250 – How To Become a Millionaire in 2 Years with Real Estate ft. Chad Carson

Synopsis

Chad Carson has been a real estate investor for 18 years now. He began his career by flipping houses and finding deals for other people. Together with his business partner, they currently own 110 units, mostly small residential apartments. He is driven to develop his business to earn passive income while traveling with his wife and two children.

Join us in this episode as Chad explains how we can become millionaires by investing in real estate.

Key points

How He Started

His father owned rental properties when he was a kid. He would often drop Chad and his brother off at the properties to assist him in cleaning them, so real estate didn’t appeal to Chad at that time.

In college, he received a scholarship to play football at Clemson University. He opted to get a degree in Biology since he wanted to be a doctor. But then he began reading some of his father’s books and grew interested in the lifestyle of an entrepreneur, such as the notion that he could be his own boss and travel anywhere working from a laptop, without having anybody tell him what to do. This concept prompted him to change careers, which his father encouraged.

For the first year, he assisted him in finding deals. The following year, he went up to South Carolina on his own and started his own company.

Starting on His Own

Chad works with a business partner he met in college. They discussed starting a business together after moving into his business partner’s spare bedroom. They were primarily interested in flipping houses, such as looking through foreclosed properties.

According to Chad, he used a variety of marketing techniques, such as direct mail and signage. He drove around with a sign that stated, “I buy houses.” Because he wasn’t making any money yet, he had to live off the money he had saved up in the past. To buy the properties, he and his business partner needed a source of funds other than going to the bank, which they couldn’t do since he was unemployed. Eventually, after much thought, they decided to approach a professor that Chad had met while attending Clemson University. They presented Chad’s formula to him, such as how he can find houses worth $100,000 to $150,000 yet purchase them for a low price. He ultimately loaned them some money, and they’ve been using this technique ever since, collaborating with private individuals to flip houses.

Foreclosures

There were a lot of foreclosed properties in 2007-2008, which was terrible for the economy. Chad and his business partner specialize in short sales. For example, they send direct mails to individuals who are a payment or two behind on their mortgage, asking if they are thinking about selling the property. They also expanded into direct mail to landlords, such as those evicting tenants or inherited properties.

When asked where they acquired the property records, Chad said they approach list companies. He even recalled back when online transactions were uncommon, and data was kept on CDs. Now there are services like PropStream that make it easy to get comprehensive real estate data.

Because of appreciation, there are fewer foreclosures at present. The good news for homeowners is that if they fall behind on payments, they can simply put their house on the market and sell it fast. However, some personal issues would push individuals to sell properties right away rather than put them on the market, where experts like Chad come in.

According to Chad, if he had to start over today, he would still try to find evictions. With the current eviction rules, he would send letters to every landlord in town who has had an eviction in the previous month or two or filed one in the last year since it may have been postponed.  Out of the 100 landlords he’ll be contacting, he is bound to receive at least five to ten replies.

Starting from Scratch

When asked what he would do if he had to relocate and start over, Chad said he would begin by researching the market and talking to people. By doing so, he’ll begin to have an understanding of what’s working, what’s not working, who people are, what they’re like, how people negotiate in that area and other helpful information.

He would then begin with something simple, such as looking for vacant properties. For each property he discovers, he would try to contact the owner to buy their property. With time, he will surely hear from these landlords and then develop everything from there.

Raising Money

Sean asked Chad how they persuaded their professor to invest in their business. Chad said that he told his professor that he would be able to repay him in any situation and that the amount of money he would borrow from him will never be more than 70% of the property’s value. He understood that his professor, like any other investor, needed a sense of security for his money, so he was determined to provide that.

Private Money Lenders

Chad shared that at the beginning, he borrowed money from family members such as his grandmother. He explained to them how their money would grow as a result of this investment, which encouraged them to invest.

Coaching

Chad has an email list for which he sends out emails twice a week to those who sign up. He began with 26,000 people but soon reduced that number by removing those who were no longer opening his emails. He wanted to send emails since they are more personal and go straight to the recipients.

He also has accounts on Facebook, Instagram, and YouTube, but his email list is the most important to him.

Final Advice

According to Chad, aim to make your company as simple and safe as possible in the long run. You must keep in mind that your business has two phases. There is a growing phase with high leverage and a second phase with stability, income, and security. If you’re in the first phase, keep envisioning what you want your business to look like in the long run, and if you’re in the second phase, ask yourself what more you can do to make the most of your time.

References

More from our guest

• If you want to learn more about Chad, you can find him on Facebook, Instagram, and YouTube in his channel Coach Carson.