BP Podcast 043: Getting Started, Making Offers, and Crazy Properties with Shaun Reilly


On today’s episode of the BiggerPockets Podcast we sit down with real estate investor Shaun Reilly to talk about a wide range of topics – from getting started while living in an expensive area to wholesaling, putting in offers, flipping houses, buy and hold, and a lot more.

This interview was a ton of fun to do and there are so many great nuggets of information that anyone who listens will walk out with skills they can apply to their real estate investing business.

Read the transcript for episode 43 with Shaun Reilly here.

Listen to the Podcast Here

In This Show, We Cover:

  • How to start investing when properties are super expensiveBiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AM
  • The benefits and pitfalls of investing in condos
  • How Shaun got his first successful flip from a failed wholesale deal
  • Investing in real estate with a credit card
  • Shaun’s direct mail campaign – and how he got the list for free
  • Tips on working with real estate agents
  • Offering on HUD Properties
  • Offering on hundreds of properties to see what sticks
  • The mistakes Shaun has made in his real estate investing
  • The craziest property anyone on our show has ever purchased
  • And more!

Links From the Show:

BP Podcast 038: Unique Strategies for Buying Real Estate with Travis Daggett

Books Mentioned in the Show:

Tweetable Topics

Don’t focus on simplistic things that are easy to do but are not effective. (Tweet This!)

The key to buying troubled properties is buying them at the right price. (Tweet This!)

There are two kinds of real estate investors –  those who make a lot of money and those who give up too soon. (Tweet This!)

Connect with Shaun

Shaun’s BiggerPockets Profile

Shaun’s BiggerPockets’ Member Blog

Shaun’s Lead Gen Website: http://www.rre-homes.com/


About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 80,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!


    • Thanks for listening Ivan.
      It is pretty amazing how the prices for stuff is so different in different areas of the country.

      Where are you going to be looking for deals? Don’t feel bad if you can’t find those <$10K move in ready places! As I said in the interview finding a $35K place that needs twice that much in work is a nice find in MA. 🙂

      • Hey Shaun, thanks for the response. I currently live in Anaheim, CA and currently in the process of obtaining my RE license. But I am a college student, so the amount of cash and financing is be a bit challenging. I was thinking to start off maybe look for deals in the Greenville, SC area, my father lives there.

        • Congratulations on getting involved with investing at a young age.
          When you talk to more old farts like me you will hear a lot of them saying that their biggest regret in the business is that they didn’t start sooner!

          I don’t know specifics of that market but I am sure you can find properties cheaper in SC than in Anaheim.
          Where do you expect to end up after graduation? You can invest anyplace but that could be a consideration for you.

  1. I am newer to REI and really appreciate all the resources that BP has provided. The podcasts are great and the questions asked seem to be structured to educate newer investors like myself. Shaun, thanks for the information you provided about your REI business. On certain topics you went into great detail to explain your reasoning and I found it to be very helpful.

  2. Shaun, great podcast, lots of good info, and you’ve obviously kissed the Blarney Stone!

    Re. David Allen’s book, I read that (288 pages) awhile back, and then of course the material evaporated out of my ears. Thankfully I tripped over a summary of the book (62 pages) by an outfit called, “Shortcut Summaries” which one can find on Amazon.

    Good luck on your continued success.

    • Thanks Greg! Glad you enjoyed it and found it useful.

      I’m actually surprised “Getting Things Done” is only 288 pages. I have the audio book and that is like 7 CDs so I would have guessed it was even longer. 🙂

  3. Great show guys!

    I’m fairly new to investing in Massachusetts and really enjoy hearing how other locals are getting it done. I happen to have started out in Lawrence and also happen to agree its the worst city in MA. There is however potential as there is in other areas depending on your risk tolerance and obviously as with anything it’s all about finding the right people to work with and to rent to.

    Lots of good information in this podcast and always look forward to your posts.


    • Hey Matt,

      Thanks for listening and glad you enjoyed.

      Despite my dig on Lawrence I wouldn’t automatically tell someone to steer clear of it. It does have some things going for it and there is potential if they can just get their act together. I’d be more hesitant to flip there but would do rentals there as you have some decent cash flow potential.
      I’d actually say it is similar to Lowell in my mind that way. I WOULD flip there if I got the right place but have done better with rentals. I don’t know Lawrence as well and it is like another 20min farther away for me which would be the biggest reasons I don’t look there.

    • Hahaha…
      Mike I would say the results as of now are horrendous.
      Actually at the so bad it is hard to believe level.

      ~2,500 pieces and one guy has called to ask to be taken off the list!

      Pretty sure my postcard sucks. Working on revamping the pieces for the 2nd hit…

  4. Shaun, awesome job with the podcast…you mentioned putting signage on your car..have you received any feedback?..the house near Lawrence, how long was it on market before you received the offer? And did you only receive one?….keep plugging away with the postcards…if you throw enough darts, while blindfolded, at a dart board , at some point you will hit the board

    • Hey Billy,

      Thanks for listening and for the comment.

      To answer your questions:

      – No calls from sellers on the car magnets yet. I did have another investor that lives in my neighborhood get in touch with me and we have had some interesting talks. Not the goal but not a bad thing!

      – That house took 28 days to get the first offer, which fell thought at the inspection. After putting it back on the market took 14 more days to get the offer that eventually closed.

      Silver lining on that was the 2nd offer netted probably $3-4K more than the original one would have!

      I am pushing ahead with the postcards. Since recording the podcast I have put out another 1,200 of them… With ZERO additional calls.
      Hard to believe that my postcard could actually be THAT bad! 🙂
      Getting a couple of completely different pieces for the follow up rounds though!

  5. Kenny Anderson on

    Once again…very informative show guys!

    Shaun: Curious to know more about how the situation worked out with the property you won on auction.com that had occupants. I perused the site for the first time and came across a few properties that had occupants. Do you find that these occupants are normally paying rent to the previous owner, or are the occupants normally the current owners? I can only imagine the potential issues with evicting if need be.

    • Hey Kenny,

      Thanks for the questions.

      You are actually mixing up a couple of different properties. The one I mentioned that was occupied was the one I picked up at a tax sale. In PA (Where that property is) I know that the procedure for removing a former owner is different then a tenant. I was able to identify that the residents are tenants so if I do have to remove them it is just a vanilla eviction vs. a slightly more complicated “ejection”.

      Since the stuff on Auction.com seems to mostly be dissipation of a banks REO portfolio (rather than the initial foreclosure auction, as least the places I have seen) if they are occupied they are likely the former owners or non-paying tenants.
      If they are non-paying tenants getting them out should not be any different than any other eviction (Which may be very easy or very hard depending on your state). If they are the former owner it might be different.
      My understanding is that some states would treat them like any other tenant and you just have to evict (which like I said could be easy or hard) but other states (like what I mentioned in PA) will have a different, likely more difficult, procedure for a former owner.

      It would be a good idea for you to find out what that procedure is in your state if you are looking at occupied REOs. Then once you know that try to figure out if the place was owner occupied before getting taken back.

    • Detroit gets to bad of a rap.
      I mean lots of people go bankrupt, just not usually 700K at once… 🙂

      But hey at least they still have the Tigers and their clutch playoff performance, oh wait…

      Hahaha… Go SOX! #2013WSChamps 🙂

        • Not that I think it will totally hold up but right now 10% through the season the C’s are the 4th seed in the East and the Pistons are tied for last..
          This without Rondo.

  6. Hi Shaun, enjoyed the show. I was wondering what your method is for evaluating the homes sight unseen, as in, your pie in the sky budgeting so that when you arrive onsite and find the value just dropped $100k you are still OK! Can you walk us through the specific procedure?

    • Hi David,

      Thanks for listening and for the good questions.

      Honestly it isn’t anything to amazing. I have a “rehab” sheet like most people do and use it when I do walk around or when I do a desk top analysis. The big difference at my desk is I assume everything is broken since I have no way to know otherwise.
      So I have some realistic conservative pricing I feel works in my area and I just check the boxes and add it all up. Some items are an “each” and others are estimates based on SQFT.
      So most places are basically full gut rehabs until I see them. If the budget will work in that case then my offer might get countered. I have had others check out places for me to give me some idea of how they are and I will pull back based on some of that information, but that isn’t typical.

  7. Hi Shaun,

    I believe you talked about being an agent at an investor-friendly firm in this podcast. I am thinking about doing this and was just wondering what type of arrangement to expect when joining up with this type of investor friendly broker. What are the fees? Commission split? I think this will help me when I start looking for a place to hang my license. Thanks for your time and great podcast!

    • Hey Robert,

      Great questions. I will say this stuff will vary A LOT. Different area will have different fees and costs for basic stuff and every broker can have different fees and requirements.

      My guy has very minimal fees.
      I think it is like a $200 annual administrative fee that is waived if you do at least 1 transaction a year. They basically were getting a lot of wannabes that weren’t doing anything. So this at least will cover supporting them for a year before asking them to leave. 🙂
      I have annual E&O insurance which I actually just got the invoice for and was $172.
      That is pretty much it. I had to buy some business cards for it, which I never use, that cost like $30 or that range when I first started.
      Other things like MLS fees, state license fees, continuing education fees yada yada yada will be the same no matter where you are.

      My commission split is okay but not amazing. 70% to start for most transactions. Once I hit a cap it goes to 80%. One nice things is the cap is “forever” as long as you do one deal a year after hitting it (most places have an annual one).
      I think at some point it goes to 90% but I’m not really close to that since all my stuff is so cheap. 🙂
      The broker is an investor himself so you get 100% if HE buys your deal and I think it is like 90% for an interoffice transaction.

      Like I said this all this stuff will be all over the place with any given office but should give you a flavor of what is out there.

  8. This is probably a dumb question, but I’ll ask anyway. You said that most real estate agents would probably consider it a waste of time to submit so many lowball offers and so it was good that you were an agent yourself. However, wouldn’t you say then, that it was wasting your own time, and therefore money, to be doing this instead of making higher offers?

    • Great question Dawn.

      The fundamental reason that it is not inherently a waste of time of time and effort for me is that I am putting in offers based on making:
      >$30K + a portion of a (usually) 3% commission
      The agent is putting in the offers based on:
      A portion of a (usually) 3% commission

      So a success means a LOT more to me than to them.

      This is a big simplistic in that I also put in the time to analysis the property, which takes a lot longer than putting in the offer. That is one reason that I pretty much always submit an offer I evaluated.

      To break it down cost wise a little more lets say I buy a property for $80K (That is on the high end of what I pay for junkers around here) if they make a 3% commission and get a very good split of 80% that is only $1,920.
      Not a bad chunk of change but if they had to put in over 200 offers to earn it they might not see the pot of gold at the end of the rainbow after the first few dozen.

      Also for perspective the median home price in MA is well over $200K so just doing a single retail buy or sell they would make about the same as doing 3 buys with me. To land those 3 deals they probably submit 500-1000 offers. Not really worth it to them.
      For me landing 3 deals the profits plus getting the buy commission usually ends up landing me over $100K. So I would essentially earn $1-2K per offer submitted.

      Pretty sure any agent would agree to submit as many POS offers as I wanted if I agreed to pay them at that rate. 🙂

  9. Hey Shaun great podcast and tips.
    I have been thinking of getting me my RE license for the same reason you mentioned (mls+submitting offers).
    I have been told that once you pass the state exam, in order to get MLS access you need to join up with a firm and also pay the fees to join. And even then you only get access to the state you’re in. Sounds like you are searching out of state a lot. Are there any MLS access workarounds for people like us that mostly want to pick up out of state properties?

  10. Hey Hunter,

    Glad you liked it and got some useful info out of it.

    You pretty much have it down for how the agent stuff works.
    I actually do not have direct MLS access in my out of state markets. It is actually a big hindrance and I want to get a license there to avoid it. I have agents that I work with and think they are good, and would keep working with to do leg work but I’d like the unfettered ability to search for and evaluate the deals.

    Anyway to your point. There isn’t any reason you can’t get a RE license in a different state if that is where you are going to be investing. It will probably be a little tougher to find a broker to hang your license with but it isn’t impossible. If you are going to be active and making offers that they will make money off of they will probably be okay with you being remote once the checks come in. 🙂

    Good luck!

  11. Shaun, I hadn’t realized you were on a podcast. Glad I checked it out. I’m not sure why not one has asked this question yet but…Which card & what kind of credit score granted you a 35k cash advance with a 3-4% transaction fee & 0% for 13 months?

    • Hi Blue,
      Thanks for listening and commenting!

      My credit generally jumps around in the mid to high 700s.
      This was a BoA card but I have done things with Discover, Chase and some lesser known ones as well.
      I now have some well established ones in my LLC’s name which are starting to send me similar types of offers as well.

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