EPISODE #1 | NEW TO REAL ESTATE INVESTING | REACHING THE GOAL OF MAKING MONEY QUICKER
Hey, Jared, I'm finishing my last few months of school graduating college soon, and I want to get into real estate investing right now. I'm searching the area of four homes was on Zillow and realtor.com. What are my next steps? And should I get a real estate license? Thanks, James. For the question. Hey everybody, Jay Eric Jones, real estate broker of Jones group real estate about me. I've been in real estate for 19 years, sold over 3,600 homes to the general public I've personally bought and sold 45 ish 50 range properties on my own behalf for primary residences and flipping houses and all that kind of stuff. And I've helped investors flip more than 250 homes in my real estate career from finding them, acquiring them, cleaning them up, and flipping them out to a profit. So I'm going to walk you through what I would do if I were just getting out of real estate school like James and how I would take that person and scale up to a multimillion-dollar business in hopefully short order.
My goal today though, and maybe a two-part series is to give you an idea of all the milestones you need to look for as you go. I find that new investors or people that are trying to get in the business, get distracted by buying products. They don't need it. When a lot of the world has the information, you just need to tap into it. Not saying that the entire education will be free, but if you do know where to look, and my goal is to give you the areas where you can stop and focus so that you can enhance the learning curve of what you need to spend your time on. Because a lot of people do spend their time spinning their wheels. And my goal is to help you get to making money quicker. Let me get started with this. The first thing that you need to think about as you're starting to frame your idea of being an investor is you need to get into the business.
First, of finding motivated sellers, playing simple, there are many layers of motivated sellers, there are many types. And so I'm not going to do exhaustive research here. I'm gonna give you a few of my favorites, but there are obviously foreclosures. So people that are behind their mortgage there's tax. So people that are deficient on their taxes, all these types of situations create public records, which is a traceable event, which allows you to interface with these sellers either in writing or in person at the door. But you have divorced situations. You have people that are evidently, uh, violating code enforcement issues, where you see the grasses too high, and there's exterior, uh, issues with the house yard sales can be an indicator that someone is going to sell soon. That just made me motivated. I like general equity sellers. So another way to find home sellers that might be motivated is getting to people who have had the property for 20 years or more.
They've owned an ideal piece of property. That is like what you're looking to find because obviously don't want to mail everybody. He's owned a house for more than 20 years. People that don't have existing mortgage things of those nature, that you can actually have an opportunity to, uh, to talk and interface with the cell and possibly buy it. You have a state sale situation. That's where someone has passed, leaving a property to the heirs, and there's an opportunity for that property to be sold as well. So let's jump into this first. Where should you start? You're getting out of college, your entry into this business. A lot of times people have the first challenge, which is how do I fund it, right? Is not cheap. It's not free. Real estate is a bigger price tag investment item. So how do you do it?
Well, number one, I would tell you, if you do not own your primary residence, start there that now the tools available to someone buying a primary residence are much easier than, than just a, uh, an investor that's buying his first flip. So for instance, if you go through an FHA pre-approval process with a mortgage lender, you can get 96.5% of the money from the bank. So you require a very low down payment, as I was saying a second ago, you need to find a motivated seller. You stay off realtor.com. You stay off zillow.com other than to use them for a resource tool to find, uh, what properties have sold for in the area or what the schools are or data like that. But you're not using it to find real estate to talk to sellers, but we're going to delve into that detail here just in a moment.
But the first thing that I want you to do is to think about what the property will be, the first property that you're going to look at, and again, you might be thinking, well, Jared, I don't think I can qualify for 96.5%. I'm going to get out of school. I don't have work lined up or there are some gaps. Well, I'm going to share with you how you can get into real estate without using your own cash. You can use other people's money and make a great living. And for long, you will not have a cash problem because you'll have the profits from your own business to take care of that. But one of the things that you might do is pre-qualify for FHA in the first place I would tell you to start is you can back up and you need to look in the areas that you would consider buying.
Okay? So if you did get pre-qualified for FHA USDA, by the way, has a hundred percent financing, zero money down. Those product types allow you to look at what you're potentially buying from a price point standpoint. So like I'm going to spend, you know, 180,000 on my first purchase, what a homes go for in the areas that I'm considering. So you want to consider starting what is the retail price of my target area, right? You're going to get into the areas that you're, that are around you, that you're going to consider working as an investor. And you're going to say like, you know, what, what do these types of homes sell for in the end? Like what's the as-is value, pre repairs and, and then what might be in a budget for a potential rehab here, what will be my final value price?
So the thing is like, if you are, you know, under a price of one 80, and that only buys you a two-bedroom home in the communities that you're at, you don't need to door, knock and focus on marketing to homes that are four-bedroom homes. For instance, you need to figure out where your target audience is and then go to them. Okay. Now, in reality, the next step would be, go find a seller, right? Have a conversation with a seller about selling their house to you. There are two ways you can do that. If you're completely cash-strapped door-knocking is a way many investors start. Their process is, they get a data pool like I'm describing, and I'm gonna tell you how to get information, to find these equity owners and how do you get to their addresses? And how do you find these types of data pools?
I'm going to share that with you, uh, in a moment, but, but the point I'm making is you have a seller, they have a lot of equity. They may or may not be interested in selling. How do you figure that out? Well, there's an easy way. You can go knock on the front door. Someone comes up to the front door and you're simply asking them if they've given any thought of selling in the year ahead. And so that becomes a potential prospect that you pursue. So you simply go and ask. And now, again, I'm not here to do exhaustive research on how to do a door-knocking presentation. There's plenty of that information online. The next thing you can do is direct mail. Direct mail is a great way to reach sellers. If you have the cost stamps are obviously the most cost-prohibitive challenge with using direct mail, but direct, direct mail is fantastic.
So let's talk about direct mail because there's a little bit more to it than just door knocking, door knocking. Very easy to not mess that up. You simply walk up to the door, look in the keyhole and knock right direct mail, a little bit different animal. Okay. So if you do direct mail poorly, it will cost you a lot of money for your very expensive lesson. So I'm going to give you an overview really fast on how to resellers by direct mail as well. So direct mail, you're going to want to make sure that it stands out. Many sellers like everybody else are going to be sorting their mail over the trash. And you want to make sure that you do not use white envelopes. You don't use envelopes with, with security, uh, labels, the little round windows that are in the front that has the address.
So let's talk about direct mail because there's a little bit more to it than just door knocking, door knocking. Very easy to not mess that up. You simply walk up to the door, look in the keyhole and knock right direct mail, a little bit different animal. Okay. So if you do direct mail poorly, it will cost you a lot of money for your very expensive lesson. So I'm going to give you an overview really fast on how to resellers by direct mail as well. So direct mail, you're going to want to make sure that it stands out. Many sellers like everybody else are going to be sorting their mail over the trash. And you want to make sure that you do not use white envelopes. You don't use envelopes with, with security, uh, labels, the little round windows that are in the front that has the address.
So it's again, handwritten font with like, uh, you know, yellow, legal pad paper that looks like it was folded up and put inside the envelope for the person to read. If you're getting a good mailing list, the mailing list will have the first name of the person you're mailing to which will create what's called a mail merge name for the inside of the letter. So it'll say, hi, David. Hi, John. Whoever's getting the letter. You'll print right on and handwritten font, which is what you should be using. Ideally like bluing. So it looks like you actually wrote it out. And that's what it gets put into the envelope. The more personal, the more realistic the messaging inside the envelope, the better it's going to work.
Hi, my name is John. I just got out of college. I'm looking to buy my first home. Your home looks great. If you sell it to me, you can avoid spring cleaning. You can avoid showing your home to a thousand people.
There are all these great benefits of working with me to buy your home as-is no problems. No pressure. Let's talk calmly. Okay. Very simple, very simple. Nothing to go too far over the top. Now that concludes the initial thought process where you should stop, where you should start, what you should focus on, and what you should stop focusing on. So just want to cover some basics on how to redirect your focus. In the second video, I'm going to talk to you about how you can acquire a property with no money whatsoever, how to make a very profitable business using other people's money. And also how you can acquire in a mass, a large investment portfolio of real estate with none of your cash in the game. So stay tuned for that. If you have insights and input on motivated sellers, feedback on what we talked about, particularly in this video, please support this channel. Subscribe hit the bell icon to make sure you're getting updates like this video, share it with someone, you know, that might benefit from it. I'll talk to you real soon.
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