Pandemic Real Estate Investing Opportunities with Melissa Shea #DDRE41

Pandemic Real Estate Investing Opportunities with Melissa Shea #DDRE41

welcome back to the data driven real estate podcast the podcast for real estate professionals dedicated to driving business using data i'm aaron norris along with sean o'toole with property radar and this is episode 41. we are very excited today to have melissa shea she's the ceo of real estate integrated company everyday re group the president of the long island real estate investors association she's got a new york broker's license she's a licensed commercial lender for everyday funding and an exit realty regional owner for connecticut and rhode island and since she has eight kids i'm just excited she can talk to us so melissa welcome to the show thank you so much for having me yeah it's a real privilege to be on here so that's great we don't talk to too many people with that many different licenses how did you end up in this niche um just out of service for people you know they would i would my first passion was owning maria right a real estate investors association i bought it about in 2007 great year to buy it oh my gosh really great buy it yeah and um i just kept asking the members what do you need what do you need and so they said uh we need a hard money lender and back in those days right there was no hard money lenders um they all disappeared right and then you got 50 ltv and stuff like that so i said all right let me start getting into it so i started helping them you know uh raising capital to for different projects and stuff like that to help my members out joint venture or whatever and then uh i realized you need a a a broker's license for it so i got a broker's license to do it and then uh my members kept saying well all right now that you got us the money where's the deals so you have a broker's license get a broker's license and start a franchise so then i started doing the real estate um side of it and uh we started helping our members that way and um then i got my nmls to help um people with their residential mortgages i've since passed that on because let's face it i got a lot to do and that's that's i don't like working with the government that much so um lots of detail and paperwork that is not my forte but i found a really good servicer for the industry and my members and i just care about the members that's all it came from that's how i just kept racking up those licenses and things like that what brought you towards uh to buying a rio how did you how did you reach that and just for the folks listening aria is a real estate uh investor association so it's a local group of real estate investors because it's so much it's so little work and you make so much money as uh running area right melissa well in the beginning yeah it's a labor of love as oh my gosh i actually turned it into extremely profitable business and i didn't didn't intend to do that it was again just out of service because i my first year of real estate i bought six properties then i bought 11 my second year by the third year i realized i'm in a lot of problems here because i didn't know it was around two thousand five six seven um i bought on appreciation and not cash flow and i found myself in a big pickle and i didn't know how to get myself out and i was only doing it by myself i read rich i read um colton sheets book dating myself by saying that so i cover my grades but um yeah and so i got myself in some big trouble and i was searching for somebody to help me like a group or something and um i did the rich dad poor dad no not richard um i started googling it online you know investors on long island and so it brought me to a real group and shawna you're not gonna believe me but when i walked in i felt like angels were singing like oh like there's people like you just as insane as you you know my friends were telling me you're buying another house you know more tenants toilet problems and you got it evict and you know i started losing my friends my family wouldn't talk to me about it and i got so much negativity and then i walk into this room of like you know 50 60 people and like they were all like go get them you know so positive and so um i found out it was right around 2007 right when the market was correcting and uh the president said she was gonna sell it to some person that was just gonna dissolve it for his own and i thought oh god i can't lose my little heaven so self-preservation that uh yeah i just so i asked her i said please i love this group so much can you please make sure that um you know i'd be interested in buying it so and she we worked out a deal and uh i bought it and i've never looked back and you write you're aaron you're absolutely right i didn't know what i was doing i didn't know how to run it i wasn't a good marketer um i did everything wrong and yet it's my most successful business today so who knows you can fail into success it sounds like a lot of your other businesses uh came out of that right so yeah funding and uh real estate brokerages and and other things uh all grew from that uh fateful day when you walked in yeah i i wish i knew how much my life would change or maybe it's better i didn't um i became a a mentor which i never thought i would be because you have like that imposter syndrome in the beginning because you like i was just doing like i'm a hustler if you can't figure that out already yeah um i just like doing it right and then everybo and then i went through a horrible thing called divorce anybody been through that that's fun um so it's like a reset in your life right because they take everything i mean everything's gone you know once they find out you got assets they just the lawyers suck it all up um so our kids lost everything and um the beauty of that the absolute beauty of that was i got to rebuild the whole real estate portfolio again with so much more knowledge that i could do it so much faster and i was actually on a radio show like kind of like this and the guy asked me if you had to start it all over again what would you do and so i started saying it and then he's like why don't you teach people i'm like oh i don't think i have time you know and uh do you know we had one you don't have time you seem to have time for everything i know i i gave up sleep it's a great thing you know so um but what happened actually out of that was you know how um a lot of times ria's will have these people come in and educate the you know your members and stuff like that and this guy took ten i think it was five five people he took seventy five hundred dollar deposits from and just banished with the money so so my heart broke for them and i said listen i won't charge you anything but i'm gonna have to do it as a group and i'm gonna have to add five more people in that to offset my costs and that's how my mentoring program started i have uh over 140 graduates everybody um 84 of them make their money back in uh two years or less and 50 of them make it back in um less than a year so those are really high numbers by the way are you behind them with a lighter like putting a fire under them or oh yeah i kick their ass no that's the reason a lot of people do not take action yeah i mean i think that's the biggest problem it's it's you know it could be i think it's often less the instructor and more the people that are attracted to those programs so do you weed out people when they apply um because the only way you can have that level of success is by telling a whole bunch of people no because there's a bunch of people that just will never they'll pay the money with the hope and dream but they'll never actually do anything yeah i i i think that's probably the biggest thing i don't it's not about volume for me i'd rather take 20 small i think we're our classes are up to maximum 20 because i know i can be effective with that and um with that i'll i meet with them one-on-one and if i don't feel like they're a good fit for the program you know no harm no foul i'll give you money back or you go on to i'll give you some recommendations of what you should be doing but i'm looking for people who are just as motivated as i am you know i'm going places you want to come with me then you come but you're not ready yet then then there's a lot of other free content out there totally where where is your rio located i'm in long island so um okay and now we've branched out to connecticut and rhode island and you guys meet monthly yeah so well actually a lot more now we used to meet monthly pre-koban again i did the same thing with the very first um covered rhea meeting we had virtually like this uh we had about 80 members on there which was great and i said to them what do you guys want from me what can i do what can i show leadership to you guys during this scary time and they said they wanted more free content and more support during this time so we turned it into a weekly call and we have done double down with education we give them six meetings a month now and which is a lot that's a lot of work yeah but i can't tell you how many more deals have come out of it more students have come out of it um you know you give you get what you give right so i gave it for free for the whole year 2020 i gave every meeting was free for all our members and everybody was free and then in 2021 we started charging and um it's been extremely successful and rewarding well what kind of deals are you doing right now is it i know you manage you have quite a few rentals but are you still flipping yeah so i'm flipping right now about uh 17 properties and i have a portfolio about 100 and it ranges every day because i'm buying and selling so often but it's a range of about 120 to 130 units is where we're at right now and those are flip versus hold rental so 17 are flipping right now and the rest are all buy and hold i really want to double down on buying buy and hold uh yeah yeah that's and that's since 2007 or actually since after the divorce i guess when you restarted so how over what period of time did you do that well i've done over 600 rehabs um wow yeah so my and here's a funny story right so if anybody's listening and you think oh my god that's too like crazy like i could never do that i my first 11 i didn't make any money on i made i wrote checks at the closing table to get rid of my first 11 houses how screwed up is that right yeah it was it's a different way to pay for education right you pay a mentor you pay somebody else or you pay at the deal it's you're going to pay it either way right yeah you're going to pay it either way a personal smart sale all right yeah exactly like oh yeah another rehab i used to get like i got my stuff like oh this is gonna be the one this is the one i'm gonna make money on and you know you still lose a little bit here and there um but i've also made a lot of money flipping too i mean where are you predominantly flipping is it in the long island area god no um no it's mostly out of state um we we have a lot of competition here in new york um we've got a lot of people with deep deep pockets so very competitive we used to do quite a bit because we were specialists in short sales um i unfortunately had to go through with my divorce so i got a wonderful lesson on how to do it and i got a wonderful lesson on the emotional part of it because uh a short sale is not about the financial matter for them it's about the emotional piece of it yeah so if you can connect to them in that space of empathy and the fear they feel um they have a lot more trust and confidence and i've taken them through the finish line and um and i enjoy it i really enjoy it because watching you ever do a short sale and watch them at the closing table like when they sign their last document and they get up you see thousands of pounds of stress just leave i always tell them tonight is going to be the best night's sleep you've had in years and so we did get a lot of our our flip fix and flips from that but when the coven and moratorium hit it's really it dried out quick you know i think that empathy piece right whether you're an agent taking a listing or you're a real estate investor buying somebody's house or whatever like that that is really the the key to the whole thing if you're working directly with the uh with the owners right like yeah understanding that situation and the rest and that piece is so lost on everybody who's focused on i mean we're in the list business we sell lists right but but everybody's like focused on oh this list or that list and you know you have the best the worst list in the world and close a lot of deals if you can connect with owners and you can have the best list in the world and not close any deals if you can't connect with owners yeah that and it's a hard thing to teach it really is i i have quite a bit of agents and i you know trying to teach that compassion you either have it or you don't um i find the best ways to recruit for that is somebody who's actually been through a short sale i always tell them make their mess their message message because look you can relate to them right like look you were in a financial mess upside down destroyed credit blah blah blah and now you come out you're you're smarter you're better you buy a short sale afterwards so you know how to buy with equity you um you can make money helping others it's like such a i know it's cliche-ish but there's a real joy in doing that there's a real satisfaction in your work when you can help somebody and then still get a good payday out of it too you know it's fun so well that's why your lists are important so you and i talking yeah so the list is still a necessary part we're here oh god that's where it starts right [Laughter] uh i wanna before we go into the states that you're active and i do wanna talk a little bit about long island you know we have listeners all over the country and so some people might not appreciate your your proximity to new york city and what you guys are going through to compare to what the city is and i believe you have some inventory in the city of new york right yeah so we have uh the whole tri-state area pretty much except for jersey because you know new york is in new jersey's um but yeah so when covet hit right um if people don't understand long island is the island next to manhattan it it actually has queens and brooklyn on it but we don't um naturally associate those two with long island but um when kovet hit they all came to the island so our real estate jumped up like many cities right the suburbs did so much better than the city did and i can't tell you the increase in amount of activity just from that and new york started it all with the covid you know um you know there was there were some scary times in the beginning like this time last year a lot of deaths were happening people just wanted to get out and um they were just overpaying ridiculous amount they had cash and they just kept buying and so our market went up quite a bit our and the dynamic was our inventory shrunk because any of the short sales immediately were expunged because there was no evictions no foreclosures going on so inventory shrunk fast it created that increase in price and we're still kind of experiencing that even though the city truly hasn't opened up yet you know jim still can't open up and restaurants still can't open up fully you know so they're feeling it you know and for how's the tenant situation worked out you shared one particular story of a tenant that stopped paying in february where you offered cash rate keys can you can you walk us through that yeah so this is going to sound really bizarre to a lot of other states out there especially because i invest in tennessee it's very different there um so i have 10 buying holds in new york one is actually a shelter home that nestle county is my um tenant and they didn't pay for four or five months which is interesting um and that was for homeless people right so that's crazy but the one story i was telling you about aaron was um they both stopped paying in they the husband and wife stop paying in february the mortgage on it is thirty to sixty a month is my monthly payment and they were paying thirty two hundred dollars a month and they stopped paying they are both on disability so they did not lose their jobs they did not lose their benefits and then they decided to rent out my basement so they were renting out my second level collecting eighteen hundred dollars bragging to me about this realize that they don't have to pay new york's you know because new york said pretty much you don't have to pay if you're a tenant and we have been paying ever since so that's february of last year so we're on our what 13th month of paying uh april 14 will be 14.

And we can't even start the eviction till june if they don't extend it again and an average eviction in new york prior to covid was six to eight months and then they did a law change that was now making it nine to 12 because they added you had to give 90 day notice to them to vacate right so i mean i offered this woman up to 30 thousand dollars to move 30 000 and she wouldn't take it is that crazy well because she knows that she's going to be able to park it there till 2022 and you'll be out 70 grand and yeah yeah yeah you will you will end up with a judgment you know oh yeah yeah because that does you but they just filed bankruptcy and wiped that away with a 2 000 payment you know so yeah i think what what our state did was sinful in taking away our rights as landlords um because i have a commercial mortgage you know they're like oh just ask for the forbearance well for forbearance doesn't forgive the debt first of all and the second part is is that you're going to have a lump sum do when it comes up maybe you can modify but that's not the luxury we have with uh commercial mortgages right because it's not fha backed or anything so i'm paying like seven percent i'm looking to refi because rates are better now but um i can't refinance either because i don't have a paying tenant right yeah it doesn't really look good on paper does it nope so i think you know and that's why we invest out of state right because who wants to deal with that you know and it really ruins it for other people i'm very active in the um you know homeless homelessness i have a non-for-profit organization too and um it really ruins it for them because where are they going to go you know and then let's like take it you know you guys are going to have some serious lists coming up in our market because you're going to have two things one is you're going to have all these landlords that want to sell right i put that house up for sale as is with the tenant occupied you can't even believe how many people are making offers on these houses like that really yeah well they're gonna have to deal with the tenant after right i mean can yeah but they're so desperate to get houses anything right so and they figure they'll make it up on the back end yeah i'll sell it at a 60 000 discount just get out of the damn thing and they'll pick up a deal and they'll deal with it so and that if it's a residential mortgage they're getting rates in the threes right we're in the sixes you know so fives now if it's a homeowner that buys it the eviction law is different right they can actually kick the person out no not new york not in new york isn't that crazy it is interesting like why they would take that risk they're just so desperate to own something yes wow yeah isn't that crazy but um yeah so that that's what the next major fall is all these investors that only single-family houses right they're behind on their mortgages because these tenants are not not paying for months and months and months of time i have 10 houses out of all 10 houses in new york only one tenant is paying one whoa yeah so i'm floating 35 000 a month in mortgage payments just in new york and these tenants do not have to prove any kind of yeah nope no california at least on paper right they've required uh proof of you know of you know loss there and uh that seems to me like just a base case requirement like you know why should somebody get a windfall um you know that that's just that's not fair it's not right and here's what the other problem is so let's let's get through the when you know forget the amount of foreclosures that are going to happen because of this incident where are those tenants going to go when they eventually get out if you know that they haven't been paying during cover do you think any landlord is going to even take them the shelters are going to be over flooded and because the county wasn't paying us we closed down our shelter so so many shelters closed down it's a big mess so my solution is go to connecticut go to uh you know south carolina north carolina tennessee anywhere else you know the pendulum is always swinging you know even in places like california and sometimes things have to get really bad before the pendulum starts swinging the other direction so you know maybe this is uh you know the cure right like having it get so bad to one side then things start swinging and going the other other direction it's just i don't know that's the way things go over time yeah there was it was two landlord two tenant friendly state i mean literally a manhattan eviction would take you two years you know it just that's insane that's an average and a foreclosure the average um time to foreclose in new york is seven years so five to seven years i've got a guy who's always reaching out to me and uh about you know he still thinks in you know new jersey new york that whole area that there are and we don't really know right we kind of believe this is true in nevada because we had we were tracking nevada back through the crisis and um nevada changed some laws and basically made it criminal you know to foreclose right it's crazy it's a long story we won't go there but um but what we saw happen was the foreclosures went away right but i don't think it was because people started making their payments i think the banks just said forget it we'll let them not make their payments and we'll just sit on these properties until they you know whatever so you know i wouldn't surprise me at all today if there are tens of thousands of owners in nevada that haven't made a payment since 2007.

And banks have just said we'll wait till they die or sell or move or whatever right and because it's not worth foreclosing and the prices have gone up and so that you know the assets still there we're continuing to accrue the interest and stuff we'll get paid someday but we're not going to worry about it for now well they got to be careful about that because they could do a quiet title action and clear their debt out and that's it maybe yeah maybe so uh you know it's it's interesting uh you know and so anyways he feels the same things happen in in in new york new jersey etc and that there are tens of thousands of people that have haven't made a payment since 2007.

aaron norris

And no foreclosures because we didn't really see the volume of foreclosures there that we saw in other places well in nevada no no i'm saying even in new york and new jersey nevada certainly yeah you know why a lot of that was um so because we're such a reputable state um there was um the largest um attorney was fraudulently foreclosing on people uh stephen baum's office so they had to reverse all the foreclosures every one of those foreclosures you know what a mess that was and they put a moratorium for 18 months on foreclosures so what happened was they just settled out and that's why our short sale business did so good because we were just settling out with the bank the banks were hungry to just settle at that point because they knew they couldn't foreclose and um yeah so that's really where our strength comes in is that that short sale market which yeah when that all happened i'm back eventually do you see a lot of members sort of preparing for the opportunity that you're talking about maybe picking up some properties for over leveraged investors not prepared to do what you're doing yeah um the investors you know you don't even have to wait for the foreclosure part they're just so desperate to get at like investors are a little bit different than homeowners because they don't have the memories of you know bringing johnny home from the hospital and watching them grow up in the house you know it's it's a different emotional attachment right it's like oh my god yeah they don't have the legal protections um being foreclosed or evicted yeah and well actually foreclosure they still can't foreclose on them either but it's going to destroy their financial life right because the financial hit to them is is too much and so if they can get out of that they'll take they'll take a hit and move on you know um it's unfortunate because it's out of our control right and and i i think that's the part that uh you know losing our constitutional right to execute you know you don't pay you have the right to evict and i don't mean like you know throw them out heartlessly but like you said there's a lot of good reasonable states that said you know what you have to prove that you actually got impacted by covid before we have before you can go after this is a three-month grace period four-month grace period something we're trillions and trillions and trillions of dollars of support right so much in the name of homeowners so much went to and not homeowners but to renters and the rest right and so there's been a lot of support for these folks and you know so to the degree that we were going to put trillions of dollars of support out there to have it go to making sure their housing payments so it supports the entire chain and doesn't just pick and choose and you know i keep hearing stories of like folks that are you know not paying their rent but investing in gamestop that can that shouldn't happen well that was a stupid thing that they did a lot of legislation didn't think this one through no they wrote the checks to the tenants they should have been writing it to the homeowner or the uh landlord and so the tenants got the checks and they still weren't paying their rent like you said they went that's why i was right let them make the decision but then don't protect them from eviction if they use it you know on a new big screen tv that's true too that's true too are there a point i've seen different states doing different things in california there's some non-profits getting karzak money to backfill specifically working with landlords or is any money available in the new york market for landlords making up past rents as grants we've been we've been trying to actively uh come together as a community it's a little divided right now but it's it's taken such a hit that we have to get united on it but no there's no resources for they view the landlord as the big ugly rich people and meanwhile it's your mom and dad your neighbor next door it's not it's not conglomerates it's not hedge funds are smart they're buying in in places where there's low taxes right they're not buying in their own backyard right and here's the funny part is most of the investors that buy these rental houses live in new york you know what i mean so that's the ironic part you're actually hurting that whole economy of scales like you said sean like if they had just paid it to the landlord it would have kept the whole economy going um yeah the same thing happened to small businesses right so you know like in a lot of cases small businesses right you gave people this extra unemployment benefit which i think was awesome and you know there's a lot of good things about that but then i know lots of small business owners who were trying to survive keep their business open and they're asking those employees to come back and they're saying i'm making too much money on unemployment i don't want to go back to work right right and and so now wait a second you know so yes this helps in a way but there were jobs available over here that people weren't willing to take and you know so it's we're not very good as a country at stimulus and it's one of the reasons right we have it we put all this money out there and ideally right you're reflating the economy right covid's incredibly deflationary you're reflating the economy and getting it back on track but because we're not good about how we do that the money pops up all these unexpected places and you know you've got a run on exotic cars and you've got to run on gamestop and you've got bitcoin going through the roof and like the money pops out in these places where it shouldn't and yet small businesses and landlords aren't helped at all and they're getting just absolutely hammered and um and you know the rich get richer because both parties think that uh the 250 000 a year small business owner or you know small landlord that owns five properties a rich person and not not the guys who are actually profiteering off of all of this yeah anyways i'll get off my soapbox this is we're here to talk to you yeah but you know what's interesting about that is that you know thank god we're in real estate you know what i mean and that's probably the message and that's probably why you know my big my big mission if you want to put it on life is to empower and educate people for financial independence through real estate so it doesn't work in new york so great so what you know take your lickings but don't give up right that's my 600 rehabs i would not have my 600 if i gave up after my fourth writing my check you know and there's real estate available everywhere else i'm still making a lot of money thank god because that's offsetting my new york mess but my guess is if you if you survive through this thing in new york you still do really well in new york like everybody wants to beat on california but you know the investors i know in california all kind of crush the investors i know everywhere else right in terms of absolute income and rest and you know you're making 50 100 000 a deal versus two and ten like so that's true i i don't know but it it does it can be very frustrating at times yeah and if you do it right like um ironically florida is the one i made the largest spread on but there you know our average flip is between forty and sixty thousand dollars still you know it's it's got a good chunk to it i mean there's i'm not gonna lie there's times we made some really really good money and then there's times where you just get beaten down by the town and stuff and i'm writing a check for twenty thousand dollars to get out of the deal and the you know but um it's just a big boy game and you gotta get into it and you gotta survive you know and i'm a woman and i do it anyway you're a new york woman you better watch out yeah mama that's where you really gotta watch it exactly well let's talk about the data you talk about different states what data did you use to was it strictly landlord friendly or how did you select your states so um i evolved over the years as i grew my knowledge base right so my first mistake was i bought in florida similar to a market we have now right i bought new construction back then it was very popular right so dr horton would buy a you know build a house a community whatever i it was like gambling honestly it was addictive right so i put down ten thousand dollars and then i just wholesale that contract off in two months for another ten thousand dollars i'm like wow this is great it was cooler than me right so and it was i kid you now it's like going to a casino right so the first time i did it with 10 grand i was like oh wow i got 10 grand back so i did it with three houses and i think i made like 15 grand between 10 and 15 on each house so what did i do i go in with 11.

11 right 11 and um yeah that's right my magic number right that's the one i should never gamble on and i got stuck holding the bag and i couldn't wholesale them so to not lose my down payments i closed on all 11. how stupid was that so now i have 11 negative negatively cash flowing properties because i didn't think look see and feel right i didn't i didn't do the data right i didn't see that yeah a thousand people a day are moving in but just you know 1200 are dying you know what i mean like that you got to look at those numbers you know what i mean you gotta look at who was actually buying those houses it was only investor to investor was hot potato right and then so that was my evolving in data there is that i had to look for jobs markets where there was stable income and that's when i learned like okay cash flow is the game so i got myself out of that mess by uh doing a strategic deal where i was able to buy six apartment buildings simultaneously that was a little stupid too but i went for cash flow right and cash flow did me well i did well uh the divorce didn't do me so well but that the cash flow did well and then when that all got taken away i had to go through my divorce and i lost my house and i went oh my god if i'm going through this there's got to be other people that are going through this and so then we started doing the list pendants list and so we would buy in strategic markets and we did research uh new jersey uh suffolk county where i actually lived was the um top 10 in the nation of foreclosures so i thought wow this is of list pendants so we filings foreclosure filings but they weren't getting completed no and that actually that dynamic worked really well for us because the bank was willing to work with us because they knew they couldn't get to the finish line we could talk to the homeowners in a way that said hey don't look at this in milking your life look at it as a launch to start your life because the the real truth of the matter is nobody wants to stay in their home not paying rent i mean it sounds great and sexy and fun and all or mortgage but mentally it does something to them they don't thrive because they're always afraid of like who's gonna pull my credit or it's just as a negative way of living when you can free them out of that bondage is when you can help them overcome their fear right when you can tell them listen there is a better way let me show you how and they listen i've i have people who come back to me two or three years later and they're like oh my whole life is all better they move out of state they do this they move in with family they buy another short sale life can begin when they stop yeah because their credit situation none of that starts improving until after they get the deal done and move on yeah and that's so that data was so important because we had callers calling constantly you know once they were at auction dates or when they were lispendents and developing those relationships and now so then we moved into other states we moved into connecticut rhode island um down south so our data led to where are good jobs right so i have a big portfolio in tennessee in memphis i love memphis uh nike built their plant there bear bear build there um same thing with pittsburgh did a lot of research and data on that what's where's jobs right so here's a hint for all you listeners you want to find where the good deals are don't go for the home runs go for the steady eddy cash flow where there's good solid jobs where there's good employment you know and it helps when you guys can provide good data like that where we're um absentee landlords you know that's a really good thing we're going after that in connecticut you know absentee landlords um especially if you have holding power and you can bail out the folks like uh you know new york like our absentee landlord list in new york right now if you've got holding power it's a good time to get some discounts yep that's and that's the truth right so you got hedge funds that are looking for those kind of deals um because new york inherently doesn't lose its value really it doesn't that bad i mean we can cry and complain all we want right now but um it's kind of like california right california holds its value just does you know because it's california's new york but i find that for the average investor especially when they're starting you don't need to hit the heavy hitter areas go with the the bread and butter the non-sexy areas right alabama was great for me i made so much money in alabama it was easy and it was five ten thousand dollars here and there twenty thousand here but it was easy you know what about like in new york new jersey right so in california there's they're only miles apart but there's a big difference between trying to invest in newport beach and riverside right like those those are completely different markets and what an hour drive aaron you live down there yeah without traffic one hour without traffic but do you get do you see some of that where there are those markets where the you know closer to you that are growing and thriving and you know still going to be more expensive than memphis but do you look at that and do you look for those kind of more micro opportunities within your market yeah so for long island um the bread and butter sweet spot like the entry level is between 350 and 550 i don't even think there's a house for 350 on in long island anymore where yeah that was like in the hood right the hood has changed right and that's probably why we go out of market our taxes are really our biggest dream on us um you know a simple little hou like my house property taxes are close to 16 grand and i don't have a big big yard or a lot of thing you know for 16 grand i mean that's crazy money um our our second house in in maryland and that's not too far from dc uh the taxes are six thousand dollars ten thousand dollars less you know it's crazy difference so you get so much more value out of state and um so what strategies are you liking um you mentioned absentee or is there a specific data set that you're tackling when you're going into these markets so um i like fatigued and absentee landlords so like people in california just because they have money will invest in turnkey properties in out of states you like how i said that right we're really good from california got it or new york or canada you know our state absentee owner list is one of our more popular for sure right yeah because they think it's um like that what is that george foreman grill like said it and forget it that's what they think it is and that's the danger you should be a note holder not a property owner right and that's the difference right if they can understand that so they don't understand when the tenant calls and they have a problem or there's an issue with their tenant or something like that so um owner two is another really popular list so as you know folks start hitting 70 75 80 right they're kind of done with being a landlord and you know they probably need or want the cash for other things and stuff you know so that post retirement absentee landlord's another good one well you know what's also good about that because they want to do their either 1031 exchanges and they'll do it to like a dst you know so um so then at least it's just kind of more stagnant they've exhausted their tax benefits you know another good uh market list i'd be interested in is i was pretty passionate about this is the senior market because in our particular area reverse mortgages are going to really hit hard in new york new jersey in california where there's high property taxes because for anybody who doesn't know what a reverse mortgage is that's on the call is that um basically they don't have to make a mortgage payment but they have to still stay current on their property taxes and their um their insurance but they essentially are using the equity in their house to live off of whether it's in monthly payments or a lump sum now a lot of mortgage pay uh companies back in the day were incentivized to get the lump sum money and so a lot of these seniors had never seen this kind of cash in their life right so they kind of feel like they won the lottery right so they get their house it's worth six hundred thousand dollars right they get a reverse mortgage they get a lump sum of three hundred thousand dollars they don't have to make a mortgage payment on it and then they can live in it so that they die that sounds great so now they spend all that money on you know all their grandkids paying for their weddings and fixing up you know buying cars and they don't yep getting a cadillac you know um splurging and they don't save for their taxes and their insurance and they don't save for or do the repairs to their house because for the next 20 years they're going to live there they think that they're not going to have a repair you know a roof's not going to go or a heater element's going to go and so six to eight years later they can't pay their property tax their roof is leaking and it's so sad because they probably lived there 20 30 years and now they have to find out that they're going to get kicked out of their house because they can't afford their mortgage tax it's it's it's heartbreaking honestly it's heartbreaking and so we do a lot of short sales right before coven we were getting about 30 of our short sales were all reverse mortgages it was so sad it was so sad and i would be interested in the data just to see how many people have reverse mortgages in our market areas because the reality is oh and and then the beauty of it is let's say they did say for a rainy day right nassau county increased their taxes something like 17 percent their property taxes in like a two three year period of time if you're on a fixed income boom you just lost your home you just lost your home yeah so that's rail against prop 13 in california but it's it is you know you know let property taxes not increase more than cost of living index you know because why should government grow faster than cost of living and uh you know that just that one drives me insane and one of the things i do like about california um but yeah i know that that uh the reverse mortgage list is another uh uh popular one and a fairly unique one that we have that a lot of people don't so yeah i'm thinking about that so you could because we have the demographics of the owner as well would you be interested in in the age of the owner combined with how long they had the the loan in play so the reverse mortgage how many years would you want to see its season yeah and the reason why is because they don't really feel it in the first five years right okay right it's anything after that five is where they really start feeling it and that's because they they don't really plan out that far and then the age yeah i know i'm gonna give you more cause i'm on it i wrote it down for another show i'll have more ideas but um yeah i really do think that that's look i've come to this philosophy in life that when you serve others you when you solve other people's problems you solve your own problems right so it is a heartbreaking problem and i'd love to solve it for some seniors because and they're so embarrassed to tell their family members what happened because you know and then they're out on the street and they don't even know why you know so i i started this thing called the golden girls um so we would get a few of these single women you know their husband passed away they're in the house they don't know how to do the deferred they're in the reverse they're embarrassed so we would get the only way they could live together was if i put a couple of them together so we had like three women move into a house for women so i called it the golden girls because program because that was the only way they could afford to live here and still see their grandkids otherwise it was move out of state you know so i love that yeah isn't that funny yeah we have to end um yeah wanted to get in touch with you what's the best way to reach out probably go on longan maria l-i-r-e-i-a dot com um definitely email me melissa longan rio or info at longanrea um we have every second i'm sorry every fourth wednesday of the month i do a free give back webinar so you can sign up for that for free and it's intro to real estate investing ask where whatever questions you can pick my brain for that whole time and whatever you want to learn or it's all free it's really is it on zoom it's on zoom yep very good okay everyone in the nation can go we have people from california to florida to canada who join us and uh even the uk so it's crazy you have seen this with the battery is sounds like yours is one of those um where with zoom now they've suddenly have this much broader you know audience than the the local folks that would drive you know maybe an hour to come to a meeting it will be fun to have the in-person meetings though too because you know going to the rios and throughout california like you meet a lot of people and you make a lot of friends and you know a lot of familiar faces and and i do miss that so it'll be nice to see that part start again so will you do a mix will you continue doing this and but you'll go back to doing the live yeah we did we do semi live so we'll have a live audience and um zoom at the same time so i can hold up to 25 legally here whatever with the covert restrictions and um yeah so we do that on our second wednesday our general meeting we have that here so that there's a little networking still but um yeah i can't wait till the day shawna i really would look forward to that we're close we're making a lot of progress i feel good about it thank you so much for asking me to be on your show as well so thanks for being here very cool all right so long everybody thank you thank you for listening to the data driven real estate podcast you can find show notes and links to some of the resources mentioned in the show at datadrivenrealestate.com click that join the community and you'll be forwarded to the property radar community where you can ask questions about the current show and even see upcoming guests and ask questions there we'd love to engage with you in the community so check it out please don't forget to like favorite subscribe and share on your favorite platform where you're listening to the show it helps us out a great deal thanks for listening and we'll see you next week

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