We are John Gerstenlauer and Scot Poirier and we’ve been on Planet Ron since 2015.
Prior to that, John was a Sr. Vice President of International Operations for the tenth largest construction company in the United States. John is a licensed Professional Engineer (Civil) with an MBA in Finance. He has over 40 years’ experience in the construction business, handling project management, cost controls, claims, contracts, accounting, finance, and corporate management. Most recently, John oversaw billions of dollars of new military construction work in Afghanistan, Iraq, the UK, Guam, and the US. Yes, John is the very definition of a Thinker Brain…..and proud of it!
Scot’s background has been in ministry for more than 30 years. He has served as a Youth and Family Minister in his earlier career and served as a pastor for two churches. His work has led him overseas to Europe, the Caribbean, and South America. At heart, he is an educator and a lover of people. He has served in prison ministry, inner-city ministry, and helping to feed the poor and marginalized through his gift of leadership and his ability to grow organic food in a large-scale volunteer garden.
John and Scot met about 20 years ago in a church in Massachusetts. One day John asked Scot if he would be interested in using his IRA to invest in real estate. John had learned about using self-directed IRAs for investing in real estate. Scot was enthusiastically interested, so they pooled together IRAs (including their wives’ IRAs) to buy two multi-family properties in New Hampshire.
Shortly after, they purchased another multi-family property using their own (non-IRA) funds. Scot and John still own these properties today. These properties are cash-flowing nicely and the traditional bank debt is shrinking with the passage of time.
Having been bitten by the real estate bug, we hungered for more ways to make money in real estate. As fate would have it (or not) we met Derick Van Ness through networking with other entrepreneurs. Derick asked if we ever heard of Ron LeGrand and highly recommended we join Ron’s Gold Club and attend one of Ron’s events.
We immediately joined the Gold Club and within 6 months attended our first Quick Start Real Estate School in San Antonio, Texas. At the same time, we were doing our first Ugly House renovation project in a joint venture arrangement with an experienced local contractor.
What a ride that was…….so far!
At the Quick Start school, our lives changed! Ron filled our heads with all kinds of new, creative ways to make an honest living in real estate. We had no idea that the “honest living” would one day turn into an “honest fortune”! We were so excited at Quick Start, we signed up for Ron’s Master’s Program and were fortunate to have Brian and Lynette Wolff and Todd Foster as our mentors. We worked our butts off while holding full-time jobs, and we learned and learned, but… to use Ron’s words – WE SUCKED! Yes, it’s true. There was a time when we really SUCKED!
But we were not about to give up!
Yes, we REALLY sucked, but we were stubborn and determined to make this Terms thing succeed. So, we kept at it, sending yellow letters, calling FSBOs, putting out bandit signs – and finally, our determination paid off. We got some pretty house deals, plus a few work-for-equity properties and the cash started flowing back in, not out like previously. Slowly, at first, but it inevitably grew, and we knew we were on our way from eating rice and beans to steak and lobstah (as we say in New England!)!
There was one property that we visited in Massachusetts where the owner was willing to sell for what he owed. When we got there, Scot was like a kid in a candy shop – so excited to be the next owner of this fleabag! That’s right, it was a fleabag, literally! The house was full of fleas, was a mess, and needed a lot more than “work-for-equity”. This was a “work-for-your-life” deal, but Scot was excited about it. John said, “no way, we’ll never be able to get someone to buy this piece of crap from us”. But, seeing that there was no risk to us (thanks to Ron!), we signed a Purchase and Sales Agreement with a delayed closing and started marketing the property. Not too long thereafter, a married couple contacted us and wanted the house. The husband was a pretty handy guy and was able to take care of what John saw as “major issues.”
So, here is the structure of that deal:
Massachusetts – Subject To
Comps = $210,000
Purchase price = $141,250
PITI = $1135
Option price = $219,900
Rent = $2000
Non-refundable down payment = $15,000
Front end profit = $15,000
Monthly cashflow = $2000 (rent) – $1135 (PITI) = $865
Back end profit = $219,900 – $15,000 (NROD) = $204,900 -$141,250 (mortgage balance) = $63,650
$15,000 + 63,650 = $78,650 + 865 monthly cash flow + paydown of mortgage
Scot smiles and John is humbled!
And we got creative with our Transaction Engineering!
On another Ugly House deal, Scot negotiated with the owner to sell us his house for a little more than he owed, keeping the underlying mortgages in his name while we renovated it, increasing its value by a substantial amount. Here is the structure of that deal:
New Hampshire – Ugly House
ARV = $575,000
Purchase price = $220,000
PITI = $2,500
Transaction Cost = $42,000
Holding Cost = $35,000
Renovation Cost = $150,000
$575,000 – $220,000 – $42,000 – $35,000 – $150,000 = $128,000
We think we can, we think we can, we think we can…
WE KNOW WE CAN!
As we got better and better at calling sellers and buyers, we joined the ranks of Ron’s Masterminds and benefitted tremendously from that close relationship with Ron and other like-minded business people. Those great relationships continue today.
Keep learning, or FAIL!
Ron recognized our dramatically improved capabilities, determination, and indomitable spirit, and invited us to become Mentors in his Mentoring Program.
We started off with only a few students to get our mojo going, guiding others through Ron’s systems. Yes, even Mentors continue to learn.
At first, Scot handled all student calls and John answered the contract and other technical questions (always the Thinker Brain!). Now, both Scot and John are doing student calls helping more of Ron’s students get their businesses up and running and growing their wealth.
We love to share our experience and challenge our mentor students to, Never, Ever, Ever Give Up, so they too will enjoy the successes available to them on Planet Ron.
John Gerstenlauer and Scot Poirier