BiggerPockets Podcast 043 with Shaun Reilly Transcript
Link to show: BP Podcast 043: Getting Started, Making Offers, and Crazy Properties with Shaun Reilly
Josh: This is the BiggerPockets Podcast, Show 43.
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Josh: What's going on, everybody? This is Josh Dorkin, host of the BiggerPockets Podcast here with my co-host, Brandon Turner.
Brandon: Thanks for not giving me a nickname this week, Josh.
Josh: Oh, man. You've been crying the past couple episodes. I figured I'd go easy on you.
Brandon: Tears have been shed.
Josh: They have indeed. They have indeed. How have you been, man? You've been good?
Brandon: I'm doing great. I'm doing great actually, yes. Thanksgiving's right around the corner and we're excited for that.
Josh: Yes, yes. We're at show 43. This is 43 weeks in a row, 43rd week of the year. It's crazy.
Brandon: Yes, man. It's been crazy. We're coming up on the big 5-0.
Josh: Yes. It's bananas. Let's jump in to this when we've got kind of a cool show today with Shaun Reilly from Newton, Massachusetts. Shaun is a buy and hold investor who became a house flipper who also has purchased properties at long distance. We're going to cover lots of cool stuff like what do you do if you live in an area that's pretty expensive, how to get started, and things like that.
We've talked about craziness, craziness like buying a house that has railroad tracks in its backyard and sewage plants in the front. You will be amazed at what you can make money with. Check it out. Pay attention. If you've got any questions for Shaun, check out the show notes at BiggerPockets.com/show43 and be sure to ask him your questions there or check him out on the site. Otherwise, let's just jump in. What do you think?
Brandon: Let's do it. By the way, I like how you said "Mass." instead of trying to say the whole name of the state. Let's hear you say it, Josh.
Josh: Massachusetts. Let’s hear you say it, Brandon.
Brandon: I can't.
Josh: Come on. You can say it.
Brandon: I said it during the show once and it was...
Josh: Awkward?
Brandon: It was awkward. I worked my way through it.
Josh: Yes. Mass. It's easy. It's easy. Yes. Anyway...
Brandon: Let's do it.
Josh: All right, Shaun. Welcome to the show, man. Good to have you.
Shaun: Thanks for having me. I'm really excited about it.
Brandon: Awesome. Us, too.
Josh: Shaun, let's get down and dirty here, man. What kind of investor are you?
Shaun: I do a couple of different things. I started off as a buy and hold locally. After a couple of years, I started getting into doing fix and flips in my area in Massachusetts. A little over a year ago, I also started getting involved with out-of-state rentals.
Brandon: Okay. What's the market look like where you're at because I know some areas of Massachusetts are very expensive?
Shaun: Most of Massachusetts is relatively expensive even in the real boonies and stuff like that. It's still more expensive than a lot places in the country.
Brandon: My area is pretty boonies.
Shaun: I live right outside of Boston so it's very expensive here as they say. I'm in $400,000 or $500,000 condo land.
Brandon: Ooh. Ooh.
Josh: Yes. That's got to be Cambridge.
Shaun: Oh, yes. Lots of them in Cambridge. I'm in Newton, which is close to Cambridge, borders Boston. It's where Boston College is. One of my high school teachers didn't like it very much so he'd always call it the University of Newton.
Brandon: Nice. Nice.
Josh: Yes. I've actually lived right on the reservoir at BC after college. It's kind of a fun place to be. It's a cool town for 17- to 21-year olds.
Shaun: Yes. Actually, I've lived in Brighton near Newton where you're talking about. We actually probably had places pretty close to each other at that point.
Josh: Nice. Nice. Awesome. You started buy and hold, went to flipping, and then got to out-of-state rentals. I guess we'll cover that transition. How did you originally get in to buy and hold?
Shaun: I had actually been interested in real estate for quite a few years, had read a lot of books, did a lot of studying, wanted to get into cashflow and rentals. Me and my wife bought our first place which was that condo in Brighton I was just referring to.
It was actually...we bought in the wrong side of the flip back in 2004. Then, in 2007 we wanted to move to a place that was a bit bigger because we were starting to think about starting a family and stuff and a 663 square foot, two-bedroom condo was probably not where we're going to be...
Josh: Yes.
Shaun: Raising a family. As I said, we bought it in 2004, wanted to sell it in 2007. As opposed to eating $30,000 or something to sell the place, we decided to turn it into a rental because we thought we should at least be able to cover our cost which we have been able to do. We had actually always joked that it was so close to BC that it would always make a good rental property if we didn't have to sell it. That's how we got started there.
After that, as I said, I have always been interested so that gave me a little old kick in the pants to get started. We like the fact that people are just mailing us money every month.
Brandon: That's how it is?
Shaun: Yes. What we did after that is...I grew up north of Boston, a city called Lowell, which is right near New Hampshire, one of the other bigger cities in Massachusetts. Boston dwarfs everything else. After that it's one of the bigger cities in the state.
I grew up right outside of that and most of my dad's family still lives there and stuff like that. I knew the area pretty well. It's like, "Hey, we can probably buy the same unit for less than...probably about 40% of what we paid for our place in Brighton. Maybe we could get somewhere between two-thirds and three-quarters of the rent. Hey, let's start looking there."
We actually bought two almost identical units there six, eight months after we first started.
Josh: Were these condos as well?
Shaun: Yes.
Josh: Okay. Okay.
Shaun: Actually, all my stuff in Massachusetts are condos.
Josh: Really? Okay.
Shaun: The rentals.
Josh: Got you. Got you. Interesting. Let's talk about that a little bit because a lot of people will shy away from condos. I know that I had a condo experience myself that did not go well. I loved where I lived. This was in SoCal and inherited a board of directors that felt like running a board was like running the universe.
They got very power hungry over a 40-, 50-unit building and started going crazy and doing bad things. It gave me a very bad taste for living in such a place or if ever owning a rental in such a place because you're at the mercy of those folks. Have you ever had any similar experiences? Or, how does it work for you?
Shaun: Those things are definitely risks. I have dealt with...my places range anywhere from just five units all the way up to several hundreds. The small ones, they generally sell for me and they just did stuff. It really does depend if you have good people there.
I've actually been pretty lucky and for that really, really small one, the person who's in charge, the trustee there is awesome. He's very easy to work with, very nice, does a good job of keeping things in order.
We do have...actually, in our biggest complex, we had something kind of similar to what you had. There were a couple of people who had been on the board forever and just had crazy power trips. One was eventually voted out which was very nice. For the first couple of years, if I went to the association meeting and stuff, literally they had to have cops and attorneys and stuff there just to keep things in order.
Josh: Wow! Really?
Shaun: But the cash fLowelld so...
Josh: Yes. There you go. There you go. The big thing for me was these guys didn't want to get earthquake insurance. Living in Southern California...
Shaun: In California, it's kind of a big deal.
Josh: Yes. I owned everything between my four walls but the building itself didn't have coverage and that was a bit troubling. Interesting. You put up with that stuff and continued to acquire condo properties after that. You're a braver man than I am.
Shaun: I did slow down for a while but that was actually more because like a lot of first-time investors who buy rentals like the books tell you to do, they don't make you nearly as much money as you were hoping. I got in to a holding pattern for a while. I only bought one since those first three here. I did buy…it was another condo. It was in the same area and the same basic unit and stuff.
The thing I like about condos especially for getting started and you know, you have to due diligence on the association and all that kind of stuff is that if you want to sell manager properties, it's a lot easier because typically as you were saying you're responsible for inside your four walls but you don't have to worry about exterior maintenance.
You don't have to worry about cutting the grass, plowing the snow, fixing the leaky roof, any of that kind of stuff. The association is in charge of that. You pay for that. That's why you have to evaluate the fees and make sure it's worth it.
If you consider that to be just part of your property management fees and your reserves and stuff like that, it's a good way to get your feet wet because you don't have to deal with every single issue. You only have to deal with the stuff that's set inside your actual unit. It's easy to self-manage.
Josh: Absolutely. Absolutely. I think the scariest part of the board is really those one-off assessments that tend to pop up every couple of years or every year. It depends on your board.
Shaun: I get three deck assessments and I don't have a single unit with a deck. That kind of stuff is frustrating.
Josh: Yes. It could be. It could be for sure. For those people listening, condos do have their benefits for sure but there are also certainly negatives. Obviously, look at your own risk tolerance and decide if an investment on a condo is really for you. If the numbers work and you're willing to put up with it then it could definitely be a good deal. That's great.
This condo thing, you picked up a bunch of condos. Did you continue, as a buy and hold guy, did you move single families from there or was that kind of the "I'm going to move on to flipping houses now?"
Shaun: What happened was after we got those first three units, the converted primary and the first two that we bought otherwise, as I said, like a lot of people, didn't turn out to be as good of investment as I thought initially so got into a holding pattern for a while, blew our wad with down payment money and stuff like that and also since they weren't doing as well as we wanted, we wanted to step back and reevaluate how we want to do stuff.
These weren't like killer investments where it's like I ended up going bankrupt, lost all the properties from foreclosure. It was like instead of cash flow and $200 a month, it's more like breakeven.
We got into a holding pattern for a couple of years, built my network and my knowledge, kept going to my local REAS and other real estate meetings and stuff like that. I always wanted to get in to the flipping stuff, too. I just kept on learning about that.
One day, something clicked and started just putting out tons and tons of offers to try to acquire some properties and started getting some. Ever since then, I've mostly been doing that around here. I did pick up one new rental locally about a little over a year ago.
Just to show what I learned in five years is that the...it was also a condo in Lowell, more or less the same unit that I bought the other two times but I paid half as much.
Brandon: Oh.
Josh: Ah. There you go.
Shaun: Now the cashflow is a lot better.
Josh: Yes, sounds like it. I'll take it.
Brandon: That's cool.
Josh: You started flipping then at that point. What did your first flip look like? Did you mean to flip it? How did that start?
Shaun: Like most people, initially I was thinking, "I should probably go in to wholesaling because of the easier than going through a whole rehab process because I don't actually have enough money or connections. I've never done it before, blah-blah-blah."
As I said, one day I just clicked. Basically, it was if I don't start putting out offers, I'm never going to buy a property. I started putting in tons and tons and tons of offers. Basically, the month I decided to really get into it, I probably put in 200 offers. A lot of them was like throwing stuff against the wall. I didn't really expect there to be any traction and there was. Eventually, I did start getting some inquiries and stuff.
The first place I got under contract that I had hoped to wholesale and I didn't work toward that. I actually had a buyer all lined up and he was using card money. Basically, his lender backed out the day of closing. He was scrambling and I was trying to figure out what to do with that.
It was a bank-owned hunt property so we were going to double close. I had to perform or lose it. You couldn't get an extension. I did get a short extension. I had to pay $300 to get a two-week extension or something hoping that he would be able to get his finances in order.
He wasn't able to pull it together. At that point, I was at a decision point. I was like, "I know this is a deal. I've been studying this forever. I've been putting in these offers. I've been evaluating stuff. I know there's a ton of profit in this deal. I'll close on it and then I'll keep marketing to see if I can wholesale it." I did eventually close. For Massachusetts, it was ridiculously cheap. It was $34,000 I think I paid.
Brandon: Wow. Wow. Wow! It sounds like...I won't say it.
Shaun: It needed more work than that. Actually, I remember at one point I looked up, since it was an MLS deal, I looked it up on MLS. It was the cheapest any house had gone for. This was in Chicopee, Massachusetts. This was way west probably about 85 miles outside of Boston, which is actually part of the problems.
I didn't have a network out there. It was the cheapest place that went on MLS for three or four years before that and nothing cheaper since then. I was like, "You know what? If nobody's bought anything anywhere near this cheap, it's got to be pretty good."
I tried, kept marketing it, had a few tire kickers, did the Craigslist thing, going to the REAS thing. It was funny because there was actually a REA out of Springfield, Massachusetts which is the big border town that literally closed a month before I got the property. I go, "Let's go out to this Springfield place. I'm sure there will be buyers there."
Then, the next closest one was one in Wooster, Massachusetts which is the second biggest city in the state and probably 30 or so miles from there. I go, "That's probably where everyone else is going to be going now." Luckily, I checked if it was still...to get the address, I went online to check it out and it literally had just closed. I was like, "Oh, well. I'm glad I didn't drive all the way out there to pitch something."
Josh: You got this property under contract. You decide you're going to close. Obviously, it sounds like you had the cash to close yourself. You were able to actually do that.
Shaun: Yes. I didn't have to do anything too dramatic. I did have some cash. To be honest, I took a huge credit card advance to pay for it. It's one of those things people demonize sometimes is using a credit card. In this particular case, I had 0% for 13-month offer. I just took the money out and that was more than enough to close on it.
Brandon: I've done that a few times now. Yes, I know people demonize that, don't they? I even am guilty of telling people be very, very, very, very careful in doing that and maybe don't do it at all, but I do it.
Josh: I'm the one who demonizes it.
Brandon: You are.
Josh: You all can look at me and make your little devil eyes at me.
Brandon: I know it's dangerous. There are a lot of bad advices in the world but it's worked for me and it hasn't messed me up yet.
Josh: Or if you get a 0% loan for 13, 16 months, it's better than hard money.
Shaun: That's my point. You get that kind of deal. Why is it better to get a secured loan at 12 to 15% with the same transactional fees for the same time period?
Josh: If you look at it from that perspective, I think using a card with an offer like that is probably your best option if you don't have the cash.
Brandon: I wouldn't do the 40% cash advance fee or whatever, the really crazy cash advance charges but if it checks out nice...
Shaun: Yes. These things are usually only either at 3% or 4% transaction fee, which is pretty typical to what you're going to pay for hard money points. Why pay, like you said, the double-digit interest and all the other closing costs. If, God forbid you actually do default on it, you don't lose the property.
Brandon: Yes. Yes, that's true. There you go.
Josh: There you go. You've got this property now. You've been shopping it around to the clubs that don't exist. Their stores are closed and they're conspiring against you. You decide, "You know what? I'm going to go ahead and flip this."
Shaun: Exactly. That's what happened. When I was having a hard time wholesaling, I got a few tire kickers off of Craigslist and I actually called some of the "We buy houses" people who are out there who did not get back in touch with me. I was like, "Whoa." Then, I was like, "You know, I just know there's profit here."
My biggest concern was, as I said, it was well out of my general area so I didn't have a contractor out there. I hadn't done any flips yet. Somebody who I had formed a relationship with then had been looking at some local properties, agreed to go out there and take a look at the job. His quote was well within my budget so we just went for it.
I'd say it worked out very well and made well over $30,000 in that first flip. I was only looking to make about four in the wholesale. Then, I was "Oh, this rehab-ing thing seems to the better way."
Josh: There you go. There you go.
Brandon: That is the interesting thing about wholesaling, right? If you were a really good wholesaler, you can get those amazingly cheap deals. It's hard to pass those deals up as a flipper and then hand them over to somebody else to make the $30,000. I understand the velocity thing but that's where I struggle. Anytime I get a good enough deal that I could wholesale, why would I wholesale it?
Josh: The way I see it, wholesalers, really their job is the marketing. They're marketers versus flippers who are more job-ers, I guess. Maybe that's a way of describing it. I don't mean negative on either of them.
The wholesaler, your job is to get that flow. You want to work, work, work and get as many leads as possible, as quickly as possible and you want to dump them as fast as possible. Yes, you can have ten, 20, 30 deals in a month. You can't flip ten, 20, 30 deals in a month unless you have a huge infrastructure.
Shaun: Yes, I think that's the big thing is just the difference in volume. Subsequently, I have wholesale-d some properties. I wholesale-d a property that at the time I actually had a lot of stuff coming in. It was a very magical time where it was the second property I got under contract that day after getting one under contract two days earlier and had multiple projects going.
It's like whoo! Is it actually going to be hard to get it? I wasn't able to wholesale that. For the most part I don't get enough leads that I can't handle them. If I started having more projects then I could reasonably take on at once, I'd be looking at that more.
As I was going over the last couple of years, I have built up a stronger network even out in that western part of the state where I had a hard time wholesale-ing this first one. I don't worry about getting stuff in places that I would not necessarily want to do the job myself because I am much more confident that I could dump them if I need it.
Josh: Got you. Got you. Where are you getting your leads from?
Shaun: Up until about a year ago, I was pretty much exclusively doing stuff on the MLS because there was enough bank on stuff that...I was able to get deals and I was putting in a lot of offers and getting things to work out and especially I did pretty well with HUD around here. Like I said, that first one was a HUD and I got a few other ones that way.
Since then, it's definitely been the MLS. A lot of places in the country have dried up a lot. I'm actually currently just getting a lot of my direct marketing to motivated sellers going. I have not purchased any properties from that yet but I'm definitely working on it.
People see me on the forums. I've been pretty active in a lot of the ones talking about direct mails and stuff like that to try to get new ideas and then blogging about my stuff on my BP blog to keep myself accountable.
Josh: Yes. Yes. That's awesome. They can check it out. We'll link to that on the show notes on BiggerPockets.com/show43. Let's talk about that a little bit. Maybe we could jump back to the flipping stuff afterwards.
"Direct marketing to motivated sellers." You're new to this, which makes it actually interesting. What strategy did you decide to go with after doing all this research? What are you running with? Who are you targeting specifically in terms of the motivated guy? How is that going? Obviously, you haven't closed the deal yet. Fill us a little bit.
Shaun: The main form that I'm trying to use is direct mail because based on when I've talked to people locally and most of the stuff I've read on BiggerPockets has convinced me that that is probably the most effective way to go. I've been working on that.
In addition to that, I've been doing some of the more low-hanging fruit like posting Craigslist ads, getting in touch with people who post "For sale" ads there. I finally took the plunge into tacky and started putting signs on my car.
Josh: Oh, yes. How does the family feel about that?
Shaun: My wife has been so surprisingly not bad with it.
Josh: Surprisingly mediocre.
Shaun: She hasn't said, "Take them off," or anything but I was worried she might be...at least when we do go places together. I figure she'd probably be okay when I was by myself but when I take them to a kid's birthday party or something like that, she doesn't ask, "Would you take them off the car?" That's not what I thought she would go. She's been cool with that.
Brandon: Nice. Nice.
Shaun: Just a lot of the common stuff like leaving stacks of business cards in different places, those kinds of simplistic things that aren't particularly effective but are easy to do.
As far as the direct mail, I've only been doing it not even quite a month yet. I've been sending stuff out. I've been doing it in chunks to just start getting stuff out because I was working on a list for a long time and then I realized if I wait to fully refine everything, I'm never going to send out any mail. I started sending stuff out a little more piecemeal.
Josh: Who are you sending to specifically?
Shaun: I'm sending to out-of-state absentee owners.
Josh: Okay.
Shaun: The main reason for that is that it was a list I was able to compile myself for free.
Josh: There you go.
Shaun: I figured that was a good way to start, keep the cost down until I figured or get a better strategy and feel my way through the actual process.
Brandon: How were you able to get those for free?
Shaun: I am a licensed agent and I was able to pull the information off MLS. It was actually for the Massachusetts MLS. It's a pretty easy system. Actually, Mike Lacava in one of his articles a couple of months ago showed the process for that. That's actually who I learned how to do it on the BiggerPockets
Brandon: That's awesome. Yes. Look at that, power of BiggerPockets.
Josh: Awesome. Awesome.
Brandon: That's cool. Do you recommend other people getting their real estate agent's license? I ask a lot of our guests this.
Shaun: I think I'm going to come down where everybody who has their license says that they should because I've found it pretty beneficial to...if for nothing else, just for the MLS access and the ability to put in my own offers on bank-owned and short sales and stuff like that.
Josh: Yes. You're not paying the commissions. You can expedite the rate at which you get it done. You don't have to wait for somebody else to respond to you. Those are definitely benefits.
Shaun: Yes. I especially like it on the buy side because like I said, I can research stuff on MLS. I could com stuff out. I can go do my own visit without having to schedule it with a realtor and I could put in my own offers.
Brandon: Which would come in handy when, like you said, you're putting it in a couple hundred offers in that first month.
Shaun: Exactly.
Brandon: No agent is going to want to do that.
Josh: That's what I was going to say. Yes. Because we talked with a bunch of agents, Brandon and I and we're always asking them, "Hey, how can we improve the relationship between agents and investors?" Agents will, lo and behold, will always say, "Get them to stop doing that crap where they send out a ton of offers that have little chance of succeeding."
If you think about it, how on earth can you get 100 offers out with a 1 or 2 or 3, 4, 5% success rate? Most agents are going to tell you to piss off. Really, the only way to do it is to do it on your own.
Shaun: Yes. If somebody else were asking me to put out as many offers as I put out as an agent just for the commission, I wouldn't do it.
Brandon: Yes. I saw a thing yesterday on the Facebook group. I'm part of a real estate Facebook group. Somebody complained just about that. They said, "Investors are asking me to put in 50 hours a month worth of work just to make the potential of making a few hundred bucks commission on the $12,000-house." It's ridiculous. There's no incentive for the agents at all. That's something we need to understand as investors.
Shaun: Yes. I think in my area I actually have better success working with agents because even the beat-her-up, need-tons-of-work places are at least approaching $100,000. They actually are getting reasonable commission on the buy side.
Even though I'm an agent, I'm perfectly happy to work with other agents. When I network and I meet people, I say, "Hey, I'm an agent but if you bring me a deal, you can write the offer for me and I'll list the resale with you." That's their incentive.
Josh: Okay. Nice. That's cool.
Shaun: I actually do list quite a few of my flips with other agents just because I just am not that great at selling places. I do some of my own stuff like places that are close to me or if there's some particular reason why I don't think that I could use a local person with a specialized knowledge and stuff like that. Probably 60% of the places I've resold I've had with other agents.
Brandon: That is really interesting to me because a lot of investors say all an agent is doing is stick it on the MLS and that's it. Why am I paying them 3% or 6% or whatever just to stick them on the MLS? I would love to get your take on that. What does a good agent do to sell a house that just roll it on the MLS doesn't accomplish?
Shaun: I don't know. It's kind of hard to say. I have, overall had better success selling my places fast when I've listed them with other people. I kind of go back and forth.
I would say half the time when I list a place myself, I sell it pretty easy and then I save on the commission. I'm just like, "Why do I waste that money listing with other people?" The other half of the time it is such a pain in the butt that I'm like, "Oh my God. This is the worst 3% I ever could have saved."
Josh: Yes, yes, yes. A good agent...I think I could answer that as a former agent who was never particularly good either. I was a buyer's agent. I was never a listing agent. I think what I saw that the good listing agents did was they got a lot of energy for the listing beforehand.
There's that age-old argument about open houses. Agents all complain that open houses are useless. I think if the house looks good, the house is ready to go, an open house can sell your house pretty fast. Getting energy about the house, getting it out to other agents, making deals with other agents and letting them know that you've got this great property, just like an investor, it's about networking.
A good agent is going to be somebody who's very well networked, who's tight with the other investors in the area, and who has the capacity to go out and basically bring you buyers. That's really what it comes down to.
Brandon: Yes.
Josh: If you've got a good agent, they're going to have lead funnel just like an investor's going to have a lead funnel as well. They're just going to have the capacity to do that. I think that's really the biggest difference between a good agent and a mediocre agent.
The other thing is also just the willingness to spend the money on the marketing. Good agents will spend money and they'll market it because they know they're going to see it back and they'll put their name all over the neighborhoods. They'll do whatever they have to do because they will come back and pay itself back. The mediocre ones tend to chance out I think on their spend. This is my take on it.
Shaun: Yes. I think that's pretty accurate overall. When I have listed with other people, generally I've had better success moving the places pretty quick; not always but generally I think I've had more advantages that way.
What really got traction either open houses I've done or ones that they've done but something that they bring to the table usually that I don't really have is they do broker opens is that they get other agents through there which is a big thing.
My office is a small independent "investor friendly" office. The motto is "Investors working with other investors." All the agents more or less are doing their own kind of investing as well. We don't have a strong retail branch. These other people can bring in people from their offices and if they're with one of the bigger companies, some of the other local offices.
Josh: I think broker opens, I'd say they're probably be more valuable than just an open house to consumers because giving the opportunity for other folks, other brokers to show up other agents to come and know it, when they've got a client, that's where it's going to come from.
Again, when I was an agent in California that was the one thing that I saw. The most successful listing guys they always, always held a broker open. They got excitement. By the way, to do a broker open is to have a bunch of food. The broker opens that didn't have food, nobody showed up for it.
Shaun: You only went to those?
Josh: Yes. The broker opens that had a nice little catering that you probably spent a couple hundred bucks on brought everybody in. Those houses really tended to sell fast. You never think about those things but those are actually pretty important.
Brandon: In my town we have what they call a tour. There are probably two dozen agents that get together every Wednesday. They just go all together from different...I'm in a small area and they go and look at every single new property that came on the market in the past week; at least every one within whatever niche that they're in.
That's one of my favorite things about listing with an agent is exactly that. Almost every property I've sold has come as a result somehow of an agent who had walked through the house during that tour. I think it's huge.
Shaun: I said I've got a lot more traction from those than the consumer open houses. I think at least two places sold to an agent that went through one of those or a client of an agent who went through one of those that we did. Yes, I definitely like doing that. I always, when I talked to the agents, I ask them to do that.
Brandon: Cool. Let's go back to flipping a little bit and talk more about your strategy with that. First of all, what kind of property are you flipping? What are you looking for condition-wise or size-wise, those kind of things?
Shaun: I actually cast a pretty wide net both geographically and in what kind of properties I'll do and what level of rehab I'm willing to do. Essentially, the deal flow is small enough that I’m willing to chase dollars and go pretty far out and do a variety of kind of things. I haven't done anything smaller than a two-bedroom house at this point but I have told people I'm willing to look at small.
As I mentioned, I have some experience with condos. Those don't scare me even on the flip side. I do tell people I'm willing to look at those like the smallest one-bedroom if it's in the city or something where people actually do buy those. I have looked up to small multi-family, two or three families for potential flips in areas where it's not uncommon to have owner-occupants there.
Like I said, I do a whole wide range there. For the most part it's been two and three-bedrooms, single families.
Brandon: Cool. Are they usually pretty nasty ugly units that you need to do a complete renovation?
Shaun: Yes, pretty much. There are some exceptions. I had one place. It was funny. I had put in a bid on this place. It was a hot property. I put a bid on it without seeing it. I do a lot of analysis, desktop analysis just putting in worst-case scenarios and I'll throw in some offers based on that. They accepted my offer, which I was surprised. I usually just hope to see a counteroffer.
I rushed down to go look at the place. I want to say I had a $75,000-budget on the place. I walked in the front door and then I literally took a step back to look at the house number to make sure I was in the right house because it was so knocked-up bad.
As I said, I'm an agent and I'm a HUD-registered agent. Basically, my office has a set of keys that work with all the HUD locks for the places all around the state. I had a key to the front door yet I still was so shocked that I took a step back to see if I was in the right place.
Josh: Nice. On show 38 with Travis Daggett, we talked a lot about HUD homes and making offers on them. It's cool that you're a HUD agent. We get to see what it's like from your perspective as well. Maybe you can dig in a little bit on the HUD process really, really quickly for those who may not have listened and maybe unfamiliar.
What's HUD? How does it get listed? How would you make an offer on HUD homes? Where would you find these things?
Shaun: Being that I am an agent and my brokerage is registered with HUD, it's very easy to deal with those properties because if you want to put in an offer, you have to put in through a HUD-registered agent. If you're not an agent or if an agent in your brokerage isn't registered with HUD then you have that extra step to go through and then all the stuff that we were just talking about as far as annoying the other agents by putting in too low offers and that sort of thing.
Since I don't have that hang-up...if you can put in your own offers, it's ridiculously easy. Essentially, it's just a one-page form that you have to fill out for the property. You can't put in any particular contingencies. You just have to fill out the basic information. I can put in a HUD offer in less than two minutes once I do the evaluation.
I do that a lot and put in a lot of them. I put in ridiculously low offers that I don't expect to ever get except that I'm just hoping to get a counteroffer that's within the realm of possibility.
Brandon: I'm assuming that you don't go look at this properties first then, right?
Shaun: I don't think I've ever looked at a HUD property before I put an offer on it.
Brandon: Okay. Yes.
Josh: Is there a danger like putting in too many lowball offers for an agent? They're going to say, "Go away. Stop making these offers." Is there a danger that HUD stops responding to you because you're that annoying guy who always puts in these awful lowball offers?
Shaun: It seems for the most part to be very automated and it doesn't seem to matter. There was one time I got an e-mail from somebody at one of the asset management companies asking if I knew how to use the system because my offer was so low. I think I offered $1,200 on a place that was listed at $120,000.
Josh: You really do lowball offers.
Shaun: Basically, if I spend the time for a HUD, this is not the same on every particular place. Since I don't see any ramifications, if I do the evaluation, I'm putting in an offer no matter how stupid it is.
Brandon: I think that's an awesome strategy to do. If you're going to spend the time anyway and you find out what that final number is that you should offer, why not throw it in at least? You'll never know what might happen.
Josh: Yes.
Shaun: It's funny with that. I will re-submit offers every once in a while. What I generally do is I increment it up a dollar just so I know they're looking at my most recent offer or something. That is if I don't have any other reason to change it.
For this particular one, after they said that I didn't put in more offers on it but they kept sending me counteroffers for weeks. I'm like, "You know what? If you're going to keep countering my $1,200-offer than I don't really feel bad about putting it in.
Josh: You're putting in, say it's $100,000, you put an offer...say, $10,000. Let's say you made a generous offer, knowing you. I was just kidding. You put in this $10,000 offer. They counter you at $95,000 and you counter them at $10,001 and they counter you at what?
Shaun: Like I said, it's a pretty automated system. What they typically do is they just sent out an e-mail to basically anybody who put in an offer. "We have decided this is the minimum net offer that HUD is willing to accept on this." They basically just send it to everybody. If you put in an offer, you'll get that e-mail generally. That's what I'm looking.
I don't remember exactly what you said. Say, the place is listed at $100,000. I put in a $10,000 offer. They come back and say they come back at $70,000. Then I was like, "Okay. Maybe if I go out there, drive the neighborhood to see if I might be on the low side," because I try to be conservative with that until I look at the property obviously.
Maybe I can do my rehab, like the place I was talking about where I thought I was in the wrong house, my rehab budget dropped $50,000 as soon as walked in the front door. If I can tighten up the budget, maybe this will be workable. That's when I start putting in the time.
Josh: Is that $70,000 that they come back to? Is that hard and firm or is there negotiation?
Shaun: It will keep coming down.
Josh: How does that work? If you counter again, do you get another standard...
Shaun: It's not really counter. It's more like you can re-submit an offer. It's not like what you do with an agent. You can verbally go back and forth and then just make the contract. You would just submit a new offer. If you wanted to get the property at the price that they said, you would just make sure that it netted out.
It's a net amount. They take capital, commissions and closing cost, credits, and stuff like that. If you put in the offer so it nets out to the amount that they want, unless somebody goes higher then you're pretty much guaranteed to get it.
I did that one time that I put in exactly what they asked for in the counter because they had just dropped the price and they said they would accept something like $10,000 under what the new price was. It was pretty much like what my Mayo was.
Josh: Tell me about the counter then. I'm going to call it a counter, the second offer, third offer?
Shaun: 15th offer.
Josh: When do you do it?
Shaun: Generally, I have it on a weekly, every other weekly kind of cycle where if I already have...like I said, unless I have some other reason to change my offer, I just increment it up a buck just so I know they're...actually, that very first property I was talking about, I adjusted my offer a couple of different times or I guess once.
They actually accepted an earlier offer than the most current one which got me...I was indignant about that but then I went and looked at the property. I was like, "It still works even though this is $3,000 more than what I most recently asked for." Instead of rocking the boat I just did it.
Now what I do is I make sure I put my rock-bottom offer first and then I'll increment from there just to make sure that kind of thing doesn't happen again.
Josh: I'm assuming that's worked.
Shaun: Yes. My most recent offer is always my highest now. That's the one that they're evaluating even if it's only higher by a dollar, it's still the highest.
Brandon: Yes, that makes sense. Let's move on. What is the cheapest home that you've ever bought? How low can you go on these things?
Shaun: Locally, in Massachusetts it would have been that very first property I was talking about that was around $34,000. I actually bought another one, my most recent one a few months ago was also in that same $30,000-range which like I said is ridiculously low in Massachusetts. Both of those needed much more work than...the cost of the work was much more than the price of the house.
As I mentioned, I do some out-of-state rentals. In that market, things are much, much, much cheaper. Even the very nice houses don't cost me that much. The cheapest house I bought ever was $2,000. I bought that at a tax sale in Pennsylvania.
Josh: Wow. $2,000, that came totally without any kind of secondary liens or anything?
Shaun: Yes, free and clear.
Josh: Okay. Okay. What was that house actually worth?
Shaun: It's probably worth somewhere in the low to mid-20's.
Josh: Okay. I got you.
Shaun: Like I said, it's a much cheaper market out there. Also, this place was inhabited when I bought it. I'm actually in the process of trying to figure out what's going on with the people, if they're actually tenants who don't I guess have a current lease so I'm trying to see if they want to stay, if they want to go, if we have to evict them. It's a little bit up in the air.
Obviously, the place is fully inhabitable if people are already living there. I'm sure it needs some work. I'm hoping to get them to stay for a slightly below market rent so I don't have to do turnover costs.
Josh: Did you buy that sight unseen again? I'm guessing.
Shaun: Obviously, we couldn't get inside. We did go around the outside. For the most part the exterior was in pretty good shape. It was hard to tell...we didn't even want to peer in the windows once it was clear that people lived there. You can at least look in the windows of places that are vacant.
We saw people were living there. We saw the electric meter moving and stuff like that. I go, "Okay. Let's just get out of here before people call the cops for trespassing."
Brandon: Did you actually go to the courthouse steps to buy that then?
Shaun: That's not exactly how it works but yes, more or less. It was an auction hall at the municipal building, but yes. Same idea, yes.
Brandon: What are these properties in this area looking like price-wise or condition like? What are you looking for down in Pennsylvania you said?
Shaun: Yes. It's in western Pennsylvania right near Ohio.
Brandon: Okay.
Shaun: Well west to Pittsburgh.
Brandon: Okay. What do they look like down there?
Shaun: They don't look too different from what I have up here. They're older housing, not super old. It's more like World War II era, World War I, World War II which given I'm from New England that's like new construction.
Josh: Yes. Nice.
Shaun: They're pretty typical houses. Like every other place, you can have your really nice houses. You can get really dumpy ones. For the most part, I'm looking at...there are some two-bedroom places but mostly they're like three, one and a half, three-two type places, like pretty good square footage.
Brandon: What kind of price range have you seen?
Shaun: The stuff that I'm looking at because I'm not looking at the higher end stuff for rentals. There are places in really good, fully rehab-ed condition, they're probably in the 30's.
Josh: What are you picking them up for?
Shaun: I've gotten stuff anywhere from that $2,000 house to the most I've paid for a place so far was a fully rehab-ed duplex for $37,500.
Josh: Wow. What are those rented for?
Shaun: The duplex, I'm getting a total rent of about $1,000.
Josh: Okay. Yes, that's great.
Brandon: Yes, that's not bad.
Shaun: Yes. I had another place...this was a place I bought right off of MLS. It was move-in, more or less move-in ready. You have to do a little bit of work to it but it only cost me 17 and rented that for 575.
Josh: Okay. Okay. That's cool.
Shaun: You have to put a little bit of work in. I'm probably all in before getting rent still under 20 but probably more like 18 and a half, 19.
Josh: That's still pretty good.
Shaun: Yes.
Josh: That's still pretty good. Shaun, let's talk about mistakes. We all make them. It's funny. I get these investors who will e-mail me and say, "Josh, I have to close my profile because I talked about a mistake I made and now nobody's going to take me seriously."
Listen. If you're a real real estate investor, you've made mistakes. Nobody is going to give you any less credit because you've made mistakes. They'll treat you differently if you're a liar. I closed a profile of somebody today who was one of those "Hey, I've got a billion dollars in real estate available." At the same time, he's asking for money to help him flip a house.
I don't know. That doesn't really work so well together. Don't do that, by the way for anyone listening. Don't.
Shaun: Quick tip. Quick tip.
Josh: That was good. That was good. I might fire Brandon and bring you in.
Brandon: Hey. Okay. I can take it.
Shaun: You're totally right. It's all about honesty. You don't have to be an expert in everything. People make mistakes. They may say something wrong. Yes, you have to be upfront and honest and try to be aboveboard on everything.
Josh: Yes. Let's talk about mistakes. What mistakes really stand out to you that you've experienced in your career thus far?
Shaun: One of my funniest mistakes is...going back to that very first property that I talked about that I went to try to wholesale and eventually rehab-ed. When I was doing my valuation, I had in my head the wrong place where the house was. Like I said, I hadn't seen the house. I was just doing an online evaluation, desktop rehab analysis based on the size of the house and doing costs in MLS, which doesn't necessarily tell you where the house is.
I went to go put in my offer. I had in my head that it was probably about 40 miles south of Boston. I put it in Google maps and it turned out to be 90 miles west. I put in this offer on this house and I had absolutely no idea where it was.
Josh: Nice.
Shaun: That's a pretty good mistake.
Josh: Okay. That's a good one. Know where your properties are when making offers. That's a good...
Shaun: That helps. I haven't been that far off since.
Josh: Okay. Okay. There's a good one. You got any others?
Shaun: Like I said, everybody makes lots of mistakes.
Brandon: I don't. I'm perfect actually.
Shaun: Oh, okay.
Brandon: Sorry. All right, keep going.
Shaun: Around here we have a fair number of places that are still on septic systems. We have pretty tight regulations around that as well. I purchased a property that had, it's called a Title 5. That's the name of the law. You have to have this path inspection to be able to resell a house unless you're a bank. Everybody else has to have a path. The bank doesn't.
One of my HUD properties had this past report. I thought I was all set, didn't have to worry about septic. I didn't do any follow-up. You can go to the Board of Health and check the records and stuff like that. I didn't bother to do that because I had this past report and that's generally all you need.
When I went to resell it, the buyer's agent was looking up some other stuff on the house, just looking for some old permits and stuff because like I said, it was a bank-owned property so I disclosed that's what it was and I didn't have a good history on say, how old the roof was because we didn't do the roof. She was looking for some old permits to try to glean a better idea of that.
She noticed, "something seemed funny with the septic reports." Eventually, we had to dig it up, get it reexamined. The Board of Health started making other things. Thank God that it was in good enough shape. We didn't have to replace it but I did have to do some repair work on it and that was about a $10,000 overage that I wasn't expecting because I just had this report and I didn't verify stuff. The old trusted verify.
Josh: Nice. Yes. That could have been a dirty problem.
Brandon: Before we go on to the end of the show, I want to ask you about something that you teased me on the e-mail about and that was a property you bought. You said that you're not afraid of buying any type of property.
Shaun: I don't get all hung up like a lot of people do on buying nice houses in nice areas. Whatever. This one particular place I was telling you about, literally across the street was a sewer pumping station, in the backyard were train tracks. I mean serious train tracks right in the backyard, not even a hundred yards away from the back of the house. It was also in the flight path of the municipal airport from the city next door.
It probably is in the flood zone now. It wasn't at the time but with the new maps, I wouldn't be shocked if it was because it was down the street. It also bordered a town...since we're banging on towns, Lawrence, Massachusetts one of the crappiest cities in all of Massachusetts. It bordered that. There's the sewer station then across the river was Lawrence.
Being next to one of the worst cities in the entire state was only the fourth or fifth worst thing going for this house.
Josh: What did you do with this thing?
Shaun: I renovated and flipped it.
Josh: Okay. Okay.
Shaun: My thing is I look at the prices. This was a funny story. I was looking at auction.com. It was probably midnight, 1:00 in the morning. There was an auction ending the next day. Even if I had this unhealthy obsession of looking at properties beforehand, I wouldn't have had a chance with this particular one but it was going at a ridiculously low price.
The town is North Andover, which has pretty good school, pretty high prices. Based on the size of this house, I was figuring it was a 250K ARV and the opening bid was $62,000-ish.
Josh: This is the one with the tracks behind it?
Shaun: Yes, exactly that one.
Josh: Okay. Okay.
Shaun: Basically, I put a bid on it. I was like, "Hey, it's never going to work." The next day I get the e-mail, "Hey, you were the high bidder."
Josh: What did you bid?
Shaun: 62.
Josh: Oh, you bid 62. Okay.
Shaun: Yes. I just put in the minimum bid. Obviously, I'm just super duper excited because...well, that's not true because whenever I have an offer, I always get scared. It's like "What did I miss," which obviously, in this particular case, I missed some stuff.
Josh: Little due diligence, right?
Shaun: Yes. I immediately went out there, got my contract to come look at it. As I said, I do a sight unseen budget. I had a very high budget on the place just assuming that was probably the issue is that it needed tons and tons and tons of work. I got out to the place. Essentially, my ARV dropped $100,000 as soon as I pulled up to the house.
We went inside but then it was actually in way better condition than we'd expected. I was talking with the contractor. I was like, "This is the lipstick on the pig. What can we do to make everything right without having to..."
There are certain levels of work you can do before you have to start pulling permits and update everything to modern code. We checked out all the plumbing and all the wiring. There was no knob and tube wiring. It had circuit breakers, not a fuse box, all the kind of stuff.
Everything was working okay. Obviously, if there were major problems like that we would have had issues. We didn't want to have to bring everything up to code by ripping down all the walls and stuff because it also had a pretty bad floor plan. We had to work with what we could without having to spend too much money.
We were able to come up with a reasonable budget, keeping it pretty low. Basically, I was able to resell it like I said, about $100,00 under what most other places in that town were going for. Literally, the places that were my direct competition when I'd listed it were the uninhabitable REO's and short sales that were still on the market.
Josh: Nice. What were the final numbers? You paid 62. You put how much in?
Shaun: It was roughly in the 30-range.
Josh: You had 92 and you sold it for?
Shaun: $159,000.
Josh: Oh, that's not bad.
Shaun: In the end, it netted out...that was one of the properties I listed myself because I didn't think I needed an experienced agent to just underprice it by $100,000. Including my portion of the commission, I made a little over $33,000 on it.
Josh: Wow! That's awesome. That's a good deal. That shows you that buying a property with a sewer plant in the back, railroad tracks in the front or vise-versa next to crappy what is it? Lawrence?
Shaun: Lawrence, Massachusetts.
Josh: I grew up in Lawrence, New York. The people of Detroit are happy to hear this interview. You could still make money.
Shaun: Yes. My key to buying these troubled, I call them properties is that you just have to buy them and like any real estate you have to buy them right but in this case you have to take all that kind of stuff into account. Like I said, these places, the uninhabitable REO's were selling for not much less than what I had my resale as because of these locational issues.
If I paid $100,000-plus for the house which actually had been on MLS, $110,000, anybody could have bought it at that price which was actually the cheapest place in the town at that time.
Josh: Got you.
Shaun: I wouldn't have made any money. I would actually have lost money on it at that price.
Josh: Yes, yes, makes sense. Let's move on to our...
It's time for the Fire Round.
Brandon: The Fire Round.
Josh: Fire Round, these questions come from the BiggerPockets forums. We shout the out quickly at you and you shout out some quick answers back.
First question in today's Fire Round is my handyman is ripping me off. What do you do? Obviously, we're going to go on to fire them. How do we avoid this situation?
Shaun: It's tough. I would say one of the hardest things to do in real estate is find good, reliable contractors down to handymen. I have been pretty lucky and I have a really, really good contractor that I try to do as much work with as I can because he works well with me, communicates good.
I think his prices are good. He pretty much always comes in below what I have as my own estimates. I try to be pretty conservative. I kind of expect him to come in under but it's never been any kind of issue. I, knock on wood, haven't had price creep yet, that sort of thing.
To be honest, I don't have a good handyman because I haven't ever been able to find one. I actually use the contractor on stuff that I probably should use a handyman on and probably I'm paying him a little bit more because of that but actually if somebody could do the work because I just haven't found a good one.
Brandon: That in itself is a tip right there. If you have to pay more money, pay more money and find somebody that's reliable.
Shaun: Yes, very true.
Brandon: Cool. Next question: what color should you paint a kitchen in a flip? Same color as the rest of the house or something different?
Shaun: I've gone a couple different ways. I have gone not super bold but different color scheme in the kitchens. I would say sometimes it's worked out for me. Other times, people have talked about how "We don't like this color. We may try to repaint it," and try to use that as leverage. I'm like, "Sorry you don't like it. I'm not going to like knocking $10,000 off the price of the house because you want to repaint the kitchen that I just painted."
We've actually gone more towards using the fairly neutral colors that we're using throughout the rest of the house there as well.
Josh: What's the best way to get started with no money?
Shaun: If you don't have any money, I found if you can get a good deal, I don't have any trouble getting a hard money lender to finance pretty much all of it if you have enough meat in it.
Josh: Okay. Good.
Brandon: What's the best type of property to buy first?
Shaun: To buy first, I guess it depends on what you're looking to do. Like I said, I actually liked buying the condos for rentals because like I said, it makes it a little bit easier getting your feet wet with the property management.
Josh: Okay. Right on. We're going to cut this one a little bit short because I know you're a little short on time. Let's move to our Famous For. That was all Shaun. That was all Shaun.
First question is: what is your favorite real estate book?
Shaun: I'm going to be a cliché like everybody else and say that "Rich Dad Poor Dad" was a big one. I actually feel the follow-up books like the "CASHFLOW Quadrant" and the "Guide to Investing" were some pretty good ones.
Josh: Right on.
Shaun: I also like "Nothing Down," the Robert Allen classic. I don't think a lot of this stuff is actually applicable anymore because lots of changes in the last 30 or 40 years but it's still a good book to get your mindset.
Brandon: Yes, I agree. What's your favorite non-real estate business book?
Shaun: Again, I'm going to be a cliché, "E-Myth."
Brandon: Okay.
Shaun: I also like "The 7 Habits of Highly Effective People," which I know somebody mentioned on one of the recent podcasts. That's a great one. That's a great way to just live your entire life, not just your business.
Josh: There you go.
Shaun: Another one that I've liked recently is called "Getting Things Done" by David Allan.
Brandon: I love that book. Love that book.
Josh: Yes, I love that. Yes. Awesome. Cool. Hobbies?
Shaun: I have two small daughters. That monopolizes most of my time. I do love that. I like spending time with my family and playing with my kids and stuff. That really is my favorite thing. Personally, I like sports. Watching sports is part of my life. I enjoy that.
Josh: Go Red Sox, World Series.
Brandon: Go Mets. Go Mets.
Shaun: Actually, I'd be going to game six of the World Series tonight. Hopefully, it's a win to wrap it up.
Brandon: We'll see. This comes out in a few weeks.
Shaun: Yes, a couple of weeks.
Josh: People will look back and they'll laugh right now.
Brandon: Final question: what do you believe sets apart the successful investors from those who end up giving up ad failing?
Shaun: I think that's exactly it. It's just sticking with it. You do see people in the forms who said, "I sent out 500 letters and I didn't even get one good lead out of it." You just got to keep following-up. You just got to keep making offers.
I made probably 600 offers before I got that first wholesale/flip property under contract. My hit rate is terrible. I told you I put in a lot of low offers. My hit rate is pretty low. I've put out thousands and thousands of offers to buy dozens of properties.
Brandon: That's cool.
Shaun: I actually always say there are two kinds of real estate investors: those that make a ton of money and those who give up too soon.
Josh: Yes. That's good. That's good. I like that quote.
Brandon: I know I definitely couldn't do it, do it your way, man. I won't have the fortitude to put in thousands of offers. That's tough. That's really hard.
Shaun: You got to have a pretty thick skin because you definitely get people mad at you and you definitely get a lot of rejection. Like I said, some of the properties I buy, the sewer plant place shockingly, they were issues that came up and had to deal with them. It is definitely easier to just buy the 3-2, 1,800 square footage with the attached garage in the nice neighborhood type places but...
Josh: Different strokes for different folks
Shaun: Exactly.
Josh: For sure, for sure. Shaun, we want to thank you a lot for being on the show. We definitely appreciate it and we look forward to seeing you back on the site.
Shaun: Yes, definitely. Thanks a lot, guys. I really appreciate it. One last Quick Tip: anybody who is listening to this who is not a BiggerPockets member, go to the site. It is an awesome site. It's going to have all the information that you need to learn about, to get started in real estate. Josh and Brandon didn't ask me to do this. I didn't even tell them I was going to do this. It's totally unsolicited.
Josh: Thank you very much.
Shaun: I love you guys.
Josh: Thank you very much. Appreciate it, man. Thanks so much.
Brandon: It's been good.
Shaun: Thank you, guys.
Josh: We'll talk to you later. That was Shaun Reilly. Lots of cool stuff from that show. We jumped around a little bit but there are a lot of fascinating little tidbits. Definitely hope you enjoyed it. We appreciate you listening to our show, guys.
Brandon: Make sure you connect with Shaun over on BiggerPockets, too. Send a caller request and jump in to the show notes and ask question.
Josh: Yes, yes. Shaun's pretty active on the site. He's active on the forums, very active on our member blog area as well. Be sure to interact.
Otherwise, as always thank you. Check us out on Facebook at facebook.com/biggerpockets, Twitter at twitter.com/biggerpockets. We're on G+. We're everywhere else and come hang out with us on BiggerPockets as Shaun suggested. That's about it. Brad, I appreciate you as a host. You're really great to work with, man.
Brandon: Even if I can't say Massachusetts?
Josh: Aww, you did it. Nicely done, my friend. Why don't you take it out this time? Seriously.
Brandon: Seriously this time?
Josh: Seriously.
Brandon: This is Brandon signing off.
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