Welcome to the October episode of Investor Insights With Brie Schmidt!
Brie Schmidt is one of the most well-respected buy-and-hold investors in Chicago. Each month we discuss an investment topic brokers should master.
In this episode Brie talks about one of the biggest challenges when starting to work with investors – making sure you have boundaries around the amount of time you’re willing to devote. Without a clear set of expectations in place you may find that you’ll put in more hours than is reasonable. Brie shares best practices on how to make sure the relationship is worthwhile to you, the broker!
Please visit Midwest Real Estate Networking Summit as mentioned on the show.
Transcript
D.J. Paris 0:00
This episode of Keeping it real is brought to you by Quicken Loans real estate professionals. When you work with Quicken Loans, you have an agent relationship manager available to you and your team. These dedicated experts are part of the agent relations team. They serve as your single point of coordination so you can count on them to keep you in the loop throughout your client’s entire home buying process, call 888-980-2891 or go to real estate dot Quicken loans.com Today, call for cost information and conditions equal housing lender licensed in all 50 states NMLS consumer access.org Number 3030 And now onto the show.
Hello, and welcome to another episode of Keeping it real the largest podcast in the country made for real estate brokers by real estate brokers. My name is DJ Paris. I am your host and guide through the show and today we have our investor insight monthly episode with Bree Schmidt. Now if you’re not familiar with Bri, let me tell you a little bit about her. Bree Schmidt acquired her first investment property in 2011 and left the corporate world in 2014 when she became a full time real estate investor. She’s the managing broker of Second City Real Estate a full service brokerage working with new investors and seasoned investors looking to expand their knowledge of the industry and their portfolio for utilizes her extensive knowledge of building and managing a portfolio to teach clients all about all aspects of buy and hold investing. Bri teaches how to analyze potential properties, calculating your ROI best practices within marketing and leasing, and also how to be a landlord and build a portfolio. Her job does not end when you close on a property she is always available to help you throughout the process and scale your business. She is the co founder of the Midwest real estate networking summit, which is a nonprofit educational summit for real estate investors. It’s a three day annual event provides new to experienced investors with the tools and connections necessary to build a real estate business. And they just announced their 2020. Next dates. And so if you’re interested in you should if you’re at all interested in real estate investing or working with investors go and attend the Midwest real estate summit to get more information, visit Midwest ar e summit.com. Welcome Bri to welcome back to the show.
Brie Schmidt 2:41
Yeah, thank you very much.
D.J. Paris 2:42
It’s been a few months we should actually you just had a major life event. Would you care to share that with the audience? What’s happened?
Brie Schmidt 2:50
Yeah, so when we last did the show I was pregnant. And now I have a baby. She’ll be two months tomorrow. So it’s been a fun few months getting adjusted to not sleeping ever.
D.J. Paris 3:07
Congratulations on behalf of all the listeners as well as myself, we are thrilled to have you back. But we understand that time is more limited or in short supply these days.
Brie Schmidt 3:20
Different adjustment.
D.J. Paris 3:23
I haven’t been through it yet. And I’ve heard that it all gets easier after year three, so you only have two years and 10 months left before it gets easier.
Brie Schmidt 3:34
Oh, I heard that’s the worst year? Well, well, like
D.J. Paris 3:37
I said, I’ve never done it. So what do I know? My sister’s, hers is in almost approaching your three. So I’ll report back after she hits your three. So okay, so what do we want to talk about today?
Brie Schmidt 3:51
So one of the things I wanted to talk about, and it was kind of irrelevant, to me, at least right now is time management with investors, and how to how I deal with them. It’s in fact, the 99% of my business. And one of the things I actually just got an email the other day, from an investor who was looking, you know, they’re from Israel, and he’s looking to pool money from out of the country, bring it to the US, he wants to go do it in Chicago, you know, build a team out here, build a portfolio, and you know, through multiple conversations with him, we decided that it just wasn’t we were going to pass them off to someone else who a was probably a better fit in the first place. But be because you can’t always just take on every single piece of business that comes your way. What he you know, what they’re looking to do is extremely time, time intensive, and at the end of the day, not worth our time to do that sort of work. So that’s kind of what sparked this idea is you know, hey, you know, if you are working with investors or you want to work with investors, you know, how can you To manage your time with them to be more efficient.
D.J. Paris 5:04
And this is a common question I even know here at our firm, I’m sure you got you get probably these calls all the time, because you’re so well known in the investment space, we get them here at our firm as well, we’re where somebody will just call up randomly, seemingly randomly and say, Hey, I’m an investor, I’m looking for some deals. Can you Patch me through to one of your brokers, which of course we do. But we’re always like telling that broker, hey, here’s how, and we don’t have a great set of guidelines to help a broker, especially a newer broker who’s like, I’ll take any any lead you have. And it might be an investor who, you know, ends up taking maybe more time than it’s worth. So how do you go about evaluating who you work with? And what kind of time you spend?
Brie Schmidt 5:46
That’s a Yeah, so that’s a great question. And I’m sure you guys get a ton too, and how, you know, everyone wants to be an investor, and especially now in the cycle, the market cycle, where when we’re at the top of the market, everyone jumping into this business, it seems just like we see an influx of people becoming real estate agents, we also see an influx of people becoming in real estate investors. So one of the first things I do understand that I manage a team of six. And the way that we are structured internally, is we all work in areas that we personally invest. So the first thing I ask them is, what’s your budget? What area? Are you looking to make sure that either Am I the right person? Or is it better off to go to one of my team members, who has you know, handled that area, we’ve gotten someone that handles you know, Berwyn, Cicero Forest Park, we have someone that handles the south side, North Side suburbs, we have it all structured based on our own area of expertise internally, once they’ve kind of gone through there. The second question I ask, what’s your budget? And that’s a really, I think, a really important question. And if they don’t answer that question, I don’t move forward with a conversation. I want to know exactly what’s your budget, like? And how are you paying for this? Are you have you been pre approved? Right, I want to see your pre approval, I want to see your proof of funds. Because I find a lot of times people are like, oh, yeah, you know, I, my budget is $800,000. Like, great. Let me see your pre approval. And then I get the pre approval, and it’s 400,000. I’m like, Well, how are you going to buy $100,000 property if you’re approved for 400. And their response is always well, rental income, because you can use rental income to increase your qualification. And I’d said, you know, no rental income and no Chicago property will ever increase your approval by that much. Generally speaking, you need about 70 $100 of rent, to increase your approval by $100,000. In funding financially with DTI calculations, and all that. So that’s step A. And I said, I used to be afraid to ask them off the bat what their approval was, and ask them like, you know, Hey, have you been pre approved? Let me see your qualifications before even taking a phone call, but I find that it helps me lead out half the people upfront, who just like, Well, I’m sure I’ll be fine. You know, great. If you’re sure you’ll be fine, then go talk to the bank and then come back and let me know. And a lot of times, I think people don’t understand the core competencies of approvals, which is debt to income ratio. And if they don’t understand debt to income ratio, they don’t they just think like, Oh, I’ve got a good job, and I’ve got good credit. Well, they don’t realize that they’ve got a bunch of debts, they currently have a mortgage that eats up 50% of their DTI. There’s no way they’re actually getting the approval anywhere close to what they need to afford. But secondly, I also asked to make sure they understand realistic expectations, you know, as at least least once a week some of the messages me and says, you know, my budget 650 And I want to be in Bucktown. Right? I was fine and say that’s not
D.J. Paris 8:52
you can buy a condo for 650. That’s about it.
Brie Schmidt 8:56
You know, if and that’s always my response, like that’s not realistic. Are you open to other areas? You know, and if they’re like, Well, I really want to be in Bucktown I’m like, well then I can’t like that I physically cannot help you. That is just not realistic. Linkin Park, obviously. Same thing too. But you know, if you’re looking for a cash flowing investment at 650 or more Avondale, Irving Park, Albany Park sort of areas, you’re definitely not in the Bucktown Wicker Park areas at 650. Unless your rehab budgets about $400,000, which typically,
D.J. Paris 9:29
So how often do you get calls because I know we get calls like this where somebody says when we asked those questions to qualify before we pass them off to one of our brokers and they go, Hey, I’m looking, I’m just looking for deals. Right. So that that’s a very common response. What do you say to that?
Brie Schmidt 9:45
Though, it definitely goes back again to what if they’re in my specific area, so I cover the north side of Chicago. I was explained to them that the average deal is typically 98% of list price. And a vast majority of my clients are volved in multiple offers over asking price. So if you’re looking for something that pennies on the dollar, then Chicago market is not for you. That’s my exact explanation. The north side of Chicago is not for you, if you’re looking to get something that 70 cents on the dollar,
D.J. Paris 10:15
or if somebody says, Hey, I’m looking for a short sale, you probably get that question a lot, too.
Brie Schmidt 10:21
Not really. And I try to explain to people that you can’t, you know, going into this as an investor, the more the more like pigeon holed you are with, like a has to be this neighborhood, or it has to be a, you know, brick gray stone, or it has to be too bad. Like, the more like, two bathrooms, whatever it is, the more focused you are in those capacities in the beginning, the harder it is to find your investment. So I always try to explain to people, you shouldn’t go into this with an open mind. And I always explain to people that it’s similar to having a pie, right, and you have a pie, you can cut your pie into four pieces. And the four pieces are cashflow, Condition, Location and price. So if you want cashflow, to be the biggest piece of your pie. The other pieces have to be smaller. That’s just how it works. There’s only so much pie you can have. Same thing like with location and location is the biggest piece of your of your pie. The other pieces need to be smaller, you’re going to sacrifice on price, it’s going to be expensive, you’re going to sacrifice some cash flow, and then you’re going to sacrifice on condition because location is the biggest priority to you. So going into it, it’s up to you to figure out, you know, hey, what’s the most important part of this is it going to be you know, I definitely want an X amount of cap rate slash return. Or I definitely want a project that’s value add, or I want a project that I don’t have to do anything to because I work full time and I want something turnkey, these are all variables that go into the puzzle, which you don’t necessarily need to know off the top, you know, off the front base of it all. But it’s something that you need to know before you make the purchase, though short sales fall into that. But I also as everyone you know, any agent knows Short sales are not what they used to be. They’re you know, they have not been for a very long time. You know, these smoking hot deals where you’re again, getting things pennies on the dollar, it’s just not realistic in this market cycle a It’s not realistic. And then in the areas of Chicago that I deal with, it’s just not realistic. We haven’t seen, you know, hugely discounted properties and least five years.
D.J. Paris 12:28
So once somebody passes the sniff test, we’ll call it as an investor. And you say, okay, they understand their budget, they understand approximately what they’re looking for. They seem serious, I’ve seen the documentation, then how do you go about determining how much time to spend with them.
Brie Schmidt 12:46
So one of the things that we do, especially before we even do a phone call, and I always say phone call, because I don’t do in person meetings, I think in person meetings are a huge waste of time, I will meet them at the actual showings when it’s time. But anything as far as conversation about, you know what to expect, all those things can be done over the phone. And
D.J. Paris 13:08
well, and plus, there’s just real quickly Sorry to interrupt. But there’s also safety considerations. In particular, if this is not a referral or someone you know,
Brie Schmidt 13:15
correct, of course, on. So that’s one of my rules that I only do, I only do phone calls until we actually go to do showings. But before that phone call, what I do is I send them an email and I have it I actually have uploaded on bigger pockets as well as a document. Every year, I go through all my sold, my clients sold investment properties. And every year I pick out five properties that I think are average. And I think that are a good representation of what you can get, you know, in a shorter period of time in Chicago, so I don’t want to show them the home runs. And I want to show them different price points, different neighborhoods. And I put all my my calculations as far as returns, what the cash on cash is going to be what the cap rate is going to be what the investment down payment is going to be. I put all of that into an excel sheet, and I tab it out by loan product as well. So I send them a document, I usually send them the last two years of examples. And I like to explain to them that, hey, these are property examples, which are a good representation of what you can expect in this market. Review this first before we schedule a call. So they’re able to go back and see 10 properties that clients have acquired, that my clients have acquired, and what the actual returns are for different loan programs. So if they’re thinking I’m going to do FHA, or I’m going to do 25% down, this is what the actual numbers look like. And I find specifically with out of state investors, that conversation almost always stops right there. Because they’re always looking, you know, from out of state, they’re looking for at least eight 9% cap rates, if not tons. 10s always the number that I hear like I want a 10% cap rate. I’m like I want a unicorn, that’d be great, you know, tick cargo is more like a six, potentially is seven realistically, but it’s more, you know, it’s a five to 7% range. It’s definitely not a 10% range. So I asked them to go through and write notes back to me, I know we can discuss those notes on the phone call a i, that gives them the opportunity to do their own due diligence and sort of create creating their own opinion of things we’re looking at picture. So looking at room sizes, they’re looking at rents, again, what the returns are, and then coming back to me and like, so which one of those is your favorite is the user may 1 question, you know, because I want to see which one, they picked a just sort of determine their personality, but be which one they picked, to make sure that they actually did the work. Because if they’re not going to do the work, I’m not going to do the work either. And that leads the conversation. You know, which one was your least favorite? What did you think about the areas? Where do you think about the returns the condition, and that guides the conversation, which usually leads to a pretty in depth hour long conversation about expectations in this market? Not from a return perspective, but like, hey, you know, this means that you want to live in, you know, you have to be in your transportation, like, let’s talk about this. What’s your future plan? Are you gonna live there for a year? Are you planning on living there for five years? You know, what deal? And that’s kind of our jumping off point of starting that conversation with all potential clients.
D.J. Paris 16:25
Yeah, that makes sense. How much time do you spend sourcing inventory for the investor to review is that the bulk of the time that you spend or not.
Brie Schmidt 16:40
So that’s also something in friars time management to discuss. So once we’ve, once we’ve understood that they can a afford, the areas that we are working in B that they understand what kind of returns are to be expected. And we tend to be very conservative with our projections, just you know, I don’t want to it’s all sunshine and rainbows. Then it comes to you know, now let’s now we can start looking at properties, right. And so, I’ve gotten my team is all focused by area. So I definitely do this for myself on the north side with my partner, Charlie, and my other agents are getting better at doing this. But how we work things is because we cover essentially from Pilsen to Jefferson Park up to Evanston is basically our our main focus area. So every day, we get every single MLS listing three times a day of every single multi unit in that area. Charlie and I both independently go through and analyze each every single MLS property that covers our area. And we’re analyzing it in what we call, it’s like a preliminary projection, right? We haven’t seen the property. So we’re just guessing, we’re guessing on rents, right? We’re using what the agent list, the rents are, we’re using a site called rental meter. And then we’re using our market knowledge. I mean, I’ve looked at every single MLS listing on the north side of Chicago in the last eight years, every single one of them. So most of the numbers are in my head, just based on experience. And what Charlie and I each do independently is every single day, we go through the list, and we put it into a calculator for us. And once the list, once we’ve got good properties in the list that we think clients will like, we send it out to our entire client database.
D.J. Paris 18:26
And this is really important. This is a huge distinction from what brokers who are maybe new to working with investors or wanting to invest themselves may think is especially if you’re wanting to work with investors, you might think well, how do I find investors? Would Bree will tell you that’s actually not the hardest part, the hardest part is finding the the the deal to, to to send to them, which makes sense. So that’s why she’s analyzing she knows the investors will show up once you can bring them something that makes sense.
Brie Schmidt 18:58
Absolutely, um, you know, there’s been, there’s definitely been times where we’ve had a client pass on a deal that we we thought was a great deal. And nine times out of 10, we’re able to sight unseen, have another client write an offer on it, just because based on our our level of experience and our ability to analyze properties, so Well, if it’s good, we’re selling it, you know, that’s how we see it. But that’s one of the differences. So when people when eight when clients come to me, one of the things that we discuss on our what we call our onboarding call, and I explained to them later, like it’s like, Hey, should I be getting a daily alert from the MLS? I’m like, honestly, I don’t set Anyone up for a daily alert on the MLS. I think it’s a waste of time. There’s no context,
D.J. Paris 19:48
right? They can’t and they can’t do the math that you can do.
Brie Schmidt 19:51
Correct. I can do it a lot quicker, a lot faster. But especially if you’re newer to intermediate investor. You know, you might not know that At the rents and the school district, which is right across the street, from and out, you know, are different than the school district across the street. There’s so many things and it’s so intricate that if you’re or if you’re just going to use a site, like centimeter by centimeter is a great website, but it’s the problem with that is it’s not super accurate. That’s the issue, because it’s that if you it only goes by bedrooms, bathrooms. So if you put, you know, I’m looking for a rent comp, and it prints out a really pretty report and all this data and it’s great. But if you’re putting a two bedroom in Lincoln Park, right, it’s not differentiating the difference between a two bedroom and a high rise, luxury condo, and a vintage two bedroom by the Paul, you know, that hasn’t been updated since the 80s. It’s, there’s no distinction between those two, and those two are gonna even though they’re both two bedrooms, there’s no you know, they don’t take consideration, square foot condition, all those things. So it’s a, it’s part of the tools that we use, but it can’t be the primary tool and I find that a lot of investors will use that as their or like Zillow, you know, well, Zillow, random, it says that it’s supposed to be this, you know, and that’s not necessarily accurate. And then it will throw off your numbers, and it may or may not be a good investment. So we like to take that off of the hands of our investors, especially in the beginning. But we also encourage them, like, Hey, I would set up your own alerts if you want. And when you see something you like, send it over to us. And in the beginning, you’re going to send it over to us with just a link, you know, hey, what about this property, and then I’m gonna come back with my notes and my calculations for you. But then as we start growing in our process, I want you as the investor to start putting together the preliminary analysis and sending it over to me, because what I’m doing is I’m teaching you, at the end of the day, I’m teaching you, right, I don’t want you to take my word and say, Hey, this is what I should do. This is what I you know, this is what briefings is right? So I should buy it. It’s not, it’s not realistic, I want you to know that it’s right, that it’s the right investment for you. So my goal is to teach you all these things throughout this process so that when that time comes, you’re ready to make the decision for yourself. That also helps us speed up for the second time around to most clients, it’s the first time we might look at 50 properties. The second time, it’s always less than three. I don’t know why. And it’s the weirdest thing, but they’ll you know, they’re ready for the next one. But because they’ve learned it all on the upfront, you know, they don’t need to go see 50 properties to know what they want. And to know what a good return is at that point. You know, they just need to see a couple in there. Now, they don’t want to go on as many showings because they’re preliminary, looking at the preliminary numbers up front, and they’re able to look at, you know, oh, you know, I don’t I know this location, I don’t like it, I’d been there before, or I don’t like frame houses on a slab, whatever it may be, you know, or I really can’t do Plex up that attic, whatever it is, they’re they’re not, they’re getting more fine tuned with their expectations. So they don’t want to go see as many properties anymore. They only want to go to the ones that they really think will be a good fit for them.
D.J. Paris 23:05
Yeah, that makes sense. And so for the brokers who are listening who are thinking, Well, how do I get this information? How do I learn how to analyze properties, really, this is a great opportunity to to promote the Midwest real estate Summit, because this is exactly what you learn. In this seminar, I was fortunate enough to get to go for a little bit to the last one. And it was amazing. And the speakers you have are amazing. And she brings speakers from all over the country, maybe even all over the world, really. And people come in from all over to attend this. So please, guys, if you’re interested, and you really, because it’s a really good point, back to the idea of putting somebody on an MLS search, you really don’t want to do that, right? Because you’re gonna get a million emails and questions and phone calls going, what about this property? What about this property, whereas you want to tell them, hey, three times a day, I’m looking at multi units or whatever your processes, and here’s the general process I use to figure out if this is a good opportunity, and you know, but if you don’t know how to do that the Midwest real estate summits probably the best place that I’ve ever been exposed to, to teach a broker or an investor, how to actually start analyzing properties.
Brie Schmidt 24:17
Absolutely. And there’s, you know, literally hundreds of investors that will be there. And it’s a very network centric event, meaning we do a lot with promoting networking. And most investors are very, like laid back type people where if you ask them like, you know, hey, what, what criteria are you looking for? Any experienced investor will tell you in five seconds. I’m this is I’ve got three things I look for A, B, and C, you know, and then again, if you ask them to, how are you getting, like how are you determining those numbers? Almost all of them everyone does things a little bit differently. But I’ve always experienced when I was first starting out, you know, I not ask people they would Grab a napkin and start telling me how they run their numbers and why. You know, and it’s a great event Yes. For learning all those things, and for networking with other investors and getting involved with the community.
D.J. Paris 25:11
Yeah, great. So everyone who is listening, go visit Midwest, ar e summit.com. Right now it we’re updating the site for the 2020 dates, those aren’t there yet. But if you scroll to the bottom, there’s a email form, put your information in because Bri actually sent out an email recently, in the last few weeks announcing the new dates, do you have the new dates in front of you Bri, I actually don’t have them in front
Brie Schmidt 25:35
of me today. 16th and 17th 2020
D.J. Paris 25:39
is going to be held in the same location.
Brie Schmidt 25:41
Yes, it’s at UIC, UIC campus, downtown Chicago.
D.J. Paris 25:45
And it is a neat space. That is a it’s a big space, there’s hundreds of people that attend, there’s vendors you can talk to. And of course, the speakers. And the networking opportunities are really unbelievable, and you absolutely need to go. So get go again to Midwest RV summit.com. We’ll also post a link in the show notes. And any other final advice for not letting investors eat up more of your time than is appropriate.
Brie Schmidt 26:13
The only other piece of advice I have is, one of the things I’m really big on personally is that business hours. And I know my hours are from nine to seven, Monday through Friday, I work 10 to two on Saturdays, I do not work on Sundays. And I’ve had to fire investor clients because they just weren’t respectful of my time. So it’s one of the things that that’s a big indicator to me, is if you you know most investors want to invest to be what we consider lifestyle investing, you know, they want to have the financial freedom to be able to do what they want. And though if they can’t respect my personal time, then they aren’t people that I want to work with. And I have found it took me years to do it to fire my first client. But I can’t tell the story before the day that I fired my first client. Like I swear that the clouds parted, and the sun just shone down on me. And it was such a glorious day because he was always, you know, texting me at 10 o’clock at night. And then if I wasn’t responding at 10 o’clock at night, he would call me. And you know, that, to me is just a huge sign of a time waster, if they can’t respect my boundaries that I lay out for them, then they aren’t someone that I’m going to want to work to. And they’re just going to drain my time. Also look at your client base, it’s one of the things that I reflect on, if I noticed that one client is taking up a vast majority of my time, and we’re not and it’s not in a you know, we’re not under contract, or we’re not, we’re just seeing properties every single week, I’m 10 times a week, sort of thing. I quickly determine if it’s going to be worth my time to continue with them or not. And if it’s not, or if they’re taking up too much of my time, I just tell them, I think they need to work with someone else.
D.J. Paris 27:57
And you get to do these things, really, when you start having the knowledge that other people don’t have, right. So you always of course want to be smarter than your investors not smarter, but but more experienced. You want to have your systems in place. Because, you know, I talked to a broker once who charges 7% as their listing Commission, which is higher than than the average. You know, the average is probably I don’t know what 5%, maybe, maybe 6%. But she charges an additional percent. And I said, Geez, how do you get? How do you how do you sell that to your to your sellers? And she she looked at me like how do I not sell that, of course is she had so much value that she was bringing, she said, This is what I offered. This is why why it costs the way it does. And by the way, she was a top 1% producer. So she’s able to say here’s why my clients choose me. And here’s why they’re willing to pay a premium. Now, we’re not exactly saying that exact message here. But if you have this sort of information, and you’re actually over time develop this expertise, you have a stronger ability to be able to set these, these these boundaries around your work and say, here’s what I do, I won’t work with you until X, Y or Z and here’s the time I can give to you and and usually it works out great, but if you don’t yet have the all of the expertise, this is where you you know, you join bigger pockets and you start you know, participating and listening to their podcasts and asking questions on the forum and reading. Bree is very prolific on bigger pockets and is on a lot of podcasts and is also very active in that community. And then she also started Midwest real estate Summit. Another great place to learn but it all starts with you becoming the knowledge source.
Brie Schmidt 29:39
Well, yeah, but on that point too as well. I mean, I think that the the time sucking clients and and we all buy say those words we all have at least one in mind. Like oh my god, that client was just non stop. Yo, and if it was one of the most glorious things when I started firing them And it wasn’t just because of my, like I was experienced and I, you know, an experienced investor that relates to anyone, if you there’s the 8020 rule, right? What is that 8020? Rule 80% of your business comes from 20% of your clients. You know, if you’re finding that you are running around ragged on a specific client, you know, and what is it really going to? Is it really worth your time? Is it affecting your other clients? That’s a big question, too. You know, if one client is taking up half of your time, which makes you not able to serve as your other clients, is that client really worth it? My pain? The answer’s no. That’s just straight up a business decision, regardless of if you work with investors or not. We even have one right side. And so we review our clients as well. If someone is starting to, you know, seem like a tire kicker, will will then re engage a conversation about expectations, especially for guys to have a multiple times the same thing. You know, we have that a lot with it with investors, especially when it comes to rehabs. You know, they’ll they’ll go into a property and be like, Oh, this is like a $20,000 cosmetic job. Um, like, this is a $200,000 project, no, like, no if ands or buts about it. And we’re not seeing eye to eye and they’re like, and they want to do an FHA loan with, you know, 3% down and they don’t have any money to rehab, then why are they looking at a $200,000 rehab project? And if they keep sending us those, and we keep explaining that this is not what is out of their budget? How are they going to pay for this? And they keep doing it? And then we’ll just we’ll just let that client go.
D.J. Paris 31:38
Yeah, I mean, this is the same that non investor brokers have with sellers who price their home too high and say, do your magic get it sold. And the broker is desperate for the deal or wants to try and isn’t able to because the price isn’t, isn’t reasonable. And then the seller blames them, and they lose the client anyway. And they’ve just now wasted a tremendous amount of time. So the ability to say no, you know, in a respectful way, is definitely a huge power, a huge amount of power to reclaim for yourself.
Brie Schmidt 32:12
Yes, and we, if that’s what you just said, definitely one of our personal struggles of when we go up against other brokerages for listing agreements, because we don’t sell sunshine and rainbows, we will, what we think is absolutely like will tell you, this is what we think is realistic, this is what we give them three ranges, what you if you want to sell it tomorrow, here’s what you listed at, if you want to sell it, what we think it will do within you know, 30 to 60 days in the market, and then what we think will be high or will sit for a few months, you know, but that’s what we think is on the high end, and we’ve lost plenty of listings to agents that will, you know, sell them the pipe dream of what their property’s worth. And then, you know, we obviously we watch them, and you know, 3456 months go by, and then the price drops come. And then they ended up selling for around what or less than what we projected they’d sell for in the first place. And it gets very frustrating, but just epic. Like, I just can’t go in there and be like, I think your property is worth, you know, 110% of what it’s worth just to get the listing and plus a fee, right? It’s a waste of time, but it’s a struggle when other agents do that. And then, you know, you’re stuck having to think, you know, lie to them, essentially, in my opinion, sure. Or be unrealistic will say that’s a nice word or a nicer word.
D.J. Paris 33:31
Yeah. So hopefully, this has been really helpful to our listeners. And you know, these are the kinds of topics that we want to cover, right. So with respect to investors investing, there’s so much to go over that is not really taught in a traditional real estate firm, right. So the vast majority of our listeners do not work for investor focused firms. So this is why Bri is so helpful and useful. And our listeners love it. So we want to need your questions, right? So Bree and I will definitely sift through the feedback we’re getting and deaf and bring these up in future episodes. So everyone who’s listening, whatever you would like to hear from Bri about investments investors, definitely send us messages you can contact us directly through our website, and you also stream every episode we’ve ever done, including all the episodes with Bri at keeping it real pod.com You can also and please follow us on Facebook this is where we post daily content to help brokers with their business in addition to of course all of our episodes every single day there’s a we have we source we scour the internet looking for one good article to post to say this will help you so that’s facebook.com forward slash keeping it real pod or just search for keeping it real podcast. And of course find us on iTunes, Google Play any podcast app or directory you use. You should be we’re on Spotify. We’re everywhere. So just do a search for keeping it real podcast subscribe. And lastly, tell a friend right investors need to hear what Bri is talking About as well as other brokers in your office. So anyone that we think would be interested in this kind of information, you know, we have spent exactly $0 promoting this podcast, we now have 1000s of listeners. And it’s really because of two things. One, people like Bree, who come on, even after just giving birth, and sharing her knowledge, and also of course, our listeners sharing this with a friend, so please continue to tell a friend. We will see Bree, thank you again for coming on so quickly. Bree barely got any sleep last night. So this is a big, we’re so honored that and she probably hopefully will go right back to sleep after doing this. But we’re so honored that she comes on this is a big deal for us. We’re so grateful. And also thank you to all the listeners for continuing to listen, Bri everyone go visit Midwest RV summit.com Sign up for their mailing list, and we’ll be promoting this as well on our Facebook page. So Bree, thanks again.
Brie Schmidt 35:55
Thanks for having me.
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