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Many real estate investors miss out on easy deals because they don’t know how to properly estimate rehabs.

Overestimating the rehab will cost you the deal. While underestimating the rehab will send you into bankruptcy.

In this episode, Eric Cooper, a successful real estate investor who has nailed estimating rehabs properly joins me to reveal how to improve your estimation skills and close more deals.

Here Are The Show Highlights:

  • Why relying solely on pictures when buying a property can wreck all your profits (3:13)
  • Why there’s no need to panic if a newly purchased property needs a new roof (5:17)
  • Why trying to lowball your way to the bank is a recipe for bankruptcy (7:40)
  • How your emotional IQ trumps any other “skill” when it comes to real estate investing (9:35)
  • The case for not trying to make a killing on every investment (10:26)
  • How to succeed with real estate investing on social media (even if you never use social media) (10:42)

Wish you had sellers coming to you instead of having to chase them down? We put together a free training for you over at http://socialmediablueprint.com/podcast to help you do this. Or if you want to schedule a marketing strategy session with me and my team, book your free session at http://socialmediablueprintpodcast.com/.

Read Full Transcript

The big challenge is this: How are investors like us who are not backed by a billion hedge fund who are investing money from our own pockets? How do we buy, sell, and invest in the properties we believe in, yet still make a profit without risking all of our own money? That is the challenge. In this podcast, we'll give you the answers. My name is Nate Armstrong and welcome to the social media blueprint.

Hi, my friends. Welcome back to the social media blueprint podcast. Today, we are going to take a deep dive into how estimating your rehab estimates, how getting better at them will lead to more deals, deals that other investors don't even know how to touch, because they have no idea how to estimate. And you're going to hear a story today from Eric Cooper, who is a successful real estate investor that has figured out how to do the rehab estimates. And he's gonna tell you how he, how his journey has led him to a, yet another deal in a very ethical way. And we're going to talk about that. And we're going to talk about how also, how he helped the seller out of a tight situation. So let's go ahead and jump into it.

(01:14): All right. My friends. Welcome back. We've got a special episode today. We've got Eric and his wife, Lily, that are joining us today. And as you guys know, the only people that we interview for this broadcast are the people that are doing this business with hearts. They're doing it in a service basis. They're helping other people first. Yes, all real estate investors do want to make some kind of profits so that they can continue to do this business. But what we've realized is that the folks that do this from a service standpoint first are the folks that do this the best. And Eric and his wife, Lilly there just got done helping a seller put together a deal. And I want to bring them on. I want you to hear this story. I want you to understand how they put this together and how it might work for you and your future too.

(01:57): Eric Lily. Welcome pleasure to have you guys thank you. Honored to be here. And eight. Yeah. So you guys have been in this real estate game for a little bit here. I know that Eric, you've taken some, some different trainings and whatnot from a mutual friend of ours, Lou, and now you're in, you're in, you're in this program with us. But what I really want to know about stays the seller that you and Billy are helping. I got to hear kind of just a high level version of it, but I'd love to know from your standpoint, could you tell us what happened and how you're helping a seller? Yes, basically the seller is a two daughters. Their mother passed away. They both live out of state. And so they've been trying to sell their property for awhile. It's in a site they're really struggling with it. They've had it on the market for a long time, maybe like eight months and they're just not able to liquidate the property. And so we went in there, we took a look at it and basically, you know, saw the reason why. And so when it needs pretty significant work, so it needs foundation,

(03:00): Roof, all new flooring. So this is a pretty substantial remodel that's required.

(03:06): Are you thinking when you, when you took a look at that rehab, were you still excited about helping the seller?

(03:12): I was. None of the pictures always looked great, but whenever you walk through it, then you realize, Oh, the floor is not level, Oh, there's a three inch drop between the living room and the kitchen. I didn't see that in a picture, but I actually went up and got up on the roof and went and looked at it and the shingle deteriorated and I saw some water damage and the sheet rock. And so they gave me an inkling of it, but the pictures don't tell the whole story. So when I looked at that and basically walked through and looked at it and we had an initial budget from the pictures and it changed a little bit after the walkthrough, but not very much. And so the way we were able to help sell her out is most people that had gone in there, they wanted a huge discount, which didn't really meet their needs, you know, and saved time themselves out of state.

(04:05): It's hard for, to report a contract and to take on all the repairs and everything else. And so what we're able to do is make them a reasonable offer. We got a lot of experience doing construction remodels, and actually after I looked at it and I said, well, it's only foundation of roof drywall paint, Floyd. It's only, it's only foundation. Okay. It's not that bad, but we've taken on larger products. So our, our average remodel ranges between 30 and $200,000. And so we've got some significant ones, but it's not uncommon for us to pull 12 or 14 permits. So I'm actually registered as a developer cotton, general contractor and CIF counties around Houston. And so I've tackled this type of work for several years and kind of grew up around real estate, my parents having rental properties, but there's a right way and a wrong way. And I won't say they're wrong, but they have some room for improvement on the way that they manage their rental properties. But yeah, I grew up with them and I think they haven't gone the route of about eight years old, putting on a core shingle roof with a nail apron and a hammer and a, we don't do it that way. These days we shoot about 10,000 nails in a day and we roll out there with a crew. We'll strip it off and remove the whole thing in a day. So much home.

(05:26): Yeah, big difference compared to, I remember helping my parents with their real on their cabin and we didn't have fancy tools or anything. And that was a lot of manual stuff. But now you watch these crews that they can literally do it in a day. They can tear off the whole roof and put on a brand new one a day. So tell me more about the sellers on this one. So they had a little bit of a situation, obviously that you stepped in to solve what's happened since then,

(05:49): Since then they basically knew it needed more, more work. And after we went through and do the walkthroughs, we said, yes, it needs more than what's shown on the pictures. And they had a lot of bad experiences are people will go look at it, makes them offer them. They cut the offer in half. Right. And so they, they just were really party kind of, you know, the emotional term is mom's house, it's on the market so long. It can get rid of it. So what we're able to do is go in there and looked at it. We made a small adjustment on our offer. We had a budget in there, or we didn't come back and cut off. And so we're able to help them out, kind of meet their needs and get them, you know, more money than they could have gotten from anybody else.

(06:34): And it was basically because our experience and our know how kind of our volume of work that we do, we're able to benefit them and they give them a solution. So we're actually from the time of put out a contract to closing is only 21 days, three weeks. So wow. 21 days. Okay. 21 days, that's our walkthrough inspection, everything else. And so we will, we'll have that house. So, so before the end of the month, and then, you know, it's eight or nine months agony for that album squabbling though, between those siblings, all that is. And so we give them a solution and it's, it's a good solution and we're able to help them out and kind of take that problem off their hands and solve their issue.

(07:25): Yeah. Yeah. And it sounds like you were really fair with them. You gave them an offer that probably other people couldn't do, because if you understood the renovation that it needed, and you're just a fair guy, fair guy, and you got a fair wife too, as your business partner, a lot of people, they get into this business and they think like, Oh, I got to undercut everybody. I got a

(07:47): [Inaudible] to try to get deals and make money, but yeah,

(07:49): That you and I both know, that's not what sellers are gonna respond to. You gotta be fair. I know in the process that we do, we even open books, sometimes we'll share numbers with the seller. And I'm sure on this one, you could have easily done that. Have you heard anything else from the siblings or anybody else since this whole thing has come together and they send any feedback your way yet?

(08:12): Oh, they're happy. Yeah. They're happy. And so they're just a guess anxious, nervous for the closing date, fast approaching. So I think we're less than two weeks away and 11 days away, but we're yeah, we haven't heard back from other than joy and they're, you know, nervous and making sure you're not going to back out is everything okay? Everything's fine. You know, we shared our numbers with them. We've got some of the work, you know, we'll do some, we'll have others do. So got our major contractor bids already got our contracts in place. So we'll start the day after closing. So we'll roll in there pretty quickly and get the house and a good level condition. And actually I've been working on people interested because it's a nice neighborhood, nice people. The house just needed a little bit of love.

(09:01): Yeah. Need a little bit of love on the remodel and a little bit of sensitivity on the offer. Like really taking care of the seller on that one. Thank you. I feel blessed that I get an opportunity to work with you and Lily. I really enjoy working with people that do this business the right way that they take care of people and they're fair and they're good in the community. Like I feel honored that I get to work with you. How did we end up coming together to work? I know that it was Lou, but what made you choose working with us on this to help generate leads and whatnot? Oh, working with you guys. Yeah. Well basically

(09:35): Kind of weird. I didn't realize I had a high emotional IQ, but I was told by one of our executives in my day job to have acumen, what is that? You said you're doing each to set people and look through the window and see their soul. And I said, wow, I never knew. I held that. He said, you do, even if you don't know you have it. And so after I'd met you and talked to you, believe it or not, you know, I know we all have our layers again, around us in our shields, but having that ability to see through your soul, I knew you were a good person. And so I believed in what he did. He came highly recommended and that was basically first impression. And so that, that was our starting point from working with you and the team. And it's only gotten better, you know, that, you know, helping people from the heart and doing the right thing, you know, we, we operate our day by day business.

(10:28): We squeak out a little bit of profit, but we're not trying to make, make a killing on all of our transactions. So I think it's the ability that one way helping people out, making, you know, a small, reasonable profit, and then putting those two things together. But I mean, you guys are the experts on, on social media and marketing. I mean, I was lethargic. I have to confess before. I'd probably get on Facebook about once a year to a high school with some of those stay at homes. Moms would post 900 to a thousand posts a week. So my once a year I'd get on there. I'd be overwhelmed. I go, Oh my gosh, I see why I'm not on here. But once a year I can't keep up. Right. They just post so often that I would quickly catch up and I didn't really know how to use, you know, all the tools and social media, but I see it ever increasing in our day to day lives. So I thought, well, I need to get up to speed. So instead of trying to figure out all this on my own, why don't I work with people that are honest and hard working, you know, what they're doing? And so that was really kind of the main attraction to, you know, Darren to work with you guys.

(11:35): Okay. I I'm humbled. I feel blessed for the opportunity. Sincerely. It's hard to find good people with ethics that want to do everything the right way. And I feel really good when we get to do anything together. So I look forward to you in the legal and out and getting more deals. I know that this is just the very beginning of the journey and our time together, but you guys are doing awesome things, tremendous things. This, this, this story right here, it's going to help and inspire other people too. Are there any tips that you'd give someone that's brand new to real estate investing? Like what message would you give them? I know that you've been down the journey for a little bit here. What would you say to yourself as you're first starting to get into real estate,

(12:13): Say in real estate investing, you know, where there may be obstacles and twists and turns in the road. But I think I kind of equate it to building a house. You need to have a solid foundation. You got a solid foundation and honesty, integrity, and trust, and you know, love of God and you're doing the right thing to get right results. Sometimes you may walk in and look at a property or people, if you don't feel right, don't be afraid to walk away and just tell them and be honest, because there's some people we weren't able to help some houses that were too far gone. We couldn't say them. And we're just honest with people and told them, say, look, you know, we're not able to help you, but we may be able, we get home, you know, two or three other options to help them on their journey.

(13:00): Even though we wouldn't profit or proper from it, it just basically doing the right thing. So we have knowledge and in time you'll gain more knowledge, but just start off your path and your journey of doing the right thing every day. And it's like, karma, it will come back to you, you know, and that's probably my best advice. And then probably the second thing is be like a sponge seek out and try to learn something new every day and learn not only new knowledge, but principles, you can apply in your life and just seek to improve every day, try to make yourself a better person. And then you'll grow your grow and flourish in this business and in life,

(13:41): Eric, this solid, solid advice, man, appreciate that. You know this, but I just want to say it again. We appreciate you a Lilly. We look forward to doing this journey with you guys. However we can help just keep reaching out. I know we got to talk yesterday and now we got to talk again today. So back to back and you're a busy dude. You're a busy dude. You're juggling executive level position plus doing real estate full time. Like I'm impressed. My hat is off to you, my friend. Cool. I appreciate it. And so from here, I'm going to end this broadcast. Is there anything else that you want to say to folks that are out there, some of the sellers that you might be serving in the near future?

(14:17): I just wanted to thank you for the whole teamwork approach. Your team has basically embraced us as family. And so I think you, for all your patients, support, encouragement and nurturing, you know, not always a friend, but as a Metro as well. So I think you've all you do every day and may God bless you, Eric. Thanks.

(14:38): I appreciate that, man. You give me a little bit of a teary eye to talking about.

(14:43): I think he meant all right, Eric.

(14:46): Lily. Thank you both. We'll talk again.

(14:49): Okay. Bye guys.

(14:53): Alright. I hope you enjoyed that episode, Eric and his wife, Lily are amazing people. They love God. They love people. They're successful in their own rights because they take care of people first. And it's rare when you can find that. And when you do find it, you want to model that man, because that is what actually we're supposed to do. We're supposed to love other people. And that's what I see the most successful real estate investors have in common. So thank you to Eric. Thank you to Lily for jumping on and teaching us today. I so appreciate that about them. Hey, here's the thing. Next time on the social media blueprint podcast, we're going to be talking about the folks out there that get into this overwhelm. Okay? The folks out there that have no strategic plan in what they can do because a lot of folks, because they have no strategic plan, they don't get consistent paychecks and they have to feed their three or four or five kids and they don't know how to do it because they're missing the strategic plan. On the next episode, we're going to talk about how we can get a strategic plan put together for you so that you don't have to worry and struggle about how to feed your three, four or five kids. And so stick around for the next episode. I look forward to seeing you there. Bye.

(16:04): Hey, cold calling can't stand direct mail. Wish there was a way to have sellers coming to you instead of having to chase them down. Now there is it's called the social media blueprint and you can get it absolutely free when you go to www.social media, blueprint.com/podcast.

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