Janet and Larry French and Doug and Andrea Van Soest Join Aaron Norris on the Real Estate Radio Show #478

Janet-Larry French


Janet and Larry French

Silver Moon Real Estate Buyers


(Full Bio)

 

Doug-Andrea Van Soest


Doug and Andrea Van Soest

Spouses Flipping Houses

(Full Bio)

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Aaron Norris is filling in for Bruce this week and is joined by four guests: Janet and Larry French and Doug and Andrea Van Soest. Over the next few weeks the Norris Group will be doing something different. Over the last three months they have launched the Investor Roadmap. Something that always comes up is people get a little overwhelmed about how to get into the business. They do not know where to start or what they bring to the party. It is not just about the timing, which dictates the activity investors do to make money and find the deals. Based on your personality, experience, how active you want to be in the space, and how much cash you have to play in the business, they all really dictate the strategies open to you. Aaron had somebody who was an accountant and worked for a property manager who said he did not have any experience when filling out the survey. They decided to explore ideas since he did not have cash but did have experience in a unique way

Episode Highlights

    • How did they come to be involved full time in real estate?
    • How do they utilize mailers for the real estate business?
    • How did they come to form relationships with others in the industry?
    • What are their thoughts on cluster marketing and what follow-up systems should be utilized?
    • What other forms of marketing do they utilize besides mailers?
    • What is their advice for someone wanting to get involved in real estate right now?

Episode Notes

Today Aaron has two sets of couples on the show who have been in the real estate investing business and have gone full time over the last cycle. Larry French works with his wife Janet at Silver Moon Real Estate Buyers. He is an ex-computer geek and is able to utilize his computer skills in the business. Janet owned a mortgage brokerage before her current job. She loved working with numbers, taxes, and finance. This is what inspired her to jump into real estate.

Andrea Van Soest has a homebuying business called Socal Homebuyers. In addition, she and her husband flip houses on the side. She loves the design aspect of the business the most. Doug Van Soest used to be a real estate appraiser before getting into his current business. Larry is the only one who did not originally have a background in real estate as he originally went to school to be an engineer. He has a degree in environmental analysis, which is land-based. He grew up in a family where his family were investors. His dad had a couple multi-family buildings, and he learned a lot growing up in that environment. From that, he learned what not to do. His dad taught him the importance of property management, but he had a full-time job and could never walk away from it to go take care of his buildings. Because of this, they saw a lot of meltdowns and learned how important it is to give your properties attention in property management.

Aaron asked Janet if she also grew up in a home where her parents were in real estate. She said no and that her parents were teachers. Her dad had a couple rental properties, but he too did not really know how to manage them. She remembered going over one time and the guy had literally taken apart his entire motorcycle in the living room.

Andrea’s family did not have any background in real estate. She and Doug were both business majors and received a book on the subject of real estate that got them interested. Doug’s family was involved in farm and ranch and was not really involved in real estate either.

For all these reasons, Aaron asked them how they became interested in the real estate space. Larry said he liked being the guy who owns more than one house. He wanted to be the big shot who owned some things. He understood the other people who lived in the houses would pay his mortgage off for him, so it was always appealing to him since he is a very value-based person. He likes saving money, and he likes the idea of an asset that covers itself and still grows. Growing up in Southern California, he knew that values of properties go crazy. When he was not participating, he felt he was missing something.

Janet said when she was in the mortgage business, she was the middle person and was never able to be the decision maker. This was something that got frustrating all the time, especially having to deliver the bad news towards the end of the meltdown. She really got tired of recreating the wheel. She wanted to create a passive cash flow and something she could set in place now and continue to live on for the rest of her life. She saw real estate anyway and was involved in it because she knew it was a good vehicle. This was why she like it so much.

Andrea said for her and Doug, right out of college they were very entrepreneurial. They started a kettle corn business and quickly realized they were slaves to the business and had gone the wrong route. After reading the book on entrepreneurship, she got really excited about it but took the wrong road. They were after something more passive. The book, called Rich Dad, Poor Dad, ruined them in a good way. Their minds were completely shifted and changed to investing for retirement. Real estate was always that end game in which they wanted to be involved.

Aaron always likes asking people how they got involved since he grew up at a time when you were practically paid a quarter an hour. If you asked Aaron 15 years ago when he lived in New York if he was going to be in real estate, he would have laughed. He loves being a landlord now, and what it does is powerful. The hurdle he had getting started was in 2009 when he was scared to get started. His dad was someone who is not going to force it on you. He will give you advice if you ask, but you do it on your own.

2009 was a scary time. Back when Larry and Janet were buying, they could sense the value. With Aaron’s appraiser training, he knew what was good and what made sense. They were buying at a fraction of what it would cost to build it. However, you could not see the floor. You were not sure if it was going to go down another 30-40%. They came out of a market where they owned three rental properties that were completely upside-down, negative cash-flow, and bought for the wrong reasons based on emotion and appreciation. For them, it was jumping in and knowing they had to get on the fast train from learning from the right people who knew how to do the business properly and buy the right assets. Larry said the first house they bought correctly was in 2008.

Doug and Andrea also got into real estate in 2008. They heard Bruce speak in 2005 and realized that opportunity was coming for them. They continued to learn for the next couple years, and 2008 was then they felt they could jump into it. Larry remembered hearing Bruce speak in late 2006/early 2007, and Janet had been hosting work event at their house. He came home from an afternoon meeting after hearing him talk, and he had walked into the meeting with auction books. Bruce told Larry he should really consider selling his possessions. He ran in to interrupt Janet’s meeting to tell her to sell the rentals they bought in 2005. However, they decided that this was not the best decision.

Aaron said he has been with the Norris Group for ten years, and they have all been an interesting ten years. They are really fun to watch, and it feels like there is a changing of the guard. Both the Frenchs and Van Soests had gone full-time after quitting their other jobs. There was a sense that there is an old guard that is retired. Bruce is definitely in conservative mode, thinking he does not need to take any unnecessary risk. There are so many people who want to jump on it and don’t really know when enough is enough.
Aaron asked everyone when they went into the full-time process and knew they were ready for it. It is a scary jump to go from a W2 to something bigger and full-time real estate investing. Janet said what really drove the both of them was they did not really have a choice. She had shut down her mortgage company, so they had gone from a significant income to nothing. Larry was already out of the web design business, so they had very little income there. One of the things that was a benefit was that they did not have kids, or even pets. For this reason they could take a little bit more risk and jump in more quickly. They also figured if they went and got another job, it would not cover the bills either. They were down to their last $10 grand and were thinking of short-selling their own home. It was getting ridiculous. Whenever Janet and Larry have been under financial pressure, they rise to the occasion. They took it on and worked 24/7 for many years, and this is why they are where they are at now.

For both of them, they came into the business between 2008 and 2009. Janet started in 2009, while Larry had already started in 2008. Leading up to 2006/2007, his web development business was really coming into its age. There were great smart engineers in Ukraine and the Philippines who could work for $9 an hour. He could not produce content or good product to compete with out in the states. He did not want to become an outsourcer, which involved managing a lot of people and he did not want to do this. It was time.

With $10 grand in their pockets, they were able to make it work. During their whole journey, they have never done a conventional loan ever. They were able to do it by raising private financing and building good relationships with folks. The most important thing was for them to attend local real estate clubs and meeting people in the industry who know what they are doing and love to help. He mentioned the Norris Group as one of the organizations that helped change their lives.

Things have changed a lot. When Aaron first came on, there was a lot of that run at the back of the room. He always tells people to find the right club is like finding a church, you just have to try them on. Every personality is different behind the ship, and you find one that fits. The culture has changed with the for investors/by investors model. It is more round table, and there is not much product selling at the front of the room. It is a lot more productive, and people are willing to help.

Janet and Larry have been doing more of the creative things, like mailers. Aaron asked them how they were sourcing deals back in 2008/2009. Janet said they did auctions and trustee sales, as well as they have always done mailers. However, this is something they do not really do consistently and turn it off and on again. They tend to mail to specific neighborhoods depending on the specific type of rental house for which they are looking. It is rare that they will market like this for a flip. However, a lot of it came down to their relationships they have built over time.

Aaron asked if a lot of these were built from scratch or were from relationships in the mortgage industry. Janet said they were formed 100% from scratch. This was something that was valuable but not intended in that when they moved into the neighborhood they live now, she started volunteering quite a bit. She volunteered for the local philharmonic group, which raises money for the local music programs. Through that and not even promoting your business, people get curious and ask you what you do. Over time, they built that trust because people saw how they were socializing and giving back. This has made a huge difference for them. Now they are down to about 3-4 people they work with through private financing, and it has been wonderful for both sides.

Aaron said not everybody has the same skill set. There are people in his family who want to do trustee sales or be a builder, and they do not really want to work along with other people. Aaron, on the other hand, loves to work with other people. Aaron next asked Doug and Andrea when they made the switch to full-time real estate. Andrea said it was six months after they did their first flip in late 2008. It was early 2009 when they went on full time. Doug was appraising full time prior to that, and the writing was on the wall for the appraisal industry with the HBCC and all the changing laws. Their income was really about to be cut in half and they would be working harder for less. It was a no-brainer and natural progression for them to get involved.

They have also had a pretty healthy tolerance for risk. They sold everything and sold popcorn for a living, so they didn’t really have a problem diving in and trying to buy and sell houses. It was natural since they were in that field already. Every day they tried to scour the MLS and make offers. A lot of their business was relationships, MLS, REOs, and short sales.

Things have changed so quickly. Since the Norris Group works on the hard money loan side, they see where a lot of the deals are coming. It has changed for people with equity, so Aaron wondered if they switched gears recently themselves. Doug said they have not bought an REO since 2011. Now it is 95% direct to owner. They started mailing a little earlier than most people, and they have remained consistent. Aaron asked how often they mail, which Doug almost every week, or about 3 mailings a month. They do a lot of direct mail and keep the post office alive.

During the Norris Group bootcamp they talk about mailers; and one of the strategies when you have a male and female partner is you can play both sides of the coin. Some people are more comfortable talking to the female or vice versa. However, they noticed by having family working together they receive fewer angry calls. Now they are more open with, “This is us, and this is what we do.” People respond differently to different types of mail pieces, so one is not necessarily better than another.

Aaron interviewed Michael Quarles on the show a few weeks ago, and they got to talk about cluster marketing. Aaron asked them if they believe in the concept of cluster marketing and sending multiple pieces of mail to the same location, or are they one and done and move on to another list. Larry said they will hit the same neighborhoods over and over for years. Their market is small, 11 cities that all touch each other. They will start at the top and hit that neighborhood and the one next to it. It might take them a year to get back to it, but the piece will not change. They do not put a lot of effort into marketing since they do not really enjoy it quite as much. Their marketing volume and quantities are small, and it is a sideline to the rest of their business that is making relationships.

Marketing is a business in itself. One thing Aaron did not get to before on cluster marketing is the follow up systems. Michael will send about 6 pieces of mail to every house, banking that if it was him he would pick up something that looked like a bill while his wife would be attracted to your beautiful family. Doug and Andrea also mail quite a bit, but they are looking more for a type of owner or property versus a specific neighborhood. They will get multiple pieces from them every 3-6 months, although this will also vary. They will probably mail the same house multiple house during the year. Whether it is the same piece or multiple pieces will vary. If the customer calls them to follow up, then they will be put into a follow up system where they will receive 35 over the next year.

Since Andrea and Doug are also in web, they are branching out to things other than mailers. Aaron asked them if they have found the website to be a helpful piece of the mix, which they said they do, more so lately. They have done a lot of SEO and are getting a lot of leads. They even showed up first in word searches. Aaron has spoken on SEO and SMO, and the first thing he says is he wonders if he will ever be an expert since things are always changing so quickly. Facebook and Google are updating their algorithms, and Google alone has 100,000 different pieces they are updating.

Aaron asked them to give one piece of advice for people wanting to get into the real estate business at this moment. Larry said to decide what kind of asset you want and what kind of asset will get you to your eventual goal down the road. You may say it is to not have a job; well, you will need something like rentals that will produce cash flow. If you do not have the holding ability for rentals, then your asset might be a flip to start with then to transition later. You want to think about the specific type of item you will be pursuing. If you do not know what it is, you will be looking all over the place and not get anywhere.

Janet French said to not be afraid to get into the business and partner with somebody who has had a lot of experience. They will share their knowledge with you and gain from the partnership, especially if you are willing to work. He always tells people they are not giving themselves enough credit and that the assets are not theirs to leverage. If you try to find a partnership but do not feel like you bring anything, then why would anyone want to work with you?

Andrea said to just start and take action. Educating yourself and reading books is very good, but you do not want to get hung up on all the small details. You have to really do something. Doug agreed and said to take calculated action. This does not mean just getting a business card or name since this comes later.

Tune in next week as Aaron continues his discussion with Janet and Larry French and Doug and Andrea Van Soest. For more information, you can visit Janet and Larry at www.silvermoonco.com. They run the Coachella Valley Real Estate Investors Association that meets the second Tuesday of every month in Palm Desert. You can find them there at www.cvreia.com. Doug and Andrea are at www.spousesflippinghouses.com and have their own podcast.

Janet and Larry French and Doug and Janet Van Soest on the Norris Group Real Estate Radio Show

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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