Eric Sage Shares How He's Creating Massive Cashflow Through Seller Carry Strategies

Steve Trang: Hey, everyone. Thank you for joining us for today's episode of Real Estate Disruptors. Today, we've got Eric Sage with ericbuyshomes.com, and he's here to share how he's flipped, moved, lease option, buy and hold, and all these other different creative strategies for over 500 properties and doing about three seller carry transactions per month. If this is your first time tuning in, I'm Steve Trang, broker owner of Stunning Homes Realty, cofounder of the OfferFast app, the one app you need for wholesaling, and I help people become real estate entrepreneurs. If you're excited for today's show, please give me a wave.

Please give me some thumbs up. And before we get started, I started this show because I wanna give back to our community. I had a lot of struggle when I first started. We've We've talked about a little bit about some of the struggles you've had along the way, and we wanna shortcut that struggle for as many young leaders as possible. I don't charge a dime for this show.

I don't make any money doing this, so here's all I ask. This is what it costs for you to listen to this show. If you get value out of this show, please tell a friend. Either share the episode right now, tag a friend below, or tell them your best takeaway from the show later on. That way, we can all grow together.

And don't forget, this is a live show, so please post your questions. Eric's more than happy to answer them. We don't have to wait till the second half. You can ask him right away. And so with that, are you ready?

Eric Sage: Sure. Let's go.

Steve: Okay. So what got you into real estate?

Eric: Well, I will I'll I'll I'll give you kind of a I'll give you kind of a a little history on on my background. It's, my backstory is, I grew up in a small town, Yuma, Arizona. My goal in life was to be a professional golfer. I was very fortunate to, play, play golf in college, went to the University of Arizona.

Steve: Cool.

Eric: And, after that, I played professional golf for about three years. Got a very, very I got an opportunity to do it. Mhmm. And it was a huge blessing. I had a great, support group.

But after traveling for three years and, kinda doing my thing, I decided I don't wanna do that anymore. So I went to corporate America, got my first job selling elevators through a friend, through a referral.

Steve: Elevators?

Eric: Elevator. Elevator salesman.

Steve: Yep. Who do you contact?

Eric: Well, it was a referral. It was a friend of mine who was in the business, and my golf crew my golf got me in the door. I'm, the the the actual the regional manager that hired me, took me out golfing after the interview.

Steve: And after

Eric: that, it went from

Steve: But you had door to door door knocking? Door.

Eric: I mean, we have, you know, you look at all the buildings being erected right now. There's an elevator in there. And, and so, we had repairs. We had service and new construction. So I was kinda involved in

Steve: that. Interesting.

Eric: Did that for, about six, seven years and then got into the medical distribution business and, sold diapers, adult diapers. So Okay. Cultivators to to diapers. And right when I started the diaper sales business, I started door knocking preforeclosures. Mhmm.

I wasn't married. I didn't have kids. And I was always an entrepreneur. I was always looking for ways to make extra money. Right?

Steve: What year was this?

Eric: So that was probably 2003, 2004.

Steve: Okay.

Eric: Right? I bought my very, very first rental property in 2003. The wrong way. Right? Realtor found it.

Yeah. Didn't make any money. Didn't have any cash flow. The whole thing. You know?

Nothing like I know now. Like, how to buy a Right. Distressed property at a discount. So, anyway, fast forward, started door knocking, found a house. Let me tell you that, like, my very first door knocking

Steve: Oh, oh, yeah. Please.

Eric: It's it's pretty cool. So, a friend of mine says you need to start door knocking preforeclosures. Well, I didn't even know what a foreclosure was, much less preforeclosure at the time. And so I picked a list of properties in the area I lived in, which happened to be in Chandler, Arizona. And very first door I knocked on said the house was going to foreclosure on a Monday.

K? So I knocked on Friday.

Steve: So you didn't give yourself a lot of time.

Eric: Well, I didn't know what I was doing. I didn't have cards. I didn't even know what I I mean, all I knew is I bought a rental property. Right? Right.

So, anyway, I knocked on this door. And so nice house, actually, in Warner Ranch, so not far from where this Yeah. Is being recorded. And, knock on the door. Now picture, the biggest linemen for the Arizona Cardinals, okay, answering the door.

Steve: That would

Eric: be your vision of who answered. And I'm like, hello? I your I I think your house is going to foreclosure. He's like, no. It's not, and slams the door in my face.

I go, hang on a second. So I went back to my car, wrote my name and phone number on a piece of paper, and gave it to him and said, hey. If something changes, give me a call. Yeah. First door ever.

Okay? Sure enough, I get a call. From who? His, sorry, from his, from his wife. So they had an issue.

Their their their, house was in foreclosure because their bankruptcy got discharged. So now they're $52,000 in arrears, and they need to get the money by Monday at what is it? Auction at 02:00. K? Very first house ever.

So now I call what do I do? I call up my local real estate buddy that sold me my rental property for fair market value or higher

Steve: Mhmm.

Eric: And said, hey, man. I got this deal. What do I do? And he's like, I don't I don't know. I don't even foreclosure is either.

Most real most agents back then, 2003, 2004, weren't real sure what that was. But a friend of mine, he goes, but you know what? Our buddy, he doesn't work a lot, but I think he's, I think he knows how to do this stuff. Yeah. And I'd actually played in a little I was at a wedding with with this guy, a few weeks before.

So I call him up. I'm like, hey, man. I got this deal. He's like, how did you get that deal? I've been door knocking that house for a year and a half.

I'm like, I don't know. I mean, god was looking down on me. I have no idea. Right. So, anyway, it it'll go toward so we ended up saving the house, stopping the sale, saving the house for the family.

We worked out a deal. I got paid a fee Mhmm. And my mentorship, you know, started. Like, I started working with this guy because I'm like, this is this is awesome. I made a $3,500 check.

We got this house. We saved the people. Mhmm. They live in the house still, which, probably wouldn't do preforeclosure bailouts and leave them in the house program anymore.

Steve: Right.

Eric: It worked out for me because we were, you know, ethical and did it right, but that's what happened.

Steve: Yeah.

Eric: So that's that's the the how I found my mentor because I brought him a deal. Right?

Steve: Well, that's cool.

Eric: And so then I ended up working for this guy for now, keep him on. I'm still selling diapers, and I'm door knocking, from ten to two on Saturdays, for pre foreclosure houses. Because he didn't set me up on the system, so I wasn't wasting my time. Like, pure luck is what happened there.

Steve: Yeah.

Eric: And so I started door knocking, working for him, and he would show to the properties with me, and we would sign the contracts. And then, like, the third Mercedes later it's third new Mercedes later that he pulled up in. I'm like, dude, you can't come to these meetings with me anymore. I'm driving my Civic, and we're gonna meet because it's intimidating, I thought. You know?

Right. And so, so, anyway, I did that with him for about a year. Figured out I had my own money. I I knew what to do, and the mentorship was over. And I went and started buying my own houses.

And that's kinda how I got into real estate. It was and, I never never looked back. My wife and my wife and I got married. She's been my business partner ever since, and it's been a roller coaster if you think about it from 2003 till 2018. Right?

Yeah.

Steve: A couple of bumps along the way. So we, we were chatting. You've worn many different hats Yep. In real estate. So let's just go what are all the different hats you've worn?

Eric: Well, I mean, I've always, I I've been a solopreneur, door knocking. Right? Mhmm. Finding my own list and, meeting with homeowners, acquiring the properties, working with contractors. I will tell you that I've never actually physically worked on a property Yeah.

Because I cause more problems than good. I will literally hurt myself on a job site. So We

Steve: have that in common.

Eric: So I'm not, I'm not handy. Yeah. It's it's embarrassing. So anyway but I know how to buy a house cheap, and I know how to liquidate it. Right?

Yeah. So, but we've had we've had tons of employees. We've had no employees. We've had, you know, assistants, non assistants, contractors, non contractors. We've been hard money lenders.

We've been, you know, we've been landlords. We've been we've done all of it.

Steve: So you've done lease options

Eric: Yep.

Steve: Seller carry, assignment was agreement for sale Mhmm. Subject to Yep. I mean, any We

Eric: had a short sell business.

Steve: A short sell business. Yep. Yep. You had a 125 Yeah. So long.

Eric: So kinda so here's what happened. So, like, this is the greatest thing about real estate and the cycle we're in. Like Mhmm. From 2003 till now, like, the cycle's probably been the most extreme ever in our history, would you say?

Steve: Yeah. For sure.

Eric: So so I started door knocking, basically, wholesaling, and I didn't even know it at the time. I was getting a fee to bring a deal to somebody so they could do whatever they wanted to with it. But then, I went on my own and started doing my own deals, and we would bail people out of foreclosure. We would help them out, and then they would refinance and get their get their, the house back. You know?

We keep the house as our equity and and security, and then we'd work through the deal. But there was a time, let's say 2000 let's say 2005 would have been a good time, but let's say February, was when this started flattening off, and we were looking for equity. There was no more equity in the houses. Yeah. And so I'm I told my wife, I'm like, I don't know.

Like, we have all these. We have 70 houses. The market's doing some weird things, and we don't have, there's no more equity deals. Like, what do we do? And this is before I know what I know now, which there's tons of free and clear houses all over the Oh, yeah.

Planet. But I was just searching a different one way.

Steve: You're all searching preforeclosures.

Eric: Just doing preforeclosures. Right? So, and it and it was very profitable for us. We were very blessed, and and it worked out. But, so then we decided, well, wait a minute.

What's gonna happen to these people that owe more than they their house is worth? So we started a loss mitigation company. And then that worked out okay, but then we we we were spending six to nine months mitigating Yeah. When the banks didn't even know what was happening.

Steve: Right.

Eric: So we were getting we were charging fees, and then you couldn't charge fees anymore. So so we just decided, okay. We're gonna do a short sell company, and we're gonna help people get rid of their houses. And and, so we did that. But we did that for for a period of time where we had a 125 deals going at any given time.

We had a loss mitigation department of our own. We had realtors. We had marketing team. We had sales guys, and it was it was great. We saved a lot of people's houses.

It was it was awesome. Mhmm. But then the market started changing. This is a great thing about the cycle of real estate. So when you're in it, cycles started changing, and we're like, wait a minute.

We need we should buy some of these. I mean, this is I mean, the house down the street, I I had I bought for $1.75 at the peak, and I can buy the same house for $25,000. You think that's probably a good time to buy? Probably. Probably.

Right? So we started buying them. So now we started buying them. When the market crashed, it was a race to get rid of everything, which we did, fortunately. And then we started buying them at the bottom, and then the market went up and started selling them and then and then kept a few.

Mhmm. But but keep in mind, all of this is a very active business. Like, it's very, very active. You're making good money, but you're waking up on Monday, and you're like, okay. How many houses are we gonna wholesale?

How many houses are we gonna flip? What are we gonna do? Right? And so fast forward to today, of where we're at today on seller financing, and, that that's what I I figured out when I did my lease option program is I provided a ton of value. Mhmm.

I made really, really good money, and I and, I didn't have to work very hard because at the time, we kept the old owner in the house.

Steve: Yeah.

Eric: Their intent was to keep it and refinance it, and they did. Because after six months of good pays in a heartbeat, they were refinancing most likely. So we charge them a fair fee, and everyone was good. Well, now I was like I told my I told my wife this. I said, sit, about eighteen months ago.

I'm like, where did where in the okay. Because we have a we had a thriving wholesale business. We're doing very well. We have employees. We have this whole thing, and we're marketing.

We're doing direct mail. I mean, you have these shows with all the direct mail champions and all the that, talk to people, you know, TTP. Yeah. And you have Internet and all this stuff, and it's a huge expense every month, right,

Steve: to

Eric: do that. And I'm like, where do we provide the most value, make the most money, and work the least?

Steve: Mhmm.

Eric: It was back to lease option world. That's where we were like, wait. This is amazing. Let's do that. So we have now fast forward, and now we've created that similar model.

Steve: Mhmm.

Eric: Right? The only difference is instead of lease option, it's seller financing because we wanted to get rid of the expenses that go on on being a homeowner. Right?

Steve: Right. Well and when you talked about this in our meeting, a couple of months ago, a month and a half ago, it blew my mind. So we're gonna definitely have have to redo some things in 2019. So along the way, you, we'll we'll talk about seller carry in a little bit. But you built your business up.

Yep. Massive team. Right? Short sell. That's probably when you were the biggest.

I'm I'm gonna guess. Is that when you were the biggest?

Eric: Yeah. I mean, anywhere from we would have anywhere from eight to 15 team members. Mhmm. You know? And then in the wholesale world, we're probably the same.

You know?

Steve: And then you transition to a traditional real estate team?

Eric: Well so yeah. So what we did was is is I would do direct mail. Yeah. And I would take the calls, and I would go meet with the homeowners. And then I would figure out how to dispose of it.

Mhmm. So I was a one man show again when we started cycling back into wholesaling. But now keep in mind, I will fast forward. I'm kinda going I'm kinda going all over the place a little bit. Sorry about that.

Is, I I did take a little stint out of real estate for about probably eighteen months Yeah. And bought a different company and was like, this is the dumbest thing I've ever done in my life. I mean, I have all these employees again. And so it does go back to, it does go back to I'm gonna shut my phone off here so you guys can there you go. So it does go it goes back to, like, managing people.

Right? Right. Managing people is a challenge. I would say for me, like, the most.

Steve: The greatest challenge for every company.

Eric: Right. Right. And and so so, anyway, let's let's go back to, where we're where we recently were. We had real estate agents. Mhmm.

And real estate agents want to get listings, and but majority of them don't know how to market. They're not great marketers, or they don't have the money or something. And so we're like, okay. Let's hire some really good, real estate agents Mhmm. To take in all of our leads.

Right? Go meet with homeowners and buy the properties for me and get paid. Yeah. And if that doesn't work, let's list them. Right?

Steve: Right. So it's a real Makes a lot of sense.

Eric: So we have a nice we have an army of agents out there doing that. And so but what what recently has happened is is the marketing has gotten so expensive Yeah. That the the margins were just it just wasn't making sense. And and, honestly, we, I mean, we had amazing people on our team. Majority of pea and I tell all the people that come and work with me is you're gonna there's nothing proprietary here.

I mean, go on the Internet. You can figure this out. Yeah. But if you want some confidence, come work with me, learn it like I did, and then go move on. You know, and do it yourself.

Right? I mean, that's that's the thing. That's what I've told anybody. So in real estate, it's very transient to to to have that happen, so to keep people on other than your assistance and stuff. But that that's that's kinda where we're at now.

So I was like, how can I run, you know, two, you know, you know, 15 to 300 seller finance deals? Mhmm. And how does that look, employee wise. Right?

Steve: Right.

Eric: I I can pretty much run that entire business with, like, one person other than myself. Yeah. Because you don't own the properties. You don't have taxes. You don't have insurance.

It's all being paid. And so that's where I I I phased our business into. And there's a there's a combination of reasons why, is number one, and I'll we'll talk about this, but the private money side of, raising private capital, private private money, and doing it right and not forming a syndicate and all this other garbage. I I really believe that, we're providing a ton of value for that investor. Right?

Because we know how to buy really good properties. K? So that's one deal. And then the next is helping homeowners get rid of their distressed property Mhmm. Them as much as we possibly can and still make make it work for them as quick as possible, as easy as possible.

And then find a homeowner, a buyer, and a realtor and a buyer, team that that can actually, own a house now that Right. Never would have been able to

Steve: own a home. Traditional financing would have to work for them.

Eric: They're not gonna go to Wells Fargo, Bank of America, or any of these and get a traditional loan because they own a landscaping business or a pool company or a realtor. Right? But they have a nice nice they've saved their money, and they can afford the payment. And so that's kinda where I went. And, you know, we talked about this earlier.

That that I get excited about that. Like, flipping a house and making $20,000, it's pretty cool. Cool. You're revitalizing neighborhoods. Right.

Or you're wholesaling and starting the revitalization, which is has you know, you have a there's a purpose there. But but the whole, you know, where people right now are getting displaced. You know? You go to the areas where we're buying, where the seller financing thing works. They're the buyer the investors bought these houses from 25 to $60, and now they're worth $1.50.

Right? Yep. As is?

Steve: Mhmm.

Eric: Now what's gonna happen to that tenant? They're they where are they gonna go? Right. They've lived in a house for ten years. Well Now they're priced out.

Now they're priced out. So how can I create value to them and still give them ownership and not have to be a landlord and deal with all the stuff that becoming a landlord is and still make the profits and the cash flow and all the things that make sense? Right?

Steve: Right.

Eric: So that's kinda where we're at.

Steve: So the thing you mentioned earlier about, you know, doing a syndicate and how that's a really bad idea. So Jamil right here comments, the quickest ticket to jail is a syndication. He was the one that gave me the wisdom, when I first got into wholesaling. Seriously, you know, if you wanna go to if you wanna be on American Greed, start a syndication.

Eric: I love it. No. But it's so true. Like, I I don't it's like Jamille. I I talked to Jamille about that.

I don't think they'd started their business that way. They're not they're not crooks on purpose. They get they put themselves in a place where they just don't, you know, where they just don't fix the problem. Right? Right.

They deny it. Like, you're gonna fight with your wife. Fix the problem now rather than linger and get divorced. Right?

Steve: Well but we know it's not our fault when we fight with our wives.

Eric: That's right. We're always right. Yeah. Always.

Steve: Okay. So let's go through the seller carry. Because like I said, you know, it it it blew my mind when you when when you presented this to us a a couple a few weeks back. What is a seller carry? And then after that, what would you do if you're gonna get started?

So what it what is a seller carry? Because when I first secure seller carry, I'm thinking I'm going to you, the homeowner, and you're gonna finance that deal, which is a traditional definition of seller carry. But when you're talking about seller carry, you're doing a different strategy. So can you elaborate what that means?

Eric: Right. Well, you can do a combination. But let's just do, like that that was my goal today because I knew I was speaking to you. And I'm like, okay. If somebody was gonna listen to this show

Steve: Mhmm.

Eric: And they've never done real estate, but they want I mean, the ultimate goal is to create some sort of nothing's passive, but as close to passes as you can get and get to, you know, $5.10, $15,000 a month Mhmm. Which is basically, you know, it's a game changer. If you can you know, what could I do to help that? So Yep. So number one is, and I I read a lot of, like, blogs and people are like, I don't have any money.

I can't start. I can promise you when I knocked in that first door, I didn't have any I I mean, I did have money, but I didn't have the ability to buy that house.

Steve: You didn't have 50

Eric: k line around. No. I had a deal. I had a deal. And then I found now in today's world, just in our market, but in every single market, there's somebody that would die for that phone call and say, hey.

I've got this deal. Yep. Let's make some money today. Right. And then and then, you know, you know, I know the network that I'm in.

We make if I can't get rid of a house, I might call you or I might call someone else in our network, and we make money. Like, it's fantastic. Right? So there's no excuse for that. There's none.

Like, I I read about it. I'm like, there's no excuse because you can get in your car and and drive by and see a house with grass that's growing higher, and it's probably it could be distressed somehow. Mhmm. You can find you can figure out a way to find that person.

Steve: Garage door's a little uneven.

Eric: Or or or you if you can't figure it out, someone online knows how to figure it out and doesn't even know because I promise you, you and I are not door knocking and driving by every day. No. So we don't know what we don't know. Right? So, anyway so that's that's my thing.

So there's no excuse for that. So back to the seller financing deal. So right now, we can I can get a house? I get a house sent to me, probably every couple of hours

Steve: Mhmm.

Eric: That fit our model. Right? So we're we we wanna buy a house somewhere in that $1.30 to $1.50 range. Okay? Mhmm.

And and right now in our market in Phoenix, and this is all over the country, a lot of houses were bought at the bottom and were remodeled and rented. And now they're they're they're not their rental condition. Mhmm. So we can go clean it up and sell that for retail. Right?

And so so what we do is we find that house, and then what I in the meantime, I have investors that are looking for a fair rate of return. Okay? Maybe they've made tons of money in Amazon. They cashed out

Steve: Right.

Eric: Before the market changes or something weird happens. And, they wanna get a fair rate of return. So I offer them a fair rate of return or I partner with them or something. Yeah. But they're secured to that property.

Right? Right. So I find property a. I find the property. I I I put it under contract with the wholesaler, with you, with whoever, and then I have that money waiting in the wings to close on it.

Right? Yep. Then it's it's pretty simple. Then I go, and I have a real estate team.

Steve: Mhmm.

Eric: But I've also, for fun, I've built a massive buyers list of people that can't get a traditional mortgage. K? And so now they are my you know, a a lot of the wholesalers are talking about their cash buyers list.

Steve: Mhmm.

Eric: These are my seller finance buyers list. So there's a lot of them. Yeah. A lot. A lot.

Twenty, thirty thousand down. In our market, they're everywhere. They're everywhere.

Steve: So there's a lot of people out there that 20 to 30 k to put down that cannot get approved for a loan. And you have this list. Yes. Amazing. Yes.

Eric: So I have that list. Now I also have realtors that have that list. Mhmm. I mean, how many realtors out there have someone, but they just they're they're basing their whole world on getting a traditional loan, and so they they lose a deal because of it. Yeah.

Well, I can buy wholesale, sell retail. I'm not selling for like, there's other comp guys that do what I do around the country that market up 30% over retail. And I'm like, no. That that's not even like, we can sell these for retail and make money. Mhmm.

We can get a good down payment, a fair interest rate, you know, based off their financial situation, but we're putting themselves in a place where they can actually make the payment. And, typically, their payment's gonna be five to 10% over, rent. Mhmm. K? Then they get the deduction.

Okay? So so, anyway, property. I get the property. I got the lender lined up. Now key you didn't so so far, I haven't spent a dollar of my own money.

Right? Right. K. But I found the house Yeah. That was sent to me in an email that I could probably pay more than most wholesalers.

Steve: Right. Because you're actually

Eric: cash buyers. Because I've got my my exit cash buyer on the on the hook that I don't have to do a $30,000 rehab. I might have to do a $5,000 rehab. Right?

Steve: Right.

Eric: So now that that so my my underlying lender's here. My end buyer's there wanting to buy a house and be a homeowner, and we close the transaction. I make a little bit of money, and my investor makes a little bit of money. And then my agent gets a commission, and life goes on.

Steve: So that's not one close, though. Right? That's two different closings.

Eric: Right. So you have your you have your acquisition Mhmm. Closing, pays pay a few fees there. Mhmm. And then you and then you have, and and the the ultimate is find one long term investor to fund your acquisition and stay in place.

Right? And then resell it and then create the cash flow in between. Just like just like any rental property. You know? But the rental property here's the thing about the rental properties.

So what do we have when we own a rental property? We have and I I just one of my best friends, he lives in California. And he, manages his own properties, and he's been doing it forever. And it's his it's his family deal, and that's how they do it. That's weird.

Steve: Anyway So

Eric: we just had an argument this morning, and I said, listen. So so what do we have? We have management. We have, maintenance, vacancies, repairs. What was the last one?

Anyway, we have the five or six different things that taxes, insurance. There we go. Yeah. So we have all that happening. Right?

Mhmm. When I do a seller finance house, deal, guess what I don't have? None of those things. And I have equity in the deal depending. And so, you know, people talk about this.

And and I'm you know, this is something, we could have discussion about. People talk about depreciation and appreciation and how it affects your taxes. Mhmm. Well, I just eliminated 30%. So is how does that look?

Right? Right. And then I have equity in the note that I've created because I know how to buy a house under market.

Steve: The 30% you eliminated. You you're talking about you eliminated the

Eric: 50% of yeah. You know? Well well, like, you know, you you get some tax benefits for being a property owner Mhmm. Versus a seller finance. It's regular income.

Steve: But and

Eric: I don't I'm I'm not a CPA. I'm not an attorney. Yeah. Disclosure. But I just look at the real money that comes in Mhmm.

Without the headaches.

Steve: Yeah. Right? So let's let's highlight those six things there again because that sounded great. Right? So, vacancy.

Eric: So you have you have a property manager, and that's what I told my buddy. I well, okay. So how much how much a property manager? Well, it's 8%. Okay.

Do you have any vacancies? Do you have any, so you have property management, vacancies, repairs, taxes, insurance. I think we're missing one again.

Steve: Well, there's turnover.

Eric: Turnover.

Steve: So and and that that includes vacancy, but that's new carpet because it seems like

Eric: carpet's last year. Repair and repair when you have to update it. Yeah. And that and that's what I said. He goes, oh, I had eviction.

And, well, how much are you gonna spend on that rehab?

Steve: And then that doesn't include, depending on your property manager, a leasing fee.

Eric: Absolutely. Right. No. This is all and then my my fee is it's between 10 and $18 a month for a servicer. And guess who pays for that?

The borrower. Right. So I don't pay any of that. Okay. And so I I've eliminated and I was telling you this earlier.

I and this was so cool. So I get a call, from the servicer yesterday, and there was a insurance claim.

Steve: Mhmm.

Eric: K? Roof issue, whatever. And they're like, you needed to sign off on the check, and they thought the lender was here. And I'm like, no. Just have them call me.

So they call me, and the sweetest lady ever I've never heard from her ever. I I didn't I didn't even know actually, I knew it in my file who it was, but I've never spoken to them. I never speak

Steve: to them.

Eric: My agents deal all that. And she needed me to sign off on her insurance check. And so, I I said, okay. I'll I'll you know what? I'll meet you.

Because I I loved I mean, I love meeting them and see how appreciative. She was so appreciative. She's like, Eric, I'm so happy to actually hear from the company that's lending me the money into my house. And we're so happy, and we're gonna redo the roof, but we're gonna pay a little extra because we want it to be a different color so it matches this and matches that. And because we rehab the house already and whatever.

I'm like, oh my god. That's fantastic.

Steve: Right.

Eric: Why not? Right? And so that to me, I get so pumped to have that that call that they appreciate, and they pay, like, right on time every month. Well, they have to. Or yeah.

Or they lose the house. Yeah. And then such a chunk of money down that they're not gonna

Steve: And the thing you mentioned, briefly or casually was that they remodeled the house.

Eric: Yeah. They updated it. I did some work. They did more work.

Steve: But, like, if a tenant's like, hey. I wanna update the house. Like, like, hell, you are. Right?

Eric: No. They actually paint the walls of the wrong whatever. It it's not and now, yeah, now now now my asset just went up another 20%. Right. And my loan I'm still covered.

Right? Yeah. There there's a few things that people you know, they're like, well, what if the market, tanks? Mhmm. I'm like, okay.

Well, I've put a fixed number in place on my cost of money Mhmm. And I've given them a fixed number. Right. So god forbid, the market crashes and our houses are worth $25,000 again. Let's just say it happens.

Mhmm. But they where are they gonna move for $1,400 a month? Yeah. And oh and still own? Right.

Right? Yeah. So there's a there's a risk there that I feel. This is just my opinion. Mhmm.

And we could talk about this ten years from now and be like, that was a mistake. But I I really believe that that that and, I mean, I can't tell you how many times. I bought a house, this is a few months ago, and I went and met with a neighbor. Mhmm. And, he's been there seventeen years.

Steve: Yeah.

Eric: That's what I want. Right. I want payments for seventeen years. Right?

Steve: Right. Right. So okay. So starting over again. Step one.

Right? I wanna do I want I wanna follow

Eric: the urgency plan. So so you've never done a deal ever. How do I do this?

Steve: Well, I've I've been doing wholesaling.

Eric: Right? Okay. You wanna oh, you're talking about you, not your not your not

Steve: your Hypothetically, Steve, yes, wants to get move from wholesaling to sell that carrier. So what's step one? Getting the money? What's

Eric: I I personally because, I mean, you can use my track record because it works, is is I would go find some private money. And so here here's the thing. So I was tell I was I might have been telling you this before, but so you have your high, high net worth people. Right? They have tons of money.

And if they can make a 8% return over a lifetime now in today's world Mhmm. And they've already crushed it, that would be pretty good. Right? Right. And so they they look at that as this diversified deal.

They might have a huge estate, and they don't want their kids to get a bunch of money, but they would give them income.

Steve: Mhmm.

Eric: So that's one place to maybe go raise some capital Mhmm. And and tell that story. Or you have somebody who's in there between 65 and 70. Right?

Steve: Mhmm.

Eric: They wanna retire, and they have let's just say let's say they they've saved a million dollars, and they have a million dollars left Mhmm. Until they pass. Right? Well, I feel, my opinion, we're all gonna live till about a 100 now. Yeah.

I mean, I'm 46 years old. Being a 100 years old is gonna be nothing. Mhmm. Okay. So so that 60, 70 year old person, now I have another 30.

They're gonna outlive their money.

Steve: Yeah.

Eric: So I feel it's my obligation to help them get a great asset secured in first position, a mortgage, and get paid for forever. Right. With the and then keep the balance. Right? So maybe they take the interest, keep the principal.

There's all sorts of ways to do it. But I feel it's an obligation for me as a really good real estate operator.

Steve: Mhmm.

Eric: And knows how to find a great deals and put them in a really good position, not a 110%, but, like, 75, 70, I feel is a good place right now in today's market even if there's a decline, that that they're gonna get income. And it's amazing because and I feel like I'm a really good private money raiser Mhmm. With real estate is is that, they once they start getting that money Yeah. They they can't it's like, I don't know what I did. I just get paid.

Steve: Right.

Eric: I'm like, so what's your and I I this is another thing. This happened to me the other day. So one of my actually, it's a few months ago. I asked my one of my private guys. I'm like, so how's your, debits and credits on your private lending business?

And he goes, well, I don't really have any, debits. Mhmm. No. I don't have any I don't, yeah, I don't have any debits. They're just credits.

Right. The only debits I have is when I pull money out and put it into a loan. Mhmm. So you're not paying taxes, insurance, maintenance, repairs. Any problems?

Nope. I just get paid. So that that line item is just income is what you're saying. You don't have all these other things. No employees.

Do you have any employees in the business? Nope. None. So I decided, okay. How can I do this in the owner occupied world and do that?

So I know I got sidetracked a little bit on the on the purpose behind this, but so raise the money.

Steve: Mhmm.

Eric: Go find some monies that that that wants to do let's use Phoenix as an example and that you get a $150,000, in a first position to do your seller finance deal. Then properties are easy to find. I mean, you probably have one right now in your on your list of houses that you're wholesaling that will fit.

Steve: Hopefully.

Eric: You know? Yeah. And then so then you do that. You buy it. And then and then you go and and if you wanna do it slowly, you you know, I always have people go and look at it and do little little repairs so it's move in ready.

Like, the big thing says is I want the roof to be okay. I want AC, good, plumbing, and and electrical. And then let them go do the sweat equity. Alright. I want the big stuff Yeah.

Taken care of, you know, for the most part. But I have guys that come in and be like, no. We'll do it all. We'll do plumbing. We'll do it all.

We'll we just want a good deal. Okay. So Well, a good deal off retail might be 10% off.

Steve: Mhmm.

Eric: Where for us, that's like,

Steve: we're

Eric: happy if we don't have to do any work. Right? Right.

Steve: So so you find the the the lender. Yep. Right? And then you have to have some sort of agreement with them. So you're you're paying interest right away, pay interest when they lend.

Eric: So what I do and this is obviously from, this is, trial and error. Mhmm. But what I do is I say, okay. We're gonna fund this deal. This is what I'm doing with it.

You're gonna make a fair rate of return Mhmm. In a great position. You're gonna get paid monthly, amortized, and I'm amortizing. So I'm front loading them just like a banquet.

Steve: Mhmm.

Eric: K? So, then from there, I'm gonna I'm gonna, start your your first payment is not for the first sixty days because that gives me time to go clean it up and get it sold. Right. So I'm not doing a negative cash flow off the bat. Right.

That's the ultimate. Doesn't always work that way. That's huge. It doesn't always work that way, but it does it really matter to them? Like, what's their money doing right now?

Sitting in cash earning, like, a 1%.

Steve: Yeah. But that's smart on your part, giving yourself a sixty day head start.

Eric: And it's an it's a contract. Like, you know, after sixty days, if I don't sell it, then I'll start paying. But Right. For the most part, that's how I structure it.

Steve: Yeah. Okay. And then, you have I think you mentioned before that you you or someone got a loan originator license.

Eric: So no. Yeah. So what I did, I I like to stay completely out. Mhmm. So now in order for me to qualify my, borrower Mhmm.

So now I the house is now for sale. Yeah. Keep in mind, all my houses are sold off market. I don't even put them on the market.

Steve: Right.

Eric: I send them either to my list, and on my list is agents that have buyers, so I'm good with that. I'll pay them a commission. I don't care. And then, contract comes in

Steve: Mhmm.

Eric: For the price we agreed to. Then that goes right to my licensed originator, and he underwrites them. Make sure that they are majority of these borrowers, they're stated. They but he he goes he gets proof of payments, proof of income, proof of not everybody a real underwriter. Oh, it's a full on most hard money lenders out there don't like to do owner oc because of that, the liability.

This guys these guys, that's their deal. And so it protects me Mhmm. Because if they're like, oh, you sold me this house for x, and I can't afford $1,500 a month. Well, it says here you did this, this, this, and this. I just I have him do it.

I pay him a fee. Mhmm. It's actually the borrower pays for that, but he gets paid to do that. Mhmm. And then he reviews it with me, and he signs off on it, and it's done.

So it's a it's a fully underwritten originated loan.

Steve: So it sounds like when we're ready to do that, I'm gonna have to get that guy's contact.

Eric: That's right.

Steve: And then on top of that, you have a servicer servicing company.

Eric: So then yeah. So so right now, I'm I'm testing different servicers. But in a perfect world, as we scale this out, we're gonna have the same insurance guy. We're gonna have the same servicer, same originator. It's just process.

Steve: Okay. So then that's the part that's kinda nuts. Right? Is this this crazy part where you you've got this formula working now. Formula working now.

Now to feed this machine

Eric: Mhmm.

Steve: You still gotta find deals.

Eric: That's right.

Steve: Right? So how who's bringing deals, and what does

Eric: a good deal look like to fit into this model? Well, so it it the May right now, I'm getting my deals. I'm still doing direct mail. I'm still doing Internet. I'm still doing all the same things.

Like, I'm still wholesaling houses.

Steve: Yeah.

Eric: Here's the the greatest thing about this model is your goal for me, and and I I would hope other people, is to get that monthly cash flow Mhmm. To offset your wholesaling business net income. And then once you get to that, then you're like, it's just I mean, everything else is a bonus. Right? Right.

Steve: Because, I

Eric: mean, buying and selling houses and helping, distressed sellers get out from underneath their homes is a great business.

Steve: Yeah.

Eric: It's a great purpose. Mhmm. Because, I mean, I can't tell you how many people call me. You know? You call me from Tennessee and, you know, aunt so and so, you know, gave you this house, and you think you're gonna have to fly out and do all this stuff.

Mhmm. No. Did you know? I'll go and box all that stuff up and send it to you, and you'll get a check wired to you.

Steve: Yeah.

Eric: How easy is that? Right. Oh my god. That's fantastic. You know, that's that's the value that we provide as, as wholesale buyers.

But, without because they're not gonna be able to rehab it for what we can. Mhmm. The whole spiel. I'm not gonna I'm not gonna tell you the spiel, but you guys know it.

Steve: Are you getting more from your direct mail marketing and pay and online marketing versus another wholesaler bringing you a deal?

Eric: So our direct mail's working. Mhmm. And it's, like, it's very competitive. I mean, we're competing against everyone else. But, honestly, I've slowed down a little bit.

And the reason why I don't know if I told you this, but I have a fund that is gonna fund my deals. And so, like, a pretty large fund. Fund. So I've I've slowed down. I haven't been really building my private money business that much because this fund said they wanna do it, and the numbers make sense.

And at that point, I can just I can go to every wholesaler and probably pay more than anybody and still make the numbers work. Yeah. You know what I mean? Like Right. Then it's just an arbitrage game at that point.

Steve: Right.

Eric: And it's nonrecourse, which is good.

Steve: Huge. Huge. That was what that was that was what Chris Iman, said in the show a couple weeks ago. Like, if you had to do all of it again, what will he do differently?

Eric: Ask anybody that's our age, that's been in the business as long as we have, what would they say? Non recourse. Non recourse. We all we all got caught.

Steve: Yeah. But you learned eventually. So Scott Charles got a question. So we talked about finding the high net worth individuals, right, to to fund your operation or in this case, you got an investor group. How would you go find an investor right now to to fund all this?

Eric: Well, there's there's so many different ways, but I'll I'll just give you a simple one, which is chances are I I have a friend of mine. He's 36 years old. He's had two different jobs. Okay? But two different jobs from '25 to 36.

He's probably got two, three no. I actually, no. He has, like, $600,000 in four zero one k money from two different places. Right? But now he's starting job number three.

Steve: Okay.

Eric: Well, that money at 36, he can't touch it till he's 59. Right? Mhmm. So that money is sitting idle doing well, it's in the $4.00 1 k that they left it or whatever. But what if you could help him self direct that money Mhmm.

In his self directed IRA and then use that as your funding? Right. Now there's it's we call it the $4,700,000,000,000 secret, which if if you guys email me, you'll give me information. I'll send you the book because we wrote a book called the $4,700,000,000,000 secret.

Steve: Mhmm.

Eric: So it's it's how to raise private money, how to but and it's not a it's not a syndicate. It's not it's tell people, what do you ask ask anybody. What are you doing with your idle cash? Well, what are you earning? Mhmm.

Probably between what now, I guess, CDs are going up a little bit, but be under 2%. Right? Right. Maybe 2%. Yeah.

But before, it was like, it's yeah. Right? Yeah. So you can't make money doing that. It's not even inflation.

So if you offered them seven, eight times that and you can still make money or you partner with them on the cash flow or you part part if you've never done it before, maybe you do a little of both.

Steve: Mhmm.

Eric: But just as long as the cash flow makes sense for you for your time, that's what you do. So there is so much money out there right now. And and and I have I I actually did. I was talking to one of my, buddies the other day. He sold his company, and and, he's a company guy.

He likes to buy companies and, you know, buy something for a million, sell for 10,000,000 or whatever. Right? That's what I'm really I'm like, yeah. But what are you doing with your idle cash? Yeah.

Well, it's in the stock market, and it's doing this. And I you know, blah blah blah blah blah. And I'm like, okay. Well, are you getting income from that? Mhmm.

Monthly income? I mean, what are you getting from that? Is it is it amortized out? Is it I mean, how does that look? Could there be a change?

Could Yeah. The Tesla owner do something stupid and drop the drop the freaking stock market? I mean, all of that. Like, how does that look? You know?

And then where and where is that cash flow coming? Is it coming from an end borrower that's you know, thanks god every day that they have a home to live in with their family? Mhmm. And if that doesn't work, they'll bring in another family to pay the payment? Like, it's not sexy.

It isn't. It's just it just works. Yeah. Right? Right.

I mean, so so that that so to answer your question on the private money, there's there's it's everywhere. Just tell everybody that you have deals and you're willing to pay x amount. And if you're interested, let's let's do some deals. Let's do some business.

Steve: Well, I think I I heard you say before too. You don't even tell them what you're willing to pay. It's like, what do you what are you willing to take?

Eric: You you can do that. I mean, I'm pretty open about what I mean, I I I I I'll tell you right now. I pay if I do a flip, it's 10% deferred. No points. Pay them, and I guarantee three months on a on a on a flip.

So it's secured. They fund the deal. I've been doing this a long time. They get paid back. Mhmm.

All my private lenders. I never defaulted on a private lender ever in my history, and I've borrowed a lot of money. Mhmm. And then my long term, I I I try to get six or seven. You know?

And people have a hard time with that. Like, they they're like, wow. That's not very much. Okay. Well, what are your options?

I mean, let's be honest. Now if you wanna be passive Mhmm. That's a pretty darn good return.

Steve: And it's collateralized.

Eric: It's collateralized. You wanna so so I was telling my buddy the other day. I said, okay. You have, so I give you a thousand a month for sixty months, and you give me a 150,000. Sixty months later, you owe 90.

Now your risk is 90 Mhmm. On a house that's even if it drops to $1.50 or $1.30, you know, that's still you could sell that and get your money back

Steve: Right.

Eric: Pretty easily. In fact, I'll buy it from you Mhmm. For that. You know? Right.

So so just as long as you're so that's kinda that's why I love the lending world. That's why I love that deal. And and and really the end result is who who you're helping at the end at the end. You know, you're helping this this guy get his income. You make a little bit of money.

You're never dealing with banks. It's just it's it's quick, and you're providing a good service.

Steve: Candace Walton wants to know, what's the difference between a lease option and seller finance?

Eric: So a lease option is you own the house. So, like, for example, I buy the house and I own it, and then I I take maybe 10,000 down and I give them an option to buy. So let's just use round numbers. Let's just say, I buy the house for $1.50. I sell it on a lease purchase for $1.70, take $110,000 down, and then they have five years two two to five years to to give me the the $1.60 that they owe me, something like that.

But I still own the house. Right. I still have the responsibility for taxes, insurance, maintenance, all that stuff. I I've I've been purchase. I have.

But I I like it. I almost want closure. Like, it's done now unless they sell it or refinance it. Yeah. As a lease purchase, I've done really well with lease purchases, but I I don't, I don't like the responsibility of being being an owner, there's liability.

Right. There really is. I mean, you have you have all the things that go with it. That so if I was gonna pick one of the two, I'd do

Steve: the other one. Right. And as a seller carry, they're the owner. They're the owner. Lease option, you're the owner.

I'm the

Eric: I'm the owner. Yep. Right. And then They're the

Steve: owner. And then we talked about private ownership. We talked about a little bit earlier. But, you know, if I was driving down the neighborhood, I'm I'm seeing Eric's seller carry property Yeah. And I'm seeing someone else's rental rented property.

Eric: What what's the difference? So so, great great question. So I I bought a house, I don't know, let's say, six months ago. It was in good shape. It wasn't it wasn't the best house on the street.

Mhmm. Wasn't the worst, but it fit their move in criteria. Right? So they put their money I think they put 25,000 down or whatever. So a month later, I was gonna go drive by that.

I was driving to go look at another property, meet my agent over there, and, there is a house. You know? There's they redid the landscaping. There's flowers out front. It's painted.

I mean, it's it's like the nicest house on the street. And I'm like, how awesome is that? Like Yeah. That's not a rental property. They own that house.

Steve: Mhmm.

Eric: And they'll and they'll and and they pay I mean, I made a miss I I I made a mistake one month where they actually paid early, and I couldn't figure out. I'm like, I don't think they paid. Well, they paid too early. I couldn't figure out the the books weren't right on that month or something. So but, yeah, that's that's the deal.

Steve: Okay. So then let's go on back to an example. I I get your mailer, call you. Mhmm.

Eric: Hey,

Steve: Eric. You know, I got this house. It's worth 200 open market. It's a little bit of disrepair. Right?

Where are you buying it at for it to make sense for this model? And then what do you do in what what are exact steps you take after that?

Eric: So house comes in, to our team, if it's me or the agents or whoever wants to work.

Steve: 100 in Maryvale. Yep. Yep. And it's and it needs 15.

Eric: Right. So that well, Maryvale is now $2.20. So whatever. Anyway, no. That's a seller finance house around, B 2102 20.

So what I do, is I, the first thing I do is I take the call and figure figure out what the best price we can go to. Right? Let's we really depending on repairs, we probably need to be around $1.50 ish. Yeah. But so so that that would fit.

So then I literally text my agent and be like, hey. What can we sell our finance asset for? And he'll be like, oh, I have someone in my database that likes that area, and they wanna, they they have 30,000, and they'll pay probably $2.15.

Steve: Mhmm.

Eric: And they can afford this much a month, which I already know those numbers. That's that's that's it. So so that's I I because I know the exit.

Steve: Mhmm.

Eric: That's the most important part. And then I know my cost of funds, and I know I could resell it for them, what their payment typically is. And then I just back into what I wanna make. You know? Okay.

And and, typically, for I I real I think 4 to five $4.50 400 to $4.50 is a good number to take the risk, I think. Anything less than that, I think,

Steve: you know,

Eric: even though they're spreading the deal, I think

Steve: 400 as in cash flow?

Eric: Cash flow. Yeah. Okay. Yeah. That's right.

That's kinda my

Steve: So if you're not making 400 to $4.50 cash flow, that doesn't really make sense. No. It doesn't fit the box.

Eric: No. Or I just haven't put more money down or whatever. So you can play the deal. But that's kind of the the round figures.

Steve: Okay.

Eric: Well, with a rental property, typically, you're gonna put 20% down. You're gonna rehab it, and then you're gonna leverage it. And then you're gonna pay all those expenses and get, what, $200 a month, maybe?

Steve: Pretty much. With the headaches. With the headaches.

Eric: Expenses and headaches. I mean, the turnkey like, believe me, I tried to get into I was looking at turnkey all over the country. Right? And so, I really thought it was a good model. But when it was all said and done, like, there's no money left over.

It's it's unbelievable. And not to mention, all the turnkey markets that are crushing it right now

Steve: Mhmm.

Eric: Ask them what their property taxes are every year. There there are three times certain markets. I won't say our market, they're let's keep it quiet.

Steve: Okay. So then let's go back to, the property you picked at $4.50. Right? Because the seller carry, it's not just the cash flow, which is amazing part of it. But there's front end, there's back end.

So let's talk about all the different Yeah.

Eric: So typically, you know, you, the the average wholesale was 7,500 to $10

Steve: Mhmm.

Eric: The wholesale fee right now these days in our market. You can typically, in our seller finance world, with the down payment and the cost of rehab and the closing costs and all that stuff, there's 3 to 5,000 left over

Steve: Mhmm.

Eric: Profit upfront for us. Okay? I I typically like to get more, but we're not gonna squabble over that because I'm also getting another $5,000 a year.

Steve: Mhmm. So it's 5 k upfront.

Eric: Yeah. Yeah. Typically, about $5 upfront.

Steve: 5 k cash flow per year

Eric: Per year.

Steve: Not stopping Per year. For, like, thirty years. Right?

Eric: Well, let's just say it goes five. Yeah. Sixty months. You know? Yeah.

So So that's $30

Steve: Mhmm.

Eric: Plus the 5. That's 35.

Steve: Plus the profit when they do sell.

Eric: Typically because we're selling it retail. Mhmm. We're buying wholesale. So there might be $20.25 in that deal too.

Steve: Right.

Eric: Now, obviously, they pay it down a little, but but you're also doing the same on your side. So what I did is I amortized both sides so we're not catching up

Steve: to each other.

Eric: So if I have a loan here, let's just say $1.50, amortizing at seven Mhmm. And I sell it over here and then loan's one eighty at eight and a half percent amortizing, I just want them to kinda move along together on the amortization.

Steve: Right. Right.

Eric: So so it doesn't catch up and go past it. That's the right way to do it.

Steve: So you're doing a cash flow on a difference in the mortgage payments

Eric: Mhmm.

Steve: And on the arbitrage as well.

Eric: Little ar yeah. Little cash flow on the on the amortization too. So you get an amortization calculator. You can kinda figure it out.

Steve: But Right.

Eric: I mean, it's next year maybe a $101,150 bucks maybe.

Steve: Nothing to sneeze at. I mean, you got 10 of those.

Eric: It's like savings.

Steve: You got 10 of those. That's real money.

Eric: But but that the here's the thing. Like, the the spread in the note is great. Mhmm. The client this the borrower has equity, but I just look at that as a bonus. You know?

Yeah. The thing refinances I mean, the reality is I my ultimate goal on a lot of these, I wanna be the lender on this property forever. Right. So if someone contacts me and says, oh, I'm selling the house. Really?

Who's the buyer? You know? Can I can I have a option to be their lender? Yeah. Because why not?

Right. Why wouldn't you? And then you just start over again. You know? So so you don't have to, you know, go find a place for your, investors' money.

Steve: And so, you know, you've acquired a few of these. Like, I think eighteen months ago, you started taking this refocus back on how can I do less, enjoy more? Mhmm. Right? Actually get to travel with your family.

You know? Right. Dream of every real estate agent that that never does it.

Eric: Did I tell you so did I tell you what I did this summer? No. So so there's a company. You guys can Google. It's called Mindvalley.

And so Mindvalley goes to a different country every year for a month. And it's like personal development, business. It has all sorts of stuff. So my wife's goal in her life was, like, we need to go to a country every year. I'm like, okay.

Let's work that out. Mhmm. So we so we so we did it. So we were there for two weeks. We were in Estonia Mhmm.

Which is near Russia. I didn't know that at the time. But I was we were there. And so, with our note business, like, I literally didn't do anything. Like, I didn't take a call.

I mean, yes, we didn't do we had some marketing going that was being taken care of by our agents, but the note business still paid. Like, the the the money still came in. I didn't have to deal with it. It works that way with rental properties too, but we were literally gone for almost twenty days in a different country doing our thing, you know, having fun. And then this year this summer, we'll I think that they do it.

We're gonna try to do it for the month for our kids. You know? I don't know if they wanna do that or not, but

Steve: we'll figure it out. Our audience right now is wholesalers. Right? These prem predominantly people are listening to the show right now.

Eric: Mhmm.

Steve: So what we're telling these wholesalers that it's very realistic that if they wanted to switch gears, they could, in twelve months, potentially acquire 12 seller carry properties.

Eric: Absolutely.

Steve: Right? And with the 12 seller carry properties, let's just say 400 a month. Right? So

Eric: instead of $5.

Steve: Right. Instead of wholesaling for 10 k

Eric: Mhmm.

Steve: Just get 5 k upfront, have passive income Mhmm. And have 10 of those. That's $4 a month. Passive. And you can go hang out with Eric in Estonia Yeah.

Or wherever Mindvalley is going next.

Eric: Well, here's the thing. The the wholesaling business, you will never stop. Right? We're always gonna be marketing. Right?

Steve: Always in the

Eric: Always market. Always, always, always market. Always tell people that you're a cash buyer. But when that deal comes along that fits that deal

Steve: Mhmm.

Eric: Then you can wake up, a year later, five years later. I don't know what your overhead needs to be. I mean, we talked about this earlier. I mean, how much money do you really you know, making $500,000 a month wholesaling houses with 47 employees and a million dollars a month in marketing makes sense for some people. For me, not so much.

I I don't need that. I'll buy all those properties that they produce, and I'll create a cash flow. But I I really believe the wholesalers it's really hard for the wholesalers with these big operations Mhmm. To look at 400 a month as as, like, this is exciting. Yeah.

But they're doing so much volume. I'm like, what if you just did 60 how five a month?

Steve: Mhmm.

Eric: I mean, you're doing 30 houses a month. Do five a month, and now you have 60 properties at 400 a month. I mean, that's 24,000. That's, like, that's $300 a year. It's okay.

That pays some bills. It does. Right? Yeah. Sure.

Not to mention any spread and all this other stuff going on. Right. Not to mention you're helping the world with, you know, some some, retirement people getting income and and not losing their wealth and then, you know, helping other homeowners get a a home to live in. Because that's the

Steve: best opportunity to buy when they operate when the opportunity was not available otherwise.

Eric: So, I mean, that's that's why I look at it. I mean, I love wholesaling. I mean, we all do because it's quick cash, and it's great. But, I I think that this is an that where we're at in our market is, there's an opportunity. Yeah.

I I mean, could we see a correction and a big drop? I I don't know. I don't I don't know. Like, we talk about it. Mhmm.

It's possible.

Steve: We could have a black swan event, but I think it's highly unlikely to have another

Eric: We here's what I feel. I'll I feel that there's credit

Steve: Mhmm.

Eric: But it's but it's different credit. Housing credit is is is, I think, stable. Yeah. That's my opinion.

Steve: So Scott Charles asked again, how would you build a list of buyers for these properties?

Eric: So, bandit signs.

Steve: Mhmm. Okay.

Eric: Let me see if I I don't have my phone with that. I it's just, you know, sell what what do I don't even I haven't I haven't personally put these out, so they just call in to our office.

Steve: I don't know. You see them on the corner. Right? Three bedroom, two bath, pool, 1,500 a month. Call for details.

Eric: That's right.

Steve: Yeah.

Eric: That's it. So just any number of those? I I mean, I I think we have five, six hundred of them right now.

Steve: Yeah.

Eric: But, really, the the and our I I have relationships with realtors that manage that list for me. So I I don't really, I I probably would have as I grow, I mean, we're we're close, but I'll have a disposition manager that that's their whole deal is meet with these sellers. And it's the coolest thing I

Steve: would be like an employee.

Eric: I don't know. We're we're working through it. We're working through it.

Steve: Alright. So one, I mean, with with everything you're talking about right now, do you have, like, a calculator or someone that says, okay. Here are the numbers, and it makes sense.

Eric: So, my business is not that sophisticated, but I do have a calculator that I use on my phone. It's called Carl's calculator. If it's in the App Store. I think it's it's free. Okay.

And I just plug in the numbers. I put it in calculator. Carl's calculator. I don't I my phone's off because I don't want the alarm to go off. But, so Carl's calculator, throw that in, and then you just figure out where you wanna be.

What's my what's my cost? Mhmm. What's my interest? What's my resale? What's their interest?

Amortized. There's your spread. And then well, and then, obviously, you add taxes and insurance on top because you're not paying that. Right. So now you know.

So now you know, okay. What can my typical borrower pay

Steve: Mhmm.

Eric: In this specific market to be a homeowner? Yeah. And and right now, I think the most is, like, 1,600 Mhmm. With taxes insurance

Steve: to

Eric: be a homeowner in Phoenix, Arizona.

Steve: Alright.

Eric: That's not bad. Right?

Steve: Yeah. Even if the economy tanks I mean 1,600 is still

Eric: three bedroom, two bath house, block construction, newer not newer, rehabbed. Like, that's pretty good. Right?

Steve: Yeah. For

Eric: the rest of our careers, that's pretty good.

Steve: Right. And if that's your what you're owing your guy

Eric: No. That's that's no.

Steve: Oh, that's not what you're owing

Eric: your guy. No. No. I'm owing them less than that.

Steve: Yeah. So you should be even if the market dips and rent dips, you're still gonna be

Eric: okay. And and here's the thing. Like, let's say you have it goes it's like the wholesale world.

Steve: Mhmm.

Eric: And all the big wholesalers that are that are buying our market, deal comes through. Boom. They're like, I'll take it. Right. Well, you do 20 a month.

You might have a couple. You might have three that you overpaid. Mhmm. Pay the money and go to the next one. Right.

Right? Exactly. That's the hardest thing to do as a real estate investor, write a check on a bad deal.

Steve: It's a lot easier though.

Eric: Thing to do.

Steve: It's a lot easier than keeping it.

Eric: That's right.

Steve: So one other thing too is you were talking about the value of a mentor. What can you

Eric: talk about on that? Well, I'm I'm, so with technology today, you know, podcast, your podcast, like, there's so much information out there. So I I truly, I've been I've been I'm in masterminds. I, I I've had a mentor. I I found how I found my mentor is I brought them value.

Steve: Yeah.

Eric: I'm like, here's this deal that you've been door knocking for eighteen months.

Steve: Right.

Eric: Let's make money. And we did. You know what the greatest thing about my very, very, very first deal? That seller still that homeowner still lives in that house today. In fact, I've been you know, I haven't been in the area, but I can't wait to go door knock them and give them a big hug.

And I mean, they were losing their house within within days. Yeah. And they're still there with their kids. Their kids are probably older now, but a lot older. But they're there.

Like, I pulled it up on a tax record. Same people.

Steve: Very cool.

Eric: So that's I mean, that's the value that real estate investors can provide people, you know. Yeah.

Steve: You solve their problem.

Eric: So so back to mentorship, I mean, I'm I get up every morning. One I I would say one of the biggest things that has helped me personally as a personal development side world is I've been I meditate. And so, every morning I get up, I lay in my bed, try not to, like, fall asleep again. Mhmm. But I, you know, I take, you know, ten, fifteen minutes, and I give I ask for, you know, what am I grateful for?

You know? Mhmm.

Steve: Start with gratitude.

Eric: I always start with gratitude. I mean, it could be as little or as big as you want that gratitude to be for that day. Mhmm. And then I and then I pray. You know?

I pray for it could be, obviously, my family, but people I don't know I mean, pray for you. I pray for you today. I was like, this is gonna be the best freaking podcast we ever you'll ever have. No.

Steve: It's pretty good.

Eric: And so, and then I asked for abundance. Like, asking for greatness to happen to you every day.

Steve: Mhmm.

Eric: And then you get your group, your wife, your kids

Steve: Mhmm.

Eric: Your the people in your network to do the same thing. It's the corniest thing in the world, but greatness happens.

Steve: Oh, that's true.

Eric: Be sitting here right now, in my opinion. You know, I know there's a secret and all that stuff, but it's the corniest thing to do consistently over time. It pays off. Right. It's unbelievable.

Steve: Well, you get what you ask for.

Eric: Yeah. You do. And so that's changed my life. I mean, I, I've I've I've been doing that. I'm not super religious, but I'm very spiritual.

You know? Yeah. And I think that that just if you start your day that way, you know, I mean, I get up really early, like, five, and then I exercise, and then I listen to when it comes to mentorship. Mhmm. There's a million podcasts out there.

I mean, your podcast. I mean, I listened to a few, before we came, on the show, earlier in the week. I mean, there's some freaking smart people out there. Yeah. There are.

Like, amazing. And if you just take a little bit of what they learn and implement it, you know

Steve: Who knows what can happen? It's amazing. And then the value of an accountability partner. What would you what are your thoughts on that?

Eric: So, probably a year or so ago, it's been longer than that, I I hired an accountability coach. Okay? So I pay him I don't know what I pay him a month. Actually, I do. But he calls me, and this this doesn't matter at what level you're at.

I mean, if you're just beginning

Steve: Mhmm.

Eric: Or if you're you know, you got 350 seller finance deals out there, having somebody that you can talk to that's a third party that can keep your shit together Mhmm. And ask you why you're not doing x, and it's not your wife.

Steve: Right.

Eric: I've tried using my wife for years. It doesn't work. I don't know why. But we work with each other. We help.

Yeah. But we each have our own little accountability team member. And they we go over where where we're at, personally, professionally, and they just keep us together. And I I think that that's the biggest that to me is a game changer. Yeah.

Because they'll they'll call you out.

Steve: Yeah. No. That's great. I mean, I have exactly

Eric: And you

Steve: can go

Eric: online and find anybody who will be your accountability partner, but pay them. Like, actually pay them. It's worth every it's worth the investment.

Steve: Pay them. The only difference I would or the only, nuance I would add to that is that there are some life coaches out there that have no idea what they're doing. Don't go to those guys. Go to people that

Eric: Yeah. I mean, my my guy's awesome. He, I

Steve: Well, I'm not talking about you specifically.

Eric: No. No. I know. I know. But, you know, it's here's the thing.

Like, okay. So I I go back and forth on this, but there's gurus out there that teach how to make money in real estate. Right? And those gurus haven't done a deal in ever. Yeah.

And I but and I've been involved with all a lot of them because I I'm I'm I'm a geek. I love learning. Right?

Steve: Yeah.

Eric: But here's the thing. You can be a really, really, really good coach and not be good at that that deal. You know what I mean? I am. I'm personally I would say I'm an okay coach.

I wanna get better at it because I love share I mean, I hope you can tell. I love sharing what I'm doing. Yep. Because it's it's life changing. Like, it changes people's lives.

But, but there are people that are really good coaches. Mhmm. And and and to be a good coach, I mean, you're just trying to keep people accountable to to go to the next level. Right? So I I don't I don't know.

I mean It's a different skill. It's a great skill.

Steve: So and I I hear what you're saying. Yep. Because, one of my favorite examples for this is the Phoenix Suns coach back in the seven seconds or less. Did you ever go watch some pregame shooting around? So the Suns coach so you got they took Boris the out, made him a great three point shooter.

Yep. Everyone was an amazing three point shooter during during the seven seconds or less era. Right? But if you look at the Suns' shooting coach, he would go out there and correct their form and make sure they're shooting well, and they were. And he had the worst freaking form I've ever seen.

I'm passionate about jump shots. Yeah. Yeah. Shooting it right. Getting yellow and follow through, fingers spread, all that good stuff.

Right? The guy couldn't shoot with anything.

Eric: But he's a great coach.

Steve: Great shooting coach. Amazing shooting coach. But I guess the reason why I was adding that nuance is there's some people out there that have no idea what to do whatsoever. Make sure they at least know what to do in order to hold you accountable.

Eric: And they and everybody's personalities are different. Yeah.

Steve: So just as

Eric: long as you're aligned, I I I know. I mean, you know as your business. I mean, who do you go to to keep you

Steve: Yeah.

Eric: On your game? Right. Right? Like, I mean, for me, you can have a spiritual coach. You have your I mean, I went to spin class today.

This gal, she's 50. I think she just turned 54. I mean, it's unbelievable. I think she does this her fourth spin class today

Steve: by noon.

Eric: I don't know. And she is amazing. She She crushes it, and she keeps me motivated and coming back to do that. I just I just I just love it. And I don't know.

If anybody spins, it's it's fine. Sweat sweat to death. Okay.

Steve: As we wrap up, is there any lasting thought or last thoughts you wanna add?

Eric: No. I mean, I I think that, what we're doing today is just another tool in the toolbox. Right?

Steve: Right.

Eric: There's opportunities out there. You know, the oh, the $4,700,000,000,000 secret. Did we talk did we talk about that earlier? I have a book. I'll give it to you.

So, if you can, you guys can email me at eric@ericbuyshomes.com. Mhmm. I'll give that to you guys. It's It's about private money and the whole thing. And I don't know.

I just being starting, you know, almost fifteen years ago, the key for me in this business is is is cash flow. Like, I think cash flow is the key Yeah. And and and make it as passive as possible. So that would be my that would be my thing. Do you have anything for me?

Steve: No. I mean, it's a massive inspiration. I mean, I I when I heard you speak about seller care, I said, I gotta have this guy in the show and pick his brain because I wanna do this. Yeah. And we're we're gonna do this.

Okay. So, guys, if you got, again, value from the show, please share this episode right now. And if you guys wanna get a hold of Eric Howells, we talk eric@ericbuyshomes.com.

Eric: Eric@ericbuyshomes.com is good. And then or or go to ericbuyshomes.com. Mhmm. Our phone number's on there.

Steve: Okay. I

Eric: don't even know the phone number on the website because I never never use it, but it'll get to me. It'll get to our office. Yep.

Steve: Cool. And then we do have a special guest tomorrow at 04:00. It's unusual, but he's an out of towner. So anytime someone's flying in from out of town, if they wanna do a show, they're gonna we'll always be glad to have them so long as, you know, they got a track record. So Zady, he's had hundred k months, and he's gonna show how he's done that.

Again, Eric, thank you for being on the show. Awesome. Appreciate it.

Eric: Thanks. Thanks. I hope I helped out.

Steve: Oh, you definitely did. If nothing else, you inspired me. Good.

Eric: Hey. That's what that's what it's about.

Steve: Alright. And I'll see you guys tomorrow.