How to Make Money From Foreclosures

Speaker 1:

Hi everyone. This is David Baton, co-founder and CMO of Door Loop, and I'll be your host for today's show. If you're tuning into our audio only podcast, you can also watch the video version on our website at doorloop.com/podcasts. We're going to be joined today by Kevin Shippee, who makes up one half of the duo from two guys take on real estate with his partner, Matthew. You can find 'em on Instagram or YouTube or TikTok with nearly over 1 million followers and subscribers combined, they have a super, super inspiring story where they bought their first foreclosed property in 2008 and have since built a multimillion dollar real estate company based in Massachusetts with over 600 house flips, and now they own over 700 rental properties today, which is just simply amazing. So Kevin is here today to share some of his wins and also his learnings so you can avoid their mistakes and make money farm foreclosures. And they also recently published their own book called Foreclosures Unlocked, which you can find on Amazon, and it teaches you how to buy properties at foreclosure auctions. So Kevin, thank you so much again for joining us.

Speaker 2:

Absolutely. Super happy to be here and we always love meeting new people, so hopefully we going to have fun and share some interesting stuff with your followers.

Speaker 1:

So just to get started, for people that don't know you, tell us a bit about yourself and your journey in real estate till today.

Speaker 2:

Well, I'm glad that we're going to be reaching out to some people that don't know us yet, but Matt and myself, he's my business partner and he's a friend of mine from way back now, I have to say way back in college. But a friend of mine from college, we started up together getting in the world of real estate about 15 ish years ago. Feels like 35,

Speaker 1:

2008.

Speaker 2:

Just lucky it just boneheaded luck. We both were doing the regular thing. We both came from families with no real money or anything like that, and left college and got regular job type stuff, we're doing anything glamorous. And Matt finally convinced me that the only way we're ever going to get out of the rat race is to start getting into real estate. And it just happened to be that year that I said, yes. That sounds good. Let's try something.

Speaker 1:

It sounds like you may have read Rich Dead, poor Dead. Yes.

Speaker 2:

Matt's the one who reads all the books. I just helped write them on this at this point. But yeah, I did read, that's actually one of probably the only books I've actually skimmed through, aside from my own. Of course,

Speaker 1:

Of course. Well, we'll talk about that. Yeah, I mean, so Robert Kiyosaki mentions all the time the Rat Race and getting out of it. So it just actually hit me right now that you bought your first foreclosure in 2008 at the height of the crash. So did that play a factor in that?

Speaker 2:

Yeah, I mean that actually, that house I believe had gone through foreclosure and became bank owned. So that one wasn't technically a foreclosed. Well, we didn't buy it at foreclosure. We bought it after foreclosure. But yeah, not long after that we did. We started buying them more and more through the foreclosure auctions and yeah, I mean absolutely buying something that's been through foreclosure, if it worked and it's successful, why wouldn't you continue doing that? So when you find something that does work, you want to repeat it as much as possible. So that's what we did.

Speaker 1:

So did you guys go all in day one, first property, second, third, fourth, and quit your day jobs? Or were you doing this sort of on the side little side hustle?

Speaker 2:

Boy, we didn't quit our day jobs, but to say it was a side hustle would be not giving it enough. It was

Speaker 1:

A full-time hustle. Yeah,

Speaker 2:

I'm not going to lie. It was freaking brutal. The good thing was both Matt and I grew up watching our family and our parents basically have really, really solid work ethics. So my dad always worked 50 plus to 70, usually hours a week. I mean, this guy always worked. So I grew up the same. I worked my way through college, et cetera. So yeah, on our very first property, Matt and I, we scraped up about 15,000 bucks altogether. And that was the combined life savings, sadly, embarrassingly of a couple of dude who are about 30 years old. And then, yeah, I would literally meet him at the property once we bought it wearing crabby clothes with my nice clothes in my car. And I'd work, however at the house, scraping tiles off a floor, whatever it is you're doing.

Speaker 1:

Oh, wow.

Speaker 2:

And then get changed in the bathroom, put a trash bag up over the bathroom window and into nice clothes, go to work for the day and then come back to the house at night and keep working until around me. Wow. It was tough. It's not easy, man.

Speaker 1:

The golden years.

Speaker 2:

I don't want to go back. I don't

Speaker 1:

Want to go back. Were any of your parents involved in real estate?

Speaker 2:

Not at all. My dad worked for the bulk mail center. He basically worked for the postal service and worked there like 30 ish years or something like that. Wow, okay. And Matt's dad, I believe, owned a deli, a restaurant.

Speaker 1:

Okay. So when did it become like, Hey, this can actually be a full-time thing, and when did you make the decision to quit your full-time job? Did you have five properties? When was it?

Speaker 2:

It took a while, but yeah, I would think it probably was maybe around having around five properties or so. Matt actually wasn't working at that point when we bought our first one. He didn't have a full-time thing. That's what he basically did is he said, I'm just going to do this. Instead of going out changing and picking up a job, needed somebody, we needed as much manpower as we could, so we used his manpower as much as we could. And then mine to supplement outside of my job. Also, some of my paychecks for my job were of course getting, Hey, we need a water heater after all. Okay, well I had a really good week this week, so here we go.

And then, yeah, we basically use what's called the bur method today, and the last step of that, of course is repeat. So did it over and over. We got to a few properties. We ended up bringing in another business partner for a while, and it was at that time that we brought somebody in who had recently sold off his business. He came in as an investor as well. So that helped us take on more and more projects. It then also gave us the ability for our company, our little company, four or five houses or whatever, to cover Matt and I and our cost of living, which was a very tiny cost of living. We kept it very, very quaint.

Speaker 1:

I'm assuming you didn't have any children back then?

Speaker 2:

No, not at all. I had a bunny rabbit and that's about it. And yeah, I mean, Matt and I eventually both moved into one of our rental properties and he lived in a third floor apartment. I lived in the second floor apartment and we had a section eight tenant on the first floor apartment.

Speaker 1:

That's awesome. Yeah, I

Speaker 2:

Remember you guys were all in. What's that?

Speaker 1:

You were all in.

Speaker 2:

We were all in, yeah. And honestly, you don't have to do that, but that is the path we went and it made it so you never thought about not doing it. You're in, you have to get through it.

Speaker 1:

Right. I wasn't going to go in this direction, but it actually is interesting. So you had a partner, you have a partner, and you had another partner. So let's talk about partners for a second. Number one, do you recommend having a partner? Is it necessary to have a partner? Would you have been as successful without your partner? Let's go with that first.

Speaker 2:

Well, I would hope if he was here as well or instead of me, he would say no. He would definitely not be as successful,

Speaker 1:

Obviously.

Speaker 2:

But I will certainly go on record. Matt, if you're watching this later, I'm on record saying it. No, I would not at all be as successful. I don't feel that successful. I just feel like a regular dude. I am a regular dude. I don't know. But definitely we're stronger as a team. I think partnerships can be fantastic, but partnerships can also be marriages and in divorce and messily. So they're very, very tricky. And I can tell you from having some significant experience, Matt and I had a lot of similarities, but the fantastic thing is we have a lot of differences. And that's, for us, been very, very helpful and very, very key to having a successful business. I don't want somebody that's always like, yeah, Kev, let's do it that way, Kev. You're right, Kev. That's the best way to do it, Kev. I want somebody to challenge me and also vice versa. So that's been really, really helpful. Having styles that kind of compliment each other versus always pushing in the same direction because that's how you end up really, really far down the wrong path sometimes.

Speaker 1:

So if someone is considering a partner, besides the advice you just gave, is there one major thing? Number one best piece of advice if you're going to have a partner?

Speaker 2:

Actually, the weirdest thing is when it comes to partnerships, I get asked that question a lot. And yeah, I think I keep finding myself coming back to the answer of put yourself in their shoes and just do in life the answer of treat other people the way you would want to be treated. So remember when they do something that annoys you or they make a mistake or they drop the ball, you will absolutely drop the ball. Maybe you are the next one that drops the ball. How do you want that person to handle you and think about you and talk to you about it when they, again, just always put yourself there and treat them the way that you would want to be treated if a sticky situation comes up.

Speaker 1:

Yeah, what does it say in the Bible? Do unto others as you want unto yourself. Yeah, it's the golden rule. Yeah, something

Speaker 2:

Along those lines. Yeah, exactly. And I couldn't stress that more. And that's really, really, I think that's just really been key throughout our partnership for sure.

Speaker 1:

Now, I read somewhere online that you had mentors throughout the journey. Did you have mentors?

Speaker 2:

Well, yeah. I mean, we definitely, I think one of the best things that we had in terms of a mentor early on especially was this dude also named Kevin. Actually, Kevin, I'm watching What's up? He was a very respected real estate guy doing the same kind of thing we do now. And I think he owned or managed like a thousand units. I mean, he had a big deal and he was a real estate agent was, but he was a well liked one, and he was a nice guy. And I've met him a bunch of times around court and I'd seen him around and he literally, this is the guy who was a thousand units, and he let me take him out for a couple of beers and just pick his brain for an hour, one afternoon. Wow. I thought that was awesome. You would think, why in the world would he ever want to help me? I'm going to be his competition.

And he never ever thought of me or treated me like that. And I'm sure if I picked up the phone or if I found his number, I picked up the phone, I called him today, he would answer, and I'd be very happy to help you with anything that he reasonably could. I mean, very, very cool stuff. So I've never found that in any other industry that your direct competitors, even in your market and stuff like that, are often going to be people that are more like colleagues. And so yeah, somebody like that was able to give us some great feedback early on, and that also helps set the tone for who we would later become, which are a couple of dudes who then started passing on and sharing our experiences mass now with people. So that really helps set the tone. We're not going to give him any residuals. Screw that guy.

Speaker 1:

If you're watching,

Speaker 2:

You're going to. Thanks. That's it. You're not

Speaker 1:

Getting idea residuals. Well, now you're probably real competition. So for people listening in, if they wanted to find a mentor of their own, is there any advice where they could find one?

Speaker 2:

Well, the best mentor is one that's at noon and at midnight. And when you're scrolling through social media and stuff like that, you're going to see this ugly mug all over the place. So we put a lot of content out to be your virtual mentor, and we don't really charge for almost any of it. But yeah, I don't disagree with the concept of people signing up for courses. In fact, a lot of people graduate high school and then what do they do? They go and sign up for $150,000 worth of courses and textbooks that cost $500 that are useless the next year. So yeah, pay 50 bucks for some guy's class here and there. Pay for a little bit of education. But otherwise you'd be amazed, again, at the amount of folks, if you're looking for somebody to network with and mentor, go to meetups. A lot of people, especially beginners, are so psyched to share the little bit that they just learned with somebody that is also learning or struggling with something. So yeah, meetups, networking events, there's tons of forums. They're out there, just start going and being friendly and you're going to find a lot of people willing to help you.

Speaker 1:

A hundred percent. And so getting into foreclosures, do you only buy foreclosures today or has that changed over the years?

Speaker 2:

Well, we've taken on some properties, but now we're taking on properties that aren't foreclosures. We take on stuff now that are maybe a distressed portfolio. So I don't want to talk too, too much about something and that we're in the middle of finishing, but we're literally closing on roughly a 20 single family property deal. And this is from Congrats.

Speaker 1:

No,

Speaker 2:

Thanks. Yeah, we're excited. But it's not a foreclosure. Somebody's portfolio, unfortunately, he passed away, and long story short, his heirs are looking to be property owners. They're looking to liquidate it, so we're buying it as a package and we're going to whatever we do with it next, figure that out, buy and hold some, keep it as rentals, maybe we'll renovate some and do it as flips, maybe we'll wholesale some to flippers, things like that. But generally, yeah, no, we do a ton at foreclosure auction and we love going to foreclosures if for nothing else for the stories, they're always wild. I mean, it is just never a dull week when it comes to foreclosure properties.

Speaker 1:

So Warren Buffett always says famously that he loves buying stocks on sale at a grocery store. He loves buying products on sale. It seems like you do something similar where you're sort of waiting for the right deal to come along. So in this game, is it all about just timing and patience?

Speaker 2:

Yeah, I would agree. Timing, patience and being super careful. Similar ways you would describe crossing a minefield, I suppose. Watching where you're stepping, not rushing through it, not being too bold. And again, that's a great dynamic that Matt and I both have where I'm a lot more cautious and I'm the guy that probably will never do anything because he just, what if this and what if that? And you just sit there and don't do anything. The

Speaker 1:

Hypotheticals.

Speaker 2:

Yep. And he's a lot more, remember the Kool-Aid man commercials? Oh yeah. Just pray through that wall. And I'm like, dude, what if there's a stud in that wall? What's on the other side of that wall? We could be on a cliff. What are you doing? He's like, no, we got to do something. We just can't keep thinking about this and what if that and worried about we're doing it. And then our job then becomes like, okay, we did it now. Now how do, sure enough, there was a stud there. Okay, well we got to saw it through it. We got to figure this out. And so going to foreclosure auctions and dealing with all that is again like crossing a minefield. But if you just sit there and freak out about it, you'll never get across. So you do have to navigate your way through it. Great

Speaker 1:

Advice. Great advice. Is there any horror story or war stories that you have that you want to share or anything, any advice for people not to make the same mistake that you made?

Speaker 2:

There's a lot. Most of our experience in our book and stuff like that are filled with, here's how we screwed up. So when you watch some of our tiktoks there, our cringey dramatic dad jokey type of humor, but they're based on stuff that's kind of real. Yeah. So I mean, I've got stories for days on it. I do my best to repress memories as much as I can. That's how you get to the next week. But I can give you one that I've been telling a little bit now because it didn't make it in the book. It happened afterwards, but it was kind of a story that was always in progress. And I'll tell you, buying a foreclosure property that's occupied is going to be probably one of the most dangerous situations you can do to yourself. Doesn't mean, hey, it doesn't mean it's not going to pay off, but it could be an absolute train wreck. And that's exactly what happened with this story. But I always tell people, buying a foreclosure property is not for the saint of heart. Buying a property where you think somebody might be living in there is borderline, effing crazy. You really have to reconsider because

Speaker 1:

They don't care where the property, they're going to destroy it and they're not going to leave. You have to evict them now,

Speaker 2:

30 different ways to answer that. Yeah, that's a hundred percent one of them. I mean, that person that is in there, you don't know who they are. They could be the former owner who is going to be potentially really cranky with you, the new owner of their house that's been in their family for five generations, whatever. I don't know. Wow. It could be somebody that bought it two years ago and immediately just never paid a mortgage once in their life. It could be somebody that literally broke in or whenever found a door unlocked and he's in there just sawing the copper pipes while you guys are at the auction. He's like, what's going on out there? You have no idea. It literally could be tenants, it could be a nice rental property and a great family that's living there, and they've been paying the landlord just like they're supposed to, and the landlord just wasn't doing the right thing with the rent and cover the mortgage and doing everything. And now you're going to have to go have a really weird conversation with some people who didn't know why you were there that day.

Speaker 1:

Is there any way to know for certain if someone's living there or not

Speaker 2:

Mean? I mean, I think if you drove down any street in any neighborhood, you would pretty much know for sure somebody lives in X, Y, Z house. But a lot of these homes that are coming up as foreclosures, they have a range of things, and one of them is that they're probably not the best kept properties. So sometimes it's really, really tough to know if a home is actively being lived in or maybe somebody stopped by once in a while or really what's going on. So your experience will help you become a better detective with these types of things. And then if you're planning on going to an auction that's happening next week at 1 2 3 fake street, go over there today and knock on the door, man, it's not, you can't just walk up to somebody's house and ring their doorbell. I mean, half of the country kids all over the country are going to be doing that tomorrow night, right. Ringing doorbell and saying, trick or treat or ring somebody's freaking doorbell, say, what's going on? Like, Hey, listen, I saw this house listed at foreclosure auction. Looks like you live here and have a conversation.

Speaker 1:

So for those that are listening, we're recording this October 30th, the day before Halloween, which is why that came out. Yeah, it's alright. Yeah, no, but all good, all good. So that's a great idea. That's great advice. I never bought a foreclosure myself, but it's my understanding that you can't inspect the property inside before you buy it. You can't see any pictures. Is that still true today?

Speaker 2:

Yeah. I mean, I don't think I've really gone to a foreclosure auction where they allow you access and allow you to take a tour or anything like that. Not

Speaker 1:

Even pictures, video, nothing.

Speaker 2:

You got to start being a detective, don't you? Wow. Yeah. So you're buying what I refer to as a big mystery box, and we live stream this stuff all the time on our channel going to auctions

Speaker 1:

I saw this week.

Speaker 2:

Yeah, I mean, you don't know. I mean, you have no idea. Sometimes we're spending a hundred grand on God knows what I'm inside. It's nuts. Yeah.

Speaker 1:

Okay, so it's a risk. So can you walk us through a very simple dumbed down version of a typical foreclosure process, A to Z? How do you know about foreclosures? Where do you find them and then how do you buy them, et cetera?

Speaker 2:

Yeah, there's different types of states that have different types of foreclosures. There's judicial states and non-judicial states. But for instance, most of our stuff is in mass. Mass is a nonjudicial state, which means basically if a bank wants to, usually it's a bank for closing. It's an owner of a property, didn't pay their mortgage. That's the most type. So somebody doesn't pay their mortgage for probably a really long time. These things don't happen overnight, and the bank eventually gets to the point where they hold an auction and the auction generally gets advertised a few different ways. So by law, I think they have to advertise it at least in some local papers, stuff like that. But most of the time if the bank is trying, say the bank had a mortgage on his house for $200,000, the bank wants to get as much of that back. That's what they're holding this auction for. It's they're trying to recover the money that they lent out to this property, so they want to get as much as they can. So they're going to hire an auction company that's going to hopefully promote the fact that there's an auction and they'll put that on websites and you just start going online and in your area or your city state, whatever, and looking for different companies that are holding foreclosure auctions and posting them on their website.

Speaker 1:

Is there a national website with all foreclosures in the

Speaker 2:

Us? I don't think so. No, not that we have. We found that, oh my gosh, there's this website, there's this company we didn't even know about, and they're holding, oh crap, maybe they don't do a ton, but maybe they do three or four a month in our area. That's pretty awesome. Now we have three or

Speaker 1:

Interesting targets.

Speaker 2:

So we start kind of just keeping our eye on those sites and checking them routinely and then whittling them down. Now a lot of things get scheduled, and that's kind of the wake up call sometimes to an owner that was previously unwilling or maybe unable to keep their house on track, and they'll take the right steps and the foreclosure auction gets canceled. So that happens quite a bit. But basically the day of the auction happens, you go out to the property to become a bidder, you register, you usually have to bring a deposit check of some sort. In our area, most of the houses that we're going to either you bring in a bank check for five grand, that's what lets you register to bid. So I mean, you got to figure, right? You don't want the 30 of the homeowners cousins showing up and all pretending to be bidders and screwing around with stuff. So they weed out a lot of that. So you got to put up five Gs to register, and if you do get the high winning bid at that time, they keep your $5,000 deposit and it goes towards your bid.

Now, sometimes you might walk away from an auction being the high bidder and them owing you money because you bought it for less than $5,000, which can absolutely happen. It's happened to us. Wow,

Speaker 1:

Okay. Wow. So what happens if you find the foreclosure online? Is someone able to call that owner and try to buy them out of their house before the foreclosure happens?

Speaker 2:

Yeah, usually. I would imagine because they're still the owner, I would imagine that you have a lot of those opportunities. Maybe they're not in the house, maybe the owner deceased, maybe they moved to Florida and the house is from messy split up or divorce or something. There's a whole lot of what ifs. Maybe it's an investment property and the tenants weren't paying, and of course this poor guy can't pay his mortgage, he's losing the house, and he's just like, Nope, I've walked away from the property not touching it. A lot of times people just won't take those calls or you could go knock on your door. Maybe they're living in there, they won't have those conversations. Generally speaking, they got to wherever they're at, imminent foreclosure for probably some reasons. And one of those reasons is the unwillingness or ness to resolve this by figure it out, putting it up for sale or taking the right steps.

Speaker 1:

So I watched some of your videos and you're actually showing up to the property for this auction. There was actually one recently in the rain. So is it always in person? Is this not online anymore, ever?

Speaker 2:

Yeah, so I think some of the online stuff is not a first time around auction. So when we're going to, these are the actual first auction. So I kind of think a lot of the online stuff, I'll have to ask Matt, but I think a lot of the online stuff is more like the bank bought it back at the actual auction and then they threw it up online to try to auction it and auction it to see if they can spark more interest. But yeah, we're going with these things. They're happening for the first time. If you saw some of our videos or our lives, first of all, I apologize. Our content is, it is what? It's,

Speaker 1:

It's great. It's so entertaining jokes

Speaker 2:

And our acting is on point,

Speaker 1:

Especially when you dress up as a different character yourself. Those are the best. Yeah.

Speaker 2:

But yeah, you never know. I mean, we've seen some really crazy stuff happen at these things. We've had properties that were auctioned, that were occupied, and it turns out it was former owner occupied and we've had the owners come out and almost get our stream canceled pretty much with some of the stuff that they would do or say. Wow. I remember there was one, I don't think it was there, but I was one, I had to deal with them afterwards, and they started trying to spray the auctioneer and bitters with a hose. It was winter time, and I think they hooked up a hose and we were trying to spray people. There was people that literally threatened to clack, clack, anybody that came on the property. So that was me that had to go back to that property and be like, hi there.

Speaker 1:

From the new owner with the local sheriff,

Speaker 2:

I just show up. I'm like, eh, whatever. But yeah, we've seen some crazy stuff. So you never know what you're going to get. They do have them live at the properties, and if nothing else, it becomes a really interesting experience. So if your watchers are thinking, Hey, listen, I'd love to do this or know more about it, et cetera. One of the things I always tell people is just go to the auction. You don't have to have five grand to go show

Speaker 1:

Up. Yeah. And just watch what happens. That's so interesting. Yeah. I think one of the things that I never realized when watching that video in the rain was that you all showed up, maybe four or five, you it's raining and you're waiting to bid, and the bank just starts off with a super high price and everyone's like, Nope, I'm out. I'm out. I'm out. Okay, goodbye. Like what? They do that, I didn't even realize that. So they're just asking for too high of an price, basically.

Speaker 2:

Yeah. It's kind of like an eBay, putting out a stupid reserve bid, and what's the point of even doing it? Well, the point is it's a legal process. That's the only way they can do it, but it's anti climactic, that's for sure.

Speaker 1:

Yeah. Yeah. One idea hedge, I don't know if you know about this or maybe people are using this, but if there are these auction websites that you're talking about, and then you have to keep refreshing it every day. Look for new listings. There is a website that we use in our business called Visual Ping, which will check those websites for you and send you an email alert anytime there's an update on that page. Nice. Maybe that will help. Yeah, here you go. So let me ask you, after you buy the property, then what, you obviously try to get the tenants out of there, the owner out of there, fine. And then majority of the time you're innovating.

Speaker 2:

No, I don't know. I don't want to say majority. I've used this analogy before, but it's kind of like when you get water running down a hill, it swings back and forth finding the path of least resistance to the ocean, trying to find its way forward. So that's what I would probably try to equate this to. And I always try to tell folks, if you're going to buy a property, have hopefully plans a through several letters passed a and pivot when it makes sense to pivot. And that's where people get kind of in their own way a little bit, is they get too aggressive or too strong-willed, or maybe they didn't leave themselves financially, they bought it for too much and they didn't leave themselves the ability to pivot things just don't go according to plan all the time. And the more you have this sense of confidence that, well, I own the place, so get the heck out, or I'm going to do this, or the more you feel that way and you try to go full force on something, the more paint you might end up finding you have.

So if I buy a house at foreclosure auction today and I get it at a pretty good price and it's got occupants in it, I'm going to have a conversation with the occupants. And I'll tell you, we've done every different thing with the occupants. So if I buy a house, I'm thinking I might want to flip it. Sure, I might want to have it empty, renovate the house and put it on the market. But I find out that it's got occupants, and this is actually a story that's in the book. This is a great example of one where we bought this very large, like a Victorian style home nearby, and it was foreclosed on. We went to the auction. The person in the home was the former owner, and he had, again, it's a huge Victorian style house. So he had adult sons and daughters also still living there.

And so he was on the mortgage, he had lost a house. Sure. You would think we're probably going to have to say goodbye to these occupants, the former owner family, so he can do something with it. We're going to either renovate it, we're going to rent it, or maybe we're going to wholesale it and sell it to a contractor. The bottom line is these people are kind of in our way, and as inhumane as that sounds, it is kind of the ugly truth of how this stuff works out. But what was really, really cool is in that scenario, I guess I'm going to give you the free little tour of one of these coolest stories we have in our books. My favorite story,

Speaker 1:

You rented it to them? No, I don't know. We

Speaker 2:

Kind of did. We rented it to them for a few months while one of the adult occupants, the sons or daughters or whatever got pre-qualified. Qualified for their own mortgage,

Speaker 1:

And then you resold it back to them. We sold

Speaker 2:

It right on back to 'em. They never the home.

Speaker 1:

Wow.

Speaker 2:

But let's talk numbers. Well, I forget exactly the numbers, but we'll use vague numbers. Don't hold me to this. If you book and they don't jive, but let's talk numbers wise. The dad who owned a house, I think he had a mortgage, we'll say it was $260,000 on this house, and he lost it. We bought the house. It's a Victorian house. It's wood siding and all that needs upkeep and it's occupied. So a lot of people weren't looking to buy this thing. We bought it, we'll say we wanted it auctioned for 60. That's six zero thousand dollars. Gosh, the house is a little bit of rough shape, needs some cosmetic needs, some fix it up and it's occupied. Nobody wants to touch this thing. The bank also understands that they don't want to become a landlord and an owner of this property either, and it looks kind of rough on the outside. So we bought it for 60, talked to the owners and family and all that. We did a little bit of work on the house, but I think they may have actually paid for some of the work, fixed up some porches and stuff like that. Nothing crazy. Took them several months to get qualified, and at which point they paid us a use in occupancy while they're living there, and we sold it back to them for $160,000. Wow. So we were thrilled cost us. We made a hundred grand and we basically did nothing realistically.

Speaker 1:

Wow.

Speaker 2:

They were thrilled. They were thrilled because they had,

Speaker 1:

Well, they saved a hundred grand. Yeah,

Speaker 2:

They've been living there for years without paying anything. They weren't paying a mortgage. That's how they got into that problem in the first place. And then they get the place back in their name and for it's for a hundred grand less then they owe before. So they were like, they probably hadn't paid to live there a half a decade, and they got a hundred grand knocked off their mortgage basically.

Speaker 1:

Wow. It's a win-win for everyone.

Speaker 2:

They were psyched. We were psyched. I mean, the bank not so psyched, but nobody cares about the bank, do they?

Speaker 1:

Wow. So you're telling me you can get a deal, you can buy a house worth two, $300,000 for 20% of that price.

Speaker 2:

Sometimes. Sometimes. But like you said yourself, you saw another auction where the bank put some stupid number out there for a house. Right? Right. So it's just like the lotto. You can't win if you don't play. So if you didn't go to that auction and you didn't register and you didn't know about this whole thing, then there's no chance for you to snag a house that's worth 200 grand for 60,000. There's just no chance for you. You didn't even show up. That's why I tell our folks, learn about this stuff. First of all, we try to make learning fun and entertaining as best we can. Learning is boring a lot of times, and so is reading educational books about real estate. Who the hell wants to do that? I get it. I get it. And that's why I said, dude, we have so many stories. We've had so much stuff. When I tell my family and friends or I go out for a beer and I tell people think I'm making this stuff up, they're like, there's no way. And I'm like, dude, pictures, you got to write a book. And I'm like, someday.

Speaker 1:

And then boom, you wrote one. Yeah.

Speaker 2:

Well, we didn't want to do one that was just stories or trash talking or whenever it might be horse. We want to do something that's educational that helps people that blah, blah, blah. But at the same time, it's kind of fun. So that's why I said, learn about this stuff. Almost all of our content is free. There's so much free stuff out there to learn about and to learn from. And then just go to some of these auctions and hang out, see how they go. And then you got the money to scrape together. Have a check in your pocket just in case.

Speaker 1:

Right. So you mentioned courses a few times online. Is there any course that you love that you've seen other people do? I mean, I don't know if you offer a course yet, but is there any one course that you love?

Speaker 2:

We don't have a course

Speaker 1:

Yet. Yet,

Speaker 2:

Yes. We don't have a course yet. No. Which is always funny because people, they're in our comments. They're like, okay, whatever, dude, I'm not buying your course though. And I'm like, there's no course. If a million people watch this TikTok, I will make 30 cents. I don't care. This is not a thing. Don't stay dumb and poor. It's your choice. I don't know. I'm not telling you something here, but no, I don't know. There's a lot of good creators that we know that are in the real estate space on the different socials. Sam, faster Freedom, invest orders a couple of great guys from those two channels. And if they have courses, definitely consider them. If we ever do put out a course, you should definitely spend the money on it. These things are not that expensive compared to the amount of money, amount of value you get out of them. Yeah,

Speaker 1:

For

Speaker 2:

Sure. So people do it all the time and they do it for way less. The amount of classes I took in college that are completely useless, and I paid good money for that.

Speaker 1:

So what's the goal for all the social media? I mean, you guys are everywhere, TikTok, YouTube, Instagram, you have almost, I mean maybe over 300,000 followers, which is incredible. What's the goal? Just to share, give back knowledge?

Speaker 2:

Yeah, a hundred percent. And have fun. I mean, honestly, it was a creative outlet for, as you can tell, we're not

Speaker 1:

Bullet, the videos are hilarious.

Speaker 2:

Yeah. We want to enjoy what we're doing. And so when we got into social media, it was a little bit of just me being, you could see it was just me, just being a dork in front of me creatively fun. And of course it was Matt wanting to share and educate as well. So a hybrid of that. But yeah, we put it out there, and I talk about it all the time, is that we had a really rough time getting here. We could be all smiles about it now because kind of here and it's getting better, but every day, every week, there's another challenge in our life and we overcame so many obstacles. The amount of times, like I said, amount of times early, not even that early on a couple of years, even in we made a lot of mistakes and those mistakes didn't put us out of business because we doubled down and we worked harder.

Like you said, we were all in. So if there's an opportunity for me to share a story, an example or whatever to help somebody miss a huge mind that took our legs out from under us at one point, then I want to do that. And if I can have some fun doing that at the same time, I definitely also want to do that because people are going to probably listen to you a little bit more if they're at least rolling their eyes at something stupid you said, or laughing at a wig or something like that. I think you're going to see more people want to stay engaged.

Speaker 1:

Yeah. Are we going to see any Halloween posts this week?

Speaker 2:

That's a great

Speaker 1:

Question. Are you going to show up to an auction with an outfit

Speaker 2:

Perhaps? Well, that's a great question. So I did. She doesn't like it, but really hated wearing it. But we'll see if I can get her to deal with it. I have a great little Halloween costume for my bunny rabbit, and she's going to be handing out candy at some point, so we'll see. That's awesome. What's up with it?

Speaker 1:

That's awesome. Okay, so you buy the properties now you have a few hundred properties in their management. Yeah. When do you sell them?

Speaker 2:

Well, we're selling some. Originally we started, we went about 10 years without selling any, but we moved on from different business partners over time as well. So it's just Matt and I now, but we just let go of the 16 unit property that I had to be convinced it was a property that constantly attracted some of the worst quality tenants as a rental property in the world. And I was spending a stupid amount of time there and quite legitimately putting my life at risk. I mean, which is, I'm not that worried about that aspect of it, but I don't want to have to, if I could, I'd rather go have conversations and deal with people that aren't featured in trying to be careful about my word,

Speaker 1:

Threatening you basically,

Speaker 2:

Or featured in the news often for various scary things and literally like, dude, you have to stop this activity in these hallways because your neighbor is all, oh my gosh. And I'm like, you can't keep doing that. I'd have to knock on the door and tell somebody who's a member of a good way to say a group of friends that hang out in urban areas and have a lot of activities that they engage in. But

Speaker 1:

What about police?

Speaker 2:

No, they're not going to help. They'll be like, thanks if it's an ongoing investigation, of course we can't. You know what I mean? So get help. But a lot of times you're not getting direct help. Maybe they're aware, but they're monitoring situations because they want to work their way up chains and stuff like that. But the bottom line is, I have a nice lady that just moved in across the hall and I absolutely have a responsibility to her, my good tenants, and I take those responsibilities seriously. So you got to go do what you got to go do. So Matt was like, look, we're finally getting good offers. Maybe we should just could sell this. Here's what we're going to take in for profit or proceeds from it. Why don't we take that money and we'll put it into this and then we'll make this and it'll be way less work. So actually we'll probably make the same, but it'll be way less work and less risk and less headache. And I was like, man, I don't want to give up. I want to go smack these people around.

Speaker 1:

All right.

Speaker 2:

Yeah. I get stuck. I get stuck very much into fight and in a weed. And when that's what you do when you get up every day and you're like, okay, what property do I go? I have to go to today? What one do I have to basically patrol? You get almost addicted to it, and you lose your business hat in sense, and you're on your emotional hat and sense about it. And that's not where you want to be looking at this stuff like a business as well.

Speaker 1:

Well, you also want to sleep well at night, don't have to

Speaker 2:

Worry. And I should say you want to look at it as a business primarily. Emotion definitely can play a big role for you in terms of motivating you to continue and try harder and work more and do more. But yeah, when it just doesn't make financial sense to keep a property going, you have to come to that realization, let it go.

Speaker 1:

Can you do a 10 31 exchange with foreclosures?

Speaker 2:

Yeah, well yeah, sure. You buy something and you sell it. If there's a gain there, you can keep rolling that up. And that's exactly what we did with this.

Speaker 1:

Amazing, amazing. So let me ask you, let's get into the book for a second here. You wrote your book and it seems like you wrote it because everyone kept asking you to write a book. Is that how it came to be?

Speaker 2:

Yeah, I mean, I've been saying it for years, Matt, and I don't want to, we're not trying to credit grab from each other on whose idea was what, and did I do most of the work? No, nothing like that is all the cool stuff in the book for me. Yes, no,

Speaker 1:

Obviously,

Speaker 2:

But I've been saying it for forever because I deal with a lot of tenant stuff as well. So I'm at the properties at time, I'm dealing with tenant complaints, problems, collections, evictions, moving people in, moving people out. And so I get a lot of those kind of stories, the crazy stuff used to be or deal with. And I've always said, oh my God, I got to write a book. But of course I'm not the Kool-Aid man, so I never do it. And Matt was probably, probably Matt, I don't know Matt if it was him, was like, look, we should just do this. And so we decided what we're going to make it about, yada, yada, yada. And then we kind of put together all of our notes and thoughts of all the stuff that goes into it.

Speaker 1:

So for those listening, what is the book about? What can they learn from the book?

Speaker 2:

They can learn probably about a million good reasons not to buy a property at foreclosure. What are you crazy? And then they can learn a few good ways and good reasons why they should. Yeah, awesome. But it's called Foreclosures Unlocked. You can get it everywhere, like Amazon and all that stuff because we're not normal human beings and I just can't do anything like a regular person. We made it a Choose your own adventure book. Do you remember those at all?

Speaker 1:

Yeah. Whoa. Well, I have three kids, so I have a few of those books. Okay,

Speaker 2:

Nice. Yeah, so we made it a choose your own adventure. I just can't. That's

Speaker 1:

Awesome. I can't see people.

Speaker 2:

That's

Speaker 1:

Awesome.

Speaker 2:

So I don't know how, I think the hard part was translating that to an audio book that doesn't work. Oh

Speaker 1:

Wow.

Speaker 2:

We're working on that and we'll try to find a way to make it play kind of straight through, but I just wanted the extra fun. Maybe our next book will be like a scratch and sniff or a pop-up book or something. I

Speaker 1:

Don't, well, that was my next question. Is another book in the works, is it coming?

Speaker 2:

I think if we see that this one is successful and people really like it, then yeah, I mean we have so much, I mean, this is just such a narrow thing.

Speaker 1:

So

Speaker 2:

Our brand name online is Two Guys take on real estate. But I was thinking a good series of books would be two guys take on foreclosures, two guys take on evictions, love it. Two guys take on whatever flips and come up with different ways to go. But there is a lot. We've done every aspect of real estate. We started getting into commercial real estate. We've got a lot of that under our belt now too, and we have a lot of fun doing it. We have stories and examples for days and we just can't stop making mistakes. So we'll always tell you what not to do as well.

Speaker 1:

That's awesome. What do you say to people or the haters that say, oh, you can't find any good deals anymore. The market's too high, it's too crazy. All the information's out there, everyone knows about it. There's no good deals. What do you say to those people? There's

Speaker 2:

Always going to be a million reasons. When we started doing this in 2008, there was people that were like, oh my God, why you shouldn't be investing in real estate. The real estate market's terrible. Everything's terrible. And there's always going to be reasons that you can't and reasons you shouldn't and reasons not to and stuff like that. And I mean, hell, we're telling you why you shouldn't and how bad these things can be and stuff, but the idea is it is knowledge and you're learning. Okay, so you just have to find a different, in a creative way, perhaps to find a way to buy a property. Yeah, they're not everywhere. If they were everywhere and these things are just, deals are just falling off trees, then that's not really that much of a deal. If everything's all the same low price, that's not necessarily a deal.

It's just what it is. Finding a way to create a deal, the first, the bead, for instance, and the bur method is buy, right? Buying something, anybody can buy something, buying something at an amazing discount and price is the key there. That's just so brushed aside. And yeah, if all houses were a hundred thousand dollars, then you going out and buying a hundred thousand dollars house, that's nothing. That's not a big deal. Going out and buying one that's 50 grand now, that's how you take advantage of them. That's how you made yourself an awesome bee in the bur method. So going to a foreclosure auction or evaluating these things before it gets, maybe you're the lucky person that gets through to the owner that their house is going to be, you're the 40th person that's approached them, but you have just the face that they want to talk to and you'll be the one that convinces them to do it. But just sit there and say, nah, probably not going to work. Somebody else has already tried that. I'm just going to sit home and look at my credit card debt and complain. You have every right in America to live like that and be like that if you want to. Or you can exit out of Netflix and go out and stop by a couple of properties and try.

Speaker 1:

So let me ask you, I mean, it sounds like there's definitely a high risk involved, especially for your first foreclosure, buying an mystery box so to speak. But there's obviously huge upside and reward if you do it. So for someone trying to buy their first foreclosure, it's scary. They find a partner, a mentor, someone who's done it before. I feel like going in it alone yourself is almost literally a case for disaster.

Speaker 2:

Well, I mean, you're not alone when you have your online friends, Matt and Kevin from Two guys did God

Speaker 1:

Estate. There we

Speaker 2:

Go. No, you're not alone. When you are part of a community where you have a resource where you can go and post on a forum and ask questions and stuff like that. So you might feel alone, but there are a lot of good people out there that are going to be willing to help you when you,

Speaker 1:

Any good forums you recommend like BiggerPockets or any of those?

Speaker 2:

So Matt's a huge BiggerPockets guy. I was hanging out a couple months ago out for a UFC fight with one of the dudes from BiggerPockets. I don't do the BiggerPockets things, but I guess he's wrote one of the books. Really nice guy, Brian Green and obviously know him or whatever.

Speaker 1:

Yeah.

Speaker 2:

Oh no, I'm sorry. Jesus. I'm sorry. David Green.

Speaker 1:

Are you talking? Yeah. Okay, go ahead.

Speaker 2:

Super awesome guy. And everybody's just regular people. These aren't people that are trying to hoard knowledge and only if you do something for me, well, I help you. These are just great people. So yeah, become part of those communities and start learning about it. But yes, your other part of the question was should you partner up or find a mentor? Yeah, sharing some risk, especially early on. Awesome idea. I'd much rather, I mean it's using the buddy system. I mean, we were taught that as kids do that with real estate, why not at least start maybe with something like that and then work your way through it from there. If you find that, hey, you guys want to do deals together and that's awesome going forward, but also once in a while want to do one of my own, that's awesome too. Absolutely. And you're not going in blind.

You're learning hopefully before you leap through that Kool-Aid man wall and you thought about this stuff a little bit. And then of course, making sure you're the buying, right? And you do that by being very conservative. If you have your first and maybe your only deal that you're going to make, if it goes badly, you might not get a second shot. So yeah, be very conservative and be very careful. And if that means you didn't make a purchase for the first several times that maybe you could have, you're choosy. You can't be indecisive forever. But if you're kind of wise and choosy and eventually pull the trigger, you'll get to where you need to be. But yeah, your first domino needs to be able to fall for you to be able to keep going forward.

Speaker 1:

And you've mentioned the bur method multiple times. So for those that don't know what that is, you can Google it, just type in B, and then four Rs, RRRR, which stands for buy, rehab or renovate, rent the property out, refinance it, and then repeat the process. We also actually have a great guide to door loop.com/hub with the entire process mapped out basically step by step. So in closing, I have about probably two or three questions left for you to end it off. Okay, sure. So do you see any trends happening in the future? What's your vision for the future foreclosures in real estate in general?

Speaker 2:

Well, every time somebody asks that, everybody, you can ask people that get a million different responses, I would say that you're probably going to see a lot more foreclosures coming through. Now what happens to those? Do the banks gobble 'em back up insane prices so that they could do whatever the bank's going to do with it? Maybe that's going to happen short, but I think you're going to see a lot more foreclosures coming through because

Speaker 1:

Interest rates are super high now, and variable interest rates are finally kicking in and raising

Speaker 2:

Same type of fat things. Not to mention that being coupled with the whole thing with 2020 and the change of, I think, I don't even know what you want to call it, ethics about life after that where a lot of folks, if these were foreclosures that happened to an investment property where there was a tenant involved, those tenants that there were basically told, Hey, there's no consequence if you decide to steal, so don't pay. It's no problem. And in fact, the government would then reward their poor

Speaker 1:

Action crazy with

Speaker 2:

Money by paying off the landlord eventually. And so the amount of people that we've seen that just didn't pay and then had the government paying their behalf, now that's great. The landlord does get made whole eventually, but maybe in the time between eight months that it took, they started losing the house or people got so used to the free money coming and consequences that when that all went away and they were expected to perform again, they forgot how or that were accustomed to it. And now we're seeing the after effects that the government stopped, started saying, no, wow, all the protections are over. All the free handouts are gone. And now I have it myself. We have people that are 10 months behind and they're like, well, I don't know what to do. I only get $900 a month. When they say, they mean they don't earn it, it's given to them. And I'm like, you should have got figured. What? I'm

Speaker 1:

Like,

Speaker 2:

Okay. So they get kicked out of a rental property, which I would say is kind of a sad thing. It is a sad thing. But they ripped somebody off for almost a better part of a year. In doing so, the poor landlord in the process basically provided a long amount of service and didn't get paid. So no landlord wants to ever kick somebody out for non payment. That's crazy. Nobody ever does that. They do it because they have to. It's the last resort and it costs a fortune when they do it. It sucks. So I would imagine a lot of landlords won't survive that. And these are going to be your mom and pops. These going to be your corporations. These are going to be the regular person that bought an investment property or inherited a relative's property and rented it out. Those people are going to lose that property to foreclosure. So you're going to see a lot more of that, I think coming through.

Speaker 1:

Okay. Doom and gloom.

Speaker 2:

Well, GM and gloom, if you're the losing side of that, but that's how things work, right. I have a bunny rabbit and I know that they're part of the cycle and the circle of life, so I get how that stuff goes too. You don't want to see it happen anywhere in the wild, but this is how the market does work. The government got really involved and fiddled with the market a lot and created a weird situation that we're seeing now. And I think, yeah, there's going to be some type of correction, maybe an avalanche of foreclosures and that could be amazing for your followers and people that are watching this podcast, reading our book. Because if you're learning about this stuff now, you'll be ready later when it's ready for you to pou. Hundred percent.

Speaker 1:

So last question to end then. I love this question. If you could go back in time for when you first bought your first foreclosure before or after, what would you tell yourself today?

Speaker 2:

I would slap myself in the face and say, stop investing in property. Stop. Yeah. I was like, don't invest in, don't do it. Yeah. No, but seriously, I mean, I'm from mass. I grew up here and I've always had a lot of pride in where I live, and I would definitely say that was dumb. Invest in states that treat property owners somewhat closer to fair. It is an insult how unfairly set up laws are against people who own a property in states like mass and similar types of states. And I would say, wow, if you can survive doing this in a state like that, you can thrive anywhere. So why not from the beginning? Make it a little bit easier for yourself if you have an avenue to do that. We were just a couple of borderline broke dudes that started roughly in our own backyard here, and we dug in so deep we're going to stay here, but people will start doing stuff in other areas and other things too. But we would've had a much, much faster path to success had we started it in an area that was a little bit more fair. Got

Speaker 1:

It, got it. So if you did want to buy a foreclosure in a different state, but you don't want to drive there every single time for an auction, you would just send someone there on your behalf basically. You can do

Speaker 2:

That. Yeah. I'm sure you could do a lot of stuff by proxy, so to speak. Okay. Yeah. And I mean, again, if it's at the right price, it ultimately doesn't matter. If you snaked an amazing deal and you spotted something that we bought a house for $200 once we bought a two family house for 200 bucks, I don't care what state that's in, you can't screw that up. So there was no reserve bid. It was like eBay, but with no reserve bid. You're like, what? And yeah, so this stuff can happen,

Speaker 1:

But can you buy a house for $200 and then get hit with a $50,000 tax bill or something? Or liens or anything else?

Speaker 2:

Well, I mean, we literally bought it for 200. So there was no liens, there was no tax bill. Yeah. I mean, if you're not doing your due diligence and there mortgage went for $200, sure, but they hadn't paid taxes for the last 18 years. Yeah, you get better buckle up. But no, that wasn't the case. There was no taxes owed, no water bill owed.

Speaker 1:

What? But how is that? Why couldn't the original owner couldn't just put up $200?

Speaker 2:

Don't forget, everybody always thinks when a home is getting foreclosed, it's the original owner sitting inside that house having a worst day of their life. That's just not always the case. In fact, often it's not. Many times these homes are vacant. Many times these homes are in horrible disrepair. This property was a two family property. It was packed like a hoarder and it was in rough shape.

Speaker 1:

Okay. They just wanted off the books, get rid of it, move on,

Speaker 2:

Basically. Yeah. Somebody decided just not worth anything, just let it go, whatever. I don't know. Wow. Again, you can't win if you don't play. Matt happened to be, he was the one showing up at that auction that day. Nobody else showed up. And that could be you guys. That could be anybody out there watching this kind of, yeah, look, that's a home run. That's a lightning strike. That's not going to happen over and over, but hey, it did because we were in a position to take advantage when it did. Amazing.

Speaker 1:

Yeah. Amazing. Alright, so lastly, where can people follow you online? What are your handles everywhere? TikTok, Instagram, YouTube. It's all the same. Everywhere. Yeah.

Speaker 2:

We are close to hitting a million on TikTok, but yeah. Wow. We're big boys over there. I guess I didn't know that, but YouTube is probably the best, mainly because TikTok and all the other platforms, they focus primarily on shorts, 32nd little clips. YouTube at least has access to our long-term content, our long form content, supplement, long videos, things like that. So I would say yeah, our name is the same on all these platforms. It's ridiculously long. It's two guys take on real estate and I can't find a way to make that look good on a T-shirt or something. And

Speaker 1:

TWO not the number two,

Speaker 2:

Right? No. TWO. Yeah. Not the number two, but the word two

Speaker 1:

Guys take on real estate. Yeah. Got it.

Speaker 2:

Awesome. And we're all over the place on there. If you jump into the comments, we love getting roasted. There's not a day that goes by that I don't pick on Matt for being bald and he doesn't pick on my nose. I mean, so there's nothing you can say to hurt my feelings at this point. Have fun with it. Enjoy the content, have fun with other people in the comment section. Seriously and learn, but enjoy being part of this and learning.

Speaker 1:

Awesome. Well, can stay on board. But thank you again for joining us. I really appreciate it.

Speaker 2:

Awesome. Glad to be here. Thanks so much for having us.

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