AirBnB Mold made this Person a Fortune

why does it always seem like everyone around us is always making a killing and we're just struggling to keep up everybody's getting more followers than us they're making more of a killing than us on stocks like the latest IPO or on Bitcoin and you know what we're just always missing out how can we finally be the ones winning the lottery when is our ship going to come in well in today's video Michael is to use this mushroom and an Airbnb behind me to show you exactly how you can look for opportunities that can make you a killing as well now you may have come here wondering how much did that mushroom make well five hundred thousand dollars is what the mushroom made and I'm just getting that out of the way so you don't think I'm trying to clickbait you but the whole purpose of this video is to teach you how that money was made let's get into it flush back to June of 2010 this property behind me was listed for sale for nearly one-point-six million dollars and all the way through the next two and a half years the property went into escrow and fell out of escrow meanwhile mr. mushroom had a little home he could keep growing in so for two and a half years mr. mushroom grew his family and kept growing and growing family was starting to seep through the drywall into the laundry room which was on the other side of the garage and all of a sudden not just started invading the wall next to the washer and dryer under the cabinetry or behind the sink area no it started cultivating in the granite countertop that is you could literally see its growth grow through the countertop as the countertop became darker and darker and this is granite stone the mushroom was living in so needless to say the price of the property kept plummeting in fact while the property started it's a price in a 2010 at a million a 595 it was reduced to 1295 after the mushroom started living a bit then it was reduced to 1 million 95 and just kept cancelling the deal nobody would buy the house that it was reduced to nine hundred forty thousand dollars eight hundred forty thousand dollars and now enter Kevin and his client after multiple canceled escrows and multiple price reductions we started thinking wait a minute what's wrong with this property this isn't the market being funky this is something about this property that could be creating a massive opportunity in real estate there's something known as the culture of fear the best example I could give you for the culture of fear is and I'm not trying to bag on this particular industry these people are great people but the roofing industry when first time homebuyers get into real estate one of the first things they're concerned about is the potential for a leaky roof and I'll tell you in my career I've seen more totally fine roofs replaced solely out of fear then I've actually seen leaky roofs part of that is because when we see leaky roofs in movies or TV shows we see buckets full of water mold mildew fungus we have these images of Katrina destroying Louisiana and creating all this toxic black mold around but the reality is any single roof leak that I've ever seen in my career was a roof leak that could have probably easily been patched for under 20 dollars in materials and that's and what I have done as a real estate investor now that gives you kind of the example of how the culture of fear works where people will spend fifteen thousand dollars on a new roof that really just needs maybe if they hired it out a two hundred dollar patch well the similar fact it can be said about mushrooms and my client having been a professional real estate investor also knew that and now I want to walk you through exactly how we were able to use this culture of fear to our advantage to make $500,000 and now know the nice thing about this $500,000 isn't that it's five hundred thousand dollars I mean that's pretty freakin awesome no it's that it was five hundred thousand dollars that was able to be used in a tax-free way that is if you were working for $50,000 a year and after taxes went home with $40,000 you'd have to work twelve and a half years to make the money that this mushroom made and that's why you got to stay to the end of this video so you can write down all of the steps to make a lot of money step one in order to take advantage of mushrooming opportunities like this one you have to constantly be involved in the market and this could be as simple as keeping an eye on every single property that hits the market that's exactly how we came upon this deal when we decided to take a look at the property and see mr. mushroom in person we decided you know what let's go ahead and write an offer let's see what happens now this property had been on the market so long and had lost so much value that by the time we came around to it the property was selling through something known as a short sale now a short sale is where the seller sells the property for less than the outstanding loans on the property however the seller has to prove a hardship as to why she can no longer make the payments well unfortunately for the seller the seller had lost her job because she was becoming really irritable and was having trouble sleeping and concentrating even her dogs started expressing some signs of irritability and I guess it's anybody's guess as to what would have possibly caused that irritability [Music] but anyway at this point the property was listed for eight hundred forty thousand dollars and we made an offer on it for eight hundred thousand dollars cash now when an investor in real estate says cash they rarely actually mean cash usually the money is coming from some kind of line of credit or a private party loan or some other source that's because usually people don't want a lot of cash sitting around when they're professional investors now I don't want you to get discouraged so enter step two so remember step one was being involved in the marketplace but step two was have your financing in order there are ways to get private party financing but there are also ways to be pre-approved for renovation loans that would help you take care of issues like this in fact the very first property I ever bought I bought and it didn't have a kitchen it didn't have toilets and I bought it using an FHA 2-0 3 K or 203 K renovation loan now it took an entire two months before we actually heard that we officially got the deal that's because this is a short sale and short sales are anything but short in fact they're usually a lot longer they're not called short sales because they're short in time they're called short sales because the seller is selling the property short or for less than what they owe on the property now we get the deal and as any good real estate investor does the first thing you do is you surround yourself with a group of professionals that's why really good real estate investors will always have a real estate agent and a circle of contractors and vendors and inspectors to help them through their transactions to make sure they're not getting screwed the typical first-time homebuyer doesn't realize this in fact most first-time homebuyers are just looking for something pretty and move-in ready that has really nice staging and flowers and pretty colors on the walls but professional investors realize the real money in real estate is made when you buy great quality properties that for some reason have fear elements that are making them sell for a lot less than they're worth such as a mushroom now being my clients professional I did everything in my power to get to the bottom of what was causing mr. mushrooms well existence and see here's something interesting about mold in real estate in order for there to be mold there has to be a source of moisture that helps propagate in the mold helps the mold grow if there's no moisture there's no mold or at least there's no living mold anymore now me being a professional my mission was to get to the bottom of what was causing mr. moles growth and after all professionals would generally realized that the only way mold can grow is if there's a source of water so I went to the seller and said hey have you had any issues with the plumbing and she said nope nope no issues that I know of and I paused and sort of looked at her for a moment and she said but I do turn the water off every day after I shower and I said what you turned the water off after you shower every single day yeah and she kind of grabbed my arm and we walked outside and she showed me where every day she would turn the water valve on to go take a shower brush her teeth and get ready then she'd come out and shut the valve off again and kill all the water of the house and I'm thinking to myself okay that's very odd and I said have you ever thought about calling a plumber oh no no no I haven't called a plumber and I'm thinking myself clearly somebody has lost their mind like not to be insensitive here but the first thing you should do if you have a building problem is called a plumber so anyway I asked her to turn the water on and she turned the water on and then I decided you know what let me find where the attic access is to this property so upstairs in the dist unit of this property which this is where we get into the whole Airbnb part because this guest unit was like the perfect air B&B that was it was essentially paying for the property itself but anyway inside this guest unit I open this access panel to actually just walk into the attic I didn't even need a ladder for it because the guest unit was located above the garage and it had this access panel in the closet so I opened this panel because I'm thinking well the water leak is probably above where the mildew is anyway I go into this access panel and look at what I found not only is the plywood wet leading me to think oh my gosh are you serious here's the problem but if you listen closely you get here where the water is scorning and this is a video I took I found this in like five minutes of looking for the problem so the issue ended up being a pinhole leak in a 90 degree angle solder of a copper pipe that was just slowly like a sprinkler head squirting water out and drenching the wall and by the seller actually turning off the water all the time not only did it make it harder for her to actually see where the water was coming from or god forbid call a freaking plumber but it actually made the mildews growth more aggressive because when you give mildew some water you give it the energy essentially to grow but then it starts getting dry and it starts getting pissed off and what does it do when it gets pissed off it goes and it spreads all of its mold spores thinking I gotta spread my genes quickly before I die and just exacerbated the mold problem oh you can't make this stuff up so anyway now we don't where the problem is and we realize how solving this plumbing leak would only cost probably a $75 service call with a plumber which is shocking but hey whatever it was our deal now so great no we had to do was deal with mr. mushroom so anyway after we discover this basically $75 plumbing repair that needs to be done so this poor woman can actually use her plumbing again without fear of contributing to this mold we had to deal with mr. mushroom so that we could finally restore this property into the very very profitable Airbnb that it was and was to be but then so we called out a mold tester and this mold tester came and started doing air sampling with their little air sample pumps and all that and while his air sample was going on he looked at me and said hey Kevin you know don't worry don't stress out about this I thought it was hilarious I'm like this is such a great deal but generally real estate agents aren't like me and they kind of freaked out over these things in fact this is the kind of stuff that I teach in my real estate investing course how to deal with and how to identify that's linked below you could use coupon code redfin to get 20% off you can also use that 20% off coupon code to get 20% off the real estate agent course where I teach you how to work properly with your clients and actually provide them a more higher quality service both of these by the way have live streams twice a week where you can personally consult with me and ask questions but anyway he looks at me and says Kevin don't don't worry there's only a 1% chance that this mold is toxic mold 99% of mildews that grow in a house are not toxic they're not dangerous they're not problematic yeah you've got to deal with them they could cause some irritations like on your skin or or you know maybe like a runny nose but generally most of the household mildews are non-toxic and I'm like hey whatever man that sounds crazy I look at mildew I'm like that gross get to get that out of my life I don't want that around me but you know whatever if that's what you say bro whatever just keep doing your sampling and so sure enough we get the mold report and it comes back you know it's clear clear clear clear clear oh pretty much fully loaded as stachybotrys and I'm like that's not toxic black mold it's Stachybotrys stachybotrys is the technical term for toxic black mold which is also known for causing sleeping issues irritability and mental problems as in mental issues so we get ourselves out remediation quote and a company wants to charge seventy five thousand dollars to remove the drywall on this wall and the mildew and restore the functioning garage to the way it was and what is my Clyde - hey Kevin we got this expensive quote let's ask the bank to give us money off the price and they decide to give us $47,000 off the price - we're all of a sudden my client was buying this property for seven hundred fifty-three thousand dollars in a neighborhood of 1.3 million dollar houses and air B&B but this is where the story gets really juicy because you know how my client got that quote for $75,000 to remove all that mildew and restore everything my client it's a professional real estate investor and just like what I teach all of the clients that work for me there are really expensive ways to solve problems and then there are safe and less expensive ways to solve problems so a few weeks go by and I visit my client after the closing and I realize everything's patched up the drywall is repaired the plumbing leaks repaired the wood that was rotten between the walls has been replaced pictures of everything fully documented and my client had even had new mildew testing done to verify that there was not a spore of mildew left and I said this is great how'd you do it well this is where my client said well I found on Craigslist a few air purifiers these are usually triple filtration air purifiers that generally cost somewhere around a thousand to two thousand dollars depending on the strength of them you get off the x rent these for $80 a day the filters are very expensive though and he set these up and got a few people to put on Tyvek and I'll tape up their wrists tape up their shoes and put on respirators with toxic dust filters probably by far the most important thing when it comes to mildew in fact the EPA says that most mold projects can be dealt with by a homeowner themselves it's only when they get larger in size that they become more complex this would be considered a more complex one but the general rule of thumb still remains you wear gloves you wear Tyvek you properly ventilate the area you wear a mask and you wear gloves well here is such a mask I just bought this on Amazon for $38 you may be thinking to yourself that this stuff is expensive but it ain't in fact it's pretty freakin easy to use see the beauty about why these works so well is rather than those stupid little white paper masks that people use where air can still kind of come through between the sides of the masks and then it's kind of worthless these you can actually proof yourself that there getting rid of anything that could potentially get into your nose unfiltered watch this see the beauty with these is you can cover up the sides like this and hold it and breathe in and if while you're covering the filters you can't breathe in you kind of just go you breathe and go breathe because you're covering the filters it means there's no leak around the edge of the mask and so now that everybody was properly protected what did they do they set up the filtration equipment and they went to work properly bagged everything up after cutting it up properly disposed of it all and rebuilt the wood the drywall the laundry room area mildew tested everything and boom everything was clear now instead of spending seventy five thousand dollars the clients spent under five thousand dollars to put all that drywall in the lumber all over the labor costs for his employees these $38 respirators everything under five thousand dollars when a company set the cost of the project would be $75,000 Sasak culture of fear remember that business of fear and the market had reduced the value of this property over five hundred fifty thousand dollars now the client ended up doing some other renovations as well and got the property ready for air B&B after he was done with it it was probably worth again 1.3 million dollars today it's worth in excess of 1.7 million dollars an air B&B ease for a typical net profit of around seven thousand dollars per month so next time you think about why other people always seem to get so lucky and everybody else is winning the lottery maybe you should start asking yourself what are you doing to let the lottery fall in your lap and maybe you should start considering getting educated and investing in real estate where a massive Society of fear well that's kind of Frank boothy isn't it prevents a lot of people from making money but leaves just enough opportunity for a ton of other people now remember how I said this was tax-free money yeah I wasn't kidding see when you buy a good deal like this and you create over $500,000 in value by removing a mushroom it's only taxable when you go to sell unless you do a 1031 exchange which if you keep the property you don't pay taxes if you eventually decide to sell the property you can exchange it into another property and keep doing that forever and ever and ever and never pay taxes there's even a way you can avoid paying taxes through your death so in other words you very much screw the government out of ever getting their money now not a CPA so don't sue me bro instead check out this video on how I made $100,000 buying a house off Facebook or check out this video where I go undercover door-knocking to make $100,000 in a summer

Channel: Meet Kevin

Views: 76,534

Rating: 4.892581 out of 5

Keywords: airbnb, mushroom, client, fortune, real estate, investing

Id: XsaHecNcW28

Length: 20min 8sec (1208 seconds)

Published: Sun Aug 11 2019