Any industry is sure to have its ups and downs, and nowhere is that more evident than in real estate. However, the benefits of real estate are something you can build an entire life out of. William Morales talks to Anne Amagrande, the CEO and Managing Investor of Grande AMA & Associates LLC, about how to navigate the industry with grace. Everyone’s story begins somewhere, and if you’re ready, you could start a life in real estate quite comfortably. Let William and Anne take you through the ups and downs of the industry to let you see if it’s something you want to take a plunge in.
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The Good, The Bad & The Ugly Of Real Estate With Anne Amagrande
The Ups and Downs Of Real Estate
I’ve got Anne Amagrande. Thank you so much for being here. How are you?
I’m doing wonderful. I’m excited to be here. I know that we’ve had great discussions in the past and I’m looking forward to this.
Tell us a little bit about yourself. How did you get into this into real estate? Did you know early on that you had that entrepreneurial spirit?
Honestly, I’ve always had an entrepreneurial spirit. I grew up with a family of entrepreneurs. My grandparents were entrepreneurs. My parents are entrepreneurs. Two of my sisters also in their own businesses. This is in our blood. I always knew I wanted to be an entrepreneur, but I never knew exactly what I wanted to do. I just knew I didn’t want to work for “the man,” which is what we all get stuck in. When I was actually working in my corporate job, I had a friend approach me who had been flipping homes for a while and he said, “Why don’t we flip a couple of properties together?” I said, “I’m not happy about working 90 hours a week for somebody else and have not seen a ton of benefit from it. Let’s see where this goes.”
In my off time for the first eight months or so, we flipped a couple of homes and I realized that I was good at it. I come from a background in operations and logistics. I’m great at building systems. I’m great at managing employees. I’m great at all of these different things. This was such a great transition for me because I took what I knew from logistics operations and applied it to real estate. Going forward, honestly, it was having no emotion about the actual aspect of real estate. I took a lot of, “We’re going to create a system and we’re going to execute it and then we’re going to be done.” It was nice because it took a lot of that emotion of, “I like this house. This would be beautiful if we did X,” but we’re never going to be living in these homes. Especially if you’re a wholesaler, if you’re flipping a home, if you’re renting a home, these are not homes you’re going to live in. You need to remove a lot of that emotional aspect out of it. I was good at doing that. This was such a great transition for me to get into real estate.
The people that are jumping into business, if they had created the systems and not just go to these guru classes but work on their business, “This is what I’m going to do for A, B and C,” and have everything in place before they jumped the gun. Because I think a lot of these guys that I interview or I talked to are getting through wholesaling, but I don’t think they know what they’re getting into. We’ve talked about this, you’re talking to a seller, you’re going to try to talk them from $100,000 down to $40,000 and they’re going to try to make a $20,000, $30,000 fee. Anne, as a wholesaler and you flipped houses, isn’t it more complicated than just offering the seller $0.30 on the dollar, $0.40 on the dollar? Can you give us a couple of steps that should be in place before you make these types of type of offers?If you're flipping or renting a home, you need to remove the emotional aspect out of it because these are not homes you're going to live in. Click To Tweet
I think that’s huge. There are so many people that because of the capital requirements, they can’t jump directly into flipping and buy and hold. This is why a lot of people start with wholesaling. I think it’s such a fantastic place to start. There’s a very low capital requirement to get into wholesaling. This is a great place, especially if you have never done this before because if you lose $500 because one of your contracts fell through, it’s $500, it’s not $50,000. This allows people to learn the terminology, get to know those other investors and what those individuals are doing. I love it when people tell me they’re wholesaling. “How long have you been doing it?” If they said they’ve been doing it for five, ten, fifteen years, I don’t believe that that’s a great long-term strategy personally, but I think it’s great when you initially got started because wholesaling is not going to create income.
This doesn’t create cashflow for you. This is something that you have to actively work your business. This is part of what I wanted to talk about, the good, bad and ugly, and this is the ugly side of it. When you have a business model that constantly requires your attention on a day-to-day, on a week-to-week and a month-to-month, you can’t take vacations. You’re missing time with your family because you’re actively running the business. This is why we’ve decided to focus more on that buy and hold side to create cashflow for ourselves and cashflow for our investors because this is what the ultimate goal is. If you are constantly wholesaling, if you’re constantly flipping homes, you’re never going to be able to retire. What we need to do is find a way to create a cashflow.
This is why a lot of people invest money. Why we have investment accounts is because ultimately your IRA or your 401(k) or your pension plan is going to create a consistent income for you. All we’re doing is we’re translating that into real estate and creating a more beneficial area. If you love real estate, you already know how to do the buying. If you’ve done flipping, you already know how to do all the renovations. All you need to do is translate that into how can I create consistent and constant cashflow. This is where buy and hold comes in.
That’s a good point. The topic is the good, the bad and the ugly. We’ve talked about the ugly side. It’s true because if you do wholesaling and you got to constantly send out mail or get on the phone and do cold call, driving for dollars, you have a job. This business model is good maybe for short-term. What would be your recommendation? Because you do have a job. You’re working 9:00 to 5:00 or pretty much all day and you can’t take a vacation because you’ve got to have constant classes coming in. What would you suggest this business model should last?
I don’t necessarily think that it’s a time frame per se. It’s more about how much education you’re giving yourself. If you’re driving for dollars once a week versus driving five days a week, you’re going to get five times the exposure of that. Are you going to your local REIA? Are you connecting with other investors? Are you trying to get information? Are you listening to podcasts? Are you becoming educated? There’s a huge stigma around viewers. I don’t have any problem with individuals that have done this in the past that now do mentoring. What I have a problem with is individuals that have done this one or two times and now they claim to be an expert. I have worked with a multitude of different what I call mentors versus doers. I don’t work with gurus. When people say guru, you automatically have that stigma around it. My biggest suggestion is always find somebody that is doing what you want to do. If that’s wholesaling, find somebody that’s already successful in wholesaling. It doesn’t even have to be in your own state, but you need to connect with your peers.
This is what I love about your show. This is connecting individuals that want to learn. If you want to learn about wholesaling, find somebody that’s already doing it and doing it well. We don’t want to learn from somebody that’s doing one wholesale deal a month. We want to learn from somebody who’s doing 20, 30, 50 wholesale deals a month. It’s because they’ve got their systems in place and they can actually show you exactly what’s going on. It’s the same thing with flipping. I learned how to do my buy and hold strategy from one of my mentors. It’s been fantastic for me because they already have the systems in place. If you work with somebody that has been doing this for a long time and has a successful business model, we’re not talking about an accessible strategy, but an actual business model around what you want to do. Your learning curve is going to be so drastically shortened versus if you try to do this all by herself.
I understand the people I deal with, they might be shy. They don’t want to go up to anybody. Go to a meetup group. There are plenty of meetup groups all over the country. Here in New York, there’s probably about 100. Go to Meetup.com and just type in real estate investors or wholesalers, you will find something. If you’re the shy type, then you go online. You can find Anne and you can find me, you could go to BiggerPockets. You can go to tons of other online sources. There are the sources and the people are out there. You just got to take the leap of faith and go out there. Talk to people. Invite them to lunch. You don’t want to just take, but offer something in return to these people that have been doing it for a few years or you’re doing 20 to 30 flips a month. It’s a valuable lesson to work with someone that has the experience. For me, when I wanted to learn about creative financing, I never met my mentor per se, but I met him online and I talked to him. I followed his videos. I followed his podcast, I bought the books. The education is out there. It’s taking those step-by-step and implementing and sacrificing the three hours of watching TV. Use those hours to work on your craft. What do you say to that, Anne?
For the first year and a half, I worked seven days a week. At the beginning, before I left my corporate job, I was working about 90 hours a week and then on my days off, I would go out and flip homes. I realized that I didn’t want to constantly have to flip for the rest of my life. I looked forward into my life and I’m a huge planner. I always look to the future. What is this going to look like? What is the strategy and model going to look like when the recession hits? What does it look like when I’m 50? What is it going to look like when I get pregnant? Am I still going to be able to swing sledgehammers? Probably not.
I started looking forward and when I’m 70 years old, I don’t want to continue to flip. This is when I had the realization that I wanted to do something that created passive income. This is why we started transitioning getting into passive income, acquiring and buying whole properties. The first thing that I always tell any investors is you need to do a little bit of soul searching and determine, do you want to be an active investor or do you want to be a passive investor? The distinction between those things is if you want to be an active investor, you need to truly understand what that means for your life. If you have a family, that means on Saturdays you’re not going to soccer games. You’re going to be flipping a house.
You need to look out what this truly means. If you need to be active at the beginning, that’s great. If you can transition and have somebody else working for you, you can expand your bandwidth where somebody’s working in managing your portfolio in real estate while you’re off doing another venture and making more money somewhere else. That’s fantastic. This is what we always try to talk with our investors. We take them through an entire vision process about where they want their life to be. We work backwards and we reverse-engineer and figure out what they need to do in order to get to that vision.
I love that motto, “If you’re not planning, you’re planning to fail.” For you, the investors that you deal with, if somebody comes to you when they’re young, they got good years to work out their kinks in terms of finances. If you run into someone that’s older, in their 50s and 60s, can you help them out also?
Everybody starts at a different time in their life. We worked with some individuals in the medical field that are just starting out as doctors and they still have a ton of student debt. They’re like, “I want to get this paid down. How can we create some cashflow once my business starts getting up and running?” We’ve got individuals that we work with that we’ll help them set up 401(k)s and things of that nature on the initial onset. We also work with individuals that have pension plans. They are working toward retirement and they’re like, “I’m 59 years old. I can’t take this out for another six months. Can we start building out a plan and a strategy for one week can move that over into a self-directed account from my 401(k) or from my pension plan?” There are a lot of different ways, but it all goes back to the vision. If you’re 30, when do you want to be retired and what does that look like? What steps and actionable items can we take to get you to that point? We help them to build this vision and also learn about what their vision is and then we can create and help them to build a plan for what that’s going to look like as far as real estate is concerned.There's so much passive income to be made from acquiring and buying whole properties. Click To Tweet
We talked about the ugly side of it, which is a wholesaling. What would be the bad side of real estate, then we’ll finish off with the good side?
There are many bad sides, but there are many upsides. I would say that the bad side is some of the learning curves that you go through that were unanticipated. There’ve been many times where we bought properties that looked good and got the inspection. You then get into the home and you’re like, “There were so many more problems than we initially thought were going to happen.” This is why it’s important to make sure you get your inspections, to make sure that you understand the neighborhoods. We’ve had this happen multiple times and what we do is we will hold on to the property for a few years. We rent it out.
We were like, “This probably just isn’t a great property and this probably isn’t something that we want to hold for the long-term.” We turn it around and we ended up selling it and we’ll 1031 it into another property. This is what’s great about working with an expert like our company. You don’t need to do these things on your own. You’re not stuck because you’re like, “I bought this property and it’s taking a whole bunch of time. What would I do? I don’t have the time to list the property, sell it and then try 1031 exchange.” This is what’s great about being on that passive side where you work with companies like ourselves that help you through initial problems and through these initial things.
That’s part of the bad. There was a property in Phoenix that the roof blew off because of sandstorms. We had two sandstorms within three days. This was during August, so this is when we got all of our monsoons and we had three additional monsoons that were coming through. The adjusters were so backed up because of so many different areas of the Phoenix Metro area that were devastated that it was going to take them a week and a half to get there. I was up on the roof with a resident during one of the lightning storms. We were up on the roof covering up the roof with a tarp to prevent additional damage. These are some of the things that some of our investors are like, “I’m 78 years old. I don’t want to jump up on a roof and do that.” I’m like, “That’s what I’m here for.” I’m a young buck and I’ve got no problem jumping up on a roof.
You don’t anticipate that. Mother Nature can wreak havoc on our professional and personal lives. Can you tell us the good about real estate?
This is something that we want to talk about into the future, the creative side of real estate. There are over 90 different ways that you can acquire a piece of real estate. Our absolute favorite one is to do subject-to. We love subject-to properties. If we’re talking about baseball terms, that’s like our grand slam. Finding a sub-to, you get in for a very low cost. You’re able to help some people out of a bad situation. We’ve got seller carry. We love seller carry. We acquired our last property down in Texas as a sub-to. We were able to help them get out of a bad situation. We gave them money to move so they can restart their life. We’re helping to rebuild their credit. There are a lot of different things that we can do to help the individuals.
What I love about it is because we do the buy and hold versus the flip, we’re able to offer more money because it doesn’t affect our bottom line as much as it potentially could in other types of wholesaling or in flipping. Because we’re doing buying home, we can offer a little bit more. There is so much money to be made in real estate investing. We don’t need to be greedy. If I can give somebody an extra $5,000 and that would make a huge and positive impact in their life at that current moment, if we can make the numbers work, I’m going to do that. Because I know in the long run we’re going to make a lot more money.
Anne is planning to come to New York City. We’ll do a show about creative financing and we’ll go over what subject-to is, what seller carry back is and at least some of the other ways to acquire properties because I’m a big proponent of creative financing. We’ve talked about the good, the bad, the ugly. Where do you want to see your company go? Also as an add-on question, do you guys do the United States? Do you guys invest in certain cities, certain counties or are you just particular in the West Coast? Where do you guys usually invest?
We started out in the Phoenix Metro area because that’s where we live. We know pretty much every single street. If you give me an intersection, I can tell you about how much I’m going to pay for the house and what the approximate rent is going to be. This is what that driving for dollars does. It helps you to better understand your market. That’s what I love about the wholesaling side. We’ve expanded into other parts of Arizona. We’re expanding nationally. There are a lot of different markets that we’re looking into, especially as we look forward into the next recession. Because it’s never if, it’s always a when.
We’re already doing our due diligence on which markets we going to try and target when we get into that recessionary period. We’re on a national scale and we’re looking to have 100 properties under management. That is with our investors. We are looking to work with larger funds because we are looking to expand into Europe as well because their economy is slightly behind ours. Once we had our recession, we know that theirs is coming. This allows us to do a little bit more of that planning. It’s something that we’ve discussed internally on where we see our expansion going.
I’m learning so much from you, especially the planning side. One area of weakness of mine is planning. I love talking about the planning side. What I like about what you’re doing is you’re helping investors out from all ages, which is great. Because I always see that the people that are over a certain age, I don’t hear about them. Everybody’s always in their 20s and 30s, but what happens to the people that is in the 50s, 60s and 70s that might not have that chance because of a full-time job. You’re expanding your business model to include everybody, which I love. I think that’s a great business model and you’re helping other people out.
There are so many individuals in the 2008 recession that lost pretty much 50% of their portfolio. A lot of them had to go back to work. If we can help them to create a scenario where they can rebuild some of the wealth that they ended up pulling out of the stock market, we would love to help them to do that. Real estate is not discriminatory. You can be 30 years old and you might’ve had a relative hassle and you have some money. What are you going to do with that? The best thing is to create a scenario where that can continue to give back to you. That’s what we like to educate. This is where we love to help individuals that still want to maintain their full-time job and still want to get promoted within that company, but wants something on the side that they can either enhance their lifestyle or they can enhance it for their retirement and possibly retire early.There are over 90 ways you can acquire a piece of real estate. Click To Tweet
You hit it right on the head. I think in this day and age, especially here in the New York City area where the rents are supposed to be stabilized. For a student, you might put $3,000, which is crazy. More and more people are looking to get that side hustle and real estate is one of them. Maybe having a podcast or anything else, but I think real estate is definitely the way to go. Before I let you go, Anne, I wanted to ask you one more question. How do you find your deals? What’s the best way for a beginning wholesaler or any investor to look for deals? Do you go to the MLS or do you send out letters? Because we always taught to send out letters to absentee homeowners. What do you think?
I would say everything. I am a fantastic networker and that’s one of my strengths. I will talk to anybody about anything. What I love to do is I go to our local REIA. I put out ads on Craigslist like, “If you’re a wholesaler and you’ve got a great market, these are the numbers that we’re looking for. Please contact me.” I’ve had so many different individuals contact me that are virtual wholesalers. I’ve got a couple of great virtual wholesalers that contact me on a weekly basis that says, “I’ve got to sub-to in Pittsburgh. I’ve got to sub-to in Texas. I’ve got a sub-to here. I’m going to sell and carry in this area.” We give them specific areas that we’re currently targeting and then they all flood that market.
This allows us to be the first individual in the door on a lot of those deals. What I always tell them is, “If it’s not something that I’m personally interested in, either it’s not the right market, it’s too far away. It’s not quite the home demographic we’re looking for. I said, “I’m going to refer you to my network and I’m going to pass it along to them. I’m not looking for a finder’s fee or anything. I just want you to get paid because you’ve done the work.” This is not about me taking off a little bit of their money because I’m making the introduction. I want my employees to get paid. I love to help other people. He’s done the work. I haven’t done anything except pass on a phone number.
I always make the assertion of, “I’m going to give you this person’s information, but I want you to know that I still want to be the first person you’re sending all of these deals to. I’m going to continue to connect to you, but if I find out that you’re sending these to other people that were within the network that I gave to you, our relationship will be done and you’ll have no more communication with us.” We need that loyalty. We need that integrity with the individuals that work with us because we give it back to them.
I’m a proponent of going to actually meet people. I’m not an online guy. I always get invited to be in these Facebook groups. I’m not going to spend two hours online. I’d rather spend two hours at a networking event so I could talk to people, gauge their emotions and see what they want to do. What is it that they looking for? Why are they getting into this space? I think that doing online networking, to me personally, it doesn’t work. Be out there and meet with the people, shake their hands, have a drink and have that connection.
What I always tell people is you make a better impact. I’ve always made a better impact in person than I do over the phone. If you send somebody an email, how memorable are you going to be? They get 1,000 emails a day. I’ve been traveling a lot because I like to go out and visit other investors in other parts of the country. All of these connections that we’ve made, family offices, venture capitalists. I want to get my face in front of them so that they know that I’m serious. If you’re just a name and a phone number, it’s not going to make as big of an impact. I’m a face-to-face person. I’ve always been told I’ve got an old soul.
To me, I think that’s the right way to do it. I believe in meeting people, and I keep on saying that your networth is determined by your network. I even get different ways to meet people, whether joining a chamber of commerce or meetup. For online people that are shy, you have to get off that shyness. I was that too. I was very shy. I didn’t like going to these things. You are forced to network because you’re running your own business. Real estate is a people business. You’re going to meet realtors, contractors, attorneys, title companies. You need all these people on your team eventually.
This is honestly how you create a lot of trust with people, is having this face to face conversation. Sitting down and putting the phone away and having a real conversation with a real human being.
Anne, you said it all. Thank you so much for being here. If somebody wants to look for you, what’s the best way to contact you?
Thank you so much, Anne. I can’t wait to meet you in person so we can talk about the creator side of real estate, which to me is going to be a big hit with my audience.
I’m glad to be here.
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About Anne Amagrande
Anne was born and raised in a small southern California town outside Pasadena. Her Parents and Grandparents were entrepreneurs so she and her 3 sisters never had a chance, it was in their blood to be bold, creative and challenge the status quo. Anne gained a sense of business acumen at a young age while working in her parents’ and grandparents’ printing business.
After College Anne worked in Retail Logistics and Operations, working with one of the largest retailers in the world and later became certified as a Global Logistics Specialist rising through the ranks and landing in Distribution Center overseeing operations of Inbound freight for 63 stores in Southern California.
In her spare time, she found time to work within her true passion of Real Estate, Economics, and Finance. Upon entering Real Estate, Anne began flipping homes. After a while, she realized that it was not feeding her true desire to help others. Anne changed direction and sought a way to create a Win-Win-Win scenario. Along with her team, Anne created a truly unique system designed to create a Win-Win-Win model for Investors, Long term Residents, and locally owned and operated preferred Vendors, all while maintaining a profitable model for her business. Anne’s motto: “When everyone wins the world is a better place”.
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