12: Forget About Rentals, Owner Financing Rocks

Mitch Stephen

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Show Notes

Mitch Stephen has been flipping houses in San Antonio for over 20 years. Over that time, he’s managed to purchase over 1000 houses!

He specializes in owner financing properties.

He is also the author of several books. One is My Life and 1000 Houses: Failing Forward to Financial Freedom, which details his journey in real estate investing and My Life and 1000 Houses: 200+ Ways to Find Bargain Properties.

And just to show you what kind of guy Mitch is, I want to share the story of how I got his first book.

I found out about it when it first came out and ordered it right away. I didn’t receive it within a day or 2 and, honestly just wanted to say hello to Mitch so I called him. He promptly drove 45 minutes to my houses and personally delivered the book to me. That’s incredible service!

In this episode Mitch talked us through a typical owner finance deal where he can buy a house cheap and owner finance it to a buyer as-is. There are a ton of benefits to doing this instead of renting.

First, he makes money on the sell with a down payment from the buyer. The buyer does the fix up so that Mitch doesn’t have to. The collateral for the loan is improved by the buyer making the loan even more secure. Mitch doesn’t have to pay the property taxes and insurance as he’s sold the house to the buyer. He also is not the landlord so he doesn’t have to fix toilets or anything else.

There was a lot more detail shared within the episode, so be sure to listen and be ready to take notes.

If you are planning on owner financing properties, you really need to be aware of Dodd-Frank. Mitch discusses how to make sure you are in compliance using a cool short-cut.

Mitch also discusses why he likes driving for dollars so much and some tips to make it even more profitable. He also discusses why he doesn’t feel bandit signs work as well as they used to.

You will also find out about his system for knowing which marketing he is doing is producing the calls he receives.

Recommended Books

My Life & 1,000 Houses: Failing Forward to Financial Freedom

My Life & 1,000 Houses - 200+ Ways to Find Bargain Properties

links

Determine Rents for a House

Get Phone Numbers and do Mass Texts

1000Houses.com"

Dodd Frank explained for real estate investors

How to decide whether to wholesale, flip, rent or owner finance deals

Come and join us in the FlippingJunkie Group on Facebook!

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Episode Transcription

Danny Johnson: This is Flipping Junkie podcast episode 12. [music] Welcome to the Flipping Junkie podcast. My name is Danny Johnson; former software developer turned house flipper, flipping hundreds of houses. Each week, we bring you interviews, strategies, stories, and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now, let’s get to it. [music]
All right. We’ve got a great show for you today. I’ve got Mitch Stephen from San Antonio here. He does a lot of owner financing where he buys houses, sells them as is with owner financing to a homeowner that does the fix-up for him. Now, he gets payments every month and doesn’t have to mess with the hassles of fixing up houses and dealing with picky buyers. So, I’d say that’s a pretty good thing. He’s developed quite a system over the years and today on the show, he shares that system with us. So, you’re really going to want to listen in and take some notes. We also talk about Dodd-Frank and some of the other things to be aware of if you decide to venture into owner financing yourself. Now, I personally prefer to owner finance over having rentals because it’s just a lot less hassles with doing that. So I hope you get as much out of this talk as I did and I hope you enjoy the show.
I’m super excited today to have Mitch Stephen on the podcast. Now, he’s been flipping houses in San Antonio for over 20 years and over that time he’s managed to purchase over 1,000 houses. He specializes in owner financing properties and he’s also the author of the series of books entitled My Life and 1000 Houses. The first book is Failing Forward to Financial Freedom; excellent book, tells about his story and his journey in real estate investing. And the second book that he released recently is 200+ Ways to Find Bargain Properties. And I’m told he’s got a third one that’s going to be coming out in February, I think is what he said, and it’s the Art of Owner Financing. So, the first two I’ve had and read are excellent books and I’ll be looking forward to the third one.
Now, just to show you a little bit about what kind of a guy Mitch is, he’s in San Antonio like I am. I want to share a quick story about how I got his first book. I found out when it first came out and I ordered it right away. And I didn’t receive it within a day or two and I was really anxious to get the book and honestly, really just wanted to say hello to Mitch, so I called him up. And I told him I hadn’t receive the book. It was in the mail and I think I received it the very next day, but it didn’t matter. He still actually drove 45 minutes to my house and personally delivered the book to me, so that shows you just what kind of a guy he is. And now, he’s agreed to be on the show, so that’s awesome.
So, thanks for joining us, Mitch.

Mitch Stephen: Hey, Danny. It’s my pleasure and I’m happy to be here. That was a neat walk down memory lane. I didn’t remember that story until you brought it up.

Danny Johnson: Yeah, I remember that day and I thought that was really cool. I thought that you would just tell me, “Hey, just wait. It will be there” you know. And so I guess I ended up with two copies, so I was able to give another one to a friend. Just to say thanks again for doing that.
You know, if you want to get started just to let people know a little bit about you. Now your first book, the Failing Forward to Financial Freedom, really talks in-depth about how you got started and it’s a great read too. It’s a good story. It’s not just dry. It’s a fun story. It tells about the mistakes that you made and stuff like that. But you want to give our audience a quick talk about how you got started in real estate investing and why you started investing real estate?

Mitch Stephen: Well, it was probably the only thing I hadn’t tried and failed at already. So, it was like the last thing left for me to try to do. I actually didn’t go into real estate in any kind of supernatural fashion. I was just trying to buy some rent houses and then through a course of problems and disappointments and lot of anxiety. The book is about the morphing from being a landlord into being the bank, being the owner financier and dropping all those liabilities. So, I fall down an awful lot in the book. A lot of people asked me seriously if I really wanted to put it out because I fall down a lot in here, and some people then thought it was a little much. But I say, you know, it’s the truth, that’s what happened. I mean, maybe some other people who are falling down a lot will appreciate it. It’s really a book about getting back up is what it is. I wrote that one just to kind of catalogue what my journey was after the Get Rich seminar because the gurus are leaving a lot of things out. They talk to you about landlording. They don’t go over how often air conditioners break in the State of Texas at 140 degrees and how much they’d cost; and what your likelihood when you have 20, 30, 40, 50 houses, how many are going to break that year. That’s just one liability out of, you know. I don’t know, Danny. How many liabilities can you think of if you own a rent house with roofs –

Danny Johnson: Yes, it’s all those things that they don’t mention. So, it’s like everything like, “Look at what this looks like on paper. That looks awesome. You know, you should do it.” And when you introduce all those liabilities, the things that go wrong, and introduce people, tenants into the mix, it becomes a different story.

Mitch Stephen: Yeah, that piece of paper, those numbers don’t tell you that unless someone is really pulling out a sheet where they actually showed you their expenses by the year. But anyways, like you said, the first half of the book is autobiographical. The second half of the book is 18 stories that I’m not smart enough to make up that happened to me while I was out there in the field trying to figure out the real estate game.

Danny Johnson: Yeah, I always like those. I’ve got some crazy stories to tell too. It’s always good to… Have you gone back recently and read some of those? You know, sometimes you forget them a little bit and you read them and you just still think that’s so crazy that that sort of thing happened to me.

Mitch Stephen: Yeah, yeah. I mean, every now and then. I always have the books sitting around on my coffee table for people who’d come over or whatever. I’ve got a couple of books stowed away and sometimes I just pick it up. You know, I was so naïve when I started writing my book that I figured I needed to write about 400 pages then cull it down to about 325. So, I wrote 400 pages in 12-point font and I actually wrote 800 pages. I didn’t know that’s what I’ve done. I could have been done like 2-1/2 years before I really finished. The thing was I had 55 stories at the back. So, I have another book coming out sometime probably, more stories from My Life and 1000 Houses because I have about 20 more stories left over.

Danny Johnson: Wow, that’s awesome. Yeah, I will have to check that one out, too. So, you want to share with us what a typical day is like for Mitch Stephen nowadays?

Mitch Stephen: With the preface “nowadays”, nowadays it’s kind of a lot different and maybe not as helpful to other folks that are starting out, but nowadays, I get on my computer about 7:30, I answer my emails, do what I got to do, check in with everybody. And I have a Thursday meeting at 12:00 with my office and my team who buys houses. This is one of the toughest real estate markets in the nation right now because we are booming so big. It is a seller’s market. And even in a seller’s market, in 2015 I’m just a tad behind pace to buy 100 houses. My goal is to buy 100 houses. So, in a very tough situation these days, we’re still going to buy 100 houses. So, I check in with my team every Thursday. That’s 2 houses a week is what we kind of set our goal at, knowing that we won’t make it every week.

Danny Johnson: Who are the people on your team? Like what are their roles? Do you have an acquisitions person? Just general staff?

Mitch Stephen: I have 4 acquisition people. I have 2 salespeople. My person and long-time assistant, my daughter Shannon Stephen, who closes every deal in and out for the last 20 years, and then we’ve got her an assistant now, and I have a fulltime bookkeeper. So, there’s me, my daughter who’s my direct assistant and her assistant, and the bookkeeper are the only ones on payroll. Everyone else is success driven. You know, I have very lucrative carrots in the right place for people to find me houses and to sell my houses. So I haven’t seen the last 55 houses I bought.

Danny Johnson: Right, yeah. So, you said you have 4 acquisitions and 2 sales. So, 4 acquisitions are the people going out there pounding the pavement, finding deals and then the sales people are the ones that are selling them after rehab, right?

Mitch Stephen: Yeah. They’re either selling an owner finance or we’re wholesaling them. You know, out of the 100 houses, 40% will get wholesaled because they don’t fit my owner finance strategy, but that doesn’t mean they are not a deal. So, we don’t turn down deals. We don’t care how we have to profit from them or what strategy we use. We just make sure if we can profit from them that we take them down. So, 40% of them will get wholesaled and 10% will just get retailed in the traditional manner, put on MLS.

Danny Johnson: Okay, that was my next question. Okay, so about 10%.

Mitch Stephen: Yeah. And the other 50%, we’re trying to owner finance. Now, I also have a relationship with the broker that if I can’t buy the house, I list the house and I get 25% of her commission. If I can’t sell someone a house, then my people will refer to her to go to MLS and try to help them and we get 25% on that commission. But, you know, you have to have a license to get referrals. There’s someone in my office that has a license, so that’s how we do it.

Danny Johnson: Okay, great.

Mitch Stephen: Actually, everyone has a license except for me.

Danny Johnson: Yeah. There’s a lot of investors out there. They hear a lot about the wholesaling, bird dogging, rehabbing, and selling retail. There’s not a whole lot of people talking about owner financing. Would you mind walking us through what typical sort of owner financed deal from the purchase side – what type of property you’re typically buying, what kind of rehab you’re doing, and then the process of selling with owner financing?

Mitch Stephen: A typical deal is like, you know, the other day… one of the examples that stands out is, I think it was like around last year or sometime, I bought a house for $15,000. I borrowed $17,000 at 8%, 5 years interest only. My payment is $114. Did you notice there Danny that I put $2,000 in my left-hand pocket.

Danny Johnson: Right.

Mitch Stephen: Okay. And that’s tax-deferred money because its borrowed money and I don’t have to pay tax on that $2,000 until some major event happens like someone pays me off or someone refinances or I sell the note and get paid off. You know, I pay myself off. So, that’s the first half, right? But you got to remember this house, you can imagine a house at $15,000 is not livable. As a matter of fact, I’ll make it real short, you could stand in any corner of this house and see the other 3 corners, okay? Stud it up. No flooring. No cabinets. No air conditioner. It is a shell. And the outside of the shell was an old worn-out shell, not a nice shell. Because the greatest plan on the planet, in my personal opinion is buy it, don’t fix it, owner finance it for double, and watch the man who’s making you payments go over budget fixing up your collateral. That is the greatest real estate strategy plan on the planet as far as I’m concerned. How much time did I spent on rehabbing that plan, Danny?

Danny Johnson: Yeah, none.

Mitch Stephen: How much risk do I have? How much on my materials can walk off, Danny?

Danny Johnson: Right, none. Yeah.

Mitch Stephen: How many contractors can screw me on this plan, Danny? [laughs]

Danny Johnson: I see where you’re going with this.

Mitch Stephen: Yeah. What I do is I have essentially traded all those hours and all that risk of doing a rehab and just go find another freaking house.

Danny Johnson: Wow! See, I was under the expression that you were doing a lot of the fix up, you know, not yourself but having somebody, a contractor or somebody.

Mitch Stephen: I’m not telling you that I don’t ever fix up a house. I bought a house down there underneath the Hemisfair Tower in the Lavaca subdivision and we bought it for $100,000 and we put in a $100,000 rehab and it will be worth $350,000. But it’s a major thing and it’s in a historical neighborhood. It’s just the margin was so big and the houses around it had gained the neighborhood so much momentum that I just wanted to be a part of fixing up one of those houses right in the middle of all those other fixed up houses and so I did it. You know, I haven’t done a $100,000 rehab and I don’t know when.

Danny Johnson: Yeah, those were exciting, the ones down in the historic districts with the values going through the roof and everything. So, for the owner finance like the chippies, some of the lower end properties that you’re owner financing, do you do any of the fix -p on any of those or are they all strictly sold as is?

Mitch Stephen: Nope. The plan is not to. You know, I put them up for 2 or 3 weeks or 4 weeks and see if I can move it the way I want to. If not, I have to put more money, just as an example. Then, I’m going to go put $10,000 into something and I am going to mark up the house $20,000. And so, I’ve got a higher price point and I’ve got all that risk. You know, I fixed the house and I… depending on where the house is, you worry about vandalism or theft while it’s sitting there vacant. I mean. I’ve rehabbed, you know, my share of houses. I mean, hundreds and hundreds and hundreds of houses I’ve rehabbed. I choose to like maybe take out the thrash, maybe mow the yard, maybe after a week or two of just letting it sit. But most of the time, I sell my house owner financed with the dog doodoo on the carpet, the cat litter box still tumped over in the kitchen, and the weeds still up to about my waist. And what it allows people to do is just come in with smaller down payments. See, my market gets really big now because I don’t take that big of a down payment when I ask for that because I leave them their money and their resources to put into the house. But you’ve got to be prepared if you do this plan in really rough houses to maybe have to offer the house for sale 2 or 3 times, but you’ll notice the price goes up. The first guy goes in, he gets about halfway through the rehab, he quits. Now, instead of trying to sell it for $30,000 owner financed, you’re selling it for $42,000 owner financed and then that guy comes in, gets his part of the way and he quits. Now, you’re selling it for $56,000 owner financed.

Danny Johnson: What percentage do you think of times does that happen for some of those properties roughly?

Mitch Stephen: A lot less than it used to because I vet the people a lot harder now. I would rather spend the time upfront trying to decide if this is the right guy to fix the house, i.e., “Do you have some money in the bank? Why do you think you can fix this? What do you do for a real job?” “Oh, you’re a carpenter and a roofer.” Okay, I get it.

Danny Johnson: I bet you’re seeing some botched up stuff then with some of the early ones, right?

Mitch Stephen: No, you have to… like if there’s foundation or roofs or both, you have to lay it out to them in what order they have to do it in and that they have to pull permits on things like foundation, electrical, and roof. But you talk to a person to see if they have that wherewithal. “Is this the kind of person I really need to tell this to? Because if it is, maybe I should think twice.” And then you get people there, wealthy engineers that work downtown and they’re trying do some rent houses and, you know, they got $50,000 in the bank and this is going to be their 15th house.  And they are friends with the guys down the city where they pull apartments. Okay, different kind of guy. I got it. You’re in.

Danny Johnson: Right. I know it’s probably a house-by-house basis, but is there any kind of rough formula for determining how much you’re going to sell one of those for as is, owner-financed?

Mitch Stephen: Yeah, it’s not even rough, it’s exact. You know, you figure out what the rent is, which is not hard to do. That’s easy. You don’t even need to be a member of MLS or anything, get on Rentometer or Zillow or Trulia or all 3 of them. Figure out what the rent is. Subtract the taxes. Subtract the interest and multiply what’s left over by 100 – and that’s how much your buyer can afford to finance. That’s how much they have for principal and insurance. So, 750 minus 50 insurance, minus 100 in taxes equal $600. 600 times 100 is 60,000, as if I needed a calculator. 600 equals 60,000. I don’t even need to multiply by 100. I can do it in my head. If you use the terms 10.5% in 20 years, that will work – 600 equals 60,000, give or take a couple of dollars.

Danny Johnson: Right. So, 10.5% interest amortized over 20 years.

Mitch Stephen: Yeah. When you use it like that, you can look at the numbers and tell what the payment is or you can look at the payment and see what the balance is. 600 equals 60,000. 700 would equal 70,000. $720 leftover, they could finance 72,000. So, that’s what they can afford to finance. So, what is the owner finance value? And notice I didn’t say the value? I said the owner finance value. It’s a completely different value. It’s not the MIA value. It’s not the BPO (Broker’s Professional Opinion) value. It’s not the CMA (Current Market Analysis). Or going off to MLS, recent sales. It’s not that value. I don’t care about those values. I don’t need those values. I might look at them just to see, just like I might look at what the house is taxed at by the tax assessor collector for the property taxes, but it doesn’t mean anything because we don’t need appraisals to sell houses owner financed. So, I need to make it worth it. The only thing that you have to believe, to believe the owner finance strategy works, is you have to believe that a person paying a $950 rent would rather pay $950 to own. Do you believe that, Danny?

Danny Johnson: Oh yeah.

Mitch Stephen: And if you don’t, don’t do this. No. It doesn’t have to do with interest rate. It doesn’t have to do with anything. The big question is, can you buy a house and can you do whatever it is you’re going to do or not do to this house and move it over to a person who’s paying a 950 rent, who would rather pay 950 to own?

Danny Johnson: All right. And so you would still determine that sort of calculation for even like the first example with the house that was basically a shell.

Mitch Stephen: Now on that one, I didn’t really… on the house that was a shell and I was going to say that – this is really a formula for houses that are rentable or pretty much rentable, ready to move, maybe clean them up.

Danny Johnson: Okay.

Mitch Stephen: So, on the other on, I bought a house for 15,000, I borrowed 17,000. And I thought, you know, what are the chances I can owner finance this for 38,000 with 3,000 down? I said, “I think the chance is pretty good.” But even if I only finance it at 30,000 with a 1,000 down, I’m still a winner. You know, I’m a big winner. So, I’ve tried it at 38,000 for 3,000 down and a guy came and bought it. But let’s back up a second because I didn’t finish that formula on how you establish the value. We had 750 minus 50, minus 100 for insurance, is 600. If they have 600 a month for principal interest it means, if you use the terms 10.5% in 20 years, they can afford to finance 60,000. If they can afford to finance 60,000, what is the owner finance value? Add 10% to 12% on top. So, in this case, 10% would be 6,000 on top. So, it would be 66,000 is the owner finance value. But since we’re not crossing a threshold and since I don’t need an appraisal, I’m going to go ahead and push this to 69 or 60.99 so that I have $3,000 or $4,000 worth of bargaining chips that I can just give away.

Danny Johnson: Right.

Mitch Stephen: Sometimes I give them away, sometimes I don’t. Now, we move on to the sale. So, in my example where I bought the house all in for 15,000 and borrowed 17,000, my payment is 114 a month. I borrowed the money at 8% interest only for 5 years. By the way, if you’re a guy out there that has been thinking about wanting to owner finance houses but then you figure out that it’s really worked, like most people do figure it out pretty quick that this is not as easy as they’re making it. If you really want just a passive income, you know, I borrow money at 8%, I give people a first lien on this house, and as you are listening to the example of how it goes, ask yourself how you feel about having a first lien and making 8% on the deal on fixing this right. So, I went and I sold the house in about a week, did not even mow the yard, for 38,000 with 3,000 down. The guy I talked to said that he lived across the back fence. The fence separated my house and his house in the backyard. And that he was a contractor and a roofer. So, I leased him the house. I gave him a lease and told him that as soon as I saw the exterior finished and painted and the interior finished and painted, I would go down and make him the taxpayer of record. I would file his mortgage with a deed of trust down at the courthouse to make it official. Until then, he would just have a nonrefundable lease, $3,000 nonrefundable, and we mapped out what he was supposed to do. And within about 4 months, he finished the inside of that house with cabinets and doors and sinks and countertops and tubs and tiles and showerheads and electrical outlet coverage and switches and light fixtures and everything but the AC, which was fine with me. He brought that house from being worth a little of nothing to probably $59,000.

Danny Johnson: Right. That’s a win-win for everybody on that one.

Mitch Stephen: Yes. Look at the guy who loaned me the $17,000 in the first lien position. You think he was pretty safe?

Danny Johnson: Oh, yeah.

Mitch Stephen: Yeah. He’s got a lien for $17,000 on a house that’s now worth $59,000. We didn’t know what it was worth at first. And if he would have drove by and looked at it, the investor, the private lender would have looked at it, he might have thrown his hands up. He might have known what it was worth. But it’s my job and my profession. I do know what it’s worth. It’s worth a lot more than that. I never know exactly what things are worth, but I know really close. And so, right off the bat, I proved that it was worth $38,000. And then, the guy went and did all the work and moved it up to what I knew was somewhere around $59,000 to $65,000. So now, this private lender’s position has gotten stronger and stronger and stronger with every day that passed.

Danny Johnson: Right, right. And some people listening might not understand how that works where when you got a loan to purchase the property and then you lease it and then you it turned it into an owner finance sale after he had gone to a certain point. So, how did you owner finance it to him if you had a loan already on the property? Some people don’t know how that works. Could you explain that a little bit?

Mitch Stephen: Well, it’s a large difference between banks and private lending. I have been to banks where they gave me a line of credit or gave me a loan with the explicit idea and knowledge that I was going to wrap the mortgage, which means wrap the mortgage – what you want to do is you want to set up your underlying debt that you’re buying your houses with. You want permission from that lender to allow you to wrap the mortgage, which means essentially sell the house to someone else in a second position for a higher amount of money. I bought the house essentially and borrowed $17,000. I owe $114 a month to my private lender. My private lender, in the documents that we signed when he loaned me the money, gave me permission and stated that he understood that I was going to wrap this mortgage with another mortgage. Where was the other mortgage? I sold it to my buyer at $38,000 with $3,000 down. Meaning, there was a $35,000 loan still left on the property in the second position. So, essentially, my buyer occupant inside the house was making me a payment of $350 and…

Danny Johnson: You know, you’re getting a different figure…

Mitch Stephen: Hold on, Danny. I didn’t do this. This was such a small amount of money. I did this loan at 12% for 12 years and the payment was $450, okay. So, my guy was making $450 to me and I was paying out $114. So, that’s what happens. In a wraparound mortgage, the person in the second position that’s living in the house, makes a payment to me of $450. I owe a payment to my lender at $114 and I get to keep the spread and spread it around 300 and somewhat dollars.

Danny Johnson: Yeah, I don’t try to do math on air. I just… [laughs]

Mitch Stephen: $326. So, you see where I got, Danny?

Danny Johnson: Right. You got cash flow and you don’t have to fix toilets. You don’t have to pay the property taxes. You don’t have to pay insurance.

Mitch Stephen: It’s bigger than that, Danny. I got more than cash flow. I picked up 2 grand when I bought the house and 3 grand when I sold it. I picked up cash and cash flow. I paid myself $5,000 to create a $326 positive cash flow of which I have no liabilities.

Danny Johnson: Right.

Mitch Stephen: Right. So, last but not least, do you think I can sell a $35,000 note when the property is valued at $59,000 to $62,000? Do you think I have to discount my note to sell that note and give him all my money? No, I didn’t. And in 6 months, I not only had the $5,000 upfront and had 6 months’ worth of payments of $450, which I think is around $1,800 or a little over 2,000 bucks. So, I collected 2,000 bucks there and then I picked up the difference between $35,000 and $17,000 which is what, another $18,000.

Danny Johnson: Nice.

Mitch Stephen: So, I found a house for $15,000 and I ended up collecting $2,000, $3,000, $2,400 and $18,000. How much is that? $26,400 I made in 6 months off a house I bought for $15,000.

Danny Johnson: And didn’t have to fix up.

Mitch Stephen: And I didn’t mow the yard.

Danny Johnson: Right. Nice, nice. I wanted to ask you one question. Now, you said you typically sell the owner financing like you said this one was a different because it was a lower amount, you amortized it over 12. So, some people might be asking, like that you said the typical one I think you said was 10.5% at 20 years. What’s the benefit of doing it over 20 versus the 30 years to both you and the buyer?

Mitch Stephen: It’s not whether it’s a benefit or not. It’s just a choice. When you’re young in the business, you need your cash flow to move up quickly so you can quit your job or get a gun away from your head every month about paying your bills. So, the shorter you have a note, the higher your spread will be between what you owe and what you collect because houses on shorter notes have higher payments.

Danny Johnson: Right.

Mitch Stephen: So, in the beginning, you would want to keep your notes as short as possible. Me, I don’t need cash flow. I mean, I’m not desperate anymore for that. So, I would rather have the 30-year loan and keep my note. I rather make $50 less per month and keep my note for 10 years longer. And so I do 30-year notes, but I talk to people in terms as if they’re not financially independent already. Because if you’re not financially independent, you want more cash flow.

Danny Johnson: Have you seen a difference though within the number of people that you have to foreclose on at the longer 30-year because they might pay it for several years and then look and see how much they’ve paid down, and you know, it’s a little bit easier for them to walk away from it?

Mitch Stephen: No. I find more foreclosures in the shorter years. Their payment is higher and their chance of failure is greater because you made their payment higher. People get in a routine in making that house payment and they get settled in. Very few people say, “Wow! It’s been 10 years and I’ve only paid down $8,000 on my note.”

Danny Johnson: Right.

Mitch Stephen: Very few people say that. If anyone ever says it to me, I just say, “Well, then quit making a payment of $650 and start making a payment of $750 and watch what happens.”

Danny Johnson: Right, right, right. Yeah, there’s nothing that says that that’s the only payment they can make. They can pay it down as a 20-year with a 30-year note and have it end that much sooner and save all the interest, if they want to but they don’t have to.
Now, I wanted to move on just a little bit into the marketing part of it, finding these deals and finding all of your deals. Obviously, you talked about the goals of getting 100 deals a year and with this competition being so and saying, you know, you’re still on track to do that which is pretty crazy. Obviously, you share a lot of that, if not all of it, in your book that there are 200+ ways to find bargain properties in the My Life and 1000 Houses series. But when some people see the 200 and they read it, it’s awesome, great information. But some people might feel a little overwhelmed when they see so many strategies. They don’t know really where to start. Could you share with us maybe 2 or 3 of your favorite strategies that you feel are best to start with to get the most bang for your buck?

Mitch Stephen: Well. You know, like you say it, my strategy might be different because I’m in a different place and I have a different sophistication and I have a different amount of cash flow. I mean, I spend $8,000-$10,000 a month.

Danny Johnson: But for people that might be starting on a shoestring budget that they want to get some traction and want to get some leads, you know, are there 2 or 3 of your favorite sort of techniques to use that don’t require a whole lot of money, maybe take a little bit more time, but generate a good amount of leads?

Mitch Stephen: Yeah, sure. When you don’t have money, if you’re going to be successful without money then you’re going to trade knowledge and time for money. And so what you do in those cases – and I try to put my book in just that order that you’re talking about. I started out with things that were basically free, the things that you’d pay for one time and they work 365 days a year and then the things that you have to have a monthly budget for that ranged from reasonable to crazy expensive like cable TV ads and stuff. I mean, the simplest thing, and I always find that when you get out there and start moving around, that’s when everything happens, so get out in the field and watch what happens. Start driving for dollars and looking for abandoned houses – still one of the best things in the planet.

Danny Johnson: Absolutely. And that involves… just for the people that might not know, what exactly is driving for dollars?

Mitch Stephen: Driving for dollars? You just just get in your car and go to a part of town you think you can afford to buy houses in and drive up down the streets and take a picture of the house where you can capture the address either on the mailbox or on the side of the house and then type in the street name underneath it and go to the next house. If you do that for about 8 hours, in my town, you can collect about 100-120 houses that are vacant and these are excellent places to start.

Danny Johnson: Now, are you just choosing only vacant houses or houses that you’re not really quite sure if they’re vacant but they look pretty rundown? Do you include those?

Mitch Stephen: Of course, but I make a mark next to the ones that may be occupied.

Danny Johnson: Okay.

Mitch Stephen: I’ve talked to mailmen and got them to just do it for me. I make friends while I’m doing that. If I see a mailman, I’ll call him over and say, “Look, here’s my card. This is what I want you to do. Send me a picture of every vacant house you ever see and write the address underneath of it and text it to me. I’ll put your name and my phone number if you agree and you put my name and phone number in your phone if you agree, and I’ll have a list of every house you ever refer to me. And if I buy it, I’m going to bring you 500 bucks.” So you’re starting off immediately. Even though you’re doing the work yourself, you’re starting off immediately trying to build a team that works while you’re not.

Danny Johnson: Yeah. And what’s awesome too about driving for dollars and beating the streets is whenever you see a house being rehabbed, you can go in there and see what kind of work they’re doing, get the card from the contractor, and start building your list of potential contractors to do rehabs for you too.

Mitch Stephen: Yeah. Dealing with contractors is a whole chapter in itself.

Danny Johnson: Oh, yeah. We won’t get into that. But it’s like the other things you can do while you’re driving for dollars that really will build you –

Mitch Stephen: When you see that vacant house, if you’re really interested, I mean, knock on the door or leave a card and ask the people to the right and the left to call you. If you’re going to do that, you’re going to have to mark down what you have to, you know.

Danny Johnson: Yeah. And most people will not do that. So, there could be 20, 30 people driving that neighborhood looking for these vacant houses. But I’ll tell you what, there’s either one or none that are getting out and knocking on the neighbor’s door.

Mitch Stephen: Yeah. The rule is 2 houses to the right, 2 houses to the left, and 4 houses across the street. That’s 8 houses. You know, the people who are successful in this business are not lazy. I’m telling you right now. That’s why I pointed out in the beginning. If after you read the book or you go to the seminar and you think this isn’t for you because this is going to take work, then maybe you can become a private lender for someone like me or Danny or somebody whoever you think is honest and is going to make their payments to you because it’s a very secured position.

Danny Johnson: Absolutely.

Mitch Stephen: It’s work. And it’s just like any business that you start when you’re new. New businesses, it takes 2 years to get them off the ground and it takes everything you’ve got to do it especially if you’re part-time. There’s no business that starts off right off the bat typically in the first months or year that you get involved. Now, I’ve seen people jump into real estate and make 100 grand on their first house, probably the worst thing that could ever happen to him.

Danny Johnson: Yeah. Expect that it will always be that way and find out it’s not. One part of that –

Mitch Stephen: As if they’re invincible. Divorced the husband and say, “I don’t need you anymore.” Find out that it was pure luck. [laughs] It’s like those guys that you give the fake lottery ticket to and they cuss the whole family out and say, “I don’t need you, guys” and the family informs him that the ticket is false.

Danny Johnson: Oh, man. This is not good. All right. So, the driving for dollars and then any other… how do you feel about bandit signs? Most people will name off bandit signs. How do you feel about bandit signs?

Mitch Stephen: You know, I bought hundreds and hundreds and hundreds of houses off of bandit signs, but I think they’re largely being ignored now because of overuse and lack of service from those signs from people who are half-heartedly in the business. I don’t think those signs have a good reputation right now for that. Bandit signs are still the greatest thing on the planet to sell your house. But there’s either so much competition or the perception of those signs when you’re trying to sell a house is that you’re going to run into some guy who’s been trying to scalp you. We just put out 600 and didn’t get that kind of response. So, either the sign company is taking them down faster than we think, I mean the sign police, or they’re becoming ineffective.
So, one of the things I do is I like to mail or even keep some postcards that I used to mail in my car so that when I see a vacant house, I can deliver the postcard. And one of the reasons why I want to deliver the postcard is because I use a company called livecomm.com and they allow to buy phone numbers and I can do all kinds of things with these phone numbers, but one of the things I can do is I can send the phone number to a recording. When they call that recording, I capture the phone number of the person who called to listen to the recording. And so when you’re trying to buy a house, you may only get one shot to connect with this person and let’s say you, Danny, mailed out your postcards and they hit on Tuesday and the wife went out, picked up the mail on Tuesday and drops your postcard on the dining room table, pays no attention at all. Her husband comes in after bowling later at 11:30, sits down to have his last bourbon and water before he goes to bed and he’s looking at the card on the table and now it’s 11:45 at night. He picks up the card and there’s 2 phone numbers on that postcard; one phone number says, “Call Mitch Stephen directly” and the other one says “recorded message.” If he’s going to make one of those calls that night, Danny, which one you think he’s going to call?

Danny Johnson: Yeah, the recorded message.

Mitch Stephen: Yes! He’s going to call the recorded message because no one is ever going to call you directly at 11:45 at night.

Danny Johnson: Wow! That’s an awesome tip because I’ve heard about doing either one, but I don’t know that I’ve heard about having both on there. So, that’s a good point.

Mitch Stephen: Also, here’s a nice little tip for you when you start out. Use a code name. Like on my postcards, my middle name is Dale. So, when I mail out postcards, if they want to call someone and talk to him directly, you call for Dale and here’s the cellphone number. But when people call me and ask for Dale, I know that’s a postcard. I say, “Dale’s not here right now, but I can help you with anything you want. My name is Mitch. How are you doing? What’s your name?” When I drop stuff off or use some other technique, I might use a different name like Steve. You know, if someone asks for Steve, I know that he got me out of Craigslist. So, you can have as many names as you want. Same old things, “Steve’s not here right now, but I can help you. My name is Mitch. How are you doing?”

Danny Johnson: Right. It’s a good way to keep track of what marketing that you’re doing is performing.

Mitch Stephen: Now, if you use something like Livecomm which the phone numbers are only like $2 a month, I mean, you can have something that absolutely would track for you. I have different Livecomm numbers on mine. But here’s the point. The guy calls the recording for one of two reasons: One is because it’s too late at night or Sunday morning too early or whatever, but he’s not going to call you during that time, so he calls the recording. The system captures the phone number and it’s up to you to get back to them, but at least you have the number. He may listen to the recording and throw it in the trashcan. That would be the last time you ever have a chance to meet this guy and because you had a certain kind of phone system that captures the numbers and let you know, then you have this chance to buy a house that no one else has. It’s all about putting yourself in the middle of the road and we like to say, I’ve drilled this into my company’s head and culture: “You can’t get hit by the money truck if you’re not standing in the middle of the road. So, every chance you get to move closure to the middle of the road, the better off we are.” And having that extra number with the recording moves me more into the center of the road to get squarely hit by the money truck.

Danny Johnson: Oh yeah. That’s awesome. That’s a good advice on that one. I wanted to talk about… You had mentioned before about in the first book The Failing Forward to Financial Freedom, you discussed a lot of mistakes that you’ve made and we all make mistakes. People hear about successful house flippers and they think it was an overnight success and never typically hear about what it took to get there and all the mistakes that were made and some of us make bigger mistakes than others. But what’s one of the bigger mistakes that you’ve made that you could tell us about that hopefully we could help other people avoid?

Mitch Stephen: In a tangible sense I can say, in a financial sense that I can really point to the numbers, the biggest mistake I made was buying raw land right before the recession and having to hold it at a tune of $8,000 a month for the next 2-1/2 years.

Danny Johnson: Can you repeat that a little bit because it sounds like you moved away from the mic? It was kind of…

Mitch Stephen: Oh, I’m sorry. I was sitting here talking into my phone thinking and walking around. I forgot we’re on the phone. Sorry. The biggest mistake I made was buying some raw land right before a recession, of course I didn’t know there’s going to be recession or didn’t guess, and having to hold on to that land to the tune of $8,000 a month over the next 2-1/2 years until the markets changed and I started selling it off slowly. It took me 4 years to actually get rid of it.

Danny Johnson: Ouch!

Mitch Stephen: For the first 2 years, no one stepped on it. No one would even look at it. So, that was $8,000 a month for 2 years and then it started to cut back down a little bit and a little bit and a little bit for the next 2 years. So, I suppose it probably cost me $400,000 or something by the time that mistake was over. The good news is, it didn’t sink me. It really, really didn’t change my lifestyle that much because I had done very well in the last 20 years about taking my cash and buying assets with it. So, while I had made a big mistake, I had made a ton more smaller good investments, a ton of small good investments, a ton of them. That while it’s not fun to look at that money on paper, I even hated it, I even have to review it today because I’m trying to block it out, man.

Danny Johnson: Sorry. [laughs]

Mitch Stephen: No, it’s okay. But that’s the truth. That would have crushed a lot of people.

Danny Johnson: Yeah.

Mitch Stephen: And what was the lesson there? The lesson was when you can’t sell raw land, it’s very difficult to make the raw land pay for itself. If I had stayed with my houses and I couldn’t sell them, I could have rented them. I could have done something with them because there’d been a structure on them, but raw land is just like an alligator. It just takes a bite out of you every month and there’s nothing to do about it. It’s an all or nothing proposition. In my plan, I was supposed to make a million dollars. In reality, I lost $400,000. So, that was the tangible case study I could tell you. Where the real, real mistake in my life was made, was made way early on – early, early, early, early on. I did not find a personal mentor until 4 or 5 years into my business where I was almost getting out of the business because it was beating me so bad. It was just like the real estate investment business was good on a couple occasions and then I get beat with a baseball bat for another 4 months and then it’d be good, you know, I make a strike and then I get beat with a baseball bat for another 60 days. My biggest, biggest mistake was not getting someone on my side that was really what I needed and who I thought they were. And that game of getting a mentor was a tricky game. too.

Danny Johnson: Yeah. That was going to be my question. How did you find a good mentor?

Mitch Stephen: How I did it was I became, I mean, I was good at finding houses. If you can become good at finding houses, you can pick your mentor. You just go to your local community and find out who’s the badass in town and tell him you want to bring him deals and that you want to partner with him. It looked like a business relationship, but it’s really a business relation plus mentorship relationship if you’ve got your ears open and your eyes open and you’re doing business with the guy. So, that’s how I figured it out. Then later on, I paid for mentors which again, I was about to go bust on something. That’s actually how I found my first guy.

Danny Johnson: Was it paying for mentorship?

Mitch Stephen: Yeah. When I had 25 rent houses that were killing me, I paid someone 10 grand to tell me what I was doing wrong and how I get out of it. I actually didn’t want to know what I was doing wrong; I wanted out. And he says, “You’re not going to get out, but this is how to straighten it out.” He didn’t teach me what I wanted him to teach me. I wanted to get out. And the neighborhoods that I bought those houses, nobody at the time was able to qualify for a loan or even the house wouldn’t qualify for a loan. So, getting a loan wasn’t an option to sell them and to get out of the business. So, he told me that I just need to owner finance them and collect 3,000 down per house and then make the payments on the house about equal or greater than what I was collecting for rent and that includes principal interest, taxes, and insurance.

Danny Johnson: Wow! So, knowing that now and looking back, do you think that $10,000 that you paid for that was worth it? Absolutely, right? You just changed everything that you did –

Mitch Stephen: When I paid the 10,000, it might as well been a million because it was my last 10,000 and I was going backwards from my rent, it was killing me.

Danny Johnson: But still worth it. You do it over and over again I’m sure, right?

Mitch Stephen: No, I would pay $100,000 for that. It would be worth it.

Danny Johnson: Right, right.

Mitch Stephen: And this is what I’ve been trying to tell people. If you don’t know how to raise private money and you don’t want to pay someone $10,000 or $15,000 to teach you how to raise private money, you’re crazy because learning how to raise private funds to buy any deal you want for the rest of your life is worth millions and millions and millions and millions of dollars. If you pay $100,000 to someone who would actually solve that problem for you by this time next year, you would have solved that problem that you would never have to worry about money again and where you’re going to get it and what rate you’re going to have to pay and all that. If you solve that problem in the next 12 months, you’re a multi, multi, multi-millionaire waiting. The only thing left to do is figure out how to find deals and that’s like teaching a dog how to chase a bone. I mean, it’s not that hard to find deals if you apply yourself.
Just think about it. If your life’s endeavor was to buy 50 houses and you started when you were 30 or 20 and if you started when you’re 50, how long do you really think it’s going to take once you get the hang of it? I say in my examples that I average 350 per month positive cash flow, I really am underselling that. I really average 450 per month. So, at 10 houses, my spread, my cash flow is 4,500 bucks on 10 houses and I got paid to do that. On average, I get paid $8,000 a house to create the positive. So, 10 houses means I put 80,000 in the bank and I increase my cash flow from $0 to $4,500 per month. How many $4,500 per month do you need to quit your J-O-B and take a vacation when you damn work, please?

Danny Johnson: Yeah, absolutely.

Mitch Stephen: And then don’t forget this. In the example I just gave you, I average about $8,000 between upfront, between what I get when I buy the house, what I get when I sell the house down payment, and my cash flow is around 450. But what that story doesn’t tell you is, is along the way to try to find the owner financing houses. I find houses that don’t fit the owner financing model or in places I don’t want to go, i.e., “I found a house. It’s a great price. The neighborhood’s okay, but there’s a crack head living on the right side of the house and I don’t want to fight that. It’s a losing battle.” They don’t care. And so, I’ll say I’m just going to wholesale that house and I might pick up 7, 8, 10 grand on the house. Already today this year, Danny, I wholesaled enough houses to put $365,000 in the bank.

Danny Johnson: Nice.

Mitch Stephen: This is not the money that I would make, the 80,000 I’d make on 10 houses that I put in the bank. That’s an addition to my owner finance strategy money. When you’re looking at the owner finance strategy money, don’t think “Well, the only way I get paid is if I borrow some when I buy and I get the down payment. That’s the only way I feed my family at the end of each month until the cash flow gets built up.” No, that’s not true. There’s houses and things that you wholesale for cash.

Danny Johnson: Right, right.

Mitch Stephen: You can make some money doing that too. No matter what strategy you have in the real estate arena, wholesaling is got to be part of that strategy.

Danny Johnson: Absolutely.

Mitch Stephen: It’s just got to naturally be part of it. There’s wholesaling and then there’s everything else. Everyone –

Danny Johnson: Yeah. And especially on a market like we’re in right now, there’s so many investors dying for deals that they are paying crazy amounts to just make sense to wholesale something a lot of time.

Mitch Stephen: You know, how I wholesale stuff? If I can get it done fast enough… now, I had some houses that I bought that weren’t what I thought. That everyone’s done it. You buy the house and didn’t think to ask about that, didn’t look over here. Anyway, something pops up. I foreclose on myself, Danny. They’re paying so much with the foreclosure auctions. I hired a trustee to foreclose on my trust and I take my house down to auction and I’m cashed out of that son of a gun in 48 hours. I have foreclosed on myself and watched these people coming from China and San Francisco and California paying so much damn money for junk that I said, “You know what, I’m going to sell my house. I’m going to sell my problem houses right here.”

Danny Johnson: Yeah, that’s a strategy.

Mitch Stephen: And I sold my problem houses and made money, good money, way more than I thought I would have made.

Danny Johnson: Yeah, that’s an awesome strategy. Before we start to close out here, I have been meaning to ask you something because a lot of what you do is the owner financing and there’s a piece of legislation that came up not too long ago called Dodd-Frank and how was that affected you with the selling of houses with owner financing.

Mitch Stephen: Well, what it really did for me is it eliminated all my competition because all my competition got scared and ran. They were saying things like, “They made it against the law to owner finance houses,” or, “They’ve made it impossible to owner finance houses.” And I go, “Yeah, they sure have,” and then I say, “You skip owner financing house.” Because what I did was I went and learned how to conform. At first, it was kind of scary and I thought it was going to be this big deal and of course, it was a change in how I was doing business. But here’s the thing. I either have to have a residential mortgage loan originator license, an RMLO license, or I have to hire someone. And the State of Texas allows me to hire someone that has a license to put me in my buyer because I guess, in all their infinite wisdom, these legislators deemed that I’m not smart enough, integral enough, and honest enough to put together a mortgage for someone on my own property, then I got to hire someone to do that now.

Danny Johnson: Right. And so, do you want to explain what that is? I mean, as far as like conforming to what. So this is all about making sure that you’re qualifying people to be able to pay for the house that you’re selling them, right? Is that pretty much–

Mitch Stephen: The thing is like a cabillion pages long, we could talk about it for a thousand years. I’m going to shortcut this for you, but I’ll humor you for just a second and say, “Yeah, now when you sell a house to someone, you have to have a reasonable reason to believe they can make the payment. There’s not a percentage of their disposable income that’s spoken about. There’s not.” You know, it just says “You have to have a reasonable reason.” So, that reasonable reason could be, “I don’t know where he gets his money because he’s an illegal alien and he doesn’t have a bank account. He gets paid cash. But my reasonable reason for thinking that he can afford the house is he lives in an apartment down the street and pays $1,000 a month and that he’s been there for 2 years and the manager just sent me this letter right here you see it, your honor, that says that he hasn’t been late in 2 years.” So, that’s my reasonable reason to believe he can make a payment. I don’t know where he gets his money, but he’s getting it from somewhere.
Now, that’s the most extreme case. That’s out of the box thinking to just what it says. The other thing is you have to give cooling off period. You have to present certain kinds of documents to explain to them what their interest is in Truth in Lending and it’s not just Dodd-Frank. If you’re talking to someone about the regulations for owner financing houses, then you better be talking to someone who (a) read Dodd-Frank, who (b) read the Safe Act, who (c) read the Finance Reform Act, who (d) read your state’s property code, also read Truth in Lending and also read RESPA docs and probably a couple other more things. If they hadn’t read all of that and laid it over top of each other, they have no business commenting on your business – none, zero, period.
So, here’s how you shortcut all this: You find an RMLO in your town or in your state or someone who’s licensed in your state. You call them up and you negotiate a price that you agree on for their services and then you sit down for 30 minutes or 40 minutes and you listen to what he tells you that you have to do and then you just do it. End of story. Go buy houses. Go sell houses. That’s all you do. Hire an RMLO. Agree on a price. Learn what he needs you to do. Continue on with your business. Period.

Danny Johnson: Nice. All right. And the last thing I want to ask you is, and I know that you’ve coached plenty of investors over the years, and one thing I do like to ask about of people that have done that is, have you noticed any common traits on the people that actually succeed versus those that don’t? Like anything that’s blatantly obvious where you can tell pretty quickly when you talk to somebody whether they sort of have something that others don’t that can help them to succeed.

Mitch Stephen: Absolutely. They’re just running through my head right now. Number one, they don’t complain about anything. The ones that I know, they don’t complain about anything. If something happens, they look in the mirror and they say, “Hey, how am I going to stop this from happening next time?” Not. “Did you see what that person did to me?” They never complain. They take full responsibility for themselves 100%. Number two, they’re enthusiastic. They’re on fire with it. Number three, and this is a big one, they’ve usually have had enough and I call it “The Had Enough Barometer.” You know, it starts from zero over on the left and it’s got this needle that goes like a clock spinning all the way over to 3 o’clock on the right, and on the right is a red line pegged. And when I am looking at their “I’ve Had Enough Barometer,” it’s usually pegged over here at 3 o’clock in the red, meaning I’ve had enough of this crap. I’m not letting people tell me what to do anymore and they’re not going to be in control of my finances. I’m tired of people telling me when I can go on vacation. I’m tired to have to beg someone to go so I can pick up my kid because they’re sick. I’m tired of having to ask someone, “Can I go watch my kid’s championship soccer game in Dallas this week? And I need to take the 3 days off.” I’m tired of that. I’m tired of that. I’ve had enough. And that’s one of the biggest barometer right there is that. If they’ve had enough, then they’re ready to accept the challenge and to get hit in the stomach a couple of times and maybe even get hit in the mouth a couple of times, but they’re not tired. They’ve had enough and they’re going to fight.

Danny Johnson: Awesome. I agree 100% on all of it. For all the listeners out there of the Flipping Junkie podcast, can you share with everybody how they can find you?

Mitch Stephen: Yeah. My name is Mitch Stephen. That’s the first thing. No one offends me if they misspell my name or anything, but it’s just I got to get it right from the beginning because we are dealing paperwork and stuff and if I don’t get it right from the beginning, it will be wrong all over the place. My first name is Mitch, M-I-T-C-H, that’s the easy part, but my last name is Stephen like a first name. There’s no “V” in the middle. There’s no “S” on the end. It’s S-T-E-P-H-E-N. And you can find me at 1000houses.com. I have a blog there that is very informational. Can I give something away to your people, Danny?

Danny Johnson: Sure.

Mitch Stephen: If you want to go to 1000houses.com, the first 100 pages of my book is free, My Life and 1000 Houses: Failing Forward to Financial Freedom. Once you sign up for any free thing, then you will get a couple of emails from me a week. I don’t like to beat people up. Honestly, I’m going to tell you exactly how it goes because I just like to be straight up with people. It goes content, content, content, content, content and a soft offer. That’s how it goes. So, there’s a lot more content and very little offer, but it’s there for people who are interested in certain topics. And if you ever don’t want to be on that list, just hit unsubscribe. So, it’s real easy. If what I am talking about doesn’t interest you, then of course we only want interested people there. So, 1000houses.com.
Also I wanted to mention my books are now available on iTunes and Audible.com. If you’re not really a person who wants to read or you like to double dip while you’re driving and stuck in traffic you want to take in a book, that’s a perfect place to double dip while you’re in your car. So, iTunes and Audible.com, you can find the 2 books I have in the My Life and 1000 Houses series: Failing Forward to Financial Freedom and 200+ Ways to Find Bargain Properties. And also on that site, I offer group coaching which is every Tuesday night at 7:00 Central Standard Time on the phone. You can be anywhere in the country or the world if you can just get a phone connection. And then I offer one-on-one mentoring on a very limited basis because I’m the one that answers the phone and deals with everyone, one-on-one directly you and me. So, I can really only take about 12 people at a time. Maybe in 2015, maybe I’ll do about 17 people this year. I’ll mentor about 17 people one-on-one. I’m very conscious about who I’m working with and just because you want to come one-on-one doesn’t mean that we’re going to do it because I have to feel like you are in the right aptitude and the right attitude and at the right market and that your goals are something I can help you with. If I don’t think I can help you with those goals, then I’ll either tell you what we need to do to get you there so I can help you, or I’ll tell you that I don’t think I’m for you and we won’t waste your money.

Danny Johnson: Awesome.

Mitch Stephen: I’m very adamant about making sure that people have a super fantastic chance to make that money pay.

Danny Johnson: All right. And of course, everybody, we have show notes for the show at flippingjunkie.com, which is my blog. Flippingjunkie.com will have links. Everything that was mentioned, resources mentioned in this episode, links to Mitch’s blog and website and all of the stuff that he just mentioned. So, if you forget about some of those things, you know that you could always find it on my blog as well to find links over to him and you can find that at flippingjunkie.com/podcast/mitchstephen and as Mitch said, it’s S-T-E-P-H-E-N. So, it’d be flippingjunkie.com/podcast/mitchstephen. I really enjoyed the interview with you Mitch and I’m glad that you took the time to share all your valuable information with us.

Mitch Stephen: Hey, it’s my pleasure, man, and good luck to you and this podcast. If you’ll send me a link, I’ll post it on my Facebook and stuff because I think you’re doing a great service to the young and veteran investors out there. So, I’ll do what I can to help push it out.

Danny Johnson: Awesome. I appreciate that, Mitch. Well, thanks again and we’ll talk soon.

Mitch Stephen: Thank you.

Danny Johnson: [music] Well, thanks for listening. I hope you enjoyed the show. And you can visit facebook.com/flippingjunkie to go to the Flipping Junkie page and leave a message there with whatever’s holding you back and any questions that you have about flipping houses, I’ll be glad to answer those. And I’m looking for topics for the podcast. So, if you have anything that you like covered in detail, please go there and visit facebook.com/flippingjunkie to do so, and be sure to subscribe to the show and leave a rating and review on iTunes. Thank you very much and see you next week.