Jim Huntzicker has been a real estate investor in Northern Illinois since 2007, and is also a licensed real estate agent (IL) and has been since 2006. He started out as an aggressive new agent helping investors buy and sell their rehab properties and quickly realized he was on the wrong side of that transaction. That is when he decided to become a real estate investor and use all he had learned to be successful himself.
These days his primary focus as an investor is residential redevelopment (aka rehabbing) and teaching others about how to use the Multiple Listing Service (MLS). Jim buys, renovates and sells residential properties in Chicago and the suburbs. Since starting in the real estate business he have been involved in over 450 transactions. His real estate investing company is Yellow Star Properties, LLC and they do 10-14 rehabs at any one time.
In 2011 Jim started coaching for a national real estate investing education company. He started his own true one-on-one coaching group known now as Real Estate Investor Academy®. Real Estate Investor Academy® is where Jim teaches real estate investors how to take their business to a whole new level.
In 2014 he created MLS Domination®. MLS Domination which is an online course that teaches you how to use the Multiple Listing Service (MLS) to get a steady predictable stream of deeply discounted deals (and income) for your real estate investing business.
What you’ll learn about in this episode:
- The MLS Domination system
- How to use the Multiple Listing Service for a steady stream of discounted deals
- How many deals Jim will do this year
- Jim’s background as an agent that made getting into real estate investing easier
- Why you need to learn one acquisition strategy really well before adding new ones
- How much Jim typically buys and sells properties for
- The CRM Jim uses
- Why you have to be persistent pursuing sales — and learn how to do it without being annoying
- How much profit Jim aims for every deal
- How Jim got into private money
- Jim’s strategy for negotiating called “the dance”
- Why you should offer the most you can pay — and be very clear about that
- Why you shouldn’t ever think of your offer as a “low ball” offer
- The opportunities that are out there when you know your market
- The importance of never knowing a seller’s motivation
Mitch: This is Mitch. And welcome to the real estate summit podcast. Today you’ll gonna get you some of Jim Huntzicker, and boy, this guy’s doing some big deals. He’s very prolific, he was a real estate agent for a while, helping other investors get rich. And he decided maybe he should get rich himself. So, he stopped being an agent per se, and he started picking up the journey to be a real estate investor himself, and my, what a journey it has been. So, he’s got about 450 deals and we’ll gonna talk to him about what’s on the horizon for 2016 and 2017. Jim Huntzicker, how are you doing today?
Jim: I am doing good, Mitch. Thank you for having me on.
Mitch: Wow. You are also the founder and the proliferator of the MLS Domination, right?
Jim: Yeah, I started the Real Estate Investor Academy and I am the creator of MLS Domination. It’s been 8 years as a full time investor– I’ve used the MLS to get about 75 % of my deals that I flipped, in the suburban Chicago. And most people tell me when they hear I use the MLS to get deals, I hear 2 things all the time.
There’s no good deals at the MLS or the MLS is too competitive, right? And I always say like “Well, it is too competitive for the non-deals”. Of course it is too competitive, because there is so many good deals and if you know how to shift through all that. Just like anything else, if you do direct mail piece, you’ll send thousands and thousands and you are hoping to get a small percentage of those to even call you back, right? I mean, all that small percentage that will call you back, you hoping that you buy a small percentage of that. The MLS is no different. The MLS is thousands and thousands of listing, most don’t work, just like your direct mail piece, most of those houses that you’re gonna send direct mail piece too, don’t wanna sell, can’t sell to the price that you need to pay, whatever the case is, so use– put it through your file to figure out the ones that we can– you know at the end, you end up talking to private sellers, some can sell free of price, some can’t, then you buy that a handful that you can, on that direct mail piece. The MLS is no different. You set up your searches, you got to catch your net wide, you gonna filter it down, and it is all about looking through the MLS. How do you look through the MLS through the best deals, so in that–pretty much people’s problem, Mitch, is that they still don’t know how to look through and expect anything, they think, you know,”Yeah, it’s hard. I know. I’m giving up”. So, they give up. But, because I was an agent first, I had a little bit of better of understanding of how to work the MLS that probably how it play to my success. Using it as a deal source for years.
Mitch: Okay. So, if you are interested to know more about the MLS Domination, where Jim buys about 75% of his properties, you can go to
, but right now, we’re gonna move on to some really meat on the bone. We’ll gonna learn what makes Jim tick. Because, this guy’s doing some big stuff and he doesn’t do little deals. He does this kind of different from Mitch Stephen’s owner finance strategy. This guy’s’ doing some big stuff, some big rehab numbers and we’ll gonna learn about his life. How many deals do you think you’ll gonna do in 2016, Jim?
Jim: 2016, I should do over 30 under 40 somewhere in there, I would probably end up with 35, I would say this year. And my model’s changed you know, in 2010, in cranking amount, you know, 60-70. And I do big rehab– I don’t do little, there’s no such thing in my world as carpet and paint. I rehab. I average rehab cost is around 75 grand. I have a rehab going on right now, and the rehab cost alone is $210,000. So, I don’t do little rehab. So, when I say 35 it is not like am doing 35 little tiny rehabs; these are big–major projects, so, all of my projects have gotten renovations, in most cases, it is rare for me to do just a little bit of carpet and paint on these things. If you’re good–once you’re good at buying and working at a system, you can get them deep enough for you, where you can do that, I would say it’s a good way to make me good checks, by making them perfect, do the windows and siding, the entire inside and you know, they sell very quickly when you do that right, and you are able to price that right.
And you know– when I was cranking about years ago, before my kids were born, I had a different start. I have twins that were born about 5 years ago, and that changed my life. I have invested in many people so my focus changed, I wanna be able to spend much time with them as I could while they were young, so I took the rehab and I scaled that way back, so I get to spend more time at home. And so, once they’re older and back in school full time, my wife comes back to work, hopefully in my business, and am going to go back up again. But, by now 35 or so is good.
Mitch: It is about quality, not quantity, you know. If you do 1 house and make a million dollars, then you only have to do 1 house. It is not about the number, I just wanted to get people that kind sense of the scale that you are running. And it is good that you brought up the numbers, because you are doing some pretty darn big rehabs and those things takes time. What do you credit as a key for you being able to find these many kinds of really decent to great deals every year?
Jim: You know, it is like anything. It’s now learning and learning and learning, when people get in, just like I was no different, the only difference when I got in as real estate investor was I already was an agent working with investors. Now, most of you will come into the real estate investing world you know from scratch and looking at all different strategies and they all work, but they are all challenging. Like, they all take time to learn and I take it a while to master, even the follow up process and your people doesn’t do all this follow up properly. I was–because, I was an agent first, I had a lot of sales training. I saw a study that still stays with me, from MIT. I used it at my real estate agent business and I adapt into my investing business and it said that the average sale is made between the 4th and 12th contact. So, if you only calling back your leads 3 times, then you are not even getting to the point where the first sale opportunity is made. So, when I was an agent, I would call back every single lead that I had 12 times without question. And I cannot tell you how many deals that I got done, on a 10th, 11th or even 12th phone call. It was unbelievable. So, I delved into that– you know, being an investor’s well but what I’ve realized, and that I’ve been teaching that for a lot of years and [INAUDIBLE] it gets hard, right? We get to cash big checks as real estate investors when you do it right. And we want it to be hard, because if it was easy, everybody would do it, and we wouldn’t have big checks to cash. But, the problem is, is that anybody would come and try one strategy, which works but they don’t try long enough and give it enough time and they wanted the next one– the next one and the next one. That stuff just doesn’t work. I can’t do that.
What I tell people, learn one acquisition strategy, really really–whatever it is, right. It could be direct mail, or it could be bandit signs, whatever it is, you know direct mails several different lists, different lists have different follow ups strategies, they have different you know, different ways to approach that kind of lead, like a probate, you know, you got to be sensitive, because somebody died, where the absentee owners just an investor, no big deal, but it could be different conversation on the phone. You get really really good at one acquisition strategy, before you start moving on and starting a new one, that you say also don’t work. You know people don’t give them enough time to really put it into the system. If they don’t work, we don’t do it, right? I mean, we don’t work.
Jim: But, I hear over and over, “Oh, it just didn’t work in my market”. It’s just you didn’t give it enough time or–
Mitch: Or you didn’t find the meat part of it. So, this is really interesting, so obviously, education what does that, and I always tell people, you know, find the niche that you want, if you get all the free stuff that you want in the internet, mess around, experiment, read about them then, find the ones that turn you on and then find the one finally that you think is the one for you. And then, start grilling down, and start only listening to that and then once you are sure that’s what you wanna do, then only then, is when you hire a mentor and that guy should be an expert on that one specific niche on how to do this. And like you said, you got to hang out with these guys for a while, because it doesn’t happen overnight. What’s the average price range of the houses that you are doing deals on? What do you buy for?
Jim: In most markets, I mean in suburban Chicago, we’re kind of expensive market here. And so, it’s a deal that we’ve ever known, so I have a private money that I built up as a based on my average per purchase being a $225,000. It is what we buy them for, that’s the acquisition cost and the–we are selling between 4 and 500 generally, it is where we really at. I like to cut my one [INAUDIBLE] $210,000 the renovation cost, you know, that particular property, I got for $265,000, is what I paid for that property. And so, I’ll be into it obviously for $475,000 and that’s my all in. That’s you know, my estimate for holding cost, selling cost and all that. That is my– that is I have to borrow ’til I hold it, sell it, fix it up. So, that particular property were going to list for $699,000, now that’s a pretty big split there. I got– it was a unique deal. It was on the market, this is when knowing your market and market research which you know, Mitch we are talking in this part of this call. Most people overlooked, when you know your market, I’ll tell you about 2 deals that are in the same market of mine, the same town actually. Because, the agent didn’t even know the 1 deal, but [INAUDIBLE] but this deal was brought a builder’s cost and hey,”There’s a double lot over here, and [INAUDIBLE] one of my marks that I work in, and he say “If it’s a double lot the one lot is vacant, the house is on the one, do you wanna buy the one with the house, and I’ll take the lot and build a new construction on it, ’cause I don’t do new construction”. And then, when I looked at it, and “Yeah, what got to be in it”? He said, “Well, I think we can get it for you, now I could have paid, I could paid 295 it could be 300, but I didn’t have to pay any of that”. He goes” We can get for 265″. And am like, “Fantastic. I can pay that”.
So, but that’s about having a relationship, but knowing your market, like he knew the market well and say, “Hey, we’ll just put thing up with what we are trying to sell it for”. He got the lot for whatever, for what he paid, it really didn’t matter to me. And I got the one for [INAUDIBLE] And I got the house for this price. And so, knowing your market that well, we were able to, he’s gonna sell–he’s gonna make a profit on his new construction and am gonna make great profit on my house, and the price we listed it for is right where we sell. You could go over that number, you know, there’s cost where you could go up, over and try to sell it for $20,000 or $30,000 but there’s no need. There’s enough profit in the deal anyway. So, listed and sell it quickly, move on to the next one. And there’s plenty of profit there. But, the other deal, I started about–we’ll this is just crazy to me, and so, right now my market, very low in inventory, you know, the market is cranking. I just listed one on Saturday and we got a cash offer you know, on it yesterday, which is Monday, right? So, 3 days later, 2 days later and you–most people will tell you, if there’s no inventories low, there’s no good deals in the MLS, there’s no inventory you can buy at the MLS, and so, about a month ago, about a month and a half ago, I was focusing on some other business, like a lot of summer seminar entrepreneur, when I do a few different things, I spoke to him with one of my few things, I didn’t realized I sold 3 of my rehabs and I didn’t put it on a pipeline, I just kind of like, I just say, “Momentary, what happened to my crap, and my contractor works for me”. “Hey man, where do we go next”? And I was like, “OH yeah, right”.
Mitch and Jim: [LAUGHTER]
Jim: And so, I was like, I started the rehab, I can’t stop everything literally, but I am– this is the priority, I got to get deals. So, I went to the MLS like I always do, and there was one right there, it’s been on the market for 44 days, listed for 250, let me go away and so I went, and so I called the agent, “Oh well, I rejected several offers”. And especially one of my students, even experienced investors who haven’t used the MLS before, when they hear the rejected offers, “Ugh, like it’s a waste of time'”. When I hear rejected offers, I am like, “How many”? Is it 3 or 4? When I hear 3 or 4, “Yes”. Because, if they rejected 3 or 4 offers, and there’s still on the market, it just a matter of timing, you just have to be the outright offer to right times. Some people usually receive 5 offers, they didn’t lower than the price that they ever thought they have to sell it for, or what they thought what it was worth buying, this [INAUDIBLE] for older people, they have a price set, this has nothing to do with market value. But, you wanna offer is way low, like first offer reject, second offer reject, third offer reject, fourth offer reject, the agent could say, “Look, we needed to take it off the market or you got to take this offer and accept it”. So, that was the case of this house, I got it for 225. But, a lot of people had, like I had students when they are told that the offer was rejected or the offer were jacket, means they didn’t even try. Like,–
Mitch: I wanna go back to what you said, and we thought [INAUDIBLE] I had the numbers a little bit different from the group that I was studying with. But, I was in a collective genius brand consortium, with 80 people in there that were tops in their niches, and tops in the market, and tops in the peripheral products that they offered and we, based on the conclusion, that we will start buying houses between the 6th and the 12th touch. And that’s when I changed my whole buying strategy because it got so tough, when the market got so hot and they’ve been hot for a while now. And I wasn’t gonna quit the business, I wasn’t gonna raise my bar and start buying my deals at less margins, I wasn’t gonna be that, because I’ve done it before, when the market turned, it wasn’t fun. We started diving into CRM that we make sure that we got, you know up to that 12th touch or 13th touch, basically we never given up until the deal is gone. What kind of CRM are you using?
Jim: For the longest time, I used– our agent system that I just modify, it is called Agent Office, because I was an agent first, I use it in my real estate business, you know I still actively, you know– when I started becoming an investor. So, I still [INAUDIBLE] that system, I created my own broad plans, like you know get a house on a contract [INAUDIBLE], you launch this it sets a reminder up, so, that’s what I get originally. And I mine The Podio, and that’s what I used to run the whole thing.
Mitch: I use the Podio, too. Because, it is pretty easy, there’s a lot of people out there that have a lot of experience with it. You don’t have to invent the wheel and you can plug it with all kinds of different things, and it is free, for the most part. We use that too. So, I just wanted to reiterate for all you listeners out there, it is about the 6th, 7th, 8th, 9th and 10th touch. A touch can be a text, it can be an email, it can be a phone call, and it can be a message left in a voicemail. It’s a touch, every time you make a communication, and so, just we– one of the things that we do that really helps, I know you did this, am sure you did. But, I need to know the answer from Jim himself. We send out a physical contract to everyone. Physical, in the mail, and so we have another excuse to call them and email them so, there’s another few touches right there. I actually do touches that invent other touches, like we send out physical email, and then we send emails, “Did you get the mail I sent you? The contract that I sent you in the mail. Yeah, just confirming, if not here’s another one attached”. And you sent a text,”Hey, I just sent you an email, have you found the contract”? It is about getting into their lives, whether they like it or not, and just kind of being there all the time, and being active with the smile in your face, and be energetic and enthusiastic about doing something. Pretty soon, what you are hoping for, is like what Jim said, right time, right place, the time is good. They just throw up their hands and say, “The hell with it, am doing it right how. This is the guy”.
Jim: And a lot of them, like people whenever they say, we don’t get that psychology of how that works, I don’t wanna be annoying, that’s what it takes you know, if you’ll gonna be in sales, but I think sales, when I say sales and sales even applies to that, the sale here is being–getting the house under contract, that’s the sale. It doesn’t have to be like, when I say sale, I didn’t mean you are selling cars, the sale here is touch to touch point to 6th to 12th, that you guys, you know, minimum sticks at that sale is getting under contract, and so, you are being aggressive like most people. When I say aggressive, I think calling a lot. I don’t mean calling [INAUDIBLE] a jerk, like, “You sold me the house”. I mean, just being aggressive with your follow up. Most people, I realized actually appreciate it. That you get once in awhile, you get that, you know, miserable person that they’ll hang up on you, and that person stops everybody from all those follow up calls, because they get one of those and they’re done. Well, that would be 1 out of a 1,000 people, you know, it is very few people are –especially if they don’t wanna– they called you, right? Because, you sent them a mail piece, so this is a warm lead, this is not a cold lead, and [INAUDIBLE] they are afraid to get that it makes [INAUDIBLE] but, what I thought most people appreciate your persistence because they do wanna sell, it’s just that they they haven’t figured out their stuff out, they’re nervous, they don’t know you, they don’t know how this work. They’re busy, people got kids, wives, work, whatever, you know. And they just don’t think about you every day, how they could you their house, how could you make a profit, you know. That’s not what you are doing. So, you just have to remind them that you are there, you are ready to buy when they are ready to sell, and stay in front of them. And if you call them, 8th time and you give up, well guess what’s going to happen, another investor in your market gonna send them a letter, one letter, one phone call and close them because they’ve already been warmed up from you. So, if you don’t stay on it, just know that they are going to sell it at some point, and it’s not gonna be to you, because you already warmed them up and [INAUDIBLE] one of your competitions. So, you got to stay on that, you got to be persistent.
Mitch: Well, and so part of the art of not being annoying sales man, is to learn how to be persistent without being annoying. It’s not annoying to call someone or email someone and say,”Hey, I sent you something in the mail, has it arrived yet”? That’s not annoying. You know, it’s like the guy is professional, he is doing some follow up, he is making sure that I get what he sent me again, I love it. I love the kind of feel once–then I get everyone in my office to call him every day. [LAUGHTER]
Mitch: You calling today, you calling tomorrow, you calling the next day. Make sure use their own cell phone, I mean. This guy’s just disconnect his phone, and then we’ll know for sure no one else will.
Jim: Yeah [LAUGHTER] It’s funny. Better deal, they called in, they’re mad but–those calls to stop new investors, you know from start–you know from getting from doing it, you know from send to them [INAUDIBLE] to free, to get those calls, my favorite kind of mail is probate. I did it for years and years and years, very successfully and I’ll do it again in the future, just right now, I just right now I get enough deals from what my current business, between the MLS and up wholesalers. 2 different wholesales to bring me deals. So, am good there. But, because it is–you are doing with a [INAUDIBLE] it can be an awkward phone call, sometimes they will call you and they’re upset or they’ll start crying in the middle. So, if you are not able to meet that particular compassionate, or you don’t know how to do that, probably that’s not the right form of direct mail for you, because you will also get the person and says–calls you and start chomping off the edge because they feel like you’re some sort of vulture trying to steal their house. I only ever do to this people is like I stop, and said “Did you care for me educate you on what exactly I do”? Because, I–what I do [INAUDIBLE] it’s not, but I hope people that are in situational problems, when they have to sell their house quickly, where somebody died with a mortgage on their house, and they can’t afford their own mortgage, let alone another one, and they are have a house with equity on it, so if they sell quickly, they can pull the equity up, but because of the state sales and probate, your attorney didn’t tell them, because they can actually sell it during the probate process, they said to keep the proceeds in the estate and you know you could do that, maybe you don’t know you could do that, but a lot of people, or maybe you do know but a lot of people don’t know that you can do that. All you could do is educate them, and educate [INAUDIBLE], but if you keep like being miserable in your [INAUDIBLE] which every phone call now, and usually at that point, because if you tell them, “I am a professional. I know my stuff”. They will so be happy but you just hang up on me because like, “Son of a gun”. Or “Okay, I got it. I get it now. And some people will never make you happy, they just wanna be miserable no matter what and they’ll gonna drop it an atomic bomb and hang up on you, but you know, it is just an education process. And so, I also– those people don’t know what we do, when they get a call, they got mad at me, they don’t know what we do, they don’t get it. And they are probably miserable anyway, they’re just looking for another thing to be miserable about. So, I really don’t let that affect me too much.
Mitch: If you are not getting that kind of answers every now and then, you are not calling up people. [LAUGHTER]
Mitch: You are not doing worth the darn, you know. It’s all a numbers game, so, when you do these houses, if you are doing rather expensive houses, average price 225, what is your average rehab about?
Jim: $45,000 is my average, yeah.
Mitch: Okay. So, what kind of rate of returns are you looking for, when you do these deals. I mean, a lot of gurus are teaching, you know, to make 30% profit on every deal, I think that it is unrealistic sometimes for people starting out. What are you expecting?
Jim: You know, it is not unrealistic because it exists, but you know, if you are only looking for 30 % complete profit, I mean if you sell a house for 200 grand and you’ll gonna make 60 on that, that is very difficult to do, because, it sure does exists but it is not gonna be the norm, you want to make this deal–what am looking for, I got my stuff from the MLS and so, there’s always a competition there, which is fine, you–because of that, there’s a place for you to make profit, but it aren’t usually gonna be 30%. So, what I look for is a 15% profit at the back end. You know, if I am selling a house for 400, my walk away after all the screw ups village, I have got enough cushion, they were making 6, I sell for 5, I got to make 75, that’s the bare minimum. Does it always happen? No. I just sold one actually where I only made, just put a presentation yesterday, ’cause I only made a 9.8% which is– you know– that is too close, I mean you would never buy a deal with that but lots of stuff happen, that was a problem that deal and the other deal that I close that month, was a 14.8%, so we were right there, but still, in 6 months, and in those particular deals, I made a combined 25% on money that I borrowed. There was a penny of my own money on that deal. So, you show me where you could make 25% in 6 months on money that you borrow, and you know, I’ll join in but, that’s why I don’t personally own the stock. I don’t know anything about the stock market. I’ve never said here, I’ve never researched it. For a while, I own some, I had a guy tell me what to do and he had no repercussion that he was wrong. I didn’t liked that. So, I figured out way to take my money and use people’s money and make my 15% at the back end. So, everything goes well, every 6– ’cause I sell my properties every 6 months on average. So, you owe own it, the day I bought it ’till the day I sell it for about 6 months. And I make 15%. You do that twice in a year, and it is 30%, but it is on 2 properties. But, that if you are willing to that, you know your numbers well up to do that, and you study your market, you know your stuff, you can do that all day long. And so, that’s what I’ve been doing for years. I’ve been, you know, making 15% on each property that I take up, and sometimes I make more, sometimes I make less. But, still at the end of the day, even though I wanna screwed up, I made under 10%, that under 10% was still 40 grand, by the way. So, what’s gonna goes is nothing. And in still, you know, if– okay, so take that money, re- invest it again for the next 6 months. And now, I make 15%. That money that I borrowed [INAUDIBLE] that is worth that 10% if I make 15% on the next one, now I have a 25% a year on the money that I borrowed. You know, so I guess, you can tell how you look at it, a lot of national gurus would teach that 30%, I wanted to feel it safe, so I don’t– I don’t fall temper, that is safe, if you are always looking for that, you will never ever be gonna be coming close to getting burn, but you’ll be losing money. But, if you do many deals, you do that way also, conveniently, and why don’t you do this. Run money to your students, well, private or hard money, a lot of times, hard money they want you to have that a lot of times, they want you to have 20 % profit margin, after your acquisition repair cost are done, you got to have 30% left over with the ARV, after repair value, so that’s what’s the hard money gonna have to be. So, for teaching me how owe me find deals 30%,well they also have a lot of times these hard money companies, wind you the money, it works for the hard money model, it also safe, like it’s a two ways to look at that, ‘because it is a safe number, like when you are teaching brand new people, you should be looking for that, ’cause you gonna screw up, it gets more money because you are excited, so you don’t have a sloppy ARV, you’ll gonna underestimate your repair cost, because you have no clue how to do that, not unless you are a contractor, so having that kind of margin is smart at the beginning, because you are going–you are not gonna have that anyway. You’ll probably end up with 20 or 15.
Jim: Probably, not 30. So it does make sense. But, it is not realistic. It is not, you know, if you are gonna do this, then the new construction guys are making–are looking at margins, about 8-12% in my market right now. Like they are happy with 12 a lot of times they are making 8, and you know, there’s new construction in my area sells between 8 and a million and so, but they are happy with 8-12%. So, am happy with 15 all day long, especially ‘because it’s in 6 months. That 8-12% on the new construction guys that we are talking about, that they buy the house, by the time they sell, they’re on it over a year. You know, they are doing a stock home on a vacant lot. So, I’ll take again my 15% all day.
Mike: Yeah. So, you mentioned private money and I’ve been telling the world for a long time now, the difference between making a good living and being a multi multi multi millionaire, is private money. Tell me, about private money in your world. And how do you come to find it? How do you come to go and raise private money?
Jim: Well, I tell you, my biggest mistake when I first started out was, I was working with investors and that thought I was a real estate agent, and I got into the business like, “Oh, it’s gonna be awesome”. But, I didn’t realize was that, I wasn’t actually retiring and all my friends and family, most of them use them already. So, when you get into the business as an agent, you call your friends and family, that’s your sphere of influence, that’s what it’s called, right? I didn’t have them to call because that was my dead book of business, and try to find somebody else. I find real estate investors, started working with them for about a year and they were making, you know, I was helping them to buy properties and sell the properties. I was really good at that. And I could do this on my own. You know, ’cause I am making 4 or 5 grand, I started making 35 grand, it’s flipping. I am like, “That’s for me”. I set up real estate and invest myself. The first deal I got, I had the wrong partner. I had the wrong wrong wrong, it was 2007. Did everything that was wrong, plus the market was just starting to sink, and I don’t wanna lose money on that house, I was not sure how much. I went out desperately, I showed a house to a client of mine, it was updated and [INAUDIBLE]. And when we get there, all blue. It was updated but it was the ugliest counter top, paint, it is blue everywhere.
Jim: It is blue everywhere. I mean, it is– fresh paint, nice like, nice paint. It was a professional paint job, and it’s blue. And the counter tops, like it was blue with a white stripe on the side, I can’t believe that they made it. So, it obviously, it wasn’t for my client, but am like, “Nobody gonna buy this thing”. Well, it is priced for $440,000 at that time, it was down from $540,000, so it is down from $100,000. I only see it 3 times, the way it was–because it was owner occupied, but I can tell from the public record that it was paid off, no mortgage on it. I got a lady I went there, I could see the desperation in her–to sell, ’cause I am in the market for 360 days, and she would– could you start, [CROSSTALK], we’re very negotiable. I like, “Man, this is awesome”. So, I just like, “I called the agent and you guys are at 440, am gonna be in the 3’s, am gonna run my numbers”. And the offer that I submitted was $300,000. The agent was really cool up until I got the offer. “It seems like you’ll gonna be in the 300 but, not everyone–it’s just a waste of my time”. And long story short, we went back and forth for 2 days, and they accepted my offer for $300,000. But, here’s the problem. I had no money. I only have $25,000 in earnest money on the contract, I didn’t have that. I have to come up with another $300,000 or $295,000, and I was after that, which of course I didn’t have neither. But, I presented that offer, ’cause I was desperate, expecting them to reject it. I just– I was just surprised that the agent was, when they finally accept it, but if there’s a will, there’s a way, right? And so, you know, there’s I was just looking at this quote on my wall from Jim Rohn, love it. It is a “If you want it bad enough, you will find a way. If you don’t you’ll find an excuse”. And so, I had a property, I knew it’s gonna be a good deal. I went and made a few phone calls, I found an equity partner for this deal. Means, somebody who I didn’t paid for the money but we split the profit, 50-50. It is not what you wanna do in private money, but I was very limited on my options, and I needed money very quickly. So, I got [INAUDIBLE] money, I did all the work, I got the property. I rented, rehabbed. I was involved in that whole process. I sold it. I give up half of the profit, but I did everything. But, who cares ‘cause the funny thing is, we made a little over $70,000 on that deal and the one–you can’t even make this stuff up. The first deal that I did my own, for over a year and a half, by a nightmare house, I may–but I’ll never forget. Is that, close– on Thursday, I made the money, in Thursday, I made half of 70 grand or whatever. Early next day, the deal closed, I lost 36. Unlike, literally, and it wasn’t next week, it was the next day.
Jim: I made that money a day before, so I never actually lost money, I didn’t make any either on my first 2 deals, because it was basically a [INAUDIBLE], and I moved on, been doing deals ever since. But, it is funny, you know, I only made that deal since, I–because I was desperate, and now that’s a strategy I teach called the “Dance”. Because, it actually thought something about how, people need to have you on a house that is owner occupied, that there’s real people involved. It’s not a bank. You know, in order to get into their head and their mindset, of like getting them down to my price, sometimes, you gotta sink to your property a few times, and a lot of times, these properties are vacant and you don’t actually have to go, just call in and schedule a showing, they take you one, you call them your feedback, “Oh, we are still interested by this. Man, you’re price is high, and we’ll gonna run our numbers, we’ll gonna have you a cash offer”. It’s just that a strategy that I use to call the, Dance. It works very very well. My records actually 32% off the list price. So, that one was 31%, which was good, obviously. But, the property was listed for 400 but I bought it for 273, and the craziest part about that, that was my best– you know, 32% off the list price, that was the current price, it was down to 400, it was originally priced at 550, 550, 367 days in the market– 340 days in the market, down to 400, I bought it for 273. Sure, I presented the offer to the agent, who love me up until that point, what they usually do. But, he was like, “You said this is me closer to 300 not under 300. The owner will not accept this. Blah blah blah”. And I said, “Am not trying to insult you and your client, but based on what I do at the property, this is what most that I could pay”. That’s the line that I used every single time. “I am not trying to insult you and your client, but based on what I do with the property, this is what the most that I can pay. If you guys can’t accept this price, I can completely understand this, just reject the offer, but this is the most that I can pay based on what I do”. They call back in 10 minutes. My best deal–the biggest discount that I got, she calls back in 10 minutes, and says, “They accepted it. I can’t believe it”. And am like, “What do you know”? [LAUGHTER]
Mitch: I’ll never understand the average real estate agent, because they’ll instead of getting upset about it, they just present the offer that’s given, and they don’t have any– they don’t have to embarrassed with the offer, their job is to present the offer that’s given. You know, whether the person likes it or doesn’t like it, up to the person who’s selling the house. I don’t understand why they think it is their job to negotiate for the people. You know what I mean.
Jim: Before they even present, [INAUDIBLE], “Hey, this is the offer. Go present it”. But, they are embarrassed to present to an offer that is so low, because their marketing is so great, they show them great marketing, and they have their price but, it is a great tip for everybody. Like, you know, when I get these–when I tell stories about “Oh, I got this huge discount”. [CROSSTALK] if I speak livelier than ever, it is every single time, somebody comes up to me and said the same thing. “How do you get your low ball offers accepted”? And I said, my response is always the exactly the same, “I never presented a low ball offer in my life. I presented thousands of offers at this point in my career, thousands, and I’ve never submitted a low ball offer”. “What do you mean, you just told me you got a 32% off the list price, I mean, there would be 30 ways to show me these deals “.But what are you talking about, what a mindset problem that you have. If you think I was presenting low ball offers, I was presenting an offer that is consistent with the good property’s current condition, just because they had the property overpriced, doesn’t mean, I am the one presenting the low ball offer. So, if you have mindset that it is a low ball offer, of course, you’ll gonna be embarrassed to call the agent and not present the offer. But, I know–am a ferocious real estate investor. I evaluated this property. This is the most I can pay for. This is the most that any investor can pay for. So, I presented a good offer based on the property’s condition, if they don’t wanna accept that, because, they feel it’s worth more money, then that’s entirely up to them. But, this is all I can do, and so, I am not presenting a low ball offer as well”. And so–
Mitch: I like that.
Jim: It is a simple mindset shift. It is the truth though. You know, it is how you can [INAUDIBLE] these offers that are significantly lower than list price, because, if you had the right mindset going into, you’ll be fine, but I don’t always low offers. I mean, the other 2 deals, the one I tell you about here, there was– an entirely set of story. That one, the one that I got, I’ve got 3 deals in 9 days, in this story. One was 10% under list price, it was in the market for about, 40 days. Year two, were brand new listing, one– the agents that are trying to double on the deal on all the time. More and more a double end means, they are the listing agent, and even though am a wise and [INAUDIBLE] I would love to get the buyer’s side of the commission too, and because they were usually give you some inside information, and they are making double the money, so usually–kind of push the offer to tab, I am not saying they will tell you inside information, but am saying that they won’t either. But, they don’t want it anymore. So, it’s fine. You just work that number and you work that commission to the deal. Because, I was given a commission on this what brand new listing, I did paid money right off the money from the list price. All I got paid was all about 315 for it. The commission was 3%. So, I could offer the list price, which I got it for, and you know, when you throw a commission to the deal, [INAUDIBLE] 315, that’s why having an agent on your team is important, that way you can get more deals, you know, I could have paid 325 for the deal, without the commission. I could have. But, I don’t need to first of all. And that’s why having an agent on your team that is looking for a front end commission, they are involved in the back end profit, because you know, otherwise if [INAUDIBLE] are evaluating your deals for what it’s worth, you get yourself for this price, they tied the profit in a bag can, they’ll gonna evaluate their profit number a lot better, anyways. That’s why I paid list price for a guy, and I was kind of, what a funny agent, because they wanted me to buy, they wanted me to close as little trouble as possible, ‘because I planted all my seeds prior even before submitting the offer. They comfort me, they told me why I need to be, in not so many words and [INAUDIBLE] the other one, so, these are all works in a couple of days, right? 9 days. Two– these two were on the same day. The other one, now this is crazy, this is to show you how the average agent and the National Association of Realtors, only does 3 deals a year, 3 that’s the average. So how many are doing 1. But, I know it should have [INAUDIBLE] in this story, so that one, which I told you with my big rehab, my $200,000 rehab, that was the builder and I were both at the market. He brought me, I evaluated. Yup. Done. Let’s do this deal. It is a great deal. This one, so it was listed for 279, and I know that market, I live too far from the market and am like, “I just saw a comp there, I didn’t look it up to confirm but the exact same house that was in great condition but totally [INAUDIBLE] except for a new roof, the original windows, 30-45 years old house, originally everything but, [INAUDIBLE] but it was original owners. And the exact same lot size, 3 blocks away, sold for 450, 450 now, I ended up basement, finished partial basement, mind you it was a partial basement it was unfinished, either way, there was a house in great condition, same thing but needed renovation. Actually, I think I didn’t have to do the windows on this house, ’cause the thing–the windows have been done. But, it was listed for $279, and I am like, “Something is wrong with this”. I gotta– I go and go look at it. And when you– using the MLS, the biggest contribution to your success next to the conversations you have with the agent prior submitting the offer is, you have to be quick. The best deals are gone in hours. And so, I get up there, and am looking on it, this is the same house. I call my buddy– my buddy was a guy that actually sold that, and so I call him and “Hey, am I missing something with that house, what are the deals or anything special, it had like diamond studded floors that I missed or you know is there something that you know, did they sell us a pot of gold, like what is going on there”? And he said, “Yeah. It is just the right market. This is the spring market, and so I went it, I can pay 325, this house is worth 550, when it is done. And so go back to agent who doesn’t want to be a dual agent, so I got an offer over, “Am gonna be tight. I’m gonna charge you $10,000”. She’s like, “Well, you might be wanna closer to the higher one there”. And so I submitted the offer at $295,500, I added an extra 500 on top of that, just to make sure i’m right over the top. And I offer her $10,600 over [INAUDIBLE] and I got that property. That one’s easily worth 550 all day. That’s gonna be a fantastic property, ‘because the agent didn’t know the market, if I listed the property I got there fast and I have to tied up on the first day, ‘cause if that goes–if that goes over the weekend, this was like on a Tuesday. If that gotten through the weekend, there’s no way am getting it. Because, the other investors– I locked it up Day 1, other investors didn’t even see it, it was under contract in the first 3 hours. And when it goes under time check, the buyer’s agent name, actually listed it on the listing. So, I calls from people who were trying to buy it from me, “What you pay, what you paid like”? I’ve got a wholesale right on that spot, I mean, but I am a rehabber. And I know how to rehab. I know its market–it’s one of the best school to search in my area. They call it the [INAUDIBLE] the Grammar School– the middle school, or high school are like all dense. It’s a very good area. So, there’s no way, am rehabbing this thing and I am selling it for, you know $550 or more. And I’ll make– you know, ’cause maybe I can 30 or 40 on a wholesale deal or maybe even more, but I can deal easily, I mean if I don’t make, you know probably a 125-150 on this, I would be shocked. That’s the norm. I guess it’s not the norm, these are not your average resolved, I am gonna tell you that ‘because it’s probably denying deals, and it is not knowing your market, it is that is all about. Here’s an agent, that somebody hire–he’s a professional, sell their house through them, because they are the one that knows the market, not the homeowner. And they underpriced it, you know by 50 grand, at least, on what people could pay. I mean, am being conservative, it is probably a 100. That one that sold for 450, it was just a different market, it just still doesn’t make sense to me, I mean technically that shouldn’t be worth 450, too. Honestly, I don’t get it. But, I could pay a lot more, didn’t have to. But, that just goes into studying your market, knowing your market. Now, I thought I was gonna pay a lot more than the $295,500 that I did, and I won’t have, but because the agent didn’t know, she was pushing my offer to get close quickly, ’cause I said, “Hey, we’ll close in 2 weeks. The house is vacant. Am ready to buy it. Let’s close”. And we did, I think we close like in 15 days later. It was a couple of Wednesday’s away. And so, there’s 3 deals in 9 days, when I paid 10% on it, it was sitting on the market, after being told they have rejected several offers. The reason why I paid the list price, it just lifted on its first day, it didn’t take 3 days to accept it. And then the other one, you know, I paid $10,600 over a list price. So, people always say, “How do you–you are only getting is this property under 30%”. That’s not what I do, when I go fishing for deals, me looking for equity, properties with equities on them that’s been in the market for over 300 days, that’s when I get those kind of deals, but the majority of the property that I get are new listings or newer listings when they are done with price change. [INAUDIBLE] she’s a great one too,’ cause this is like, just goes into psych college, you pop people’s minds, you know look at the MLS as an agent, not as investor, when I just gotten the beginning of the year, they were priced at 279, and this is in the market that I live into, so I know it very well. And they were down to 249. So, you know it is a $30,000 flunk. And I [INAUDIBLE] and it was 260 and now its 240, it was a $20,000. And I go over to them, and this is some under 250, I could consider, I can get a lot of plenty to get it around 220, I could do that. I go to the property, I can’t pay more than 210. And so, I call the agent, that agent that was really nice, older age and can’t find in any of my seasonal planting, not even a little. She’s like, i’m not giving it. But, anyway, I presented the offer at 210 [INAUDIBLE] they came back at 230, 220, 210. All done within the same day. And they just reduced from 269 to 249, and they gave– and I went inside, and I bought it for 210. So, you know, the mindset that people have is more like–they all reduced. They just reduced you know from 269 to 249, there’s no way they can accept 210, am not even know what got it. I go and pay 210 for that thing, and am not– or am not bringing my offer, because they’ll not gonna accept it, this gonna be rejected anyway. So, [INAUDIBLE] am having like 4 students of mine, to put the offers in, because, you never know. You never know the seller’s motivation is, if the agent told them, and like the one that I got for 32% off, those priced at 550,now these people are okay to 273, because it turns out they were rich, I found out all the kids are throwing at money. So, they don’t need the money, it wasn’t a big deal. You hire real estate professional, he comes over, and tells your evaluation like, saying [INAUDIBLE], put yourself in 300, no problem. But, a realtor professional comes over, and says, “Hey, I can get 550 for this thing. We should price this at 550”. Are you gonna say, “Hmm, no. I want 300, just price it to 300″. Of course, you’ll not. A real estate professional just told you to that it is worth 550, and you’ll gonna list it for 550. But, if the [INAUDIBLE] that particular deal, I wish it wasn’t worth that, it was down to 400. I bought it for 273, but– you’ll never know the seller’s motivation, why their price–sometimes, there’s 3 or 4 siblings involved on this estate or whatever, and they can’t agree. So, let’s put the highest price possible, because that’s the only thing to get the other siblings off to get [INAUDIBLE] this estate. So, you’ll never know but they say, we will take 300. But, we will price it at 550,’cause we’ll see what we can get. So, you never know what’s going on in at the background. After, you may question, when you call the agent, ask as many questions as you can about, the offers, you know what they’re gonna firm on this thing, until they tell you that they’ll stop answering questions, I keep asking and asking and asking. They always say, “I don’t feel comfortable answering that”. But, that is my job. As a real estate–as a buyer. As a real estate investor, it is my duty when I call to find out as much as I can so in that way I can formulate my offer that makes sense, in order to get the property at the best place possible. But, I get– I have some students that say, “Wow, should we ask that”? I mean of course, you shouldn’t ask what the bottom line is, or is that the question–but, it is crazy how many times I asked that, and an agent will allude to what that number is. Because, the average agent, again this is 3 deals a year. Hey, am an agent, I am still a licensed agent, with all respect to all agents, but sadly in my business, I realized that most agents they are looking at their paycheck, that they get in the closing and not with the destitute of the seller or the client. They are only doing what it takes to get the deal done quickly. I see agents like blown over stuff, that shouldn’t be blown over all the time. Because, all they are looking at is trying to close the deal. No, it’s not every agent, don’t get me wrong. But, I see it all the time. So, you know, ask the right questions, and you’ll be surprised that you’ll get the right answers or the answer that you are looking for, at least.
Mitch: There’s your nugget you guys, know more lowball offers, you are going to make the best offer, you can do. You’ll gonna make the best I can do offer, that’s what it is. So, instead of–especially if you are doing low ball offers, just approach that, this is the best offer I can make, given what I can do for this house. And get out of that low ball mindset. Because, that’s your own problem, if you are thinking you are a low ball. You don’t know where these people at, you don’t know what their needs are. I totally appreciate you for coming on. You are interested in Jim’s MLS Domination, where he gets 75 of his deals, he says, 75% of his deals from the MLS and wholesalers, if you are interested in that, go to
need to learn more about Jim Huntzicker there, and you know, I just wanna tell you that was a lot of information, good stuff, I love your stories and thanks for taking the time to come on, Jim.
Jim: Hey, Mitch, I always have good time talking in, thank you for having me on.
Mitch: All righty. That’s– I wish all throughout the 2016 and I look forward talking to you again in 2017, all right?
Jim: That could be a good deal, looking forward to that one, too. Thanks, Mitch.