Mark Chornohus

Circle of Champions Winner

Mark was flipping a 13-unit small apartment building, hoping to make $15,000 in an assignment fee. He accomplished this within 90 days of getting started.

What you’ll learn in this episode:

*Mark has been doing real estate on and off for six years, recently deciding to take it more seriously and do it full time

*He found that with other mentors and seminars, he always left wanting more information. He found Lance’s boot camps to be one of the better ones. He believes if he had upgraded his mentorship, he would have gotten all of his residual questions answered

*He chose small apartments vs. single homes because of the bigger potential returns. If you have one unit and it doesn’t rent out, you’re losing money. With apartment buildings and multi-family you have a bunch of units, so you have better cash flow possibilities

*He found his deal on the net and contacted the realtor who had it listed. The list price was $420,000 and gave him the three offer LOI he learned from Ron Legrand in his boot camp. The seller would not owner finance at all. So he wouldn’t accept the offer. He countered at $382 after Mark submitted $360

*All communication was through the broker. Their negotiation process was very easy

*For $420,000, Mark put together the three offers and he accepted cash at $382,000 and then put together a buyer flyer and did the marketing through Lance Edwards

*He got it under contact with the realtor and submitted the contract to customer service and they told him to submit it with the flyer and a summary

*He got around ten calls from the flyers buyer generator, but everyone was asking for owner financing and he couldn’t make that work. He again tried to convince the owner to self-finance, but he would not

*Mark’s sale price was $399,000. He was aiming to profit $17-18,000

*Every potential buyer wanted financing and had no cash to worth with

*Mark put down $10,000 in earnest money

*He is moving on to the next deal, using Craigslist and Loopnet. He has since closed another deal in Branson, MO

*The most important thing he learned is how to calculate income and expenses. Also, post ad for property for sale. They always have like 15-20 percent expenses. With Lance’s program, they give you the formula and show you actually what it’s going to be. So even when you think you’re getting a deal, you’re not actually getting a deal. You can pretty much call out the seller right away. Another thing is you just have to stick with it and keep going

*His family has been involved in real estate purchases mostly in California and Arizona, mostly single-family units

*When he learned about Lance’s small apartment program, he started thinking about how much better the number in buying and selling would be in other states

*He did the “plug and play” and he found this deal through one of the postcards about three or four months in

*He was presented with three triplexes in Indiana but rejected the third one because it was in bad condition and in a bad area. It was the seller’s decision to x out the third one from the deal because it needed too much work

*The owner was interested in selling so he could “go bigger” and find 10-15 unit buildings that he could invest in with friends

*In about two or three weeks, the owner and Ryan agreed on a number that worked for them. Ryan says, however, “we were not able to sell our financing because they wanted to get out and go big.”

*Ryan used one of Lance’s buyer flyers to help build his potential buyer list

*After the team made sure the summary Ryan created was legit, Ryan started marketing the property. In about two or three weeks, he started getting hits and found a very interested person

*It was nerve-wracking in the beginning with the buyer. The first person who called was from a buyer group that the Atlantis team had found, and it was a big investor who had hard questions Ryan couldn’t answer. He got good advice from Lance’s team but the potential buyer ultimately decided he didn’t want to buy in Indiana

*The second buyer was friendly and he and Ryan struck up an immediate rapport. He understood the numbers and had an additional unit down the street. He was excited but it was still nerve-wracking for Ryan since he was so new

*Ryan did a conference call with the seller and buyer. The seller was skeptical, but his objections were overcome and they signed up for inspection dates

*One of the two buildings was great, and the photos Ryan got in the beginning from the cellar and the ones the buyer received at the inspection date were the same. The other building, unfortunately, was “like a D-minus building.” The outside looked the same but the second was in horrible condition and was going to need such a huge overhaul that the deal as is no longer made sense

*The buyer backed out of the deal, and the seller cancelled the deal too, realizing how bad it was after never having really been in the building

*Ryan had only put down $100 on each complex before getting them under contract

*Despite the setback, Ryan liked the postcard method and the fact that the intake team did all the work on the front end. So when he called the seller he had all the answers. “It was as if I had a fellow employee call everything in there, with me as the boss, kind of verifying before giving him a deal number.”

*Realizing that the seller wasn’t completely honest about the bad building was an eye opener, but Ryan saw some positives in the process and says it helped him build his confidence

*He currently has five deals in the negotiating stages. He’s calling on postcards, trying to get seller financing, get terms and get the deals done

*The single most important thing he learned is that you need to work on this like it’s a math problem from school. You need a number of surefire things to call on and to inquire about or you won’t get far because you can’t just rely on a single deal. You have to have 15, 20 or 30 of them, and then they will start closing. It’s crucial to keep getting more in the pipeline.