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Jeff Scislow: Improvising Over 35 Years and $20M In Agent Commissions Earned

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Jeff Scislow has been a real estate agent for over 35 years, with 34 of those years at Remax. His career started out with a bang, selling 58 homes in his first year and last year eclipsing over $20 Million in commissions earned during his time at Remax. Over this span, he's adapted and evolved as the market has changed. He was a pioneer in the industry, being one of the first people to have a buyer's agent back in 1992. He was the first agent in Minnesota with a website back in 1995. He's been a top 10 agent in all of Remax in 1996 and 2006. While being a Minnesota resident, he helped over 200 people buy homes in Florida in one year. He's done flips, rentals, guaranteed sales, financed contract for deeds for his clients, and much more. You name it, he's done it in his career. Hear how his business has twisted and turned over these past 35 years and how he's enjoyed the ride along the way!

In this episode, hosted by Mike Swenson, we discussed:       

  • How Jeff has earned over $20 Million in commissions in his lifetime with Remax 
  • Sold 58 houses his first year 
  • Because of his desire to win and succeed at a high level, he wanted to become rookie of the year and made sure that he got there 
  • Talked about the importance of prospecting to grow your real estate business
  • To be successful, you need to spend your time with the people who are ready, willing, and able to buy and sell a home. Otherwise, you're wasting time working with people that may never buy or sell in the near future
  • Jeff started flips in 2013 and did 27 but decide to stop due to gaining better results in areas
  • Jeff loves to track his numbers in his business. The average profit he made from flips was $43,500 per home
  •  He had a program set up helping Minnesotans buy properties in Florida. In one year he did 223 deals through the program

 

Timestamps: If You Want To Jump Ahead To Your Favorite Part       

0:00 - Intro and overview on Jeff’’s career    

11:00 - Jeff's first hire experience 

16:25 - How he got started with contact for deed 

30:30 - How Jeff started with flips 

35:00 – What his business looks like today 

40:35- What his finical freedom looks like 

 

Links In This Episode:

Jeff's Websites - The Scislow Group: https://www.southmetrohouses.com/

  

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Full transcript here:

Mike Swenson 

Welcome, everybody, we've got a new episode of REL freedom stories and today I've got Jeff Scislow and Jeff has been an agent for 35 years, 34 of those with Remax results and he just has a great story talking about being in real estate for that long how the markets changed how you've had to adapt, and his mindset has changed and he's kind of run down some different areas as his careers evolve. So, we're going to just talk about improvising throughout 35 years in real estate. So as I mentioned, Jeff 35 years in real estates, he has eclipsed the $20 million in commission mark, and REMAX honoured him for that last year and then also two times he has been in the top 10 of all individual agents with Remax back in 1996, and 2006. So welcome, Jeff, we're excited to have you, if you want to just give a little bit of your background and then we can dip into how you got started into real estate.

 

Jeff Scislow 

Thanks, Mike for the intro, and hello everyone. How I got started in real estate, let's back up to after high school, I went in the Marine Corps for four years and served our great country and then they trained me in computers. After I got out of the Marine Corps for seven years, I continued in the computer field and thinking that this was going to be my career. But I had this little, let's say a little itch, thinking I was on the wrong elevator, that there's another elevator that can go a lot higher than the IT department. So I thought about it made the switch and got into real estate simply because I wanted to have more potential, I felt I had the ability to earn more than what they could ever pay me, even if I got promoted to certain positions.

 

Jeff Scislow 

So I got into real estate and hit the ground running and my first year at Coldwell, I was able to sell 58 houses. So I was off to a good start working primarily with buyers. It was kind of hard to get listings as a new agent, but I worked with buyers and really helped them to get into a house. So very, very good start, and then at that point I got into REMAX they recruited me over to REMAX results I've been with Remax results, the entire length after that first year at Coldwell.

 

Mike Swenson 

Now you have a really good story, talking about how you got started, because I think this really speaks to your personality of not wanting to have a limit on your income, you had talked about, when you first got started wanting to be Rookie of the Year and finding out what needed to happen to be Rookie of the Year and I think you'll find this with a lot of agents where they're very competitive, they're very goal driven and when they commit to something, they commit to something. So I think that's kind of a theme here of your production. But tell us about that story of being Rookie of the Year and what you wanted to do to hit that.

 

Jeff Scislow 

To preface that I use as another example, I think once a person makes the determination, and they have the confidence in themselves and I'm not trying to brag about these things but when a person determines that they can do something, they believe that they can do something and they're willing to pay the price and they're willing to do what it takes to be successful to achieve that goal that they've set, I believe they can do it, I believe anyone can do it. So it's not something that I necessarily possess that's unique because I've been able to do it. So going back to the Marine Corps, for example, my goal was I was going to be number one in boot camp. I told my friends that I worked out I mentally conditioned myself before I actually went into boot camp, and ended up coming out top out of the entire series of 250 people, which was a surprise because I only want to be top out of 50 or 60, ended up being top out of the the whole series, so I say that now to answer your questions.

 

Jeff Scislow 

Specifically, we had a programmer, Coldwell had a programme called Fast Start. It was a two week training programme kind of teaching the ins and outs of real estate, how to make sales, how to get listings, that sort of thing. So, at the end of our final day, which was a Friday, the President came down and congratulated, everyone wish to saw Well, here's a new pack of agents, let's kind of see how they do and we've just given them two weeks of training and let them loose. Well, I walked down the hall to Lee Olsen's office. I say, excuse me, do you have a moment? I have a question. Because I already had a game plan, I had goal and I wanted to become the Rookie of the Year, that's what I wanted within Coldwell Banker.

 

Jeff Scislow 

This is back in 1986, so I said, what would it take to be the Rookie of the Year with Coldwell? He thought it, you could see it's kind of a peculiar question. He pondered and he says, well, there was a guy by the name of Paul Redlener, and he was the top agent at Cobo. So he says, well, Paul Redlener is our top agent right now. A few years ago when he started, I think he earned the most money that any Coldwell Banker agent has ever earned. Here, $37,000 in his first year, and he was rookie of the year that year, and no one's earned more than that in their first year. Now, those are pretty bizarre numbers, right? 37,000 wow, what a great income. So anyway, I smiled, and I said, well that's really encouraging. He looked a little puzzled. I said, my goals 50,000, I had a goal before I asked him, I just wanted to know if my goal was high enough. He just affirmed it was high enough. So he says, okay, well, good luck with that. I mean, he was nice about it, but I could read his expression.

 

Jeff Scislow 

So let's fast forward 12 months, I actually had 75,000 of those 58 sales. Again, they were small houses, 7099 single family houses or whatever but really, really dating myself. But it's a great business, as we're going to talk about, but I had 75,000, but I left. So I never really received the award but I certainly earned what have been called the Rookie of the Year, so that's why I've used that example. Again, anyone can set a goal, anyone can make that type of a determination to reach what they want to do. And it takes discipline, it takes planning and I think a lot of times, it's important to write it down, and then tell someone what you're going to do. When you start telling someone what you're going to do, boy there's a lot of power, there's a scripture passage that says life and death is in the power of the tongue. The law of attraction, there's different ways that people might describe the same situation, same scenario. When we speak things as if they were, they kind of come our way, so I believe in that, but it also takes hard work. You can't just sit back and and wait for it to show up, it doesn't usually work that way but the two go hand in hand hard work and speaking out your goals.

 

Mike Swenson 

Yeah, well I already picked that up when you had mentioned about being number one in your class in the Marine Corps, because you said "I told my friends, I was going to be number one". So, I see that as a theme. So what did you focus on? Because if the top agent did 37,000, and you did 75, you did double what they did. What was your game plan? Like kind of boots on the ground? How did you turn up all that business being brand new and doubling? What the top agent had previously done?

 

Jeff Scislow 

I worked like I said, primarily with buyers, and so I began, our office manager, he trained us as agents very well. We would go in at night at seven o'clock. He says everyone's coming in at seven o'clock. It's kind of like the Glengarry Glen Ross, let's teach these agents how to make some money, but he drilled us on dialogue and scripts and we practice that. So the best thing I remember that he did for me personally, is he taught us those things. So for example, back then we had the big fat calls directory, reverse directory where we could get everyone's phone numbers. I would just look up the apartment addresses and I would start calling the people one after the next. My goal was 50 calls a day, then it got up to 100 calls a day. So I was trying to make 100 dials and talk to people every day. For example, if I was calling someone that was living in an apartment, I get their voicemail, or I get them live, and I say have you ever given any thought of stepping out of the apartment and into a new house? And people said, well, yeah, I've thought about it, but I can't afford it. Do you know what it would take to get you into a new house? Not really. Well, do you have any money set aside for this?

 

Jeff Scislow 

I remember one guy saying, one of my first sales, he said, I've got about $10,000. I said, that'll do it. I say, are you willing to use that to get into a house and stop renting? And he said yeah, so he was one of my first five sales, but he had 10 grand, he never thought he could buy a house. So I did a lot of those types of things. I made phone calls all the time. Always prospecting, always prospecting and as I would say now to agents today, you've got to carve out at least two hours a day, if you're going to work eight hours, 10 hours or six hours a day, carve out about two hours a day in prospect, you should have a list in front of you all the time, as I began to do more and more business, I started hiring admin, and they would prepare the lists for me, expired listings for sale by owners, apartment renters.

 

Jeff Scislow 

I would call, some are seller leads and for listings and others are buyers. I was always calling, I wanted names and numbers in front of me. Now, they're internet leads. And I know a lot of us think they're kind of a waste of time because a lot of the people are just tire kickers, I think it's still important to call them and if they're a tire kickers you say well do you know anyone maybe friend or family or someone at work that is in fact or you can change the question up and say, Who do you know maybe a friend or family and so forth? That might be buying a house in the next say three to six months? So you ask them an open ended questions so they don't say yes or no, these are some of the dialogues that you learn.

 

Jeff Scislow 

They may not be ready this internet lead may not be ready however they know people that are ready and if you ask them in the right way, and you're doing as the Romans do when in Rome do as the Romans do type of thing. You build that rapport with your voice, with your tone and in so forth, if you call and you get a voicemail, and they talk really fast, and you can talk really fast, if they talk pretty slow, and so forth, and just slow it down, because people will resonate with you based upon personality and based upon your voice. And so that's really important, these are little things that make a big difference. And if you're going to be hitting homeruns, or if you're going to just keep hitting singles.

 

Mike Swenson 

These are things that, thinking about 35 years, technology has changed, the markets change and all that, but those principles have lived for years and years and years, knowing your scripts, being able to relate to people mirroring and mirroring and matching their tone and their pace that stuff doesn't matter how long you are, because people want to work with people they know, like and trust, and you're just building a connection with them. And so many times people treat leads as leads, but they're real people that want to work with somebody eventually and if it's not going to be you, it's going to be somebody else. So you have the opportunity to start that relationship. So then let's take a couple steps forward here you had talked about, you hit a spot in your business where you were growing, you mentioned, you hired admin, then you got to this spot where you're like, hey, what if I hired another agent to help me with working with buyers?

 

Jeff Scislow 

Well, this is going to go back to 1992 and I had this idea, unheard of, I'd never heard of it before. I thought what if I could hire an agent to show houses for me to delegate and somehow will split up the commission that would allow me to focus more on getting listings, the more listings, the more buyer calls on my listings, because I have signs out there. And I want to focus on that. So but I can't do it as well, if I'm not showing houses because it takes more time, typically to make a sale when you're working with a buyer, especially today. Anyway, so I was a speaker in Atlanta in 1982, at the REMAX convention. And I had this idea in the back of my head, it had nothing to do with the topic. At the end of my talk, I says, before we wrap up, I'd like to ask the audience a question. Now the audience was about 200 people in this workshop, and comprised of Americans and Canadians.

 

Jeff Scislow 

So I ran the idea by says has any or you know, here's the idea that as an agent, we would hire another agent, and they would show houses for us and so forth. Has anyone heard of anyone doing that? Zero hands went up, I said, How many think it might be a good idea, and a third of the room, raise their hand. And I said to myself, that's good enough for me. So I came home and I ran an ad in the paper, and everything was in the newspaper back then. Any type of promo we didn't have all the social media and online internet wasn't even around, by the way in 1995, first agent to have a website in the state of Minnesota. Can you believe that? 1995. Okay, lots of dating going on here. So in 1992, I run this ad after the convention. And oh, my gosh, I got all kinds of flack from other agents. You know, who do you think you are?

 

Jeff Scislow 

I mean, you just some arrogant, lazy. I mean, you don't want to show houses, you're going to who, you know, I got a lot of flack from people. And one person answered the ad. So he came in, and he had sold three houses in nine months, he was ready to quit the business. He came in, and he had a part time job. So he's got to quit this, and this and so forth. So what we ended up doing is, I said, Steve, the one thing you're going to need to learn is to know, you have to understand the people that are ready, willing and able, because you're working, he shared his leads with me and so forth. He was working with all the wrong people when he came in to actually start a couple weeks later, he brought in all of his leads. And one by one, he says you're wasting your time, I'm crunching up these little pieces of pink paper and they all want the trash can wasting his time.

 

Jeff Scislow 

They're not going to buy anything. And so now he's got no leads, he thought he had leads. Yeah, and this is what I say to the audience. If you think you have leads, ask yourself, are they ready, willing and able, if they're not, you don't have a lead, get rid of them or put them on some tickler file or something, but work with the people that are ready, willing and able. So Steve comes on board had sold three nights we sell and I'm going to give us some percentages here he sold at the pace of four houses a year, believe it or not, the average agent today sells about six or seven houses a year. Not not a real good living, but that's the average licenced agent. And so, Steve was at the pace of four and he was on a 5050 split.

 

Jeff Scislow 

So let's just say he's getting to 100% deals a year. Okay. So Steve came on and I said, you know, we got a lot of training to do, Steve. And so I'm going to start with 30. I'm gonna start to 30%. And then after, you know, as you do, well, I'll increase it. So in that first year, he started at 30 and he ended at 35. So let's just say he's getting 33 for the sake of math here. Steve, after training him and letting him go And I was giving him leads now too, because I don't want to, you know, I want him to show the buyers. So I'm generating the leads, Steve sold 48 houses the first year. So what's a third of 4816 and 16 is eight times as much as two. So Steve's income, his first year with me went up eight fold. And he hung around for five years or so. And then he, for personal reasons, ended up leaving the real estate business, but great guy, first buyer agent that I'm ever aware of ever heard of Steve hall? So Steve, it was a great run. And whatever you're doing today, I wish you the absolute best, he was a great guy.

 

Mike Swenson 

Yeah. Well, and that just shows too. I mean, you know, because as agents, we like to, you know, we like to chase shiny pennies, and there's lots of lots of pennies to chase. But But thinking about the idea of that idea of the buyer's agent. You know, a lot of people laughed at you, a lot of people scoffed at you, and you felt it in your heart of hearts to go after it and turn it into something. And then you mentioned about the website to being the first agent with a website. So, I'm sensing a theme here of finding new ways to do business, trying to find new ways to evolve your business, as well. So, kind of moving along. Next, we talked about, guaranteed sales you believe strongly in them, and what they can do things like contracts for deed, so, talk about your experience with those. And even doing this, you know, back in the 90s, where a lot of people are doing it today, you did it a long time ago, so, talk about how those came to be for you.

 

Mike Swenson 

Yeah, back in the 90s, I would offer a seller a guaranteed price in their house, it helps me to get the listing and so forth. And again, our market today for the agents that are new right now, we're in a totally different market, we'll probably get into this a little later in the programme. But back then, let's just say it's an average market, you know, the absorption rate, which means if no more listings come on the market, how long will it take for the existing inventory to sell, it's about four and a half months as a normal market. Right now we're at point nine, we're under one month, because inventory is low and selling quick, we're in an unprecedented market. So back then, and now is different. But at the time, when we had a normal market, on a listing appointment, I would say you know, if your house doesn't sell, and 90 days, 60 days, whatever the market is, if it's really fast, it could shorten that period of time.

 

Jeff Scislow 

I would do a guaranteed sale that if it doesn't sell, you know, let's let's just pick a number, let's just pick a number back then, let's say the house was $150,000 listing, okay. And I would probably guarantee that how it's priced right, I feel it's priced right, I would guarantee it anywhere from 135 to maybe as high as 140. Depends on the market. Because if it's at 149, nine, and it's not selling, you're going to go to 144, nine, you might sell it for 140. Back then they didn't sell it 100% or 110%, or whatever they're selling it today, totally different market. So we're guaranteed has to be less than retail, because the sellers getting the convenience. If it's not selling them, maybe we priced a little high, we have to bring it down. And so there's a lot of components to a guarantee sale, I won't go through them all. But after so many showings, the price should be adjusted. I don't want to buy the house. But if I did have to buy the house, I buy the house.

 

Jeff Scislow 

The other thing I would do using the scenario, let's say the the the guarantee was 138,000. And we listed at 150. And if it didn't sell, then I buy it at 138. Sometimes the seller said would you buy it without even showing the house? Is it what would you take 135? I'll buy it today. And sometimes they say yes, other times, well, we need a little more. And then I take them out at 138. In this scenario, what I would then do is I would waive the commission, typically, let's say it's 8000. Keep it simple. So now it's 130. So I'd buy their house for 130. And then most of the time, if I didn't keep it as a rental, I put it back up on the market by owner contract for deed for 150 559. Because you get a little premium. These are just relatively fictitious numbers, but they're not. They're not out of line. So a little higher than the 150, maybe 155 since it didn't sell there. And then, you know, I take you know, whatever, low down payment, you know, maybe $15,000, that's 10%. That's pretty low on a contract.

 

Jeff Scislow 

So but then what am I doing, I didn't take the commission. So I didn't get taxed on the commission. But I'm actually financing my commission that eight grand is in that number. So now I'm learning back in the day that interest rates were 10 or above and so on a contract easily get 10% I'm getting 10% on that $8,000 Commission, so I'm earning an extra $800 every year on my commission. And then when I actually get paid off, I'm paying capital gains on it versus paying ordinary income on it. So I get a bunch of those. It I'm going through it quickly. But mathematically if you know your numbers and you know a little bit about the tax law got a good accountant, you can start making good decisions. That'll build your wealth over time. So that's that's kind of what I did I did is guarantees to get the listings, if I got the guarantee executed, if we transacted on it, then I would sell it on a contract for deed. I'm the agent I don't I can I sell a lot of things on contract for deeds, craiglist marketplace and so forth, I still do today. And so there's just another way to build wealth. I mean, when you look at it, you're coming way ahead by doing something like that, if you didn't need that $8,000 Commission, go ahead, and, you know, finance it out to a future buyer and start earning interest on it. And then paying capital gains tax.

 

Mike Swenson 

Now how many agents back then were doing that, because I know, guaranteed sales are more common I will and less needed in this hot market. But how many agents were doing it back in the 90s?

 

 

Not a lot. Not a lot. I mean, people would come and go. I know that there were some companies and some groups of agents that started doing it more in the 2000s, right before the crash, and they got buried, because they had all these guarantees on these on these houses that he had to buy, and a lot of them went bankrupt. So yeah, it depends on the market. Like it's easy to do today, because the markets crazy, it's there, the inventory is so low, they sell really fast, it's so easy to do guarantee sale, from an investment standpoint, it's more important, if you can find an opportunity to buy something, if you own a piece of real estate, you have an asset, that's probably appreciating at a pretty good clip. And there's a lot of things you can do. It's It's It's amazing. If you have a property and you want to sell it in a contract for deed, it is there's all kinds of creative things that can be done in this kind of a marketplace.

 

Mike Swenson 

So how many properties then did you pick up, kind of during that time, in terms of ones that you ended up ultimately holding as investments?

 

 

I had several dozen. And then I lost a lot of them on the on the market crash. So you know, the only the only advice I would give there to anyone is don't do too much of something and thinking I had properties at 16 properties in Florida, and a lot of them here in the Twin Cities, and then the market just imploded, you know, in 2007 and started going down and kept going to 2011. So it's like a falling knife. And I worked, you know, for about three years, three and a half years to kind of de leverage myself, you know, negotiating with the banks, short sales, some of them trying to sell them and get any equity out. It was it was a brutal experience.

 

Mike Swenson 

One that I learned a lot from didn't have to file a BK stayed afloat. But it was it was a huge loss from what had been built up. But it was built up with this incredible 2003 or 2006 price increases. You know, back in the day, I mean, that the net worth was going up. I it was ridiculous. It was going up six figures a month because of all this real estate appreciation. There was marketplaces that were appreciating over 50% in Arizona and Florida. 50%. Crazy, crazy appreciation. And so that was a game and a lot of people lost. But it is what it is. And we learned from it.

 

Mike Swenson 

Well, I think that speaks to I mean, if you're if you're going to be in this industry for 35 years, you're gonna have your ups and you're gonna have your downs. And so, for anybody that's gotten into real estate, myself included professionally now, I did buy my first home back in 2006, and watched it go down. But in terms of being full time in real estate, I haven't been through a market downturn like that. And so, just understanding those things happen. And when you're in it long enough, you're going to have to figure out how to adapt and you're going to have to figure out how to adjust and improvise. Right, which is what you had to do. There was no rulebook on, here's how you here's how you offload properties as the markets tanking, you got to figure it out.

 

Jeff Scislow 

You think you know something, and you know, it's just like, you know, look at today. What do you think's going on in the world? I really don't know. I don't know what to believe. I mean, today's more bizarre than anything. But back then, as the market was on its way down in 2007. I was really big with the Florida you know, I wasn't licenced there. People think I was licenced in Florida. No, I set up referral programmes down into Florida and did a tremendous amount of business down there. And unfortunately, the market went down and so people have bought and owned real estate in Florida. They lost money. I lost money as I just alluded to. So but I remember in I think was the first quarter of 2007, I had an article in the sun country, you know, they had the little magazines and stuff I was I would write into the articles once a while. And I remember I put in there I says, this is just a minor correction. See, I didn't know I didn't have a crystal ball, but I remember the article, I still have it somewhere buried in a file. This is a minor correction, it's not the time to sell. I was totally wrong.

 

Mike Swenson 

So talk about the Florida piece a little bit, because I think that there's a lot of ingenuity there and what you did, and so you would set up essentially from people looking from Minnesota to go to Florida, and you would find out these properties and then allow them to invest so share a little bit more about that programme that you did there.

 

Jeff Scislow 

Sure. You know, the the buzz was back in 2003, or four, when I kind of got started in this, that 80 million, baby boomers are going to retire. And a huge percentage of them are going to go to Florida. So that market is going to really blossom and explode. And so I started to talk to people that might want to buy a place now while the prices are lower. And as a result, I was working with other agents that were already kind of doing this. So I kind of piggybacked on them, I'd refer to Minnesota agents that worked in Florida, or had a licence down there. And that's kind of how I got started, I bought a couple of properties myself. And then I thought, I'm gonna go down to Florida, and I'm going to learn more, I'm kind of like the salmon swimming upstream.

 

Jeff Scislow 

So by 2005, or six, I 2006, let's just say there had already developed a really good programme. Now I had a resume, I could go to what they called the developer, a lot of the sales that I was involved in purchasing and also sharing here, were condominium conversions, they were apartment buildings are being converted to condos. And the person that did the conversion was called a developer. So I went down there and I wanted to meet the developer, I said, I'd like to be your estate agent. Here's my resume, here's other projects that I've sold in, here's how many I have sold. If you'll allow me to do that. I actually like your product, I like your location, I like the building. I like the prices. And what these developers did, they would guarantee the investor rent, your rent is guaranteed for 12 months, maybe 24 months, here's how much you're going to get. So when you look at the rent, that's guaranteed, though, they're going to put a tenant in there, whether they're happy, whether they have a tenant or not.

 

Jeff Scislow 

In that property, you're going to get the rent for a year or two. So what am I paying for the property in exchange for in relation to the rent, so I created formula, and, you know, overpriced properties were point three or point 35%. In other words, take the rent, and divided by the price. And if it was point three, five, it's kind of expensive. If it gets up to point five, zero, or anything higher than that which is was rare. That's a good value. So I used the relative scale, and I went shopping. So when I found something that I liked the location, I liked the building. And I liked that ratio. I thought, Okay, this is maybe something I can buy. And I'm willing to buy. But first I'm going to talk to the developer, and I would talk I find out who it is get a meeting, here's my resume, I can be your out of state agent, I'd like to be paid, X percent. And those referral fees that I was asking for were equal to a full commission, because I'm the out of state agent, but it's called a referral fee.

 

Jeff Scislow 

I'm not representing anybody, I'm not representing the buyers. So when I had that agreement in place, I took a lot of pictures, I bought one myself. And then I made a created a PowerPoint, I created cable television back then was popular. So TV ads, we had green screen sitting on the beach, me and my lender, buddy. And so we would talk about these projects, on the TV commercials and invite them to come to the seminar at the hotel, wherever we're holding the seminar. And we'd get 50 or 100 people sometimes showing up, and we'd sell sometimes dozens of properties at one of these events. And when we say sell them, they're interested, we get their name and so forth and address.

 

Jeff Scislow 

Then the developers team would send us by email, a contract, and the contract would allow them to buy and I had a disclaimer, I'm not representing you. Right, you know, no guarantee of future because when the prices went down, they tried to come after me said well, this guy should have had a crystal ball. We lost money. I seriously, Department of Commerce came after me didn't do anything wrong. I had a disclaimer, I mean, but it was it was it was a nightmare after the market crash, but this is how I built this up. And it was all with good intention. I was buying in multiple cities. I had 16 scattered around the state. And I thought they were really good opportunities. I really did. And unfortunately, we all lost a bunch of money in 2006 Next I did 223 sides in Florida, from Minnesota with a couple of trips and doing seminars. So it was a huge, a huge opportunity. But it was it didn't last because we had liar loans. We had all that subprime lending. And that's really what caused that market to crash, unfortunately, and you know, seems to be going good, everyone's excited. Everyone wants to buy more.

 

Mike Swenson 

So okay, then fast forward a little bit, here, maybe about in the last five to 10 years, he started doing a little bit more with flips, and have done that a little bit more. Why don't you talk about about your experience with that?

 

Mike Swenson 

Well in the sense of the word flip, let's define flip means fixing something ugly, and making it beautiful, okay. And I started doing that where I would hire contractors, and I was turning it more into a business versus maybe one here and there. So I started doing that in 2013. And I think I've done 27 or 28 of those. And I've kind of stopped doing that. It was just too much, I had three, four, sometimes five projects going on at one time. And that just got to be too much of a headache, too much stress. I track everything.

 

Mike Swenson 

So then were you, buying them fixing them up and then holding them or were you, the goal was just flip it and be in and out as fast as possible?

 

Mike Swenson 

Correct, to sell it. Now let's just say I wanted to hold it, I wouldn't go to a full blown flip. When you flip a house, it should be a nine or a 10 on a one to 10 scale, I mean, at least a nine, it's gonna be nice. That's when you sell it. If you put a renter in there, two years later, it's back to a five, maybe at best. So when I when I fixed something, I would always sell it. So these would be sold. Average profit is about 43 540 $3,500. profit per flip was about 27 or 28. I stopped doing those almost a year ago. With a minor exception. I did one last summer, right, put five grand into it. That's a minor flip. I've had somewhere I put over 100,000 into it. My average flip. I would buy in the ones twos, maybe threes, and then I'd sell it for at least you know, whatever. There's the profit after expenses, so forth. You can kind of do the math, but I stayed in that kind of bread and butter range so that I could turn them quickly.

 

Mike Swenson 

How would you find out about them? Were they just telling other agents? Were you marketing? Was it just your kind of sphere of people that have worked with you in the past? How did you find those?

 

Mike Swenson 

There's a number of different sources. wholesalers are typically new into the real estate industry. I'm members of the Minnesota real estate investors Association and also Minnesota real estate club. I get leads from those organisations, wholesalers that are new, they'll they'll find the deal. They'll go find someone that's going into foreclosure and they try to then sell it off. Sometimes the wholesalers make great money maybe as little as five I had one wholesaler make $35,000 selling me a place around Lake McComas for I probably paid 180 for it. If I recall, I don't remember it's a few years ago, but he made maybe a pay to 20. And he bought it for 185 or something. He made 35 grand. I thought, Wow, that's a huge wholesaling fee.

 

Jeff Scislow 

I buy with as many problems as I had on that house, I still made over 40, myself. And I had a lot of problems that that I should have never had with contractors. So how do I find wholesalers is one source, I would actually get online and look for pre foreclosures. I tried to contact a few lawyers that wasn't working so well. I found them on MLS, I look for something on the MLS and I'll find something. Now the one that I did last year I found on MLS, and I made I think I made 45 or $50,000 on but I've sold it on a contract and I'm still making interest. Right? So yeah, they're just, you know, when you when you I'm not looking for them right now, because of my business continues to evolve, and just into, let's say, components or aspects that are more lucrative. So I kind of flow in that direction when I find something that works.

 

Jeff Scislow 

So I think, through referrals, through networking, through the wholesalers, through pre foreclosures, you can go to the county of got on the courthouse and look, you know, and look them up yourself if you have the wherewithal and time and energy and skill to do that. You can buy courses on finding foreclosures, you can drive by houses and look for long grass and peeling paint and then go knock on the door. I mean, there's a lot of things that you can do. And then you want to know a little bit how to do that. So that's a that's a business in and of itself. finding them is important. Finding the deals is important, but they are out there. And I was talking to someone the other night they said you know aren't the deals really hard to find. I said don't say that. As soon as you say that you won't find anything. So I'm just ready, I'm ready, willing and able to find the next deal. That's the way you want to talk. So they're out there.

 

Mike Swenson 

Yeah. So then kind of the the last piece you're moving forward to today, what is your business look like today?

 

Mike Swenson 

Well, the inventory, as we know, is very short or very tight. I'm doing very little advertising and marketing in that category to pick up listings. It's extremely competitive. And so in that sense, you know, past clients, referrals, great. They come virtually at no cost. If you're keeping in touch with your database, your client base, past client, you know, basis over you should be fine. And getting that business that flows in at very little cost. I always ask for business, I always go out to eat all the time, I'm single, and I don't cook, there you go, I'm always out to the restaurant, right? So anyway, I'm always given out my cards everywhere I go, who you know that might be looking to buy or sell a house and I get names by always asking, always have cards always leaving, leaving with the check and so forth.

 

Jeff Scislow 

The other thing that with buyers right now, I won't go into the specific details. But if you're working with buyers, and we're all kind of working with buyers, it's really, really competitive. And so I would take the time and acquire strategies that you can put into contracts, that'll give you the advantage. We might have chatted about this before, but 10 out of 14 of my buyers last year, were in multiple offer situations, obviously want to get there before anyone else. And if you can, if you can work something with the listing agent, if at all possible to get a good offer in Right. Right away. That's good, then you fend off the competition. But 10 out of 14, we won. And we were not the highest, hardly ever. But there's other clauses that you can put into the contract other things you can do.

 

Jeff Scislow 

Again, I don't want to get into it because the market is so competitive, right? I call my clauses, Santa Clauses because they keep on giving. And I when I meet with a buyer, and they hire me to rep them, I tell them some of the examples of my Santa Clauses and we laugh and so forth, but they work. So what can you put in your contract to give you the competitive edge? I would just encourage the viewers to think about that. Right? What can you do to be competitive? What can you do to win. And, after I lost a couple of them earlier in the year, last year, in 2020, I says this is terrible. We got to start over again. So if there's 10 offers on the house, do you want to be the one that wins, or one of the nine that loses, I don't want to be one of the nine. So I started to develop Santa Clauses and they work that guaranteed but a high probability.

 

Mike Swenson 

Right. And if you think about a buyer's agent, they're going to spend so much time chasing property showing properties, writing up offers writing up offers writing up offers. And so if you can find a way to keep them as clean as possible, and as strong as possible, it's gonna be it can be the difference between doing two deals a month or three deals a month because if you think about all the extra time you're going to spend chasing properties, it really makes sense to be as sharp as possible and you found a way to do that. So hats off to you.

 

Jeff Scislow 

Yeah, it's just a matter of if to give a suggestion for an agent that's lost. Why did they lose? It might be price, of course, price is important. But what other elements can you put in your offer to make it stronger? And you have to be careful because you're representing the buyer. And they always have to make a choice. So for example, if you said, Well, why don't you waive the inspection, that could be really bad advice, if there's a problem with the house later, but you can introduce that to them. And there's other components relative to the inspection that you can incorporate into that offer, so that it's much more attractive to the seller based on how you word it.

 

Jeff Scislow 

So I won't get into the specifics, but there's a lot of things like that. I would encourage the agents to think about how to make their offer more competitive. It's all about being more competitive, it's all about really give giving the seller what the seller wants and and reducing the risk to the seller. How do you do that? You know, it sure you can do with earnest money. Those are the obvious things. What other things can you do? And I would encourage people to think about it come up with their own Santa Clauses. I just have the original Santa Claus. No. Anyway, it's  like I said, I have fun with the business. We laugh about it when I'm meeting with with the buyers for the first time. Make sure you get your buyers under contract. I know there's people that don't, I don't need to get them under contract until we find a house. Everyone has a different way of doing business. But if I'm going to commit to them, they're going to commit to me so they're just business 101.

 

Mike Swenson 

So taking a look back, Jeff. Thinking about, as we talk about kind of financial freedom and time freedom, 35 years in the business, it's had its ups, it's had its downs, you've adjusted you've kind of went with the market, talk about a little bit of the the lifestyle freedom that you've had now, as a result of kind of all these little things that you've done over the years have really added up to a really great career. So what is kind of time freedom and financial freedom look like for you today, as a result of all your 35 years of hard work?

 

Jeff Scislow 

Well, I always paid my contractors with American Express, I have a lot of delta miles. It's little things like that, for example, that I mean, I can fly forever. I mean, I have a lot of miles, for example, because I flipped and I paid everything on a credit card. Well, there's, there's an example of where, you know, it's, I've deposited those in an account that I can fly, it's not going to cost me to fly around the world minimum wage, nothing, because I've deposited those based upon a plan. I said, Okay, well, I'm gonna build up the miles. That's an example. And if you'd like to travel like I do, that's, that's a pretty good gig. So what's important to you as an agent, what's important to you. So, cash flow, if a person decides they don't want to work, they don't want to go into the office, they don't want to prospect anymore, they're all done?

 

Jeff Scislow 

Well, if you have bills, and you have no income coming in to pay those bills, you're going to go upside down. So again, it's all about knowing your numbers. And it's it's, I'm not trying to give necessarily a financial course here. But if you have rental properties, for example, there's cash flow, there should be. And if you have contract for deeds, which I have a lot of those that's that's part of my new business model, I'm creating more and more contract for deeds for for buyers. So I've got income coming in on a regular basis based upon those investments. And for those of us in the real estate industry. boy, boy, we should be we should be owning real estate. Are the prices too high, it's too late to buy I shouldn't buy right now, not necessarily, because the prices are probably going to continue going up, probably the national number, November, going back to November of 19 2019, that one year prices went up nine and a half percent huge increase. Because low inventory, low interest rates, what's going to change that what's going to send the prices down, it would have to be something catastrophic, that we probably can't see right now, I don't know what that might be.

 

Jeff Scislow 

I'm not going to think in that negative sense. But with low inventory, low rates, prices will continue to go up. They should hopefully not too fast, hopefully steady, you know, 567 percent a year, but they're up around 10% a year. That's huge. That means that $300,000 rental properties going to be 330, maybe in a year. So why wouldn't you want to buy it now, lock in a low interest rate, start getting a cash flow, if you put 20% down on that to avoid the PMI, your cash flow and today's investor rates, you know, it depends on you know, if you get three and a half, that's great, maybe you're four and an investor loans, something like that, you're still going to cash flow on that three $400 a month, maybe a little more depends on the taxes and so forth. Why not put that 4000 $5,000 a month cash flow in your pocket and write up maybe 25 30,000 appreciation over the next year, and pay down the loan, maybe you're paying the loan down at a clip of 250 bucks a month, that's 3000 bucks there.

 

Jeff Scislow 

So you made three, he made five, that's eight, and then you got 25 to 30. You know, you're up to $35,000 a year by buying a rental property today, why wouldn't you want to do that? Yeah, plus, you get to depreciate the house. Plus, you get to depreciate the house. And if you buy the house at 300, and you put five grand a little spruce up in it, you might get a 10 grand return that's called forced inflation, I'm going to cause the appreciation on that house to go up by putting some strategic money into the house, make it a little nicer, it'll be easier to rent, I'll get an extra 100 bucks a month in rent, because I put the five grand in. So I get paid back over time. But I've also increased the value. All these things are little components when you start doing them on this house on this house in this house. You track it on a spreadsheet after a while, you know, you have no problem with paying your bills. Let's put it that way.

 

Mike Swenson 

Yeah, you truly are somebody that knows your numbers. I mean, just in the conversations that we've had, you're you're rattling off numbers, back from the 80s and the 90s in the 2000s. And so, just knowing your numbers is key, and I totally agree. Over 35 years, small little deposits add up to really big deposits and so you found ways to to build a little The wealth here, build a little wealth here, build a little wealth here. And that's going to add up and add up and add up.

 

Mike Swenson 

I think so many times agents are short sighted, they just think of how much did I make this year? How much did I make next year and they get out too soon, they go back and they look at their job of, hey, I made 100 grand last year, but my first year in real estate, I made 70. So I can go make 30,000 more if I go back to my other job. Well, yeah, but that's one year, if you think about three years, five years, 10 years down the road, now you've got a chance to get into investments to do more things and build more long term wealth. So you're certainly an example of that of somebody who ran with the market, ran with different ideas and improvised over time, and found ways to build that wealth. So, thanks so much for coming on. I really appreciate it. If your story has resonated with people, how can they best get ahold of you?

 

Jeff Scislow 

I'll give you an email and a phone number. Feel free to reach out my email is my name [email protected] and text me at my cell if you wish 612 747-990-0612 747 9900

 

Mike Swenson 

Awesome. Well, thanks so much, Jeff, for coming on. We really appreciate it all the stories and appreciate you sharing your wisdom.

 

Jeff Scislow 

Thank you so much, Mike. It was good to be here. Have a great day

 

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