BiggerPockets Podcast 233: 15 Deals in the First 18 Months with Arianne Lemire

by | BiggerPockets.com

Some investors get started slowly—a deal here, a deal there. But for Arianne Lemire, going slow was not an option. Arianne began investing just a year and a half ago but has already done 15 deals, with more coming in every month! How did she do it? As she explains, a powerful “why.” You’ll learn how Arianne turned her drive for financial independence into a real estate career that includes rentals, flips, and wholesaling. Arianne’s story is powerful and will inspire you to blast off like a rocket to reach your destination!

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In This Episode We Cover:

  • How Arianne got started through the BiggerPockets webinar!
  • Her very first deal
  • What “delayed financing exemption” means
  • How she used BiggerPockets to figure out her strategy and to find a lender
  • A discussion on whether you should get your real estate license
  • Where Arianne invests
  • How she shifted her strategy due to her “why
  • How to handle being a female real estate investor
  • Tips for landing lots of deals in just two years
  • Where she is now in her business
  • What marketing strategy she uses
  • A general contractor horror story
  • The importance of surrounding yourself with the right people
  • What’s next for her
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “It’s just a number’s game, so just submit as many offers as you can.” (Tweet This!)
  • “Instead of being a piece in the chessboard, you’re now looking over the chessboard.” (Tweet This!)
  • “Use your strengths to your advantage.” (Tweet This!)

Connect with Arianne

Show Preview

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 1500,000 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!

31 Comments

  1. George Bittar

    Great episode and inspiration you guys. Well done to just getting it done with no excuses. I have a follow up on finding out your Why.

    I have often struggled with this and can’t say I have a clear why defined. As recent as yesterday I was completing a book project I am working on and this question came up in an interview and I sort of danced around the question and feel I still have loose ends on this. What tools are resources do you recommend to get crystal clear on your why? I am sure others struggle with this as well and similar to finding your purpose. One strategy I heard of was to keep peeling the onion back and keep asking Why until you get to the core of why you really are pursuing something.

    • Arianne L.

      Hi George. I think the onion analogy is a good. One I recommend having a conversation with someone you trust and use that onion analogy. Keep peeling back the layers. I agree that it can be hard to pinpoint. And you really need someone who wants to get to the last layer as much as you do. It could start from “I want financial freedom” -> so I can retire early -> so I can spend more time with family and provide for them -> because that’s what I think a good mom/dad/sibling should do -> otherwise I’d feel inadequate -> so I can be happy. Etc. You’ll probably find out a lot about yourself in the process.

  2. Patrick Cruse

    Delayed financing exemption – from what I’m reading about it a big hangup of it is this: “The new loan amount can be no more than the actual documented amount of the borrower’s initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value).”

    By my understanding, if you buy a house for 50k, spend 20k in rehab, and it appraises for 125k and you use the delayed financing exemption you are only allowed to get a loan for 50k (initial purchase price).

    If you wait for the typical seasoning period of 6 months you’d be eligible to get a loan for whatever LTV you agreed on for the full 125k appraised value (100k if using 80% LTV).

    Can someone tell me how the delayed financing exemption is something different than this?

    • Ishviyan d.

      Patrick – I have come across the explanation you laid out too. However, I do know for a fact that lenders offer 70% LTV via the delayed refinance option. I’m not exactly why the sources online reference the fact that the new loan cannot exceed the initial investment (vs. ARV), but lenders out there do base the delayed refinance on the ARV. So in your example of the 125K property, a delayed refinance would help you pull $87,500 of that back out. The delayed refinance exemption is not particularly popular in the lending industry yet to my knowledge, so not all lenders offer it. But it definitely has its benefits.

    • Carolyn Lorence

      Hopefully this will help clarify rules for Delayed Financing Exception. The 2-paragraph excerpt below is language from the FannieMae Selling Guide and eligibility matrix found here: https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html#Delayed.20Financing.20Exception

      Delayed Financing Exception
      Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met.

      The new loan amount can be no more than the actual documented amount of the borrower’s initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value).
      All other cash-out refinance eligibility requirements are met. Cash-out pricing is applicable.

      It can be confusing, so your banker should be able to clarify how the final numbers are calculated for the refinance. My understanding is that the new loan also includes closing costs, prepaid fees and points on the new mortgage, and is also subject to maximum LTV based on current appraised value, and not only the initial cash investment.

      Perhaps Arianne would share the actual numbers on the first delayed finance for simple illustration purposes?

    • pearce g.

      I did one of these last year. Paid 55K cash in June. Roughly 6K in improvements. Rented. Then refinanced in October at 80% at the lender’s 70K appraisal value. It was my first deal, and I didn’t even know about the DFE. My lender just did it. Cash flowing nicely with only 5K in the deal. I wish I had 50 of these.

      One key qualifier, however. This was done through the lender’s commercial lending arm to my LLC. 20 year amortization with 5 year balloon and about 1% higher than residential rates at the time. So the Fannie Mae rules did not apply.

    • Arianne L.

      Hi Patrick. You’re right. The delayed financing exemption is great for properties that require little or no rehab and you are able to buy at 75% or less of the current value (what would turn into the appraised value). If you remember in the podcast I said that our 3rd property which ended up being our 1st flip needed more work than the first two – that’s why we decided to flip it. Cause we would leave the rehab cost in it. If you have a property that needs a lot of work. It would be best to go the typical BRRRR method. Buy it renovate and refinance in 6 months. What delayed financing provides you is speed. You could buy 4 rentals in a span of 4-6 months and still have your initial pool of cash. To do that with typical BRRRR it’d take you longer since you have to wait 6 months to get your cash out

  3. Rhyetta Musser

    I love the Bigger Pockets podcast! I really enjoyed listening to this one while on my morning run. I really enjoy hearing from female real estate investors. I just didn’t think that Brandon and Josh gave enough time for her to really share her stuff. I would’ve liked to have heard more from her and her other deals!

  4. Carolyn Lorence

    Arianne – Loved your podcast and your ability to get your business organized to quickly! Congratulations! My question is with regard to your direct mail campaigns and your lead generation site. I see that your lead gen site is Investor Carrot. I’ve been evaluating them, along with Lead Propeller. How did you decide to go with Investor Carrot, and did you start your direct mail campaign before or simultaneous with launching your lead gen site? Assuming you are using their SEO service, can you share the cost / benefit? And finally, how did you find, evaluate and hire your current support team?

    Thanks for sharing!

    • Arianne L.

      I went with Investor Carrot since I haven’t heard of Lead Propeller when I signed up. Lead Propeller is a great site and the owner truly cares about the product and is a real estate investor himself. I will likely get some lead propeller sites up and running as well. Investor Carrot I think offers more education if you want to learn more and be more hands on. They are a little more expensive though.
      I had the lead gen site before the direct mail campaign. But I’d recommend getting the direct mail going first. It takes 4-6 mailings (over several months) to really see traction
      I don’t use their SEO service. I just use IC’s prebuilt content packages which in my small market does pretty well.
      Hiring the team has been the hardest part. Even though I know that with direct mail its a big funnel I guess I haven’t applied it to the team yet. I still need to hire more A players :).

  5. Mark J.

    It’s important that criteria of the delayed financing exception gets clarified quickly. I’m not an authority– just passing along my current knowledge and personal experience here. Others please jump in with your feedback!

    #1 The property purchase must qualify as a “arms-length transaction”.

    Typically that means an MLS purchase, but HomeSearch, XOME, Hubzu, etc. may be different. I’ve never purchased from these sites, so I don’t know. Since I typically buy foreclosures at the county auctions, these properties DO NOT qualify as a “arms-length transaction.” The Supreme Court actually had to clarify the rationale for this– “The Court noted that as a general matter, foreclosure sales reflect a strong impetus to liquidate property in order to obtain cash to satisfy one or more creditors. This Court considered this motivation as a type of duress — though the compulsion to sell quickly may be greater or less in any particular case.” http://www.lexology.com/library/detail.aspx?g=07c61146-1854-48ea-94de-d65d3b99882e

    #2 You can perform a 70% cash-out refi within the first 30 DAYS of the initial arms-length purchase.

    I did this last year on an MLS-listed property. However, because the property was underpriced by the realtor, I knew it was a good deal and would appraise higher. I paid $99K, but it appraised at $110K, so I received the immediate cash-out refi on the $110K appraisal amount. However, I guess you could also complete a quick rehab that would bump up the appraisal 10%-30% within 30 days. This way, you wouldn’t have some portion of the remaining 30% funded from another source (PLOC, HELOC, credit cards, personal funds, family/friends borrowing, hard money, etc.) and locked in the property as equity.

    Can anyone confirm or correct my understanding of this? I’ve read that a cash-out refi at 75% of the appraisal value may be possible too, based on credit, DTI, having six month of reserves, etc.

    More info on Fannie Mae’s “Delayed Financing Exception” (updated April 27, 2017): https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html

    • Arianne L.

      Hi Mark

      #1 It might become more clear if I put the definition of a NON-arms length transaction here
      Non-arm’s length transactions are purchase transactions in which there is a relationship or business affiliation between the seller and the buyer of the property.
      -so if you are an employee of the auction sites then that would be a NON-arms length transaction. Otherwise you are fine.
      -the arms length transaction rule applies to ALL financing. not just the delayed financing exemption

      #2 in the link you posted it specifies there that :
      “The property must have been purchased (or acquired) by the borrower at least six months prior to the disbursement date of the new mortgage loan ”
      -so it is 6 months after your cash purchase not 30 days.

      I recommend asking your lender to verify. I would mention “delayed financing” and if they don’t know about it choose a different lender. I can recommend @Jerry Padilla here on BP.

      • Arianne L.

        Okay I think I copied the wrong paragraph for #2. This is the one I meant to paste

        “Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met.”

        – which means from the day you close on the property with cash, you have up to 6 months after that to utilize delayed financing exemption instead of going to normal BRRRR route.

        I encourage everyone to check out the “Delayed Financing Exception” section of
        https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html
        and to speak with your lender for the specifics

  6. Danielle Perry

    Arianne
    great podcast! Really exciting to hear from another female investor! My husband and I have completed 13 flips. In order to scale up I think I need ‘a team’. you indicated you were using a PM who manages the projects, someone who answers the phones, meets the sellers – how did you go about choosing them? I read the post on where you have Investor Carrot as your DM.
    thanks
    Danielle

    • Arianne L.

      Danielle
      Thank you! That’s awesome, congratulations on doing 13 flips!! One of them is a friend and the two went through the traditional hiring process – I posted an ad, sifted through the candidates, interviewed and hired. It’s one of the biggest learning curves I’ve had since I’ve never been in a management position before. And yes I use investor carrot for our websites.

  7. Taro Wichman

    Arianne,

    Your podcast has been my favorite so far and it has inspired me to make my first post. The reason being, I am a Physical therapist that graduated in December 2015 and after a year of practice I felt trapped as well. I wanted to be able to spend more time with family especially a newly born niece. Being in more student loan debt than being able to pay with a years salary was overwhelming. I began looking for other options and real estate really caught my attention. I have done all the required coursework for my real estate license and am currently studying for the license exam. My question is how did you manage working full time as a speech therapist and work as a realtor? Were you able to hang your license at a brokers office but not really put in hours?

    Thanks,
    Taro

    • Arianne L.

      Most brokers will not require “floor time” [required time spent at the office answering incoming calls]. Most agents act independently. So you pretty much work your own schedule. A lot of buyers and sellers want to meet / look at houses after 4pm, on lunch breaks, and on the weekends. So if you can work those hours you can totally be a retail agent. I didn’t do a lot of retail agent work but mainly bought and sold our own flips / rentals.

  8. Jeromy Boutte

    Congrats on your success Arianne… way to crush it right out of the gates. Your success is very inspiring!!! I have gained a great deal of valuable info and will listen to this again multiple times.

    Shame, shame @BrandonTurner for not knowing any songs from one of the greatest rock bands of all time! Lol

    @JoshDorkin… buy the entire Rush library and give it to Brandon, you will probably get more production out of the 7′ Sasquatch! Lol

    Great job for another great podcast! You guys and gals are great! Thank you for the continued education you provide to so many of us!!

  9. Daniel Crenshaw

    Arianne,

    This is one of my favorite podcast with such invaluable information! I see that the majority of the previous comments were surrounded by the concept of Delayed Financing Exemption, but I wanted to focus my questions/inquiry towards XOME. I see the great benefit in using them just as you would the other online sites (i.e. Auction.com, etc) and one being financing. Do you know how that works? Does XOME set you up with a specific lender after you’re pre-qualified or do you get the option to choose from a list of lenders they provide to you? Are the lenders requiring a specific amount for reserves? Any insight would be greatly appreciated.

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