Finding Deals Through Social Media and Local Banks

Mike: Hey, everyone. It’s Mike Hambright with FlipNerd.com. Welcome back for this episode of the FlipNerd.com Expert Interview show where I interview experts from across real estate investing industry to help you learn a thing or two, and to help break up the monotony in my life. I love meeting with people that have a lot of great information, and today is going to be exactly that.

This is episode number 303, and my guest today is Jason Lucchesi. Jason is a real estate investor, a mentor and a coach, and really has a unique spin on a lot of things. He’s really found his niche, and he’s talented in a lot of areas. He found his niche in social media and LinkedIn for finding buyers and sellers and financing and a whole bunch of stuff, really using social media to find deals, and help fund deals.

So we’re going to talk about really two things today, our show is in two parts. The first part we’re going to learn a little bit more about Jason, and he’s going to talk about finding deals through social media. Something you don’t want to miss, and we don’t really talk about it a lot even though probably most of you listening to this are maybe listening and trolling Facebook right now as we speak, probably. But he has some powerful tips, and you definitely don’t want to miss it.

And then we’re going to get into talking about funding your deals through community bank. Jason has some great lessons to share about how you can first of, learn which community banks in your market are kind of keeping their loans and trying to invest in the community.

So he’s going to give some tips on how to find community banks that might be willing to lend to you, and he’s found that a number of banks are willing to lend at very low rates, like 6, 7 tight percent, and probably not a lot of origination points and stuff like that, and maybe even a 100% of your rehab. Quite frankly I use some local banks, and I have for years, that are very much like that, very easy to work with, investor friendly. It just takes kind of rolling up your sleeves and finding out who those are, but Jason’s going to give us some advice on how to find those today.

So let’s go ahead and get started. Hey, Jason, how are you today?

Jason: Good. How are you doing, Mike? Thanks for having me.

Mike: Good, good. Great to see you. I’m really excited to talk about these things. We talked for a while ahead of time, and for our listeners out there when I have new guests on we always talk about what are we going to talk about today, what are some great things, and we always beat some stuff up as to, “We’ve talked about that a lot on this show, let’s find something different.”

But for Jason it was real obvious that the social media stuff is what we should be talking about because despite the popularity of social media in everybody’s lives, it’s kind of taking over. Not a lot of real estate investors use it as a tool in their business. Right?

Jason: They don’t. When I do training classes and we start covering it, people always respond like, “Man, this is brilliant.” I ask a lot of our people that are always on our live webinars, “Hey, who has a LinkedIn account?” And majority of them always say they do, and then I’ll ask, “How many of you are actually using it?” It’s literally crickets after that. So everybody has the account, it’s just they’re not utilizing them to their fullest opportunity.

Mike: Yeah. Before we kind of dive into LinkedIn and some other social media things, for those that don’t know you why don’t you tell us a little bit more about you and who you are?

Jason: Sure, yeah. As Mike said I’m Jason Lucchesi, and I’m from the Indianapolis, Indiana area. Been here now since 2008, and I actually became a full time real estate investor in 2008. I actually came from Countrywide Home Loans. For those of you that don’t know, that was pretty much the company that caused a lot of the issues in 2008, and I was with them for quite a while. Saw the writing on the wall, lost a ton of money from our good old Angelo Mozilo, our president of the company, announcing some really bad news. At the time I was putting about 40% of my checks into my 401(k), so lost a lot of money.

Became a full time real estate investor here in Indianapolis in 2008. Took a little bit of time for me to really get successful, probably about six to eight months for me to really find my niche, and ever since then it’s just been a great business for me.

I’ve been married to my wife, Jamie, now since 2007, and we have three great children, Brady, 8, Gavin, 6, and Cordelia who just turned 1 not too long ago. So truly a blessed life, a lot to be thankful for. I do a lot of different strategies with notes, foreclosures, short sales, apartments, lot of wholesaling, lot of package deals. You name it, we’ve done a lot of it, Mike, and we continue to adapt to with our market changes.

Mike: Yeah, and you have to. What’s interesting is we have people on the show from time to time that have that mortgage background, that were on the originating side or they were lenders or whatever. And then when they kind of opened a new chapter in their life and became an investor they basically took that knowledge.

Truthfully, I’ve done a lot of deals, pretty active in the real estate space, but I have no background in the mortgage side, other than kind of high level like, “Well, I think this is how it works.” I don’t really know. There was an opportunity here because this is how we did it when I was over there, and I know that this is how they get sold, and I know this is how they’re serviced. I don’t have that knowledge.

When you went in to real estate investing did you think right out of the gate, “I’m going to apply this knowledge I have over here.” or was that something along the way that you started investing and you’re like, “Wait, I know something that most people don’t.”

Jason: It took a little bit for me to take the skills that I developed while I was at Countrywide to apply them, and it wasn’t until I really started focusing heavily, at that time, on short sales. I was able to understand them a little bit differently than most people that have not that experience. From a negotiation stand point, we had to do negotiating with home owners all the time, so the negotiation stand point helped out quite a bit. And the mortgage business at that time was so competitive you really had to know how to talk to people the right way.

Me personally, I don’t do like a salesy pitch to people, I just treat people the way I can tell on the phone that I’m having with them or in person. I just treat them like people, like you and I are talking right now. I don’t do anything over the top and make somebody feel awful for making a decision. We did really well.

I started off as an account executive with Countrywide, worked my way up. I was one of the top people out of 6,000, and eventually became a manager and started managing a couple different offices. It turned out pretty well. We got to learn the secondary market, we got to learn what loss mitigation was, so it definitely helped out quite a bit.

Mike: Yeah. I think once you start to understand that secondary market, and how loans are being packaged and sold off, and stuff like that, I mean my guess is that’s come back around to you and your life knowing, which some of the stuff you’re going to share here, and some of the stuff that you’ve done on LinkedIn with finding asset managers and stuff like that. I’m sure that that helped a lot.

Jason: It did. It did help out quite a bit knowing some of the people to talk to. I never really had to deal with it on my side, but I did know these are some of the people that you do want to talk with.

Mike: Sure. Let’s talk about LinkedIn because I agree with you, LinkedIn is one of those tools where if I go back a long time, I was pretty active on through college and stuff. It’s always when you need to find a job like, “I need to find a job so I’m going to start using it. Otherwise . . .” Once in a while I’m going to go out and I’m going to accept a bunch of requests that people send me that I don’t even know who these people are, and every once in a while they’ll pull me back in, but it’s quite use the same as like Facebook, obviously, where you’re inundated with people’s personal lives.

So I think because it has that professional focus from a job side or a networking side that unless people need something they don’t generally go look at it. But I think that’s probably some of the problem is that people don’t realize how valuable of a tool it could be for real estate investors. Am I saying that right?

Jason: No, you’re absolutely correct on that. It’s more of a professional type. Even though we do stuff with Facebook, LinkedIn, you’re not seeing people post what they’re having for dinner or they’re checking in at the gym or what not. That’s all awesome stuff on Facebook. But on LinkedIn it’s more like professional articles from maybe The Wall Street Journal or HousingWire or Huffington Post. People are talking more about professional things that they’re doing within their businesses.

And it’s crazy how much it’s grown within the last three to four years. They literally have 300 million members now, and 180 million of those people are actually super engaged, super active on LinkedIn’s platform. When I really found out that LinkedIn is much more than a site to try and get employment on, it really changed my business dramatically.

Mike: Yeah, and I know one of the things, let’s talk a little bit about this, is that it’s a great place to . . . I know in past you’ve bought distressed assets or you could buy notes, there’s a lot of things you could buy, but you can go find out, “Hey, I’m going to buy them from . . . these are the 10 banks I want to talk to.” And you can start to network with people because you can find out where they work, right?

That’s one of the beauties of it. I don’t think I’ve ever gone on Facebook to find out who works at this company because most people aren’t linked back to their company. Some are, but most aren’t, not like LinkedIn. LinkedIn is kind of like your resume. If I wanted to find somebody that works for XYZ bank I can probably click on XYZ bank and see all of their employees that have linked themselves, right?

Jason: Yeah, absolutely, it’s crazy nowadays. You could go on LinkedIn and these companies now have their profiles listed on LinkedIn, and all of the employees associated with that company. So it’s really, really cool that you can really just go on there, find a company that you want to maybe get a direct contact with, and you could start finding the right person in that department, and you could connect with them.

I do that for trying to find direct contacts at banks, hedge funds, private equity firms, even private sellers, we’ll find private sellers. It’s really cool that you could start connecting with these people, and it’s amazing how much information you can receive because not too long ago when I first started calling banks I literally was cold calling them.

I would cold call these people, and I’d be like, “Hey, can I speak to the asset manager? Can I be passed to the asset management department or the REO department?” And you didn’t have anybody to ask for specifically, have a name, and next thing you know you’re getting passed around from department to department, and there you go wasting four, six hours of your day. So it
wasn’t the best use of your time.

When I found this out on LinkedIn it was just like a complete light bulb went off in my head, and I’m like, “Man, I can’t believe this is available first of all, and I don’t have to pay for it.” So it was really kind of a mind-blowing opportunity to just take a hold off.

Mike: Sure. And would you say, Jason, just continue talk about LinkedIn here, I know that some people listening right now might be thinking about, “Well, yeah, for REOs or stuff, but that’s long gone.” I know it’s where you are at in the Midwest that actually REOs and short sales and stuff are still more prevalent than they were in some of the other markets, they haven’t worked themselves
through.

Could you maybe talk about that for a second? Are you primarily using it as a tool to find bank owned assets? Are there any other ways you’re using it to find deals?

Jason: Yeah, absolutely. We find asset managers, portfolio managers, loan workout officers. We find them at these banks, and we talk to them to try and acquire non-performing notes, some of their REOs that have not been listed yet because, believe it or not, a bank would rather sell to an investor like us, Mike, that could just buy the property, and they don’t have to pay out 5 or 6% commission and potential lawyer fees on top of that, attorney fees that they have to stack on top of that.

So some of these banks if you get to them before they actually listed with an agent, they would prefer that, and they do give great discounts on these properties. Non-performing notes, REOs, and even some properties that they have taken back, that they haven’t been able to sell, you can buy them in packages and they’ll give you great discounts on these properties.

Mike: Yeah. Where I am at Dallas, for example, REOs were never really a big thing for us here. I’ve bought hundreds of houses, but very few that were foreclosure or REO type assets. But I have actually seen a lot more over the past several months of packages of assets coming around and stuff like that that you would kind of think, “Man, isn’t that kind of dead?” But what’s happened is the big banks sold it off to some hedge funds, they’re fooling around with it for a couple of years, and now they’re selling some of it off.

It’s just kind of this ripple effect of, I don’t want to say anything that’s going to tail us away, but there’s somebody that I know that’s coming into like a thousand houses a month that they need to sell from an overseas hedge fund that has bought pieces of packages over the time, and they’re trying to get rid of the pieces they don’t want now. So I think a lot of that stuff is going to be working
itself through probably for years.

Jason: I’ve been saying that for a while now, and I did a live broadcast not too long ago on my Facebook page talking about that exactly because I see that that’s going to be flooding our market here very soon. I’m not sure if you saw the movie “The Big Short” or not.

Mike: I did, yeah.

Jason: Well, Michael Burry, who is played by Christian Bale, already said that we’re facing another housing crisis, and I believe a lot of it’s going to be caused by a lot of the hedge funds that just bought way too many properties and got in way over their head. We’re going to start seeing floods of property start coming back here.

It’s either going to happen through these banks are going to possibly acquire some of these properties, they’ll maybe just start exiting from the properties, but it definitely proves that our market is changing. And you said it perfectly. We’re going to see waves of these properties coming back on the market, and getting in with a lot of these gate keepers is going to prove to be huge for anybody’s business.

Mike: For a type of guy that spends a lot of time networking with asset managers or people that have deals, can you maybe give some quick advise or tell a little bit more about what you do? That is actually, “I want to network with you to find out what you have today,” and, “I want to network with you to lay seeds for future harvesting.” How much of that is building networks now
for stuff that might come around down the line?

Jason: Sure. If I contact an asset manager today, and for some reason they don’t have anything available that they’re looking to liquidate I’ll stay in contact with them on a weekly basis, either it be a phone call or an e-mail or maybe even I’ll send them like a thank-you letter for taking a time to speak with me. Because believe it or not, a lot of the old school and new school tactics work perfectly, sending a letter to somebody and saying, “Thanks.” I know, Mike, you’ve done that around Christmas time New Year’s to us, and I appreciate that. It’s just the small things like that make a huge difference in our business.

Mike: Right, 9 out of 10 people are like, “Do you have anything? No. Well, thanks.” And they just move on.

Jason: Yeah, exactly. I had that same problem happen probably in 2011. I was contacting a large hedge fund in New York, and I was seeing if they had anything available. Most people would’ve, like you said, 9 times out 10 would’ve hung up the phone, but I stayed on and I flipped it at that point, I said, “Are you guys looking to acquire any new properties?” And “Boom,” he told me exactly what he was looking for, so they had about $10 million in liquidity that they were looking to apply and deploy towards new residential properties. So it quickly turned from a disappointment to a great opportunity.

Mike: Yeah. In just a minute here I want to jump into the second part of the show, taking action segment, and we’re going to kind of switch gears a little bit and talk about how to get money through your community banks, but before one more question from a LinkedIn space. We talked about finding relationships there to find deals.

What other things could you use LinkedIn for other than finding asset managers and finding potential banks or lenders that have deals, and who the right person is to talk to there? Are there other things that you’re doing, maybe raising money or finding private lenders or anything like that through LinkedIn?

Jason: Yeah, we’ve actually found a lot of private money on LinkedIn. It’s really going in and taking advantage of the groups. In October of 2015 LinkedIn changed their policies on quite a few things, and used to only be able to join 50 groups for free with the basic account, now you can join 100. The groups have changed quite a bit, and they’ve allowed you to join the 100 groups now.

Groups have changed a little bit since that time, when that took place, but you can still find a lot of great people in these groups. And I suggest if you’re not sure which groups to check out, just type my name in the search box if we’re not already connected, and you can see all the groups I’m in, and you can go and join all of those same groups. Those are some of the top groups that I would recommend for folks, and they’re filled with investors.

The cool thing is, that I just want to mention here on LinkedIn, once you start connecting with people you could start setting up reminders and you could start placing tags on those people. So say for example, Mike, we just connected, you’re a cash buyer, you’re wanting to buy stuff here in Indianapolis, and you’re telling me you’re looking for three bedroom, one bath properties. Well, I can tag you, I could go to your profile now that you and I are connected on LinkedIn, and I could place a tag on you that says, “Cash buyer, Indianapolis. Wants three bedroom, two bath,” or “Three bedroom, one bath.”

Mike: So you can write notes on people in LinkedIn that only you can see. That’s awesome, I didn’t know that.

Jason: Only you can see, yeah. And then you could also set a reminder up. So you could set a reminder up that states, “Hey, contact Mike in a week. Let him know what type of properties we have available.” And that will buzz you through e-mail and it will let you know, “Hey, you’ve got a reminder. Contact this person.”

Mike: Is that a free feature or do you have to be upgraded?

Jason: Yeah.

Mike: That’s cool, I had no idea.

Jason: Absolutely free. It’s pretty cool stuff.

Mike: Yeah. That’s kind of a little bit of CRM.

Jason: Exactly, it’s really cool from that stand point, so you don’t have to go out and buy a software for reminding you to follow up with this person. It’s just a cool little tip that not a lot of people utilize on there.

Mike: That’s awesome. Well, Jason, let’s jump into the taking action segment, and let’s start talking about . . . . we’re going to shift gears a little bit and talk about how to get your deals financed through community banks and local banks. This is something that I’ve been doing for years, and I was fortunate to get my foot in the door even when the market was kind of in a downturn, and it was usually through somebody I knew that’s like, “Hey, I got in here.” Then they got me in, then I would get more people in, and we’d find our way in there.

Let’s start talking about that and some of the lessons that you’ve learned, and I know we’re going to specifically get into sharing some tools and things the people that are listening can actually use to try and get their foot in the door at banks in their community. So if you’re listening get your pen out and let’s take some notes here. I’ve got my pen, I’ve got my notes. I’m doing it, Jason.

Jason: Nice. We’ve been finding a lot of banks, especially like the local mom-and-pop type banks. And I’m talking like they probably have
six or less branches throughout the state or maybe if you’re close like me in southern Indiana, they may be spread out like in Kentucky and potentially Illinois. But we’re looking for banks that aren’t selling off to Fannie and Freddie. They make in-house decisions on real people, so go figure.

A lot of the banks that were doing a lot of this in the ’50s and ’60s, the good old handshake deals. The handshake deals aren’t necessarily there, but still having a small relationship with a bank like that, they make in-house decisions, and what we’ve been finding is they are doing 100% financing off of the ARV, and they’re also giving rehab money in draw periods.

Now, most draws typically you put your own money into it, and then you get the draw. Well, in this case they’re giving you the money, then they have an inspector come out make sure everything’s going good, then they give you another draw, so it’s literally 100% financing.

And I think most of the time most of the banks that we’ve been working with, they typically want to see a 660 or 680 FICO score, and they really don’t base it off of your reserves. They base it off of the actual asset. So if they have to foreclose or take it back it’s much easier because of the terms that they’re giving on that particular deal.

Mike: Yeah. So in your experience they’re willing to potentially lend up to 100% assuming you bought it at 70 or 75% of value, you bought it at a discount which is their cushion, right?

Jason: Yeah, and they’ll do an appraisal, they’ll make sure that the values are all there, and they make an in-house decision on the deal. As long as the numbers make sense, like Mike said, it’s at a 70 or 75% ARV, they’re going to lend you that money on that deal. It’s happening all over the place, and as long as you can find the ones that aren’t signed to Fannie and Freddie, you’re going to have a really, really good, solid contact. And I’m seeing, Mike, these deals are being underwritten at 6.5, 7.5% interest. Sometimes there are origination fees, but those are put into the deal.

Mike: But they’re usually nothing like what a hard money lender would charge. They’re not like 3 and 4 points. They’re like a soft flat fee of 500 or $700 or maybe 1%, right?

Jason: Yeah, it’s nothing that you’d be like, “Man, it’s going to take a bunch of my profit away.” It’s going to be very, very small, like you just said.

Mike: Yeah, I’ve been working with a couple of local banks really for years, and my experience is they just . . . like you said, you’re talking to the decision maker. I’m not a big fan of going into physical banks and stuff like that, but with these type you want to every once in a while. But usually when you walk in it’s not uncommon for president of the banks to come over and shake your hand, and say, “Hey, Mike. Good to see you. What are you doing here?”

Just have a personal conversation with him, and they know you on that level. You don’t have all this kind of clutter of decision making processes. They’re still doing appraisal, they’re still going through, they have a process, but you’re talking to the decision maker ultimately.

Jason: Yeah, absolutely.

Mike: In my instance too, I’ve been able over time to get it to where my rehab money is through unsecured lines. So they fund the purchase price of our deal, and then they’ll do up to 100% of the repairs, and it’s not even tight. They’re not doing repair draws and stuff like that. It’s just through an unsecured line that’s just backed by my own good name, and generally some deposit’s on hand or things like that. They’ve been a little bit more lenient with the repair side because a lot of the community banks maybe don’t have those rigid processes or don’t want to have to deal with repair draws and all that stuff as well.

Jason: Exactly, you said it right, Mike. I recommend if you find a bank that is going to do this type of lending for you, they definitely have lines of credit available, but definitely do your banking needs with them. Have a checking account with them, have your business banking account with them. It’s just going to add so much more trust and loyalty to the deal that you could get approved for lines of credit, and literally it’s like you pay nothing with the lines of credit. I know a couple of the banks that we’ve dealt with, their rates are so, so low it’s ridiculous. So that’s definitely a great point there for sure, Mike.

Mike: Maybe you could take a minute to talk about . . . because I know when I came in 2008 some of the people that I know, they got wiped out. They got wiped out because they have one lender. They maybe had access to millions and millions of dollars, but they just got pulled off from under because they didn’t have any diversification. And I think maybe kind of talk about building multiple relations like that with community banks, the importance of having multiple lenders, just your experience.

Jason: Well, the other thing too is making sure your numbers make sense. A lot of people in 2004-5 were getting this loans at 100% of an inflated value. Nowadays you’re going to purchase it not at the inflated values that we once had. Right now, especially in Indiana or the Midwest, we didn’t see the rep or appreciation that some of these other states received after 2010, 2011. So I would just say buy right. Buy deals at great prices. You won’t see that problem.

But again, the versification is key, making sure you’re spreading yourself to maybe like 2, 3 different banks, having those options out there, and just making sure that you’re not getting deals that are over a leveraged price, but thankfully, Mike, they don’t, well, I shouldn’t say everybody, but some of these banks don’t have the 125% programs anymore.

Mike: Yeah. With working with multiple lenders too another thing that I found is you want to be honest about your needs. You don’t want to go get . . . it depends on what market you’re in. But if you’re only doing a deal here and there you don’t want to go get multimillion dollar credit lines because ultimately they’re going to look at you . . . it’s not like they set that money aside, but they set aside the possibility of you needing more money. And if you’re never anywhere close to that level amount that they’ve granted to you then they’re going to look down on that, that they’re working with somebody that asked for a lot more than they needed.

I would try to, in my experience, try to start off with . . . because there have been some other banks that have talked to me about working with them, and it’s kind of weird. It’s like I don’t want to alienate the banks I’m working with now by taking business away from them and just spreading it too thin. I have told people in the past, “I would love to have those conversations, but I just don’t need the money right now, and I don’t want to pull it away from other partnerships that I have that are strong.” You got to find a way that balances that out for you, right?

Jason: Absolutely, and I only use the lines of credit, Mike, to do light flips. I don’t use it for long-term holds. So if you’re planning on using a line of credit for your long-term holds I would recommend that you have the bank take on those long-term holds for you. You’ll probably get better pricing over the long haul, and you’ll also too, with lines of credit, you’re paying interest, just interest. You could obviously opt to pay some principal, but if you do a loan with the bank you’ll obviously be paying principal plus the interest. So that’s something that I would recommend too, banks will give great terms.

The other cool thing is they don’t do the Fannie and Freddie guidelines where they will only do four loans at a time. They don’t have to do that because they’re not having to follow government programs and put in through Fannie and Freddie. So that’s another recommendation that I have there too.

Mike: Jason, for folks that are listening let’s talk about in the vein of taking action here. Let’s talk about how they can build those relationships, how to find them, and then in the back of your mind, as you’re talking about it, maybe consider two types of people, like veteran folks that are listening, and then even some newbie folks that might worry like, “Well, I don’t have any experience to share with them.” Which is a powerful tool if you have it, but is not that you can’t.

If you don’t have it you may have a great job that you have some financial track record that they’re excited about more so than your experience. Maybe share how people can go build these relationships, and some tips that you can share with us.

Jason: So for finding the right banks, like finding banks that want to sell off some of their inventory or you’re wanting to find banks that will lend to you, this will work in the same. So Bauer Financial is what I’d recommend for finding banks that you want to try and find people that you can work with at the bank to either get financing or to get some of their current inventory. That’s spelled B-A-U-E-R Financial.com.

And what I’d recommend there, Mike, especially if you’re looking to build some relationships with some of the banks, you’re not going to be able to get these deals from the top 20 nationally recognized banks. They don’t sell off to us, mom-and-pop investors, so that’s going to be kind of hard for you to do. But the state level and regional level banks will absolutely work with you to a capacity of they will liquidate some of their assets to you. Let’s talk about it from a beginner stand point first.

Mike: Yeah. Real fast, so Bauer Financial is a website. Tell us a little bit more about what that is or how to use that.

Jason: Yeah, sure. I totally just jumped past that.

Mike: Sure, no problem.

Jason: Bauer Financial will allow you to find all of the banks and credit unions per your state, and it’s absolutely free to get that information. Now, you go on that site and you just click in the upper left-hand corner under “Star Ratings,” and what you do is you can simply find the banks and credit unions that are in your state.

You could start going through there, find out who the banks are, and then you could find out who the banks are that you want to contact and put that information in LinkedIn. Once you know the bank and all the stuff you can put that information in on LinkedIn, and start finding out who the employees are.

Mike: What would you look for on Bauer Financial that says . . . let’s say that on your way to work every day you drive past like three community banks. You’d find them all on Bauer Financial, I assume because they’re there. They exist. What would you say, “Yeah, we really want to contact that one versus another one,” what are you seeing on Bauer Financial that tells you that this is the type of bank you want to talk to versus the other type?

Jason: Well, they do go by a star rating. The higher the stars the better from a confident stand point of knowing that that bank isn’t about to go out of business.

Mike: So the stars are kind of a rating of their security, I guess, stability?

Jason: Yes. So if you have half a star, to me that would be like I probably won’t be able to get financing from them, but I could potentially get some deals.

Mike: They might be liquidating, yeah.

Jason: Yes. So you could potentially get some deals from them. Some banks, if they’ve gone too far in the process of maybe they’re in bankruptcy and they’re liquidating, they may already have set in stone all of their assets that they’re selling to a particular bank. Well again, you could find out who they’re selling it to and contact that bank. It’s pretty cool what you can do with the star ratings, and figure out from a stand point who should I be contacting.

Mike: Right. And the significance of trying to find deals from them, as you said, is you want to try to find people that are doing loans and keeping them in-house versus selling them off, which means they may have some bad debt or some forecloses of their own once in a while, and they need to liquidate. Is that right?

Jason: Absolutely, it happens. It’s not as frequent at the mom-and-pop type banks just because they make in-house decisions. They’re not doing 100% financing with somebody that has a 580 FICO score and they just got a notice of default a year ago. Those loans aren’t being done anymore, and the local banks never really got in trouble because they make decisions on us homeowners, and us investors, and they’re making good decisions with their lending.

Mike: Yeah. So what are the types of questions that you would have? You find who to contact, and you don’t want to just say, “Hey, I noticed you worked at XYZ community bank. Are you lending right now?” How do you open that door? I know you’ve got some great tips here, but a lot of lenders that are working with investors or would consider working with investors, they might get a lot those types of request. How do you kind of stand out, and what are the questions you ask to get your foot in the door?

Jason: So what I typically ask when I’m talking to one of these banks is, I’ll just simply say, “Hey, I was researching your bank. I’m here in the area, and I wanted to follow up with you to see what type of loan programs you have, specifically for investors. I come across a lot of great deals, they make great financial sense, and I would love to potentially do some business with you.” And then they’ll explain to you some of the loan programs that they have.

And at that time you could find out if they have any programs where they base it off of the after par value, and if they do rehab loans which most of them do. They call them construction loans or rehabilitation programs. So that’s how I typically start the conversation, is I try and find out what type of loan programs they have first of all, and I also, if they sound like a good bank that I want to do business with, I’ll talk to them about potentially opening up a checking account too.

Mike: Yeah. And then for more experienced folks I’d suggest create, it could be a PowerPoint presentation or some level. When we were trying to get our foot in the door many years back at one of the local banks we created a little . . . we ended up having a bound too. It was real brief, but it was literally in PowerPoint, and we just shared examples of, “Here’s what we bought it for, here’s what we put into it, here’s some before and after pictures, and here’s what we netted on it.”

And just to kind of see, it really makes it real like, “Wow, how did you buy it for that. You made a big transformation there.” It kind of tells the story of what you do and say, “This is the types of loans we’re looking for,” if you need to educate them a little bit. So I think that could be a powerful tool to share your experience.

Jason: Absolutely. You could do a PowerPoint or a Keynote for those Mac users out there, and you could definitely walk in there. If you walk in there like that you’re definitely going to be viewed differently from a stand point of it adds a lot more credibility when you could bring three or four deals that you just recently completed, and you could show the net profits and all that kind of stuff because that adds a lot of credibility to them wanting to lend to you.

Mike: Yeah, it helps just stand out in a sea of . . . especially these days where everybody and their brothers are investors again, so how do you stand out, right?

Jason: Yeah, that’s true. But I’ll be honest with you, not a lot of them are really taking advantage of contacting banks.

Mike: I agree with you, yeah. I agree. Awesome, Jason. Any other tips you want to share from networking with lender side, anything that we haven’t covered yet?

Jason: On the lender side? No, not really. I think we’ve established Bauer Financial, how to find the banks. You could also contact credit unions as well, they’re selling off as well. So you could contact them, and for those advanced people out there you can also find non-performing notes. I love notes. It’s a big part of our business here. You could definitely get notes from them as
well.

Mike: Yeah, awesome. Well, Jason, appreciate your time today. For those that want to learn more about you, we’re going to add links for Bauer Financial and some of the other things we talked about on a show today, but where can they go to learn more about you?

Jason: I’ve got a blog. It’s just my first and last name, JasonLucchesi.com, and I’ve got a great blog on there. It’s where we give away a ton of content. So it’s great information for people at the new level, all the way on up to the advanced level. We go over a ton of great stuff. It’s all free. So come by, take a look, check us out.

Mike: Awesome, we’ll add a link down below the video here. Great to see you. Thanks for joining us today, Jason.

Jason: Thanks for having me, I really appreciate it. It’s always a great time being on here.

Mike: Yeah, good to see you. And for everybody that’s listening out there thanks for joining us again today. We have 303 episodes now of content. And we also, for those of you that don’t know, I forgot to plug this for the whole year, we have another podcast REI Classroom that we publish literally seven shows a week.

Every day of the week we publish a quick lesson there, typically five to six minutes short lessons from lots of experts in a whole bunch of different facets, so really diverse so check it out. You can check out FlipNerd.com/classroom to learn more about that show or you can search for it on FlipNerd.

Jason, thanks again, my friend.

Jason: Thank you, Mike, appreciate it.

Mike: PassiveRental.com is your source for turn-key done for you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash-flowing, professionally manage rental properties in the hottest rental markets across the country. We can also help connect you with the financing for your next property. Invest the easy way today and get started by visiting PassiveRental.com.

Are you a member of FlipNerd.com, the most robust real estate investing platform in existence, where you can find off-market wholesale deals and great vendors literally in your market? You can get access to advice from experts and learn about local clubs and events right in your backyard. If not, please visit FlipNerd.com and register for a free account. You can register in less than a minute. It’s pretty much the coolest site that’s ever existed in the real estate investing industry. So get on over to FlipNerd.com.