What You Missed November 2017 General Meeting
by Rob Earhart

How to Turn Houses Needing Renovations into Pots of Gold

Robyn Thompson, The Queen of Rehab

November 7, 2017

Robyn began with, “We just finished up a big event with over 500 people attending. During that event we gave away a New Mercedes Benz. The Mercedes went to Pittsburg instead of Orlando, but we have had two winners in our area in previous years.”

“I got into real estate about 28 years ago,” she said. “I went to a company meeting with 503 of us. A guy started with, 'I was hired to take the fat out of the company. One of every three will be gone in a short time.' ”

I started to work at a diner and then, one night, when I came home, my neighbors were moving out and leaving the house to be foreclosed. The bank took it over and listed it at the current price, which was the same price I paid.

It did not sell for the $80,000, so the bank discounted it over and over. Finally, they put it out at auction and I bought it for $27,000. I put my tips together to get the $2,700 down payment and bought it. I was paying $800 per month on mine but only $400 on that one. I figured I could rent it out and make $400 per month. Then I thought that maybe I could do this again and quit my job.

I came here in 2007 and the market was in the tank. I sat around until 2011 when I met Larry Harbolt and he taught me how to use owner financing. I bought a whole bunch of houses and now generate 32k every month, whether I get out of bed or not.

You have to market to find the houses that will give you a good deal. Do you need help finding hot profit deals? You gotta go away from the herd. Everybody is on the Internet, in the MLS, etc. You have to get into direct mail because others don’t want to do it.

I had a lot of section 8 rentals up north and wanted to sell them as they became vacant. I got down to the last one and the tenant had been there for 14 years. I made $950 per month for 14 years and I figured I could make some good money on the sale.

I told her to let me know when she was gone and one night she called to say she was gone. I realized that the temperature was around zero and the house had hot water heating. Once it freezes, the water cracks the pipes and when it thaws, the home fills with water. Then, I would have to deal with insurance claims. It’s Christmas Eve and I had to call my GC to shut off the water. Luckily, he called to say the heat was still on, so we were OK.

Robyn stated, “I realized that the farther away you are from your rental, the less interest you have in checking it out. I decided to use listsource.com, to see if anyone else had a long distance rental that they wanted to get rid of. I wanted a list of distant owners who have owned for at least seven years.

Listsource said they could supply the list of names, the prices, the sizes etc. For that I paid $310 for 3100 names, or 10 cents a name.

The best negotiation strategy is to mirror and mimic. You deal with each person differently according to their attitudes. I had to put my letters in a format that did not brag, but connected with them. I developed the “Horsey Letter” to introduce myself in a non-threatening way.

I sent out 1000 letters and received 127 phone calls. I made the mistake of listing my cell phone and they blew it up. If you do not answer the phone they don’t call back. The next 1000, I decided to find someone who would answer for me. I found PATLive and they get the information for me and email me the list. If I get 10 calls, I cull it to two and buy one. The first time I made $200,000 and did four houses. If I had used PATLive, I could have done better by reaching more people.

I used a young and an old horse in the background and it worked well. I recommend something cute like a dog or the flag. Robyn warned, “On Saturday, I will give you the letter but do not mail it to Ocala or I will hurt you.” I can show you how to get 127 people to call you.

What I’ve learned is that I want to do whatever everybody else does not. Saturday, I will also cover the nine types of houses to buy. I want to turn my money 2 ½ times a year so I want to buy, fix and sell right away.

Houses on a busy street will not sell. Saturday, I will go into all the houses not to buy. A house should improve $10,000 a week, so in four weeks it should improve by $40,000. When I do rehab a house, it is drop-dead gorgeous. I spend about $7,000 more on my rehabs to make them stand out. I buy a lot of materials at Stone-Mart on Anderson. Leonardo is my favorite tile, or Noce Premium Travertine tile.

She asked, “How would you like all the SKU numbers in Lowes and Home Depot for the good stuff I want to put in the house?” When I interview contractors, I choose what goes in and, if they don’t put in what I spec out, they don’t get paid. If you come Saturday, I will provide the SKUs.

If you watch the HGTV shows, greys are in style, but most people have tan couches, so if you stay with the greys, your house will stay on the market for an extra three months.

I will show you how to find and train contractors. You have to thoroughly weed out the immature and select the “mature, grown-up adults.” I have a team in Ocala and they know how to do it. There are three components: Time, Price, and Quality. I don’t try to find the cheapest contractor.

I want to have a drop-dead gorgeous house that may sell for $10,000 more, but cost me $7,000 and sells right away. If you have a Plain-Jane House, it sits for a few months and all the Realtor can do is have you drop the price.

Number two is find the money. The cash is always in this room. You must come to meetings early and talk to everyone and find out who has the money or needs a deal. If you don’t have the money, find the deals and wholesale them to get started.

Than Merrill was a student of mine and made a lot of money on wholesaling. He got a three-bedroom house that was burned. I loaned him the money at 2% for transactional funding on Wednesday. He sold it on Thursday for a $50,000 profit and paid me back.

Robin gave out several CD’s and promised to deliver four more on Saturday.

I used to do REOs but now do all kinds of deals with all kinds of people. I will show you several ways to get a deal, but you have to choose three to use. One type of sale is an assignment, where you just collect some money and turn the deal over for money. If it’s over $10,000, then you want to do simultaneous closing.

You should wholesale one deal a month by the 7th of the month to cover your expenses. For the next 23 days I concentrate on the rehabs. Once you do that for three or four months in a row you will know you can do it anytime and will never be broke.

The last thing I need to teach you is how to sell a house. You need to sell a house on a monthly payment and know how much it will take to close.

I evaluate all applications. I need two month’s pay stubs, one year’s tax returns, and three credit reports. Then, I can qualify anyone in a heartbeat. I don’t sign a contract on any of my houses unless they can prove they can afford it. Pre-approval letters are toilet paper.

LP/DU = Loan Prospector; Desktop Underwriter.

Robyn said, “The thing that I am most proud of is my orphanage in Haiti. We just raised $200,000 for more construction that will begin soon.”

We also have a five-day bootcamp called “Junkers to Millions,” where we do the rehab program on steroids. We will tour homes with the contractors and show you how to evaluate a deal and show you how to do your own. We will do the paperwork you need for your taxes and keep track of all expenses.

Then we’ll cover how to keep your name off the public record with LLCs, corps, trusts, and we’ll cover how to find good people.

All five days are $1,995 for one person, or $2,995 for two. You can repeat as many times as you like as long as you like. You have the right to come to the first day and go with us the second day; if you are not satisfied at that time, we’ll give you back your money.

Robyn then stayed after to answer questions about her bootcamp and seminar.