like I said, I think you’re in that category. I’m like, I know to myself, like there’s no way this isn’t going to work for them. It might be a matter of time, right? It doesn’t mean it’s going to be tomorrow, but it might it’s going to happen because there’s an investment in the consistency of that process. And now that you remind me to like what We talked about at the very beginning, like you really have demonstrated a tremendous amount of like consistency and stick to itiveness. And think back a few months to previous seller conversations you had that seemed promising and then like just didn’t quite work out. And but you were really keen to like, extract the specific lessons from that. Remember, I remember there was one particular one that was like, I think I, I think I tried to force the seller financing thing a little too much, even when there wasn’t a perfect fit for them. So you took that lesson and you applied it. And then once you played in this case, with Dan, totally different results.
Ryan
Yeah, I agree. And I appreciate that. I feel a little bad because I feel like the last month or two as I have not been as consistent as I need to be. And I’m excited that things are stabilizing. I can get back into it more in the conversations. But thank you for that. And yeah, and you’re right. And I think you talked about this being being an art. And I really do think it is because it’s a lot of reps, right? It’s getting out there and doing it. And a lot of those early failures that I had, were really useful for me for this conversation. And the one you’re talking about specifically, you know, I think a lot of the people in that are trees that are in your group are very, you know, conscious of how they interact with other people. And that makes them good at the approach that you take. And I still remember that one is I kind of forced it. And not only did I force it, I made it much more in my favor than their favor. And I still remember the email that I got back when they were just kind of like, No, you’re you’re a jerk. And you’re like this is all about you, you didn’t think about us at all kind of was the gist of the email. And that really hurt. Because I don’t like I don’t like being that way with people. I want them to know that I’m you know, I’m not trying to take advantage of them. I’m trying to work something out. That works for both of us. And that was a really, really hard but a really good lesson for for kind of how to make sure that you’re appropriately bringing, you know, seller financing up to the people you’re talking to. But yeah, it’s it’s been a process. But I’m, I’m happy I’m here and I’m excited for the next. You know, next what the next couple of years brain?
Jeff Stephens
Yeah, absolutely. Well, kudos against you for, you know, extracting that lesson making sure you it didn’t get lost on you, and then really literally applying it the next time as well. And you know, I’m just sitting here thinking, like you just said, like, I’m a real estate investor, and I got I got this thing done, and you know, in less than a year to write it, like nine months, kind of sort of concerted effort working with us and working on this. But you know, so as we record this today, you know, our market is kind of slowing down a little bit. But when you were sending your letters when you met Dan, it was still a very hot, tight market. And there’s so many people out there who say, Oh, yeah, right seller financing, like you can’t, you can’t get deals with seller financing. Why would anybody agree to 4%? Interest interest only? Why would they agreed on the 15%? Down? Yet you did that? Or they’ll they’ll also say, Yeah, seller financing, that’s great. But that’s advanced. I mean, you need to do a few deals sort of the normal way first, and here you are, like your first ones. Right out of the gate were exactly that. And I think that that is something really to feel to feel really good about. Well, thank
Ryan
you. I appreciate that. I couldn’t have done it without you in the course. I mean, I’m not here to make a pitch. I guess I’m doing that. But But yeah, I mean, it’s, you know, to your point, without the context, in the historical knowledge in your trials and failures that you talk a lot about, and getting there. And without having that information, I’m not sure that I could have done this on my own, or I could have been, it would have taken a lot longer, right. And so, you know, by by doing the course I streamline that process. And now my first deal is an owner finance deal. And again, what I feel like it’s a really, it’s a really good one. So, yeah, it’s, it’s been fun. And I’m excited to take this forward. And I think to your point, you know, I think owner financing the way that you approach it and trees approach it is it fits the person. And that’s going to work in any market. Because you’re going to be working toward what their needs are. And that’s why it fits. So yeah, I’m excited to continue use this process. I think it works really well for me, because it’s a very people oriented process, which I love. I like talking to people. And yeah, I’m really happy and happy that you took me to the promised land if
Jeff Stephens
you took yourself there. I’m glad I could show you the map, though. Yeah, one final question. You I think you are probably the single most clear person I know on the topic of like personal values and why and things like that. And you don’t need to share more of the details of that unless you want to but my question is, like you knew why you’re buying rentals. So can you can you just give us a quick sense for how does this acquisition you’ve made now and then in the momentum you’re creating? How is this getting you closer to why you’re doing everything?
Ryan
Yeah, I mean, I’ll talk to talk quickly about my values. I have a for value framework. And I’ve recorded them. And this has been a work over about a past two years that I’ve really been heavily working on. And so, for me, it’s family flexibility, community and legacy in that order. And the why for this rental is, as you said earlier, with momentum, this really gets me to where I want to be where down the line, I have the financial freedom to spend more time with my family, to have more flexibility to work on projects that really engage me, I’m highly involved in my community in a bunch of different ways. And so I’m gonna have more time to do volunteer work or coaching, to continue to do that kind of stuff. And then eventually, all those pieces together come to form that legacy, which is, you know, kind of, in my mind, kind of the purpose of why we why we live to, you know, the people the way we make people feel and how we leave that on after we go and, and this rental gets me to there to allow me to do a lot of that work. That gives me a lot of passion and purpose. So this is step one, and it’s it’s step one to two a lot of steps, but it’s you know, you have to take that first step to go because the rest of the way.
Jeff Stephens
Fantastic. Well, congratulations again. Excellent job. I’m super proud of you. I’m glad to see that you are proud of yourself in the in the the humility since that thoughtful real estate entrepreneurs have, but it’s also easy for us to just kind of brush it off me like yeah, okay, whatever, I’ve got more busy things to do. And I think it’s important to celebrate that and, and even like, you know, you mentioned before, like, Well, I haven’t been as present in the last month since, you know, since the deal closed. But sometimes you just need to take a little breather, take a little nap, you know, and come back, come back to it, you know, before long. And I think it’s great to celebrate that and acknowledge that. So congratulations. I’m super excited for you.
Ryan
I appreciate it, Jeff. And and I want to thank you and thank everybody in the group, who’s helped me along the way because they’re a big part of this and the community is, is excellent. The people that have taken my calls and my concerns and helped me talk through stuff. You and I and others as well. So thank you thank the group, and I’m excited for the future and excited for the future for you as well as you continue.
Jeff Stephens
Thank you. Thank you. Great job.
Ryan
bro. Thanks.
Jeff Stephens
Well, there you have it, my conversation with Ryan. I just really really like Ryan as a person. And I like I said at the beginning, I knew he was going to be successful with this. And so he just kept chipping away at it was not discouraged or not remain discouraged by first couple conversations that didn’t totally pan out and just kept going found this person and solve the person and solve the deal and did an excellent job. I think the future is so bright for Ryan, and I’m so excited for this.
That is it for today’s episode of Racking Up Rentals. Again, show notes for today’s episode are at www.thoughtfulre.com/e191. Please do us a big favor by hitting that subscribe button would be so appreciated. And if you would rate and review this show just real quickly, doesn’t have to be long or eloquent. Just a rating there and a couple words would be super, super helpful and very appreciated.
Did you know that we have a Facebook group for Thoughtful Real Estate Entrepreneurs too? We do and you should be a part of it. It’s called Rental Portfolio Wealth Builders and we would love to have you join us there. Just go to group.thoughtfulre.com and you will be taken right to that page we can hit the Join button. If you liked this episode, please take a screenshot of that and post it to Instagram and tag us; we are @thoughtfulrealestate. I will see you in the next episode. Until then, this is Jeff from the Thoughtful Real Estate Entrepreneur signing off.
Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers. Remember: solve the person to unlock the deal and solve the financing to unlock the profits.
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