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Real Estate Investing For Pennies On The Dollar With Danielle Pierce

 

Some think that you need a hefty sum in order to start investing in real estate. To break that notion, Danielle Pierce joins Moneeka Sawyer in this episode. Danielle is the founder of Real Estate Profit Lab, which focuses on tax liens and property preservation. Here, she talks about her strategies on how you can start investing in real estate with minimum capital the way she’s always been doing it. Danielle also shares her wisdom and insight on what you need to identify when thinking of starting your own entrepreneurial journey in order to maximize your chances of success.

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Listen to the podcast here

 

Real Estate Investing For Pennies on the Dollar with Danielle Pierce

I am excited to talk to Danielle Pierce. She is a graduate of the University of Illinois at Urbana-Champaign. Danielle has an Accounting degree, which she has not utilized in over twelve years. She began her entrepreneurial career after a sudden layoff from her corporate audit position. This is one of those things that happen so often. We think our jobs are stable and then we get laid off or something happens. This is a great story for you, ladies, to take in. Danielle took this as a sign from the heavens that she was meant to be a full-time entrepreneur. Although she did look back at a time or two, she has held onto the reins of entrepreneurship and never plans to let go. Danielle’s online courses and group training programs teach aspiring business owners how to establish and grow profitable six-figure enterprises within the real estate industry outside of sales. Danielle is a proud member of the Forbes Real Estate Council. Danielle, welcome to the show. How are you?

Moneeka, it’s awesome to be here and thank you for having me.

I’ve been ready for this conversation because your topic is so awesome. We’re finally chatting. Tell us a little bit about your story. How did you get into this?

The quick and dirty version of my backstory was like a lot of people, I had the idea that I was going to go to college, get a job and break the glass ceiling. I wanted to be a partner in a public accounting firm at the time, which when I was doing my accounting degree was the big six. Now there are only four. That shows you how old I am. I started working and I did not like it. I hated it very early on. I would go to work and people would be there complaining about how much they didn’t like their job, their bosses, and their coworkers. They’d been there for years. I said to myself, “This is not going to work for you.” Long story short, after I left one position, I went to another job thinking it would be even better or somewhat less boring. I left public accounting to go into internal audit and it was the worst thing ever. I was like, “This is so boring. I hate it here.”

It’s funny because your personality is so vibrant. I can’t even imagine you in accounting or auditing.

I was working at Equity Office at the time, which was owned by Sam Zell, who used to own a bunch of stuff in Chicago. He’s a famous Chicago billionaire and they were doing layoffs. I was like, “I want to be laid off from this job. I want to get in that pile and get the severance package because I’m ready to be an entrepreneur.” I got what I asked for and then I wasn’t ready. It was awful for the next five years as I struggled to try to figure out what being an entrepreneur even looks on a day-to-day life. I had these ideas in my head. They were far out of alignment with reality that it wasn’t even funny. It took me a lot to figure that out. When I finally did start to figure it out, I would never go back to being in corporate. That’s why I say I’ve held onto the reins for many years. That’s my plan.

It’s interesting because it is true that once you’re out, no matter what you go through, the entrepreneurial journey is not an easy one. I always say it’s the best personal development program in the world. It asks you to step forward to be your very best self. You have to grow. Even so, no matter what challenges you go through, it’s gratifying. You never want to go back.

I agree with that wholeheartedly. It’s hard to go back. Once you have freedom, you can’t go back to asking for permission to go on vacation. I’m not there anymore.

The other thing is when I have tried to go back, I wasn’t able to grow as much in the position when I was under somebody else with their expectations. Their expectations are very different than my expectations of myself. It felt very limiting also. I always tell my ladies there are a million ways to make $1 million in real estate. Talk to me a little bit about tax liens versus flipping versus wholesaling and what your favorite is and why.

I’ve been in real estate for many years. I’ve tried a bunch of different things. Initially, I did like a lot of people. I had an idea and I would say, “I’m going to do that.” I would start it, it got hard and then I would stop and do something different. I did that for the first four years or so. I was like, “I’m going to do short sales. I’m going to be working with buyers. I like helping first-time buyers.” That definitely was not my ministry because for me, buying a home is very transactional and straightforward. For most people, there’s a lot of emotion involved.

Once you have freedom in the entrepreneurial lifestyle, it’s hard to go back to corporate. Share on X

As a real estate agent, you’re like a marriage counselor/social worker and all these different hats you have to wear in order to close. If you don’t close, you don’t get paid. I was like, “This whole model is not working for me at all.” I stopped working with buyers and I said, “I wanted to work with sellers and help them sell their home.” It’s also very emotional because people think their home always is worth more money than what it’s worth. I got tired of that. I tried to do loan modifications. I partnered with a company that helped people do loan modification. I was a dabbler and now I look back and I’ve realized that dabbling is not the way to go. Not just in real estate but in anything. You have to focus on one thing. I tried all those things and I had mediocre results at best. I finally decided that I was going to stick with the repairing and maintaining the bank-owned properties. Also, tax lien investing came a couple of years after that. That’s been my path. It’s always in real estate but I never focused until about 2013 or so.

How do you find the bank-owned properties?

In order to do that particular business, you have to have a business of your own setup. There’s a background check that you need to complete. It’s the criminal background check. It’s not credit-based. There are 3 or 4 different types of insurance that you may need. The fourth one is workman’s comp insurance, which you may or may not need depending upon where you live and depending upon the company that you choose to partner with. From there, you’re applying. There are about ten national companies that are pretty solid, pay on time, no issues with dealing with their contractors and pretty straightforward companies. There are dozens if not hundreds of other smaller local mom and pop companies where you’ve got to stay away from. You want to get a contract with a national company. From there, you select a covered area that you want to cover. It can be a specific county, a set of zip codes or the entire state. All the work that those properties need in your assigned area is work that you can do if you’re well-versed in working in the field or you can hire a team to do it for you.

The companies that you are working with, they’re the people that have access to the REOs?

That’s correct. It used to be back in the day that you would work directly with say Bank of America, Wells Fargo or Chase. As you know, this is the outsource, information, digital age/economy and all of the above. What those big banks have done, they outsource everything to what’s called servicing companies. My contracts are with servicing companies. The people that I help and work with also get their own contracts with the servicing company. That company has the authority to handle everything for that property, including the sale of the property. For what I do, we don’t do the selling part but we get it ready for sale. Once it sells, it moves over and then we find another property, and rinse and repeat.

I’ve never heard that strategy before. Is that one your favorites or is the tax lien one your favorite?

The property preservation is my favorite. Tax lien investing is my favorite too though. The thing that I love and hate about tax lien investing is that there’s a lot of hurry up and wait. For tax lien investing, you pick the areas where you want to invest, and then you say, “The auction is on this day. I’m going to Chicago to register for a sale that’s happening in Indiana in April.” Now I’m going to go register. The list is out. I’ll search for properties and then I’m waiting until the sale. The sale comes and everything’s supercharged and all this adrenaline. You then win a bid or if you don’t, then you’re waiting again for the redemption period to pass. There’s all this excitement and then wait. At the end of the day, you’ll either have a property free and clear or you won’t have the property, but you’ll receive back the money that you paid, plus whatever the statutory interest is, plus attorney’s fees as well.

Is it possible that houses go on sale for auction for $500?

It is. The one that I’m going to in Indiana, the starting bid is $500 and that sale is April 7th through the 9th. There are only about 700 properties on the list and probably 10,000 what are repeat properties that have been through multiple auctions. When you start digging into some of these auctions that take place, you’ll find that some properties run through the auction over and over, which means that no one wants the property. The highest I’ve seen is nine times it has been up for sale and nine times, no one has bid on it.

In the EXTRA portion of the show, we’re going to do a real deep dive on the specific steps on how to get started. Can you give us a high level on what’s the best way to get started in real estate, doing what you’re doing?

 

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