BiggerPockets Podcast 093 with Erik Stark Transcript
Link to show: BP Podcast 093: 0 to 400 Deals (in 5 Years!) via Smart Marketing with Erik Stark
Josh: This is the BiggerPockets Podcast show 93.
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Josh: What’s going on everybody? This is Josh Dorkin host of the BiggerPockets podcast here with my cohost, I’m literally here with my cohost he’s 5 feet away from me, what’s happening? There I am, see it’s crazy? Brandon Turner; what’s up, Brandon?
Brandon: Hey! What’s going on? It’s our—I think this is our first podcast where we’re in the same room, right?
Josh: Well, we did the live podcast when we were at FinCon.
Brandon: That’s true.
Josh: This is the first time we’re acutally recording together in the studio.
Brandon: Fancy. So, if people hear some echoing that’s why cause you’re sitting 10 feet from me.
Josh: Yeah, so, you know, having some technical difficulties with this, but hopefully we can work it out. Well, listen, this is first of all, the podcast itself is amazing. This show is phenomenal so that in itself I’m really excited for folks to check this one out. There’s a lot of really cool tips that you’ll find in this show that we have not talked about on any of our previous 92. I definitely, definitely encourage folks to really pay attention.
Before that, though, this has been kind of a crazy week. I mean, first I’ve got Brandon here, that’s crazy in itself, but last week we launched our new book, Brandon’s book, and I’ve got a stack of those puppies here we’re giving them away tomorrow. Obviously, for those of you who are listening, this show comes out this coming Thursday, but tomorrow is actually yesterday which was Wednesday so it’s a little confusing, but the book is The Book on Investing in Real Estate with No and Low Money Down. You can find it, check it out, at BiggerPockets.com/NoMoney. Brandon’s first book, our third book on BiggerPockets within the first couple days it hit number 3 on Amazon for top selling real estate books. It’s crazy.
Tomorrow, Wednesday, or yesterday when you’re listening, is our 10-year anniversary at BiggerPockets. I launched the company 10 years ago and we’re ecstatic. I know I’m ecstatic. It’s been an amazing, amazing journey. We’ve come a long way. Tens of millions of people have come through BiggerPockets, and we’ve helped so many people with their real estate I’m really blessed to be a part of this whole, I mean, it really is kind of like a movement so I don’t know. I just want to thank anyone who’s been a part of BiggerPockets over all these years, and then we hit another milestone on Sunday, this past Sunday, we crossed one million, one million, forum posts. So, it has been crazy!
Brandon: It has been insane. It’s been like an epic week. It’s kind of like last week where I talked about that one week where I had dunked a basketball, kissed a girl, shaved my head into a Mohawk, it was like that kind of week, but here at BiggerPockets.
Josh: Yeah, nice.
Brandon: So, nice work.
Josh: Thank you, thank you.
Brandon: Well, let’s get on to today’s—
Josh and Brandon: Quick Tip
Brandon: Alright, today’s Quick Tip is: we did mention this a long time ago, but I just wanted to reiterate for those of you just joining us; if you have not yet read the community book that we put together called Real Estate Rewind you totally should. It was actually written by 8 different members, I think 8 or 9, members of our community, volunteers, who each wrote a chapter answering the question: if you could go back and do it all over what would you change? And, as we talk about on the show today, our guest actually talks about how there’s so much wisdom in that question. So, we put it into a book, you can get it, and I will put a link to it in the show notes at BiggerPockets.com/show93, and, again, that’s Real Estate Rewind.
Josh: Nice. Awesome, awesome. Well, while you’re there make sure to please leave a comment or ask a question to today’s guest at BiggerPockets.com/show93. I know that—
Brandon: Especially ask about the drunk letter, you’ll love that.
Josh: Oh, yeah.
Brandon: Love that.
Josh: Yeah, wait til you hear about this thing.
Brandon: Wait til you hear it.
Josh: It’s brilliant, brilliant, brilliant. Before we introduce the guest I think we want to give a quick shout out to today’s sponsor.
Brandon: That we do. Alright, today’s sponsor, again, is 99Designs and branding is a set of perceptions that people have about your company and design is key in effectively communicating your brand and standing out from the competition. But what options are available to entrepreneurs like yourself with little to spend on design? Online marketplaces like 99Designs can help you build your brand on a budget. You’ll get maximum creativity with 99Designs contest model, which is awesome, where dozens of designers compete to deliver the best designs. If you want to see it for yourself it only takes a week to get a design and you’re guaranteed to love it so visit 99Designs.com/BiggerPockets and you’ll get a $99 value power pack of services for free. So, check it out today.
Josh: Awesome. Great, and, again, we’re definitely fans of 99Designs. They do great things so that’s fabulous. Also, really quick, if you are a listener of our show, one of the tens of thousands of people who listen to us each episode, I definitely want to ask, and beg of thee, request upon you to leave us a rating and/or review on the show on iTunes. We definitely count on that to get people to find out more about the show. It helps us get the show to a new audience and we definitely appreciate you guys letting us know how you feel about the show.
Brandon: I want to hit 1,000 by the end of the year. So, just so everyone knows: 1,000 by the end of the year so go vote. There’s a link to it on the show notes page at BiggerPockets.com/show93.
Josh: Awesome. Let’s get to this thing. Today we’re chatting up Erik Stark a real estate investor in the Florida market who is really blowing things up down there doing hundreds of deals in a short time, and not just Florida, he is working in my favorite town… Detroit, Michigan. That’s right. So, it’s definitely a cool show. He’s a great guy and we’re really excited. So, Erik, welcome to the show! Good to have you here.
Erik: Hey, thanks for having me, guys. I appreciate it.
Josh: It’s a pleasure.
Brandon: It is a pleasure. Awesome. Well, how did you get into real estate? Number one question.
Erik: You know, that’s a great question. We’ve got to go back about 7 years, but before I started flipping property I used to flip cars. My first day out of high school I went to sign up for my real estate license and I was the only person who signed up for that class and they called me to cancel it. So, what I went and did as the next best thing is I love the automotive industry so I went and started managing a detail center.
That grew into another thing, I started buying and cleaning up my own cars and before you knew it I was the Cadillac and Corvette king of town who used to flip cars to all the people so I always had a knack for flipping.
Josh: So were you on park benches? You know, “Cadillac King,” or something like that?
Erik: No, we just had some main street frontage in a very good area of town and we just used to decorate the front lot with all kinds of cars and make people come in and we became the number one spot to detail cars. Before long people would come in and really like it and we’d sell them this one, this guy would buy one, this guy would trade one and we just started going flipping crazy.
Josh: Nice. That’s cool.
Brandon: My dad does a lot of that. He likes to buy cars. He’s fixing up, I think it’s a ’65 or ’66 Mustang right now?
Erik: Oh, that’s beautiful.
Brandon: Yeah, he’s spent I think twice what’s it’s going to be worth when it’s done, but he doesn’t care. He just loves the process.
Erik: I’m the same way, man. I’m the same way.
Brandon: Well, cool. How did that transition to real estate, then? I mean, they’re probably fairly similar, right?
Erik: Yeah, one day when we were managing the detail shop we were turning a lot of units over there and we had a gentleman who came in one time who had a group of fleet vehicles cleaned out of his. He kept bringing in all these work vans, and contractor trucks, and finally last he brought his very nice Denali vehicle in there and we cleaned it up for him. I finally had to ask, “what do you do for a living? You’ve got all these nice vehicles and your personal vehicle is nice,” and he says, “oh, I buy real estate,” and he gave me this little flyer, or sign whatever you call it, and he said, “if you ever come across something in the neighborhood you be sure to give me a call and let me know,” and I knew that there was a guy across the street from our shop who would show up every couple of months and cut the grass and yell at his neighbors to keep all their trash off the property. Finally, I just approached him one day and said, “what are you doing with this place? Why don’t you sell it? This place is in constant distress, there’s people breaking into it all the time,” and he’s like, “I would love to sell this place. I don’t even know where to turn,” and I said, “well, give me your name and number and how I can get ahold of you,” and I ended up calling this gentleman and I said, “hey, here’s a property you might want to follow up with,” and he shows up at our office about two months later and he hands us a stack full of cash and he says, “hey, I just bought that property. I just want to let you guys know”.
So, from that point on I just started to interact with him more, get involved, just do everything I could to become a sponge in the flipping industry of real estate.
Josh: That’s awesome. Really quick, the thing that he did is what we tell everybody to do. You tell everybody what you do. So, he told you, “hey, I’m looking for deals. I’m looking for opportunities,” and had he not said that you would never have gotten started A, and B: he never would have made all the money he made on the deal that he was able to send you a pile of cash from.
So, to anybody listening, you guys this is why you have to tell everybody. Absolutely everybody about what you do because you never know who you’re talking to. You were a guy at a detail shop. Okay, great, you know, you’d never think twice that the mailman, the guy at the detail shop, the guy behind the counter at McDonald’s, could be the lead to your next deal.
Erik: And it was very casual. It’s not like he stood up there and gave this big pitch, it was just, you know, this is who I am, this is what I do, just very casual. I think a lot of people get intimidated about, “oh my gosh I’ve gotta have the center focus,” just be casual in your approach it makes life a lot smoother.
Brandon: Yeah, that’s awesome advice. That’s great. So, how did that turn into your first actual real estate deal? Besides that one, I don’t know if you’d call it bird-dogging or whatever, how did you achieve your first deal?
Erik: Yeah, you know, I have a couple of stories that revolve around my first deal. My first deal that I did on my own and then I also have my first deal that I ever did with my business partner. So, I can kind of share both sides of that, but my first deal, I actually carry my check with me, the very first deal that I did back in… September 24th 2007 was the first time I ever did my real estate deal, but my wife used to do home care for a facility in town and one of her clients had passed away one time. One of the times she had said, “well, the son is going to be giving me a television from the home,” and I was just starting to get into real estate more at that point. I was transitioning from flipping cars so I had clothes, and hats, and signs, and all kinds of marketing material made. So, I went over there to help her pick up this TV one time and the son had approached me because I was wearing a Cash For Homes shirt and he said, “hey, you’re one of those flip this house guys”.
So, I sat down with the gentleman and I put together a purchase agreement. Ended up flipping that property a couple of days later and made $7,600 on that transaction, gave away 60% of it to the local REA president for kinda helping me, guiding me through that process of overcoming that fear. Gave her a nice referral fee, but at that point I really didn’t care because I made more money flipping that one house, even though I only took 40% of the profit, than I did flipping these cars. It’d take me a good amount of time to make that kinda money flipping cars.
Brandon: Yeah. When you say “flipping” you’re talking about, I mean, essentially you bought it and then sold it right away. You’re not actually fix and flipping, right?
Erik: That was just an assignment. A straight assignment. I took a contract, in one page just signed it over to a buyer that I had met at the REA and never closed on it, never even had to put up an earnest money, nothing like that. So, it was just a simple assignment.
Josh: I was just going to say, I guess there is some confusion with the flipping, wholesaling, some people use those terms interchangeably. I guess for the purpose of the show maybe we can make somewhat of a distinction to help folks out. In this case the assignment, I mean, this I would consider a wholesale deal. So you never actually held the property, you assigned the contract.
Erik: Yes, correct.
Josh: So, maybe, just for the purpose of not confusing any of the listeners we can use that terminology even though I know that they are used interchangeably by some folks.
Erik: Yeah, no, I mean, to me flipping is when you close on a property, and anytime you sell a property in under a year but you take title to it it’s considered a flip according to the industry standard. This was just an assignment deal. Took a contract, handed it off for a fee and got it out of the way.
Josh: Right on.
Brandon: Cool, and now is that what you do? Are you a wholesaler? Or, for those who don’t know who you are, do you do other things as well?
Erik: Yeah, I mean, our company—I strictly focus on marketing and raising private capital. My favorite thing to do is wholesale properties cause, again, I’m a family man, you know, a lot of my time is devoted to marketing, spending it with my wife and our son, but I also have a business partner. We’re doing new construction homes right now, we have rental units that we manage in house, we do rehabs, but my side of the business is just to keep the cash flow coming in all of the time and just to keep turning units, but we do everything under one roof. We don’t outsource anything. Everything is done in our office.
Josh: So how many people do you have on your team then? I mean, you must have a sizeable squad.
Erik: We have me, my business partner, an in-office assistant and then two virtual assistants.
Josh: Okay, and what about, I mean, if you’re doing new construction, rehabs presumably you also have a construction crew, yeah?
Erik: Oh, we just hire the builders, yes.
Josh: Oh, okay. So, not everything’s in-house. You do outsource some of it.
Erik: No, too much liability with that stuff, yeah. We tried that in our early years to have everything under one roof and it’s just less liability and increased profits just to hire a team to handle that stuff.
Josh: Okay, so can we go back, and we’ll get to this stuff. The first deal you talked about this wholesale that you did. How many deals have you done since then?
Erik: I mean, well over 400 properties, and I would say about 70%-80% of those are wholesales.
Josh: Okay, and what about—you’ve got the 70%-80% wholesales, then it sounds like you’ve done a bunch of actual flips as well, do you do buy and hold or is it just kind of, I’d say, the turnover type deals?
Erik: Yeah, the way that we’re structured now is we focus more on marketing just to get leads coming in and then when a really good qualified lead comes in we determine. If it’s an A class location, we only keep rentals in A class locations typically that we can get owner financing on. That’s what we prefer to do. We don’t really go after the single-families, we go after multis, we go after commercial, strip-centers, we really don’t want to own too many single-family properties just because you’re managing too many people. When you get into the multis and commercial they can kind of self-manage themselves, especially in great locations.
We divide everything to say either this is either going to be a great wholesale deal to keep the company money coming in, or if we can owner finance the rental property we add it to the portfolio, if it’s a great piece of dirt with a crummy house on it we blade it and build new construction.
Brandon: I love that idea of marketing for whatever you can get and then figuring out where to put it into the puzzle. It kind of goes back to the whole, like, toolbox analogy that I use a lot, right? The more tools you have in your toolbox the more projects you can tackle.
Brandon: I love that. So, let’s actually talk a little bit about that. First of all, A class location, what does that mean, for those who don’t know, and then owner financing how does that work?
Erik: Typically we define an A class location with the word “romance”. It’s where everybody wants to live, it’s close to the place where you take your wife or your spouse out to dinner on the weekends, it’s just where you don’t have to manage your rental property and have to be on site to collect all the time. The people are working-class professionals, suit and tie people, they’re a little bit above the middle class genre and it’s just where everybody would like to own a piece of real estate at. So, that’s what we define as an A class location.
Brandon: I really like that. Romance, I really like that a lot. So, you look for owner financing, or seller financing, in those areas?
Erik: You know, it’s pretty tough to get owner financing in an area where people own incredible properties because, quite honestly, they don’t need to owner finance it. They could stick a sign in their front yard or call an agent or an attorney and sell it so we have a pretty unique system for getting owner financing on less desirable properties and then what we do is we trade up the collateral when we sell a low-rent property for cash and then we move it over to the A class property.
I do have a case study that I can explain as we get deeper into things to show people because, quite honestly, most people in romantic locations don’t need to do owner finance, but we’ve done it.
Josh: I don’t know if it’s proprietary or if you’d be willing to share your system, or at least kind of a synopsis of it it’d be kind of interesting to find out a little bit more about that.
Erik: Absolutely. We had done a deal, actually this stems back at the beginning of January 2013, we bought what’s called a booger property. It’s a very cheap property, it’s not in a war-zone area, but it’s not in the most desirable part of town. It’s where everybody goes to flip homes in a rental area or just kind of the lower end spectrum, but it’s not a war-zone. So, we bought this property for $17,500, put $2,000 down, financed $15,500 on a 4% note over 5 years with $125 payment going to that owner for the term of 5 years. We plan on keeping that property as a rental, but me I decided to wholesale it, turn key to an investor. We pocketed $7,500 from that transaction net meanwhile we were negotiating another 4-unit in an A+ location where we took that $7,500 profit, put it down on the 4-unit and then financed the difference of $151,500 over a 15-year term at 7%. So, we traded from a lower-end property where we took the profit from this one to cover the down payment on this one, and eventually we sold the 4-unit and now moved that over to an A+ location.
So, we do a series of trade-ups, and I probably would have to draw it out for you on a white board, which I do have behind me if you need me to show you, but I mean, it’s something that we’ve really perfected in our business and it seems to be working well.
Brandon: I think that’s cool.
Josh: I was just going to say the trade-up definitely makes sense, but the numbers you went way too fast for me.
Erik: I know, I apologize.
Josh: I definitely need something in writing. No, no, it’s okay, but I thought you were actually going to say that you were holding onto that first property and then you were going to, you were using just the down—I missed it all. Over my head.
Erik: I mean, we can slow down and I can break it down for you. It’s really powerful, you know, and whenever we have people that come to us that want to really get into the next phase of their business and they’re doing wholesales consistently you just can’t afford to pass up on the good opportunities, and a lot of times they don’t have the ability to take these properties down. Number one: they don’t have the money. Number two: They don’t have the knowledge, but when you play this strategy you really at the end of your year you can look back and say, “man, I’m really good. I’m really glad that I did take this property down and put it in my portfolio”.
Josh: Hey, Erik, what would be helpful, I think, would be if you can actually write up maybe the one the A to the B to the C in some kind of written form, give it to us and we’ll include it in the show notes so that anybody who’s interested can actually see because this is something and it’s not simple, but—
Erik: I have a napkin sketch I can send you guys.
Josh: Perfect. That’s be awesome. Alright, cool. So, that’s fascinating. What market are you in?
Erik: I live in Fort Lauderdale, but my business still operates up in Michigan.
Josh: Oh really?
Erik: We’re just north of Detroit so I operate the whole marketing and wholesaling side virtually from Fort Lauderdale.
Josh: So you are operating remotely in Detroit.
Josh: Ah, boy. So let’s talk about that. I mean, when you did your first deal was that in Detroit as well?
Erik: Well, I just moved down to Fort Lauderdale in the past couple years so I’m originally from Michigan. I know the streets, I know the market, I know the values. When the sellers call me it’s almost like I’m there on the ground because I know exactly what streets and what areas they’re talking about, but we decided to pick up and duplicate our business down here so we still have a big marketing machine going on up there, but I decided to come down here and get things picking up down in this market as well.
Josh: Would you have been able to do that without knowing the market as well as you do?
Erik: I don’t think at the level of the amount of volume that we’ve done, I don’t believe so.
Josh: Alright, and the reason I ask is this: you know, everybody knows I beat up on Detroit, and there’s a reason for it, but it’s one of these places where there’s so much marketing that goes to people out of state like, “hey, Detroit’s dirt cheap,” or there’s other markets too and I always caution folks, “hey, listen, be careful, you don’t know that market”.
Erik: Very careful.
Josh: It’s a really tough place to do business if you’re unfamiliar. You go one street away and you’re in deep trouble.
Erik: Deep trouble, like, life threatening trouble. Absolutely.
Josh: Yeah, okay.
Erik: Yeah, I don’t recommend, I mean, of course it’s cheap. Everybody can come to town and flip, but I’d give everybody a word of caution. There’s life threatening situations down there and it’s not worth any amount of profit so you gotta watch Detroit very closely.
Josh: Have you experienced, I mean, we’re talking about life threatening stuff, have you experienced any of that type?
Erik: Never, no. Mostly what we do is in the suburbs of Detroit, I mean, we do own some Detroit stuff and we flip there occasionally, but we don’t, you know, we don’t play in those areas. There’s no need for us to.
Josh: Yeah, hey, really quick, I want to hop back and then we’ll move forward a little bit. You had talked about these three segments of your business; you’ve got the wholesales, the buy and hold, and then the new construction, and one if it doesn’t fit this bucket, it fits the next bucket, if it doesn’t fit that bucket it fits the following bucket. I think that’s really clever and we’ve talked to, I think, a small handful of people who’ve kind of explained their business in the same way, but I think it’s really fascinating to see. Listen, you have a focus, if it doesn’t fall into that focus it moves into the next focus and then the next focus. I wonder, could you have organized it in a different manner, right? You’ve got the wholesale, the buy and hold, the new construction, did you struggle with figuring those three buckets out? Did it take you a long time to decide that those were going to be the three pathways that your business was going to really focus on or did that just kind of happen organically?
Erik: You know what? That’s a very great question. It actually stemmed from two different things. Michigan is a very, very, saturated market. I know there’s a lot of places across the United States where people are marketing very heavily, but we have a swipe file that we build of every single person who markets in our area because our mentors and our lenders give us monthly mailers of who’s mailing in that area, but to answer that question: it came out of two different situations.
Number one was it was driven by the marketplace. What’s going on in the market up there? Values are increasing, the market is kind of exploding with the retail buyers, a lot of people are turning to get new construction finance loans. So, we wanted to service more than just the cash landlords where we were wholesaling over to them and then just doing the simple rehabs. We wanted to tap into the new construction market a little bit, but we also realized that we needed to provide a very valuable service to that marketplace. Without being able to provide a service where we could solve people’s problems because one of the issues we were dealing with was people want so much money for their homes right now because the market’s up for what you want to call it. We were losing on a lot of wholesale and rental opportunities because you have to pay more than what a property’s worth. The only way you can pay more than what a property’s worth is if you owner finance it or you’re going to turn that property into a higher and better use.
So, when somebody says, “I want $125,000 for my junkie little bungalow that will never be worth more than $130,000 when it’s fixed up,” you have to take that piece of dirt and build a big, huge home on it that you can now sell for $400,000. So, it was really driven by two different things: how can we be service providers for the marketplace and how do we create our niche in the market where we’re not losing out on these opportunities by the mass because, again, every seller just thinks they really have gold in this market, we need to play to that.
Josh: Hey, really quickly, you talked about a swipe file of competitors, can you explain what that means? I’ve never heard that term before.
Erik: Yeah, a swipe file is one thing I keep with me everywhere I go. It’s literally, I mean, this would be my—if somebody ever found this at Denny’s it would be very, very critical to our business but we have a couple of very large mentors and lenders up in Michigan that own hundreds and hundreds of properties and since they own them in their personal names one of the things that they do is they send us packets of mail every single month with who’s mailing and pretty much everybody who’s marketing up in that area. So, we know who’s sending what, when they’re sending it, at what frequency, what the message is, whether it’s a postcard, a yellow letter, a flyer, a door knocker, I mean, if you’re mailing to the absentee landlords with the probates we know who you are.
Erik: That’s very crucial to our presentation up there because I know whether you’re a wholesaler and have the ability to close, we can explain this to sellers throughout the whole process that, “feel free to go to those guys, call us last if you prefer. If they can’t close we will”.
Josh: Does that allow you to go in and, well, obviously the competitive intel is really interesting. We haven’t talked to anybody about this and it’s fascinating to me.
Erik: I don’t share it with anybody guys so this is exclusive to BiggerPockets. I’m not kidding, I don’t talk about these things.
Josh: No, I mean, it’s a really good idea. Now, do you use this information—I’m assuming you use it to alter your marketing, you use it to change messaging and all sorts of stuff, huh?
Erik: Oh, absolutely! When a seller tries to call me and pin me a corner and says, “well, send me your best offer because I’ve got other postcards and mailers,” and I say, “Oh, from John, Jennifer, Kim and Ryan?” “Well, yeah, how do you know?” “Oh, they’re wholesalers. They’re just gonna bring me your deal to fund it so pick whoever you want I’ll probably be able to buy it cheaper from them,” and they’re like, “now you just reversed the scenario on me”.
Josh: Wow. Dirty man, that’s dirty.
Erik: No, that’s business.
Josh: Smart. That’s very smart.
Brandon: I like it. I like it a lot. You wrote about that on a BiggerPockets, like, on a member blog. I wrote it down here cause I actually wanted to talk to you about it today. Why Gurus Suck and Most Newbies are Failing Because of It, and that was kind of your message in there was if you’re doing what everyone else is doing and you bought some system that will help you get unlimited leads and you bought it online, well, so did that guy down the street, and that guy, and that guy, and that guy. They all bought that same system which is giving them automated leads and the same mailers go out, and anyway I love that article so I will link to that in the show notes at BiggerPockets.com/show93, but yeah people should definitely read that article cause you nailed it on there.
Erik: It’s painful, man. We meet so many people who are spending money that they don’t have to get into the business, and you can’t blame them because they’re just trying to gather any bit of information that they can and they’re looking here and saying, “well, this postcard is tried and true,” but nobody ever stops and asks the question: how many other people are sending the exact same mailer? So, we have a couple of really good things that have really changed up our marketing. Simple things like, here’s a quick little tip, start sending it from a personal home address versus from a Main Road because now you don’t look like the corporate guy, you look like the individual person who just wants to buy your property. Nobody wants to sell to the big dog, they want to sell to normal joes, you and I.
Josh: Yeah, hey, do you have any other tips without giving away all of your secrets?
Erik: I do, and they’ll probably come out as you guys ask questions. I mean, a lot of the stuff I just take for granted.
Josh: Well, I was going to ask on beating out your competitors, that’s really more what I’m interested in. How do you get the deal, you know, you already talked about one way you can actually site John, Jennifer and Billy who are also marketing. I mean, that’s ridiculous. That’s just silly, but any other kind of good tips for one-upping the other guys? We do cover this a lot on the show and I say a lot of guys say it kind of comes down to: you’re the real deal, you’ve proven that you can close, you can demonstrate that you’re there to solve their problem, but it sounds like there’s more to it with you and it sounds like you’ve got some other kind of clever things that you do.
Erik: You know, a lot of it comes down to when it comes to our marketing one of the things that I have on my board behind me is to be persistent and consistent. If you study the statistics of marketing upon your fifth mailer you increase your response rates from 7% on the fourth mailing to 80% on the fifth and most people quit after the 2nd or 3rd campaign just cause it’s so costly, they’re not getting results, you’re joining the ranks with all the other people that are there. So, when you market with persistence and consistency and you’re always tweaking—I just had a gentleman that called me the other day that said, “you guys have been mailing me for years. When I want to sell I promise I will not call anybody else but you guys, but save your stamps from now on and don’t mail me no more,” well, now I don’t need to mail you because I’ve got your phone number I’ll just call you.
You know, when they say that fortune is in the follow up I can’t put enough emphasis on the fact of: follow up with people. When Sam Walton was asked how he was able to become so successful when he got knocked down he got right back up again, and that’s one thing we do. We don’t have a very elaborate system. My follow up system is yellow pads of paper. I have yellow pads every, I mean, you follow me around I have yellow pads everywhere in my life. They’re in my car, my bathroom, my bedroom, they’re my whole life.
So, be persistent, be consistent, follow up like no other and when you can eventually afford it get yourself a brick and mortar office. You know, one of the things that are really crucial to our business is everybody wants to deal with the normal person, but they also like having a verifiable address where if they want to check up on you and maybe stop in cause I still get called a scammer quite often from people who are looking up my name on the internet and saying, “well, I see that you flip houses professionally and you just want to make a ton of money off of me and what you do is a scam,” and it’s like, “it’s not a scam, but you can verify all of these things about who we are and I want you to. I want you to know that you’re dealing with the real deal, but of course I have to make money. That’s how we keep these postcards in front of you and these office doors open and the economy stirring and at any time people can call and verify our credibility. Here’s projects that we’re buying in your area right now. Go drive by this home, we own it”.
I had a conversation with a lady yesterday. We were talking forever about her property and she kept talking about this home that was right outside of the hardware store and after she bragged about this home for 30 minutes I said, “we own that property. That’s ours. We own that,” and she’s like, “you’ve gotta be kidding me”. So being able to connect those dots and build your credibility. You don’t do it for bragging purposes, but I want people to know that we’re genuinely vested in this market, in this industry, and the economy and we’re here to provide a service and help you.
Brandon: Yeah, I love that. I think that’s fantastic. I think a lot of wholesalers and flippers just get a really bad name, and some of them deservingly so because they’re terrible individuals, but you get that in any industry.
Erik: Yeah, you’re right.
Brandon: So, I like to hear you’re doing things the right way and that’s very cool. So, you’re doing direct mail it definitely sounds like, is that your main emphasis on getting leads?
Erik: Yeah, we have a little bit of an internet presence out there. I would say direct mail is probably one of our biggest lead sources that we have out there, but when it comes to being out on the ground and on the field we don’t do bandit signs, we haven’t done those in years, just trying to avoid the sign police I would just rather not be involved in that whatsoever.
Erik: But one of the things we always do when we purchase a property, even if it’s a wholesale deal, is we have a 4 foot by 5 foot sign and then we also have an 8 foot banner that in front of every project we ever, even if it’s a wholesale deal, we put it in part of our contract when we sell it, “another property purchased by Erik Stark and Steve Mills,” so that way people are driving around and are saying, “this is the same guys that are marketing to us month in and month out,” we’re connecting dots. You know, you’re building credibility by people seeing that these guys are really out here in the field not just turning my contract for a profit, they’re really doing this.
Brandon: This goes back to that classic business thing of, like, touch points I think they call it? It takes 8 interactions or touch points with a branch in order to buy from them. So, the first time you heard from Coke you didn’t buy a Coke, it took you several interactions. The exact same thing you’re doing, right? You hit them over, and over, and over in different areas, in different methods, they see you online, they research you, they see the signs and in the end they know you cause you’re a local business and that’s who they’re going to sell to. I think that’s just excellent, excellent advice.
Erik: It’s been pretty crucial, yeah.
Josh: And I love the signs, “another deal closed by us,” which is, I mean, I don’t think we’ve heard anybody say that yet that they’re doing that technique and you’ll see realtors do it in a few cases, but from investors you will rarely hear about investors doing that. A lot of builders will do it, showcase builders, “built by so-in-so,” but investors that’s really, really good idea.
Erik: And that’s what this is. I mean, it’s 5 feet wide by 4 feet tall blue and white same as all of our marketing and everything you associate the blue and white—
Josh: It’s got your branding on it.
Erik: Again, you’re associating, you’re touch pointing.
Josh: Yeah, hey, so how much does it take to get started with direct mail? I mean, you guys do a lot of it, so what does it take for somebody to get going on that?
Erik: I would say you’ve gotta have a good, I mean, you can really focus your list, you know, the way that we segment our lists, excuse me if I run off onto a tangent here, but you can start with as little as $1,000 but you realistically should have $2,500 plus. When people come to me with marketing ideas is that’s the thing is they’re working a corporate job, they’re barely making ends meet now, they want to know what they can do to really market effectively and I’m all about focusing your list.
You know, everybody in the world is mailing to absentee owners. The one thing that nobody’s mailing to is the return absentee owners. There is more gold in the returns that come back from the absentee owners because everybody’s so focused on following the masses they’re not focused on the 40 postcards that get returned to your mailbox because they’ve moved, that address is no longer forwarded, they’re not skip-tracing these people to figure it out, but there is true gold inside of those return mailers. I tell people, “here’s a stack of my return mailers. Follow up with these people and start going after them and when you get a lead that’s qualified we’ll help you work it”.
Josh: That’s great.
Erik: So, you don’t need a lot of money but, again, you have to do the opposite of what most people are telling you to do.
Brandon: So that’s an interesting idea. People are listening to this podcast and they have no money really to get started with direct mail, go talk to a local wholesaler and ask if you can buy, or borrow, or have their returned postcards and I think that’s a terrific idea. I’ve never heard anybody say that before, but that’s fantastic. Wow, I love that.
Josh: That’s awesome, yeah.
Brandon: So, definitely by mailing to people that nobody else is mailing to or by doing the hustle that nobody else is willing to do that’s how you can get better deals.
Erik: Yes, you’ve gotta go deeper than, again, everybody’s mailing absentees so that’s just a given for us. We don’t bank on absentees to really support our business, it’s just a given. We stay consistent and persistent on it, they’re always going out the door. We’re going after probates, return mailers, code violations, driving for dollars. I still spend the better part of Monday driving for dollars, looking for new vacant properties, you know, knocking on doors and just being active in the market cause I’m a true believer in the philosophy if you spend your Monday building enough activity that avalanche will come back to you in the next week or two weeks and cover itself in one 8-hour day.
So, if you really spend 8 hours, you grab a Starbucks, you take a lunch, you go out in the field, I don’t care if you use a bunch of yellow sticky notes and say, “I want to buy your property,” stick it to their front door with a phone number and there’s no cost in that. I mean, what is it? 99 cents? Go to the dollar store, they’re 99 cents. So, spend your Monday out in the field cause the streets tell you everything. You can only do so much behind a computer and I’m a computer guy. I love to do things virtually, but down here in Florida I’m in the field every single Monday.
Brandon: Yeah, that’s awesome. So, going back, maybe we can transition to that and this is a good time, you’re down in Florida, your partner is up in Michigan, how do you—let’s talk about partnerships cause I mean, I’m a huge partnership guy. Everyone knows that, if you bought The Book on Investing with No or Low Money Down last week we talked about you guys know that partnerships are how I’ve done it, but I want to know how you did. Like, how did you find your partner and how do you guys work together?
Erik: You know, me and my business partner’s absolutely incredible. I mean, he’s been one of my greatest influences and mentors. He’s helped me transition from—he started in the mortgage industry when I was flipping cars and he would stop by the shop every once in a while and things just kind of progressed between us and we were the only kids that we went to school with during high school that really had an entrepreneurial mind. You know, we gathered outside the typical friends in common that we had and the reason why we decided to partner is because what I’m great at he sucks at and vice versa.
I mean, we have never had an argument, and I’m not kidding, we do not argue about anything. We turned this business into one big game, and that’s how it started off between us is kind of a hobby that turned into an actual business. When we officially formed in April of 2008 we did 35 wholesale deals within the next 8 months and then in 2009 we transitioned over to doing 92 properties and a lot of those were rehabs.
So, the game that we started playing was when we get a property locked down can I flip this contract before you get your rehab bids in? And we just started turning this into a big game and after that point it was hands off. If I had a signed contract and earnest money that’s it. It’s off the market, we’re flipping it, it’s sold. He’s got a contractor bid and my guy’s on the way with the earnest money that’s it, we’re rehabbing it.
Josh: So you guys used each other to motivate and push one another which is awesome. I mean, that’s a really, really great idea.
Erik: We never focused on the weaknesses, we played to each other’s strengths. So, I mean, again, there’s no doubt that I wouldn’t have been able to do that level and I don’t think he would have been able to either if we hadn’t been a partnership because we pushed and drove each other very fiercely.
Josh: What’s the structure of it? Are you guys like 50/50 partners?
Josh: Okay. Got it. So, if you do a flip are you guys both putting up the cash for it, or do you have something like that worked out? Or in the early days before the business had lots of money which I’m assuming it does today?
Erik: You know, the way that we got started—here’s where I’ll, if I can I’d like to talk about the first deal that I officially did with my business partner.
Josh: Yeah, sure.
Erik: After I had done that one deal on my own I was kind of working under the president of the local REA organization and I was bird-dogging and wholesaling for him and I was making really good money, but I was essentially a high-paid employee. There was no room for growth, I was not allowed to be creative, do my own thing, flip my own properties, I was essentially working for him, but making great money.
So, I always kept in touch with my business partner cause he was breaking out of mortgages into real estate at the same time I was breaking out of the automotive into real estate as well. So, we always kept in touch and shared ideas and masterminded together and one day he had called me and said that he had a property under contract that was a really, really good deal, and I had been working with a buyer who had brought that deal to my attention a couple days before.
So, I called him back and said, “hey, I’ve got a buyer for this thing. Go ahead and lock it up and I’ll get my buyer over there and we’ll flip this thing together,” well, when I had mentioned that to the gentleman that I was working with at the time that was like a hands off, like, make or break type of situation where if you go forward with this you’re no longer with us. So, I had to make a split decision that day on a Friday and essentially what I did is I walked away from that group that I was working with to join forces with my partner. It turns out that the buyer that I had been working with just boarded a plane to go to Arizona for the month and wasn’t interested in that deal.
So, now I just walked away from the life blood that was feeding me on a dream of potentially flipping this property and growing something bigger. So I had to put that call into my newfound partner and say, “hey, man, my guy is just out on this one. He’s not going to be able to do anything,” so we knew we had a great deal. I put up the earnest money for it and at that time we kind of had been going back and forth in an office where there was a local broker that we were kind of renting space in his office. Every time we would come into this office and drop off these files this guy would mention to us, “man, you guys are finding really good deals for other people. Why aren’t you guys buying and flipping these properties yourselves?” and it was like, “well, we don’t have the capital to do that,” and he just said, “if you guys ever need money to buy a property just come to me. I’ll give it to you”.
So, essentially that’s what we did. We officially incorporated ourselves in April of 2008. We locked that property up with an earnest money deposit, we went to him, he gave us, I mean, literally the day of closing we’re like, “man, we’re still trying to learn the dynamics and the ins and outs and how does this go down?” You know, we’ve got all these papers ready, we’re hoping he’s not gonna scrutinize this mortgage and our promissory note. He hands us a $115,000 check, never stops writing in his rental journal, never asks for a mortgage, never asks for a promissory and he’s like, “see you guys in Las Vegas!” We went and bought the property, we came back gave him the mortgage and the note and we’ve just been going flipping crazy ever since.
Erik: So that was our first deal that we did. So, we passed up on—we probably could have made $5,000-$7,000 wholesaling it to my buyer. We closed on that property, put it right back on the market immediately and made $16,000 on it. So that was our first partnership.
Josh: And now you’ve got you and your buddy who are partners and now this guy is kind of your partner, a private money partner it sounds like.
Erik: Yeah, just a lender.
Josh: Now, have you been working with him all throughout the past X number of years?
Erik: Absolutely, yes.
Josh: Okay, so he’s still, I can’t talk today, he still helps finance your deals for you then?
Erik: Yes, he’s still one of our lenders. We’re actually working to sell a lot of cause, you know, he owns a lot of property. About 160 properties free and clear. We are working to package his stuff and sell everything. We call it his paradise retirement plan. We are working to sell all of his properties, get him cash liquid rich again and then all he can do is sit in his cottage in Naples and just lend us money and we flip everything and just pay him interest.
Brandon: And that goes back to the whole thing we talked about earlier, right? About letting everyone know what you do and just getting out there and networking and talking to people because you never know when you’re going to run into this guy. That’s terrific. That’s awesome. Cool, well, we’ve gotta move on and start kind of winding down. A couple questions for you: first of all, mistakes. Do you have any that you can share that can maybe help other people not make the same mistakes that you did when you were building your business?
Erik: You know, we have a quote up in our office up in Michigan and as soon as you walk in it says, “education is what you get when you read the fine print. Experience is what you get when you don’t,” and—
Brandon: That’s good.
Erik: I have marketing mistakes, I have legal document mistakes, we have deal structuring mistakes, you know, nothing that immediately pops in. Actually, this just happened the other day, we had a property that we’ve currently had listed on the MLS for sale and when we signed the offer with the gentleman who wanted to buy the property we all forgot to date the purchase agreement. So, the gentleman that we had sold the property to happened to be four days past his inspection period and came back and said nothing about the failed inspection results, he said his buyer couldn’t get cash financing. Well, we said, “your financing is cash. It has zero contingencies for financing approval so we’re taking your earnest money because you never came back in a reasonable amount of time,” and he says, “well, according to this purchase agreement I have all the reason…”
Erik: So, I mean, this is a recent mistake we just made in the past 14 days.
Josh: Wow. I’ve got all the time in the world, baby!
Erik: We’re still learning lessons to this day, but you know, if I really looked back and think about what caused us the most trouble work really well with your contractors and your city officials. You know, when we were really doing 70, 80, 90 rehabs a year and you’re getting the building code enforcement and the building departments involved these people either make your life a vacation or a nightmare, and a lot of times when they were challenging what we were doing or trying to accomplish with the home they would tell us that, “no, this is our system, this is how you guys have to operate,” well, we knew if we followed their system we weren’t going to be able maximize this property’s potential.
Looking back, I mean, we fought and battled and sued and received lawsuits from a lot of cities out there because were flipping so many properties and they were just adapting to all of these foreclosures and they didn’t know how to deal with the overwhelm of these junky properties in their city. So, we’re trying to clean them up and they essentially made us guinea pigs because we were doing such high volume they were kind of using us as test rats to say, “well, this is how we would essentially like this building code to work,” but we knew that the national residential code they were working by was 2006 so we challenged everything. As soon as you start challenging your government you’re asking for a revolt. I mean, that’s just the way it was for us.
I mean, luckily nothing got too out of hand, but when I look back and say, “what could have went smoother? How could we have made this more synergized?” it would have been working better with our cities and our building officials to say, “hey, here’s what we’re doing. Help us out. Let’s play your game”.
Josh: Yeah, and that’s what I was going to ask you. You know, what would you recommend to other people who may not have the, I don’t know, big brass ones to go and fight the local building inspectors and fight local municipalities about what they wanted. I mean, how do you play nice with those guys? I personally have had some pretty hellish interactions with building inspectors and they could really, really make your life absolutely miserable if things go the wrong way. So, what’s your best piece of advice for making things go smoothly with these guys?
Erik: You know, you have to find the perfect balance between kissing their ass and making sure that you’re following your own program, but if your goal and objective is to stay small and not grow in life don’t grow the cities. If you’re a growth junky and you want to accomplish what nobody else is doing be prepared for a little bit of battle, but be educated. You know, appear to be a normal guy. When you show up in a nice luxury car and you’re meeting these building inspectors, you know, we were young kids at the time. We were only 25-27 years old and these building inspectors are pulling up saying, “man, you guys are young flipping a lot of properties,” they only think that we’re making an absolutely ton of money so now the jealousy factor starts coming in. Now they just have an eye out to catch you anywhere that they possible can.
So, find the perfect blend of being educated, kissing a little bit of butt, but also making sure that you communicate a lot with them. We started to get to the point where we had no other choice but to sit down and say, “we’ve gotta find a common remedy or nobody’s going to accomplish anything,” you know?
Josh: Yeah, well last question before we move on to the next segment here: if you were to start over today, knowing what you know now, what would you do? How would you begin your business differently if you could do anything?
Erik: You know, that’s a very good question because a few years ago we did just that. We picked up and I moved down here to Florida and we essentially had to recreate the business we built in Michigan and just duplicate it down here so now our main goal is to focus on a marketing machine. You know, we have the financing in place. We don’t so much identify the buyers anymore that we can quickly turn properties to so we’ve only focused on building an outstanding marketing machine that delivers us leads that we can kind of pick and choose and say no to these ones and focus more on these ones, and have the financing behind you to where—because anytime you’re wholesaling properties you’re in a pinch. You’re racing against time before your contract expires, your inspection period, you’re trying to get your buyer in there and sometimes you’re fudging things together and it’s too tight.
So, we focused on the marketing and the financing to make sure that when we did have an opportunity we don’t have to act fast anymore. We don’t ever want to feel the pressure to where we have to sell off a majority of the equity just because we’re in a position. So, now we’re at a point where we want to maximize everything and in order to do that down here it came down the marketing and making sure we had the financing to capture the equity when we found it.
Brandon: Yeah, I love that. I think that’s great. I love the term “marketing machine” we talked about that a couple times on the podcast cause that’s really what it is. It works and it delivers consistent and persistent, like you said, leads and I love that. So, cool. Alright, well, hey let’s move on to—
It’s Time for The Fire Round
Brandon: Alright, these questions come directly from the BiggerPockets forums and number one I’m going to ask you: what is the one essential question that you should ask a real estate mentor? If you’re trying to attract, let’s say you’re trying to attract a real estate mentor, what’s one question you should ask them besides “will you be my mentor”?
Erik: You know, one of the things that I still ask my mentor every time that we get together is: what do you wish you would have done differently? And there’s a lot of wisdom that can be found in that question because if we all think about the real reason we got into real estate it was to have a better quality of life, and I don’t know if anybody else is like me, but when I achieve one ground breaking breakthrough in my life I’m already focused on my next summit and where I’m going to next.
So, when you have a conversation with these mentors that have achieved greatness and done all these deals you really soak up that wisdom and what their response is because a lot of it comes back to when you’re making high income, when you’re buying and owning your time, what essentially you get back to is living and enjoying a life. That’s pretty much why all of us got into real estate, but we probably all work harder than most people who work corporate jobs, I mean, it’s just a part of the industry is that if you want to be successful you’ve gotta work hard.
So, one of the questions that I always ask my mentors is: do you have any regrets about your success and what would you have done differently? I really lean in and focus on those responses.
Josh: Alright, right on. Next question: for the overwhelmed investor completely new to real estate what would be the one thing you would tell them?
Erik: Learn marketing and negotiation. The way that I view real estate is a lot different than most investors. When people come up and ask me what I do I’m a real estate marketer and I capture equity for a living. That’s what I do. I don’t look at myself as—I would say my partner’s an investor, but I’m more of a real estate marketer because what I focus on is leads coming in and capturing that equity. I’m like one of those people at the rodeo, you know, I’m sitting on my horse and I’ve got the bull there, you swing open gate, you run out, you lasso it up, you run and tie up the legs, I throw my hands up and that’s me in real estate. I’m after the pursuit. So, one of the things that has revolutionized our business is being masters of marketing where we control the lead sources that come in and being able to negotiate regardless of what that situation is. Whether you’re getting a call on a war-zone property that almost anybody can negotiate a war-zone deal that nobody wants, but when the call comes in on a fifty-unit apartment building you’ve gotta be a chameleon that can really appeal to that person, provide a little bit of value, and know that you can take that property down. So, marketing and negotiation is where I spent the majority of my time nowadays.
Josh: That’s great.
Brandon: Cool, and I think that’s where the, wholesalers especially, need to spend a majority of their time. I think that makes perfect sense. Great. What’s been your worst investment?
Erik: You mean as far as financial-wise, real estate-wise?
Brandon: You pick. We’ll leave it general. Is there anything that just stands out as, “that was bad”?
Erik: The worst investment is something that doesn’t give you a return. So, the way that our lives are set up we don’t go to bars, we don’t club it up with our profits, I think those are bad investments to me. I mean, if I make a bad real estate investment deal that I learn from it’s not a bad investment, you know, so maybe I’m not perfectly qualified to answer that question, but anything that doesn’t have a return or allow us to grow is a bad investment in my eyes because we’re all about growth and experiencing growth.
Josh: Nice. What’s the most creative marketing technique you’ve ever used?
Erik: The drunk letter.
Josh: The drunk letter? Really?
Erik: I don’t know if—I don’t have one of the letters here on my desk, but—
Josh: You’ve got all sorts of new stuff for us.
Brandon: Yeah, I don’t—
Josh: What’s a drunk letter?
Erik: Yeah, we had a situation a few years ago where we had a property that we were essentially unable to sell and the way that we used to sell some of our properties is when we bought a home and physically closed on it and took possession and now we’re ready to sell it rather than just listing in on the MLS we were ready to get our marketing going the day that we closed on it and mail everybody that recently paid cash for a property within that neighborhood or subdivision. So, we had a property that we had called everybody, you know, we reached out to the wholesalers and the buyers and nobody really wanted the deal.
So, what we essentially did is I looked at our marketing piece which was just a white envelope and it had a yellow piece of paper that says, “I need to sell my property that’s one near what you own at such in such street,” and I kept looking at it and saying, “how can I get a better response from this mailer?” So, what I realized is our return address was coming from our Main Street Corporate Headquarters so what I needed to do was kind of flip the script because I know how to appeal to people’s greed. When somebody can take advantage of a desperate seller that’s when you’re going to find a motivated buyer, in my opinion.
So, what we did: we took the address of the property that we wanted to sell and on the outside of that envelope, I mean, I write with my left hand so I wrote that thing out in my right so it looked like I was drunk. So, I hand addressed it to all the buyers, did the return mailer from the property I needed to sell and then in red ink I drew an arrow and said, “I desperately need to sell this property”. You tear open that mailer, you flip it open to a yellow sheet of paper that says, “urgent notice: I desperately need to sell my property near the one you own at such-in-such street. I own it free and clear, the taxes are paid, I’ve had it listed with a realtor and I need out now. Take a drive by, call me at this number, and I will let you inside,” so it makes it seem like I live at this property so when they call me and say, “well, I’m out front. Can you let me inside?” Yeah, here’s the lockbox. Now they’ve figured out that I’m a clever, savvy investor, but I got the open reader and the response that we needed and we sold that property. That allowed us to really—we kind of played that out in our market very quickly cause people picked up on it very quickly, but we sold a lot of properties using the drunk letter because that’s what people want is somebody they can totally take advantage of the situation.
Brandon: That’s funny.
Josh: Wow, so you were preying on the greed of other greedy, shady investors.
Erik: Sure enough, fair enough.
Josh: They show up, they think that this poor drunken guy is gonna and they show up to take advantage of you and you flip the script.
Josh: That is pretty, pretty smart and good on you on taking advantage of those guys.
Brandon: You’re like Dexter, the guy who kills serial killers.
Josh: You’re calling him the serial killer killer?
Brandon: Yeah, you’re like the Dexter of real estate I love it. Alright, moving on. We’ve gotta get out of here so we’re going to end here with our—
Brandon: Alright, these questions we ask everyone. So, hopefully you know what’s coming, if not eh, but here you go. Number one: what is your favorite real estate book?
Erik: Audio or book?
Josh: Book. Doesn’t matter.
Brandon: Well, if that’s an audio book that counts.
Erik: You know, I’ve been glued to everything by Mike Kent lately. I just had the pleasure of speaking with Mike out in Vegas and I met him about 2 years ago. So, I’ve been listening to Mike Kent who’s Don’t Get Voted Off Real Estate Island. Mike is a non-guru who has 30 years of no-ego wisdom behind his teaching abilities. Again, he’s not a guru. He shares it straight from his experience. He has no ego, there’s no bragging in his material. So, I really, I mean, I listen to it over and over. It’s been in my CD changer for over 18 months now on repeat.
Brandon: Cool, well I haven’t read it.
Josh: What’s a CD changer?
Erik: I’m still old school, man. I haven’t gotten into the whole iPod thing.
Josh: I’m just kidding. Alright, what about favorite business book?
Erik: My favorite business book. I would have to say—
Josh: The Book on Creative Finance from Brandon, I mean, what?
Erik: I would have to say this is a book that not everybody, this is a book that was published back in 1927. It’s called Principals of Marketing, I don’t know if you guys can read it, but this is a book that I found in a house of all places. It’s called Principals of Marketing by Maynard Beckman and absolute wisdom in this book so it’s been one of my favorite reads ever.
Brandon: Nobody’s ever said that one before. I love new suggestions. I don’t even know if we’ll find that on Amazon, but if we can I will link to it.
Erik: They’re 99 cents on Amazon I had somebody tell me that.
Brandon: Oh, good.
Josh: Cool. Nice. What about hobbies? What do you do for fun outside of real estate? What is your life outside of real estate?
Erik: I’m a family man. I have a wife and a son. We spend a lot of time on the beach at the ocean, we race motocross, we travel a lot, we spend a lot of time down in the Florida Keys. We scuba, we snorkel, we jet ski, you know, we try to create experiences. We’re not really big on material possessions. They don’t really provide much value to us. We have a pretty simple set way of life, but most of our money is spent on experiencing what life is all about. So, spending time in the ocean with friends, Bar-B-Cueing, eating, you know, the simple stuff.
Brandon: Can I come over for a Bar-B-Cue?
Erik: Absolutely. Anytime you guys are ever in Fort Lauderdale call me and we’ll do it.
Brandon: I actually go to Fort Lauderdale once a year cause I always end up on a cruise that leaves from Fort Lauderdale. My parents are cruisers so we go with them a lot. Yeah, I’m coming over.
Erik: Fly in a day or two early.
Josh: His family likes to cruise. I’m just, double meaning. I don’t know. Alright.
Brandon: Moving on. Last question: well, from me anyway, what do you believe sets apart successful real estate investors from those who fail, give up, or never get started?
Erik: In my opinion I think those that have a vision of their own that don’t just get into this business for the money side of it. One of the things that my business partner always talks about is we meet a lot of very wealthy people who are emotionally bankrupt. They have no character, they have no drive, their life has just become a numbed existence where you could make all the great income in the world, but you don’t have the character to show any of it.
So, I think when you’re true to your own vision you wake up with conviction every day and believe in what you’re doing that’s the true side of success. Real estate has the ability to make astronomical amounts of money, but if you’ve become a slave number one, if it’s really put a shame to your character you’re not truly successful, in my eyes anyway, even though you have all the money in the world. I think you’re successful when you’re living out your dream even if your dream is to make $30,000 a year and to play video games all day. You know, when you’re true to your own dream. Not what your mentor or the latest seminar told you you have to do. Your dream, why you wake up every day and do what you do, that’s what makes people successful in my eyes.
Brandon: I love that. Very cool.
Josh: Awesome. Well, Erik, it’s been a pleasure, man, really. This has been a fascinating show. Lots and lots of things that we haven’t heard before which is phenomenal. Really, really happy about that. Show 93 on the BiggerPockets podcast. People can check out the show notes at BiggerPockets.com/show93. Where can they find out more information about you?
Erik: The only thing that I have available is on social media, Facebook.com/TheErikStark.
Josh: Nice, and you’re on BiggerPockets as well.
Erik: Yeah, BiggerPockets, yeah.
Josh: Fantastic. Well, thanks so much for being on the show and we look forward to, actually, really quick, I forget about this all the time. Guys, if you have any questions you can ask Erik on the show notes at BiggerPockets.com/show93 and he’ll be there to help you out and answer them.
Otherwise, Erik, thank you so much for coming on we really appreciate it.
Erik: Thank you guys. It was my pleasure.
Brandon: Alright, we’ll talk to you later.
Erik: Take it easy.
Josh: Alright everybody that was Erik Stark on show 93 of the BiggerPockets podcast. That was a really, really good show. I’m kind of blown away by a few of these things, again, including that drunk letter which is a really, really great idea. So, we just want to thank Erik again for coming on board. Otherwise, guys, thank you for listening. Show 93. We’re getting close to 100! More milestones coming up which is fabulous, but again to everybody who’s been a part of BiggerPockets over the last 10 years I really, really want to thank you.
To everybody who’s participated in our community, 10 million forum posts, as I mentioned at the front of the post, 10 million forums posts which is unbelievable.
Brandon: Isn’t it 1 million?
Josh: Oh, shoot, it was 1 million! But I was thinking about Austin Powers! Oh, my, “10 billion!” Alright, 1 million forum posts. ONE million. Which is still pretty darn impressive if you ask me. Not quite 10.
Brandon: Next year we’ll hit 10.
Josh: Alright, alright. We’ll hit 10. Well, if you haven’t engaged, if you haven’t participated in BiggerPockets yet, there’s a lot of people getting involved. There’s a lot of cool stuff happening, a lot of people getting together, a lot of people helping each other out networking, doing deals, doing business so jump on there. Go to BiggerPockets.com/forums and participate in the forums.
Otherwise, join us on the other social networks. Keep listening to the podcast. Keep getting involved. Keep asking questions. Get out there. Make things happen. Do deals, and I’m Josh Dorkin signing off.
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