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CEO | REAL ESTATE WORLDWIDE

In this Exclusive Interview, the Real Estate Mogul & Serial Entrepreneur Discusses Markets, Goals, Family, and his REI career.

Interview by Linda Pliagas

Recently our team had the opportunity to interview one of the most well-known and respected real estate entrepreneurs in the industry, Kent Clothier. We discussed everything from his most recent Find and Flip Summit to discovering who some of his greatest mentors are.

In this memorable interview, Kent also shares some touching personal photos and discussed how real estate investing can give individual investors the freedom needed to fully enjoy family life.

Realty411: Kent, you recently wrapped up the Find and Flip Summit with Grant Cardone. What was that all about?

KENT: The Find & Flip Summit was all about showing investors how to take the “next step” towards financial freedom. We had an amazing group of speakers and trainers from around the country coming – myself, Grant Cardone, Sean Terry, Pat Precourt, Justin Colby, Elena Cardone, Chris Clothier, Brett Tanner, and Frank McKinney are just a few of the big names joining us this year.

In fact, at last count, this outstanding lineup has bought and sold over 8,000 properties, sold over $1 Billion in 2017 alone, and manages or owns rental portfolios valued at over $1.3 Billion.

It truly was an incredible event showcasing the best-of-the-best, and it created massive impact to the hundreds of attendees who attended.

Realty411: What are some markets that your team is most interested in acquiring properties in?

KENT:Memphis, Phoenix, San Diego, Oklahoma City, Dallas/Ft. Worth, Houston, Las Vegas, and Little Rock are just a few of the markets that we are currently really focused on.

Realty411: Can you give our readers some advice on how they can get their investment career to the next level?

KENT: Pay close attention to who you are learning from. Do they have the scars? Do they have the experience and wisdom you desire? Are they living the life that you desire or are they just really good at marketing?

Your mentors should have bullet-proof systems, processes, online trainings, and lead-generation systems. We have worked really hard over the years at REWW and Memphis Invest to truly demonstrate what it takes at every level of the game and to be leaders in the market for anyone to follow.

Realty411: Who are some of your mentors or people who have impacted your way of thinking?

KENT:I have had mentors my entire life that have helped guide my career. My father played a critical role in early business and leadership development. He pushed my brothers and me harder than most people would think is normal, but it paid off. Outside of him, there have been a ton. Specifically, Sal Ricciardi, Roland Frasier, Frank Kern, my uncle – John Bloodworth.

Realty411: As a real estate entrepreneur, you are diversified by having an array of products such as 1-800-SELLNOW, Find Motivated Sellers Now, Find Cash Buyers NOW and Find Private Lenders NOW. Do you believe in diversifying in different markets as well for your real estate portfolio?

KENT:I do. I own properties or notes in Florida, Tennessee, Texas, Arizona, and California. To your point, I have business interests in many facets of real estate, digital marketing, online training, software as a service, an investment fund.

My partners and I are always looking for ways to expand our reach and add to our portfolio of companies and properties.

Realty411: Kent, what are some of your goals for 2018 and beyond?

Kent: I am very excited about 2018 and our road map. We have great outlook and game plan to continue to expand our reach through our Boardroom Mastermind program and our REWW Academy program.

We feel there is a real void in the market right now and an area that is undeserved.

That area is the “tweener” investor or agent. What I mean is: There is a huge swath of people that know how to do the transactions and are making some money, but it’s not even close to being a business. Equally, there are a lot of people out there that have a great circle of influence – like a Meetup group or REIA – but have no idea how to turn it into a business.

No one is talking to these people and certainly not providing them with real leverage points to help them turn the corner and FINALLY get what they want….financial freedom. We can do that for them.

We have a highly-acclaimed online training academy (REWW Academy) that we have spent an enormous amount of money to develop over the last two years with a team of Ph.Ds. We used a proven learning ISD format (just like they do with college courses) and brought in the best experts to teach these classes.

So now, here we are with this massive asset that literally anyone in the country can leverage and point their team members, new hires, local network, local meetup, or local REIA club right to it to get trained by the best in the business.

They can buy it for their own purposes or sell it as a service to their group and get paid a commission by us. Bottom line, it’s “plug and play” and is a complete “white glove” business in a box for them.

The same is true of our Boardroom Mastermind This has quickly become the premier real estate investing mastermind in the country with almost 200 members from around the country.

Again, it’s an easy place for people to get their teams trained by the best, rub shoulders with the brightest and most successful investor network in the country, and help to grow and monetize their own network if they desire.

In closing, I’d like to point out that we have invested in a lot of infrastructure, so others won’t have to. They simply need to step into our world and let us show them how to make it their own.

Realty411: How did you and your family turn your real estate passion into an empire? When did you decide to leave your previous occupations and focus only on real estate?

KENT:We all came into the business in the early 2000s in different cities and for different reasons. I was in South Florida, Chris was in Denver, and my father was in Memphis. It wasn’t until the mid 2000s that we really began to understand that we were doing something unique with our business model, our marketing, and our customer service. At that point, we turned the corner and went all in and decided we are going to become leaders in this industry because, quite frankly, there was just a sea of mediocrity out there, and we couldn’t stand it.

Realty411: What are some of your favorite ways to unwind and rejuvenate?

KENT:I love to hang with my wife and kids. Love to go to the beach here in San Diego, go paddle boarding, or just travel the world.

Realty411: Real estate is a relationship-based business, what are some ways investors can create rapport to enhance their careers?

KENT: Decide what your core values really are and only communicate from that place. What do you stand for? What do you stand against? Why are you doing what you’re doing? Why does your business matter? What impact are you trying to create in the market?

You see, people want to belong. We are all looking for our tribe and want to surround ourselves with people that inspire us or make us feel better about life. So, being clear on who you are first and then being very “out there’ with that information, allows people to quickly connect with you.

It also allows you to cut through all the noise and confusion and just surround yourself with people that are going to build you up, make you better, and make this business more successful. It will also allow you to easily run off the naysayers and time vampires. They won’t want anything to do with you. Best part, either way – you win.

Realty411: You’ve stepped back from speaking at many events, how can our readers learn from you if they cannot attend a live event?

Kent: We are not hard to find. We have hundreds of YouTube videos, Facebook posts, blog posts, articles, and a big social media presence. Go look up “Kent Clothier” or “Real Estate Worldwide” and you’ll find a ton of stuff out there.

But in the end, there’s nothing like one of our live events and getting that “raw-and-uncut” information straight from the horse’s mouth. Do whatever it takes to get there, but I’ll make it worth your time. Guaranteed. 🙂

 

Photographs courtesy of Kent Clothier. For Kent one of the best parts of being a real estate investor is the freedom to spend time with family. In these photos Seema, his wife, along with their daughters enjoy quality time with Kent.

Constrained housing supply has been a theme for much of the past year, with land and labor shortages, expensive lumber and tight financing options all contributing to what has been a challenging year for both builders and buyers. Finance of America Commercials new construction product could be starting to change that.

Launched in February 2017, the product is available in all major markets to new and seasoned real estate investors who have experience building or who have partnered with builders to capture value in markets with a lack of new construction supply. Eligible brokers can also refer this product to their clients.

‘The real estate market recovery of prices and apparent lack of available housing supply improved the margins available for new construction properties. Both large renovation and new construction projects quickly evolved as additional opportunities for investors…’

~Andrew Hurd, VP of Credit (Finance of America Commercial)

New Construction Financing Fills a Gap

When asked about the development of this new financing option for investors and builders, Finance of America Commercial VP of Credit Andrew Hurd said that the company took notice of new construction demand continuing to outstrip supply in all major markets over the past year. This trend, coupled with feedback from many of the firm’s clients that they were feeling the pressure of declining inventory but still seeking growth opportunities, spurred creation of this product.

“The company saw a need in the market,” Hurd said. “After a decrease in foreclosure inventory previously sought after by institutional investors and local long-term hold and fix-and-flip operators, investors turned to new ways to achieve yields in their markets. The real estate market recovery of prices and apparent lack of available housing supply improved the margins available for new construction properties. Both large renovation and new construction projects quickly evolved as additional opportunities for investors, so we saw an opening to help our clients overcome a challenging market dynamic with new financing options.”

As part of the new construction loan program, the company offers loans from $150,000 to $2.5MM for the construction of non-owner occupied single-family residences, two- to four-family units, townhomes, and multi-family properties up to 20 units.

Additional features of the program include:

• Lines of credit for multiple transactions and single loans for new investors
• Funding up to 75% of land value, 95% of construction budget, 75% After Repair LTV
• 12 month terms, with optional 3 month extensions
• Rates from 6.99%

Despite being available for less than a year, Hurd said that investors and builders have been flocking to this new option.

“Clients using this product enjoy the simplicity of financing which allows for proceeds on land acquisition, including up to 95% financing for construction costs. This financing is supporting construction projects from the West Coast to Key West for builders working on starter homes from the $100s up to luxury builds over $5 million. We’re seeing this product fit a range of needs and project sizes and our borrowers have been vocal that this is filling a gap.”

Finance of America Commercial brokers are echoing Hurd’s sentiment.

“My client was looking for financing for a groundup build as well as the ability to purchase more investment properties,” said Ralph Taylor III, a broker in Irvine, CA. “The ability to turn the line multiple times and the flexibility of the qualifying threshold was exactly what he needed to continue building his real estate investment business.”

Finance of America is the Partner for the Builder Community

FACo’s new construction program sits alongside additional builder financing options from the Renovation and Construction Lending group within Finance of America Mortgage, another of Finance of America’s lending channels.

Options available from the Renovation and Construction Lending group include construction to perm financing and the FHA 203k program, which are both available to borrowers who intend to occupy the home after construction or renovation.

“With loan products available for homebuyers, builders and real estate investors, Finance of America has quickly established itself as a key partner for the builder community,” said William Brown, director of the Renovation and Construction Lending group at Finance of America Mortgage.

New Opportunities Emerge

While financing for builders and investors is getting a bit easier to come by, FACo’s Hurd thinks there are still opportunities to create new forms of financing.

“The market for build-to-rent is gaining traction,” Hurd said. “Investors are looking to build new construction rentals without the hassle of repairs and while capturing higher rents with new condition properties.”

Hurd said this push is informing the company’s latest development, a product designed for build- and flip-torent investors, which is due in early 2018.

 

By Leon McKenzie, CEO, US Probate Leads

The real estate industry is full of potential for both REALTORS® and investors looking to cash in. One sector within the industry that will allow you to spread your wings and fly is the probate real estate sector. This sector has a value that runs in the trillions due to wealth left behind by aging and dying American homeowners. If you are interested in building a profitable realty or real estate investment business, then you definitely should pursue probate leads.

There is one question though: what constitutes a good probate real estate lead? What should you be on the lookout for when determining whether to spend your time and money investing in marketing to that lead?

After all, time is money and you do not want to pursue probate leads that are going nowhere. Not when you have to contend with competition.

Well, the secret is in having a list of criteria that you can use to find the right leads. Here are some of the factors that you can consider:

1 THE REPUTATION OF YOUR PROBATE LEADS SOURCE

Probate leads are only as good as their source. Do you have any idea of the reputation of your source? Now, you could go down to the county courthouse yourself and attempt to find a few leads that you could follow, but be prepared to spend a lot of time there.

You can rest assured however, that this is the most reliable way of getting good leads.

You could also use referrals to find leads but there is only so much you will get in the way of quantity of leads. How many people do you know who can tell you where the latest probate leads are?

You could also utilize online resources like social media, but there would be no way of you ascertaining whether the information you are getting is correct until you follow up. And this could waste a lot of your time.

For all the above reasons, you should consider using a probate leads company whose sole job is to find good probate leads for its clients. A company of this nature would do due diligence because its reputation depends on the quality of the product it provides.

Do note that not all probate real estate leads companies are worth your money. You want to get your information from a company that is reputable and reliable. A company that provides the latest leads is your best shot of getting access to good quality leads that have yet to be pursued. In addition, your leads source should provide a comprehensive list of leads from as many counties as possible from across the nation.

2 THE POTENTIAL VALUE FOR MONEY YOUR PROBATE LEADS CAN BRING

You have no way of knowing which probate leads will work out for your real estate business and which ones will not. However, you can determine based on the pricing package whether leads are worth buying in the first place.

Quantity is not always a good thing. Cheap is not always better. What you want is quality. Ten probate leads that will result in a sale or two are much better than 50 probate leads that will not work out at all.

So, what you are looking for is how many leads are on offer for sale, how much they will cost you, and their potential return on investment. You also need to consider just how many people will have access to the same set of probate leads at the same time you do.

The latter is very important because it determines the level of competition you will have with other REALTORS®and investors for the same leads. This in turn will determine your success rate when it comes to converting those leads into clients.

It would be prudent therefore for you to be on the lookout for a set of probate leads sold for a fixed affordable price. It would be even more profitable for you to hold out for leads that are offered to you exclusively for a set period so that you can have the first shot before your competitors get access to the same leads.

3 THE QUALITY/ COMPREHENSIVE NATURE OF THE LEADS

What is the nature of the leads that you have access to? We definitely are not talking about the name of the executor and nothing else.

A name alone will not help you if you want to launch a marketing campaign strategy to reach out to your potential clients. What you want are details; lots and lots of details. You are far better off getting a probate lead that constitutes of the mailing address of the probate property and the phone number of the person who can be reached as primary contact. This is much better than having a name only. You can always address an introductory letter to the title “the executor” until you are able to get the name of the contact you reach out to.

If a lead does not contain at least the mailing address, ignore it. That lead is not worth your time and energy. It will require you to waste a lot of resources just to find out if the lead is worth pursuing, which you could have spent wooing otherleads and trying to convert them.

4 RESPONSIVENESS OF THE LEAD

A lead remains so until you convert that person into a customer. For that reason, you need to gauge whether a lead is worth pursuing further based on how responsive that party is to your first attempt to communicate.

If you want to be the best REALTOR® or real estate investor in your locale, it is important for you to learn how to read into not only what people are saying, but also what they are not saying. When you choose to stick to probate real estate, be aware that you will be dealing with the grieving on a regular basis, and they are a bit more unpredictable than the ordinary potential seller. So, gauging how responsive they are is a skill that you need to learn, and learn very fast.

The fact of the matter is that most executors who act as the primary caretakers of probate properties are motivated sellers. It’s just that some of them need to grieve and get their act together first before they choose to part with the properties that they are in charge of.

As a REALTOR® or real estate investor, you need to keep two lists. One list should be for those leads that are very responsive, and the other should be for those leads that are worth revisiting several months in the future.

The moment a lead that you reached out to contacts you, pay very close attention to what that person wants. If the lead in question just wants to ask what it is that you do, that’s good enough. Even if that lead is not ready to be converted into a customer, the fact that he or she has reached out to your business means that what you are offering in the way of services has caught the lead’s attention. You should double down, and nurture that lead until you can get what you want.That is a very good quality lead.

Other very good quality leads consist of executors who live far away from the probate property they are in charge of, as well as those in charge of prime properties that beneficiaries are fighting over. Such executors are usually very motivated to sell and get rid of the troubling property just so that they can have peace of mind and steer clear of stress. Also be on the lookout for leads associated with properties that have pending bills. The bills indicate an overwhelmed executor who has no idea of how to go about managing an additional property. Leads of this nature can easily be converted to customers because they do not want to handle financial stress for long.

That said you should not completely ignore leads that show a reluctance to even contemplate selling a prime probate property. If the death of the lead’s loved one is still fresh, it makes sense that the executor will not be in a mood to part with that person’s property. But if you were to offer your services a few months down the line, that lead would be more amenable to being nurtured and converted into a customer.

It would be prudent therefore, for you to learn the useful skill of gauging the responsiveness of a probate lead on a case-by-case basis.

CONCLUSION

While the real estate industry as a whole is very competitive, a significant part of the probate real estate sector is still uncharted. You can be a pioneer in your locale, if only you take the time to invest in your realty or real estate investment business.

The quality of your probate leads is the foundation to building your real estate business into a successful company, so tread carefully when acquiring them. Start by scrutinizing the reputation of your probate

leads source, determining the ROI, selecting the highest quality of leads based on details provided, and then learning how to gauge the responsiveness of the leads you contact. By paying attention to the details, you will set yourself up for success. It will be much easier for you to laugh all the way to the bank thereafter.

FOR MORE INFORMATION

Leon co-founded US Probate Leads more than 12 years ago and has witnessed its growth during that period from a one city lead provider in the probate space to the only national provider of probate leads for virtually every county in the country.

Leon likes to point out that US Probate Leads is the only company providing Probate-related Real Estate-related leads to Investors and REALTORS® based on data collected directly from individual probate courts in virtually every state. This has been achieved by building a National Network of Researchers that visit each county one time each month. Leon’s team processes this incoming data and makes it available to individual subscribers for their use in reaching out to highly motivated property sellers.

 

By Gary Massari and Bruce Kellogg

Introduction To Real Estate Matters

This is an initial article in a new series called, “Gary’s Real Estate Matters” from Gary Massari, CEO of REI Fortunes and Bruce Kellogg, Real Estate Consultant.  In this article you will learn the importance of estimating repair and renovation improvements and how you can benefit financially!

Use With Contractors

When working with contractors, you can save money several ways; first, buy your own materials and only hire the contractor for labor. This will save you 20% on materials that contractors mark up.  Secondly, if you are a veteran, Home Depot will give you a 10% discount. If not, then find a friend who is a veteran to make your material purchases for you.

We are going to show you a template we use so you can see how it works, especially with contractors and sub-contractors for each area of rehab. It is important for the bidding to be uniform so that careful comparisons among bids can be made. If a bidder departs from the estimator, there must be discussion to reconcile any differences. Otherwise, you are comparing apples and oranges, as the saying goes.

Building Your Own Estimator

There are a lot of cost estimators you can get for free by searching Google, but designing your own to meet your specific needs is far better and more accurate.

When designing your estimator using an Excel spreadsheet, there are four summary parts you want to include to the estimator:

1. Exterior
2. Interior
3. Mechanics
4. Other

Exterior will look something like this…

Notice that the UNIT SF works together with the COST (unit price) to calculate the total cost, as in this case for a new roof.  You can easily contact a roofing contractor in your area to get a square foot cost to replace a roof.

Here are the categories for the Exterior:

1. Roof
2. Gutters
3. Finish
4. Masonry
5. Painting
6. Windows
7. Garage
8. Landscaping
9. Concrete/Asphalt
10. Decks
11. Fence
12. Pool
13. Septic

Here are the categories for the Interior:

1. Painting
2. Hardwood
3. Carpet/Vinyl
4. Kitchen cabinets, flooring, counter tops, electrical & plumbing
5. Appliances
6. Bathroom
7. Framing
8. Insulation
9. Walls
10. Doors & Trim
11. Basement
12. Foundation

Mechanical

1. HVAC
2. Plumbing
3. Electrical

Other

• Demo & Dumpsters
• Termites/Mold
• Permits

Concluding Remarks

• The unit cost in our example is based on the San Francisco Bay area. They will need to be revised for areas that have substantially different cost structures. Input from local contractors submitting bids should make this possible.
• In many markets around the country, sale prices are now declining. Therefore, it is critically important that rehab costs be estimated accurately, and an extra margin be added for safety.
• Put a Yes/No column, and that way you can walk through a home in minutes and mark Y or N based on your observations. When you leave you can then calculate the cost.
• Make sure you add a 10% to 20% contingency to the total project to cover unknowns. Some hard money lenders will only allow 5% overall contingency, so in that case pad your line items to include a sufficient contingency.
• When doing major renovations, it is wise to get SKU numbers for your kitchens, bathrooms and mechanical items.
• The best use of a detailed cost estimate is to assure that you have covered your bases to have a profitable project, and to convince your investor as a wholesaler of your accuracy and credibility.
• Your cost estimator will also come in handy when you negotiate your final offer on a discounted property to assure profitability.

Let Gary and Bruce know if this article helped you, and write us to request other topics.  You can always reach either of us by calling us or emailing us…

Gary Massari, CEO REI Fortunes, https://reifortunes.com

925-451-1619 [email protected]

Bruce Kellogg, Real Estate Consultant, [email protected] (408) 489-0131

 

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