There is an eighteen-month window of opportunity for real estate investors to find good properties and Robert Orfino shows you how to take hold of it right now. Learn about the immediate steps you need to take from increasing your FICO scores to finding the right properties. Robert also shares tips on how to spot motivated sellers and how to be on the right mindset about the economy that will drive you to start and step up your real estate investment game.
Listen to the podcast here:
All Yours For The Taking with Co-Host Robert Orfino
We talked about getting things going and fear and doing all these things. Someone said to me, “Rob, great show.” I was like, “Thank you. That’s awesome. I appreciate it.” It wasn’t just a show. All of this is for your taking. You can have it right now for sure. We talk about this a lot about how good this market is and how the economy is strong and how cash and capital is flowing. There’s no better mix than right now, not that I’ve seen in the last since maybe 2004, 2005. The market was as primed as it is now, yet we have people that are still sitting on the sidelines, still nervous, still not quite ready. All I can tell you is it’s all there. Everything is on the table for you right now. You’d have to go and get it. We’re in one of those windows of opportunity that this country provides every ten to fifteen years.
This is the greatest nation ever. Do we have faults? Of course, we do. It’s the opportunity to start your own business, the opportunity to be whoever you want to be, the opportunity to go and educate yourself anyway. You want to get the job that you want, all that opportunity and the opportunity to own property. There are a billion-plus people that have a hard time understanding that, but it’s right here for you in Texas, one of the greatest states to invest in ever. You need to buy property ASAP. Don’t buy bad property. Don’t go into it and just with your eyes closed, but you’ve got to start spending some time. You’ve got to get yourself prequalified and you’ve got to buy property.
This is it. You’ve got eighteen months left. We lost a few deals. We’re not worried about it because there are still so many deals out there, but we need to grab them. We need to get them now. We’re still buying at a deep discount. The trends are all there. A lot of that multifamilies coming back. You’re going to start seeing that mixed-use. You’re going to start seeing some ground up stuff around the beltway, which is happening now. Most of it is multifamily popping up, but some of it are single-family homes and outside the 99 there, you’re going to see a lot of that single-family development and that corridor from the I-10 up to 290 on the 99.
You’ll see all these single-family houses pop up in the next 18 to 24 months. We’re still buying properties at $60,000, $70,000 and $80,000. We’re putting $40,000 into them and we have $110,000 at the end of the day, all in. At $110,000, they’re all in, we’re renting for $1,400. My friends in California are banging their head against a wall. My friends up in the northeast, they can’t find these properties yet. We’re finding them in appreciating markets. It’s 11% appreciation in some of the markets we’re buying in. Wake up. This is it. If you don’t want to work with us, it’s fine but please get to work.You need to buy properties ASAP. Start spending some time looking for good properties and getting yourself pre-qualified. Click To Tweet
It’s not free. You’re going to have to do some things. You’re going to have to fill out a lot of forms for bankers, mortgage companies and mortgage brokers. You’re going to get your stuff kicked back from the underwriter. It’s a pain in the butt. You’re going to have to work with agents, and some agents don’t understand investing. A lot of agents don’t understand investing, so you’re going to have to work with the ones that do know it, and you’re going to have to make offer after offer. You’re going to have to go out and meet these wholesalers and look at those deals. 90% of them are going to be junk and 10% will be a little gem right here. You’re going to have to move very quickly. You’re going to have to put $3,000 or $5,000 down with no way to recoup it.
You’re going to have to put money at risk. Not a lot, but some. Less if you’re buying off the MLS, more if you’re buying off market. It’s shocking how many people I still talk to who are like, “It’s probably time.” Nope, it was time last year. Now you’ve got to catch up. Now we’re in catchup mode and it hasn’t passed you yet. You still got eighteen months, but you’ve got to get going now. I had some mastermind people over the house. We have brunch usually once a month, the Big Game Hunters and mastermind folks. We went through some of this stuff and I showed them the exit, which we haven’t shown to anyone else, and understand what we’re doing here.
Jason and I talked about, “We have a big picture. We know what we’re doing. We’re trying to work to the marketplace. Do we lose a few? Will we win more? Yes, we will win a lot more.” It is there. It’s on the table for you. Let me give you some backhand coaching. Let me show you how to do it. You’re like, “I don’t know where to start.” Here’s where you start. Go to MyFICO.com. I have no affiliate with it. I don’t make any money. Sign up for that $29 a month program. Go ahead and get your true FICO score. Get your FICO two, four and five scores. That’s your mortgage score. If you’re sitting above 700, let’s go.
If you’re below 700, you’ve got a little work to do. We brought in Merrill Chandler. We had a weekend event and laid it all out. There were 80 people between the cameras, between online and the folks in the room, who were hopefully figuring it out. You have the same opportunity at this point and the same opportunity to figure this stuff out. MyFICO.com, check out your two, four and five mortgage scores. They need to be above 700. I’m sure there’s a hard money guy driving somewhere or a mortgage broker saying, “I could get them loans at 650.” You can get them crap loans at 650. You can get them junk at 550 a day out of bankruptcy.
Don’t deliver that nonsense to me. Don’t fall prey to that mortgage broker. “I can get you a loan a day after bankruptcy. You’ve got a 550 credit score, I can go ahead and set you up with a mortgage right now.” At 50% LTV, meaning they’re only going to give you half of what you need. If you’re a day out of bankruptcy, you don’t have the other half of the house. It’s a nonsense. It’s a throwaway line. It’s just marketing. You need about 700 on your mortgage FICO. That’s where you need to be. You need to have your 20% down. You need to have your team in place. You need to have a Jerry Ta or someone like that in your corner. He needed to be able to jump on that stuff. It’s not impossible. It’s all right there.
Jerry will pick up the phone. Mindy will pick up the phone. They’ll talk to you about it. I know there are a lot of engineers in this town, both in space and in the ground and you guys have a tendency to overcomplicate things. It’s not. If you have a 700 FICO score or better, you’re ready to go. You need about 20% down. If you have 20% down, go talk to an agent. Call us (281) 401-9008. Go ahead and text us. You have to have a sense of urgency in this because the market, this window is slowly shutting. The more we see ground up going out in that on the 99 between the I-10 and 290 that is the clock ticking. “What does that mean, Rob?”
That means that the market value is going up. These aren’t going to be new houses available for $150,000. These are going to be new houses available for $289,000, $299,000. They will pull up the medium house price, which makes it harder for you to find affordable rentals. If you drive in that corridor every day or once a week, I want you to know that what you see coming out of the ground is a clock ticking. The more houses that are going up out there, the less opportunity there is in this market.
I don’t know what else to tell you. I know you have questions. I know you have fears. I know you have doubts, but here’s what the reality is, 700 FICO on that mortgage score and 20% down. If you don’t have that, then you’ve got some work to do. If you have that, what the heck are you waiting for? Will it make you happy when the market turns and you can tell everyone that you missed it or will you be a bit more happy when the market turns and you already have three, four or five rental properties? It’s 700 FICO on the two, four and five FICO scoring and 20% down. That’s what you need. You can do owner finance.If you prefer watching football than generating revenue to buy real estate, you're not an entrepreneur. Go and enjoy your beer and chicken. Click To Tweet
You can do all. I talked to my buddy in California. “You’ve got any houses that I can buy that don’t need any money down?” “I just give those away, for sure.” No, I don’t know. Get a 700 FICO and get your 20% down and go. Most of you have good jobs. We’re talking about six figure jobs here in a town where it’s 40% cheaper to live than where I came from. No more trikes, no more jet skis. You don’t need a second truck. Take that $25,000 and buy a house quickly. If you need to talk to agents, text us (281) 401-9008. If you want to get in the room and see what’s going on, come out to the lunch. Text (281) 401-9008. You want to go look at these properties. Smell the money.
If you need to do the work, let’s talk a little bit about the work part of it. Let’s talk to all the people that are there that are sitting there. They’re pre-qualified in this market. If you don’t have the 20% down, I do suggest driving Uber. We’ve got two very successful people in our group that have gotten their down payments from driving Uber. If your credit score is high, it’s probably because you carry a high credit balance or you have lots of inquiries. You’ve got to work the balance down and you’ve got to pay someone to get rid of the inquiries. There’s no secret.
If you have a low credit score, it’s probably because you have a high credit balance. Pay the balance down. “How do I pay the balance?” You go get a second job. “I don’t want a second job,” then you’re not an investor. You’re not an entrepreneur. This is not the life for you. The opportunity is there. You just have to do it. You’re like, “I don’t want to do it, Rob. It makes me uncomfortable and I don’t get to watch football and baseball and all that stuff.” You’re out. Thank you. I get it. There are ten other rooms in this town where you can go and eat chicken, drink beer, and get sold the dream every single month. Good, go enjoy it over there.
If you don’t have a 700 FICO score and a two, four and five and you don’t have 20% down, then you’ve got to work. Get a second job or get a third job. Watch Gary Vee do multilevel marketing. I don’t care what it is. You generate revenue. You use that revenue to pay down your credit. Do all the little tweaks that are online to increase your credit score and save up your 20% and go buy a house, preferably a multiunit two, three or four where you could still get 5% or less interest it. You can cashflow $300, $600, $900 a month. That’s the work. You can go, I don’t know, spend a couple of thousand dollars, $25,000 and go believe the charlatans that you can find properties for no money. Good luck to you. We’re talking a little bit about your FICO. We’re talking about those little tweaks out there. There are some things that you can do and you can go on the internet and we’ll post on our page. Top three little tricks to hack your score. The reality is you’ve got to work it. You’ve got to do the work.
Rick asked, “What are you talking about eighteen months?” Here’s what we believe and we can be complete knuckleheads and be completely wrong. We look at the HAR reports and the HAR reports every month show us that houses that are selling for under $100,000 that market is reducing. It’s not because people aren’t interested in the house under $100,000 or not because they don’t want to buy a house on $100,000. It’s because there are no more houses under $100,000. The house that the landlord that most of us are looking for is that $60,000 to $80,000 house and we’ll put $20,000 to $40,000 into it. We’ll be sitting at $120,000, it’s worth $150,000. That’s 80%. We got to bring a little money to closing. We’re all good, rents at $1,300, $1,400, $1,500. It’s a winner. It’s what most of us are looking for.
That’s what everyone’s teaching out there at this level. They’re harder to find. That market is disappearing. The $90,000 houses now on the market at $120,000. The market is telling us, “These houses are rising.” As the economy goes up, the rising tide lifts all ships. These $100,000 ships are being raised up into the $125,000 range. The house that was $125,000 is now $160,000. That $100,000 to $150,000 category is also disappearing. As we build more and more ground up houses that are being sold for $289,000, $299,000, $309,000, $329,000, with the market is screaming at you as you drive the 99 and you’re seeing these signs, new houses starting at $289,000, it’s right in your face as you drive by.
It’s telling you starter houses are $289,000. That’s why I’m saying as you drive that highway, that race track because 99 you can just fly. It’s crazy. As you drive down that race track and you see more and more housing starts and you see new houses at $289,000, $299,000. Starting at $299,000 means $359,000. The market that you drive through every day is telling you people can afford $300,000. If they can afford $300,000, why would you sell your house at $80,000? Why we even try and get $110,000 for it? Why would you sell her house at $125,000? Why don’t you put a little paint, clean it up a little bit, sell it at $160,000?
The bottom of the market is coming up. As it comes up, the opportunity for us to buy houses that will cashflow is being eliminated. The question becomes, “Robert, I’ll have to buy a rental property at $175,000.” Maybe, but will the rental market keep pace with the appreciation? Is it going up 2% year over year, 3% year over year, 7% in some markets, year over year? It’s not. Between taxes, because your market goes up, your value of your house goes up, you’re going to get taxed on that. As that goes up, you can’t make cash. Now you’re just buying single-families for the appreciation, which is still a strategy.
The other thing is as interest rates rise that is going to increase the cost of your mortgage, your PITI, it’s going to go up. Do you think insurance is going down? That’s the last I. Principal, Interest, Taxes and Insurance. Do you think any one of the interest of the taxes of the insurance is going to go down? No, nor is the principal because we have to buy the house higher. Your PITI just goes up 7%, 8%,9%, 10%. The window starts closing. We can’t find the $75,000 Texas City, three-bedroom, two-bath that we can put $25,000 into to rent it $1,300.As the economy continues to grow, the cost of housing will rise. Click To Tweet
That market disappears and I think we have about eighteen months. You can hold that property and we have one that’s so very tight, but it’s already got about $70,000 worth of equity. This is the thing that Jason’s going through too. He’s got a house that got $100,000 in equity, now about $90,000. He can’t make the rent work. This is what we mean when we say we have eighteen months left. We’re not saying that the world is going to collapse and everything’s going to, “Eighteen months. Robert is talking about the elections.” Eighteen months, the elections are going to change everything. That’s not what I’m talking about. I’m talking about jobs.
More jobs equals increased rates of housing. You don’t create more jobs and lower the cost of housing. That’s not how it works. As the economy continues to grow, the cost of housing will rise. When the cost of housing rises, it pushes us out. The $30,000 that we needed to complete the deal in Texas City now becomes $40,000, $45,000. The $40,000 we deal, we needed to get a two-unit in Stafford now becomes $60,000. The $80,000 that we needed to get a fourplex in Humble becomes $120,000.
Talking about this market, we’ve got to go now. This is the window. It’s going to take a little bit of work if you’re not there. We’re not here to sell you this nonsense dream that you can go out and create your rental portfolio with no money down. I believe it’s a strategy for sure. I don’t think this market lends itself very well to that. Not here in Houston. San Antonio is a good market. Some of these smaller sub-markets work well for owner financing. The market is going up. It’s $260,000-something for the median price. Once people understand how valuable their houses, and I think it has already happened, is when a homeowner realizes that their home is no longer a liability and if it’s an asset, it’s much harder to deal with them.
The whole motivated seller thing is people that are looking at their house as a liability and not an asset. This is why it is almost impossible to do wholesaling on a big scale in Southern California, New York City, Boston, Seattle, Portland or even Dallas, it becomes very difficult. The wholesale deals are 80% to 83% ARV. People look at their houses an asset. This is an asset. This is money. This is my retirement. In LA, everyone thinks their house is worth $1 million and most of them are right. $629,000, $639,000 is the median out there. That’s a lot of money in your house.
When you’re doing this owner finance, we’re going to get some free real estate, which is not. A lot of the markets are going to look at where the mindset is still this house is a liability and not an asset. A true motivated seller understands that the house is a liability. There are no motivated sellers out there who think, “This house is an asset.” Why would you be motivated to sell your asset? Just be aware if you’re in those markets, you’re in that Southern California market, I’ve got a lot of friends up in New Jersey, in New York and that marketplace. That marketplace is full of assets. They are not liabilities.
Can you still buy it at auction? Can you still pick up houses in Elizabeth and Irvington? You can, but you don’t want to work those areas. Take that off the board and what do you have left? You need a 700 FICO and your two, four and five FICO scoring. You need 20% down and you need to have a decent job. I’ve got people who have already quit their job or don’t have a job and are now starting real estate with nothing. I’m like, “Don’t come to my room. Don’t spend the $20, $40, $50. It’s a waste. Go drive Uber.” There are tons of multilevel marketing schemes out there where you can start for under $500 because at that level, when you have nothing, it’s all about your hustle. It’s all about you being able to close deals.
If you have no money, no job and no sales skill, it’s bad. If you have a skill to sell something, if you can be a salesperson, then start anywhere. I don’t care what. Sell the marijuana oil, sell the pills and lotions. Go sell timeshare. I don’t care. Start somewhere. Get it going and hustle. You joined a timeshare company and you could work seven days a week, you can make $1,500 a day. Is it the most glamorous thing to do? No. Will it produce revenue? Yes. Go sell cars. An average car salesperson’s going to sell about twelve a month. Twelve a month should equal about $10,000 to $15,000 a month. A good car salesperson in this town is going to sell twenty-plus.
Twenty-plus is probably going to create $20,000 to $25,000 a month if you have a sales skill. If you don’t have a sales skill, you don’t have any money and you don’t have a job, it’s tough. I’m telling you straight up, we’re probably not the people to work with. Some of you don’t want to hear it, but I’m telling you that what we teach, talk about and formulate, it’s based on the assumption that you’ve got good credit or you’re working towards good credit. You’ve got 20% down, which is why we don’t bring any of these lease option guys on our shows or in our rooms. We don’t bring any owner finance guys out there. It’s just hard.
I don’t think this is a great market for it. Will you find some up in Montgomery? Yes. Core Centerville, yes, keep going north. I don’t think you’re going to find very many here in this market. It’s very tough. I think you got to set up a call center, do a lot of bird dogs, and there are some people in this town to do that. They’ve got tons of people working for them, dogging and everything. Bandit signs, cold calling, yellow letters, door knocking. They’re trying to pull out those owner financing. Maybe they do get five a month. That’s a lot of effort. It’s the kingpin who’s creating the wealth. It’s not the work abuse. That’s just like a free job. That’s going to work for free, being a bird dog.
When we talk to you, we’re talking to the individual who has got good credit or getting there, who has a decent job and can come up with 20% down. If that’s you, if you’re reading and that’s you and you’re saying, “I can do that,” then it’s time to buy houses. (281) 401-9008 text us. Tell us, “I’m looking for an agent. I want to come to the Friday lunch. I want to come on the bus tour.” Let’s go. This is not the biggest market in the real estate investor world. We’re talking about a very small segment of the market that we speak to every day. Anyone who comes up to meet these meetings, “I’m thinking about quitting my job,”
I’m like, “Why would you quit your job?” It’s imperative to have those resources. Take action now, especially if you’re in that position where you’re close on the FICO, you have a decent job and you’re pretty close to the down payment. Let’s make this happen. You can do it. You can be different than the rest. We talked about it. You could be different and get this stuff done versus the other 86% of the population that is just going through the motions every day, showing up at the job. We don’t hype financial freedom, but having $1 million in assets is not a bad feeling.
Having that backstop in your life is a good thing. Take advantage of the opportunities that this market, this state, this nation, the greatest ever is giving you right now. Don’t wait. We don’t think the meteor’s is going to hit and destroy the market. We think the market will rise so strongly, your opportunity is going to dissipate. (281) 401-9008, take advantage of this marketplace. I’m very passionate about this because I was a knucklehead who was broken in a hole and in debt and I was able to climb out of it. If I can do it, anyone can do it.