TRAEric Helbock is the definition of hard work and making things happen. He is a full-time teacher who did his first flip in 2010, which took 2 ½ years for him to sell because it needed so much work. He ended up picking up odd jobs to help fund his flip and he was doing the rehab himself because he didn’t have the money to finance anything out. His story is inspiring because he purchased a property most would have given up on, but instead, he figured it out by putting his mind to it.
Eric Helbock Real Estate Background:
- Full-time technology teacher.
- He is also a Real Estate Investor; Has bought 8 SF rentals, 10 condos, and 15 unit building, he does his own rehabs, self manages and never buys from MLS, only buys distressed deals.
- First Flip was in 2010 and it was a flop, taking 2 ½ years to sell it.
- Poughkeepsie, New york
- Say hi to him at ibuybrokenhouses@gmail.com
Best Ever Tweet:
“If you’re going to waste the time to go look at something, make the offer. Even if you think it’s too low, there might be someone like me on the other end who might really need it.” – Eric Helbock
TRANSCRIPTION
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Eric Helbock. How are you doing, Eric?
Eric Helbock: I’m doing very well, thank you.
Joe Fairless: Well, I’m glad to hear that. A little bit about Eric – he’s a full-time technology teacher. He is also a real estate investor (surprise, surprise). He’s bought eight single-family rentals, ten condos, and a 15-unit building. He does his own rehabs, he self-manages, and never buys from the MLS. He only buys distressed deals, under market.
His first flip was in 2010, and it was a flop. He took 2,5 years to sell that puppy. Based in Poughkeepsie, New York. We’re gonna have a fun time, I think. Eric, first, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Eric Helbock: Sure. So my current focus is I’m looking larger, I’m looking at either multifamilies, maybe 15 to 30-units, or I’m looking for self-storage units. I’ve put out a very small, handwritten batch of yellow letters – I think it was about 22 – and I got a phone call almost right away for a 75-unit self-storage with four commercial and four residential apartments.
I didn’t actually end up being able to close the deal. 1031 money got in the way, and someone [unintelligible [00:02:08].05] we were supposed to have our second meetings. So then I said, “Alright, I keep buying these single families, I keep buying condos, and looking at small multifamilies… What am I gonna do if I really do get an accepted offer? How am I gonna pull the trigger on this right away?” So I started selling off some of my smaller stuff, and I stacked a bunch of cash, so hopefully I could pull the trigger next time.
Joe Fairless: Okay… Well, let’s rewind. Let’s go back to the first flip that was a flop – your words, not mine. It took 2,5 years to sell–
Eric Helbock: No, no. I appreciate it.
Joe Fairless: So what happened?
Eric Helbock: So I was as green as the [unintelligible [00:02:39].29] I went to a couple of tax sales, I went to a couple of foreclosure sales… I was looking everywhere; I was looking at MLS properties… And one day I tried the Putnam County tax auction, which is probably about 45 minutes from my house… And there was a house that really no one was bidding on. I ended up picking it up for $30,000 site unseen. I got there very excited… I think I had $3,000 to my name. $2,700 of it was with me, and $300 was in another bank account. You need 10% down to close, so I had them transfer the money so I could actually at least accept my deposit.
Within 27 days I needed the other $27,000. I begged, borrowed and stole from friends and family (minus the stealing part), and I was able to close. I got there, it was a shell. The front looked pretty decent. It had new windows… There was a huge gap under the front door, and when I went in, it was a hoarder. The person had crazy signs on the wall that I think used to be posted on the front lawn, about the town. It was a very bad situation. There was [unintelligible [00:03:42].01] there was no sheetrock, there was no electric, there was no plumbing… It took me almost a year just to get permits. They just kept fighting me on everything, and I think it was bad blood from the last owner.
The walls were 2 by 4, the ceiling was 2 by 6. They would tell me I had to go to 2012 energy codes, and they wanted me to build out all the walls, build out the ceiling. It was pretty much a nightmare.
Joe Fairless: Okay, so you have $2,700 in one account, $300 in another. That was your 10% down payment, and you still hadn’t seen the property…
Eric Helbock: Yup.
Joe Fairless: Did you see the property before you then borrowed from family and friends the remaining 27k?
Eric Helbock: I saw the outside… [laughs] I will say, I’m very enthusiastic… So I was going through it no matter what. I wasn’t gonna lose my $3,000. The lemons was gonna become lemonade. I kind of peeked through the window… I had an idea of what I was getting into, but not really.
Joe Fairless: You didn’t have access to go inside at that time?
Eric Helbock: Oh, not at all. Now.
Joe Fairless: Okay. But you could get a good idea by looking through the windows from the outside, what you were about to undertake…
Eric Helbock: Oh, yeah…
Joe Fairless: So you were full-steam ahead regardless at this point in time, and you’re like “You know what – I’ll find a way.”
Eric Helbock: And that’s it. That goes into my best real estate advice ever – no matter what, take action. I hear guys all the time, that are green as I was, that listen to podcasts… At that point I didn’t know anything about podcasts, I didn’t know anything about even meetups, or anything… I just knew I wanted to do this.
I hear guys tell me that they’re not finding any deals, and I’m like “Well, how many offers did you make last week?” “Well, I looked at one house…” “But how many offers?” At the end of the day, you’ve gotta take action. Without it, you’re really not gonna be able to find any deals.
Joe Fairless: So 2,5 years… How did it turn out financially?
Eric Helbock: It was great. I’ll tell you a horrible story; I thought it was funny. Chase came out with the “Take a picture of your check and it’ll go right into your account.” In New York state you need lawyers. I didn’t bring a lawyer, and I still was able to close somehow. I took a picture of the check as it was being handed. I sold it for 130k. I bought it for 30k. I put a little time into it… I didn’t lose any money; I didn’t make a ridiculous amount. I think I made 50k or so profit, but it took a long time.
Joe Fairless: 50k?
Eric Helbock: Yeah, I think I made 50k or maybe 60k. It was my college education. So I took a picture of the check and the lawyers asked me what I was doing. I said “Oh, just depositing in my account.” He thought I was being funny. They were totally freaking out, because I didn’t actually close on it yet.
Joe Fairless: [laughs]
Eric Helbock: I thought this was funny… You know. They didn’t find it so funny. I said “To be honest with you, I’ve just never seen a 100k check before.” I grew up with not so much money, so… That was my first deal.
Joe Fairless: Alright… And why did it take 2,5 years? Because the permits took a year?
Eric Helbock: The permits took a year, I was doing everything nights and weekends, and like I said, I really had no money, so I was taking on side jobs to pay for material… And then I was doing the work myself after work, and on weekends. Again, still not knowing about the network, not knowing about hard money or private money… At some point I actually even got so desperate that I saw those signs that we call bandit signs; at the time, I didn’t know what they were. I just knew that I was hurting. And I’ll tell you the truth, I still use that pain every time I make an offer; I think about I might be actually helping them by buying their place, because I know if someone made me even a halfway decent offer, it would have been really helping me. But the tenacity got me through it, and I ended up doing pretty well because of it.
Joe Fairless: You made the phone call… What happened as a result of that conversation?
Eric Helbock: I think they made me such a low-ball offer… Almost what I originally paid. And at this point I was already a year-and-a-half, almost two years into it, and I think they made me a $45,000 offer, or something like that… And I think I was probably about 60k or 65k into it. I just said “You know what – I’ve made it this far, I’ll figure it out. I’ll get this done.”
Joe Fairless: What were those closest to you saying about the project when you were at that stage in the process?
Eric Helbock: It’s really crazy, because I didn’t really have too many naysayers… Even my wife was very supportive; when I brought her to the house, and the trees were growing into the house, and there was a pile of dirt in the front of the house, and I walked her in and it was literally a hoarder, so it was full… She’s like “Alright, cool.” And when I brought my mom there, I’d cut down the tree… And the tree was hollow on the inside, so it actually fell into the house… And I grabbed the extension cord and I pulled it out of the house, because it was a pretty thin tree… And she’s like “You’re gonna figure this out. You’re gonna do it.”
So it was kind of crazy, because everything says I should have failed, or everything in my head said I should have failed, but I didn’t. Like I said, I still use that same feeling to this day. Every time I’m gonna make an offer, I think about “You can do this. You’re probably helping the other person… Do something that works for you.”
Joe Fairless: How many family members were involved on that deal?
Eric Helbock: It was me, and actually my mom lent me some money. I think she lent me 20k or 25k. Then I basically worked a lot to get the rest of the money to finish the rehab.
Joe Fairless: So now let’s move on to how you parlayed that into building your portfolio. How did that take place?
Eric Helbock: So shortly after it actually closed – I think it was a matter of two months – I went to the Dutchess county tax foreclosure auction, and I picked up a condo. I got there and I opened the door; it was unlocked. I’m looking around, and it was a drug den… And it was actually in a pretty nice area.
Joe Fairless: How did you afford it? It sounded like all your money was going towards that house at the time.
Eric Helbock: Oh, once I sold — I’m so sorry. I sold it, I got 130k, I paid back my mother, I went to [unintelligible [00:09:13].29] with my wife, and I bought a small backo, because every guy needs a backo, right? I still had a large amount of money left, and I went to this tax foreclosure auction, and I said “Hey, I might as well try this again.”
Joe Fairless: Okay.
Eric Helbock: So I bought this condo that was a crackhouse, and I’m looking around like “Oh, my god, I did it all over again. What am I getting myself into?” And one of the neighbors comes in and says “Does Anthony know you’re here?” And I said “Who’s Anthony?” He said “The guy that lives here.” I said “I just bought this tax auction.” And they’re like “He’s in jail.” I said “Uh-oh… What for?” They’re like “He’s a violent man, and he assaulted one of the neighbors…” I said “Alright, great. It sounds like I have to go to prison.”
So I went down to the jail. I had to call my lawyer, my lawyer told me I had to evict him… And it took about three meetings with him, and he basically said “What are you proposing?” I’m like “I’ll put all your stuff in self-storage until you get out, and I’ll give you a couple hundred bucks.” He more or less told me that anything of value was stolen already, so I didn’t have to put anything in storage. I said, “Great. So I’ll double the amount of money I was gonna give you.”
So for the next week or so I put money in his [unintelligible [00:10:16].06] because you can only do a certain amount a day… And within a week I pretty much had that place gutted, bathroom redone, kitchen redone, the walls painted, and I was just waiting for carpets. So I think about three weeks after I spoke to Anthony and had him agree to our terms, I had a tenant in there.
Joe Fairless: That’s great. That’s a quick turnaround, because if one would describe the situation leading up to that – hey, you’ve got a house that has had a lot of drug activity, and the person there is in jail, so you’ve gotta work this all out and then turn it around… I’d bet the over on — if someone said a month on getting it turned around, I’d certainly say way more than one month.
I just wanna clarify – it was three weeks after I actually spoke to Anthony in the prison and he accepted for me to discard all of his stuff. So it was probably a little over a month. Maybe a month and a week, or so. But yeah, the condo turnaround was really quick… And within that time, the same real estate agent I continued to call over and over called me, and I was just at the last legs of turning this, and he said “Hey, I have an off market deal.”
Then within the next couple of months I bought a couple more condos, and condos became my wife’s favorite thing, because she knew I was in and our really quick. I think the fastest condo we ever did is two weeks from the time I started talking to them… And the thing that takes the longest was getting carpets.
Joe Fairless: And you’re flipping these condos, correct?
Eric Helbock: At one point I had a nice portfolio of condos as rentals. I think I had seven. But I did flip quite a bit of condos… And one of my favorite techniques is I get the owner to agree to allow me to do the work before I own them. So basically, for them the only risk would be if someone got hurt, I guess… But I’m not that type of guy anyway. But the reward was if something was to happen and I didn’t close, they got all the repairs for free.
So yeah, I did that quite a bit of times. I wanna say not this summer, but the summer before I did two condo flips. I was able to do the rehabs before I owned them. One had an accepted offer before I even owned it… And I was selling them off-market, like Facebook, Craigslist… And it was through an agent — and the agent called me and said “Eric, your name’s not on it. I have to write the address”, and I said “Let me just send you a copy of my contract from the other owner. I want you to know that I’m not lying here, and I’m closing next week.” She said “Alright, I’ll explain it to the new homeowner.” The day I closed we went under contract for me to sell it to the other person.
Joe Fairless: What is it about condos that makes it so quick relative to homes?
Eric Helbock: On the condo the only thing I’m really rehabbing is either one or two bedrooms. Usually, we’re painting the walls, patching the holes, we update all the lighting and all the outlets, as well as all the switches… Stainless steel appliances… If the cabinets are in decent shape, I paint them; if they’re in horrible shape, I buy [unintelligible [00:13:03].23] And the bathroom – we usually can keep the tubs, and we just do the tiles around the bathtub over.
So it’s really in and out. Literally, I’ll drop a guy off for work, and when I get there, I’ll work until 9, 10 o’clock, and then start all over the next day. So it’s a lot of painting, a lot of fluff and buff, or lipstick on a pig, get her ready, take her to the dance.
Joe Fairless: So let’s talk about the 15-unit building… How did you get that deal?
Eric Helbock: Alright, so I was finishing a house… It seems like the last ten years has been non-stop – finish one house, start over, do it all over again. So I was finishing a house, and I bought another tax sale… And now it’s probably February, late February. I just got a tenant, and I tell my wife “I’m gonna take a little time off.” We have two crazy dogs, we [unintelligible [00:13:54].10] and my mind just keeps going back to real estate. So I’m mowing the grass every night, I’m calling every wholesaler I know, everyone I know from networking, from going to all the local meetups and real estate meetings, and nobody sees any deals. We’re talking 2018, March.
So the market is actually pretty strong, and nobody has anything. So I said “You know what – I’m gonna start cold-calling.” And I started going on Craigslist, I started going on Facebook… People that had things listed for rent, I’m asking if they ever thought about selling. A good friend of mine, Bob – he’s a genius, he’s great. Me and him sit together and we made a list of 4 to 20-unit buildings in the Dutchess county area, outside of Poughkeepsie city or Beacon. And basically, I just sat there and I looked up all their names, I’d find them if they had an LLC, I would basically find out what address their mail was going to, and a lot of times it was their own primary address… So I’d look up who owns that house and then I’d call.
I got to a lady named [unintelligible [00:14:53].21] who owned a 15-unit building in Wappingers. She was like my third appointment out of the 144 unit list. I had three appointments [unintelligible [00:15:02].27] so something about her said “Go to this one first.” Which I did. I sat with her for probably three hours, for three days in a row. On the third one, I’m like “We have to talk money.”
I think he had it listed two or three years prior to that at 1.2 million. She tells me that she wouldn’t take a dollar less than 800k. So we talked back and forth, and then I said “Oh wow, this is gonna happen.”
So I said “I have to raise some money.” I put it out to my network, and I was very surprised I had 300k-400k lined up within a couple days… And then I wasn’t sleeping at night. So I called up everyone and said “Hey guys, I’ve done a lot of single-family, I’ve done a lot of condos… I’ve never done a multifamily. I’m a little nervous, and I can’t do this to you guys, so I’m gonna bow out gracefully.”
So I took money out of my retirement, I took money out of whatever funds I had – I think I refinanced a property – and I came up with 180k. I think she wanted 350k down. So I reached out to a guy that I mentored, another teacher, who had just finished a BRRRR. He did a nice rehab, and then he took all his money out a year prior. I’d been mentoring him probably a year, a year-and-a-half… I said to him “Hey, I know you have the cash… I’m gonna offer you something and I think you’d be crazy to say no.” And he jumped all over it. Within 9-10 months we had the rent roll…
Joe Fairless: What did you offer him?
Eric Helbock: I offered him half. I gave him everything, 100%. 50/50.
Joe Fairless: So 50/50 ownership… And then what was his role?
Eric Helbock: Basically, we self-managed everything, we rehabbed everything ourselves, and we basically are partners. He had to come up with 175k and I came up with 175k. I think it was roughly 350k, and I think she was gonna hold the note at 454k. I think the total was 754, but them we wanted a little slush fund for repairs, because there was a lot of deferred maintenance… So I think the total we brought together was 805k or something like that.
So we went from a rent toll of $10,200 to around $14,300 right now, a year and a couple months in.
Joe Fairless: Wow.
Eric Helbock: Yeah. But within the first nine months we were pretty stable at $13,800 or $14,000, something like that.
Joe Fairless: What were some challenges post-closing that came up?
Eric Helbock: Actually, there was none. The hardest thing for me was to finish up some projects… Because of my cold-calling efforts, not only did I get that property, but I also grabbed two condos and another house, and I was flipping all three of them. So the two condos already had sold, and the house I was trying to finish… I tried to actually sell it off to a couple other investor friends I know. That didn’t work out. I was so close to the end, and I think I was just asking 140k [unintelligible [00:17:46].21] But I think at that point I just said “You know what – Barbara, do you mind if we just hold off a couple more weeks, so I could just wrap up this current project?” I was also having my second job, so I had a lot going on. The day of my inspection I had my daughter Olivia… She actually told all the tenants that we were gonna do a walkthrough, and then she postponed it. She was great throughout the whole process.
Since I’ve sold a lot of properties, this year my goals was to get ready for a larger unit or self-storage and have a nice down payment; a couple hundred thousand. Because I wanna look at 2-3 million, so I wanted to have a nice chunk down. So when I was selling off my properties, I actually offered to buy her out of the mortgage that she’s holding for us… And she started to cry. She said “Eric, you guys have been great to me. Please don’t sell it. Please don’t refinance. Please don’t give my money. I look forward to this money every month. You pay me early…” I didn’t need to buy her out; I just assumed it would be a win/win. So she’s still holding to the note…
Joe Fairless: When you started cold-calling, you mentioned it briefly, but I’d like to learn more about it… What sources did you use to find the owners to then call?
Eric Helbock: See, I’m 41 years old, but I’m so technology-illiterate, it’s insane. I literally go on Facebook if I see someone renting a place. “Hey, how are you? I’m Eric Helbock. I buy houses. Have you ever thought about just maybe selling?” I go to the town, I ask if they have any leads, or if they know anyone that’s been hit with violations…
Joe Fairless: What office in particular?
Eric Helbock: Dutchess county — the building department in Dutchess county, in Poughkeepsie.
Joe Fairless: Okay, alright.
Eric Helbock: So I talk to everyone, I’m very friendly, I offer people money… I currently am working on a flip that my lawyer gave me… I gave him a nice tip, I gave his assistant a nice tip as well; paralegal, I apologize. I believe in taking care of the people around you, but I’m not very computer-savvy… So if I see someone listing a place for rent or for sale, I call them.
Joe Fairless: And before the 20-unit building…
Eric Helbock: Oh, now — my friend Bob is very computer-literate. He’s also an agent, so I told him to pull any off-markets… And he asked me “how far back?” and I said “As far as you can go. I don’t care. As long as it’s from 4 to 20 units” that was ever on the MLS, on LoopNet or whatever sources he has. So we get together once a month to network and just to hang out, [unintelligible [00:20:11].04] and he handed me a list and I went right to town on it. I actually still haven’t even phoned everyone on the list.
Joe Fairless: How many were on the list, approximately?
Eric Helbock: 144.
Joe Fairless: 144. Now, an ambitious guy like you, it surprises me you haven’t called everyone. How come?
Eric Helbock: Because now my mind is thinking bigger, and I’m afraid that [unintelligible [00:20:34].25] one shoulder; he’s always saying “Eric, what are you doing? Stop getting distracted. Stay focused. Do you want multifamily?” Because I’m an opportunist. Right now I’m JV-ing two deals. If I see an opportunity to make money, I get involved. I love this business, I really do.
So I do tend to get distracted, and I’m afraid if I start cold-calling these people, I’ll be busy tied up for another six months. I wasn’t looking for the current flip I’m involved in, and now I’m hopefully closing in the next month or so on another flip, which I wasn’t looking for as well… But they keep happening, and I guess when you fill up that funnel, it just keeps dripping down. So these are old things that just kind of happen.
Joe Fairless: You mentioned it already, but if you have any additional advice, we’d love to hear it – what’s your best real estate investing advice ever?
Eric Helbock: One was take action, and make the offer. If you’re gonna waste your time looking at something, if you’re gonna go there, make the offer. Even if you think it’s too low, there’s someone like me on the other end that might really need it. You might actually be helping them out.
The lady that we bought her building – her husband was very sick. Timing was perfect. The last time [unintelligible [00:21:39].27] I think about half the building left, because it went up for sale. So I happened to reach out in a perfect timing. Same thing – just make the offer. That’s my best advice.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round? First, a quick word from our Best Ever partners.
Break: [00:22:02].13] to [00:22:48].27]
Joe Fairless: What’s the best ever resource you couldn’t live without as a real estate investor?
Eric Helbock: The people around me, the network. It’s really unmatched. It’s really nice to have good people around you.
Joe Fairless: What deal have you lost the most money on?
Eric Helbock: I’ve never lost money.
Joe Fairless: What’s the best ever deal you’ve done?
Eric Helbock: Last summer when we bought the building, one of the three flips I bought for very little, and I’ve made a little over 100k in less than two months.
Joe Fairless: What would you attribute that to?
Eric Helbock: Against what everyone says, I’m there, I’m working, I’m there doing the work with the people. I’m managing myself.
Joe Fairless: But you’re doing that with others, so… Comparing that one to the other ones, what made this one stand out?
Eric Helbock: I bought at the right price. I bought that for 54k, I put 50k or so into it, and we sold it at 212k.
Joe Fairless: And what allowed you to buy it at that price, versus others buying at that same discount?
Eric Helbock: [unintelligible [00:23:39].04] best resource was, the one thing I couldn’t live without – my network. I happened to sit next to someone at a real estate meeting, and the guy asked me if I’d look at a house with them. I did. He asked me what I thought of it, and how much I thought the repairs would be. I told them 90k if you’re paying people. And he said “Oh my god, I bought into this program. We buy only houses”, and it came up exactly 90k. He’s like “That’s way too much work for me. Would you wanna buy from me?”
We went back and forth on the price. I think he had it under contract for 40k. We settled at 54k that I’d buy it from him. Instead of 90k, I did work with some contractors as well, and I think we were at 50k and 54k, so like 104k.
Joe Fairless: Best ever way you like to give back to the community?
Eric Helbock: I host a local meetup, I help people… Unfortunately, sometimes I’m brutally honest with them. I’ll say things like “How many offers do you make? What are you doing?” There’s a famous quote that I love – if it’s important to you, you’ll find a way. If not, you’ll find an excuse.”
I talk to other investors, I talk to my students at school… I tell them “You can’t be upset with the results if you didn’t do the work.” I talk to people, we meet up on Saturday mornings at Starbucks before my kids are awake, and I’ll drive people around, show them what I’m doing… I love networking. That’s how I give back.
Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?
Eric Helbock: They could call me. I think you’ll put my phone number and my name on your show notes. Ibuybrokenhouses [at] gmail.com, or my phone number is 845 444 6053. That’s my cell. I answer my calls. I’ll call you. Leave me a message and I’ll call you back right away.
Joe Fairless: Partnering up with someone, picking up the phone, calling people who have a place for rent, and then also when you found those 4 to 20-unit properties, or specifically the 15-unit that you purchased, and have increased NOI substantially in a year and change.
It is partnering up with someone who can pull off-market leads, and then reaching out to them, and giving them a call. Simple as that, but it takes effort, it takes consistency, and there you go. Thanks so much for being on the show. I hope you have a best ever day, and Eric, we’ll talk to you again soon.
Eric Helbock: Thank you so much. I really do appreciate it, and I appreciate your podcast.
