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Fran Yerardi spoke at our Multi Family Sub Group in February and gave a great talk about the state of Real Estate in Massachusetts. I got to sit down with him afterward and really pick his brain about investing in real estate, the current market and some great ways for the newbie (or not so new) investor to hit the ground running and start to make money right out of the gate.Sheila: So Fran, Give me a little bit about your background and how you got into the Real Estate game.
Fran: Sure Sheila, as you know I owned and operated a very successful restaurant in Newton. As I built the business I started to make a lot of money and I wanted to find somewhere to invest that money and make it grow.
I also had a nagging problem that some of the residential neighbors of the restaurant would complain about the noise level, lack of parking etc. so I solved two problems at once by starting to buy up some of the houses around my restaurant. At that time the market was appreciating very quickly so I was buying for appreciation not cash flow. In fact I was okay with being negative on the properties every month as I knew they were increasing so much in value.
I rode the appreciation wave and made a lot in the great market we came
through in the early 2000's. Around 2005/2006 I saw the writing on the
wall and started to change my strategy a little. I now started to buy
properties at a huge discount and either flip them or keep them for
cash flow.
At the same time I opened HomeVestors in the North East, setting up an office in Newton. HomeVestors is a franchise that specializes in buying "Ugly Houses". As a franchisee I have the unique tools and systems to purchase property way below market value. I can then flip the property on to another investor, rehab it myself and sell it to an end user or keep it for cash flow.
Real estate slowly became my main focus and I actually closed my restaurant down last year so that I could focus on investing 100% of my time.
Sheila: So as a full time investor, do you find it difficult to do deals in the current market and economic climate?
Fran: Actually it is exactly the opposite. There is so much opportunity out there right now that I find I have to turn stuff away every day because there just isn't enough time or man power to meet all the home owners and get all of the deals under contract. I have a great staff and they do a lot, but there just aren't enough hours in the day to take advantage of all of the opportunity that is out there.
Sheila: Well that sounds like a good problem to have. Now what about financing? In today's tough credit market does getting financing impede you from doing more business?
Fran: Financing can be tough but we are in a great position where we have excellent relationships with several lenders and also have the cash reserves to buy for cash. It is all about systems and when you have good systems in your business for buying, selling, financing etc, managing the cash flow becomes less of a problem.
Sheila: Fran you make it sound so easy! If it is really this easy why isn't everyone doing it?
Fran: Well like anything you do in life it is very easy once you know what you are doing. I have been attending the various real estate investment meetings now for several years and I get to talk to a lot of investors and people who want to become investors but who haven't been able to pull the trigger yet on that first deal.
What I am finding is that people really want to get involved in this business but they don't have the comfort level to pull the trigger. They either don't know how to find the deals, negotiate them (It can be difficult convincing the home owner to sell at a large discount), don't know how to properly value the property, or the steps on putting together a deal.
Seeing this, I put together an intensive month long training that teaches people how to do exactly what I do. I keep the class size really small so that I can really work one on one with everyone. I take them right from finding the deal, to negotiating for the right price, to writing it up, to flipping it to another investor for a quick profit.
This is a great way for someone who is just getting their feet wet to go out and buy properties safely and pick up 5, 10 20 thousand per deal. I literally hold their hand through the process until they are comfortably doing it themselves.
And I have to be honest here; I have an ulterior motive for what I am doing. I explained earlier that there are just way more deals that I can possible go out and put under contract. If I have a bunch of "me's" out there putting properties under contract, that solves that problem for me. Once a person has been through my training, I know they will buy the properties right, and I guarantee I will buy them from them.
How much money they make is really up to them. They know what I'll pay for it so their profit comes from the spread between what they can put it under contract for and my price. And I have shown them how to put it under contract for way below my price!
Of course some may choose to do the rehab themselves and sell it onto an end user or keep it for cash flow, which is fine by me; I want to see people succeed in this business. But for those who want to cash out quickly, I will buy those properties from them all day long!
Sheila: That sounds like quite the offer! Tell me more about the course? Is it during the day, at night...what are the details?
Fran: Well it runs over the course of a month. We meet every Wednesday night at my office for 4 consecutive Wednesday nights, where I teach the systems, role play how to negotiate with the home owner and basically teach you all the tools you will need to succeed in this business. We also have two Saturday classes which are field trips where I will teach you how to evaluate the properties and neighborhoods, evaluate repairs, after repair value and basically all of the information you need to put a great deal together.
It is a fun class and like I said I keep it small so that I can teach people individually what they need to succeed in this business.
Sheila: Well I can certainly see how that would be a huge benefit to our members. Fran, Thank you so much for taking the time to chat with me and I look forward to seeing the deals that will start to come through based on the investors you will be personally training!
For more information on Fran Yerardi and the Wholesale Buyers Course please see our website:
http://www.foreclosuresmass.com/buyerscourse
At the same time I opened HomeVestors in the North East, setting up an office in Newton. HomeVestors is a franchise that specializes in buying "Ugly Houses". As a franchisee I have the unique tools and systems to purchase property way below market value. I can then flip the property on to another investor, rehab it myself and sell it to an end user or keep it for cash flow.
Real estate slowly became my main focus and I actually closed my restaurant down last year so that I could focus on investing 100% of my time.
Sheila: So as a full time investor, do you find it difficult to do deals in the current market and economic climate?
Fran: Actually it is exactly the opposite. There is so much opportunity out there right now that I find I have to turn stuff away every day because there just isn't enough time or man power to meet all the home owners and get all of the deals under contract. I have a great staff and they do a lot, but there just aren't enough hours in the day to take advantage of all of the opportunity that is out there.
Sheila: Well that sounds like a good problem to have. Now what about financing? In today's tough credit market does getting financing impede you from doing more business?
Fran: Financing can be tough but we are in a great position where we have excellent relationships with several lenders and also have the cash reserves to buy for cash. It is all about systems and when you have good systems in your business for buying, selling, financing etc, managing the cash flow becomes less of a problem.
Sheila: Fran you make it sound so easy! If it is really this easy why isn't everyone doing it?
Fran: Well like anything you do in life it is very easy once you know what you are doing. I have been attending the various real estate investment meetings now for several years and I get to talk to a lot of investors and people who want to become investors but who haven't been able to pull the trigger yet on that first deal.
What I am finding is that people really want to get involved in this business but they don't have the comfort level to pull the trigger. They either don't know how to find the deals, negotiate them (It can be difficult convincing the home owner to sell at a large discount), don't know how to properly value the property, or the steps on putting together a deal.
Seeing this, I put together an intensive month long training that teaches people how to do exactly what I do. I keep the class size really small so that I can really work one on one with everyone. I take them right from finding the deal, to negotiating for the right price, to writing it up, to flipping it to another investor for a quick profit.
This is a great way for someone who is just getting their feet wet to go out and buy properties safely and pick up 5, 10 20 thousand per deal. I literally hold their hand through the process until they are comfortably doing it themselves.
And I have to be honest here; I have an ulterior motive for what I am doing. I explained earlier that there are just way more deals that I can possible go out and put under contract. If I have a bunch of "me's" out there putting properties under contract, that solves that problem for me. Once a person has been through my training, I know they will buy the properties right, and I guarantee I will buy them from them.
How much money they make is really up to them. They know what I'll pay for it so their profit comes from the spread between what they can put it under contract for and my price. And I have shown them how to put it under contract for way below my price!
Of course some may choose to do the rehab themselves and sell it onto an end user or keep it for cash flow, which is fine by me; I want to see people succeed in this business. But for those who want to cash out quickly, I will buy those properties from them all day long!
Sheila: That sounds like quite the offer! Tell me more about the course? Is it during the day, at night...what are the details?
Fran: Well it runs over the course of a month. We meet every Wednesday night at my office for 4 consecutive Wednesday nights, where I teach the systems, role play how to negotiate with the home owner and basically teach you all the tools you will need to succeed in this business. We also have two Saturday classes which are field trips where I will teach you how to evaluate the properties and neighborhoods, evaluate repairs, after repair value and basically all of the information you need to put a great deal together.
It is a fun class and like I said I keep it small so that I can teach people individually what they need to succeed in this business.
Sheila: Well I can certainly see how that would be a huge benefit to our members. Fran, Thank you so much for taking the time to chat with me and I look forward to seeing the deals that will start to come through based on the investors you will be personally training!
For more information on Fran Yerardi and the Wholesale Buyers Course please see our website:
http://www.foreclosuresmass.com/buyerscourse
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