If you have trouble getting a loan from the bank or wondering how you could ever find the money to buy a property, especially when you live in an expensive market, then you will definitely want to listen carefully to what Monick Halm’s guest has to say. Lanisha Stubbs is a creative investment property broker and real estate investing goddess extraordinaire. She is the number one property broker at Wesity, Inc. With her stock knowledge and experience, she talks about seller financing and finding sellers, citing examples of recent successful transactions. She also shares their ten-step action plan to help investors create profitable investment businesses.
Listen to the podcast here:
Seller Financing: Creating Win-Win Opportunities – Interview With Lanisha Stubbs
I am here with a special guest, Lanisha Stubbs who is a residential and commercial broker in Los Angeles. She’s an investor who loves helping others build wealth through real estate. She’s had over twelve years of experience in real estate and consulting. She works with her husband. They founded a group called Wesity, Inc. They’re investment specialists and they help investors build wealth in creative ways. From all of her work with all of the different investors of the year, she’s figured out what systems work and don’t work. They’ve taken the best of what they’ve learned and developed Wesity’s Ten Step Action Plan to help investors create profitable investment businesses. I’ve invited her in part because of this creative way in which she finds properties in a tough market like Los Angeles. Los Angeles is one of the most expensive markets in the country. It’s tight. There’s a housing shortage and yet she is able to help. She helps her clients find properties where they’ve been able to create win-win opportunities for the seller, get seller financing, and get into this property with no money down. It’s fascinating how she’s done that. I’ve invited her to talk more about that. Welcome, Lanisha. I’m happy you’re here.
Thank you so much for the invitation. I appreciate it. It’s been a pleasure because I’ve met you. You’re inspiring with your direction with your group and with your syndication. I’m just thankful to be here and to be able to share with your audience my background and what I know in real estate.
It’s our pleasure. Let’s start with your background. How did you get into real estate investing in the first place?
I got into real estate straight out of college. A college friend of mine became my broker. We were both born and raised in the LA Inglewood area. We started in our own backyard and our marketplace. He showed me the ropes. We learned together as we grew up. I started investing right before the market crash, around 2006. I was eager, green, fearless, and naive on the market standpoint because I was so young in my career. On my first couple of deals, I made over $100,000 each in the flip. I invested in a couple of duplexes on the east side of LA. At that point in the market, you can breathe on a house and it will have equity because the market was so fast. I took the money and profits from the deals I was doing here and went to the Atlanta market. I started investing in condos and townhomes out there and then the market crashed. That was a humongous learning curve. I realized that I had bought at too high in the market. I didn’t understand the value at that point and how to analyze the market. I wanted to short sell my units to my tenants. It could have been worse. I have clients that lost a lot of their assets in that experience when the market crashed. I learned a tremendous amount in that time period.
You grew up in Inglewood and you’re right out of college. What made you think, “I want to get into real estate investing.” What made you think of that idea?
I was dissatisfied with the 9:00 to 5:00 and the check to check. It felt like I had a big lump to invest with and to make big moves with. I was ready to try to buy a house and build some type of portfolio. I thought there was no other clear avenue for me to be able to make big lump sums added in a short amount of time like the real estate market was providing at that point.
After the Atlanta market crashes and you’ve learned all of these lessons, what did you do?Seller financing helps people out of a bad situation because a lot of target properties are pre-foreclosure. Click To Tweet
I took a couple of years off. I went back to my government job, got married, and had a couple of kids. My kids became my new motivation to get back into the market. I started to study the best of the best, the savviest investors I can find. I started to follow them and the techniques that they were using to acquire and build wealth in real estate. I started working with a lot of investors in Los Angeles. I noticed two things that were missing. One, there were few women of color in the field of multifamily and big investors that I was working with. The other thing I noticed was that a lot of mom and pop family investors didn’t understand the real tool of real estate and how to use it to acquire wealth. They just knew it was good to invest. They didn’t quite understand how. I started to be the middle person. I was taking the savvy techniques and showing them to my average young investors or people who want to retire from real estate. I started showing them ways to leverage what they had or leverage other people’s money to create the wealth that they wanted to have.
I know you have quite a few different techniques that you work with people on. Let’s focus on the seller financing piece of that, which I think is particularly genius. First, can you explain to the audience what seller financing is?
Seller financing works best in properties that have some equity index, which is common in the LA market because the prices have been going up steadily for the past years since the market crashed. There are a lot of homes in LA that have equity in them. The owners have the cash to do the fix-up and rehabbing them so they’re still distressed properties. We go in and show our clients and investors how to negotiate with the seller so that they can acquire more from their property if they wait a little bit to get that money into the value that wasn’t increased or created by the investor. It allows the seller to become a lienholder and act as the bank. It makes a huge difference in the acquisition expense of an investor. You don’t have to go to a bank for a loan to acquire it. You’re acquiring it through the lien holder who is the seller. When you’re acquiring a property, you have seller finance, which is the acquisition expense, and you have an equity partner that will help with the rehab of the property. It’s good to have those. Those two are the biggest tools that we teach our groups and clients because they’re so powerful when they’re used right.
Can you give an example of a transaction you’ve done or you’ve been able to do where one of your clients has been able to do this?
We’ve done properties in South LA where they were out of state and owners. We have people that have inherited property from elderly family members that have passed away. They want to be able to get a better return on their money and make more money out of the investment. We have either cash investors that will come in or the seller finance that will become the lien holder. The investor will come in, rehab the property and fix it up, and then they’ll sell it. When the property is sold, that’s when the original seller gets the money back. They pay off the debt and the home is now ready to be a primary residence FHA type of loan that can be a property now that’s been rehabbed. They created the value there. They created the equity, which allowed my client to acquire anywhere from $50,000 to $100,000. I think $150,000 is the range of profit that they’re able to create once they’ve done the rehab and bring the value up.
I remember you telling me when we met about this one property which was a fourplex. There were a few older gentlemen that have inherited that property. Can you share that story? I think that was amazing.
We were on our way to get ice cream or popcorn one day and we saw a property behind us and I said, “That’s a nice piece of property.” It was a four-unit and there was a gentleman and a roommate who lived in one of the units. The other three units were not occupied. We saw an opportunity there to ask them if we could come in and ask them what they needed. When we come from a position of service or trying to solve a problem for them, that’s when we benefit the most from the real estate transaction. We came in and said, “If you could live here rent-free or at a reduced rent, what do you need?” We started to fix up the other units and then allowed them to stay there for the period of time that they needed to until the property was sold or allowed them to transition to something. The way for the sellers to make more money as a property being rehabbed is they’re still a part of the transaction. It allows them to be able to still live comfortably in their home and not be displaced immediately, as if a cash investor would come in and say, “Vacate the property. Here’s a little bit for your home.” It allows the seller to get more out of it and the investor to come in and make more money out of the bill.
How did that deal get structured?
The seller themselves, there’s some note carrier. They have an interest in the same way a bank would. They put a lien on the property. If it’s sold or refinanced, they get that lien paid off. That’s their ability to go and reinvest. That’s also their ability to stay in a position of being able to benefit, especially if there’s interest involved or any type of lump-sum payoff at the end. It allows them to still get more money out of the property than in its current condition and trying to sell it.
They became the note holder. You guys fixed up the other units and they were able to stay there. Did you sell it afterward? Did you hold the property? Is it rented out? How did you work that out?
It’s still in play. We haven’t sold that yet. From time to time, we’re still trying to get those other units done. Once we’re done, we get all those rented out. It’s good to use it and keep it for the seasoning period of the rentals for another year. Meanwhile, we have that rental income that we’re benefiting from. We’ll sell it off at some point.
Do you guys have all of the rental income? Is it split with the seller? How does it work?
It is prorated with them, so they benefit from it.
I love something that you said. You come from a position of service. You try to solve a problem for the sellers, which what this is all about and how you can create these true win-win situations. What other advice would you have for somebody who’s interested in doing seller financing?
The name of the game is coming in and solving the problem. Most people aren’t looking at a real estate like it’s the answer to everything. They have a lot of other things going on. A lot of the creative approaches that we show people takes no money and no resources to pull out that creativity in the deal and how to structure it. A lot of people don’t know what they’re sitting on because they don’t have the means to fix it up. They think, “Nobody’s going to give me any money for this.” It opens the seller’s eyes, it allows the investor to come in and make the profit they need to make. It’s helping people out of a bad situation. A lot of the properties of the owners that we target are pre-foreclosure and divorce probates. These are people that have real-life problems. Real estate happens to be a coincidence of that. You help them get through their real-life issues like how to relocate grandma who may have some medical concerns. These gentlemen didn’t have the means to fix up the other properties to benefit from what they had. They didn’t realize they’re sitting on a piece of property that once it’s fixed up and fully rented, it’s $1.3 million. $200,000 is the debt they had on it. When you don’t know what you have and you’re able to show someone that, it’s such a blessing in that experience.
How do you find these sellers?Real estate can be a long-lasting legacy that you can leave to your kids. Click To Tweet
My top three leads are going around in my neighborhood, in my backyard. You’d be surprised that some of the most affluent areas still have people who have issues and problems and whatnot. People that were foreclosed or have a debt or have a fire. You find some of the worst homes in the better areas. It’s that equity in between that allows you to have that creative negotiation and approach to the transaction. I look for ones that are high equity and are pre-foreclosure. Pre-foreclosure implies that they have to make a decision within the next 21 to 90 days. If they don’t, they’ll lose their home. Those are motivated sellers. Those are good leads to find, people that are willing to do whatever needs to make it happen so that they can be okay.
We teach our clients. We sell through education. We’ve been taking this one step further since we put together Wesity. We’re trying to get the consulting side of our business moving. We’ve created meetups so that we can share the information and approaches that we know have been effective. We’ve created profitable investment businesses for our clients. We’ve also started hosting events at the Olympic Collection. A past coach of mine, Lloyd Segal, invited me to host my meetup and club meeting at the Olympic Collection.
I was excited to be invited by you to come and speak to the group as well. We spoke about how you can syndicate, use other people’s money, and the seven factors you need to be a successful syndicator. Do you want to tell a little bit more about that particular event?
It was at 11301 Olympic Boulevard. It’s free parking across the street at Starbucks. It was a night full of fun. It was a real estate event with guest speakers. We kicked the night off at 5:00 PM with our meetup where we were sharing the latest techniques and tools on how to invest in real estate, create some profit and welfare. At 6:00, they had 25 plus vendor booths. These are all the people that you’re going to want to build your team with as investors. It’s everything from escrow, title, hard money lenders, and rehabbers. Every type of vendor you can think of was there. At 7:30, the Los Angeles Real Estate Club has a guest speaker that is different each month. They teach you how to do a deal in the next three days. It was interesting to see what technique he shared to do a deal within the next three days. It was a night full of fun from 5:00 until about 9:30. You can have an evening of real estate. Get in there and get some new friends. Get some new information. Have a source for some good reliable resources in this business.
How much is this?
The price is right. Lloyd was able to get sponsors to set us up. There’s no fee to any of the attendees as a free night of fun.
Hopefully, you guys can be there at the Olympic Collection, if you’re in Los Angeles. I know we have people all over the world reading this. If you are in Los Angeles or want to be, then come to this event. Thank you so much, Lanisha. That was amazing. You can connect with her at www.WesityInc.com. Before we go, we’re going to end how we always end with the Trinity. A Trinity is a celebration or brag, gratitude, and a desire. Lanisha, what are you celebrating or bragging about?
I’m so grateful that I had some things to pick from. I had to figure out what to share. I’m grateful to even think back and choose what I want to brag about. I’m thankful for that in my business. One of the major steps for us at Wesity was creating this ten-step action plan for investors. It’s taking a new investor that wants to acquire a real, sustainable business in real estate, how to set them up with the right step so they’re doing daily tasks to reach their investment goals in half the time. It has taken us some time to put together. We’ve been consulting for some years but we have yet to get a published piece of material out there. We’re so excited that it’s officially published and ready to rock and roll with some new consulting members. That’s a big step for us and our business.
What are you grateful for?
I am grateful for the amazing people that I’m meeting in my business every day. I’m starting to meet some people that I love, like those clients where I get to learn from them. I get to pour into them what I know. I’ve been fortunate to meet some good connections and people that I can see a profitable future with.
Lastly, what do you desire?
One of my biggest is to leave a long-lasting legacy of real estate and assets for my kids. I want them to be able to have the freedom to live the life that they choose when they get to their adulthood. I want them to understand the principles. I didn’t grow up understanding the value that a real estate or an asset of this magnitude could have in generations to come. I want them to understand leverage, cap rates, 1031s, syndications, and all these investment strategies. I want to make sure they learn early on. I always play around and kid with my family but I’m serious deep down. I want them to be the landlords their friends rent from when they go to college. I’m striving to learn as much as I can and implement it to be able to show them so they can be able to use it to move forward. I see the value. I know the freedom that it creates. I want them to be able to have that same appreciation for it all. Receiving is good. Being able to do this for myself is excellent, but it’s in the giving that you receive the most. I want to make sure they receive the value that I’m trying to set up for them.
So shall it be or so much better than you can imagine. It’s a wonderful desire. I will share my Trinity. I want to brag that I finished my book. I have been working on this book for months. It’s called The Real Estate Investor Goddess Handbook. It has everything a woman needs to know to get started real estate investing like a goddess. That is my big old brag.
Be proud of that. That’s a good one.
It’s been hard work waking up every morning at 5:00 to get my computer so I can work on it. I am grateful for all the support I’ve had with this book. I’m grateful for my amazing publisher, my amazing editor, and my husband extraordinaire who has my back all the time. I’m grateful for this book and everyone who’s been my mentor and everyone has helped me with it. I desire a full house for our events. I desire you all to show up at the Olympic Collection. We have some great content to share with you. They are amazing people that come to this. You’re going to network and we all know that real estate is truly a relationship sport. It’s a team sport. It’s a relationship game. It’s all about who you meet and amazing people come to these events. You’ll want to be there. I desire you all to come and I desire it to be a blast. That is all for this episode. I’ll see you next time. Keep it juicy and keep it pleasurable in real estate and in life.
About Lanisha Stubbs
Lanisha Stubbs in partnership with her husband, Lance Stubbs, are the #1 Investment Property Brokers in Inglewood, CA. In 2011, they incorporated Wesity, Inc. a Commercial and Residential Sales and Consulting Agency.
In January 2017, Wesity, Inc. partnered with Keller Williams Realty and opened the Inglewood Office located at 111 N. La Brea Blvd., Inglewood CA 90301. Keller Williams Inglewood is located in the heart of Inglewood and is the #1 brokerage in Inglewood, CA.
The Wesity, Inc. team is comprised of CA licensed Realtors®, Certified Investment Property Specialists, Short Sale and Foreclosure Specialists, Probate Specialists Sales and Consulting Agents. Wesity, Inc. consults on feasibility studies, Net Sheet Reviews, Return on Equity Analysis reports and various investment planning services. Lance and Lanisha Stubbs are also wealth-building speakers available for bookings. Schedule a discovery call from the website, http://www.wesityinc.com.
Wesity, Inc. understands the demanding schedules of executives and families, and the limited amount of time to make major decisions. They offer these timesaving services:
• Strategy Consultation
• Return on Equity Analysis Report
• 5-star Marketing Machine
• Highest and Best Use Analysis
• Market Research
• Feasibility Studies
Wesity offers a collaborative and transparent approach when working with clients. They recognize the unique needs of their clients, and tailor their services to meet those needs. They assist urban families in building wealth through real estate. As well as, offer portfolio analysis, to exchange poor performing property for more desirable rates of return. Most importantly they will save you time and resources by consulting first. They look forward to working with you, your company, and your family.