REI Talk Detroit | Weekly News and Interviews With Active Real Estate Investors in Metro Detroit, Michigan

Welcome to REI Talk Detroit – the show for and about real estate investing in metro detroit.

In this kickoff episode I introduce the show, tell you how it’s going to the structured, and very briefly give you my background. And in the money talks segment I tell you how I’m funding my deals.

REI Talk Detroit is a show by and for real estate investors here in the Metro Detroit area.

Each week I’m going to interview someone in the real estate investing space here in metro detroit.

Most of the people I’ll be interviewing will be investors. A few though will be service providers such as private money lenders, property inspectors, and contractors.

Each quarter we’re going to talk to one or two real estate agents about the state of the market, and I’m also planning on having shark tank type sessions and open Q&A sessions with private lenders

Everyone that I talk to though will have one thing in common – they will be actively involved in real estate investing in some way in metro Detroit.

Some of the folks you’ll know. Others you won’t. Some will have big business, some won’t. And some will have a ton of experience, and some will be rookies.

And I don’t plan to do any lecturing.

Instead, I’ll be focusing on experiences. Success and failures. Challenges and stories. And through them we’ll do some knowledge sharing that I hope will help educate you, inspire you, and give you new ideas that you can implement in your own real estate investing business.

Each episode will be broken down into four parts.

Segment 1 will be local REI news.Segment 2 will be the interviewSegment 3 will be Money Talks, where I’ll ask each guest how they’re funding their deals, since that the question that I get most often.And in Segment 4 my guest or I will answer listener submitted Questions

In this kick-off episode I basically interview myself for segments 2 and 3. If you already know me then this will be a repeat. If we don’t know each other then I encourage you to listen in and let me know if we should be doing business together.

I do need to make a request. If you have feedback on the show, a question you’d like answered, a news item, or perhaps a recommendation of someone you’d like me to interview, or if you’d like to be a guest on the show, simply go to the website for the show REITalkDetoit.com/contact and let me know about it. And I’ll take it from there.

In this episode I interview Trent Dalrymple, former Hard Money Lender turned Real Estate Investor.

Trent’s story is inspiring. He was cursing along with a profitable lending business when the government jumped in and changed the rules. Overnight he had to switch gears and find another way to earn a living. And he did. We talk about what he experienced and what he did about it during our conversation.

REI News

No local REI News to report this week.

Just a reminder though that I’m still looking to put a group of folks together to do some decent volume of suburban turn key properties for a couple of hedge funds that called me.

So if you’d like to participate with funding deals, or if you can do some volume in the suburbs (not including cities like Pontiac or Inkster) then go to the contact page http://www.REITalkDetroit.com/contact and let’s talk.

And if you have a news item to contribute or an event coming up, drop me a line and I’ll get it on the show.

Current Business

Trent is now on the investing side of the business instead of the lending side.

Because good numbers are hard to come by with straight rehabs, he’s primarily focusing on doing straight new builds in Birmingham and Royal Oak. He has a pretty cool business model where he has licensed contractors bringing him deals and doing the work. He has one property on the market, two nearing completion, and he closed on the purchase of a new property a coupe of weeks ago. He’s busy.

It’s a unique and pretty simple business model as well - if you’re interested in how it works then this episode is for you.

Also - because the new build business is highly capital intensive, and because he’d like to do more of them, Trent is also looking for additional finding sources. If what he’s doing is of interest, then drop him a line. His contact information is below.

How He Got Started in REI

Trent started his career as a radio DJ. He was "spinning records" on the radio in Southern California in the 80’s! Once he got married he realized that he’d need to do something more substantial to support his family. He started on the retail agent side like many do, and got frustrated with it.

So he jumped over to the lending side. He did that for a while in California then he moved his family back to Michigan. When the lender he was working for went out of business during the crash, he and one of his former money partners decided to start their own Hard Money lending business. He did that until the Dodd-Frank legislation put him out of business as a lender.

Biggest Mistake

Trent says that his biggest mistake was not trusting his gut instincts with some of the folks that wanted to do hard money loans with him. He tells the story of how he made a loan even though his gut told him there would be issues. And sure enough the borrower was a problem from the start is is presently in foreclosure.

Biggest Success

He says that he particularly proud of two things. First, that his business is going so well now and that he enjoys it so much. The second is that he won a sales contest to sell a premium mobile home back in the 80’s which lead to a nice bonus check but also a lot of new business selling additional models of the premium home that he had sold.

Money Talks

He has numerous sources of capital, which you’d expect from someone who spent so much time with private lenders in the past. At present he’s using family money and partner money to fund his deals. Nothing really fancy - but Trent is yet another example of someone who has spent a lot of time cultivating respect and a solid reputation, which in turn makes it really easy to attract investment capital.

Answer to Listener Question

The question that I asked Trent was “How do you go about delegating and outsourcing work in your investing business?" And as a follow up, "How do you keep track of the work that you delegate?”

Trent is like most investors in that he knows that he need to keep up on what’s happening in his business. So he’s starting small by delegating some of the tracking and office work. Because he wants to grow his business and do more deals, he thinks that delegating might take the form of having someone visit in-flight projects and take extensive video and picture to document progress.

Links and Resources

Trent’s looking for three things:

1. Licensed contractors with deals
2. Additional sources of funding
3. Deals! Particularly in Birmingham and Royal Oak

If you’d like to talk to Trent about any of these, or if you have questions for him, you can reach him via email at [email protected].

He also has three new build projects that are completed or near it. They are:

...

In this episode I talk to Todd Waller.

Todd is a real estate agent, and in my opinion, he's the premiere agent in Metro Detroit. He has a tremendously successful business model with phenomenal processes, and he combines that with a laser focus on the needs of his clients. His market focus is the I-275 corridor from Commerce Township to Canton, and then west to Ann Arbor.

His reputation is borne out by his success: until recently his best year as an agent was 2008 - the very bottom of the market - when something like 30% of the agents in the state quit the business.

REI News

NO REI news this week in the podcast. My conversation with Todd went long so we skipped the news and went right into the interview.

A Word About Motivated Seller Leads

Just a short year ago the question that I got most often from real estate investors here was how to fund deals. Lately though, with the market tightening up and a ton of new investors entering the space, the question I get most often is how to find motivated seller leads.

I started in REI here in 2004. And the source that I started with was Probate leads.

And ten years later in 2014 - I'm still using them. In fact, I never stopped. The reason is that they are a tremendous source of leads. There's not a lot of competition, and there are plenty to choose from. Plus - they're easy to find, cheap to buy, and simple to process.

If you're someone who's having trouble finding motivated sellers, then I highly encourage you to start chasing probates.

And I also encourage you to use my educational program as your roadmap.

It's $97 and it includes my six letter sequence and my excel tracking and follow up spreadsheet. In short - it includes everything you need to start chasing probates today.

Check it out at Probate Real Estate 101.

How He Got Started in REI

Todd took a really interesting path to real estate. He majored in Political Science at the University of Michigan, and parlayed that into an internship with a state senator. He then jumped to a job with the state republican party working on campaigns. After the 2000 election cycle he realized that the job wasn't conducive to his new marriage or having a family, so he quit and went to work in a cube farm doing automotive research. That wasn't the best fit for his personality, because he has one, so when a friend suggested that he look into selling real estate, he jumped at the chance. And the rest is history as they say, as he closed 13 deals in his first year.

Market Overview

I asked Todd for his thoughts on the real estate market as it pertains to real estate investors.

For the market he's in, his outlook is positive. He sees listing volume staying steady for the next several months, and it sounds like there are still lots of folks planning to list their homes over the next few months.

On the demand side, he senses that there may be a slight softening, but he hasn't seen anything to prove or disprove that feeling yet. And he thinks that it may just be the cyclical nature of the late summer market.

Overall though his outlook is positive for flippers and wholesalers, in that prices should stay stable for the next few months, which bodes well for flips and wholesale deals being closed now.

Keep in mind that this is just his opinion based on what he sees in his area of focus. Treat it as another data point to put into your analysis as you decide how to proceed. It's by no means a prediction!

Answer to Listener Submitted QuestionThe question I asked Todd was "How to you establish credibility when you're an investor trying to get the attention of a busy real estate agent?"

His answer was - have a business plan before you ask an agent for anything. It's the old adage that you can't steer a parked car. If you know what you'd like to accomplish in REI, have it researched and written down so you can talk intelligently about it. You don't necessarily need to know the area that you want to focus on - because an agent can help with that - but you must know what you want to do.

I asked him if he'd respond to an invitation to lunch with an investor that wanted some of his time. He thought that was a great idea. I did that a lot when I got started, and it paid HUGE dividends. Just make sure that you show your appreciation for the value and the time that they give you by picking up the check!

Haves and WantsTodd has one of each.

On the "want" side, he's looking for listings - primarily in the Northville and Plymouth areas as it's his back yard, but he's always on the lookout for listings up and down the I-275 corridor from Commerce to Canton and over to Ann Arbor.

On the "have" side, he has a 2+ acre parcel in Hamburg Township that he's selling. It...

In this episode I talk to Brian Borawski.

Brian is a CPA who happens to have several real estate investors as clients in this area - including me. I've used Brian for several years now, and it's been great to have a knowledgable person like him available when issues come up like the sale of one of my apartment buildings back in January of 2013.

The great thing about Brian is that he's versatile. I found him during my search for a CPA who knew real estate investing in depth, but he's also been very helpful in creating and managing a corporation that I set up for an Information Technology consulting business I started two years ago.

A Word About Motivated Seller Leads

Just a short year ago the question that I got most often from real estate investors here was how to fund deals. Lately though, with the market tightening up and a ton of new investors entering the space, the question I get most often is how to find motivated seller leads.

I started in REI here in 2004. And the source that I started with was Probate leads.

And ten years later in 2014 - I'm still using them. In fact, I never stopped. The reason is that they are a tremendous source of leads. There's not a lot of competition, and there are plenty to choose from. Plus - they're easy to find, cheap to buy, and simple to process.

If you're someone who's having trouble finding motivated sellers, then I highly encourage you to start chasing probates.

And I also encourage you to use my educational program as your roadmap.

It's $97 and it includes my six letter sequence and my excel tracking and follow up spreadsheet. In short - it includes everything you need to start chasing probates today.

Check it out at Probate Real Estate 101.

How He Got Started Working with Real Estate Investors

Brian has an interesting story.

He started with a day job at the Taubman Company, which develops and owns upscale shopping malls around the country. There he was exposed to complex real estate accounting transactions. While working for Taubman he started a blog website for the Detroit Tigers because he's a huge baseball fan.

He started accepting advertising on his site - and he realized that it could be a very lucrative side business. So he started additional blogs, and at his peak had over three dozen active baseball-related blogs with 30 college students writing for him. When it got to the point where the advertising revenue provided enough income, he quit his job and went full-time into blogging.

That lasted two years until Google changed their search algorithms and 70% of his revenue disappeared.

He flirted with getting another day job, but decided to open his own CPA practice instead.

Having had an interest in real estate investing, and also realizing that it might be good for business development, he started attending REIA meetings and he also attended several real estate seminars. He picked up numerous real estate investor clients along the way, which was good for his bottom line, but it pushed his desire to get into real estate investing to the back burner.

Taxes and REI

You don't need a crystal ball to know that taxes are only going one way - and that's up.

I asked Brian if there's anything that we as real estate investors can do to prepare for it. His main piece of advice is to keep excellent records and documentation, because he thinks that the IRS will be going after "low hanging fruit" - and that means real estate investors.

He also offered to sit down with you to take a look at your business and prior year taxes. That would be a great way to understand what your options are in an environment where taxes are expected to rise sharply.

Answer to Listener Submitted Question

The listener question I asked Brian was "Why shouldn't I do my taxes myself and save a couple of hundred bucks a year?"

He had a couple of reasons why that's not the greatest idea.

The first is time. It may take him a couple of hours to complete a tax return for a real estate investor. But it could take the investor 10 to 20 hours to complete it. Even if the investor could do the work as well as a CPA, wouldn't the investor be better off putting those hours into his REI business rather than doing taxes?

The second is expertise. Using a retail tax prep software package will not give an investor the same comprehensive view that a human CPA, who know REI can. It's just not possible. So it's likely that by saving a couple of hundred dollars by doing taxes yourself you're costing yourself thousands of dollars in missed deductions.

Haves and WantsBrian has one item to offer.

A complementary one hour consultation.

That's how I met him, and I encourage you to take advantage of his offe...