#69 - Sky-High Returns: Discover Off-Market Real Estate Gems with Sean O'Toole

[00:00:00] Hey, welcome back to Passive Income Pilots everyone, Tait Duryea here with my buddy Ryan Gibson. What's up, Ryan? I watched Tait just sweltering here in the Seattle heat. Is it hot there? Yeah, 92 degrees, really, really hot.

[00:00:11] And then my AC broke on the 4th of July, like on the Friday after 4th of July. So we got a fix though. I saw the heat wave going through. I was looking at what Napa Valley was like 110 degrees. It was like hotter than Phoenix. Yeah. Crazy. Yeah.

[00:00:25] Autolulu is 86. It's cool enough though today. 85 or something. So I'm very excited. My Ragnar race is coming up this week, so I'll report back on how that goes. And I've shaved like a full 30 seconds off my mile time.

[00:00:37] So if you go back to episode somewhere in January, we talked about goal setting and I talked about shaving 10 seconds, I think, off my time. And I shaved 30 seconds off my mile time. Nice. I'm excited. I love it. Yep. Well, I'm leaving to Europe on Sunday.

[00:00:50] We're going sailing in Greece. I was very excited that I was listening to the Prof G show with Scott Galloway. And he is going to Greece to go sailing. I felt very elitist. Nice.

[00:01:00] Of course, he's going to be on a 200 foot super yacht and we're going to be on a nice 46 foot catamaran. But I'm really looking forward to it. We're going to be with a bunch of friends. It's going to be incredible. The Tate-Durier lifestyle, baby. The passive income.

[00:01:13] Hey, somebody's got to do it. Travel the world lifestyle. Someday we'll be like Tate. Work hard, play hard. That's what we do, right? That's right. And I want to hear the update on the Woodbury Island property. Oh yeah. Because we did a growth fund.

[00:01:26] We participated in the growth fund and raised some money for that. And we were talking about how they were scraping that dirt. You were telling your team, I want to be running past structure or at least some broken ground, right? July 15th, three days off the mark.

[00:01:41] So we're going to be breaking ground on Monday, July 15th. And Oak Harbor, Washington. And it's exciting. We're excited to get crews out there. And you know, we've been building a lot of self storage. We delivered our Bellby project. We delivered a silt expansion in Colorado.

[00:01:56] And we're working on Oak Harbor now. Fantastic. Kingsland is going through an expansion. So yeah, we're excited about all the expansions going on and leasing up these properties. So we just delivered all that good news in our shareholder event that we just held, which was super fun.

[00:02:10] That one for almost two hours. It was fantastic. So it's so cool you do that. That's such a cool event. It's great. It's a nice way to get everybody in the same room. You know, it was virtual of course.

[00:02:22] But just talk through all the deals that we've done over the last four years and it's fantastic. Super fun. So well speaking of passive income, this is passive income pilots, right? So we're trying to make your lives easier.

[00:02:35] But of course sometimes you want to do your own deals. If you want to be completely hands off, go get on Spartans list. Get on turbine capitals list. We've got the complete hands off done for you stuff. But sometimes myself included.

[00:02:48] I want to get my hands dirty and buy some deals, buy some real real estate. And we have the guy here today from propertyradar.com. PropertyRadar is a real estate technology website that can find who owns a property and you can call, email, send a postcard to them.

[00:03:04] It's fantastic. We have Sean O'Toole. He's the founder. He started foreclosureradar.com in 2007 enabling investors to purchase billions of dollars of real estate during the foreclosure crisis. And in 2012 expanded the vision as propertyradar.com helped investors find and buy off market

[00:03:22] properties is 20 year journey as a real estate broker and investor combined with the expertise in technology, marketing, finance and economics gives him a fantastic background to talk about how to buy properties off market.

[00:03:35] And so my only thing that I'll add to this is we answer the question like where do you find the best deals right now? Yeah. We get into that in the show. How do you find the best deals?

[00:03:42] You're going to find your own projects like what tools do you use? What resources do you have available to actually find the juiciest deals out there? And we got to go through step by step on how to approach a property owner off market and

[00:03:53] get an off market deal, which is how I've made a lot of money and how our investors really benefit it. So with that, let's get to the show. Welcome to passive income pilots where pilots upgrade their money.

[00:04:08] This is the definitive source for personal finance and investment tactics for aviators. We interview world renowned experts and share these lessons with the flying community. So if you're ready for practical knowledge and insights, let's roll. Sean, thank you so much for coming on. Thanks for having me. Yeah.

[00:04:26] So you've got a rich background in Silicon Valley foreclosureradar.com back in 2007, property radar now. We'll get you into this stuff. Yeah. Boy, that's a long story. I had some success when I was 18, bought my first house at 18, which was both initially

[00:04:44] a great success story and then ended up kind of a disaster. And also other real estate magazine after which when I was 19, after a software company I founded and so I had some early real estate experience and then went back heavy into software, Silicon Valley.

[00:05:01] And after the dot com crash in 2000 through a friend ended up flipping houses and then commercial properties and industrial properties and all kinds of stuff. Through that discovered public records and just said, wow, there's a treasure trove

[00:05:16] here that's really useful for others and wanted to make that more available. Well, actually the first thing that me and Scott did when we first got involved in real estate investing was actually searching in public records because it's amazing what you can find in public records.

[00:05:31] Specifically we went to the Washington DC tax assessor's website and you could pull records of people who are getting tax notices for default. We would literally like write a letter and we would go one by one. We didn't have any VA or whatever.

[00:05:47] We would write one by one and we'd hand write letters and send them to people. And it's amazing what happened. People would actually call us and say, oh my God, thank you for calling me.

[00:05:56] I'm about to lose my house tax foreclosure and I understand you can help me. And I have no idea what to do. And I have no idea what to do. And it was so funny because we're kind of like, we have no idea what to do either.

[00:06:05] But we'll figure it out. And some of the juiciest deals we did came from that because we worked with the city and probate court and things like that went a long distance. But that's fascinating that you started there. It's relatable to me. Yeah, 100%.

[00:06:19] For someone that's not familiar with public records, give us the context on what that database looks like, is it state by state, city by city? I think most pilots that are listening to this show, myself included for a long time.

[00:06:31] It was like, if you wanted to buy some real estate, you look at Zillow or Redfin or contact a local broker or real estate agent. What do these databases look like and what's that context? That's the data that your software pulls from, right? Yeah, absolutely.

[00:06:45] And it's pretty unique, not unique just to the United States but pretty unique to the United States. And I think it's one of the things that makes us a country that's largely a rule of law keeps down corruption.

[00:06:58] So the core sources for us are the county assessors website. So for every property, the county goes out and looks at that property, keeps track of who the honor is, who to send the tax bill to, you know, how many square feet, bedrooms, bathrooms,

[00:07:13] a lot of characteristics about the property. And that's all public records. So the county assessor can't give their brother a deal on his property taxes, right? And it's all of us can go look at that. I think that's an amazing part of that.

[00:07:29] Then together with that, we've got this, you know, concept of title or chain of title, chain of custody of the property, right? And over time, I buy a property from Joe, then I get along, then I sell it to Sally, right?

[00:07:44] And to keep track of all of that, there's the county recorders office. And the county recorders office has all these documents recorded and they get recorded in order, was a date and a document number that since their priority.

[00:08:00] So if I sell the house to Sally and then I sell it to Joe, right? And I try to sell it twice. The one that got recorded first is the one that owns the property.

[00:08:11] One that got recorded second, I cheated and scammed, but they don't own the property. So and then same thing, we hear the term of first mortgage and a second mortgage. There's nothing to do with what the mortgage document itself says

[00:08:24] and only has to do with when in time it was recorded in what order. Understood. So how can people leverage this? You started foreclosureradar.com back in 2007 with interest rates the way they are. And it's sort of this tale of two economies, right? One economy is booming.

[00:08:41] The other is suffering. There's been a bunch of tech layoffs. I mean, there's two sides of this economy right now. But I've heard that there is a small uptick in foreclosures. Is that a viable strategy for people that want to go out and buy?

[00:08:54] We talk about short term rentals all the time on this show. And, you know, rather than looking on the MLS, is that a viable strategy to maybe knock down some foreclosures? You know, the number of foreclosures is very low

[00:09:05] just because we have such high equity prices went up so fast that just let everybody with a ton of equity in their property. We're back to kind of when I first started foreclosures in 2002, 2003. Again, it was a fast rising market.

[00:09:20] People had equity and, you know, we talk about the five D's in death, disease, divorce, drugs, denial still cause foreclosures. So there are always, you know, some baseline of foreclosures out there. People have options. They can list the house for sale, et cetera.

[00:09:37] There hasn't been big increases, despite some folks having concerns about the economy. Economy is fairly strong and even where it is and people have enough equity to have options. So we're still the number one foreclosure data provider in the nation.

[00:09:51] I would love to say, hey, go sign up for our foreclosure data. But I would make it your primary focus, right? If it's, you know, really where you want to spend your time, you can do deals there. But it's not easy pickings like it was in 2009.

[00:10:05] That makes a lot of sense. And, you know, back to public records, you know, you have a lot of these other signals that are in public records, you know, like the debt, the force. You guys talked about property delinquent, property taxes, bankruptcies,

[00:10:18] you know, so there's a lot of these distress signals that you can look for in public records to find folks who might be more motivated to sell. Right. And that's where the opportunity is then is not taking a foreclosure

[00:10:32] property but identifying sellers that may need to sell before they go and list it. Right. And you also get hoarder homes and other things like this. Lots of reasons people may not want to list their property for sale.

[00:10:43] Like I always recommend everybody should list it with a realtor, put it on the MLS. You'll probably get the best value doing that. And so I think that makes the most sense. But you get a lot of people for privacy concerns or other things, you know,

[00:10:58] they don't want to clean out the house. You know, they need cash. I had a gal who reached out to me, her husband had passed away. She was a little younger than he was and his kids were all methamphetamine. It's like three boys, they're all methamphetamine addicts. Wow.

[00:11:16] And despite like restraining orders and other stuff, they were coming and going from the house just, you know, crazed out of their mind. She couldn't keep them out. They were breaking in. And, you know, her house was worth four hundred and fifty thousand dollars.

[00:11:30] She had a two hundred thousand dollar first mortgage. When we talk about her house, this is five acres of stuff like every square inch stuff. Right. So it was no, she talked to some local realtors and they're like, well, get it cleaned up and then we could talk.

[00:11:46] Right. And she said, I want to leave this afternoon. If you can give me a check for twenty thousand dollars and take over the mortgage and take care of everything, I will leave this afternoon. Wow. She's like, that's what I want.

[00:12:00] And I'm like, but you know, you're leaving all this money on the table. I'm happy to help you and get a HELOC. We can work through it. She's like, you don't understand. I want to leave right now. That's amazing. Stuff like that happens. Yeah.

[00:12:13] Taking me back to like when I was looking at my own property records and I unfortunately didn't know about my property for closures.com. Maybe I wish. I think there were some tools that I was familiar with.

[00:12:22] But one of the things that I would think about is like, how can I get data that no one else is getting? And then when you look at these websites, now they're democratizing the data and they're giving it to everybody.

[00:12:33] So how do you find the diamonds in the rough? Or how do you find that niche and get a good deal when everybody's looking at the same thing? What's your philosophy behind that? And this is why it's not a passive strategy, right?

[00:12:44] So this is why you work with somebody who actively goes and finds these deals because it's not easy. It's a lot of work. It's a lot of continued marketing. It's a lot of spend on the marketing to really get good deal flow.

[00:12:58] You could drive dollars and look for abandoned houses and knock on doors. But I think it's a full time job, right? Really to to go find these deals. I'm looking for a house in a particular area right now. There's nothing on the market.

[00:13:11] So I'm actually going to send a letter via FedEx to each of the owners. Everybody opens a FedEx letter. Super expensive, but there's only a hundred homes that we buy criteria. So I'm going to spend a few thousand bucks. Yeah.

[00:13:24] And if one of those folks is looking to sell, you know, maybe they just want to save the commission or, you know, whatever, but we can have a conversation. I really want houses that that area. It's right now. It's my best chance because there's nothing on the market.

[00:13:40] Yeah. Being unique and being persistent, I think, is really key. It was funny. Like we bought our first self storage facility by sending people off market letters, just like we did with houses.

[00:13:52] And it was funny, the guy that we bought our first storage from it was an off market deal. And when we went to go meet him, he had 15 letters on his desk. Wow. So, you know, it's funny because he's like, well, I chose you because

[00:14:04] you're a veteran and I wanted to sell to a veteran, not me, my partner, Scott. And he wanted to sell to somebody local. So like you kind of like to your point, like setting a FedEx envelope or something like that might make you stand out.

[00:14:16] What what we did was we actually took a page from CarMax. I think it was what the, I don't know if you've ever seen guys have ever gotten anything in the mail from CarMax and you get this thing and it

[00:14:26] looks like it's got your car referenced on it. And it looks like they're sending you a check and then you open it up and you're like, you look in there and you're like, it's a CarMax offer for your VIN type of your car.

[00:14:38] So Scott and I were like, oh, that looks kind of cool. So we actually went through and like individualized offers to people and made it look like a check as a way to kind of stand out. Like so people would actually open your letter.

[00:14:51] So there's all kinds of things you can do and I just appreciate your comment about like it is really hard and you got to stand out and you kind of got to do unique things with the data that you get. One more question on that.

[00:15:02] Is there anything else, any other things that you would give people advice on if they're trying to find a deal on their own that maybe has some equity in it? Yeah, I mean, it's like a one off deal or just, you know, I want to buy one property.

[00:15:13] I'm not trying to buy 10 a month. In that case, I would come back to just, you know, the investing basics and not think, you know, listen, I bought 160 properties, slipped 160 properties. And the way that usually goes is I buy nine and at pretty thin margins.

[00:15:33] And then I get one that's just like, like the one I mentioned earlier. So to go hunt that diamond in the rough, you put the time in. Yeah, you'll find it. But just, you know, know that it's going to be a lot of work and take some time.

[00:15:46] And you find a property where somebody really wants to sell it to you, you know, understands that they're selling it while below market. You don't want to get into the business of trying to, you know, bamboozle people that will come back and hunt you, especially if they're elderly

[00:16:01] you're going to end up in jail. Yeah. So, you know, but there are situations kind of like the one I talked about or like Alice just like I fully understand what I'm doing. And, you know, I want to sell it.

[00:16:11] I want to sell it today, but it's it's a lot of knocking on doors. A lot of phone calls, a lot of mail, you know, whichever one of those kind of approaches you want to take, it's just that consistent effort.

[00:16:24] If you every day took five actions, whether it be month or a year, you will get a deal. OK, fun pilot story. So talking about getting a deal and door knocking. Yeah, you mentioned driving for dollars. I think everybody knows about driving for dollars, which is basically

[00:16:39] we just driving a neighborhood looking for vacant blighted properties and then writing down addresses. Forded off that tenants that the out of town owner doesn't know about whatever, whatever. And you'll be surprised what you find. We I did that personally a lot.

[00:16:51] Well, as an airline pilot, I ended up in Hawaii on a layover. And it so happens that one of the property owners that lived in Washington, D.C. lived in Hawaii and I've been sending this lady letters over and over and over again.

[00:17:03] So I went on a run from the hotel and I actually ran to her door and knocked on her door in Hawaii for a property I was trying to buy when I was living in Washington, D.C. And I love that. So yeah, I knocked.

[00:17:13] She didn't answer and then I hand wrote a letter like, hey, I'm going to I'm a pilot. That was when I was at Alaska Airlines. I was like, hey, I'm a pilot of Alaska. You know, I remember the address 227 Tennessee Avenue Northwest. That's amazing.

[00:17:24] That's awesome. And I'll never forget this. And she called me back like right away like, OK, this is like crazy, but I'm not going to sell. But like, hey, if I were to sell, I'm going to sell to you. Like this is this is nuts.

[00:17:34] Right. So anyway, kind of a fun story. Like, like you have to be pretty aggressive, I think is the point. Yeah, I'm going to shelf what I was going to say for a minute. And I want to ask you a question, Ryan.

[00:17:43] How did you track down her information, her address? Yeah, so driving for dollars and literally. So you found the property, you saw the property that you wanted. Then how did you you went to your computer? What would you do? What's my computer went to the county assessors website,

[00:17:58] which again, Sean's data is going to help you to do this anywhere. Right. I typed in 227 Tennessee Avenue Northwest and it said it's owned by this lady. Your name was like Carol or something. And it's public record and it says and her mailing address was in Hawaii.

[00:18:13] So then I like exported that address, hand wrote a letter, like literally hand wrote envelopes and put it in the mail. And then you do it again, you do it again, you do it again. Right. And nothing, nothing, nothing.

[00:18:23] And then I started like make taking a mental note like, oh, this lady lives in Hawaii, like I got a layover in Kona or whatever it was. I'm going to go like I'm going to go like check it out. And plus it's just a great story.

[00:18:35] Right. Like, like how are you going to say no to me? So so Sean, can you explain if Ryan had used property radar dot com? What would that process have looked like? Because I know your your platform also has the ability to send postcards.

[00:18:49] So it's not quite maybe not as impactful as writing a hand written note and actually like addressing the envelope and putting a stamp on it, putting the mail or FedExing it. But your system can automate that. Right.

[00:18:58] So if you're using our mobile app, why you're up in front of the house and you saw it driving around, you just click on the house and bring up all the information. You can see whether there was a mortgage or not, how much debt there was.

[00:19:08] Is there an effect would he even have a deal here? And then you could find her information where she lives, etc. And then you could click her phone number and call her right in the app. There you go. Amazing.

[00:19:19] Or click her email, send her an email or click send a postcard and send a postcard with you selfie standing in front of her house going, I love this house. You don't call me. That's really powerful stuff.

[00:19:33] OK, so this is what I wanted to jump into that I've been sitting on here is I want to point out that you can use this strategy even if you're not looking for an investment property like housing

[00:19:44] inventory is so short right now. My wife is a realtor, right? And she has clients that want to buy are in the two million dollar range. They're like, we want a single family home and she's like, there's nothing. There's just nothing available. Nobody's selling because interest rate.

[00:19:58] Yeah, they got they have a 3% interest rate. If they sell, they're going to have to buy something else at seven. And it's the rate lock effect. And so we talked about this in one of our newsletters. I don't know a few months ago. We are seasonally adjusted.

[00:20:11] We are at lower transaction volume in residential real estate than we were in the lows of 2007 and 2008. And it's wild like no residential real estate is trading hands. Even if you're looking for a single family home

[00:20:24] that you want to live in, you can use this strategy to say, hey, this is my family. Like we're looking for a place to live. There's stuff that available in this neighborhood. Like if you consider selling, please consider selling to us.

[00:20:35] That might unlock an amazing off market deal just as a primary residence. Perhaps you do a contract to sale with a wrap around mortgage and keep their low mortgage rate and split the difference, pay them five. They're paying three.

[00:20:48] And now they get a little money towards, you know, they're a little bit of offset on their interest rate for their next place. That's very advanced. I or attorneys, you know, let's jump into that strategy, though, because that's something that most of the 2.5 percent mortgages

[00:21:03] that people refinanced into, myself included back a few years ago, are not assumable. Right? So how does that work? Can you briefly break down that strategy? Yeah. I mean, there's kind of two approaches to it, right?

[00:21:16] One is called an all inclusive deed of trust also known as a wrap where the person that is the seller puts another mortgage on top of the property that has a payment that's inclusive of the underlying mortgage.

[00:21:32] Right? So I was selling to you, you know, and I've got a 2 percent. I may make a mortgage to you for the whole amount inclusive of the underlying mortgage and with a payment that allows me then to make my payment.

[00:21:44] This is good protection for me as the seller, because if you don't make the payment, I can foreclose on you while I continue to make payments that don't hurt my credit. Right? So that's kind of one. And then the other idea is contract to sale.

[00:21:57] So you're going to make me payments for a period of time. And then so another variation on this, you know, I'm just going to keep this really high level is you have people, a lot of people in highly appreciated assets right now,

[00:22:10] and it's got more than a two hundred and fifty thousand dollar gain or five hundred thousand if they're married. And that means they're going to pay taxes on that. If they're interested in building some passive income or the rest,

[00:22:24] you could rent from them for a year, then purchase, right? And then they can 10 thirty one that property because they've had it now as a rental and they've converted the use, which can be enough of an advantage for them that they're willing to take a discount

[00:22:38] to make that happen because they're going to say, you know, thirty percent on that or whatever. So if you are spooled up on these strategies, you can effectively communicate this with with potential off market sellers and come up with some strategies that make their light bulbs go off

[00:22:52] and say, oh, actually, that sounds like it might be a good idea. It might shake some fruit loose. And then a lot of times it's just like, oh my gosh, I can I can actually move. I can actually do this.

[00:23:03] I didn't think I could and now they can't. Yeah, here's the other thing too. Like other than don't don't think of this as just beneficial to you for not having to get a new mortgage at a higher interest rate.

[00:23:12] Like there are sellers out there who don't want to pay the gain on a rental property and a way to avoid that is to hold back the note. And I think a lot of people realize this like our first self storage

[00:23:22] facility that we actually purchased, that same off market deal. The seller said, hey, I want to sell to a vet, but I also require that you take my seller financing right because he was in his eighties and he basically said, hey, listen, I don't want to pay.

[00:23:35] I have no basis in this property. But I want the cash flow. It's all game. And I yeah. So we put down a four or five hundred thousand dollar down payment, but then he held back the million dollar note and said, you know,

[00:23:47] and we said, OK, well what interest rate do you want? And he goes, I don't care. I just need seven grand a month. So then we went back home and we played with an amortization interest rate

[00:23:55] calculator and it figured out 19 year amortization at 4% would get him his 7K. He didn't care how long it took. He just he wanted 7K because that's what he needed to live off of. And it really wasn't about interest rate to him or even amortization.

[00:24:08] It was just whatever we wanted. And so and he didn't pay the gain on that million dollar note. And so he said, hey, I want you to minimally hold that for five years because, you know, I think maybe he's thinking he's got five years left.

[00:24:21] I don't know. But, you know, he wanted it to cover a period of time. So if he dies with that note in his hands, you know, his kids get it without paying the tax. Yeah, step up and basis. Yeah.

[00:24:29] Yeah, there's a lot of potential gains for the seller. So we could probably have an entire episode on, you know, seller financing and wrapping mortgages and things like maybe that maybe will come back for that, which we should.

[00:24:40] I want to stick to the strategy, though, because Tate said something or maybe you said it, Sean, that you're you're driving around the neighborhood and you like can click on a house and it will tell you everything you want.

[00:24:48] And then you can even send a postcard from your platform, which I think is super valuable. Talk to me about that. But, you know, in the context of like how many times do you really need to send somebody a letter before you're going to get any traction?

[00:25:00] Yeah, I mean, obviously, if you can knock on the door, make the phone call, send an email, it's cheaper than the postcard. But, you know, the postcard, the FedEx, the letter, you know, those things still work. And sometimes that's what you have to do.

[00:25:15] We run all of our mailing addresses through like a change address, looking for are they at a new address? So hopefully we just tell you that right in the platform. But sometimes that comes through fairly recently or we haven't gotten the update

[00:25:29] for some reason. So if you send that letter, always do, you know, return receipt requested, they'll send the letter back to you and say it was undeliverable, but you can forward it this address. Now you have the new address and now you know where there are

[00:25:41] and you can go reach them there. So, you know, there's this definitely still good reasons to send mail. You know, everybody's like, oh, you know, direct mail is dead. Nobody opens it. Nobody looks at it goes to the trash can.

[00:25:55] But if you compare it to an online ad, right, they pull it out of the trash can, they sort through it, they set it on the counter so their spouse can go through it and then they get sorted into piles.

[00:26:04] And then finally somebody puts that pile of puts to the trash. I'd say all of those touchpoints are a far better impression for 50 cents than you can buy online. Yeah, totally. Do you develop any type of call strategy for through your website

[00:26:18] or offer any type of calling service? Yeah, we do have a for folks who really want to do team and dialing. We have a dialer that will call the next person and then the next person and then the next person and just really.

[00:26:30] That's amazing. Gosh, where were you like 15 years ago? Maybe I'd still be doing buying residential properties. What is the most effective strategy that people use with you? I mean, what's working right now? What's not working? You know, I mean, I think foreclosures in 2007 were probably like,

[00:26:45] I mean, pick up the phone and you've got a foreclosure on your hands. But what's working? What's not working today in 2024? That is so like location dependent on the one hand. But bigger picture of kind of not taking location dependent of like

[00:26:59] you've got some issue going on at some area that's working and you've got new competition or very little competition working that particular thing outside of that. Everybody kind of says the same thing. A lot of people mail to what they call absent to the landlords

[00:27:15] and they also send the same thing do you want to sell? Right? I'll take your tenants. I'll take the property as is. And they every single one says the same thing, but not all landlords are the same. Right? You've got young folks that are trying to build,

[00:27:29] you know, equity. You've got maybe somebody older who's ready to retire but cares about his tenants and wants somebody to really take care of his property and his tenants that he's invested so much in or she.

[00:27:42] So what's really working well is to think about, OK, let's segment out instead of absentee elders, let's segment out these different groups. You know, Tahoe is mostly second-hand owners. Very different than down in Sacramento, where it's, you know, landlords or slumlords even, right?

[00:27:59] And what price range am I in? What are their likely motivations? And let me speak to them more directly. And then you stand out. It's just like it's very similar how when you had knocked on her door in Kona, right, you stood out and by speaking to people

[00:28:16] just taking that extra couple of steps rather than saying the same thing to everybody and treating everybody the same. That makes a difference. And I think the other big one is having empathy. You know, like we've been in the foreclosure business since 2007 all through the crisis.

[00:28:33] And, you know, we've had these customers. We get sometimes we get consumers calling and yelling at us. You told this person I was in foreclosure, you know. Yeah. They're parading me as I'm a bad person for having been in foreclosure.

[00:28:45] Like out of some empathy, how are you going to get a deal from somebody like your in foreclosure? You need to sell me your house. Not going to sell your house. They don't like you. Yeah, that's that's a really important point.

[00:28:55] I think just to have an attack to say, you know, hey, I'm interested in buying your house and then just knowing that it's probably an opportune time for somebody to actually go about selling. Yeah, and maybe not bring up that you targeted them

[00:29:07] because they're in foreclosure because that's embarrassing and puts them guard right off the bat. Right. And I'm going door to door in your neighborhood and I really want to find a property here. Like you don't need to bring up foreclosure. You use that to to manage your time.

[00:29:21] So you're spending time on the properties that are most likely to to contribute a deal, but don't use that to make people feel targeted. Let's make this really applicable to an airline pilot who has a lot of time,

[00:29:33] maybe in layovers, doesn't really want to drive for dollars on his days off or her days off when they go home. And they just want to do some work on real estate investing and they're in their layovers. You know, tell me what, you know, what opportunities exist

[00:29:46] for somebody who just wants to be 100 percent remote with your tool? Yeah, I mean, that's that's where the calling, emailing and, you know, even the direct mail works. If you're putting out those kind of constant feelers to properties that you're interested in, that, you know,

[00:30:03] whether they have some sign of distress or not, or it's just meet your thesis, whatever it is, right? Like you're trying to buy ranch property or waterfront property or whatever. I just constantly reaching out to those owners to find out who's going to sell.

[00:30:17] Like, I mean, that's certainly something you do anywhere you have access to the internet or a phone. I got a funny question. Let's say you're a pilot and you're like, yeah, this sounds like a cool strategy. And you're on a layover city.

[00:30:31] You throw out some postcards and you make some calls and someone says, yeah, I'll sell this to you. Can imagine someone feeling like that dog that actually catches the car that is chasing 100 percent. Oh, shit. What do I do now?

[00:30:45] Can I just tell you like I be vulnerable for a minute? So like the first time I like I really wanted to buy this house and I finally got the woman on the phone and I was like, oh, I think I'm going to say that's awesome.

[00:30:56] Yeah, I was like, I don't know what to say to you. But like because every time you're calling like no one's answering, no one's answering, no one's answering. Finally, somebody answers and like so that was a long time ago. The hard parts always price, right?

[00:31:09] So the harder part for most people, though, is to just shut up and listen. So good. Right. Little simple questions like what are you looking for? What do you need? Right. Why are you selling and how can I help? Right. And a lot of times what you'll hear

[00:31:27] is the price is not the primary issue, you know, they need to buy before they move, right? Or they'd like to buy before they move because they really can't afford storage in a place to stay

[00:31:38] and they're worried about that or they need to do it by a certain timeframe because they want to get their kids enrolled in a new school that's in a different district. And if they don't get that new house purchased by the state, right?

[00:31:50] But, you know, they've got other things going on. So listening to what those issues are, like, I just can't get this place cleaned out that, you know, that there's all this stuff there, whenever I don't care about it. I want to leave that behind.

[00:32:05] Really focusing on that first and solving that problem is number one. And then number two with price, I think the best thing is just be transparent. Like let's talk about what these things were, right? Zillow says this, but Zillow isn't looking inside your house,

[00:32:23] doesn't see the floor plan, doesn't see whatever. So like, hey, there's a couple of things here that might make it worth a little more. But there's a couple of things that might make a little worse. Let's let's talk about what it's really worth.

[00:32:34] And then let's start talking about, OK, you're not going to have to pay a real estate commission. You would if you listed it, right? There's some repairs that need to be done. There's this thing, whatever problem I'm solving for you, right?

[00:32:46] And then for me to do all of this and not have you do a realtor or do all of that, like I think a reasonable fee is X or my doing all this stuff for you and working it out is that worth X in addition.

[00:33:00] And you're going to have conversations about each of those things and come to an agreement that's fair for both. I think you know right away when the person answers if they're going to be a good client or not.

[00:33:09] That's what I've found is like, you know, you get the people who are like, well, how much are you going to pay me? You're probably not closing that deal. Right. You could just feel it like the person is like super motivated

[00:33:18] and they will tell you what their major problem is. And I think you hit it right on the head, Sean, like it's not price. It's I need to get out of this thing like right now. Like that I think of like the five off market rental properties

[00:33:33] or flips that we bought in Washington, D.C. and it was all getting foreclosed on or my house just burned in a fire and I have no insurance or something crazy. Or it was, you know, I have medical bills.

[00:33:45] And if I don't like I've got these piling medical bills and you know, it's a lot of it was probate too. Yeah. You know, it was going into probate, going into tax foreclosure.

[00:33:55] So in the people that did not work out, they were just looking for the highest price. I mean, it's nice that you got somebody on the phone and you paid this money to use Sean service and you got, you know, the person and everything.

[00:34:05] But like sometimes it's just you're just kind of wasting your time because you're just bidding against somebody else. And then it's like, if you're going to do that, just go in the MLS and just buy property.

[00:34:12] Well, and as pilots, too, we're like, we're pretty tend to be pretty analytical. Like, you know, checkbox focused and yeah, there's a real problem for our personality type of just analysis paralysis. To yeah, absolutely. You know, that's a problem we see overall

[00:34:29] where people talk themselves out of good deals over and over and over again. You know, at some point, you have to just say, you know what? I'm having to take the take the risk. I don't have 300 people on the back whose lives I'm putting at risk.

[00:34:42] You know, I'm a little risk, a little money here, but it's not that bad. Let me try it. Let me learn. I always say, you know, real estate is just so forgiving. It's so forgiving. You can buy the worst deal and if you hold it for long enough,

[00:34:54] you're going to make money on it. And what's the worst case scenario? You sell it. It's like, I guarantee you've lost more money in crypto or on a stock than you will in that in that deal that you're so nervous about.

[00:35:06] So yeah, there's a pull it being willing to just pull the trigger. It goes a really long way. Yeah, yeah. Totally. And yeah, out of 160, I've definitely had some losses. You know, I won't say they don't happen for sure, but absolutely.

[00:35:20] Yeah, I mean, Sean, you just said you had 160. So you did use 160 like flips or rentals or something? Yeah. So flips. And then I own commercial and industrial property too. How do you use your software? Like what's your what's your best practice there?

[00:35:35] Well, so right now I am house something. And I've identified 80 houses in particular that, you know, that I'm interested in. And so this is where, you know, I'm calling, I'm emailing and then sending FedEx letters. They're mostly second homes. I live in a second home resort community.

[00:35:56] So sometimes a little harder than yeah, yeah. And then they tend to be folks who are a little higher net worth, a little harder to reach. That's why the FedEx strategy. Kind of. Nice.

[00:36:09] And, you know, I can relate to that actually when my business partners wanted to buy a house in the neighborhood that he was in and he literally went knock the door. Yeah. They sold it to him. I mean, like literally one and done.

[00:36:18] Like, hey, I want to buy this house. So like, OK, we'll move. You know, I had some $1031 a while back that I needed to deploy. And I had never owned apartment. I thought, well, you know, everybody's talking apartment. Someone own apartment.

[00:36:31] But when I first started investing, I had like a four hour rule. I would do deals within four hours. Now I'm down to like 20 minutes. Like I won't do stuff more than 20, 25 minutes away. Just because, you know, fine, that value of money and what I want to do.

[00:36:48] And I like touching my stuff and seeing it. Like if you've got a professional operator and then it's far away, that's fine, but I tend to operate my stuff myself. So anyways, I reached out to every apartment owner in in that radius

[00:37:03] and talked to every single one of them. And my assistant did a share of this, too. And sound three that wanted to sell and picked pick the best one of the three and got my $1031 down on time. That's incredible. That's amazing.

[00:37:17] This is so great because it's outside the box thinking. I think when people when people first think, OK, I want to buy an investment property. It's like everybody goes to the MLS because Zillow, it's so easy to scroll on Zillow. Right. And it's a doom scroll.

[00:37:32] Doom, scroll on Zillow or Redfin, right? So this is fantastic. Before we let you go, Sean, we got to hear about your flying. Oh, you know, I think I took my first lesson when I was 14 and then, you know,

[00:37:46] would have fits and starts for, you know, many years, had a consulting gig out of town and that one was actually bad. I pushed my pilot to let me solo and went back and he let me solo at 12 hours

[00:38:00] and let me do my first cross country solo at 15 hours. And I almost killed myself. I think it's a G20, so that's pretty good. Yeah, kidding. Yeah. And it was basically I was just doing the cross country solo to compete to this consulting gig I had.

[00:38:15] It was super dumb and hindsight now that I know they actually know something or a little more. That's funny. Where was the solo cross country to and what airplane were you flying? From San Jose International to the San Jose Vista.

[00:38:26] So I did that round of training out of out of San Jose International in the night. That's great. Yeah, so all these fits and starts. And then finally at 50, I said, I'm done. I just bought a plane. I bought a 2050 206, Cessna 206 nice with all the fun

[00:38:42] music instruments and stuff. And put about 350 hours in that had to sell it kind of unrelated. And just bought Cessna TTX. So a lot like a serious pool, a little faster. Yeah, nice. Very cool. Primary reason was because there's no parachute,

[00:39:00] there's seven feet behind the amazing seats so you can fit surfboards. So oh heck yeah, you can't put a surfboard in a serious. Otherwise I probably would have a serious. Yeah, that's the downside. You know, those cirruses, they just the parachute takes up so much payload to

[00:39:14] yeah, you know, and then it makes it its tail heavy. So you've got to really be forward, you know, forward CG and that. Otherwise you can really feel it, you know, kind of kind of dragging in it. Yeah. So where do you take the surfboards?

[00:39:28] So I still have a place in Salos, Biscoe, I live in Tahoe. So that's that's the primary, you know, and then actually more into like wing foiling and other stuff. But but yes, bikes always got always going to have a bike with me.

[00:39:42] You're a pilot at heart with all the toys and adventures. I love it. Well, how can people find out more about you or find out more about property radar and utilize the service? Yeah. So propertyradar.com, we are definitely designed more for professionals

[00:39:57] rather than somebody just working, you know, on the side. So if you're the kind of person who wants the prosumer or, you know, the professional camera, even though you're a consumer and probably only leave it out automatic, we'll still help you. But we primarily serve professionals.

[00:40:11] You can find me on LinkedIn, Shano Tool, Facebook, Twitter, not super active, but all those places. But it would be happy to chat. These are fantastic. We'll drop all that stuff in the show notes. Thank you so much for your time and Shano Tool, everyone get out there,

[00:40:27] turn over some rocks and find some good deals. Tell Ryan and I about it. Thanks for coming on, Sean. Thanks for having me.