Categories: Podcast

98 – How To Create A Real Estate Investing Empire With Your Family – Pete Barrow

Synopsis:

Pete is one of the owners in a family run business called Parrot Property Group, where he invests in Indianapolis. He’ll talk about his real estate investing journey and the lessons that he learned from going to real estate full time.

Key Points:

If you’re going to send out direct mail, make sure you have some unique features that make your pieces stand out. As a wholesaler, the most important thing to have is a good buyer’s list so go to meetups and make more connections. To be a true investor, you have to go out and do things. You can’t just read books or listen to podcasts. And if you’re struggling to find good deals or digest a large price point of properties where you live, see if you have family members who live in other parts of the country. Get them to be your boots on the ground team and create a real estate investing group with your family.

Show Notes:

How Did Pete Start The Business

When Pete and his son started, his old friend offered them money and bought a big package of duplexes. Because of this, they then wind up with a nice portfolio. He moved from DC to Indianapolis 3 years ago and started working full time fixing up, maintaining and trying to also do some business development.

What is Pete Doing Now

Pete and his son are actually selling lately. When they bought these duplexes, he thought maybe in 20 years, they’ll have tripled in value and that’ll be a nice thing for the kids but they’ve already tripled in value. They didn’t just buy them randomly. They had a reason for buying them where they bought them and turned out to be right.

How Much Money Did Pete Put Into Each Property

Foursquare is a big square house with a hip roof. There are a lot of them in the city that built them in the 20s. Sometimes they’ll make them doubles and they’re half again as long so they’re not square anymore. They’re rectangular, but they’re huge old houses. You’re all in at about 80 and they rent from anywhere from 750. A couple of them are five bedrooms and are renting for close to 1100 bucks.

After Getting The Duplexes, What’s Next

Probably what happened is when they got the duplexes, the same seller had another package of four duplexes. His son just found somebody who wanted them and got them and passes them along. That was their first wholesale deal. They started working to get into the wholesale business and had a nice company name, Parrot.

Generate Deal Flow

It is constantly evolving. Pete is just walking around and being friendly and meeting people and sometimes that turns into a house. The bulk of it comes from direct mail. They are sending brightly colorful postcards with a parrot. But it’s getting so competitive with the postcard business that they’re starting to send fewer postcards and do more phone calls.

Software or Website To Look Up Information

Pete’s son, Sam, is writing software and he’s now writing some other stuff that will be for industry professionals for investors, brokers, and wholesalers.

How To Build Up Buyer’s List

This is the harder part. It’s not something you can just go out and get. It’s something you have to build up and it just takes time. That’s why a lot of beginning wholesalers can find a house but they can’t find a buyer. You go to meetups, every area has REIA. They have little events and always be some little presentation about how to get fabulously wealthy, but people don’t really get there for the presentation. They go there to meet other people who are investing, buyers, sellers, contractors, brokers and insurance people. So before and after the event is where everything really happens.

Deals Per Year

Pete’s team closes around 50-70 deals per year.

Typical Deal in Wholesaling and Net Per Deal

There aren’t typical deals for Pete. He had deals where he made 20 and 30 grand and he had deals where he made 1000 bucks or less.

Why Does Pete Like Indianapolis

The atmosphere is great, it’s wide open, there’s no traffic, big wide streets, and beautiful old housing stock. The people are pretty friendly compared to where they’re from. The economy is so stable that it doesn’t boom or bust.

Advice for Investors In the Bay Area Who Don’t Really Know Much About Indianapolis

Pete’s exact words: “One way we’ve met a lot of out of state investors is by buying their stuff back after they failed as investors. Now, don’t let this happen to you is what I would say. I do know some out of state investors who have succeeded, but they’ve all come here and sort of established a foothold. So I would say either come here and get to know the place and get to know the people and that way, you can make your own determination about where you want to buy and what you’re looking for.”