I Closed The Deal And Made $7200
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 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.
Case Study – Frankie Cuarez – Miami, FL
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I Closed The Deal And Made $7200
Frankie: My name is Frankie Suarez and I’m from Miami, Florida. I heard about Joe’s program, I was listening to some YouTube channels on real estate investing and I came across Joe’s videos. They were very compelling and YouTube continued to recommend more videos, so when I was driving to work I would listen to Joe.
Frankie: The best deal that I’ve done so far was, it was a lease option that I did and it was a single family residence. In that deal I was able to get a tenant, a qualified tenant buyer, within a couple of days. And I made around $7,500 on that one. I did another deal and I found the lead, this one I found calling craigslist ads, actually. But the Automarketer also found it. It was around the same time I was practicing making my calls. It was a single family residence, it was for sale by owner. And I was able to get a lease option memo signed from the seller. It’s funny, because the seller actually, as I was getting tenant buyers, she changed her mind and used the cancellation clause. But, and I hung up with her, and I lost the deal. But then I was reviewing my tenant buyer applications and there was one that had a really strong credit score and sufficient income. So I was able to convert that into a traditional sale. I saved the deal, and we closed and I made $7,200. So, from zero to saving it, that was pretty good.
Frankie: I called her back within a minute of hanging up and said, “You know, I was just looking over these applications and we’ve got one which I believe will easily qualify for a mortgage. Would you be open to selling it outright?” She said, “Yeah, that’s what I want to do.” And I said, “Great, I actually know a really good mortgage lender and I could put her in touch and let’s see if we can get her preapproved.” And she said, “Well, if you can get her preapproved then I’ll work with you.” And she honored the original lease option price.
Frankie: The thing is that we had to wait for an appraisal, so that was a nail biter, but the appraisal came in high enough where it covered my fee and the seller got 100% of her asking price. And the buyer was thrilled because we were able to get her in with 3.5% down on the mortgage. So she was able to get it done, too. So everybody won in that transaction.
Frankie: Well, the tenant buyer, although she had good income and a good credit score, did not have a lot of cash to put down. So I started researching different mortgage programs. I happen to have a real estate license, so they cover that a little bit in our licensing school. And I was able to get an FHA, a loan program, and the reason I did that is because she didn’t have the cash, but she did have the income and the credit score. The owner of the house really didn’t care as long as we were able to close the deal. And so the only thing that was uncertain was the appraisal, but I did some comparables and I believed at the time that it would support the price and it did. So we were, the reason I did it this way was really [it was] the only way that I could get the seller to work with me on making a deal happen. But it ended up being good for everybody.
Frankie: If I didn’t have a real estate license I would have assigned it for the mark up. I would have assigned it for my option fee. But since I had a license, I had the option of, what I ended up doing was increasing the actual sales price and then the seller paid me commission. But her net sale ended up being right where we started. I did it that way because I had a new broker where I hung my license hat and they wanted to show, put some points on the board. So I said, “Why not?” And I did it that way. But if I didn’t have a license I could have just assigned it for a higher amount and make the same amount of money.
Frankie: The thing is that when I first was doing it as a lease option I spent about three weeks vetting some tenant buyers. And at the end of the three weeks my seller cancelled the deal. So, we were three weeks in, plus it took about three days. So, it was almost four weeks in at that point. And then, when I was able to turn it into a traditional real estate transaction, then that took another forty-five days. So that deal took more than two months to close, which is longer than it would have if it had just been a lease option deal.
Frankie: How long did it take for me to make my first deal? I didn’t have the Automarketer at the time so I was making cold calls and it took me two weeks to sign two lease option memos and on one of those two it took me about two to three weeks to find a tenant buyer on one of them. And on the other one, I actually sold that one in two or three days, which was that deal that I mentioned. So that was pretty quick and it was a good start.
Frankie: I have some goals which are I want to work my way up to doing a deal a week. But I’m not there. But I think that if I continue the way that things are going, I should be able to make over $100,000 or six figures. My ultimate goal is to start to acquire a rental portfolio and then put in place a tenant buyer on a lease option. That way I can have some passive income. I work from home. So, I do have more time at home with my wife and we’re about to have our first child, so that has definitely been a plus.
Frankie: I really did believe in the program and I just went head first and I didn’t hold anything back. Have I automated my business? I have automated the bandit sign placing. That is done automatically. And then I’m using the Automarketer to generate leads. But I’m still the one dealing with sellers and buyers so that’s next on the list.
Frankie: Have I hired anyone to outsource my work? No, not yet. I think that once I do three months consecutive of income I’ll definitely start, make my first hire.
Frankie: There’s one deal that I’d like to share, and it’s not a deal yet, it’s a half-deal because I have a lease option memo on it. And it had to do with, at first I was very eager to get a memo signed. But if you don’t have the right terms or the right rent, you’re wasting time taking on a deal that isn’t going to sell. So my advice, or my, something that I learned from that is, if it’s not a deal, if it’s not something that’s likely to sell, you need to do a better job of talking to the, making the case to the seller and letting them know based on the market rent this property is not likely to sell and use comparable data. You can find it on Zillow. If you happen to be an agent it’s even easier for you to do comparables, but Zillow is a really good tool. It even has a rent estimate on it. So don’t waste time taking a lease option memo or doing a deal that is not a good deal.
Frankie: The best advice that I could give to somebody who is starting out is it’s very easy to fall into the cycle of taking in information and studying the process but you learn so much – I wish I knew this when I started – I did know it when I started but if you just start doing it’s not going to be perfect at first. But you learn so much more and so much more quickly when you’re doing. I spent months studying the material and really what I needed to have done is get on that phone and start making the calls and making deals. That’s where you really start learning.