BiggerPockets Real Estate Podcast

BiggerPockets Podcast 107: Making $47,000 On Your First Deal with Jonathan Makovsky

Expertise:
407 Articles Written

Many new investors lose money on their first, second, and third deal. There is a steep learning curve when trying to invest in real estate and, while the loss is painful, it's very common. However, not for today's guest. Today we sit down with Jonathan Makovsky, a new investor from the tri-state area who had incredible success right out of the gate!

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

If you are a new investor trying to find the right way to get started or if you’ve been investing for years but want to improve your game – don’t miss this impressive interview with Jonathan!

Read the Transcript

Click here to read the transcript.

Listen on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

Help Us Out!

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here. Thanks! We really appreciate it!

Sponsor

We just waRealtySharesnted to give a shout out to our podcast sponsor on today’s show: RealtyShares. RealtyShares is a crowdfunding platform that allows you to invest in professionally managed properties without leaving your living room!

Learn more by visiting RealtyShares.com/biggerpockets!

In This Show We Cover:

  • How Jonathan got started with a push from mom
    BiggerPockets-Podcast-Cover 300 300
  • Tips on taking advice to best push your business forward
  • Exactly how many houses Jonathan looked at per day in search of a deal
  • The benefits of having a real estate license
  • The lessons to be learned by failing on your first deals
  • How to use direct mail for marketing
  • The details of Jonathan’s first property, purchased for $150,000
  • How to find a partner through BiggerPockets
  • What exactly “racer math” is
  • The pros and cons of letters and postcards
  • Jonathan’s experiences with office building
  • How to make a partnership work
  • Tips on using BiggerPockets as a tool for success
  • Plus MUCH more!

Links From the Show:

Books Mentioned in the Show

Connect with Jonathan

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investo...
Read more
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    This was an awesome experience – thank you so much Josh and Brandon! I was so fortunate to be introduced to BiggerPockets ‘the Facebook of real estate’ and its podcasts. BiggerPockets and my amazing (sugar-mama) wife have been the two reasons I have been able to live out this dream. (If you didn’t like this podcast, don’t worry, there are 106 other amazing podcasts to date.) Thank you so much in advance for your support. Special thanks to Hilary, and the BP support team!
    Sonja Pope Real Estate Investor from Mahwah, NJ
    Replied over 5 years ago
    Just finished listening to the podcast and I really enjoyed it!! Thank you Jonathan for all of the tips, really insightful and impressive. Much success to you.
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thank you so much Sonja, I’m really glad you enjoyed. Wishing you many successes as well!
    Brad Ransome from Raleigh, North Carolina
    Replied over 5 years ago
    Jonathon, Loved the marketing/direct mail tips. Just curious how you go about tracking response rates? Are you using unique tracking numbers or something more sophisticated? And on a related note, do you use a crm tool of any sort for follow-up? Keep us posted on your successes! Brad
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thanks so much for the listen and feedback Brad. Our tracking method is pretty basic: All sellers call/text our Google Voice number or fill out a form online, which all gets stored in Gmail and we divide the call volume by the amount of letters that get sent out. It’s not a perfect formula – as an example, if the same seller called from a different number we would double count in our tracking – but it does the job for now. Also, return callers typically don’t use the same number to call back on, so that doesn’t skew the results too much. We use Zoho’s CRM (freemium version). I’m not in love with it, but it does the job for now.
    Mike Tetzel Specialist from Nashville, TN
    Replied over 5 years ago
    Sorry to jump in on someone else’s post but I thought it was a relevant question. I heard the podcast and read through all the comments, but could not find(or maybe missed it) what list you are mailing from? Are you buying a mailing list and assuming so, what sectors are you mailing to(out of state owners, homeowners with equity, code violations, etc)? Thank you for the information and good luck in the future!
    Jay Castillo
    Replied over 5 years ago
    You guys were so funny (especially the part when Jonathan mentioned he speeds up BP’s podcast by 20% when he’s listening, while Josh wants to slow down Jonathan who talks really fast…), my wife and I were laughing in the car while listening. The great thing is, we also learned a lot and this got me very excited for our next deal. Awesome… err fantastic (that thing about not using the word awesome too much made me laugh too!). It was great listening to your experiences Jonathan, thanks! Thank you also Brandon and Josh for this no-nonsense but very “fun to listen to” podcast!
    Joshua Dorkin BiggerPockets Founder from Denver, CO
    Replied over 5 years ago
    Thanks Jay! As always, it is great to get feedback…
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thanks for the [awesome] feedback Jay! I’m glad to hear that you were entertained and learned a few things from the podcast. Looking forward to hearing about your next deal!
    Ronald Perich Investor from Granite City, Illinois
    Replied over 5 years ago
    Jonathan, (And Brandon and Joshua) Great podcast! Really enjoyed hearing about how you ended up where you are and the type of operations you’re now running. I, too, find How to Win Friends… an excellent book. I recently started reading “Outwitting the Devil” by Napoleon Hill. If you want something that’ll turn your world in a hurry, that’s been one for me. I haven’t finished it yet, but have been really hitting it hard. And I can only listen on Stitcher, so no 20% speed-up for me! I had to listen to it in “real” speed… and it was well worth the extra 12 minutes. Thanks again!
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thanks so much for the feedback Ronald – albeit 12 more minutes you could have been talking to sellers – and the book recommendation!
    Kim Handelman Real Estate Agent from Guilford, CT
    Replied over 5 years ago
    Hey Jonathan, Great Podcast! I love the fact that you looked so long and didn’t pull the trigger until the deal made sense! I’m at that point right now and it’s tempting to do a deal just to “Do a Deal” but that’s not good business. As much as I want to do my first deal I will wait for the right one to come along. Also, thanks so much for starting the BP Fairfield Meet-up. Great people and I learned so much! Looking forward to seeing you next month.
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thank you so much for the feedback Kim! It’s really tough when you’re not finding deals, although ironically sometimes is can be a blessing. As an example, that’s what forced us to be creative and look for other methods (direct mail marketing) where we found more deals through that method. Great meeting you at the meet-up, and looking forward to seeing you again.
    Ryan Arth Flipper/Rehabber from Cleveland / Akron, OH
    Replied over 5 years ago
    Very succinct podcast. I like the way that Jonathan has made educated decisions to pivot when the opportunity warranted it or the current plan wasn’t yielding results. I do not see this as being distracted by shiny objects when the decision is based on solid information. I also listen to the podcasts sped up, at 2x. You can retain more knowledge than you think, like with speed reading. Now I can’t listen to the shows in real time, I have gotten used to it at the rapid pace. It doesn’t take more than a couple of minutes to get used to.
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thank you very much Ryan – really appreciate the feedback and compliment! Hopefully, I didn’t speak too fast for you on 1.2x speed. 🙂
    Kim Handelman Real Estate Agent from Guilford, CT
    Replied over 5 years ago
    Funny so many people want to speed up the podcasts. I can see how that could be useful but in the summer I mow the lawn to the podcast (2 acres – push mower) and during the school year I’m constantly schlepping and waiting for kids. I wish they were longer because I’m always done with them by Monday or Tuesday and can’t wait until Thursday!
    Bryan Calton
    Replied over 5 years ago
    Jonathan, This was a great BP podcast. You’re incredibly intelligent and inspiring and clearly a man of integrity. Thank you for sharing your story. I’m a member of BP, so you may hear from me again! Best Regards, Bryan
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thank you so much Bryan. That is the best compliment I can receive, and I really appreciate the feedback. Looking forward to hearing about your success stories! Thanks again.
    Shaun Reilly Landlord and Rehabber from Newton, Massachusetts
    Replied over 5 years ago
    Finally had a chance to listen to this and it was a really awesome episode. Really good story Jonathan! Wish you had time to talk more about the Brookline deal. 🙂
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Shaun, thank you so much. I have you to thank for getting me started. Your podcast was the first one I listened to and it got me hooked on BP and the podcasts. You have been a great inspiration and resource for me. Thanks again, and I really appreciate the feedback!
    Shaun Reilly Landlord and Rehabber from Newton, Massachusetts
    Replied over 5 years ago
    Check is in the mail buddy! 🙂 Thank you for the kind words. I’m happy that I was able to help inspire you to get going and that I have been of some assistance when we have talked since then.
    George Paiva Investor from Milford, Connecticut
    Replied over 5 years ago
    Hi Folks, this is Jon’s better half chiming in. I would just like to add a few tidbits to supplement what Jon spoke about in the Podcast. Combining resources with a partner can yield many benefits as he indicated. Jon brings his strong financial knowledge being a CPA and myself a strong construction background working in the industry. *gold nugget “Putting those two assets together has made us successful in a way that if we ventured out on our own we most likely would not succeed.” I guess what I am trying to get at is that partnerships can yield success as expertise that may otherwise be lacking in your venture, can share and hedge the inevitable risks accompanying real estate investment, and not to mention the additional capital. Another issue we grappled with was with the notion of “over-building”. As Jon mentioned we reconfigured the layout to accommodate a full bath and walk in closet for the master bedroom. This risk meant we had to move the front entrance and at the same time since we started down the path of open layouts we also wanted to do the same with the kitchen opening up to the dining and living areas. We ultimately tallied up additional rehab costs as mentioned in the podcast. *gold nugget “Market analysis concluded that location and added appeal would warrant the additional rehab spend.” Yes this was still a risk but a calculated one we were willing to take. Lastly I would like to offer a few lessons learned on the reoccurring themes we experienced on this flip. I’ll try to keep it short: 1. Get everything in writing. Scope of Work, Cost of Labor/Materials, and Timeframes. 2. Don’t pay for any work up front. At best pay 25% once work starts and even when its complete don’t pay the full 100%. Leave an outstanding balance in case at closing something comes up that the buyer finds an issue. 3. Too Many Chiefs (GC’s) knocking on the door rather than the workers who do the work. Luckily having some knowledge of the industry and asking the right questions keeps the budget in line. 4. Meet with the Town Building department before buying the property. You would be amazed at how much more they know about your property then you do. In conclusion, the best piece of advice I can offer is just getting out there and doing something. Using your knowledge gained here and using the forums as your sounding board to reassure you are making the right decisions will make you that much more successful. Happy Investing – George Paiva, Co-Founder, Jon George Enterprises
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    There he is: the man, the legend!
    Cal C. Investor from Peachtree Corners, Georgia
    Replied over 5 years ago
    Can you expand a little on what else you have coming along? I saw one of your properties on Fund That Flip.
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Hi Cal, Thanks for inquiring. We are in the final stages of wrapping up the rehab for our second flip, and will list that property shortly. We have our third flip that we are closing in a couple of weeks. We are under contract on an office building, and also expected to go under contract on a 16 unit multi-family this week. Our plans are to continue to aggressively search for more fix and flips, and trying to find commercial/large multi family deal that we can be owner-operators on together with other partners.
    Troy MacDonald from Toronto, Ontario
    Replied over 5 years ago
    Hi Jonathan, I have a question regarding the letters mailed to property owners – were they structured in an inquisitive manner or an assertive manner? More along the lines of, “if you are selling your home…” or “I would like to buy your home”
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Hi Troy, Thanks for the listen. We tried both; and had a higher response rate with the latter approach “I would like to buy your home…”.
    Jerome Lanier Realtor from Park Forest, IL
    Replied over 5 years ago
    Hi Jonathan, I just got a chance to listen to podcast 107 this morning and it was awesome. At one point you began to discuss how you built up your cash buyers list but then never got back around to it. If you don’t mind me asking how did you develop that list?
    Jonathan Makovsky Investor from Fairfield-New Haven-Hartford County, Connecticut
    Replied over 5 years ago
    Thanks so much for the feedback Jerome. On one deal that we came across we could not come to an agreement with the seller, so I offered to list it for the seller on the MLS. The property was a “handyman special” since it had some environmental and tenant risks that a traditional bank would likely not be able to finance until corrected, so the offers that came in were primarily from experienced agents/investors in the area and we did a deal a few weeks later with one of those investors.