Mark Schultz Victory

 

Mark Schultz Victory

Deed Dealers in Watertown, South Dakota
Mark Schultz with Jody Fiedler and Jason Giles

Type(s) of Victory: Closed on my first deal, It was just awesome


This is a story with many lessons; about preparation, patience, and never giving up. Our story is about the first property we had gotten under contract together after joining Fortune Builders. Each of us had been involved in investing previously, to some degree, on our own. While we were going through getting our business established, Jody found a property that was a potential goldmine. It was something she was really excited about but we had just started and were completely overwhelmed with all the tasks that we had on our plate. I may have been wrong for doing so but I convinced her to hold of until we finished setting up our entity and had time to start looking for lenders and so on. I mean it when I say that our plates were completely full considering we were also extremely busy with our existing careers. About a week later Jody informed us that HUD had accepted an offer on the house. She was so upset because she knew how profitable this property could be. I told her that we can use it as a sign that there is a lot of potential out there and once we complete the process we will be ready to go after all of them. I finished by reminding her that many contracts fall apart and if this one does we'll be ready. Low and behold, 4 weeks later they buyer never showed up for closing. It went up on HUD again and we got it for $158k! The CMA for this house was around $235k with an ARV of $265k, however as we were moving closer to closing the comps in the area were driving the ARV up closer to $275k. We were pumped! This was a very high end property in the city it was located. The house was located right in front of the best golf course in the area and was less than 12 years old. The problem was that the landscaping was poor and the builder routed the gutters in such a way that during a spring melt-off the water from the snow on the ground and on the roof ended up running along the foundation and into the basement. The great news was fixing that problem would cost less than $5k. To update everything else and make it "POP" would only take about $12k. So, our total rehab cost were only $17,000! We had some problems initially finding hard money lenders for our area. We managed to find two lenders we felt offered good rates. We selected one that provided 80% of the purchase price. Their rates were far lower than the other who would do 70% of the purchase and rehab and considering we had other means to cover the rehab cost that were far cheaper we weren't willing to pay that much for money. Not having the lender picked out immediately, we ran short on time and got the closing extended 15 days - which landed on Easter Monday. We went to work on getting the lender everything they needed but the longer this process went on the harder it was to get through to these people. We were down to the last week and we were really having to stay on them to get everything done. Then our appraiser's wife had a baby on the Wednesday before Easter. We had waited almost a week for him to be available and once he completed the work he wasn't able to get it to us because he was with his wife and new child, understandably. However, the lender was using this as an excuse for not getting several other unrelated things done in the mean time. He finally got the appraisal to us Friday. The lender really started to cause us concern as the week came to a close. As I was on the phone with the underwriter on Friday he told me that this wasn't even his job but they had just fired a bunch of people and he was filling in! RED FLAG!!! Then, Saturday night (yes, the Saturday before Easter and 41 hours before closing) the underwriter calls me to inform me that we need a Registered Agent in Connecticut, and a lawyer in S.D. to approve the paperwork before we can close this loan. He couldn't explain why but he flat out told us that if we want the money we need to do what they say! On top of that, he wanted a $500 payment "in advance" before their lawyer would even "review" the loan agreement. We were furious for many reasons but, more than anything, these were not things we expected to hear NOW. Monday morning came and I was on the phone with our coach at NCH. Ken took great care of us and help get all of the paperwork necessary to the lender ASAP. I was in South Carolina at the time for work but Jason was going to the closing. He drove four hours one way to get there. The closing was set for 1:00 p.m. At 1:30 the title company had still not even heard from the lender! I called the underwriter immediately and he said he'd take care of it. He sent some paperwork to them and the title company started to do their thing. However, they were still waiting for everything else at 4:30 when they received an email from our underwriter telling them to instruct us to get another extension! I was on the phone immediately. He didn't answer the first time so I called him right back again. He answered and I asked him to explain what was going on. He blew up saying that he was in way over his head; that they had 14 other loans in front of us. I asked how that could be possible considering they've had 20 days to prepare for this and no one had ever brought this to our attention before. I reminded him that we were expecting a minimum of $60k in profit on this house and HUD was not going to grant us another extension. HUD gave us to the following day to wire the money or they were cancelling the contract. He said he understood and felt bad but there was nothing he could do. I asked him to put me on the phone with someone who could do something. He stuttered and stammered and finally tried to convince me that he would "do his best". I explained to him how I hate that phrase and with a story I heard from a speaker once, I asked him to tell me whether he would "do his best" or "do whatever it takes"? He said he would do whatever it takes. I followed up with Jason who was on the 4 hour drive back to MN. He was furious. He started talking about how he was going to call our lawyer in the morning and have him start writing something up. I suggested we worry about that stuff later and try to figure out how we can get this done. He replied that he had his heals dug in now and that they were going to perform or else. Finally, I told him that I felt we had done all we could on plan "A" and it's out of our hands. If they come through for us tomorrow it would be wonderful but their is nothing more we can do about it. We had to start working on a plan "B". I couldn't think of anyone we knew who would not only have about $130k available in less than 24 hours but who would also keep from thinking we were nuts for asking for it so quickly. Then I recalled another investor who was trying to reach us after we contracted the house. They never reached out to us directly but kept talking to an agent that would contact to ours. We instructed the other agent to have them contact us directly but they never did. Instead the agent kept calling with offer numbers, the last being $208,000, and then started talking about how much she should be able to squeeze out of the buyers for a commission. That's when we just stopped replying to them completely. I asked both Jason and Jody what they thought of me trying to contact them directly to see if they were still interested in it. They weren't very receptive to the thought but said I can try if I wanted. I knew I had to do something so I collected my thoughts and tried to figure out a way I could make this all work. I developed a plan and gave them a call. It was already 8:00 p.m. at this point. They did not answer so I left a message. At 10:30 I was about to go to bed when suddenly they called back. We made small talk for a minute or so and then I asked if they were still interested in the property. He replied that they were still very interested in it and were disappointed we hadn't gotten back to them. I explained the situation with the realtor and the fact that we were really dead set on rehabbing the property at the time but now it's looking inconvenient considering how much hassle we've had just in closing. I did not explain the situation with our lender but I said we went out to close today and didn't get everything done in order to wire the money so we were going back out tomorrow to finish the closing. He asked what I had in mind and I laid out my proposal. I stated that if they were still interested in the property and could come up with the money by tomorrow, I would sell it to them and in a way that would save them the costs of double closing and us from having to wire our money. Keep in mind that this was a HUD home so an assignment wasn't an option. My offer was for them to come in as our lender with the $158k, we would write up a lending agreement between now and then, and after closing we would provide them with a Quit-Claim Deed in exchange for a signed Lien Release and a check for the rest. He replied, "The $50,000?" I replied yes to which he said he needed to call his partners right away and he'd get back to me. 20 minutes later my phone rang and he said "we're in" and that they would be there tomorrow with checks in hand! When I informed Jason and Jody what happened, neither could believe it. They weren't able to get too excited about it immediately because they had been stewing on the thought of losing this great property the whole evening. Soon enough, though, Jason started to cheer up and went to work trying to reschedule his day so he could get out to SD again to close this deal. Tuesday afternoon our new lenders/buyers showed up, all paperwork was signed, and we walked away with our first wholesale complete, not even having to pay for money because they funded the entire purchase, and a net profit of about $49,500! And if you're wondering what the lender had to say on Tuesday... well, they have yet to contact us at all since that Monday. Lessons learned: Vet as many lenders as you can, as well as you can! If you have other buyers within your reach, reach out to them immediately and start that relationship now! And finally, in the words of Mack Newton, don't try your best at anything but rather, if it means something to you, do whatever it takes and never, ever quit!


Shout Outs & Testimonials

I started my path to Fortune Builders by finally, after about 8 years of owning the book, reading Rich Dad Poor Dad. Many things in my life drove me to start taking control of my future once and for all and that book really got me on the right path. Not more than a month or so later is when I heard the radio ad for Fortune Builders coming to town. I went to the event and after being inspired by Pete at the 3 day event, interviewing with Joe Powers, and joining the FB team it has been a continuous stream of positivity and endless support and information. My mindset has totally changed since joining and I keep finding myself overcoming more and more. With all the information we get from FB, it still would not have been enough to take that deal that was completely lost to a huge win. The philosophy and positive mindset they nurture is more valuable than anything else and is what helped keep me from falling into despair, or succumbing to anger, rather than keeping my focus and creating a way to succeed! Thank you Than, Paul, Conrad, JD, all of our coaches, our adviser David Tyler, and everyone in the FB team for being so positive and helpful! This has been the greatest turn in my life.



* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in advanced FortuneBuilders’ training and coaching. The participants shown are not paid for their stories; however, some of the students depicted may also be a FortuneBuilders' coach, and our coaches are compensated for their services. We believe in full transparency, so please read our Earnings and Income Disclaimers and Terms of Use.