Categories: Podcast

100 – How To Make More Profits By Investing In Bay Area Real Estate with Haim Mamane

Synopsis:

Haim used to run a large virtual wholesaling business but pivoted to investing in the Bay Area when he realized that by investing here, he could make more spread with less overhead. In this episode, Haim will share his techniques for doing massive deals in the bay area, and how he positions himself as an expert to get a consistent stream of deal flow. If you want to be a successful investor in the Bay Area, you should listen to this episode twice!

Key Points:

Even though Haim had a very successful business as a virtual wholesaler, he realized that it was holding him back from what he really wanted to do in life. By pivoting to investing in the Bay Area, he was able to make more profits per deal and was able to cut his overhead giving him the life that he truly dreamed about. And instead of reaching out and cold calling other people, he positioned himself as an expert and invite agents to his projects to show him that he’s the real deal. He follows up through his social media presence by posting pictures and stories of his projects.

Show Notes:

Background

Haim got into real estate investing in 2011. He wanted a better lifestyle and was working a 9 to 5 job and needed to make a change. He found out about real estate and this is what drove him to invest in real estate then to wholesale and now primarily fix and flips.

Started As An Investor

Haim realized that he can’t do the 9 to 5 job for 20 more years so he stopped to read and listen to podcasts and come across Rich Dad Poor Dad like most of the real estate investors. He realized that he needed to buy assets that will generate passive income and that was the beginning of his real estate investing. He also realized that he needed 30 more rentals in order to quit his 9 to 5 job and get to freedom, Then, he shifted his model and started to do virtual wholesaling.

Start Of Wholesaling

Haim purchased his first two rentals in California. With 20% down getting conventional financing, he ran out of money. He had to go and look for other cash flow market that will generate similar cash flow but with lower value property value. So he came across Memphis and started to buy rentals in Memphis but still went out of money. didn’t have more money than to buy rentals in Memphis. He decided to go to virtual wholesaling because it allowed him to make $5,000 or $10,000 per deal and that would be an easier route to quit his job.

Finding Deals And Who To Sell To

In the first 2 years, 95% of Haim’s deals were from MLS. He had 2 virtual assistants with blasting offers around 200 offers a week. During this time, it was a zero marketing budget and was leveraging virtual assistant to generate the leads. Then he shifted and started to invest in Direct Mail. And then shifted and started to invest in direct mail. Direct Mail was the second biggest marketing campaign that generated deals, but then again, it was networking and co-wholesaling.

From Virtual Wholesaling To Investing In Bay Area

After Haim had the courage to quit his 9 to 5job, he went all in. So He hired a lead manager, 2 virtual assistants, and an acquisition guy. This resulted in a nice flow of deals. He implemented the traction model which a lot of investors keep pushing. During his travel in Santorini, Greece, he realized that there was no alignment between his goals, core values and the business model that he was running. Haim decided instead of having a high volume, low spread model, he shifted to low volume, big spread model and there is no better market in the US to do it than in the Bay Area. That was kind of the switch of starting to do deals in the Bay Area and shut down the virtual wholesaling model.

Source Of Leads

90% is from networking with real estate agents. 95% of the population, when they need to sell a property, they will go to a real estate agent. Agents usually like to have the prestige of selling a beautiful fully renovated home and they take pride in their listing. So when agents come across a shitty and not presentable lead, sometimes they prefer just to sell it off to market, to their network or to investors just to take it off their plate. That’s kind of what Haim tries to target and trying to kind of reach out to as many agents as possible to make sure that they will think about him when something like that comes through their desk.

Buying Criteria For Properties

Haim is looking only for entry-level type neighborhoods and likes to find a way to add value within the envelopes. He buys 2 bedrooms, 1 bath and is converting it into 3 bedrooms, 2 baths by adding a full bathroom and a full bedroom, Master Suite, in the lower level in the garage area. The purchase price is usually under a million or around the million-dollar. The exit price should be up to $1.7 million. They don’t go after the top neighborhood in San Francisco. The mission is kind of like tier two or three as far as the neighborhood in San Francisco.

Things To Watch Out For In San Francisco Market

Tenants laws and rent control. Be very careful when you buy a property with a tenant if you decide to evict someone, it needs to be with an attorney

Advice For New Investors

Find somebody that is experienced that is working in their market and they are in a position where you want to be. Find a way to add value to them. The way that you can add value to somebody who’s experienced is to bring them a deal. Just go hustle, generate leads, speak with sellers and bring them a deal.