Bought 10 Portfolio Houses In One Year With No Down Or Bank Financing
Case Study – Allan Andreoni – Port Huron, Michigan
I believe the best way to learn the business of real estate investing is to hear how others have done it.
When these interviews were recorded, I asked Tom, the interviewer, to ask questions that would help the viewer see how these folks got started.
I wanted to hear the struggles, the successes and a clear path and explanation of what they had to do to make these deals happen.
I did NOT want them to be a bunch of people telling you how wonderful Joe Crump was. I wanted content, examples and real life experiences.
I hope we succeeded.
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Read Transcript for “Bought 10 Portfolio Houses In One Year With No Down Or Bank Financing”
Allan: My name’s Allan Andreoni and I’m from Port Huron, Michigan, which is about an hour north of Detroit.
Allan: The first real estate transaction that I did using Joe’s technique was the “For Rent Method”. I had been doing something similar but with taking possession of the property, and after reading some of Joe’s stuff, I did the same transaction without having to take possession, which was a huge benefit because I was able to get the lease option fee, cash money up front, without having to actually hold the real estate. That was a huge benefit. Once I saw that, I realized the true value in doing that technique.
Allan: The first deal that I did took me approximately between a week and two weeks. I had been doing something that was similar. Just like if you read something over and over again, the last time you read it, you read it a little different or whatever happens and something clicks. I had already been doing something similar to that, but probably within between a week and two weeks, I did my first deal.
Allan: It was not hard work at all. I think I had a couple of hours into it, and if I remember correctly, and it’s been some time ago, but I think I made $2,000 on that deal.
Allan: Well, I found out about Joe browsing the web like a lot of other folks and what made me get involved with him and some of the stuff that he’s teaching is that I’d looked at a lot of different programs and bought a lot of different programs. You try to be a student of the business, and I was, and it seemed that all of the things that I’d been looking at didn’t take the process from A all the way to Z; there were a lot of gray areas.
Allan: So why I decided to go with Joe’s stuff was that he was pretty specific about the steps that you had to take in order to get from the first point to the last point where you’re actually putting money in your pocket. I think that that, more than anything else, is why I decided to go with him and his stuff, and the other thing was that he was very generous with his information and you could get things from Joe without buying anything and then if you bought something from him, you would get that and then a wealth of information on the back end of it.
Allan: Plus, he was a hands-on resource, so it wasn’t as if you had questions and you’re dialing an 800 number and getting a voice message – you actually had access to people and not only Joe but students that have been in his mentor program. So there’s a wealth of information there, and those things led me to continually buying his stuff and taking my business higher step by step.
Allan: Boy, that’s a broad category. There’s two things. One would be using the For Rent Method. I actually sold the same house twice within a year and the total was $17,000. So all of the people that you talk to that are worried about what happens if a tenant buyer moves out, actually, in a lot of cases, it can be a good thing. What happened was that we put a tenant buyer in the house doing a For Rent Method and they moved out within six months after paying $10,000 down (which doesn’t happen very often). We were able to put somebody else in there for the seller and they brought in $7,000, so in a years’ time on the same house, we made $17,000. So, that’s the “For Rent Method”.
Allan: The other side of the best deal that we ever did was on a property that we purchased for our own portfolio, and the lead came in through the “Automarketer”. It was a gentleman from Brazil who worked for Ford Motor Company and he was transferred to Brazil, so he moved his family to Brazil and had a portfolio of real estate local to where I lived in Port Huron. He had a triplex that he had completely re-sided, brand new roof, new windows, etc. – a nice place – and we purchased that property for $6,800. So with $6,800, we bought a triplex that was almost in mint condition with three different families that are still in there today. That was a pretty good deal and I would never have found that gentleman had it not been for the Automarketer.
Allan: I have started automating my business. I’ve been automating for a long time and I’m not as fast in my automation as Joe has been in updating the entire process. There’s a lag factor there – I’m a little bit behind him as far as what I’m doing. Every year, I try to automate a little more and I just introduced another step into my business having to do with automation and it seems to be working really, really good.
Allan: I understand in talking to Joe recently that he’s about to introduce some new cutting edge stuff and I’m really excited to hear what he has because it sounds like it’s absolutely fantastic, and with as good as the other stuff has been, it sounds like it’s going to be the cherry on top.
Allan: With the automation and the Automarkter, we’ve been doing a lot of the For Rent Method. What we’ve been doing is trying to look and see where we can go with that thing. It seems like every time I answer that question, another opportunity comes out of it. And so, the techniques that we’re doing are the For Rent Method, and then we’re also able to tie property up from our own portfolio with Subject-to. We’ve been finding land contracts where we’re doing zero interest stuff with no money down.
Allan: So, there’s a lot of different things that we’ve been doing. We’re using any technique we can possibly use that he teaches based on the information that comes at us, so we’re able to take that information and basically determine which of the things that we want to do from that same information. You can take one piece of information and, I guess in a nutshell – I’ve always heard him say you can make an offer 100% of the time on anything that comes through, and that’s exactly what we’ve been able to do – when people come through, we can make an offer 100% of the time within 24 hours, and that’s pretty valuable.
Allan: We’ve been averaging, doing the For Rent Method, and that’s, again, kind of a two part question, so the amount of money that we’re making with the For Rent Method, we’ve been averaging three or four deals a month. I’m trying to stay there, and I’d like to double that. We get anywhere from $2,000 to as high this last year in 2013 as $7,000 in a transaction, so do the math there.
Allan: But the other end of that is that one of the goals that we established in 2013 was to buy one property a month. We ended up purchasing 10. And so, that’s a whole other spectrum of income; that’s long term wealth. We were able to make those purchases with such a low amount of money that our expectation in 2013 was just blown out of the water as far as what we purchased to hold ourselves and where it’s going to take us income wise. Five of those properties were bought out of our Roth IRA which is another thing that Joe teaches.
Allan: Goals a real estate investor – the sky’s the limit but for me, where I would like to see this thing go is that I want to get to a certain level of income with as little work as humanly possible, so we’re going to try to work more and more at outsourcing things that either I don’t want to do or I’m not good at and grow our income in spite of those things or because of those things. So, in this next year, I’d like to double the amount of business that I did in 2013 with half the effort. If we can do that in 2014, that would be the next level where we would take our real estate investing business, and of course in 2015, it’ll be something completely different. As long as we keep progressing from year to year, we’ll set a new bar and hopefully hit that and then just keep going.
Allan: The impact that real estate investing has had on our lifestyle, i.e. family and spouse – it has been incredible. For instance, an example would be, in the last year, in spite of the amount of business that we did in 2013 (and it’s a good thing) I was in Italy for three weeks and then took another ten days and went to southern Illinois with friends and spent some time there, and on top of that, took some more time to be with our family, so the amount of family time that I’ve been able to spend and still have the level of income to do those things.
Allan: That’s been the big issue in years past is that a lot of folks either don’t have the time or if they do have the time, they do not have the money. So the trick is merging the two things, and when you’re able to have both, that creates a lifestyle that a lot of people are looking for. Same with my wife – with my wife, we don’t worry about paying the bills like we had in the last few years, and if we want to do something, we’re just able to go and do it. Whether it’s time or money or both, those things are available now, so it’s made a huge impact on our life.
Allan: I do this full time now, and I had a discussion with my sister the other day. She works for Bank Of America and she was telling me about her day and all of the politics involved. The conversation lasted roughly 35-40 seconds before I attempted to change the subject because I was starting to get a pit in my stomach. I remembered that I came from a corporate atmosphere and I remember what it was like due to the conversation with my sister, and I’m thankful every single day that I’m a real estate investor and don’t have an actual real job where I had to work or do physical work or anything like that. I think I’m going to stick with what I’m doing.
Allan: What I’m planning to do to build my business is continue to automate, and those things that I either won’t choose to automate because I like them, I want to get better at. I’m not sure what that will be because if I can automate everything, I would, and then just sit back and watch it unfold before me, but if I can’t do that, I’ll just get better at those things that need work. I want to grow my business to a point where I have the income that I want, which I’m not there yet, which will provide the flexibility to do just about anything that I want with my wife and my family and go places and do things where money’s not really an object.
Allan: And then, how big I want to build it is not so big to where I’ve basically gotten myself into a job again. I don’t want to do a huge amount of managing. It want to get it to a point where we can do whatever we want when we want to, and if growing a business so big interferes with that, I’ll stop short of that.
Allan: I would say, absolutely pursue it, and I would also say that there’s a lot of different types of investing out there. I’ve done many of them, and by far, the stuff that I’ve seen Joe teach and the information that I’ve read is some of the best that’s out there. One of the reasons why it’s the best is that he tries to set it up so that whether you’re a beginner in the business or you’ve been in the business awhile, he has safeguarded investing to the point where if you follow his stuff and do what he teaches, there’s less chance of getting yourself into situations that can create pain for an investor. Whereas other stuff that I’ve seen doesn’t really go to the great lengths that he has to point those roadblocks, hurdles and landmines out.
Allan: I would just like to say, for those folks out there that are contemplating whether or not they want to get into this business, whether it’s full time or part time, I’ve seen nothing else out there as lucrative. You have to put the time in and you have to put the work in, even if it’s not a lot of work, and you have to be consistent at it, but if you do that, there’s nothing else out there that reward you as well, time wise and also financially. And if you’re just getting started, stick to what Joe’s been teaching. And, if you have questions, there’s a wealth of information not only in the stuff he teaches but in the people that are around the mentor program and Joe himself. So if you have any questions, you’re always going to find somebody to give you an answer and if you keep going along that path, great things will happen.