Welcome to the deal pen, a podcast that digs into the details of untold stories from crafty real estate investors. And now here's your host Avi Rasowsky

Okay. We're live with Jay Parker from the Jay Parker network. How are you doing today, Jay? I'm doing exceptionally well, thanks. How are you? I'm doing great. I was very glad to hear you accept my invitation to do this interview because you are an interesting man. Every time you're in a meeting with other real estate investors, it's funny, you will always share an opinion that sometimes people don't understand at first, but oftentimes when they think about it, they're like, oh, wait, That's a good way to think about it. So I don't want to say you're a contrarian thinker, but you're definitely a deeper thinker than most in the investing community. And I appreciate that very much.

Avi Rasowsky

Well, thank you. Thank you. You know, it's it's one of those things is I don't know why I think like that, but I just think like that. And I think I look at it as a blessing, not not something, you know, I don't do it just to do it. I mean, because I want to protect this industry because so many people in the industry are saying things that's not really. The right thing to say or, you know, and It puts a bad stain on the industry and then we all will suffer accordingly if we don't do things properly.

J Parker

Yeah, absolutely. I mean, I'm sure we've seen a variety of different things that investors can get into behaviors that are not necessarily good for the reputation of the industry. So I appreciate what you're doing. I think, I told you right before we started recording, it's hard for me to even think about how to structure this because you have so many golden nuggets that you tell people. One in particular, and you just brought it up to me is, One of the very first meetings I ever heard you, it was at Sticky Fingers in Concord, right? Yes, yes. You said something that stuck with me big time. You said your cashflow should be just like breathing, just as simple as breathing. And when you're flipping or when you're wholesaling or when you're doing something that's a big cash pop, that's like waiting for a big gulp of air. Is that how you look at it?

Yeah, absolutely. You know, I think, you know, your money should come as effortless as breathing. We don't think to breathe. You know, at least I'm not thinking to breathe right now. I'm asthmatic, but I'm not thinking at this moment, you know, but we don't think to breathe. We just breathe, right? We don't like, no, that just could be 10 breaths from our last breath, you know? So we just do it. Yeah. We just, it happens effortlessly.

Well, let's, let's kind of dive into, um, I mean, there's so much I want to get into with your background and everything, but let's maybe talk about how you even structure your days. One of the things that you're, you've become famous for, not just in Charlotte, but all over. I think you said you meet people at airports all over the country and, and they say, Hey, you're that guy from the rising grind. Right.

Right. Yeah. Yeah. You know, I'll see people all over the country. I was in Miami and this girl ran up to me and she was standing beside me looking up to me. And she said, oh, I know you from the rise and grind. I've been in Atlanta, California, and people say, hey, I know you from the rise and grind. You're the guy from the rise and grind. And so, you know, I became that guy from the rise and grind, not real estate, but rise and grind, you know.

So for anybody who doesn't know what it is, tell us, tell us what the rise and grind is. And then we'll get into a little bit more.

Well, you know, the rise and grind is actually, um, in the mornings, we, we, um, actually walk at five 30 in the morning and we walk about five miles. And then we sit around and we talk about real estate stuff, but we do it along the walk as well. And when I tell people at the end that they just walked five miles, they can't believe it because, you know, we're just talking about different strategies and different things as it relates to making money. And they, you know, get so engulfed with that to where they're not even thinking about the walk that they're making. And so, as a result, later, What I did, I started making that a place where I meet. So if I was going to meet somebody, if I was going to meet somebody, I would say, hey, look, meet me at 530. And I would say, meet me at 530. And they said, OK, yeah, I'll meet you at 530. And then I tell them AM. Then they're starting to backpedal, you know, they say, I don't know about that. I mean, is there any other time? And I said, no, no. I mean, that's the best time. I mean, you can we can talk about whatever you want to talk about. Just meet me, meet me there at five thirty. And I find that to be the best way, because if you start meeting people, you're meeting them when it's convenient for them. And so when it's convenient for them, they don't mind wasting your time. And what I mean by that is I've met with a lot of people and they said, where's your favorite restaurant? We met at my favorite restaurant and things like that. And then I see them six months later, what are you doing? Oh, I'm doing this multi-level marketing thing. They wasted my time because I go to bed relatively early. I go to bed about 7, 7.30. And so I could have been in bed. I'm out talking to these guys, and they're wasting my time. So I said, OK, my office hours are 5.30 to 7.30. And so they said, well, what is that? I said, 5 a.m., 5.30 a.m. to 7.30 a.m. I said, we can talk about whatever you want. I say, whether you come or you don't, I'll be there. So that's what I started doing and people show up. But it's also a good way, Avi, to determine how serious they are. Yes, it's a test of commitment. If you can change their life, if you can literally change their life and their financial standards, why wouldn't you do that? Why would you do that? You know, so a lot of people will make the make the decision not to come because of the bed, they have a gravitational pull, the bed, have a gravitational pull, and they can't get without of that. So they don't come. But I look at it like, you know, probably when you were young and you were playing baseball, and if you were picking a team, if you will say a lot, pick up game, baseball, you're gonna select the people that's gonna assist you in winning. And so the same thing, if we're playing basketball, we're gonna pick the team, I'm gonna pick the team that will assist me in running the court all day long. But when we get older and become adults, one of the things we do, we stop doing that. We start selecting people because we like them, not because they're going to help us to succeed or win in life. And I think we need to revisit that and put that in perspective and start winning. And so walking in the morning, that's one of the first telltale signs Is this somebody I want to write with? Is this person going to help me to win? And you can tell by there, like there's a hill. Have you ever taken a walk?

Yeah, I've only done it a couple of times with you guys, and I wish I'd done it more, but when the kids are in school, I don't make it. So when they're out of school, I have no excuse.

So we just missed it. We just missed the opportunity.

Yeah, I think the last time I went was probably, I don't know, six, eight months ago, and I haven't been since. But you guys are, and the end of it is the hardest, by the way, when you guys do the squats. Yeah.

It is no joke. Yeah, you know, and so going up that hill towards the end, going up that hill, you know, that's that's there was this one this one person that came out there and they came out with this really nice warm up suit. And I just oh, man, they're going to kill it. You know, I'm just thinking they start going up that hill. The hill became so challenging. That person just quit and say, hey, look, I'm calling an Uber. I'm a call over. Oh, no. You know, so it's pretty crazy. But is that somebody you want to, you want to- Right, you say it's a little bit harder to go find a foreclosure than this. Exactly, exactly. When do you get an opportunity? When do you get an opportunity to actually work on building and establishing your will? We never really work on our will. So I tell them this is much like working a deal. And that deal becomes challenging. And because that deal is challenging, do you just say, OK, I give up. I can't do this or this can't be done. Or do you keep at it and keep at it and keep at it until that deal submits and you get the deal?

I tell that to my kids all the time that are in sports right now. I learned so many of my lessons from sports that you don't, let's say it's swimming. You don't give up until you touch the wall or you don't stop the race until you finish. And unfortunately, the average person quits before the finish line these days. Absolutely. Absolutely. How did you develop? So let's kind of backtrack a little bit into your past, because I only met you about five years ago, but you've been in the investing game for what, 20 plus years?

Yeah, yeah, I started in 1993, and I was in Maryland. And that's where I'm from, actually.

I'm from Maryland.

30 plus years. And so I started, and I came from a family where when you grow up, it's driven in your head that you got to get a job. And even if it's not the job that you're looking for, you got to get a job. You got to work, right? You work looking for the job that you want. It's not that you're passing up jobs. So I took the job that the first job that came available was 84 Lumber. And so I'm working at 84 Lumber in Cambridge, Maryland. And so I was working there and a lot of the guys that came in there were landlords. And so I'm reminded of this one guy. He came in and I said, hey, what do you do for a living? He said, I read houses. I said, no, no, no. What do you do? What's your real job? What do you do for a living? I said, it is what I do for a living. Up until that time, I never looked at that as an occupation or something that you could do. for a living. I never realized it from that perspective. And so then I started looking at things differently. And then I started calculating, guesstimating how much he might be collecting for rent and mortgage payment and stuff. And I was just so fascinated with it. And I haven't lost that zeal yet. So I think it was that. which helped me to find what I was, you know, designed to do. I really believe what I'm doing now is what I'm designed to do. I love this stuff.

So all right, so let's let's kind of go from that path, then you learn from this landlord. He would come in often or not.

Well, it was a lot of them that came in often, you know, and I just decided I wanted to try to purchase a house. And so I went, I put a place, the house on the contract, $500. And I didn't have the resources that I have now. And I couldn't get the money. Okay, this is the night where I didn't know where I didn't know where to get the money. And so, you know, I lost the deal. Right. And so probably about probably about five, six months later, I lost my job. I was working at 84 Lumber and then I lost my job and then I moved to Charlotte, came to Charlotte. I ran into a guy named Skip Prevent. Skip was a realtor here in Charlotte and And I told him I wanted to buy this one particular house. And he said, hey, I have one over on on what's that? I can't remember the street. It was off of North North Triad. And I said, OK, great. So we went and looked at the house and, you know, I really didn't have any information, didn't have any. There was no groups or anything like that that I was affiliated with or anything. Right. So I had little or no knowledge. All I knew, I wanted to buy properties. And so we placed it on the contract. He submitted the paperwork. And then I went back maybe two weeks later, tried to find the house, couldn't find the house. I called him to verify the address. And then I went back, tried to find the house, and it wasn't there. They had tore the house down. They had torn the house down. It was a vacant lot now. And I was, you know, again, I didn't know anything about real estate. So I had given him $500 and I was concerned about what happens to the $500 now. You know, the house is gone. What happened? He said, oh, don't worry about it. Don't worry about it. I got it all taken care of. Don't worry about it. He said, I didn't realize this house had a condemned notice. And so obviously when we were looking at it, it was slated to be condemned. Right. I didn't know it. He didn't know it. Or at least that's what he told me. And so he said, that's OK, I got another house. And so there was another house on Bradford Drive. And so placed that house under contract and gave him the earnest money. And then at the time, my wife, she was, how are they going to give us a loan? I mean, we already got one mortgage. Why would they give us another mortgage? I said, listen, don't you disqualify us? Let them disqualify us. And fortunately, they approved it. They approved the deal. Not only that, Skip had structured a transaction, because I knew nothing about this, with building escrow money. And so they gave us $5,000 at closing to fix the house up. And we did that. And I was like, man, this is great. I love it. And then the next thing was, my wife was like, well, who are we going to rent it to? So we got a sign, went to Lowe's, bought a sign. We stuck it out in a front yard for rent. we had over 70 applicants for that property. Oh, wow. Okay. This is on Brad. That was, that was, you know, how I really got started with the help of skip prevent. And so then, um, about three months later, we bought another house from the same company. This was Ford consumer finance. This is right out of the SNL bailout. I don't know if you remember that or not, but that was like in the late eighties. And so, um, lenders were taking back a lot of houses, and this is a way how they were actually financing it. This was a non-performing asset for them. And so they resold it to us and made it a performing asset, which looked a lot better on their books. And so we did that twice. And then the third time, and this is how I really started going, is a lady gave me a house. She gave me a house and I sold that house and I made $20,000, $20,300, something like that. That was the most money I had made ever, ever at one time. And so my life changed after that. I ran into a guy named Horace, I can't remember Horace's name, but Horace worked for a company called Quality Mortgage. And he was working for Quality, And so he introduced me to the mortgage industry. And that was really how I started gaining an understanding on mortgages and how they work and how the lenders work. Now, just to put it in perspective, this was before. They had credit scores at that time, it was no credit scores or anything like that. So it was like they get a credit report, they look at it. If the loan to value was their seasoning requirement wasn't even there. Yeah. You know, and they would they would fund it. they would fund the deal. So as long as you were not above 75% of the loan to value, they would fund it. And so that was great. So then I was buying properties very inexpensively, and then I would refinance them for 70% of value, cashing out, which gave me, started building cash. I had some liquidity on hand. And so it just, you know, that's, how I kept going. And then after a while, I think the next year that was in 94 with it. No, that was in 95 and 96. I did 16 houses and I bought a small apartment complex of 16 units. And, you know, we just we just kept rolling. But we had a system. We had a system. And so we could go do foreclosures. As a matter of fact, foreclosures was the first way that I actually got started in real estate was doing foreclosures. And so with that, I would actually go and get a property. The person would be willing to sign the deed over to me. The loan to value was there, meaning I was getting it at 65% loan to value. So therefore, I could refinance because they didn't have any seizing. I could refinance, take over the property, and then give them money at closing. You know, and we were doing that, and it was just a great time. And it was a lot easier then than it is now. But not to say that now it's hard or difficult either. It's just you have to think about how to structure the transaction. And you can structure the transaction where it's not cash intensive, and then you can You know, one of the things I like to say, buy it on sale, opposed to for sale, and you can cash out and that will catapult you with velocity to the next transaction.

Well, that's definitely a big Jay Parker saying that a lot of people know you for. Is it on sale or for sale? Because how many people do you see that are spending all this time on a deal and you say, oh, okay, well, they just listed it on the MLS or it's retail price. Why are you even spending time on it? How did you figure out? I mean, tell us about how you look at things.

Well, you know, what I look, I want to buy the property. I look at it. If you go to the mall, when you have Macy's, let's say Macy's, right. And if you buy something from Macy's, you're buying it at a retail price. Macy's have a wholesaler that they're buying properties from. The wholesaler have a manufacturer that they're buying stuff for. They can't buy it at the same price that they're selling it to Macy's for. So one of the things, I created a situation where I buy it straight from the buyer. I buy these properties straight from the buyer. Every now and then I might buy something from a wholesaler, but that is not... You're talking about straight from the seller, direct to seller, right? I buy straight from the seller, yeah.

Yeah, I got you. So you're basically, as your analogy with Macy's, you're going directly to the manufacturer. You're not trying to buy something at a price that they've got a listed for and then you can't make money on that.

Absolutely.

Absolutely.

Yeah. Yeah. So that's and that's how I buy. And so, you know, when people will say, oh, well, you can't get 200 percent on your your mortgage and expenses. And they're right. They can't. You know, they can't do that. Yeah. Yeah. So the fact of the matter is you can do that. Every data is with a why. Because if you're buying it right, if you're buying it on sale, if you're buying it straight from the seller, this is one of the reasons why I think that foreclosures is such a great way of purchasing properties is because you can you can go I used to work 15 different counties. And so if you work in those counties and you're doing it regularly, you're going to find somebody to have a mortgage that was taken out 18 years ago, or that was taken out 20 years ago, and it's a 30-year mortgage. And so you're going to find those deals. And so you could do that any day that ends with a Y if you go out there and just hit the streets. If you go out there and hit the courthouses, You can find those deals.

Yeah, well, here's another thing I heard you say at a meeting. Somebody said, well, you can't just go back to 2008 prices. And I think you said right back to him, yes, you can. You go back and look at somebody who got a loan in 2008, it's going to foreclosure, and there you go. It's a time machine, right?

Yeah, yeah. I mean, it's a no-brainer. It's a no-brainer. But again, like I said earlier, you can beat the masses of people in thinking because the masses of people simply won't think. They're not going to think like that. they'll tell you that you can't do it before thinking about it and exploring whether there's opportunities of actually making that happen.

Yeah. Yeah. Well, one of the things that you do very, very well is you don't just come out of cellar with a, you, I got cash in a sack here and, and let me pay you money for your house. You're, you're doing what instead, how would you categorize it?

Well, you know, I, I, I want to, um, I believe selling isn't telling. And so most people, they'll go in and say, hey, I pay cash for houses or I do this or whatever. And so I want to go in and ask what happened. You know, I want to ask things that's going to reunite that that. that pain, you know? And so I asked them, I said, well, what happened to result in the foreclosure? And let them tell me what happened to result in the foreclosure. And so then, you know, I'll say, and I'll have the paperwork, I'll have the paperwork that they were given by the sheriff department, left it to their house or delivered to them or whatever. And it'll have on there when the hearing is, it'll have on there in some cases when the sale date is. And so I'm speaking from that paper, and I have it, and I have it highlighted. Well, it's September the 21st. They're going to sell your house. What are you going to do? And I just let them tell me what they're going to do. And most time, they don't have any question or no response. They haven't thought about what they're going to do, or they don't have any means of being able to do anything. So that sets up a perfect opportunity for me to provide the silver parachute for them.

Absolutely. No, I've noticed it too, is if you talk to somebody, most of the time when people reject you at the front door or on a phone call, it's because they don't, first of all, they don't trust you yet, right? And you have to allow them to understand that you're just trying to talk through it with them. And I don't know if I can help them or not, but do you need help? And a lot of people don't even allow for that opportunity at all. They just try to throw a solution. They try to throw a hammer at a Phillips screwdriver is needed, but they're just throwing hammers at every front door. You know what I'm saying?

Yeah, yeah, absolutely. And I think if they think about it, you know, One of the things, over years of doing it, when you go to the front door, one, they want to know who you are, and two, where did you get the information from? So I tell them, that's one of the areas that I tell. I said, hi, my name is Jay Parker with Encore Financial Services. Our research department indicated that you're experiencing some financial difficulties. I'm here today to see how I'm going to be able to help you. Not if. And see, their ears are very acute. Never say, if I can help you, to see how I'm going to be able to help you, which is very important because people say, go in there and say, hey, well, see if I can help you. And then somebody else may have come before you and they'll say, well, last person wasn't able to help us. What are you going to do different? That's a good question. Let's sit down and let me go and explore and see where we can help you. And let's go from there.

Yeah, that's great. So when the conversation unfolds, typically you're getting to a point where they're actually opening up to you, whether it's a foreclosure deal or a referral or anything else. How do you walk through from understanding the need to ultimately structuring a deal with somebody?

Well, so they pretty much, I'll ask them questions. I lead by asking. He who asks the questions have the power. So I'm leading them by asking questions. So I'll say, you know, so what are you going to do on September the 10th? They're going to sell your house. What are you going to do? I don't know. Do you have any friends or relatives or anybody that you could go and live with? No, I don't. My sister, she lives here, but she has a lot of people living. It's pride. It's nothing more than pride, you know? I said, but on the 10th, They're going to sell your house. What are you going to do? I don't know. I don't know. Well, let me ask you this. If our company could assist you in relocating, provided I can get you qualified, how much do you need to assist you in relocating, provided I can get you qualified? Then I shut up. let them tell me, because at that point, you know, they're thinking about an amount, but they're also are thinking, I don't wanna say too much, because if I say too much, I'm gonna be disqualified.

Yeah, it's a very intentional wording.

Absolutely, absolutely. And see, you know, when we go from that perspective, we pretty much got the deal signed, sealed, and delivered. Because at that point, they're hoping, what? That they're qualified. Whatever they tell me, they say, well, maybe, I don't know, maybe 1,000 or $1,200. They're asking me. I said, well, I don't know. I can take it back to see what I can get approved for you. Totally, completely different perspective. You know, most people going there, I was listening to some guys the other day, and they were going in there talking value. You got to talk benefit, not value. Value is subjective. You know, well, I think it's worth this much money. And then they said, I need to make X on this. Wait a minute, who is this about? You or them? It has to be about them, you get it? But they're making it about them. How much money they need to make on the deal. They could care less. Person that's listening could care less what you're making on the deal. But that's when you're talking value. But if you only talk benefits, what's gonna benefit this person? You can lock the deal up every time.

Absolutely, I agree. I mean, you have a very specific sequence of ways that you'll buy. You actually have a t-shirt that, not the one you're wearing right now, but another t-shirt that talks about the four ways that you buy. You want to talk about that for a second?

Yeah, yeah. The four ways I buy, and that's owner finance, subject to, lease option, and for cash, in that order. And I say, in that order, For the simple fact, I believe the lowest barrier of entry of purchasing a house is owner finance, because all we have to agree on is the price. So let's say, for example, you have a property, and I'm looking at it, and it doesn't have a sign in the front yard. and it has some deferred maintenance, has high grass, it's just been neglected. You're telling me that you have not associated any value with that property. So if you haven't associated any value with that property, why should I assume you wanna sell it? So I go to him, I say, hey, well, listen, you got a house up there, what are you gonna do with it? I don't know. I said, would you be interested in getting rid of it? Yeah, I'll get rid of it. I said, okay, well, great. I'm interested in it. And I don't discuss money. And then if they discuss money, then we can talk money. But then I'm gonna come from the perspective, I'll say, hey, well, listen, when we do a lot of these deals, we set people up with dividend payments. Would you be interested in getting dividend payments? They said, dividend payments? Yeah. I said, like, you're getting, I don't know, let's say you're getting $100, $150 a month, $200 a month, something like that. Would that be something you'd be interested in? And they say, yeah, yeah, I would love to get some dividend payments. Yeah, I would love to do that, but let me ask you this. How long would you like to get it for? And they're gonna ask me, how long can I get it for?

Right, as long as possible, right?

I said, well, I mean, we do have some people getting it as long as 10 years, you know, but, you know, how long would you be interested in getting it for? And they're gonna tell me. What did I just sign them up for? Yeah, terms. Yeah. Owner finance. Yep, yep. 10 years. It's all on how it's presented. You see, again, People will go in there and they'll say, hey, well, when you do owner financing, would you carry the mortgage? And this is stuff that people don't really, I mean, general people don't know what that means. But I believe that, what did they say? They say a confused mind does nothing. And so you're confusing them. Keep it simple. Keep it very simple. Describe it. Don't ask them questions that they don't know. Oh, or would you be willing to subordinate the mortgage?

They're like, they don't know what that means, you know? Well, no. And the context that you came from was they said yes to getting rid of the house. I think that's critical. A lot of people will ask me sometimes, hey, what a What's your criteria for buying? I don't have a criteria. It's just if they want to get rid of it, I'll talk to them. If they want to sell it for the highest price possible, I don't want to spend the time on it. And the getting rid of it factor, your process there helps. You say, yeah, I can help you get rid of it. I'm the help you get rid of it guy, right?

Yeah, absolutely. We buy things that you don't want.

Yeah. Well, that's another, I don't know if you want to divulge this or not, but you told me a strategy that's genius and you've said it to other people, but you want to talk about the people that are interested in selling things that you then kind of piggyback into that.

Yeah. Yeah. You know, it's, Man, I'm telling you, this works like a charm. And, you know, I contact people and I, a lot of people will contact folks, say we buy foreclosures, we buy stuff like this, you know, we buy, we stop foreclosures, we pay cash for houses and all that. And when you go to their house and they have a stack of those letters and stuff like that, you know, of people that, have sent those kind of things to them. Right. And so I get a call and somebody said, hey, look, we have a we have a refrigerator that we're trying to get rid of and wanted to see whether or not you'd be interested in it. And I said, well, you know, yeah, I mean, tell me about it. And they tell me about it. And I say, well, I really need to see it. What do you think the next thing they're going to say? Come on, I want to say, hey, come on out, come on out and see it. And so when I get there and I'm looking at it, I said, well, I mean, it looks nice and everything. What else do you have? And they're going to show me what else they have. Why are you getting rid of all these things? Well, we're getting rid of the house, too. You're getting rid of the house? Well, we buy houses, too.

You know, so yeah, it's an easy parlay. That's, that's, and for whatever reason, I still haven't done it after five years of hearing you say that, that's it. It's yeah, it's a, that strategy. So you're, you're employing that or you have people that employ it.

Yeah, we do. That's beautiful. You know, the thing about it is, um, I was, I was told the, uh, by a good friend of mine, she told me that, It's like a vampire. I said, vampire, what do you mean? Cause I don't know anything about a vampire other than they bite people and stuff. Right. And she said, well, vampires can never attack you unless you invite them in.

Okay.

And I never knew that. I mean, that was, I didn't know. So it's, it's a part of what I call vampire marketing.

Oh, there you go. Yeah. Yeah. You, they invite you in and now you know,

You know, it's amazing how if you just think everybody's doing the same thing. Yeah. Then here comes something different. Yeah. And it's and it's not even associated or affiliated with what everybody else is doing.

Right.

So it's like, hey, let's let's call these people. Let's call this guy.

Yeah. No, it's a refreshing change of pace. And it's a, what do they call it? The purple cow in the middle of the field. Yeah. What's that? And it brings attention to you. I don't want to get too far into this without talking about how you set up your exit. So obviously we talked a lot about buying houses and the acquisition side of things, which we could go on forever. But if you, are known for one thing around Charlotte, it's for the type of cash flowing assets that you've built, which I think a lot of people refer to as communals. Is that how you refer to it?

Yeah, yeah, I do. I refer to them as communals. And, you know, communals is, it literally change your life. You know, believe it or not, at one point, earlier point in my life, I said, I would never do it.

Okay.

You know, I said I would never do that, you know, and I was I said that based on. How other people did them. And they actually. were doing low-end housing that they couldn't really sell, or the only way to make it work was to put people that were less than desirable in them. And so I just took that whole concept and I flipped it on its head, and I started making these houses very, very desirable, and then started renting them to working professionals. And I started selling or renting them rooms. And I would rent them rooms that were fully furnished, very, you know, nice, desirable, safe. Neighborhoods and they started working. And, you know, I first started doing this in in 2004. OK. And I was doing high functioning, mentally ill men with the with the county. Or with the state, actually, and they had a grant and they were paying me six hundred and fifty dollars a room. And so at that time, I was, you know, nineteen fifty a month because this was with a three bedroom. I was doing this. And I realized that that market, I didn't know enough. I didn't have enough information to serve that market. So after about two years, we decided that that wasn't for us as related to that particular market because I didn't know enough about it. And so it didn't work out for me from that perspective. Monetarily, it worked. but understanding the client, I did not understand that person. And so, you know, fast forwarding to, I think we took maybe a three or four year break and we started again with the communals. And this time I was doing it with working professionals. And so I felt that that was a market that I had more information about and It was it's been going strong ever since. And I love it. I love it because it you know, always since the beginning was renting houses. They used to do Section 8. And with Section 8, I started to add bedrooms to the houses. So I was doing four or five bedrooms and I was getting a lot more money than most people at the time. And I always was trying to figure out how I can get more money. What do I need to do to make more money? And so when I started with these working professionals, I had no idea, no information on how much I could charge. And so I started off with $150 a week. And quickly, I filled up a house like almost overnight. And I realized that was too much. I mean, that wasn't enough. And so then I started increasing the rent. We have some rents now, $300 a month. I'm sorry, $300 a week. Yeah, $300 a week. And I think the minimum we have is the lady that's been with us for nine years is $165. I never went up on a rent. That's another story. But I never went up on a rent. It is something called the Parkinson law of money.

Okay.

And the Parkinson's law of money suggests the higher your income go, your expenses will rise to the level of your income. Expenses will rise to the level of your income. The more you make, the more you're going to spend. And so now I have something that when I'm leasing somebody up, I got two people going in this weekend as I'm leasing them up. I asked them, would they like to do a rent lock? And they say, a rent lock? I said, yeah. Rent lock, you lock your rent for three years. And of course, what are they going to say? They're going to say, oh, yeah, yeah, I would love to do three years. I said, OK, well, we'll lock your rent for three years. And so over the three years, people are going to get increases. And as they get increases, what are they going to do? They're going to get a new car. They're going to get more credit cards or what have you, right? But what's also happening to rent? Rent is increasing. As rent is increasing, Their rent is staying level or it's not exceeding. And so then when they actually they say, oh, well, I'm going to go and look at see if you know what else is out there. And once they discover what's out there, they have rickshaw. And so then they end up saying there, as, as I said, this lady's been with me for nine years and we had a little altercation about the heat. I control the heat and she wanted to control the heat. And I said, no, we're not going to do that. And then, you know, we got into a heated discussion and I said, well, look, you know, you, you, you can just leave. Okay. Well, I went out in my car and I sat down and I started calculating. She's been with me at that time. It's about seven or eight years. And, um, I said, wow, this lady has given me almost $70,000. Yeah. So I quickly went back in the house and I apologized to her.

You came to your senses. All right. No, is she the only one that gets to control the heat?

No, no, she doesn't. She doesn't control the heat. Oh, you just apologized. Yeah. I apologize. You know, you apologize.

You still can't control the heat, man. Yeah, that's good. Okay. All right. Yeah, they pay me $99 a year.

Yeah. To maintain the rent law.

Well, so it's funny, I just had a long conversation with our health insurance broker and they offer the same thing. It's an inflation protection plan. And I was like, no, I didn't end up doing it because I looked at the numbers on both options, but it's a similar strategy. They know exactly what they're doing. They know exactly what they're offering. Yeah, there's big, big changes in healthcare. I don't even want to get into that. But, um, but w so for somebody that wants to picture what this looks like, because I've seen one of your Menhill properties, uh, in Menhill for anybody that not from here is right outside of Charlotte and great growing community. You bought a house, how many bedroom, tell us a little bit about what it looked like before and then what it looked like once you, once you went live.

Yeah, we, we bought a house when we bought the property, it was a three bedroom, two bath, uh, brick home. And, um, We converted it into 5 bedrooms, 4 baths. I think 1, 2, 3, yeah, 4 baths. 5, 4. We turned it into a 5, 4. Great looking property. It looks really, really good. It's really modern on the inside. We do a lot to make it look really good. So when people come, most people, it exceeds their expectations of what they're going to see. But that's what we want. We want to have the wow factor. So in the living room, we spend the most money. As soon as you come in the house, we want to create that wow factor. And so initially, you're a little suspect. You're like, well, I don't know about this boarding house stuff, because that's what they'll say. That's what people think it is, right? Yeah. Yeah, they think of it as a boarding house. And then once they come in, they see the house, it changes from, I don't want to live there. Or not that, I don't want to live here. I'm hoping. I qualify to live here.

Yeah. Same, same strategy, right?

They've got to qualify. Well, I mean, just do that over and over. You just run that over and over. It's a very effective statement. Provided I can get you qualified. Yeah. And so it's very, very effective. And we use that often throughout our business, getting people qualified. You know, what do I need to do to get you qualified? What do I need to do to get you moved in? You know? Yeah. And I always look at it from the perspective that you're going to move in. Yeah. Because I know if I say, well, let me see if I can get you to approve or something like that, then it's a question whether you can, and so they're going to keep shopping. But if I can get them into a holding period or a holding pattern for a few days, then I want to see why I don't want them, or see if there's some reason why I don't want them. But I want to take them off the market for those few days. And those are some of the things that I do when I'm talking to people, even when I answer the phone. When I answer the phone, the person knows that they've spoken with me before, because I don't answer the phone like everybody else answers the phone. It's just like an ad. When writing an ad, I write the ad in such a way to make them want to come and see it. All that is a part of marketing. And I think most people don't do a good job with that. They go and look and see what everybody else is doing, and they do the same thing that everyone else is doing. And so as a result, they get the same results.

Yeah, no, absolutely. I mean, I was at that one open house and you had just by the time I was there and I left before the main event because you had all kinds of performers come and everything. There were probably, I'm just guessing 45 to 50 people in the house and you probably had over 100 that day.

Yes. Yes. And so what happens is, you know, I don't, you know, it's, it's an open house, but we don't call it an open house. We call it a reveal. Okay. And so we call it a reveal and, um, you know, it's a way that I'm able to market to people in a way to where they don't know they're being marketed to. Yep. Yep. And so when I want to pique their curiosity, And so I had a magician there, I had a saxophonist there, a songstress, I had an ice cream lady there. And so it was all festive and people came to see. And so none of them realized that they were being marketed to. In each of the bedrooms, I had signs that had some of the J-isms and things like that, and it kept them moving from one room to the next room to see what else is going on. And so they were being marketed to, and I wasn't aware that they had been marketed to. but I was creating an experience. Yes, okay. And so if you ask somebody, you say, well, where'd you go? Oh man, I went to this house where this guy, he rents rooms by the week. And believe it or not, I get two things from there, two things that I'm looking for. I'm looking for referrals, people to refer people there, one. And two, Three days after that, I bought a property from somebody that actually was there.

So you're getting tenants and houses. And houses. Yeah. People want to say, well, how do I, yeah, how do I send Jay a house that can look just like this one day? Yeah, exactly. And so, you know, it works. It works. So on the numbers side of it, and then we can, we can wrap in just a few minutes, but I want to make sure to talk about the numbers a little bit, if you're okay with that. Yeah, I'm fine with that. Okay. So, so on the, on the numbers, let's say you got the, that example, right? Three bed, two bath house, you turned it into five bedrooms, four bath. up to maybe 290, 300 per room for the high-end room?

Yeah, 285 for the large room, and then I have 285, 275, and I think we have a 265 or something like that there.

Okay, and the lowest is 265?

No, the lowest over there is, we do have a 225 and a 235 over there. Those are small rooms that don't have their own bathrooms.

So if I just do that real quick, you got 285, I'm just using those numbers, 285 plus 275 plus 265 plus 235 plus 225? Yeah. That's all per week, which I don't think we said out loud yet, but 1075 per week times- 4.33. Yeah, right, right, right. So everybody else, you line up 10 landlords. they're all collecting per month, right? And then Jay over here is collecting per week. Why do you do that?

Well, we collect by the week because what happens is there was a statistic that came up, I think 2017, somewhere around there. And it said that the average person had a financial crisis of $1,000 has nothing they can do to recover from that. How many rents do you know that's less than $1,000. Very few these days. Yeah. I mean, not in Charlotte. I don't think you can do that in Charlotte. So when I collect by the week, one of the things that happens I'm able to identify the financial crisis a lot quicker. And so then I can actually create a solution on maybe paying over the next four weeks or something to catch up for the time that they missed. And so we make it easier, or it's a lot easier for us to adjust to that financial crisis than it is you find out about it the first of the next month. And now you're a whole month you know, into another month that they're supposed to be paying. And then you're probably a month or two before you're actually able to get them out of there. And now they owe you about three or four months. Yeah. So, um, it's just a better way of actually assessing the rent. And not only that, you know, if we're, you know, want to be honest, if we're calling ourselves investors, then, uh, I would think that getting paid for 13 months is better than getting paid 12 months. Because we collect it weekly or bi-weekly, we get paid 13 months out of the year. If you have 12 properties and you're doing that with 12 properties, you get a bonus property. just for having 12, you get paid for 13 properties.

I mean, that's gotta say something. It's beautiful. And if anyone is not using a calculator while they're listening to this, you take 1075 and you multiply it by 52 weeks, you got almost $55,900. And if you divided that by 12, That's 4,658 in a monthly, you got 4,658 coming in a month. If you compare that just for a second, so you took a house that would, what would you say that house would rent for if you left it as a three, two, and you rented it to one family?

I'm thinking maybe 15, $1,600. 1,600 times 12.

is only 19,000. Let's just call it 20,000 for the sake of argument. You've got 56,000 coming in versus 20,000 per month. I'm sorry, well, weekly really, right? 52 weeks in a year. So you just exploded that property, 55 divided by 20. You got almost three times the amount of money coming in every year from your properties because of the strategy that you're using.

Yeah, I mean, it's a cash flow very, very heavily. I don't know any real estate, from a real estate perspective, where you don't need a license in the state of North Carolina, anything that can compete. If you compare that to a fiveplex, it'll blow a fiveplex out of the water. So, I mean, And if I was to sell it, it's a lot easier to sell that than it would be to sell a fiveplex if they had to come up with the funding, the down payment, because it's still residential. It still can be considered residential financing.

Yeah. Yeah. And you're not, I mean, when you're, when you're upgrading a house into a four bed or five bed, four bath, you're not, yeah, you're not configuring it in such a way that it's going to affect any financing. Right. You're, it's still very, very appraisal ready. Right.

Yes, yes, yes. So one of the things that you should get comps before making it or expanding it to whatever you plan to make it. In North Carolina, or I'm sorry, in Charlotte, it says you shouldn't have more than six unrelated people to a dwelling. So six is a max number, but six doesn't always make sense. Because if you don't have comps in the area, to support six that I wouldn't suggest doing six, do whatever the match you can do that you can support incomes. So in that area, in the Mid Hill area, we did five because we could support five. As a matter of fact, that property came in at $420,000. We bought it for 177. We put about $30,000 in it. and then we refinanced it at 70%.

Yeah, I was gonna say, I bet you don't have any money left in it, yeah. So that's a beautiful thing. So you're, if I look at both ends of your strategy, you are maximizing your deal when you buy and you're maximizing it when you collect. Yes. And so you're basically maximizing your dollar on each side of the deal.

Yeah, I think it's important, especially at the time that we're in currently. You know, money is, You have to look at the velocity of money and the things with AI. Money is growing so rapidly. And so with that, if we want to stay relevant, we can't leave any money in a transaction. We have to have that dollar working as hard as possible. One of the things that we do, and I haven't talked a lot about it, but is we take the money And we put it in the stock market that we constantly so we refinance and we pull out 80,000. 200,000, whatever it is that we pull out, we'll put it in the stock market. And so I had a great position on Amazon. And about a year and a half ago, I purchased it. I got it for $95 a share. And recently, it went up to as high as $200 a share, which was well over 100% return on my money. Where else could I have put it? to get that kind of return. And then here's the other side, still have accessibility to that money.

So because- Yeah, you talk about a little bit the lending against your stock portfolio.

Yeah, so we have a portfolio and for easy math purposes, let's say that portfolio is $100,000, right? Let's say I have $100,000 value of stock with one of the brokers. And so they will allow me 70% of that as a line of credit. So that means that I can call them up and say, hey, listen, I got a deal that I'm about to do. You wire $70,000 to Harry Marsh Law Firm, and they would I would give them the wiring instructions and the money is sent over that quick, that easy. And I just purchased the property. So then, but here's the key thing, here's the key thing. Because I didn't sell the stop, I don't pay any taxes on that money because it's borrowed money. And then I take that money, I buy another property and I fix that property up. And once I fix that property up, and I refinance it, I pull out another, whatever I pull out, 90,000, 100,000, 200,000, put it back in the market and keep doing it over and over and over and over and over. And that's been what I've been doing for the last probably three or four years. And we've been doing really well with that. I'm excited about it. You're grateful, right? You're sure. Very grateful. I am grateful.

Let me ask you this before, so if anybody's listening to this and wants to say, all right, how do I find a house that Jay wants to buy and do this, even if they don't want to get into it, right? That's a whole separate thing. They can get into it and I'm assuming you might be able to help them if they show up at 5.30 AM. But let's just say somebody wants to send you a deal to look at, what exactly do you need it to be to fit your model where you're going to buy something?

Well, see, that's hard for me. You know, we were at a meeting the other day and the person was saying, what's your buying box or buy box or something. Oh, buy box, okay. Yeah, what's your buy box? And that's really hard for me to say what my buy box is because when I look at the deal, I'm trying to look at it from multiple different angles. What's the amortization on it? Have you done a research to see that whether it's a 30-year, it could be a 15-year mortgage. You know, there was a point where people were out there refinancing 30 year mortgages and getting a 15 year mortgage. So you can't you can't make an assessment or something like that until you actually show me the deal. Yeah. And, you know, I get it. They you know, they want to move it quick or whatever. But I don't know if I really have a buy box. OK, my thing is put me in touch with the the owner. And then I can structure the deal accordingly. It might be a situation where I say, hey, well, listen, let me, what if I, how much you want for it? You want 200,000? So let me ask you this. If we structure the transaction where in seven months, I give you 210, would that be something you'd be interested in? I might not give them any money. So it'd be no money out of pocket, but I've got seven months financing because that covers the seasoning requirement of ownership. And during the interim, I can fix that property up using the appraised value and cash out. $100,000 or whatever. Yeah.

Yeah. So let, let the conversation unfold with the seller. Yeah. The seller you'll go through. Yeah. That makes sense. Um, what, what do you want people to contact you for? What's, what's a good, obviously you're kind enough to do this with me on this, on this episode here. What is a good way for people to reach out and say, Hey Jay, I want to talk to you about blank.

I think, um, I can give them my phone number, but dang, I don't know if I went, um, You know, that's good.

Whatever you're comfortable with. I know. I know you got Facebook groups and things like that, but whatever.

I think it probably be through a Facebook group. It's the Jay Parker Network. It's a Facebook group and it's the letter. Jay Parker Network is send me a message there. That would be the best way of reaching me. And how? Probably if you look hard enough on Facebook, you can probably find my phone number. But yeah, that would be the best place is there. Or you'll see something that might say James J. Parker. That's me as well. So you can contact me via Facebook or Yeah.

So the group again, just so we get it right, it's J and then the word Parker network, right? Yes.

The letter J. Yep. Yeah. Parker network.

Okay. Perfect. And then in that group, I mean, I'm, I'm, I'm pretty sure I'm in, in that group and you see pictures of people doing the rise and grind and stuff. That's, that's evidence they showed up. Right.

Yeah, yeah, that's evident. You know some people they'll come just for the picture taking, you know?

Oh yeah, yeah. Good deal man. Well, I appreciate it. It's it's been awesome to get to know you over the years and I learned something new every time I talked to you and today was no different.

Well, you know, I really appreciate the opportunity. And, you know, I learn all the time I come to the to the meetings to hear things that you say. And I'm always calling you and asking you for information. And, you know, you never have the tape to share it. And, you know, it's one of those those things. I don't know if you saw the shirt that I wear sometime. It says me on it. Okay. You know, people never really read the fine print, but it's the me experience, the mind expansion experience. It's much like underwear. You know how underwear loses their elasticity? Once the elasticity is gone, you know, they're never the same. The brain is much like that. Once the brain is expanded, it can never go back. So that's why I call it the mind expansion experience.

I love it, I love it. I asked you once, I said, why do you govern these meetings? Because, I mean, you know more than most people when you walk into a room and it expands your mind.

Yeah, I mean, because somebody will say something that I never would have thought of because of their paradigm. Their paradigm is totally, completely different from mine. Yes. But I might be able to marry that with an idea or a concept that I have that I would not have had if I didn't show up.

Yep. I love it. Well, you said something before we recorded, I want to make sure it actually comes out that one of your, you remember the quote, your, I think you said it was either your grandfather or something.

My great, my great uncle, your great uncle. Yeah. Uncle Percy, uncle Percy.

Yeah.

This is a key. You know, um, he, he would say he was a great storyteller and he would say, boy, if you want to become wealthy, eat the fruit. not to see. And so that that resonated with me. And I kept that with me forever, you know, and it makes sense to me. That's why wholesaling don't make sense. Because wholesaling, you're eating the seed, and then you're starting over again, and you're starting over again. But if you plant a tree and the tree has apple, you pluck an apple from the tree. Next year, another apple will take its place. Eat the fruit, not the seed.

Well, thank you, Uncle Percy. Yes. Well, Jay, it's a pleasure always to chat with you. And if you want to find Jay, go to the Jay Parker Network. Show up at 530. I think you've got to be in the network to find the address, right?

Yeah, I mean, they call me or or, you know, send me a message. I'll send you the address. There you go. But you got to show up.

You got to show up. All right. I love it. Thank you again. And we'll be talking very soon.

All right. Talk to you real soon. Thanks, Avi. Thank you, Jay.

Thanks so much for tuning into this episode of The Deal Pen. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts. This way we'll get updates as new episodes become available. If you feel so inclined, please leave us a review. And remember, there's always more deals to be had in The Deal Pen. Until next time, friends.