Real Estate Investing VS Real Estate DEAL MAKING

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

Most of us are real estate investors, or real estate service providers. Few are real estate DEAL MAKERS (even if they think they are).

Real estate investing can grow net worth, provide cash flow, and enable the investor to accumulate a substantial “nest egg”. If done to scale, especially with “fee income” (money earned on other people’s investment with you as manager, syndicator, or asset acquisition specialist), can make you rich. But not wealthy.

For those that start out with little capital (substantially less than the $50 million Fred Trump provided Donald in 1966 to purchase an apartment complex in Ohio), DEAL MAKING is the accelerator necessary to accelerate wealth beyond the limits of what “investing” can provide.

It's called "deal making" because deals are not "found", they're "made". Looking on Loopnet, or MLS, identifying the few reasonably priced properties, oﬀering 15% below asking, and negotiating a 10% "discount, is NOT deal making - it's investing.

Nothing wrong with that - I did a lot of that in Phoenix and Miami in 2012 - 2014, and was rewarded handsomely for my eﬀorts.

However, despite purchasing properties for seemingly give away prices, my return over the next 10 years was just (on the high side) of what you’d expect as an investor.

Deal Making ( In some of my previous posts I've chronicled specific deals I created) is a lot more "intense" than investing. The deal maker needs to utilize an out the box strategy and tactics to create a deal that provides an ROI multiples beyond that provided by "investing". So, what does it take to be able to "make" these deals?

1. Extensive knowledge of real estate in general (principles, financing, law) and of the property type in specific.

2. Experience in “putting deals together”.

3. Capital - although it doesn’t have to be YOUR capital

4. Access to credit

5. A willingness to be “laughed at” - by brokers, lenders, sellers, and title companies when you attempt to put the deal together under terms/prices that don’t allow them their easy transaction

6. A willingness to engage in sometimes lengthy negotiations where the opposite party didn’t always (LOL) respond well to your oﬀers

7. The ability to say NO

8. The persistence to try for the 5th, 10th, or 20th time

9. The time available to devote to these eﬀorts

10. Knowledge of strategies and tactics used to make great deals.

Whether or not you’re an investor, deal maker, or service provider, (or all three, like me) let us know what you think

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Ken M.

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

9mo

Quote from @Don Konipol:

Real Estate Investing VS Real Estate DEAL MAKING

Most of us are real estate investors, or real estate service providers. Few are real estate DEAL MAKERS (even if they think they are).

Nothing wrong with that - I did a lot of that in Phoenix and Miami in 2012 - 2014, and was rewarded handsomely for my eﬀorts.

However, despite purchasing properties for seemingly give away prices, my return over the next 10 years was just (on the high side) of what you’d expect as an investor.

1. Extensive knowledge of real estate in general (principles, financing, law) and of the property type in specific.

2. Experience in “putting deals together”.

3. Capital - although it doesn’t have to be YOUR capital

4. Access to credit

5. A willingness to be “laughed at” - by brokers, lenders, sellers, and title companies when you attempt to put the deal together under terms/prices that don’t allow them their easy transaction

6. A willingness to engage in sometimes lengthy negotiations where the opposite party didn’t always (LOL) respond well to your oﬀers

7. The ability to say NO

8. The persistence to try for the 5th, 10th, or 20th time

9. The time available to devote to these eﬀorts

10. Knowledge of strategies and tactics used to make great deals.

Whether or not you’re an investor, deal maker, or service provider, (or all three, like me) let us know what you think

I'd agree with your analysis, but I'd add most Bigger Pockets commenters to #5. Limited thinkers. Investors and real estate agents are confined to their way of thinking and if it works for them that's fine, but the world is bigger than that.

Deal makers are more flexible, think outside the box, aren't always trying to force a deal to work but are looking for ways to make it happen. And yes, sometimes it takes more money but the squeeze is worth the juice. And you need to know when to walk away.

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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
9mo
Quote from @Don Konipol:

Real Estate Investing VS Real Estate DEAL MAKING

Most of us are real estate investors, or real estate service providers. Few are real estate DEAL MAKERS (even if they think they are).

Real estate investing can grow net worth, provide cash flow, and enable the investor to accumulate a substantial “nest egg”. If done to scale, especially with “fee income” (money earned on other people’s investment with you as manager, syndicator, or asset acquisition specialist), can make you rich. But not wealthy.

For those that start out with little capital (substantially less than the $50 million Fred Trump provided Donald in 1966 to purchase an apartment complex in Ohio), DEAL MAKING is the accelerator necessary to accelerate wealth beyond the limits of what “investing” can provide.

It's called "deal making" because deals are not "found", they're "made". Looking on Loopnet, or MLS, identifying the few reasonably priced properties, oﬀering 15% below asking, and negotiating a 10% "discount, is NOT deal making - it's investing.

Nothing wrong with that - I did a lot of that in Phoenix and Miami in 2012 - 2014, and was rewarded handsomely for my eﬀorts.

However, despite purchasing properties for seemingly give away prices, my return over the next 10 years was just (on the high side) of what you’d expect as an investor.

Deal Making ( In some of my previous posts I've chronicled specific deals I created) is a lot more "intense" than investing. The deal maker needs to utilize an out the box strategy and tactics to create a deal that provides an ROI multiples beyond that provided by "investing". So, what does it take to be able to "make" these deals?

1. Extensive knowledge of real estate in general (principles, financing, law) and of the property type in specific.

2. Experience in “putting deals together”.

3. Capital - although it doesn’t have to be YOUR capital

4. Access to credit

5. A willingness to be “laughed at” - by brokers, lenders, sellers, and title companies when you attempt to put the deal together under terms/prices that don’t allow them their easy transaction

6. A willingness to engage in sometimes lengthy negotiations where the opposite party didn’t always (LOL) respond well to your oﬀers

7. The ability to say NO

8. The persistence to try for the 5th, 10th, or 20th time

9. The time available to devote to these eﬀorts

10. Knowledge of strategies and tactics used to make great deals.

Whether or not you’re an investor, deal maker, or service provider, (or all three, like me) let us know what you think

I'd agree with your analysis, but I'd add most Bigger Pockets commenters to #5. Limited thinkers. Investors and real estate agents are confined to their way of thinking and if it works for them that's fine, but the world is bigger than that.

Deal makers are more flexible, think outside the box, aren't always trying to force a deal to work but are looking for ways to make it happen. And yes, sometimes it takes more money but the squeeze is worth the juice. And you need to know when to walk away.

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Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
9mo
Quote from @Don Konipol:

Real Estate Investing VS Real Estate DEAL MAKING

Most of us are real estate investors, or real estate service providers. Few are real estate DEAL MAKERS (even if they think they are).

Real estate investing can grow net worth, provide cash flow, and enable the investor to accumulate a substantial “nest egg”. If done to scale, especially with “fee income” (money earned on other people’s investment with you as manager, syndicator, or asset acquisition specialist), can make you rich. But not wealthy.

For those that start out with little capital (substantially less than the $50 million Fred Trump provided Donald in 1966 to purchase an apartment complex in Ohio), DEAL MAKING is the accelerator necessary to accelerate wealth beyond the limits of what “investing” can provide.

It's called "deal making" because deals are not "found", they're "made". Looking on Loopnet, or MLS, identifying the few reasonably priced properties, oﬀering 15% below asking, and negotiating a 10% "discount, is NOT deal making - it's investing.

Nothing wrong with that - I did a lot of that in Phoenix and Miami in 2012 - 2014, and was rewarded handsomely for my eﬀorts.

However, despite purchasing properties for seemingly give away prices, my return over the next 10 years was just (on the high side) of what you’d expect as an investor.

Deal Making ( In some of my previous posts I've chronicled specific deals I created) is a lot more "intense" than investing. The deal maker needs to utilize an out the box strategy and tactics to create a deal that provides an ROI multiples beyond that provided by "investing". So, what does it take to be able to "make" these deals?

1. Extensive knowledge of real estate in general (principles, financing, law) and of the property type in specific.

2. Experience in “putting deals together”.

3. Capital - although it doesn’t have to be YOUR capital

4. Access to credit

5. A willingness to be “laughed at” - by brokers, lenders, sellers, and title companies when you attempt to put the deal together under terms/prices that don’t allow them their easy transaction

6. A willingness to engage in sometimes lengthy negotiations where the opposite party didn’t always (LOL) respond well to your oﬀers

7. The ability to say NO

8. The persistence to try for the 5th, 10th, or 20th time

9. The time available to devote to these eﬀorts

10. Knowledge of strategies and tactics used to make great deals.

Whether or not you’re an investor, deal maker, or service provider, (or all three, like me) let us know what you think

Real estate deal making is where I had to be when I started. Being self-employed, I did not know I could get Loans.
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David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
9mo
When I started I didn't have any money and had a low paying entry level job and no rich parents. The first 11 properties that I bought were 100% financed one way or another. It was a matter of necessity. I didn't call it deal making, I called it survival.
4 Reply
Alfath AhmedBusiness Member
Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
9mo
Quote from @Don Konipol:

Real Estate Investing VS Real Estate DEAL MAKING

Most of us are real estate investors, or real estate service providers. Few are real estate DEAL MAKERS (even if they think they are).

Real estate investing can grow net worth, provide cash flow, and enable the investor to accumulate a substantial “nest egg”. If done to scale, especially with “fee income” (money earned on other people’s investment with you as manager, syndicator, or asset acquisition specialist), can make you rich. But not wealthy.

For those that start out with little capital (substantially less than the $50 million Fred Trump provided Donald in 1966 to purchase an apartment complex in Ohio), DEAL MAKING is the accelerator necessary to accelerate wealth beyond the limits of what “investing” can provide.

It's called "deal making" because deals are not "found", they're "made". Looking on Loopnet, or MLS, identifying the few reasonably priced properties, oﬀering 15% below asking, and negotiating a 10% "discount, is NOT deal making - it's investing.

Nothing wrong with that - I did a lot of that in Phoenix and Miami in 2012 - 2014, and was rewarded handsomely for my eﬀorts.

However, despite purchasing properties for seemingly give away prices, my return over the next 10 years was just (on the high side) of what you’d expect as an investor.

Deal Making ( In some of my previous posts I've chronicled specific deals I created) is a lot more "intense" than investing. The deal maker needs to utilize an out the box strategy and tactics to create a deal that provides an ROI multiples beyond that provided by "investing". So, what does it take to be able to "make" these deals?

1. Extensive knowledge of real estate in general (principles, financing, law) and of the property type in specific.

2. Experience in “putting deals together”.

3. Capital - although it doesn’t have to be YOUR capital

4. Access to credit

5. A willingness to be “laughed at” - by brokers, lenders, sellers, and title companies when you attempt to put the deal together under terms/prices that don’t allow them their easy transaction

6. A willingness to engage in sometimes lengthy negotiations where the opposite party didn’t always (LOL) respond well to your oﬀers

7. The ability to say NO

8. The persistence to try for the 5th, 10th, or 20th time

9. The time available to devote to these eﬀorts

10. Knowledge of strategies and tactics used to make great deals.

Whether or not you’re an investor, deal maker, or service provider, (or all three, like me) let us know what you think

This is great, love the post. I've been buying rental units and it has been under market value. Really after, doing many trasnactions, did i realize oh there are so many ways to strategize and deal.
I'm transition into mid-sized purchases now around 20-40 units, I think I can get pretty creative here.
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Jacob Thorpe
Lender · Lake Geneva WI, USA · Member since 2023 · 141 posts · 72 votes
9mo
Great knowledge. I love the action I think that is a key component between the two types, I enjoy building the deal as small as my deals are as I am relatively new when compared to a lot of the top guys here. Tough getting the train moving, without a Fred, but no fun in that.
Had a great project going on six/seven months ago. Will start again after winter passes. Put together this deal, attempted to use financing, got killed in committee review. Cash heavy project. Sometimes, lenders/agents/ title.. try explaining all the facets and they dont understand what the full sight picture is. But when they verify pieces can work I feel I am on the right track. There's a few top guys who will take my calls now and again - they get it, and that sometimes is the boost that keeps me going for the next few weeks. Greatly looking forward to 2026.
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- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Jacob Thorpe:
  
  Great knowledge. I love the action I think that is a key component between the two types, I enjoy building the deal as small as my deals are as I am relatively new when compared to a lot of the top guys here. Tough getting the train moving, without a Fred, but no fun in that.
  Had a great project going on six/seven months ago. Will start again after winter passes. Put together this deal, attempted to use financing, got killed in committee review. Cash heavy project. Sometimes, lenders/agents/ title.. try explaining all the facets and they dont understand what the full sight picture is. But when they verify pieces can work I feel I am on the right track. There's a few top guys who will take my calls now and again - they get it, and that sometimes is the boost that keeps me going for the next few weeks. Greatly looking forward to 2026.
  Convincing institutional lenders to go outside their comfort zone is THE most difficult task in putting a deal together. Knowing WHO to pitch and WHEN come with experience. Lots of false starts, “almost”, turndowns and frustration before you strike gold. But it takes a relatively few of these type “deals” to build a “significant” net worth.
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- Chris SeveneyBusiness Member
  Moderator
  Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Jacob Thorpe:
  
  Great knowledge. I love the action I think that is a key component between the two types, I enjoy building the deal as small as my deals are as I am relatively new when compared to a lot of the top guys here. Tough getting the train moving, without a Fred, but no fun in that.
  Had a great project going on six/seven months ago. Will start again after winter passes. Put together this deal, attempted to use financing, got killed in committee review. Cash heavy project. Sometimes, lenders/agents/ title.. try explaining all the facets and they dont understand what the full sight picture is. But when they verify pieces can work I feel I am on the right track. There's a few top guys who will take my calls now and again - they get it, and that sometimes is the boost that keeps me going for the next few weeks. Greatly looking forward to 2026.
  Convincing institutional lenders to go outside their comfort zone is THE most difficult task in putting a deal together. Knowing WHO to pitch and WHEN come with experience. Lots of false starts, “almost”, turndowns and frustration before you strike gold. But it takes a relatively few of these type “deals” to build a “significant” net worth.
  
  Another great post and reading it and your follow up of getting lenders outside comfort zone is extremely difficult. You are correct in that you need to know who to go to and when.
  Unfortunately many brokers out there find deals on BP or FB etc. and tell a borrower they can get the deal done (love the 0% financing or 2nd liens on underwater properties) and in reality they cannot as they are not experienced in doing exactly what you wrote.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
9mo
OP definitely two different objectives and approaches. Our deal objectives are 100% to 400% cash on cash in one year up to 5 years depending on type of project. These deals also have monthly cash flow on the backside.
1. Not as strong as your past examples on deal making on the financing side.
2. We have a heavy net asset base and use that strength.
3. We stick with our lenders and don’t chase interest rates. They ask us if we need funding.
4. Once you build a solid deal track record and stay with the same lenders they just need a solid deal analysis. Explain the concept and they sale to their loan committee.
5. Start small and build a track record.
6. As you and others mentioned set a limit to say no and walk away. Move on to the next deal.
7. I responded to another post asking for deal examples. Looked in their area and gave them a Deal example I would expect to make 200% COC in 2 years. Without even walking thru the thought process they said it won't work. This is my fault. I approached from a Deal Making standpoint versus their deal investor standpoint. They are a Realtor and GC per their description, but I don't think Deal Making is in their tool box. Which is fine. Maybe a different Risk Reward matrix than mine.
1 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Henry Clark:
  
  OP definitely two different objectives and approaches. Our deal objectives are 100% to 400% cash on cash in one year up to 5 years depending on type of project. These deals also have monthly cash flow on the backside.
  1. Not as strong as your past examples on deal making on the financing side.
  2. We have a heavy net asset base and use that strength.
  3. We stick with our lenders and don’t chase interest rates. They ask us if we need funding.
  4. Once you build a solid deal track record and stay with the same lenders they just need a solid deal analysis. Explain the concept and they sale to their loan committee.
  5. Start small and build a track record.
  6. As you and others mentioned set a limit to say no and walk away. Move on to the next deal.
  7. I responded to another post asking for deal examples. Looked in their area and gave them a Deal example I would expect to make 200% COC in 2 years. Without even walking thru the thought process they said it won't work. This is my fault. I approached from a Deal Making standpoint versus their deal investor standpoint. They are a Realtor and GC per their description, but I don't think Deal Making is in their tool box. Which is fine. Maybe a different Risk Reward matrix than mine.
  Henry, you’ve built a SUSTAINABLE real estate investment/development business. While there are deal making pieces, the deal making strategies/tactics I’m referring to are basically “one off”. You’ve actually achieved a “higher” level of recurring profits.
  More kudos to you. For my part, I tried development, and while I did make some money, I realized I’m an INVESTOR, not a developer (you’re BOTH).
  
  To me here are the different types in the field of real estate (many people fall into more than one type)
  
  1. Real estate business - broker, property manager, advisor, fix n flip, wholesaling, etc.
  
  2. Real estate developer - Typically assembles land, architectural plans, zoning, financing, capital raise, builds, stabilizes, holds or sells
  
  3. Real estate investor - invests in real estate actively, passively, in between, or both.
  
  4. Doesn’t care, just wants to become wealthy
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- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Henry Clark:
  
  OP definitely two different objectives and approaches. Our deal objectives are 100% to 400% cash on cash in one year up to 5 years depending on type of project. These deals also have monthly cash flow on the backside.
  1. Not as strong as your past examples on deal making on the financing side.
  2. We have a heavy net asset base and use that strength.
  3. We stick with our lenders and don’t chase interest rates. They ask us if we need funding.
  4. Once you build a solid deal track record and stay with the same lenders they just need a solid deal analysis. Explain the concept and they sale to their loan committee.
  5. Start small and build a track record.
  6. As you and others mentioned set a limit to say no and walk away. Move on to the next deal.
  7. I responded to another post asking for deal examples. Looked in their area and gave them a Deal example I would expect to make 200% COC in 2 years. Without even walking thru the thought process they said it won't work. This is my fault. I approached from a Deal Making standpoint versus their deal investor standpoint. They are a Realtor and GC per their description, but I don't think Deal Making is in their tool box. Which is fine. Maybe a different Risk Reward matrix than mine.
  Henry, you’ve built a SUSTAINABLE real estate investment/development business. While there are deal making pieces, the deal making strategies/tactics I’m referring to are basically “one off”. You’ve actually achieved a “higher” level of recurring profits.
  More kudos to you. For my part, I tried development, and while I did make some money, I realized I’m an INVESTOR, not a developer (you’re BOTH).
  
  To me here are the different types in the field of real estate (many people fall into more than one type)
  
  1. Real estate business - broker, property manager, advisor, fix n flip, wholesaling, etc.
  
  2. Real estate developer - Typically assembles land, architectural plans, zoning, financing, capital raise, builds, stabilizes, holds or sells
  
  3. Real estate investor - invests in real estate actively, passively, in between, or both.
  
  4. Doesn’t care, just wants to become wealthy
  
  there is a huge difference of being an investor and being in the business as a developer creating inventory.. when creating inventory your creating value with your hard work. Investor tends to let the market and cash flow create value.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
9mo
Spot on @Don Konipol
Your only missing the key attributes to a deal maker; we never look at a property and ask IF it works, we look at every potential and ask HOW does it work.
It's been said every property has a home-run number. It's more accurate to say every property has a home-run tactic.
The only "if" is if the necessary parties will come to the terms that make it work, or not.
You miss 100% of the shot's you don't take....
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Ying Tang
Member since 2025 · 322 posts · 121 votes
9mo
Great post! Thanks for sharing!!

I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
1 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
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- Jacob Thorpe
  Lender · Lake Geneva WI, USA · Member since 2023 · 141 posts · 72 votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
  An issue I am having at the moment as a broker is getting solid business from agents and establishing agent relationships. I booked a call with an agent and we were talking for nearly two hours where I was showing a solid new client entry to closed where agent and myself (broker) would take the client thru the full life cycle of building rapport, assessing wants and needs / what asset to place them in (turn key buy and hold, flip, value add BRRR, commercial, NC). I suggested to the agent that working with me will be a more sincere relationship, less transactional, putting out question marks proactively and will lead to a higher closing rate, a faster closing timeline, and better client management. Helping these investors land exactly where they want to land instead of transactional based relationships where I just write a loan and say "good luck". So I am willing to work with the agent in assessing their comps and proactively building a capital stack or finance solution, qualifying borrower and assessing the pipeline ahead of time so as theyre going thru the process it is a far better experience. An example would be, investor wants to do a value add.. so we would check the comps where it stands and I would give insight as to what would be a good entry price.. some of the entry prices were already 60-68% of the suspected ARV.. after rehab and closing, leaving them at 82% of the ARV not taking into consideration finance costs and holding costs. IMO a good flip or buy and hold should net baseline 15%. It can get more complicated for buy and holds when an investor wants to bridge out of hard money, season, and then get into the long term hold... have to prequal them to see.. is conventional or DSCR a suitable option.. check DTI.. check 1007.. whats doable.. I believe this is going above and beyond. But I have been hit with "this is too good to be true" or "what is different than just going to a lender when theyre ready" or "i dont want to push my clients into the arms of a lender" - I am attempting really to go above and beyond just being a broker. Not only because I have to so I can eat (more MLO's out there now than ever, Ive been told) but because I do enjoy it.
  0 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Jacob Thorpe:
  
  Quote from @Don Konipol:
  
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
  An issue I am having at the moment as a broker is getting solid business from agents and establishing agent relationships. I booked a call with an agent and we were talking for nearly two hours where I was showing a solid new client entry to closed where agent and myself (broker) would take the client thru the full life cycle of building rapport, assessing wants and needs / what asset to place them in (turn key buy and hold, flip, value add BRRR, commercial, NC). I suggested to the agent that working with me will be a more sincere relationship, less transactional, putting out question marks proactively and will lead to a higher closing rate, a faster closing timeline, and better client management. Helping these investors land exactly where they want to land instead of transactional based relationships where I just write a loan and say "good luck". So I am willing to work with the agent in assessing their comps and proactively building a capital stack or finance solution, qualifying borrower and assessing the pipeline ahead of time so as theyre going thru the process it is a far better experience. An example would be, investor wants to do a value add.. so we would check the comps where it stands and I would give insight as to what would be a good entry price.. some of the entry prices were already 60-68% of the suspected ARV.. after rehab and closing, leaving them at 82% of the ARV not taking into consideration finance costs and holding costs. IMO a good flip or buy and hold should net baseline 15%. It can get more complicated for buy and holds when an investor wants to bridge out of hard money, season, and then get into the long term hold... have to prequal them to see.. is conventional or DSCR a suitable option.. check DTI.. check 1007.. whats doable.. I believe this is going above and beyond. But I have been hit with "this is too good to be true" or "what is different than just going to a lender when theyre ready" or "i dont want to push my clients into the arms of a lender" - I am attempting really to go above and beyond just being a broker. Not only because I have to so I can eat (more MLO's out there now than ever, Ive been told) but because I do enjoy it.
  
  We have 15,000 commercial mortgage brokers on our contact list. 15 of which bring us all our deals. 14,500 we never hear from. 450 bring us deals that in no way shape or form are even close to our (well publicized) criteria. 50 bring us deals that may make sense.
  I’ll state again what I’ve stated many times - a great many people in the real estate or mortgage brokerage industry are NOT real estate professionals; they’re either professional sales persons who show up to sell whatsoever “hot” at the moment, or people looking for a part time work whenever you want gig.
  We do tons of outreach to identify and establish relationships with the professionals with whom we can establish mutually beneficial relationships.
  Private Mortgage Financing Partners, LLC
  Website View Page
  1 Reply
- Ken M.
  Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Jacob Thorpe:
  
  Quote from @Don Konipol:
  
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
  An issue I am having at the moment as a broker is getting solid business from agents and establishing agent relationships. I booked a call with an agent and we were talking for nearly two hours where I was showing a solid new client entry to closed where agent and myself (broker) would take the client thru the full life cycle of building rapport, assessing wants and needs / what asset to place them in (turn key buy and hold, flip, value add BRRR, commercial, NC). I suggested to the agent that working with me will be a more sincere relationship, less transactional, putting out question marks proactively and will lead to a higher closing rate, a faster closing timeline, and better client management. Helping these investors land exactly where they want to land instead of transactional based relationships where I just write a loan and say "good luck". So I am willing to work with the agent in assessing their comps and proactively building a capital stack or finance solution, qualifying borrower and assessing the pipeline ahead of time so as theyre going thru the process it is a far better experience. An example would be, investor wants to do a value add.. so we would check the comps where it stands and I would give insight as to what would be a good entry price.. some of the entry prices were already 60-68% of the suspected ARV.. after rehab and closing, leaving them at 82% of the ARV not taking into consideration finance costs and holding costs. IMO a good flip or buy and hold should net baseline 15%. It can get more complicated for buy and holds when an investor wants to bridge out of hard money, season, and then get into the long term hold... have to prequal them to see.. is conventional or DSCR a suitable option.. check DTI.. check 1007.. whats doable.. I believe this is going above and beyond. But I have been hit with "this is too good to be true" or "what is different than just going to a lender when theyre ready" or "i dont want to push my clients into the arms of a lender" - I am attempting really to go above and beyond just being a broker. Not only because I have to so I can eat (more MLO's out there now than ever, Ive been told) but because I do enjoy it.
  
  We have 15,000 commercial mortgage brokers on our contact list. 15 of which bring us all our deals. 14,500 we never hear from. 450 bring us deals that in no way shape or form are even close to our (well publicized) criteria. 50 bring us deals that may make sense.
  I’ll state again what I’ve stated many times - a great many people in the real estate or mortgage brokerage industry are NOT real estate professionals; they’re either professional sales persons who show up to sell whatsoever “hot” at the moment, or people looking for a part time work whenever you want gig.
  We do tons of outreach to identify and establish relationships with the professionals with whom we can establish mutually beneficial relationships.
  and thus @Don Konipol: you hit the nail on the head. So few actually even understand what you are looking for, so few actually take the time to ask, so few actually are trying to meet that need, so, so, few, but those who do are golden.
  
  The rest are what I simply call "wannabes" They mistake "being busy" with making progress.
  
  2 Reply
- James Hamling
  Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
  For Real Estate Agents, there is a wildly WRONG perception as to what a professional Investor Agent is, and how it's viable.
  
  The perception is; find an investor, and just do what you do with any buyer only modification is press for epic discounts. I say good luck with finding Lamobo's willing to accept Pinto pricing. Not viable, not in a duration or scale.
  
  The truth is there is really only 2 viable, scalable Investor Agent types.
  
  (A) The Deal Generator.
  
  This is a listing agent in the tried and true manner. Because is what every wholesaler is trying to recreate, being a listing agent. You go out into the wild, and dig. You generate buy opportunities from nothing. Some will be in excellent ready for full retail pricing condition. Others maybe a few things but still command retail action. But some will be those "disco revival" homes. Shag green carpet, floral vomit-pallet wall paper, and all the wood paneling. Aged mechanicals, roofs, windows and everything. Owned free and clear or dang near. And while you know for a measly 60, 70, 80k invested the sellers would get multiples back, they don't got it. Or they don't care, too much stress, time & energy. Or all of the above. And it makes a fantastic flip opportunity. Or maybe it's a probate situation, or a seller finance opportunity, or, or, or.....
  
  Point is. this agent would serve his investors well making for win-win-win situations.
  
  (B) The Networker.
  
  This is the agent who has put in the work to be in-the-know. Inserting self with the attorneys, contractors, bankers, PM's and what not so when there is a real estate situation, that ancillary professional say's "yeah, I know a guy". They are "that guy".
  ----
  
  Notice a common theme, at no point is cruising the MLS involved nor struggling for a seller to accept that which they have 0 desire in accepting. Nor trying to strong arm an investor into believing the $10k profit potential is well worth there $300k gamble. No, no, HELL no.
  
  If you don't have the grit to dedicate to becoming a good (A) or (B) stop fooling self that your an investor-anything, your NOT. And that's ok. The world needs retail agents.
  2 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @James Hamling:
  
  Quote from @Don Konipol:
  
  Quote from @Ying Tang:
  
  Great post! Thanks for sharing!!
  
  I just got "laughed at" by a listing agent today when a attempted a 15% discount... Feeling bad whole day.. and now feels much better after reading this😊
  A real estate broker is most successful when dealing with clients ready, willing and able to pay “market” value - or above and matching them with sellers willing to accept market value for their property.
  
  The successful investor doesn’t fit into this category. If the investor is utilizing MLS or its commercial equivalent to look for deals, then the investor whose successful will utilize offers to “probe”; that is test for sellers who are amenable to sell at investor terms. This means at rather large discounts to retail market value and/or advantageous seller financing terms. The vast majority of these “probes” result in either flat out rejected offers or counters that aren’t anywhere near doable. The agent doesn’t want to spend time with an investor that may make 20 “lowball” offers and them MAYBE find a willing seller.
  
  Hence, most agents that THINK they want to work with investors either really don’t, they just don’t know what working with an investor entails; or they really only want to work with an investor during “slow” markets. However, their training both as an agent/broker and salesperson in general makes it very hard for them to “turn down” potential business.
  
  For Real Estate Agents, there is a wildly WRONG perception as to what a professional Investor Agent is, and how it's viable.
  
  The perception is; find an investor, and just do what you do with any buyer only modification is press for epic discounts. I say good luck with finding Lamobo's willing to accept Pinto pricing. Not viable, not in a duration or scale.
  
  The truth is there is really only 2 viable, scalable Investor Agent types.
  
  (A) The Deal Generator.
  
  This is a listing agent in the tried and true manner. Because is what every wholesaler is trying to recreate, being a listing agent. You go out into the wild, and dig. You generate buy opportunities from nothing. Some will be in excellent ready for full retail pricing condition. Others maybe a few things but still command retail action. But some will be those "disco revival" homes. Shag green carpet, floral vomit-pallet wall paper, and all the wood paneling. Aged mechanicals, roofs, windows and everything. Owned free and clear or dang near. And while you know for a measly 60, 70, 80k invested the sellers would get multiples back, they don't got it. Or they don't care, too much stress, time & energy. Or all of the above. And it makes a fantastic flip opportunity. Or maybe it's a probate situation, or a seller finance opportunity, or, or, or.....
  
  Point is. this agent would serve his investors well making for win-win-win situations.
  
  (B) The Networker.
  
  This is the agent who has put in the work to be in-the-know. Inserting self with the attorneys, contractors, bankers, PM's and what not so when there is a real estate situation, that ancillary professional say's "yeah, I know a guy". They are "that guy".
  ----
  
  Notice a common theme, at no point is cruising the MLS involved nor struggling for a seller to accept that which they have 0 desire in accepting. Nor trying to strong arm an investor into believing the $10k profit potential is well worth there $300k gamble. No, no, HELL no.
  
  If you don't have the grit to dedicate to becoming a good (A) or (B) stop fooling self that your an investor-anything, your NOT. And that's ok. The world needs retail agents.
  
  Really good post with well made points.as usual James!
  Private Mortgage Financing Partners, LLC
  Website View Page
  0 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
9mo
I always called that level 3 investing: putting deals together that require multiple parties to agree on something that neither of them could do alone. They are one-of-kind constructs with tyically multi-year timelines and large pay offs. I have never done any of that - yet.
My goal has always been to make investing a repeatable process I can standardize and repeat. You have a very cockie-cutter structure: one seller to one buyer, standard finanzing, a high percentage of offers I make gets accepted (because ultimatley, I will pay enough to make the seller happy) and we close 100% of deals.
What I like about this type of investing is that every deal represents a tiny fraction of my net worth, so even at a (theoretical) 100% loss, it would not change my life. It is basically serial production on an assembley line.
In contrast: I have looked into developing/building industrial space, but that would mean all my eggs in one basket, hold your breath for a couple years and hope that you score a great industrial tenant... not something I need in my life.
I'd rather be skiing during the week ;-)
1 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Marcus Auerbach:
  
  I always called that level 3 investing: putting deals together that require multiple parties to agree on something that neither of them could do alone. They are one-of-kind constructs with tyically multi-year timelines and large pay offs. I have never done any of that - yet.
  My goal has always been to make investing a repeatable process I can standardize and repeat. You have a very cockie-cutter structure: one seller to one buyer, standard finanzing, a high percentage of offers I make gets accepted (because ultimatley, I will pay enough to make the seller happy) and we close 100% of deals.
  What I like about this type of investing is that every deal represents a tiny fraction of my net worth, so even at a (theoretical) 100% loss, it would not change my life. It is basically serial production on an assembley line.
  In contrast: I have looked into developing/building industrial space, but that would mean all my eggs in one basket, hold your breath for a couple years and hope that you score a great industrial tenant... not something I need in my life.
  I'd rather be skiing during the week ;-)
  
  I agree with you Marcus; in fact that's kinda the basis of my post. You're an INVESTOR, and building an excellent portfolio of properties that will over time (1) build wealth (2) increasing cash flow and (3) protect your estate from inflation. The "deal making" I refer to can be used either as stand alone investment where the purpose from day one was the outsize profitability of the transaction(s) or as an opportunistic tactic when the opportunities arises. I have done it both ways.
  For greater clarify here are the types of transactions I have done that I would classify as "wealth building accelerated". all but the first have some degree of "deal making"
  Real Estate Wealth Building
  1. Purchase below market value because you can pay all cash with no contingencies immediately
  
  2. Buy with seller ﬁnancing with sweetheart terms on mortgage (Assumable, Zero interest rate) and sell wrap note higher interest.
  
  3. Buy with seller financing with super sweetheart terms (Substitution of Collateral, Subordination) and Substitute a note purchased at large discount for the seller financed note at full principal value.
  
  4. Identify a property where the owner is paying high hard money rates and has no ability to refinance and Use your ability to ﬁnance at low interest rate to gain equity position
  
  5. Buy an existing note at a discount and "work the note" (refer to Jim Napier "Invest in Debt".
  
  6. Purchase Business/Real estate combination and sell the business and keep the real estate.
  Private Mortgage Financing Partners, LLC
  Website View Page
  0 Reply
- Marcus Auerbach
  Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Marcus Auerbach:
  
  I always called that level 3 investing: putting deals together that require multiple parties to agree on something that neither of them could do alone. They are one-of-kind constructs with tyically multi-year timelines and large pay offs. I have never done any of that - yet.
  My goal has always been to make investing a repeatable process I can standardize and repeat. You have a very cockie-cutter structure: one seller to one buyer, standard finanzing, a high percentage of offers I make gets accepted (because ultimatley, I will pay enough to make the seller happy) and we close 100% of deals.
  What I like about this type of investing is that every deal represents a tiny fraction of my net worth, so even at a (theoretical) 100% loss, it would not change my life. It is basically serial production on an assembley line.
  In contrast: I have looked into developing/building industrial space, but that would mean all my eggs in one basket, hold your breath for a couple years and hope that you score a great industrial tenant... not something I need in my life.
  I'd rather be skiing during the week ;-)
  
  I agree with you Marcus; in fact that's kinda the basis of my post. You're an INVESTOR, and building an excellent portfolio of properties that will over time (1) build wealth (2) increasing cash flow and (3) protect your estate from inflation. The "deal making" I refer to can be used either as stand alone investment where the purpose from day one was the outsize profitability of the transaction(s) or as an opportunistic tactic when the opportunities arises. I have done it both ways.
  For greater clarify here are the types of transactions I have done that I would classify as "wealth building accelerated". all but the first have some degree of "deal making"
  Real Estate Wealth Building
  1. Purchase below market value because you can pay all cash with no contingencies immediately
  
  2. Buy with seller ﬁnancing with sweetheart terms on mortgage (Assumable, Zero interest rate) and sell wrap note higher interest.
  
  3. Buy with seller financing with super sweetheart terms (Substitution of Collateral, Subordination) and Substitute a note purchased at large discount for the seller financed note at full principal value.
  
  4. Identify a property where the owner is paying high hard money rates and has no ability to refinance and Use your ability to ﬁnance at low interest rate to gain equity position
  
  5. Buy an existing note at a discount and "work the note" (refer to Jim Napier "Invest in Debt".
  
  6. Purchase Business/Real estate combination and sell the business and keep the real estate.
  
  #1 has become one of my favorite startegies these days. Especially when a listing falls trough a week before closing and they are already under contract on their new home. That creates a lot of motivation without having to deal with avocado green bathrooms. Sellers have huge amounts of equity these days.. But that is a still a pretty standard transaction with a short timeline.
  Our market is so tight in Milwaukee, that people are overpaying for properties that need work - because it looks like a "deal" just based on the fact that it needs work. And then you still have to do a 4 months rehab project..
  2 Reply
- Don KonipolBusiness Member
  OP
  Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
  9mo
  Quote from @Marcus Auerbach:
  
  Quote from @Don Konipol:
  
  Quote from @Marcus Auerbach:
  
  I always called that level 3 investing: putting deals together that require multiple parties to agree on something that neither of them could do alone. They are one-of-kind constructs with tyically multi-year timelines and large pay offs. I have never done any of that - yet.
  My goal has always been to make investing a repeatable process I can standardize and repeat. You have a very cockie-cutter structure: one seller to one buyer, standard finanzing, a high percentage of offers I make gets accepted (because ultimatley, I will pay enough to make the seller happy) and we close 100% of deals.
  What I like about this type of investing is that every deal represents a tiny fraction of my net worth, so even at a (theoretical) 100% loss, it would not change my life. It is basically serial production on an assembley line.
  In contrast: I have looked into developing/building industrial space, but that would mean all my eggs in one basket, hold your breath for a couple years and hope that you score a great industrial tenant... not something I need in my life.
  I'd rather be skiing during the week ;-)
  
  I agree with you Marcus; in fact that's kinda the basis of my post. You're an INVESTOR, and building an excellent portfolio of properties that will over time (1) build wealth (2) increasing cash flow and (3) protect your estate from inflation. The "deal making" I refer to can be used either as stand alone investment where the purpose from day one was the outsize profitability of the transaction(s) or as an opportunistic tactic when the opportunities arises. I have done it both ways.
  For greater clarify here are the types of transactions I have done that I would classify as "wealth building accelerated". all but the first have some degree of "deal making"
  Real Estate Wealth Building
  1. Purchase below market value because you can pay all cash with no contingencies immediately
  
  2. Buy with seller ﬁnancing with sweetheart terms on mortgage (Assumable, Zero interest rate) and sell wrap note higher interest.
  
  3. Buy with seller financing with super sweetheart terms (Substitution of Collateral, Subordination) and Substitute a note purchased at large discount for the seller financed note at full principal value.
  
  4. Identify a property where the owner is paying high hard money rates and has no ability to refinance and Use your ability to ﬁnance at low interest rate to gain equity position
  
  5. Buy an existing note at a discount and "work the note" (refer to Jim Napier "Invest in Debt".
  
  6. Purchase Business/Real estate combination and sell the business and keep the real estate.
  
  #1 has become one of my favorite startegies these days. Especially when a listing falls trough a week before closing and they are already under contract on their new home. That creates a lot of motivation without having to deal with avocado green bathrooms. Sellers have huge amounts of equity these days.. But that is a still a pretty standard transaction with a short timeline.
  Our market is so tight in Milwaukee, that people are overpaying for properties that need work - because it looks like a "deal" just based on the fact that it needs work. And then you still have to do a 4 months rehab project..
  “Our market is so tight in Milwaukee, that people are overpaying for properties that need work”
  
  I look at it as a “disconnect” between what homeowners are willing to pay and what investors can AFFORD to pay.
  
  Part of it is temporary due to economic factors - both market driven and government driven
  
  However part of it is structural. With Ibuyers, instantaneous and more accurate information availability, etc the “need” for investors to “make a market” in the SFR space is significantly lessened.
  
  The thing those “selling” the concept/mentoring of wholesaling and fix n flip don’t want to acknowledge is that neither is REAL ESTATE INVESTING”. both are running and or investing in a business. And a business in decline. The real estate INVESTOR on the other hand can pivot to other property types, other markets and or other strategies. So for investors willing, and able to pivot, there are always “deals” to be made.
  Private Mortgage Financing Partners, LLC
  Website View Page
  1 Reply
- Marcus Auerbach
  Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
  9mo
  Quote from @Don Konipol:
  
  Quote from @Marcus Auerbach:
  
  Quote from @Don Konipol:
  
  Quote from @Marcus Auerbach:
  
  I always called that level 3 investing: putting deals together that require multiple parties to agree on something that neither of them could do alone. They are one-of-kind constructs with tyically multi-year timelines and large pay offs. I have never done any of that - yet.
  My goal has always been to make investing a repeatable process I can standardize and repeat. You have a very cockie-cutter structure: one seller to one buyer, standard finanzing, a high percentage of offers I make gets accepted (because ultimatley, I will pay enough to make the seller happy) and we close 100% of deals.
  What I like about this type of investing is that every deal represents a tiny fraction of my net worth, so even at a (theoretical) 100% loss, it would not change my life. It is basically serial production on an assembley line.
  In contrast: I have looked into developing/building industrial space, but that would mean all my eggs in one basket, hold your breath for a couple years and hope that you score a great industrial tenant... not something I need in my life.
  I'd rather be skiing during the week ;-)
  
  I agree with you Marcus; in fact that's kinda the basis of my post. You're an INVESTOR, and building an excellent portfolio of properties that will over time (1) build wealth (2) increasing cash flow and (3) protect your estate from inflation. The "deal making" I refer to can be used either as stand alone investment where the purpose from day one was the outsize profitability of the transaction(s) or as an opportunistic tactic when the opportunities arises. I have done it both ways.
  For greater clarify here are the types of transactions I have done that I would classify as "wealth building accelerated". all but the first have some degree of "deal making"
  Real Estate Wealth Building
  1. Purchase below market value because you can pay all cash with no contingencies immediately
  
  2. Buy with seller ﬁnancing with sweetheart terms on mortgage (Assumable, Zero interest rate) and sell wrap note higher interest.
  
  3. Buy with seller financing with super sweetheart terms (Substitution of Collateral, Subordination) and Substitute a note purchased at large discount for the seller financed note at full principal value.
  
  4. Identify a property where the owner is paying high hard money rates and has no ability to refinance and Use your ability to ﬁnance at low interest rate to gain equity position
  
  5. Buy an existing note at a discount and "work the note" (refer to Jim Napier "Invest in Debt".
  
  6. Purchase Business/Real estate combination and sell the business and keep the real estate.
  
  #1 has become one of my favorite startegies these days. Especially when a listing falls trough a week before closing and they are already under contract on their new home. That creates a lot of motivation without having to deal with avocado green bathrooms. Sellers have huge amounts of equity these days.. But that is a still a pretty standard transaction with a short timeline.
  Our market is so tight in Milwaukee, that people are overpaying for properties that need work - because it looks like a "deal" just based on the fact that it needs work. And then you still have to do a 4 months rehab project..
  “Our market is so tight in Milwaukee, that people are overpaying for properties that need work”
  
  I look at it as a “disconnect” between what homeowners are willing to pay and what investors can AFFORD to pay.
  
  Part of it is temporary due to economic factors - both market driven and government driven
  
  However part of it is structural. With Ibuyers, instantaneous and more accurate information availability, etc the “need” for investors to “make a market” in the SFR space is significantly lessened.
  
  The thing those “selling” the concept/mentoring of wholesaling and fix n flip don’t want to acknowledge is that neither is REAL ESTATE INVESTING”. both are running and or investing in a business. And a business in decline. The real estate INVESTOR on the other hand can pivot to other property types, other markets and or other strategies. So for investors willing, and able to pivot, there are always “deals” to be made.
  
  How flipping homes got slapped with the "Investor" label is outside of my comprehension. It's a refurbishing business and looking at how it is taxed is really all you need to know about the nature.
  Entry level flipping is the worst in many ways. And by entry level I mean buying under 200k, fixing under 50k and hopefully making 10% gross profit. It is a surprisingly hard business model. Buying is hard: you are competing with first time home buyers, who thing everything can be fixed with the help of their uncle for 2 weekends. You are working with a very tight budget, which foces you to cut corners. And buyers for the finished product are financially weak, uneducated, but also demanding in a sense - not an easy crowd either.
  And the money is not made with standard updates. Very few flippers are gifted enough to elevate the lifestyle of a home with outstanding design. And base it all in solid workmanship. That upgrade in lifestyle is the recipie for 100k profit deals. But very few people have the eye, the necessary taste and design skills and frankly the balls to buy a 500k home, spend 200k and sell it for 900k.
  That's hard in it's own way. The risk that you don't nail the style when you blend the old with the new is high. And if you create a turd, you'll loose a lot of money. It's probably almost easier to just build from scratch.
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Greg Saia
Real Estate Consultant · Denver, CO · Member since 2026 · 38 posts · 8 votes
9mo
I've been in the real estate/land development arena for quite sometime. At this point I am doing all three, the deal making came before the investing with acquisition roles at some national builders and now on my own. It does take creativity, persistence and the hardest of all patience to get what you want. Often times if I get 70% + of what I set out for in a deal I'll still move forward as long as the terms are favorable. One of the keys is setting up repeating returns as the project advances to stabilize cash flow. It's one of those arts where you never stop learning and continue to perfect.
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