Keith gets to interview one of his earliest mentors in the real estate game, Larry Goins of The Goins Group and author of Ultimate Buying and Selling Machine and Getting Started in Real Estate Day Trading. Larry takes us into his own life’s journey towards becoming a real estate investor, sharing great nuggets from the things he learned along the way. Getting into the more technical stuff, Larry talks about the different ways to find properties and how he uses internet marketing techniques to real estate. He also gets into day trade real estate, buying and selling houses like HUD, and the latest deals he made.
I am grateful to have the pleasure of speaking with one of my earliest mentors in the real estate game. He’s one of the first people that I found, began reading and listening to, bought his product and watched him over the years as he tweaked his investing style. I was fortunate enough to run into him at a few industry events and get to talk to him one-on-one. He and I have done some interview swaps for our podcasts. Ladies and Gentlemen, I’m talking about the one and only, Larry Goins. Let’s get right back down to the brass tacks and get straight.
Lender Nation, I have the very distinct honor to introduce you to Mr. Larry Goins. Larry, welcome to the Private Lender Podcast.
How you’ve been?
I’ve been good. I’ve been having a blessed life, living the dream as they say. How about yourself?
I’m having fun and making money. I’m always on vacation. When I’m doing real estate, I’m on vacation. I’ve already bought two houses.
Let’s jump right into that. What deals are they? What’s your exit strategy? How’d you find them and all that stuff?
These two came from direct mail. I do a lot of direct mail. I do about 25,000 pieces a month. I’m getting ready to bump that up to another 12,500 so 37,500 pieces per month are what I’m going to be mailing. We’re doing five, ten, fifteen deals a month. We took the entire month of December off from direct mail. We did $88,000 in wholesale fees. We do a lot of wholesaling. That’s going to be my exit strategy. That’s primarily what I do. I do some seller financing and some lease option deals. I’m telling everybody stash cash for the crash.
A 100 years ago, I signed up for a gentleman’s newsletter, but this gentleman’s name was Larry Goins. This newsletter came to me in the mailbox once a month. I have my Ultimate Buying and Selling Machine. That’s the first piece of education I ever bought was from Larry Goins.
That was the original course that was based on this book.
It was a soup to nuts of how to bandit signs, direct mail, slap a magnet on your car or talk to everybody.
Have a scrolling name tag.
I remember that scroll. You even gave the website where you can order it. I remember that. There’s a bit of history here. I’m honored to have you on the show and thanks for coming on. You’ve got an encyclopedia’s worth of knowledge. I’m only going to try to keep to a few points because otherwise, this is a six-hour interview. We both lose out on other business and other deals.
I’ll come back anytime you want me.
One of the first lessons in negotiating is always making it seem like it's more important to them than it is to you.
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I remember at a boot camp I went to of yours years ago by a Bush Intercontinental Airport here in Houston. You made the statement that you had a PhD. I remember the public high school diploma.
It’s a South Carolina PhD. You’re not from South Carolina, so you got to say it right. I have a South Carolina PhD, that’s a public high school diploma.
How did you get into real estate? You’re thriving at it, but I’m sure at a time that there was an idea. Take us back.
I saw an infomercial. Do you remember Tom Vu? He had infomercials back in the ‘80s. You can Google it and you can find them on YouTube. He’s this guy who came from Vietnam or somewhere. He had no money. His whole infomercial was him sitting on the deck of a yacht with all these girls around in bikinis saying, “If I can do it, so can you.” I went to the seminar. You know how a seminar business is. I went to the preview. I signed up for the three-day. My mom and I went. This was in the ‘80s. This was right after my dad had passed away. My dad passed away in 1985.
My mom and I got into it a little bit. She did a little bit, but not much. She was doing it for me to help me out. I got into it. I eventually got my real estate license. I eventually got my contractor’s license. I got into the mortgage business. Eventually, the mortgage industry had to be licensed. I had to get my license for my mortgage business. I’m out of that. I don’t do mortgages anymore except for hard money, private money loans. That’s all we do. We used to loan other people’s money, but we don’t even do that. We loan our own money. Not that we have hundreds of millions of dollars, but we’ve got a decent portfolio. My wife manages that. I’m not in it at all. In fact, she loans me money when I need money.
My partner, the first private loan I ever did him, he missed the first payment. It was two weeks later. I said, “What day is it?” He goes, “It’s the third.” I was like, “Yeah, what’s due?” Ever since then he gave it to his wife, she hasn’t missed a payment since. You used to lend out and whatnot. That’s something we briefly discuss and depending upon what state you’re in, you have to look at your laws.
We only lend in the Carolinas.
It’s little disclosure there. It is absolutely something you can do as a private lender. When I run out of money, I’m out of money. That’s it, my account gets tapped out as loaned out. I don’t make it a habit of borrowing other people’s money to loan out simply because of the way I look at it. If I’m going to preach I demand a first position lien, how can I expect someone to loan me money, not take the first position and to go back into it. You showed the day trading book. How do you day trade real estate?
It’s a fancy word for wholesaling. In this book, Getting Started In Real Estate Day Trading. It even says, Proven Techniques for Buying and Selling Houses the Same Day Using The Internet! Back in the ‘90s, I did my first deal. It was a virtual wholesale deal. I did this deal before the term virtual wholesaling was even coined or whatever. My very first deal, I got a call from some marketing, somebody was passing through. They own the house three hours away. They’d inherited it from their grandmother. I ended up offering them $2,500. They were asking $15,000. I’m a firm believer if you’re not embarrassed by your offer, it’s probably too high. You got to know how to say it though, so they don’t hang up on you.
If somebody is asking $15,000 and you offer them $2,500, you need to know a little bit about negotiating so they don’t hang up on you. Not only did she not hang up on me, but she also called me back a few days later. She said, “Larry, I need some money and I need it quick.” She said, “If you can give me my money by Friday, I’ll take $3,000.” This was on a Tuesday. One of the first lessons in negotiating is always making it seem like it’s more important to them than it is to you.
I happened to be at the drive-through at Wendy’s. I answered the phone. This is back whenever I took all the calls from my cell phone. I answered the phone and she said, “Larry, if you could give me $3,000 and I could have it by Friday, I’ll take it.” Now, I’m thinking, how in the world can I make it sound like it’s not important? I said, “Rochelle, hold on for a second.” Her name was Rochelle. I said, “Hold on for a second.” At that point, who was that call more important to? My most important thing was getting lunch. I came back to the phone and I said, “I’ll tell you what I’m going to do. You send me some pictures. If I like it, I’ll take it.” She sent me some pictures. This was way back. She had to get one of those little disposable cameras, send it to the tenant, take it back and get the tenants to take pictures. They mailed it to me. I had to take it over to CVS and get the film developed. That’s how long ago this was. You used to have this little box of a camera. You take it to CVS. This was back before Walgreens.
I ended up buying the property. I sent out some emails to some local realtors and I said, “I’ll take $18,000 for this house and I’ll pay a $3,000 real estate commission.” One realtor emailed me back because everybody else is like, “I’ll list it for you. I’ll send you a six-month listing agreement or a one year.” No, I didn’t want six months. I wanted to own it for six hours. One realtor emailed back and he said, “For $15,000, I’ll buy it myself.” About a week later, I get some paperwork in the mail with a deed, HUD closing state and the sign here. I put it in return FedEx. A couple of days later I’m looking at a check for $15,000. I’m like, “Wait a minute. I bought this house and I sold it.” I never met Rochelle. I never met the attorney. I never met the buyer who was a realtor. I did all my business back then by phone, fax, FedEx, email and internet. We’ve even eliminated FedEx and fax. I put all the details of how to do it. In fact, I updated it. This is the new revised edition where we talk about cold calling. We talk about text blasting, RVM, all the different stuff that you use to market for properties.
I was blown away at all the different options you have to market.
Getting Started in Real Estate Day Trading: Proven Techniques for Buying and Selling Houses The Same Day Using The Internet!
There are so many different ways. In that course that you have, The Ultimate Buying and Selling Machine, we have 67 different ways to find properties.
What blew me away was when I bought it, you said, “Here’s the CD, download this.” It was nothing but bookmarks that you already had for the browsers of, “You want to look at houses in this county, here you go. This state, boom. You need this document and go here.” Because of you, I know Upwork and Fiverr long before anybody even knew what they were. I use them in my day job and people are like, “How are you getting that done?” I said, “It’s my little secret.” You can Google search and in 0.2 seconds, you’re going to have every VA company. Back then you supplied it as part of your course.
Now, it’s common knowledge. What’s funny is what I did was I started getting into internet marketing and learning about internet marketing, all I did was take internet marketing techniques and related it over to real estate before anybody else. Everybody’s doing it.
You even told me like, “You put this big sticker on the back of your car and generated one lead for you.” I forget you put how much it costs, but how much you made for that lead. You had to drive around for three years. It’s $300 for some decals and you pulled $10,000.
I’ve always said I’d much rather have ten ways to find one deal than only one way to have to find ten.
At what point did you get introduced into private lenders and other people’s money?
That’s interesting because I’ve wholesaled a lot of stuff. I have never personally ever used private money other than my father-in-law. He’s got paid too. I’ve never utilized private money besides that. I borrowed hard money. I’ve always either done wholesaling stuff or finance stuff traditionally, either did lease options, wrap or something. I have been a hard money lender since the ‘90s. I started a company called Financial Help Services back in the ‘90s before you had to be licensed as a mortgage company. I would do traditional loans and hard money loans. We were doing a lot of business. I had this lady come to my office. She used to call on other lenders. She said, “There’s an investor group in town called Metrolina REIA.”
She said, “If I can get my foot in the door, I can get some hard money loans, would you like to start a hard money division?” She said, “By the way, have you ever heard of this group, Metrolina REIA?” I said, “It so happens I’m the president.” She came to work with me. After about six months, I gave her half the business because she grew our business so much. She eventually went out on her own. My wife went to work for her. She got out of the business for a while. She went out on her own. My wife went to work for. My wife doesn’t work there anymore. She manages our loans, which is not a full-time job for my wife. It’s not like we have hundreds of millions of dollars in loans. She might have $20,000, $30,000, $40,000 loans out at any given time. Some of them might be $50,000 loans. Some of them might be $500,000 loans.
Your wife does all the servicing on your behalf of the loans that you’ve put out?
She originates and processes the loan, sets up the closings and does all that. She doesn’t even advertise. She doesn’t want to. She doesn’t like it. She doesn’t want to go to any REIA groups, market and advertise. It’s when somebody calls her. I set up her website.
I was about to say this has got Larry Goins written all over it. You’re putting this poor woman through all types of labor and tribulations. It’s funny because when I started private lending, I wanted to know every detail, every nut and bolt of the process. I did everything from A to Z including taking the payments and all that stuff. I’d have no problem looking at borrower in the eye and say, “You’re going to pay $20 a month for a servicer because in January I’m not kicking out any 1098 or 1099. They handle all of it. I suggest people outsource that type of thing. You are bringing it in-house into your family. I love that though, let the wife work.
The good news is, truth be told, my wife doesn’t service it. I have two people in our accounting department. They handle that. They let my wife know what’s going on.
I know you’re a big fan of using people’s self-directed IRA. You’re no stranger to private money at all. You haven’t used it a whole lot.
Whenever you bid, three things can happen - you don't hear back, you get a counter, or you get an accepted offer.
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I bought my first house in 1986. I’m 58 years old. The very first deal that I ever did in 1986, I assumed an FHA non-qualifying assumable loan. They used to be years ago now they stopped those in 1978. There was a few of them around in the ‘80s left before they got paid off. The deal was if you own the house, you had an FHA loan and you wanted to sell that house, your buyer could fill out a one-page document and turn it into FHA. They didn’t pull your credit. They didn’t check your debt ratio. They didn’t do anything. They assumed that loan. You were released of any liability. That was