My 6 month mentor program:
A few Case Study Video Interviews with my Students:
“I owned 80 Houses Before I Met Joe – Here is Why I took His Class Anyway”
Dan: I’m Dan Harvey, and I’m from Clarksville, Tennessee. Actually, I heard about you guys through a friend of mine named Bill Rafter. Bill told me what I was doing was similar to what Joe was doing, that I should check out Joe’s stuff. And I thought, well, okay, we’ll see what this Joe Crump is all about. Oh, gosh, I’m thinking it’s somewhere around 2011, somewhere in that timeframe. What got me started was I like Joe’s systems. I like the tools, I like the automation that he had put into the process.
Dan: I actually had the benefit of doing my first deal before I met Joe. I got started back in 2000 and back then I didn’t have a lot of money, I didn’t have much credit that anybody else was interested in. What I had was a burning ambition to succeed and I had four hungry kids at home. So I had to go out and slay the dragon, drag him home and create some money out it, so I learned how to do creative real estate through nontraditional means of buying. I didn’t use banks because they weren’t interested in talking to me. My objective was primarily to figure out how I could use my brain and not my money and create win-win scenarios for both me and the sellers.
Dan: Going back to your original question, my first deal was actually kind of exciting. I did what Joe would call a subject to type transaction. My very first Check was for $4,000 and I remember looking at that check thinking, “Wow. I remember what I used to have to do with my day job to earn $4,000.” And then two weeks later I had another check form another deal come in and it was for $3,000. And my wife says, “I like this. Can you go do that again?”
Dan: My very first deal, total time invested, I mean including the closing and the whole nine yards, probably two hours if I counted actual time spent. So two hours, $4,000 – that was a pretty good trade.
Dan: By the time I met Joe I’d already bought eighty houses. The thing that I got for me personally out of the deal was his approach to the for rent method, because what it did is, it allowed me to fill the voids in the ebbs and flows of my cash flow. So being that my primary objective was to collect and hold houses, and right now we have eighty houses that we’re holding on to, that we’d like to pay off. That’s my retirement plan and I told my kids unless you want to pay for me in my old age we might want to work on this other plan. So I’ve got eighty houses I’m hoping to pay for and what the for rent method did was, and it still does, is it fills in the voids allows me to make sure the bills are paid and we’ve got surplus monies. Plus, I’ve got guys that I’m actually assisting, helping build their collection of homes, their portfolios. I’ve got two people working very closely with me that I’m assisting and so for them, in order to not have to work a day job, being able to do the for rent method helps them, too, and then we share in the revenues between us. I provide a lot of the backend support and the training and I give these guys a place to do it and then I assist with all the marketing.
Interviewer: Oh, wow – best deal. You’re talking in terms of most money made?
Dan: Okay. It’s actually a house, that, you know, literally started out as a barely making a profit type deal. There was not a lot of equity. I bought this subject to house that was a ranch with a basement. Initially I didn’t finish off the basement. It was just a space that somebody could finish off. But I started out and the first person I put in that house had $14,000 they put down. So, I’m like, “Cool.” It’s amazing but I had like four successive people put about 10% down. Now that’s totally unusual. Back prior to 2008 we had maybe one out of every eight or ten people that would have that much money to put down on a house. Today it’s about one in twenty. So I have less and less people with big chunks of money they put down. But that particular house, you know, by the time it was done and said, I end up fixing it up at the end and I finished off the basement. I sold it for quite a bit more than I paid for it. I probably made $75,000 on a house that I started out with just $5,000 in equity. So that’s pretty cool.
Interviewer: Average income for the life of the property – is that what we’re talking about from start to finish?
Dan: Okay, so, again, I’m keeping my properties. I sell them on a rent to own basis. Eventually people cash me out. I’m going to say somewhere around $25,000 to $30,000 if we count rental income, the back end profits, the down payments I collect. I may sell that house three or four, five times before somebody goes to the bank and cashes me out. Especially in today’s economy.
Interviewer: Are you closing deals consistently?
Interviewer: How do you make that happen?
Dan: Whoa, that’s a loaded question. Automation. You know, we try to use as many tools as we can. I teach my guys that don’t do yourself what a tool can do for you. It’s just a matter of having a sales funnel that you bring people through. There’s got to be a consistent process of screening, evaluating, getting people signed up, getting the next phase or production whether it be a video that needs to be taken, pictures, getting all the forms signed, getting the house on the market, making sure it looks its best. Doing the marketing to get it sold and of course getting somebody into the property. That’s the first phase. Then of course you’ve got to maintain your clients and eventually get them to the bank and get them a new loan.
Dan: Aside from being a gazillionaire, my goal is really financial independence. It’s having lifestyle income. From the time I was a very young man I always envisioned myself being able to live on 10% of my income and invest the other 90%. And most of what I want to invest into is the gospel. The Bible is very clear about a retirement plan that Jesus laid out. He said you could lay up treasures in Heaven or you can lay them up here on Earth.
Dan: Well, everything I lay up here on Earth is going to be here and gone and I’ll be gone and eventually it’ll all be gone. But what I do now to help other people and advance their lives, advance God’s agenda, that sticks with me for eternity. So if I can raise enough surplus money to allow myself to be involved in giving Bibles out in China, rescuing Christians who are being persecuted in Somalia, those are the kind of things I want to do. That’s where I want to spend my excess money.
Dan: I think the thing I enjoy most about Joe’s materials, and I can speak with some authority. I’ve gone through many, many boot camps over the years. Since 2000 I’ve probably got over $100,000 invested in my own education. No regrets. I’ve always learned something from somebody. By the time Joe came in on the scene in my life I’d been pretty well accomplished as an investor. What I was most interested in was how Joe thought about his processes, how he systemized what he did, and the tools that he was utilizing, especially as related to the online marketing. I saw back in 2005 there was this huge shift toward mostly everything internet. And in 2008 Apple invented this thing called the iPhone. That was a game changer. And when I saw that begin to happen I saw how easy it was for people to text and surf the internet. I knew it was just a matter of time before the majority of our marketing and our advertising would all be done online versus off line. And so I’ve always wanted to stay ahead of the curve, stay ahead of my competition and technology’s it. That’s where we have to be. So whether we learn it and do it ourselves or we buy somebody’s system to do it, if you’re not doing in five more years, you’ll not be fair competition to anybody. You have to make the changes or you cannot be successful as a real estate investor if you want to do a lot of deals.
Dan: Now if you’re only interested in buying half a dozen or less, you could buy those from a wholesaler and call it good. But if you want to do forty or fifty deals a year like me, then you’ve got to have the tools to get the job done.
Interviewer: Do you do this full time?
Dan: Yeah, I sure do. When I’m not riding my motorcycle, fishing, hunting or preaching.
Interviewer: What made you decide to start doing it full time?
Dan: I had four hungry kids at home and I figured they’d get even skinnier if I didn’t feed them. Oh, man, that’s exactly where I started. I mean, if it took fifty cents to get out of town I couldn’t get out of sight. So having no money is probably the greatest thing, and the greatest problem you can have getting started.
Dan: The tendency of having money is that you throw your money at things hoping something sticks and something works. And you’re hoping money can leverage what you lack in knowledge. It won’t. It just won’t. When I got started, I tell people I was too dumb to doubt. And I figured, you know, if that old farmer can do it, and that mechanic can do it, I might have a shot at this thing. So I just figured it was a matter of specific knowledge, had to be a recipe in there someplace. And if I want to make Grandma’s cookies all I’ve got to do is measure and monitor what Grandma was doing and duplicate what she did. Success leaves clues.
Dan: If I follow people that are successful, do what they say to do, the way they say to do it, and how they do it, stands to reason that I’ll get similar results. And it was absolutely true. I tell people I’m not a great inventor at anything. I never invented – I had two inventions and I thought about them for several months and I thought, you know, these are really good. I waited two more months and there it is on the market. Somebody else is selling my idea. And I thought – bah – I could have been a gazillionaire with those things. So I’m not a great inventor. I’m terrible at it as a matter of fact. But I am a great copier.
Dan: If I see a successful model that I think that I can emulate or duplicate, you know, Katy bar the door. Because I will be the best at it and then I’ll figure out ways to make that wheel rounder and rounder and rounder but I don’t try to tweak or fix until I get the basic system down. So my advice to new people getting started, don’t dink around trying to reinvent the wheel. Just do what you’re told to do the way you’re told to do it. Once you get some experience, ten, twelve, fifteen, twenty deals under your belt. Then you can test and test and test to see where the new bar is and you might be able to raise the bar of excellence by improving slowly, one thing at a time that you can accurately measure. Otherwise, stick to the recipe.
Dan: I want to talk about the integrity of working with Joe. You know, we’re not exactly friends that we invite each other out to Bar-B-Ques an things like that – yet. I do love to hunt and fish and boat and ride motorcycles, so I’m sure there’s something in there he might enjoy doing, too. And I’m fun to hang out with, too. But what I love most about Joe is his sincerity, his genuine concern to help people, to advance them, and there’s a lot of that in my life. People that know me and spend any time with me know that I’m a people lifter. I want to see people get to that next level in life. I want to help them reach the full potential of the greatness that God put inside of every person. And I think that Joe does a great job of not only being transparent, being sincere in his efforts. If he doesn’t know, he tells you he doesn’t know. Unfortunately in the world of real estate, there’s not much he hasn’t experienced so he’s got many reference points. But his integrity. He’s never tried to snowball me, sell me a bill of goods that had no content, no relativity to it. He’s always been sincere, always done what he said he would do. And the tools and the systems he’s got, even though there were things that had limitations for me personally, even though I couldn’t use them, I saw the concept. I saw the recipe. So, it’s not too far removed for me to simply go figure out another way to make the cake if I can’t get that tool to work. I’ll just get a different tool. So I’ve been pretty resourceful that way, but as far as Joe personally, you know, I wish more people were in business like him.