#043 Buddy Broome bought a property worth $550K for $900K and is loving it!
On this episode of House Flip Masters Holly is joined by guest Buddy Broome. Buddy is one of many real estate investors who does real estate investing on the side. Buddy works full-time as an attorney and an investor he was introduced to investing as a young man in high school through his father. Buddy’s dad told him about the first property he purchased; his dad couldn’t afford to purchase a property so he approached the owner and asked if he could make payments on the property and the owner agreed because he knew that Buddy’s father was an upstanding, honest man who would pay for the propertu At the time Buddy felt that what his dad did was not the smartest way to invest but as he got older he says that his dad’s story taught him 3 important things. The first thing Buddy tells us is that his father’s story reminds him that you have to ask for what you want, second is that you can be a real estate investor with very little to no money, and lastly your reputation matters.
After high school Buddy went to law school and got a job with a big law firm in Los Angeles, he felt that the only way to earn money was to climb the corporate ladder and put away money into a 401K and eventually he would be able to retire comfortably. One day his wife introduced him to the book “Rich Dad, Poor Dad,” Buddy was not interested in what the book had to offer and felt that it was stupid. His wife left the book laying around and Buddy decided to check it out, 48 hours later he flew through the book and decided that he needed to talk to people and get the ball rolling because this book really spoke to him.
Buddy read the book and took some investing classes before he and his wife decided to purchase their first property in August of 2008. It was in September of 2008 that Lehman Brothers crashed and their dreams of becoming overnight millionaires were smashed. From that point Buddy and his wife had to change their lifestyle and become really frugal. When the crash happened all of the surrounding properties in his area had become very cheap and he decided that he wanted to make another purchase but was having a hard time with the income that he was generating.
Buddy was introduced to a group called FIBI (For Investors By Investors), the gentleman who lead the group, Ellis San Jose, offered to mentor Buddy and his wife on how to make investing work for them. Ellis then introduced them to two men, Gary Johnston and Clyde Wilson, who he insisted that Buddy and his wife take their class. Buddy says that this 3-day class changed his life. Slowly but surely Buddy and his wife have been building what he refers to as his ‘snowball’ - buying one property at a time.
Holly asks Buddy if he has ever purchased a property with no money down, and he says that he has. He learned about no money down in his first deal. In his first deal a third party investor asked him if he had the money, which they did, but he was told that if they didn’t have the money that they would find them someone who did for him. Buddy reminds listeners that when you are hoping to not use your own money down, that the deal needs to be a good one and worthwhile to the lender. If you have a mediocre deal it will be hard to get someone else to put their money down on that deal.
Buddy reminds listeners that when you are wanting to buy a property you need to not ask how much a house is, or how much money you can make on it but the most important question about buying a property is why is that property being sold?
As Buddy recounts for Holly one of the first deals that he made and all of the hoops he had to jump through to make it happen, Holly asks if Buddy was using a financial calculator during the time that deal was taking place. Buddy says that during the time at the table with the sellers Buddy did not pull out a financial calculator because he prefers to have the other party do the math to keep it as simple as possible and to make sure that the other party trusts him and the numbers that they have pulled up.
If you are interested in learning more from Buddy you can attend his all day class ‘Calculate your way Through Financial Freedom,’ he teaches you how to analyze life decisions as if you were an investor. You can find out more about his classes by going to his website at www.BuddyBroome.com On his website you can enter a giveaway from a rental property evaluation guide and an introduction to seller finance ebook.