#046 How Whitney Nicely did 50 deals with little to no money.
On this episode of House Flip Masters Holly is joined by guest Whitney Nicely. Whitney has been called the Queen of Weird Real Estate in Eastern Tennessee.
Whitney started flipping houses in 2009 with her parents, her mother was a real estate investor and she knew that she would become one herself. The first house that she flipped with her parents is when she fell in love with the process of flipping homes; she also fell in love with this particular house and ended up moving into it instead of her parents selling it. In 2013, Whitney and her brother were buying houses with cash, like her mom always did, they bought 3 houses and one of them was a total loss and with the 2 houses that they had left she realized that they had their life savings in these two houses and she realized she was never going to get ahead and start making money if she had to invest all of her money into these deals. Whitney knew she had to figure out a way to do real estate without putting any of her own money into the pot. Since than Whitney learned about lease options and did her first deal in the Spring of 2014, although Whitney has only been using this option for the past 3 years she has done over 50 deals without having to use any of her own money. Currently she has 19 apartments and 7 chunks of land that she hasn’t had to use her own money to purchase.
Holly knows that a lot of people are interested in getting into real estate don’t have a lot of money which is why she is so excited to have Whitney share her success with listeners. Whitney says that her favorite way to purchase a home is through lease options, or as she refers to them as band-aids, because they can fix any situation.
Holly asks Whitney to share with listeners some situations in which a lease option is good choice, Whitney says that when a house is over leveraged a lease option is a great choice to get a piece of property without using any of your own money.
Holly asks Whitney to share how a lease option works and what the process might be like. A lease option is an agreement that allows someone to rent the house with the option to purchase it at a point in the future at an agreed upon price today. Whitney shares that when she was a normal real estate agent she had her license for 18 months and only made $1,200 in 8 weeks using lease option she made $15,000 doing a lease option that she posted on Zillow.
Whitney shares with Holly that she recently found out from her lawn guy that he owned 13 properties and after talking to him Whitney decided to buy a few of them from him. The first house that she bought was a cracked house; the house was literally cracked and had been partially burnt. An interested party saw the listing and wanted to buy the house from Whitney, she was able to turn her small purchase into big money by offering the right option to the buyer, when her lawn guy found out that she turned around and made more money on it than he had initially charged her Whitney decided to give him a little more than she originally agreed to. The second house that she got from her lawn guy is not proving to be as successful as the first, but because it is not successful Whitney has decided that she is going to owner finance this house and put a big pink “Whitney buys houses” sign in the front and use it as advertising in that neighborhood. Whitney says that her bandit signs get her a lot of home to look at so she is excited to see what this option will bring her and she will actually own the land instead of renting billboard space.
When Whitney started doing lease options and owner financing she said that everyone else was working in one suburb so she decided to go the other direction and work in another county. She decided to do this so that she could get the experience and learn to play with the big boys in her neighborhood and have the portfolio to back it up.
Holly mentions that Whitney has provided an awesome cheat sheet for listeners that will go over what she has talked about during this podcast that you can find at our website www.HardHatHolly.com/45 and you will be able to download Whitney’s awesome notes.
Holly asks Whitney to share another one of her secret weapons that the ladies both love to use called ‘Subject to’ method Whitney explains that ‘subject to’ is when a seller still has a mortgage on their property and they need to move quickly you can buy that property subject to the mortgage staying in their name and the title transfers to your name. The reason you do this as subject to is because there is a due-on-sale clause in the mortgage that says that if the title transfers out of their name the bank can call for the whole note to be due. This is why Whitney likes to do lease options because the title does not change names and cause any red flags to the bank. Whitney has learned that by doing lease options she is protected and so is the buyer in the event that something happens that wasn’t planned.
Holly asks Whitney to share her best advice for someone just getting started in this game. Whitney advises that you just have to keep going, good deal or bad, just keep going because you don’t know when the next phone call will be or what the next seller will stay. The only way to get really good is to keep at it.