An Interview with Danny Johnson a Full Time Investor
I recently had the privilege of speaking with Danny Johnson from FlippingJunkie.com, an experienced and very active real estate investor in the San Antonio area. Danny has been investing in real estate for about 10 years now of which 7 of them have been as a full time real estate investor.
Like so many out there Danny and his wife were neck deep in the grind of the full time corporate job and soon enough realized that type of life is someone else idea of making a living and not theirs.
Danny then started to have the kind of thoughts that I am very familiar with. He realized that the corporate job was not going to cut it if he intended to build wealth and reach financial independence one day.
So in comes real estate investing…
"We started flipping houses on the side..weekends, afternoons…"
Now, there is something I can relate to...
Danny is what I like to call an "old school" real estate investor. What I mean by this is that he was buying and flipping houses before the real estate market crashed in 2009 and before there were tons of foreclosures on the market.
Through a very consistent and diverse marketing approach Danny looks for, finds, negotiates and buys houses from motivated sellers. This is VERY different from what I have been doing and that is why I wanted to write about it here since the market is going back to this way of finding deals now that the number of foreclosures and bank owned houses are going down in droves.
Danny got started with his very first deal with the intention of doing a flip but it turned out to be a bit different...
He found a property by contacting the owner through his direct mail campaign. The owner did not live in the house, was behind on payments and did not have equity on the property so Danny tried doing a short sale (getting the bank to agree to sell the property for less than what is owed not he mortgage) with himself as the buyer.
Interestingly enough after weeks of negotiating the short sale did not go through but the bank offered to sell him the Note ( the actual mortgage obligation of a house and not the house itself). Danny bought that Note and then "flipped" the Note by selling it to another investor.
His second deal was a rehab. He says it was a fairly easy project, a "paint and carpet" job like we like to call it. He remembers that since he still had a full time job at the time he could only visit it after work but that he couldn't wait to do so.
"When you get out of work you are tired and you want to go home but when I was doing this I was excited about it and just wanted to go and check on it after work…"
It was this excitement (that I so clearly understand) for his own projects that made the light bulb in his head go off.
Being the smart guy that he is he quickly figured out that with real estate he was in charge of his work and his profits. While on the employee treadmill he was letting his boss/company be in charge of him.
Two years later after having several deals under his belt and still being employed his dream of becoming a full timer came true because he got the push he needed…by his employer laying him off!
Getting laid off made his decision to go full time into real estate a lot easier.
It's uncanny how similar of a situation this is to what I went through a couple of years ago after also being laid off and going full time into real estate.
Danny says of his layoff: "I was just ecstatic, finally I don't need to make that tough decision…" regarding the relief he felt of being able to make this transition.
He and I also agree that having a side-business regardless of whether you like your job or not is a smart move in this or any economy. Being able to have something to fall back on for producing income is a great resource.
In the second part of this interview I discuss what Danny is doing to find the deals that has allowed him to make a full time income with real estate. Stay tuned...