Ed Frowley: “Know how to market for a property”

You can get into legal trouble if you aren’t aware of the laws of buying and selling. I was looking to purchase a home from an investor. I had provided the contract and they had signed. After signing, they had seller’s remorse and decided that they didn’t have to sell. This is a violation of […]

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You can get into legal trouble if you aren’t aware of the laws of buying and selling. I was looking to purchase a home from an investor. I had provided the contract and they had signed. After signing, they had seller’s remorse and decided that they didn’t have to sell. This is a violation of the contract and the seller could easily be sued and owe damages. Getting a real estate license, which teaches the licensee about contract law, would prevent this issue. Also, having a real estate license will not only allow a new investor learn what buyers/sellers are looking for, but can supplement your income by having your family and friends as clients.

Shows like Flip or Flop and Fixer Upper with Chip and Joanna Gaines have really glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some amateurs have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the ‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing Ed Frowley.

Ed Frowley started buying and selling real estate over a decade ago when looking for a home of his own, his fascination all the different homes online driving him to try and understand the market and why people buy and sell real estate. He knew his passion was in real estate investing, so Ed got his real estate license in order to work with and learn from investors, gaining a much deeper understanding. He used these newly-developed skills to establish his own successful real estate investing company, We Buy Houses in Western Mass, that makes cash offers with no home inspection.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

I have always been very intrigued with the real estate industry. I bought my first property in 2010 in Brookline, MA, when the real estate market was suffering due to the crash. What I learned as a Financial Advisor was that you want to buy low and sell high, so I bought my home when the market was low. When I went to sell the property 5 years later at a huge profit, I came to realize that money was working for me rather than me working for money. The first book I read about real estate investing was Rich Dad, Poor Dad by Guy Kawasaki. With this inspiration from Guy Kawaski and a push from my wife to get into real estate, I got my real estate license. I knew that I needed to understand the real estate laws and what buyers/seller wanted in order to be a successful real estate investor. As a real estate agent, I learned from investors, buyers, and sellers in order to gain knowledge of the entire world of real estate. I now run my own real estate investing company.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I was working on a real estate deal with a partner to purchase a home from someone looking to sell a home for an estate. The price turned out to be 100k over what we would make as an offer. So we made the offer by saying we that understood that the offer price wasn’t what they wanted, but here’s the number. They wanted to think about it, so we gave them the time they needed to make a decision. I thought for sure that there was no way they would accept our offer, but lo and behold they accepted. My lesson learned is that anything’s possible, so keep pushing forward with your business. You never know unless you try.

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

The life lesson quote that I live by is, “Do unto others as you would have them do unto you.” I believe in treating everyone with respect because I feel that’s the way everyone should be treated. Many times when I’m speaking to the owner of a home about their property, I realize that advertising with a real estate agent and posting on MLS would be a much better route for them in their particular situation than going with me. Every time, the owner responds with gratitude. This relationship can still grow my business, as that seller is more likely to refer me to another seller.

Are you working on any exciting new projects now? How do you think that will help people?

We’re currently working on a project to improve our website’s SEO. We want to make sure that our presence is better across all platforms and we’ll be able to do a deeper dive into how we can help sellers and buy homes. This process really helps give our sellers a better picture of what we have to offer, as well as an easier way to find us.

What do you think makes your company stand out? Can you share a story?

We make the process very easy for a seller to buy a home. I was working with a seller and they had a lot of questions about the process; they were unsure of the using us as their home buyer. After providing the information, the seller decided to schedule a viewing of their property. Shortly after viewing the property, we provided a simple offer with no financing or home inspection contingency. The seller realized the process was extremely easy. They had been worried about having to clean out the home and how long that would take them, but with us, they didn’t have to lift a finger. Of course, this made the seller very happy. They were able to close on their timeline and receive the cash they were looking for.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I know this may sounds cheesy, but the person that helped me the most — in terms of becoming successful in real estate, as well as other areas — is my wife. I’ve always had an entrepreneurial spirit and the desire to run my own company. My wife saw how passionate I was for real estate and told me (so many times) that I should work in real estate. I always thought that you needed a ton of money to get into real estate, but then after reading the book by Guy Kawasaki, Rich Dad, Poor Dad, it inspired me to start in real estate. I spoke to my wife about the book and she told me “this is your passion and you need make this your career.” So now I run my own real estate investing company.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

I think the most instrumental characteristics are to never give up, learn everything, and treat everyone with respect.

When I first started in real estate, I was obviously struggling to make money. I was mainly inundated with new information, so I had less time to focus on closing a sale. I took a couple of clients on showings, but they ultimately decided to not make an offer. There were a few where I drove over an hour but didn’t make a single sale. As anybody would, you get the feeling of giving up because you aren’t making money, but I had to remind myself of my goal of being a real estate investor. So I kept going until, one day, I made a sale and there was money in the bank. It got easier and easier over time. I never gave up.

After the first sale, I had gone through the entire process. I was constantly researching during my first sale and continued to learn, reading as much as I could and asking questions to others in the industry. I remember working with a client and using what I had learned to help them put in a strong offer. I collected all the right information from the listing agent to see how my client could get their offer accepted. The listing agent said the seller wanted a faster closing date. The offer was accepted; everything I was constantly learning ended up translating into helping a client and making money.

I believe that real estate is a relationship business, so everyone should be treated with respect. If you treat people with respect, then you too will be respected. While looking for properties, I collect information from the sellers to see if we’re a good fit to buy their property. I’ll tell people right away when they’re in a situation where it’s better to post their property on MLS. The seller always appreciates my transparency.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

The three things I’m most excited about are the new virtual tools being used to buy and sell real estate, the fact that more people want to move out of cities to buy a home, and the interest rate being so low that it’s allowing more people to buy homes.

The pandemic has shaken the way we all do business. In the past, real estate was done all in person; that had to change. When I was looking to purchase a home from a seller, they wanted to do a Zoom tour of the property. I thought this was a great way to limit any in-person viewings. I also now see more listings using software specifically designed to show live videos of the property. These are all great things to have as the industry moves forward.

People have been stuck in their homes for about a year now and I’ve noticed real estate agents posting about offers going 150k dollars over asking. Their clients want to move to bigger homes and they’re willing to do anything they can to get the house they want. The real estate market is on fire. It’s very exciting.

I had a buyer that got approved for a very low interest rate. This allowed them to purchase a higher priced and bigger property than they expected. I think it should be easier for people to buy homes so that the real estate market stays strong and everyone can make money.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

The three things that most concern me about real estate are the sustainability of the high prices, the sustainability of commercial, and the lack of affordable housing.

In 2007, both before I was in real estate and before the market crashed, I knew a young lender who had a nice car and a big house because they were giving out loans like candy. If you wanted to buy a home, they would give you the loan. After the market crashed, lenders tightened up on their loans for many years. I remember trying to get a home loan, but it was very difficult. The market was so high before it crashed. My concern is that this might happen again, but I’m less concerned because new rules have been implemented to reduce the possibility of another crash. In order to prevent another crash, we need sustainability, with more people able to purchase. That will be accomplished by keeping interest rates low. Low interest rates on loans allows more money to be infused into the market, keeping it strong.

When I was looking at commercial space before the pandemic, commercial was a hot commodity and prices were very high. During the pandemic, commercial space prices are beginning to drop because people are working from home and there’s a lower demand for commercial. There should be incentives to build more of a residential/commercial complex in order to help the commercial industry and focus less on office space.

According to the National Low Income Housing Coalition, over 30% of renters earning less than 25k per year are behind on rent. This is due to the high pricing of homes, driving up the cost of renting while incomes are failing to increase at the same pace. One solution may be that we build homes cheaper. There are now starting to be homes that are 3D printed. If we can 3D print apartment complexes and drive down the cost of the property, we can also keep the rent low. We need to keep innovating ways to make the cost of building cheaper.

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

My advice to real estate leaders is to keep coming up with innovative ways to create business. Lead generation is the most important part of any business. When I first started as a real estate investor, I used the traditional way of cold calling sellers. While this might be a good way to get some practice in the industry, it isn’t sustainable. I’ve learned innovative ways to drum up business, from using free ways to communicate with sellers on Facebook to working on SEO on my website. I would suggest real estate leaders try to figure out how to differ from others in the industry.

Ok, wonderful. Here is the main question of our interview. Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”? If you can, please give a story or an example for each?

The 5 things you need to know to create a successful career Buying, Rehabbing, and Selling Properties are the laws of real estate, how to market for properties, the numbers, a good contractor, and how to list.

You can get into legal trouble if you aren’t aware of the laws of buying and selling. I was looking to purchase a home from an investor. I had provided the contract and they had signed. After signing, they had seller’s remorse and decided that they didn’t have to sell. This is a violation of the contract and the seller could easily be sued and owe damages. Getting a real estate license, which teaches the licensee about contract law, would prevent this issue. Also, having a real estate license will not only allow a new investor learn what buyers/sellers are looking for, but can supplement your income by having your family and friends as clients.

The second thing to know is how to market for a property. I receive messages from people looking for help getting into investing. They often ask whether this or that property on MLS is a good deal and try to make bid on it, but then get frustrated when their offer isn’t accepted after waiting such a long time for a property to be posted in the first place. You must be proactive as an investor; create your own source of properties via lead generation. This is how you maintain a sustainable business.

Now, one of the most important parts is knowing the numbers, like ARV, rehab, and selling costs. I was speaking to an investor that was looking to sell their property; they partially renovated, but ran out of funds because they didn’t budget the renovation. Investors don’t want to pay for the work you’ve already done or run the risk of having to replace all the recent renovations. Make sure you know the numbers, because you can easily lose money.

The next item is a good contractor. Contractors are in high demand for renovations, but that doesn’t mean you should just pick one. I was speaking to an investor working on a single family in Massachusetts. The investor paid the contractor upfront for work, but the contractor did a poor job and disappeared before completing. Make sure that you work with a contractor that isn’t strapped for cash — and make sure to get reviews from the contractor’s previous clients.

Once you’ve completed the renovation, it isn’t time to celebrate — yet. You still need to sell the property. How you sell a property means whether you end up with a profit or a loss. If you’re working with a listing agent, you want to make sure they price the property correctly. The wrong price means the property will stay on the market for too long and can have dire effects on the offer prices. The listing agent needs to make sure the property is ready for showing by having the property spotless and inviting to live in. Finally, the listing agent needs to communicate with buyers. You can lose serious buyers as a result of poor communication.

What are the most common mistakes you have seen other people make when they try their own hand at house flipping? Can you share any stories?

When first starting out, many investors try to partner with other established investors to get going. I’ve seen first-time investors connect with an owner that wants to sell, but fail to run the numbers. They provide the potential partner investor the asking price and renovation costs, but the numbers show the investment will lose money. That partner investor became skeptical of working with that first-time investor. You want to maintain a good reputation in the industry.

From your experience, what can be done to avoid those errors?

In order to avoid these errors and keep your reputation intact, go through the same process for every property. Always find the ARV by running comps; calculate renovation costs, other expenses, and profit. This will give a maximum price that can be offered. If the asking price is way over the maximum price, the investor needs to reevaluate the deal.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

As a new father of a one-year-old, I’ve realized how important and expensive school is for babies and toddlers. Not only is there an affordable housing crisis, but public or subsidized daycare is also rare. Public/subsidized daycare has the potential to truly ease some of the affordable housing crisis, giving parents an easier time when going to work and a chance to actually make money.

How can our readers further follow your work online?

Readers can see updates on the company website (URL located in Ed Frowley’ Bio above) or on our facebook page. We have several blog posts and other work to read.

Thank you for your time, and your excellent insights! We wish you continued success.

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