Terry is a full-time real estate investor with 19 years of real estate experience and founder of “Nice guys buying houses”. Terry will be sharing some great information around how to find leads, to strategies in how they separate themselves from other real estate companies such as focusing on the Better Business Bureau and focusing on a specific customer. He also was open to sharing how he comps markets by focusing on micro-markets, schools, and other ways.
Terry H Burger Real Estate Background:
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“If you have that warm fuzzy feeling when you find your first deal but not sure about the numbers, then you need to be careful” – Terry Burger
Theo Hicks: Hello Best Ever listeners and welcome to the best real estate investing advice ever show. I’m Theo Hicks, and today I’ll be speaking with Terry Burger. Terry, how are you doing today?
Terry Burger: I’m doing great, Theo. Thanks for having me on today.
Theo Hicks: Absolutely. Thanks for joining us, looking forward to our conversation. A little bit about Terry. He is a full-time real estate investor, with 19 years of real estate experience and 5 years of investing. His portfolio consists of 6 rental properties and he does 30 to 40 flips per year. He is based in Atlanta, Georgia and his website is niceguysbuyinghouses.com. So Terry, do you mind telling us some more about your background and what you’re focused on today?
Terry Burger: Yeah, no problem. So I am a trained classical musician, turned middle school band teacher, turned realtor, nice guys buying houses turned real estate investor. So I spent about 9 years teaching public education and then went into residential realty or real estate for about 16 years, and then made the transition around 2013 to investing full-time. And that’s a little bit of my background. Kind of my claim to fame is my superpowers comping property and knowing what the consumer wants. I have probably walked through 10,000 properties, I probably had 5,000 moms in my car at any given time. So I kind of feel like I’m the house whisperer when it comes to knowing what the retail consumer wants. So that helps me in my flips for sure.
Theo Hicks: Well we’ll definitely talk about those two things. So the comping properties and the knowing what people want. But before that, so you do flips and you do rentals. So which one is your main focus?
Terry Burger: So we flip to buy and hold. We like to generate cash through our flips and then we can save the best ones with the most cash flow as a rental properties. So we’d pick up two, maybe three a year, if we can.
Theo Hicks: What’s your main way to generate leads?
Terry Burger: Let’s see, the main way to generate leads is direct mail at this time; we buy some online leads as well. Those are our two primary.
Theo Hicks: You buy online leads. Do you buy like lists?
Terry Burger: Yeah. So there are companies out there that have great organic traffic. So you could either do Google pay per click – we have done that before – and drive traffic to your own site. Or you have these companies out there that have really great SEO and they appear in top search results in just about every market and they get plenty of leads. So we basically just pay for leads from them.
Theo Hicks: Interesting. So you have like an ad on their website? Like if I go on a website, on the corner it will have an ad for you buying houses, or how does that work exactly?
Terry Burger: No. It’s not an ad at all. It’s kind of like they go in, and because these companies have national SEO presence they just go in, and let’s say somebody clicks Greenville, South Carolina, I have a house to sell in Greenville, South Carolina, then I buy that lead.
So if you think about how Service Master does it for storm-damaged and water-damaged houses, it’s just a national website and it’s a lead collection service, and then there are a multiple of people that buy leads. I can give you the company names if that would be helpful, Theo.
Theo Hicks: So you buy it and then they will send you a list of people who said “I want to sell my house in this market”?
Terry Burger: Yup. Let’s say Suzy Smith hits their website, and they know that I’m going to pay X amount of dollars for this lead, call it a hundred bucks, a hundred and fifty, two hundred dollars… Then they send that lead over to me and they just ping my credit card per lead.
Theo Hicks: Okay, and what are some of the websites that do this?
Terry Burger: There’s a needtosellmyhousefast.com, is the most common one, and then fasthomeoffer.com is the other. A lot of people, I think, have heard of fasthomeoffer.com.
Theo Hicks: And then for the direct mail, what’s your criteria for that? What type of people are you mailing to have you found to be the most receptive to direct mail? And then what type of messaging are you putting on these letters?
Terry Burger: I think the best messaging is just consistent messaging. What is it that your company has that might separate you from other people? So we have done a really concentrated effort to get Better Business Bureau reviews. So we leverage those Better Business Bureau reviews against our competition, and we hear this all the time, “We went with you because you were BBB rated,” or “We called you because you were A+ rated on the BBB.” That seems to help us a lot, so that kind of messaging – we get that out all the time. And then in terms of the type of person that we mail to, just like everybody else, they need to have equity, and we’re just trying to figure out who is motivated.
We have personally, I don’t think, ever bought a house from anybody under 40; so we go 40 and up. We just kind of look at our avatar customer, who is it. The problem with us sometimes is – I remember buying a house from an attorney couple one time. So typically he wouldn’t be our avatar customer, but they hated realtors. Really, honestly, Theo, that’s really what it boils down to. If they don’t like real estate agents, they call us. And I think from an investor’s perspective, a lot of times that’s what makes the investor a really good option for people, is because a lot of people have this bias against real estate agents sometimes. And that usually stems from a bad experience along the way.
And look, I was an agent for 17 years, I sold over a thousand houses, and I was a really good agent, but did I make everybody happy all the time? No, I didn’t. So that one person that I didn’t make happy, or they didn’t have the experience they thought they would have, they may reach out to an investor.
Theo Hicks: So, you’ll have on the direct mailing a stamp that says “A++ Better Business Bureau”? [unintelligible [00:08:33].23]
Terry Burger: “And if you hate realtors, call me.” No, I don’t put that on there.
Theo Hicks: Well it’s funny, because I talked to people before who would put that they’re an agent on there, and say that’s like a benefit to them that they’re an agent. But it’s interesting, they said sometimes people don’t even like agents. That could potentially hurt you as well. So thank you for sharing that.
So you send out your direct mail and leads start coming in. Now you said that you are the master comper. So how are you able to determine what the offer price is without having to go and inspect every single property?
Terry Burger: Yes, so during COVID-19 we have switched over to in-person and phone appointments, and I think a lot of people have shifted that way, right? So our biggest obstacle is how do we evaluate the property when we can’t see it. So, I’ll tell you what we do.
Let’s say we put a house under contract over the phone.. Then of course I teach comping to my team so they kind of get how to comp a property; we could talk more about comping if you want, but the process that we used to do it virtually like this, especially during their phone appointment era that we’re in, is we send our home inspector there and we also send our photographer at the same time.
So we give our photographer a big checklist of things to look for, in addition to just looking for problems in general. So our home inspector is there going all over the house, and it takes a couple of hours for him to do that. And then our professional photographer is in there with wide-angle lens and micro-lens, and she’s shooting videos, she’s shooting photographs, and she sends them back to us in high resolution. So I can get on my Mac or whatever and I can zoom in really, really tight on things; as long as you get that stuff back in high resolution, you can zoom in on something really detailed without having to be at that house. And that’s how we do it right now.
Theo Hicks: Okay, can we take a step back… Because this is what you do after you got it under contract, but how do I know what that contract price is, how do I know what to offer?
Terry Burger: So, the way we comp properties is our philosophy is we comp in micro markets. So if you think of the city of Greenville, South Carolina, that’s kind of micro-market to the whole country right? But it’s more of a micro-market regionally… So we drill down a little deeper and say, “Okay, this neighborhood right here,” Judson Mill for example, “is its own micro-market. It has its own set of values, its own set of people that live there, they buy there, and all that”, right? So one of the easiest micro-markets that we use are main roads; we won’t cross over a main road, we’ll stay within the boundaries of main roads and we’ll try to stay inside of a little neighborhood pocket that we know is how are we going to grab our comps.
The second trick that I teach people – this is an old agent trick… You’re going to at your values based on the elementary school. So you could do a zip code search which gets you kind of big picture, you could do an elementary school to search, which kind of drills you down a little deeper… Or if you want you can go into the MLS, or PropStream or whatever program you’re using, and you draw out a little polygon based on the area that you want. So we employ the polygon method, and we employ that elementary school method, particularly when you’re in the suburbs.
Theo Hicks: And then is that… Is the number like dollar-per-square-foot? Is that what you are looking at?
Terry Burger: If we can find houses that are all very very similar, we look at the values and we can ballpark it. But yes, very wildly in square footage, which in some of our areas they do… Then we are looking at 2 values – the market value cost per square foot, which would mean a normal residential retail sale, and then hopefully sometimes we can find current condition comps of houses that needed to be fixed up and sold in the MLS.
Theo Hicks: So my second question, how do you know without seeing the property if it is going to need $5,000, $20,000, $30,000 in renovations?
Terry Burger: We use a home visit sheet that I came up with. It’s got a lot of the numbers on it; so if our acquisitions manager is looking at the comps and they see that the ARV includes new kitchens and it’s basically flips, if they see that, then we are going to estimate our rehab based on those comps. We only look at the comps when we estimate rehab.
Theo Hicks: So you just assume that if the comps have a new kitchen, then you’re going need to put in a new kitchen; if the comps have whatever else, you’re going to need to do that. Okay.
Terry Burger: Yep. It’s interesting, in some markets they just paint the cabinets white. They don’t put in new kitchens. In Atlanta a lot of new kitchens go in, but in Greenville, they just paint the cabinets. So we look at those comps and go, “Okay, two out of three of the comps have painted cabinets. Why don’t we just paint the cabinets?”
Theo Hicks: What about the major cap-ex things like a roof, or painting the outside a house, air conditioning, HVAC – how do you know if you’re going to need to replace any of that stuff?
Terry Burger: So in our home visit sheet, HVAC for example – is it older than 10 years? If it is, we automatically replace it; we budget for a replacement. The same thing with the roof – if it’s a 30-year architectural shingle and they’ve got 20 years on it, we’re going to budget to replace. If it’s a 15 and has 10 years on it, we’re going to budget to replace.
Theo Hicks: Who does the home visit? Is someone from your team doing this? Or are they sending this to the owner to fill out?
Terry Burger: So our lead intake people do it during that screening call that comes in, and then our acquisitions department goes a little bit deeper on the phone, asking them questions like that.
Theo Hicks: So the next thing that you’re an expert in is knowing what a buyer wants. So if you’re flipping most of these, and you’re keeping some yourself, what do you mean when you say that you know what they want? And what step in the process does that come into play?
Terry Burger: Well, I’ll tell you a funny story… Clients are always asking me, would you buy this house? And that’s one of the most popular things real estate agents get asked by their clients. Would you buy this house? And over the years, what I’ve seen, particularly in the residential suburbs, – so I’m in the North West suburbs of Atlanta, and then we’re in the suburbs of Greenville, we’re also in downtown Greenville as well… But I asked three words; so I said, “If I’m sitting on my deathbed in a hospital and somebody asks me what’s the secret to real estate, I have 3 words for you: backyards sell houses”, period.
So in Georgia, for example, we are in a very hilly area, in North West Atlanta, kind of the foothills of the North Georgia Mountains, so there’s a lot of topography changes. So you’ll have a big family-friendly, 2-story traditional house, but your kids can’t pick a soccer ball in the backyard, because it’s hilly, or it’s steep, or whatever. So I always told my clients, “Look for a nice backyard first. You can fix up the house, but that piece of dirt is always going to sell that property.” So that’s the biggest one for us, particularly around here, is a nice backyard.
Theo Hicks: Alright Terry. What is your best real estate investing advice ever?
Terry Burger: A lot of people say this, but gosh, it’s so true, Theo. You’ve got to buy it right, and you cannot get emotionally involved in the buy. You have to keep your wits about you, be numbers focused only, and buy that house right.
Theo Hicks: In your agent days when you were dealing with clients buying a home, this seems, at least from my perspective, to be more relevant when someone’s buying a single-family house. How do you communicate with a client who is emotionally invested and wants to buy this house that’s either overpriced, or it’s going to cost too much money to fix up? What’s some advice that you’d give to them, and then think that you’re talking to a Best Ever listener who might be emotionally involved in a deal and how to get them to relax a little bit and calm down.
Terry Burger: Yeah, those first few deals are pretty emotional. I remember my first deal, the butterflies were in my stomach; I ran the numbers on a napkin at a Chick-fil-A… But I knew it was a great deal. I think inside, at least for me that first deal or two, I was so giddy about the deal, I couldn’t wait to get the ink on the paper, because the deal was so good.
Now I’m numbers-oriented; that’s not everybody. So I was emotional about it because I knew I had a great deal, because I analyzed the numbers. So if you have that warm fuzzy feeling because you found your first deal but you’re not sure about the numbers, you’ve got to be careful there.
I would always tell my retail real estate clients, “The numbers don’t lie.” So for example, if you’re going to buy a home for you and your family Theo, you’re going to look at it and go, “Well, this one is priced $20,000 more than the one that sold down the street last month. Why? Why is that?” “Well, it has a pool.” “Okay, so how much was that pool?” “It was a hundred thousand dollars.” “So you’re telling me I can get that pool for 20 grand?” That’s a good deal if you want a pool.
So it’s just looking and comparing the facts with all of the houses, just like an appraiser would. And just looking at those things and analyzing them. And knowing your numbers, knowing what stuff costs.
Theo Hicks: Alright Terry. Are you ready for the Best Ever lightning round?
Terry Burger: I’m ready.
Theo Hicks: Okay. First, a quick round from our sponsor.
Theo Hicks: Okay Terry, what is the Best Ever book you have recently read?
Terry Burger: Right now I’m reading — we have a pretty big team so I’m trying to learn how to lead my team better… So I would say lately, in the past 6 months, two: Traction by Gino Wickman, and then the Who Method For Hiring by Geoffrey Smart. Those two.
Theo Hicks: If your business were to collapse today, what would you do next?
Terry Burger: Oh, wow… Thanks for planting that seed in my brain. I would figure out how to do it better. I love real estate; I’d figure out how to do it better so it didn’t collapse again.
Theo Hicks: What is the Best Ever deal you’ve done?
Terry Burger: My first deal was really sweet. The guy had an old Porsche 911 that he wanted to fix up. The house sat empty for 9 years after his ex-fiancé moved out… And he had just got a wild hair that he was going to fix up this 911 and it was going to cost him 40 grand, and he needed 40 grand. So I gave him 40 grand for a house that was worth a lot more and fixed it up. And even to this day — we have made $65,000 on that property. Probably one of our best flips ever.
Theo Hicks: I wanted to ask you one more question – who is your favorite classical musician, classical composer, and classical artist?
Terry Burger: Composer would be Gustav Mahler. And I was a trumpet player, so my all-time favorite trumpet player is Philip Smith in the New York Philharmonic. He teaches at the University of Georgia now.
Theo Hicks: When you said that in the beginning, I wanted to ask that question, because I always listen to classical music while I work.
Terry Burger: Mahler is like the Led Zeppelin or The Kiss of that era. It’s just lots of brass music.
Theo Hicks: How do you spell it?
Terry Burger: M-A-H-L-E-R.
Theo Hicks: Okay. What is the Best Ever way you like to give back?
Terry Burger: My wife and I like to give. She’s a giver, and I like to make the money so she can give. So we support our church, we support missions organizations… One time we were trying to give away 20% of our income. It might be that way now, I’m not sure, but we give away a significant portion. I am passionate about Operation Underground Railroad. Their sole purpose is to free children from sex slavery or any other type of slavery all over the world. And that’s one of the causes I really care about right now.
Theo Hicks: Do you know who Bill Allen is?
Terry Burger: Yeah. He’s a good friend of mine, in fact, I’m now the Chief Operations Officer of 7 Figure Flipping.
Theo Hicks: I just talked to him right before we got on.
Terry Burger: Oh, that’s awesome. I talked to him earlier today too, he didn’t know I was going to be in your podcast.
Theo Hicks: Wow. And then I talked to someone else on his team yesterday, Beka Shea. It’s a small world.
Terry Burger: Yeah, good friends of mine. And Mike Simmons… Those guys, we kind of grew up in this business together, Bill, Beka, and I.
Theo Hicks: Small, small world. Alright, last question. What’s the Best Ever place to reach you?
Terry Burger: The best place to reach me, probably Facebook. For somebody who’s just reaching out to me it’s Facebook; just private message me, Terry Burger, and you can reach out to me there.
Theo Hicks: Perfect, Terry. Well, thanks for joining us and walking us through your step by step process for flipping homes, starting from your direct mailing strategies, as well as buying leads from websites like needtosellhomefast.com and fasthomeoffer.com.
We talked about how you create your offer, which is by doing comps based off of the micro-market, so a neighborhood with the major roads as the boundaries, as well as looking it up by elementary schools. And then from there, you do phone conversations with people once these leads come in.
The biggest obstacle is evaluating without seeing the property, so you will send the inspector as well as a photographer who will have a checklist of the things you look for, and then make sure that they take high definition pictures, so when you get the pictures you can zoom in to see any issues that you want to investigate further.
And you mentioned something else too about knowing what the buyer wants, and that the secret to real estate is backyards sell houses. You can’t really renovate a house and add a backyard, unless you cut the house in half. I don’t know what you would do. So look for the backyard, and then you can make the inside of the house really wherever you want it to be.
And then the Best Ever advice was to buy it right and don’t get emotionally involved on your numbers. Act as if you were an appraiser. So thanks Terry, again, for joining us. Best Ever listeners, as always, thank you for listening. Have a Best Ever day and we will talk to you tomorrow.
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