- Profit Strategy: Got property under contract for $165K and sold to buyer for $181,500, resulting in 10% flip fee ($16,500).
- Number of Units: 3
- Amount Earned: $16,500
- Personal Money Invested: $0
- Prior Experience: Some background with single family, not commercial.
Here’s his story:
Like many of those who find success in small apartment investing via Lance Edwards’ boot camps and other programs, Henry Serrano’s great success in multiple areas of real estate is rooted in single family houses.
While working in the financial services industry for nearly 14 years, the Fresno based real estate entrepreneur joined his brother and dad in a very lucrative side business, rehabbing and flipping some homes while keeping some as monthly rentals. At one point, they had nearly 30 homes, and Henry – tired of dealing with tenant problems – used his proceeds from their eventual sale to venture into buying and flipping vacant land properties all over the country, including Arizona and Florida.
When he happened upon Lance’s “How to Make Big Money in Small Apartments” program, he immediately connected with Lance’s story of finding success marketing to out of state owners. His experience with owner financing in his land deals dovetailed well with Lance’s teachings on working similar deals with small apartments.
“I loved the way Lance simplified everything and helped us break down the numbers,” Henry says. “Having spent years working with single family homes, I was inspired by his belief that with multi-family buildings, you can spend the same amount of time analyzing everything yet come out with more zeros in profit on the end. I joined his mentoring program and found those live weekly calls very helpful.
“I also participated in a live workshop in Houston with 10-12 other students, and was able to learn so much about the process from their experiences,”. That was the key, learning how to run through the process, work with Lance’s system and understand the value of due diligence. Being presented with ‘deal or no deal’ scenarios opened my eyes to what to look for in analyzing deals. I liked the way he explained the value of starting small and making comfortable baby steps dealing with individuals rather than corporations and banks if you started with 100-unit buildings and multi-million dollar deals.”
Getting in on the ground floor of Lance’s training during the recession era of 2009-10 allowed for some unique foreclosure-fueled investment opportunities that might not have presented themselves in better economic times. In Henry’s “own backyard,” he connected through one of his leads with an association of homeowners of approximately 40 triplexes, close to half of which were in foreclosure. He focused on a single triplex that had a note on it that was close to $260,000. Henry offered $140,000 and the bank declined it and countered at $160,000.
The basics were that he got the property under contract for $165,000 and sold to the buyer for $181,000, resulting in a 10% wholesale (flip) fee ($16,500), with zero personal money invested. To convince his local investor to pull the trigger, he ran through the numbers. The average unit rented for $850 a month, resulting in a total of over $2400 per month, minus the $200 association fee. That investor also became the end buyer, and the deal closed in 45 days.
One of Lance’s key concepts – the notion of “peas in a pod” – inspired Henry to use that deal as a powerful springboard to many more wholesale deals – nine in all. After going through a playful and elaborate explanation of the way pea pods are designed, he says, “We had a complex with 40 ‘peas’, or triplexes, and my investors and I ended up picking up many of those peas. I knew if there were 20 units ripe for buying and flipping, I could work deals for some of them. It got easier as it went along and became something of a ‘repeat and rinse’ process with the non-owner-occupied units. Even though I was fast building a portfolio, there was still this smaller feel about each property that worked.”
Henry’s desire to stay away from the landlord realm and continue to wholesale led him to much larger deals where he served as “matchmaker” between investors and buyers – including one where he earned a $25,000 commission on a $5 million dollar deal. He’s found that in recent years, the market is more challenging than it was during the darker days of the Great Recession. While he’s still involved from time to time in four and eightplexes, he’s often looking for situations where tax delinquency, divorce, death or financial hardship open up more streamlined opportunities to wholesale.
This multi-faceted success and Henry’s ongoing desire to find properties, connect people and make deals inspired him to emulate Lance in another way. Eight years ago, as an extension of his matchmaking endeavors, he created a local Fresno area real estate Meetup group to provide networking opportunities and a support system for local investors. Meeting on average of once a month, the community – which boasts a total of 500 overall members and 20-30 who meet regularly – has several different subgroups related to matchmaking and wholesaling. He proudly points to the incredible breakthrough success of one member, a copy machine salesman who knew nothing about real estate coming in and now owns over 44 rental units.
“I love helping and educating people, and paying my success forward so that others may enjoy success in this challenging business,” Henry says. “I find that teaching lends me credibility because people look at the person running the group as one with authority. But the most important part of this group is the networking and leveraging possibilities. Instead of me having to do mailings and look for sellers on my own, I have an incredible pool of people who already have investments and who can bring opportunities to me. I have such fond memories of Lance’s weekly support meetings, and likewise, my group is a place where people can feel free to go over any issues, discuss their struggles and work on solutions in a judgement free environment.”
As someone who once toiled in a corporate setting, Henry is thrilled that his success as an independent investor and matchmaker have given him a flexible schedule that has allowed him to spend time with his 18 and 13-year-old daughters. Since his older one is currently attending the University of Kentucky, these days that includes the opportunity to get on a plane and share a football game at the school with her. He remembers being inspired when Lance told him that one of his motivations was having enough money to send his daughter to whatever college she wanted to apply to. Now, Henry is living that “dad dream” himself.
Ever the entrepreneur, Henry also currently has a safety training business, which he purchased from a friend during the depth of the recession. Once a half million dollar a year business, Henry has restored it to its former success and grown it significantly.
“My whole family has always been entrepreneurial,” he says, “and with both this business and my real estate endeavors, the reward is the enjoyment I get in having that flexibility to get up and go when I want. Time and freedom are everything. I’ve found that the key to being successful in this business is consistency. You’re going to have good days and bad days, but you have to commit the daily, weekly and monthly effort. We live in an era of instant gratification, but in this world, results are all about taking the time and putting in the work.”