A's to Your Biggest Q's on Wholesaling Houses for Quick Cash
Hey, so if you have a finger (or two) in the proverbial pie of wholesaling houses for quick cash, then you'll really enjoy and appreciate this.
Here’s the deal in a nutshell:
Just by being ‘out there’ in the arena, we tend to get a wide and steady stream of awesome questions coming our way all the time. And as you might imagine, these questions can run the gamut of just about every facet of real estate investing you can think of.
But it’s probably no big surprise to hear that, hands down, we get more questions about wholesaling houses than anything else – by a wide margin actually.
And sure, we do our best to help out by answering as many questions as we can. But at the end of the day, there’s only so many hours and only so much we can do fielding questions one-to-one.
Which is precisely why we were struck recently with the idea of hosting a live, ‘anything-goes’ webcast for some frank back-and-forth on the topic, and invited as many people as possible along for the ride.
Well based on the response it went off extremely well and filled in more than a few ‘knowledge gaps' for the folks who were able to join us. Unfortunately, many who wanted to, simply couldn't for one reason or another.
If that's you and you missed the boat, then great news–it's swinging around for another pass! You'll find a replay of the whole shebang here for you below.
You, me, and the unrelenting 3rd degree…
For starters, understand that we kept this intentionally simple with no agenda whatsoever, except for offering straight, unfiltered answers to as many hard-hitting questions on wholesaling houses as we could possibly fit into our time together.
I've wholesaled hundreds of houses myself over 16+ years and it's kind of my jam. But because no man is an island (and also I like doing stuff with my friends) I invited Smooth Operator Justin Wilmot to join me for this, and together we tackled every head-scratcher you guys could toss at us for 90+ minutes.
If you don’t already know Justin, he’s a surfer dude turned real estate investor from Flagler Beach, Florida, and also happens to be our resident “10-Hour Wholesaler.” He drives an impressively lifestyle-centric business focused on his own unique flavor of wholesaling, does deals in multiple markets monthly, and with only around 10 hours or so a week of his time and effort.
The guy literally figured out his own bass-ackwards way to make a great living wholesaling houses and spend as much time surfing and goofing on the beach with family and friends as possible. (Side note: It's funny how some things just don't seem to make sense together, till one day someone comes along swimming against the tide and makes it happen any darn way, ya know?)
Anyways Justin and I have been friends for years now, so on top of answering questions-o-plenty, we also quipped, wisecracked and imbibed a good time together. Because that’s who we are, and because, whythehecknot.
Some stuff we tackled to give you an idea:
⇾ The skinny on “virtual wholesaling” anymore
⇾ Making strong offers, with the right paperwork
⇾ Is wholesaling becoming illegal or considered fraudulent in some states?
⇾ The sticky subject of agent/investor relationships
⇾ Can you still legally wholesale another wholesaler’s deal?
⇾ How double closings really work in the real world
⇾ What the heck is a reverse mortgage and can you wholesaling one?
⇾ What should your bottom line wholesale profit margin be?
⇾ How should wholesalers handle earnest money deposits?
⇾ Should EMDs be made out to the seller? Title company? An agent?
⇾ Should wholesalers say they’re selling “houses” or “contracts”?
⇾ What’s an Affidavit of Equitable Interest? (and why should you care?)
⇾ Are there certain places I shouldn’t be advertising my deals?
⇾ Do I really need a team to help me, or can I do this all by my lonesome?
⇾ And, yes, even more wholesaling stuff…
But look, here's the bottom line
We’re not rock stars. We’re not celebrities or geniuses or wizards or anything. We put our pants on the same way you do every day.
But we do have a pile of real-life investing experiences, including some of the hard-learned lessons from the old school of hard knocks. And we’re more than happy to bring these things to the table for you in our live wholesaling Q&A jam session.
So with that said…
Let the bean spilling begin…
Pro Tip: This is a full webinar, so if you're short on time or attention span, feel free to use the lower-right “gear” to speed it up and watch faster… Or slow it down to hear us sound drunk if you want. Cause that's always fun.
JP Moses: Tonight is all about answers to your questions on wholesaling houses for quick cash. I am JP Moses and this guy is the 10 Hour Wholesaler, Justin Wilmot.
Justin, I want to thank you for being here, my friend for being a part of this with us.
Justin Wilmot: Yeah, I'm stoked to be here… any opportunity to give back, I'm always for it.
JP Moses: Okay, couple things I want to go through… just some housekeeping to make sure that we're all on the same page with a few things. First of all, what is this all about?
Well, tonight we're going to give you straight answers to your questions about wholesaling houses or really about anything… you're going to hear a little bit more about the two of us—we both have an extensive, rich history wholesaling houses, but also experiences doing other types of deals as well, so nothing's off the table.
We're going to share openly tonight. Justin, don't hold anything back. You’ve got to open up the Kimono tonight. We're going to share our real-world experiences.
I do need to give an important disclaimer, though: I'm not an attorney. Justin is not an attorney.
You need to consult with your attorney and your legal professionals before you take any of what we share tonight as the Gospel truth or you take any action on it.
We're going to really just shoot straight with you and be honest. We're going to answer from our own real-world experiences and what's worked for us and maybe some of our friends and colleagues in the industry that we've known and walked this path with.
But before you take any action, before you take any inaction, based on what you hear us talk about, please consult your attorney and your professionals. Thank you very much. Legal Disclaimer, closed.
We want to inspire you… we want to motivate you… we want to sharpen you… we've got nothing for sale. I'm not going to ask you to pull your credit card out or anything like that. So just keep that in mind as well. This is really just about giving to you.
So, who the heck are we?
Well, I'm JP Moses. I'm a lifestyle-driven, family-focused, faith-centric dude. I've been in real estate investing since about Y2K, and I’ve been a wholesaler since 2002. I have completed somewhere north of 400+ transactions…
I don't think that number is ever going to change because I stopped counting a long time ago, so it could be more than 500. Yeah, a bunch of transactions.
Currently, I’ve got a wholesaling operation in the Memphis area. We do about 3–7 deals a month on any given month. That can vary, you know, we might do more than that in a month. And then like last month, we closed zero deals, which was painful, but it happens. It's the nature of the beast.
But we have a lot of fun here with our wholesaling company in Memphis, and I am also El President of AwesomeREI.com. (If you don't know what that is, more about that in just a moment.)
So let's talk about the 10 Hour Wholesaler: His name is Justin Wilmot. He flips loads of houses in a billion different markets. (Actually, I don't know the right number, I might be exaggerating a little bit there.) So how many markets are you actually wholesaling houses?
Justin Wilmot: I don't even know dude. Plenty.
Last I looked, the account was 11. It was brought down to 11, and we're really focusing on the Southeast region right now.
JP Moses: So you're in 11 markets, and you guys do a bunch of deals and you have a great operation. And you don’t spend a dime marketing for seller leads, which is pretty interesting when you think about it for a wholesaler—not something you hear every day.
And for those of you who are interested, I'll mention this again at the end, but maybe just want to write this down. Don't go there now, but just make a note of this maybe on a scratch pad or something. tenhourwholesaler.com/presentation.
If you're interested in hearing more about Justin's business model, his 10 Hour Wholesale business model, which is worth hearing about in my opinion, you can find out more. He's got a video presentation there and there is some training available, and you can just see if it's something that's a good fit for you or not.
We're not here to pitch you training specifically… but I know we're going to get people asking—once they have a chance to get to know Justin a little bit—how to learn more about what he does and the way he does it.
Justin Wilmot: What's so cool about my presentation is that it's like a rinse and repeat. Just got back from the exact same place I talked about in the presentation: Costa Rica… doing deals while I'm there.
JP Moses: You’re a lifestyle businessman…
Justin Wilmot: We're here to inspire. That's what it's about, man.
JP Moses: That's right…
So, what is AwesomeREI? It’s is a shiny new place, with a philosophy of a way of learning and being in the real estate investing space.
We call it real estate investing for awesome people.
Patrick Riddle is our head honcho, and I with him at AwesomeREI. Justin is a part of our faculty and team too. And we have a few other people who are part of the team.
The best way to quickly give you—in a nutshell— what AwesomeREI is about, is to share with you our 12 Awesome Do's. This is part of our company philosophy. (Wwe also have like nine 9 Don'ts and 10 Awesome's, you can go to AwesomeREI.com to check them out.)
Let me blast through them real quick…
This is what we stand for, these are our 12 values:
- Always care.
- Always have fun.
- Always keep it real.
- Always have an abundance mindset.
- Always be students, not just teachers.
- Always keep improving, learning and growing.
- Always be grateful, not just for the good stuff. You can learn a heck of a lot from the hardships as well.
- Always have a positive impact and build people up.
- Always respect people enough to just be honest. In other words, doing to others as you would have them do unto you.
- Always learn from your mistakes, which is a huge, huge lesson.
- Always give first. (And really that's a big part of the spirit of what we're doing here tonight, we just want to give and add some value to your lives.)
- Always be awesome.
Why are we here tonight? Because of our values… because you're awesome… because of our shiny new plan of awesome.
Starting now, there's gonna be a whole heck of a lot of great stuff. This webinar is just the kickoff of a lot of stuff that's meant to pour out value to the real estate investing communities.
Those of you guys who are part of our tribe… part of the crowd… part of the awesomeness that is within our reach…
We want to help you become a better version of yourself and we're going to do that in the same ways that we always have. Plus we're going to begin dispersing Knowledge Bomb trainings.
If you don't know what a knowledge bomb is, well, we have to have them available AwesomeREI.com right now. We’ve got one that like 33 killer ways to get cash buyers… basically, if you need cash buyers, you'll get all the cash buyers that you ever need from the Knowledge Bomb that we have posted on AwesomeREI.com.
We've got another one that is a secret awesome sauce for the MLS. Basically, the 47 awesome keywords that you need for your MLS searches.
And we have a lot more of those coming on a regular basis.
We’re also are starting a podcast in the near future, the Awesome REI Tips podcast. It's going to be short episodes designed to give you laser-focused tips, so you can digest it and move on. Swipe and deploy, as we like to say.
One of the things that we've been doing for our inner circle has been sharing documents… checklists… forms… and marketing pieces that are working in our business. We've shared them with a small group of people for some time.
We're going to begin sharing some of those with the public—with you guys.
In fact, we have one, that's going posted on AwesomeREI.com. It's postcard—a handwritten postcard that I have been testing in my business. I'm going to give it away to you guys. And, we're going to continue to give away things that you can swipe and deploy in your own business.
Live AwesomeREI classes like this… that's what this is. This webinar that we're doing right now is part of our new rhythm on a monthly basis on the first Monday of every month, which is what we're on right now for May. We're going to do a live webinar.
Sometimes it'll be a Q and A. Sometimes we'll have something specific that we want to teach to add value to where you are in your business at that time. But we'll have different special guests… Justin's not going to be here every time (sigh, tear).
I'll be here most of the time. Patrick will be here some of the times. We'll have lots of special guests, but the first Monday of every month we're going to be doing these for at least an hour, maybe more.
So, go ahead, put it on your calendar. If you want to tune in and be a part of the awesome, it all happens AwesomeRRE.com.
Alright, Bruce Lee said:
“A wise man can learn more from a foolish question, but a fool can learn from a wise answer.”
So, what does that mean?
I honestly have no idea!
But to me, what it reminds me of is that there are no stupid questions.
This is not just for experienced investors. It's not just for new investors. This is for: no matter where you are in your business, whatever kind of question, you got to toss it out. There is no dumb question, no matter how basic or how seemingly advanced it is.
I'm not saying we know everything, but like I said earlier, we'll do our best to answer your questions or point you in the right direction of somebody who can. So let's jump into the Q and A.
We're going to start with Alex de Burke. Alex says:
“I'm in a hot market—Salt Lake City… made 100+ offers over the last 10 months only 2 acceptances, which I couldn't wholesale. No one wanted them. Should I consider trying virtual wholesaling in an easier market? What makes a market good or bad?”
Okay, Justin, definitely gonna bring you in on this first because you do a lot of market research for the different types of markets that you're in.
Justin Wilmot: Tap me in coach! I hear this one a lot. Alex, I completely resonate with you. I completely understand what you're talking about mainly because of all the coaching I do with people…
There is no market that's the yellow brick road—that just doesn't exist. There's no golden market.
I have people who say the same thing to me in Memphis, Tennessee, and Atlanta, Georgia or Miami… or Jacksonville, which was voted last year as the #1 rental market in the country for anything under $100k. Those are really hot markets, and people say, “I'm having difficulties. Where should I go? What should I do there?”
So first off, the idea of there being an “easier market” doesn't exist.
So that means that you need to change your approach. What I’d do is stop trying to get properties under contract for .50, .40 cents on the dollar. It's worth $100,000!
The idea of this formula: 70% or 75% of ARV minus repairs minus the profits you want to make is the offer that you need to make… is a myth. Here’s why…
It would mean that if the property is worth 100k, you would make an offer for $70,000 minus the repairs. So, let's say $10,000 repairs. (Which is rare. It's more than that typically.) So now you're at $60k… and if you just want to make $10K, you're down to $50k.
And we're not even talking closing costs!
So, $50k for a $100,000 house in a seller's market, (it's 2016), and nearly everybody has this formula in their pocket… and if they don't, there’s the Zillow app or anything like it. Their neighbor has it! The neighbor that they talked to and hanging out with when they're in distress…
And look, this is my opinion because I'm on the ground all the time and so is my team. I believe that in a seller's market—where everybody has technology at this point… where they get an idea of their home's value, no matter the situation that they're in—it becomes difficult to get it for $40,000 and it's worth 100.
And lot of people can even conceptualize… I'll call a Realtor and list it for $90k, and I'll get some traffic.
But what I say is use a “justified offer,”—change your approach.
I’d say to the seller: “I agree with you, Mr. Seller. So those two offers you had, I agree, it might be worth $100,000 listed…”
And then I go through what I call a justified offer, where I show what they'll actually get when they list it for $100,000 minus the time, minus the Realtor fees, minus closing costs… and $XX is the net to the seller.
Because we're doing deals, I can actually show people a HUD statement for deals that I fix & flip, where I say, “Look, here's what I listed it for and here's the offer I finally accepted, in this amount of time… and when I finally went to closing, here's the number I got. Definitely not the number that I talked to you about with the Realtor.”
And that's the life in every market, every state across the country!
So, change how you approach speaking with sellers—try to find a common ground where you are providing value to them.
When you’re working with buyers…they need a certain price to get the financing on the deal. Especially, if buyers are using private money—they’re not going to get into it if the numbers aren't right. The buyers might beat you up. So who do you reach out to? The guys that are spending a full price. They're out there, you’ve gotta look for them and find them.
JP Moses: Yeah, so some additional thoughts as well…
One of the things you don't say here, Alex, in your question is how you're making those 100 offers that you've made. If you're in the MLS firing offers to properties listed in the MLS, that's one thing…
If you're going belly to belly with motivated sellers who have responded to some kind of direct mail campaign or some kind of marketing that you've got out there, and you've made 100 offers to them and only 2 accepted… honestly, that doesn’t seem possible, frankly….
So, I have a feeling that the offers you're making are not you making offers and bringing sellers in… and here's why I think we should explain the difference between your business and my business, Justin… I think some framing here could help.
I'm going to go out on a limb and try to describe Justin’s, but then you fix anything…
Let's say Justin is going to go into a new market that he's not in. He's gonna reach out to cash buyers first, typically, and he's going to make a connection with them. And as a professional wholesaler, he's going to find out what kind of deals they want—exactly what they're interested in:
- zip codes
- types of properties
- price ranges
- get inside their head and understand what they want
Then he's going to go shopping for what they want, like a personal concierge in a sense, and he's going to start presenting deals to them that match what they're looking for. And he's going to use, to a large extent, other wholesalers inventory who don't know how to market their deals as well.
So, Alex, you might want to consider taking a similar approach: Find out what the people who are your buyers really want, what a good deal looks like to them. Then you ought to be able to either find other people who have properties and other wholesalers, for example, and cut yourself into that deal through joint venture, which is Justin's specialty. Or you ought to be able to base the offers that you make on what you already know your buyers are looking for.
Justin, is there any part of that that I misspoke or that you want to clarify?
Justin Wilmot: No, it was pretty good, buddy!
JP Moses: Okay, I do what Justin does, but it's not the main focus of my wholesaling business like it is in Justin’s business.
We do joint venture wholesale deals, we've been at it for a lot of years, though—so we just have a lot of buyers. And we also have a lot of marketing that’s going out there consistently.
Alex, I think one of the best things you can do if you're not doing it already, is market for motivated sellers. Do some direct mail.
I don't know if you're familiar with this statement or not: The harder the list is that you're marketing to, the more valuable it is because it's not already picked over by other wholesalers.
So, a lot of wholesalers will go to ListSource.com and they'll pick up a list of absentee owners and they'll mail a postcard to absentee owners…
You can get some deals that way, but you're competing—that's what every real estate wholesaler is trained to do. You're competing against A LOT of other people.
- We're getting some of our best deals from probate. We're mailing consistently to probate. We send a sequence of 4 letters a month a part to probates.
- Abandoned houses are serving us really well right now. We're getting absentees, but it's only in our top 15 zip codes and people who owned the property for more than 20 years. So we really niched it down. That's another good list for us.
- We're sending out to a list of where the properties are defaulted on their taxes and they have property violations both together. So you talk about a good distressed seller… they have a housing code violation and they are defaulted on their taxes.
We're sending postcards and letters out to them, those are some of the lists that are bringing sellers to the surface the best for us.
I would wager that in your market in Salt Lake City, if you were to do some of that after finding out what your buyers are into, you're going to find some stuff that's going to be a good fit for them.
I think something else to consider—Justin, do you ever experiment with putting handwritten bandit signs out in the neighborhood of your properties even though you probably have a buyer?
Justin Wilmot: Yeah, we do—I mean not all the time, but we do it frequently.
JP Moses: Now I'm talking about signs to sell a house, not “We Buy Houses” signs.
Justin Wilmot: Yeah, I don't do “we buy houses” signs, I've never liked them. In the very beginning when I tried doing them, I did an insane amount… I got horrible results with those—but I've only gotten phenomenal results with cash buyers.
JP Moses: Well, I'm embarrassed to admit it, but for years (and we've never done handwritten bandit signs to sell any of our houses because I had cash buyer), I was like, I'd rather sell it with a text message to one of my cash buyers then go put signs out.
But, we brought on an acquisitions manager recently, Chris. And I thought, “Well, I'm going to try this out, let's just see what happens.”
And we had some of what I call a little “doodoo” properties that we had option contracts on that none of our cash buyers were interested in. They were crappy houses in crappy neighborhoods—like licking, the bottom of the ash tray of our real estate market.
So, we told Chris to go put our 3 or 4 signs in the area around the property that say:
“Must sell, please buy my house. Desperate. $13k or best offer. XXX-XXXX”
The signs weren’t in the frontyard of the property, but just around the property.
The phone rang off the hook! We ended up selling a lot of those houses and making like little $2,000or $3,000 profits on them.
But it was from people who lived in the neighborhood… or had relatives in the neighborhood… or they drove through that neighborhood on the way to work. So they're willing to pay more for these properties or even buy properties that my cash buyers wouldn't touch or my cash buyers are going to pay next to nothing on.
So, we now have a system of always putting signs out at every property—even if we have a cash buyer. Even if we've got it sold, I want some signs out there for 2–3 days, because I want those people calling—because we are systematically adding them to our cash buyers list.
Justin Wilmot: That's something I don't do—even when I have it soldI don’t put the sign out anyway just to get leads. I'm taking notes along with everybody else!
JP Moses: So, Alex, I would suggest on these properties that you put under contract that you didn't end up successfully selling… do some handwritten bandit signs. That just screams motivation. Just white corrugated plastic, big fat Sharpie marker. When people call in, just say, “Yeah, I'm desperate to sell this house, what's the best you can do?”
And see if they can't move on them that way for more money than you would with your qualified cash buyers.
Justin Wilmot: They are obnoxious, but they just straight up work.
JP Moses: So, Steve Madison asks: What's the lowest spread you would do on a wholesale deal?
Justin Wilmot: I don't walk away from money.
JP Moses: Do you have any kind of a threshold where it's like, we need to see at least this much margin in order for it to even be worth our time to try buy?
Justin Wilmot: Yeah, for sure. If it's a wholesale deal that we're controlling, and we're doing direct mail campaigns in one of our own target poor markets, which we still continue to do like crazy… for me, that's $10 grand.
But if I'm like doing a joint venture deal… it's a couple of emails in 30 minutes, we'll do $500 bucks on a JV.
But for a wholesale deal that I'm doing, like you were just talking about… and we're doing direct mail and putting money into it and my entire team is working on it—I’m paying my 3 full-time staff—$10 grand is the minimum.
And I say, if you aren't 100% sure that you can get at least $XX for it, or negotiate on the sales side for this, or at least we have a buyer who’s ready to rock and roll and already given you the thumbs up and ready to put a deposit for $XX where there's at least a $10k spread… figure something else out.
So, if you’re a one-man band and just want to make $5k, they can. But when you start running a bigger business, you have to think like that.
JP Moses: I think the metric there is: it all depends on how much of your time and effort is required. Because if it’s like your joint venture deal, for example, if it's just a phone call or an email or two, then $500 bucks is $500 bucks, right?
And it's great money for the amount of time and effort that you put into it.
And I'm the same way. The deals that are $500 bucks or a grand, those are for the really urgent. But it's just like we're just phoning it in, like we're going to barely try and whatever comes to the surface we're going to work with.
But if we're going to work a deal, and we're putting time and manpower into it… we typically aim for $10k, and we want to see at least s$7k. Do we make less than that? Yes. Some deals, once you get entrenched in a deal, you don't really just want to throw money away so you stick with it and you make what you can.
Justin Wilmot: Another tip: always consider, can you renegotiate? Did you find some problems with the property?
Don't do any crazy or shady, but if there's a legitimate problem that you didn't see, bring it to light—that would happen in any other transaction when selling retail and they get an inspection.
So, bring it to light. Ask for a discount on the sell side. And, do what JP just said, do more science and see if you can find a better buyer, because people can find themselves in this predicament.
We've been thinking, “Oh man, I was going to make $10k, now we’re making $3k.” Well, we've been in that place many times and will be again, and all you do is just get down on the sell side or up on the buy side with a new buyer. We negotiate the sell side. If it's legit, there you go. Make yourself a better profit.
JP Moses: Uchay asks: What if I get a house under contract and I don't find a buyer before it expires?
My answer to that, Uchay, is—when I walk into a deal and I would recommend that you follow a similar process here when you walk into a deal… part of the conversation with our seller is that this contract is contingent upon an inspection for the repairs to verify that the numbers are as they appear to be, and contingent upon approval by our funding partner.
Funding partner is the word that we use to mean our cash buyer. Any cash buyer who we work with is a funding partner on the deal. We don't try to explain wholesaling or how wholesaling works most of the time to motivated sellers because it would confuse them…
And a confused mind says no—but people understand partnerships.
So, if it's contingent upon approval by your funding partner and you can even say:
“We have a number of people we use as funding partners on different deals, and I'm not sure which one is the right fit for this… I'll probably have to show it to 2 or 3 of them to see which one’s really going to be the most interested.”
What a great way to frame the scenario with your cash buyer. Once you send your cash buyers out there to take a look at it, you better sure as heck find out what price they would be interested in if they say, “No, I'm not interested.”
Justin Wilmot: Do it, people. Write that down in big, bold letters.
JP Moses: Because why, Justin? Why do you need to find that out?
Justin Wilmot: Because they're the market. They're telling you what that property is worth, not what you think it's worth.
JP Moses: And that's what you need to go back and renegotiate with the seller. If that happens, if you get 3 or 4 buyers there, and they're just turning their nose up, you say: “Well, that's fine. If, for some reason, I'm not able to sell this, if I have to go renegotiate this with the motivated seller, what is the right price for you? What price would make you want to move forward on this?”
You find that information out and go back to your seller and say, “Hey, I'm sorry I was off here and none of my funding partners are interested… we're just not seeing eye to eye on this. So the most that they're willing to fund here is $XX.”
And you use the information they gave you to renegotiate. That's really the bottom line.
Justin Wilmot: Dude, bingo! I couldn't have said it any better.
And I would like to add, only because this is fresh, I just had a coaching client of mine ask about this: Are they comfortable being called funding partners?
First off, look, there's a lot of things out there that are said—like advertising for tobacco and cigarettes and things that kill you… we’re doing things that are going to help people and providing a service for something that somebody wants.
Second off, they are your funding partners. You don't understand that when you haven't done a deal, but when you look at the contracts, if you do a simultaneous or a double closing is disclosed in the closing contracts, and they're funding your deal, that's your funding partner in verbiage.
So, I just want to remind people if you think that, it'll come off when you're negotiating, and you're going to find wholesaling more difficult. So, don't let that happen.
Know the truth. Know it is your funding partner and get the deal done… and be confident about it because confidence comes off when you're talking to people.
JP Moses: We have a question here from Saji Abdul Wiley who asks: I need more cash buyers, where do I find them?
Rather than dig into that, I'm just going to go to the blog on AwesomeREI.com and point you to this Knowledge Bomb: 33 Ways to Build a Ridiculous Cash Buyers List. So check that out and you will have so many of them!
Justin Wilmot: Do you know who I've been using since that blog post? The Section 8 and Social Serve stuff. We have been crushing getting leads there. Not every market has a bunch of them, but they're so good.
I’ve got a little tip: A lot of times, the quality stuff is NOT in the big list that everybody knows and talks about. Like you had mentioned, too, with absentee owners and inheritance lists—that’s a small list, even if you're in a big county.
But man, it ain't about how many times the phone rings. It's about how you treat it when that phone rings (and the same thing with these buyers). It’s not a huge list, but super quality when you go to that Section 8 stuff.
JP Moses: Alright, got a question here from DH: A lot of wholesalers want you to make the check out to their company, not the title company. And when you do, they now have your buyer. On the purchase contract, earnest money may only be a $100, but deposit may be $2,000. How do I keep the buyer and JV wholesaler apart?
So, this is definitely in your specialty, Justin. Basically, the core of it there I think, is how do you keep your buyer and your JV wholesaler apart?
Justin Wilmot: First off, you don't. You really think that they're never going to meet each other or hear of each other?
Now they're not going to see each other at closing. Maybe they will, depends on how you structure the deal, but what's the big deal? You have a contract, you're in position, right? And you're going to make your fee. They can't go around… do you have a contract on the property?
If you're worried about your buyer going directly to the wholesaler after this deal—that can and will happen. There's many more buyers out there. Don't worry about it .
Two, you're not building enough of a relationship with them—explain in the beginning the value that you are providing to them. Build the case for why you are the person—build a real relationship with them. That's, that's my answer to that. It will happen.
JP Moses: All right, next question here is from Stanley Dotson: I've had different people telling me it's fraudulent to sign a contract to purchase a home that I know I won't buy. Is there an agreement or a clause that would still give me the right to sell the lead to a buyer?
Alight so, Justin, you and I were just chit chatting about this the other day…
There are a lot of people who are having kind of a knee-jerk reaction to some videos that were put out recently where someone interviewed some members of the Ohio Real Estate commission or some of the commissioners or something like that… and in that interview, the attorney asked them a lot of questions that were leading questions in my opinion, that were meant to basically extract out of them how much of a distaste they have for what wholesalers do.
So, let's take a step back for a second…
Why did the real estate commissioners and Realtors not like wholesalers? Because they feel like they should own the real estate space… anything that has to do with real estate should done by a qualified licensed professional.
Now, I'm not trying to demonize all Realtors. I was licensed for a number of years myself. I know and work with Realtors regularly, so I'm not trying to say ALL Realtors are the devil, but the NAR—National Association of Realtors—kind of is the devil.
And they have a huge lobby and they're hugely influential, and every single person on the real estate commission is a Realtor and they're being indoctrinated that they need to own the space and those who they know who are active in the real estate investing space without a Realtor, man, that's just shouldn't even happen.
So there a lot of Realtors who just automatically have a negative eye toward what wholesalers do.
Justin Wilmot: I mean, guys, they sued FSBO sites. If you own your home and put it on the For Sale by Owner website, they were suing that company. Some people don't really understand the meaning of it…
That means if you own a chair and put it on Craigslist, Rooms To Go may not like that. And then they have a big organization where their people can say you can't post their chairs like that anymore. It's freaking illegal!
We own the space, we've got a contract on that chair for $50 bucks, and now I'm gonna sell my contract for $100 bucks, is that legal?
JP Moses: So as a part of that conversation, those people made a point of saying that it's all in your intent… if you sign a contract and your intent is to never close, then they're going to basically say that you're not being honest.
Or if you say that “we buy houses,” but because you're a wholesaler, you never actually buy a house because you always assign your contract every single time—100% of the time you never actually go on title… then do you really buy houses? That's kind of what it was.
They talked a lot about intent. A lot of what they said I think it's questionable when it relates to contract law, frankly. How would it go in acourt? Who knows? The Real Estate Commission of Ohio is not a judge and just because they say something doesn't mean that it's going to stand up, but it definitely caused a lot of fear and a lot of people's minds.
Let me just kind of boil it down to its essence for you. It's not fraudulent to put a property under contract to buy, and then assign your interest to somebody else. It's not. It’s contract law. Any contract is assignable automatically unless it says it's not explicitly….
It's also not fraudulent to buy a property and on the same day resell it even moments later for a profit—that's not fraudulent either.
Both of those are rights of a contract law and property ownership.
Now, do we know how things would go in court? If you ever got called to the mat, no, you don't know…
I've been in landlord tenant court here in Memphis before and I've had a judge lean forward and say, “Son, I know what the law is, but let me tell you how we're going to do it my courthouse today…” I've literally had them say that “I know what the law is, but let me tell you how we're going to do it today.”
So sometimes the court can be the Wild West. You can't rely on it actually standing up in court just because something is legal.
So, what are we doing to preemptively protect ourselves so that all of our bases are covered?
#1: As wholesalers, we don't advertise properties for sale anymore. We advertise contracts for sale—we're selling a contract, we're selling our interest in a contract.
Our text message that we send to our cash buyer says “new contract on such and such.” Everything we say, we make sure we say contract NOT the property, so they can't say we're selling a property we don't own.
#2: We don't advertise our properties publicly on places like Craigslist and Zillow—anywhere you used to advertise… where you know you could get a lot of traffic advertising one of your wholesale houses for sale—don't do it anymore. Just don't.
We don't. I'm not going to give you advice on that, I'm just going to say we don't. Instead, we rely on direct to cash buyer marketing and we rely on our bandit signs for getting those deals out.
What else, Justin? Are you doing anything differently as a result of the fear mongering?
Justin Wilmot: I'm doing the exact same thing, which we've changed to using contract verbiage—whether that even really matters or not Is up for argument.
With what the judge told you in court… that's why I believe in just doing business the best way that you can. So, if you're ever challenged, you can prove that you're adding value and that you're not taking advantage and you had the intent.
So, in all the verbiage that you do in your marketing, which should be internal by the way, just like JP said, no more Craigslist and Zillow on a wholesale property… you should be having your own internal list, which is not difficult AND by the way, is the right way to do it.
You should already have your buyers list, which we talked about earlier. You shouldn’t be buying properties under contract that you know you can't sell anyway.
JP Moses: But I don't want my ad advertising that house for sale to be found on Google if I don't have title
Justin Wilmot: Right.
And then to finish it off… for me it's kind of simple because I don't like to get involved in the technicalities. Well wait a minute, that almost sounds like I'm undermining the law. I care what the rules and regulations and laws are of states that we're in and where we're doing deals…
So, what I do is just leave it up to the best. And so, I find the best. How do I find them?
Contact a local REIA.
If don't find the best there, I ask the #1 investor wholesaler, and a lot of times, he actually owns his own brokerage firm and wholesales most of his properties. And I ask him: Who's the attorney you're using? Guess what… they tell us because we're going to give them something in return, maybe leads we can't use anymore…
And the reason I tell you it's cool that some of them are also brokers is because now I have something I can really give them, which is leads that don't work for our company, like short sales.
So, when I get leads in that market, I say, “Look, we're real organization. Look us up. When I get leads in this market that we can’t deal with, I'm going to give them to you. By the way, who do you use to do all your transactions? What attorney do you use?”
And so, we find that attorney and let him know what our intent is, what we're doing… and then we say, “You tell us how you want us to do our deals; give us the contracts.”
And that's how we do deals. It really is a phone call away, which I believe too many people avoid. I don't know if they're scared of talking to an attorney or scared of the money… a lot of times I've found it's not even the money.
For example, in one of my main markets in central Florida, a phenomenal attorney owns a title company and does all our transactions. But you're kind of getting a double winner here, right? Same thing: “Hey, we're going to do all of our closings with you. But do me a favor and tell us what you want us to do.”
And that's exactly what I did eight years ago. I approached them and they told me and gave me the right contracts… he said, “This is how you should be doing it.” And we only did it that way.
So whatever state you're in, make that one single phone call. It might take a couple of phone calls to find the right guy.
JP Moses: One other thing that we are doing that's different that I forgot to mention earlier is: we don't only exclusively assign properties anymore. From time to time, we will do a simultaneous closing—even if we don't need to sometimes—so that we have a defensible track record of closing that we can look back on because there's nothing illegal…
Even if they decide to say, “Hey, you never bought a house. You say ‘we buy houses’ but you don't buy any houses because you don't take title.”
I can always say, “Well, look back at all these HUDs with us as the buyer and the seller on it. So clearly we do buy houses.”
Even if many times we do decide that once we have it under contract to make a business decision and assign it to one of our colleagues instead… there's nothing illegal about that. But clearly, we do buy houses. So, we want to provide a history that shows a track record of closing.
So, we do double closings from time to time.
Justin Wilmot: And a lot of people ask when they should do a simultaneous or double close… well, maybe you should be closing more properties. On our own wholesale deals, I haven't assigned a wholesale deal that we haven’t controlled in years. I close every single one of my wholesale deals every month. They're all closed.
JP Moses: So, Joe Wholesaler asks: Can you sell your equitable interest all day long, even via MLS? Yes, Joe, you can… just make sure that's not all you ever do, like I just said, and make sure that if you're really selling your equitable interest in a contract that you're not advertising that you're selling a property.
Alright, Christina says:
“If I may, in response to the Realtor discussion, just a comment from me as a Realtor/investor/wholesaler myself. There's never a problem with Realtors if the wholesaler recognizes that Realtor, if she or he brings a buyer to that wholesaler’s home. Wholesalers should compensate that agent as well. In other words, let's treat all parties fairly. If wholesalers do that, there's usually a team spirit and no bad feelings and not a them-against-us attitude. Good investor-Realtors work hard too—just my opinion based on user experience.”
Christina, I think that is how you do business. I know a lot of Realtors who think that, we as investors and, wholesalers specifically, are the seedy underbelly of the real estate community. So I'm not going to contradict your feelings in the least, but I just know a lot of Realtors don't like us at all and would rather us not ever wholesale a house—because to them, wholesaling a house is practicing real estate without a license.
Now, what you said about compensating agents, let me just touch on that…
I'd like to hear your thoughts on this, Justin…
We have a lot of agents who work with investors frequently who are on our buyers list. They want to know, they want to keep tabs on our inventory…
Justin Wilmot: We work with Realtors like crazy! My wife's a Realtor; we have Realtors on staff. I love Realtors. He's got to know how to do it the right way.
JP Moses: I do too… and here's something that I don't want to say to Christina and to anyone else…
I think, when we text a property out we do it by zip code. So we have a house in 38111. Everybody who's ever told us they want to know about a house in 38111, they're going to get a text message about it. (Sometimes we'll sell them to our top list right off the bat without reaching the larger list.) But when we do that, if a Realtor brings somebody to the table, they don't automatically get a commission on top of what we're saying we're selling this contract for because that cuts into my profit. I'm putting this out there at a profit margin that I'm comfortable with… now, I might be willing to do that, but I'm not doing that automatically…
If I say that I want to sell this house for $37,000 and it's a smoking deal at $37,000, and they bring a buyer and the Realtor says, “I got a buyer who's willing to pay $37k,” they know from the get go that their buyer's going to have to pay their commission—that I'm not going to be expected to pay 3% or $1,000 on top of that $37,000, unless it's asked right off the get go.
They know that I'm not listing this in the MLS. It’s understood that I'm co-oping and not going to pay a commission out of my half of the deal. I'm not trying to be stingy… it's just that I'm letting Realtors, who are not really buyers, in on my deals that are custom tailor-made for cash buyers.
So, the Realtor needs to understand that if they want to get paid a commission on that, and I think they should—good realtors bring value to the table and they bring buyers that we don't have—but they shouldn't automatically…
This is not the same space as the MLS. It's not a built-in assumption that the seller is going to pay 3% to a buyer's agent. It's not the same thing.
Justin Wilmot: For me, to sum that up, what I would do is just tell Realtors, “This is our ask price, and this is net to seller. If you have a buyer who wants this deal, just add your commissions.”
I don't care what it is… and every state is different. Here in Florida, you have to do it a little differently. But generally, when people ask, “Can I work with a Realtor?” The answer is always yes.
This is the net to seller… I have a contract on this property. I'm closing this property. I'm asking $40k. If you want $6k or whatever the commissions would be after the $40k, that's fine, you can go on HUD and go to your broker and he can cut you a fee. But first off, you also have to get acceptance from your broker, so that becomes a little touchy.
So now an agent who has that… if they're working with a brokerage firm that's not used to this kind of transaction, now they have to try to tell their broker and boss, here's what's going on and they have to teach the wholesale deal process to them.
Sometimes that actually has choked up a few deals. But for us, if somebody's got a buyer, we let them come on board.
JP Moses: Bandon says: In the past, I used an affidavit of equitable interest to lock up a property. I've been told to lock it up at whatever price they offer, and then try to negotiate a lower price. What are your thoughts on that?
I have some pretty strong thoughts on that, Brandon, and then, Justin, I want to hear yours.
Justin Wilmot: I know Brandon… JP, this is all you, go for it.
JP Moses: You know Brandon?
Justin Wilmot: I know the name. Good guy.
JP Moses: Okay, Brandon, the affidavit of equitable interest…
Make sure you're not recording those against a property, unless you have a contract or an option in place on that property. The affidavit itself should NOT be used.
Basically, the affidavit of equitable interest is a sworn statement in front of a notary that you have equitable interest—and if you record that on the property, then you better sure as heck have equitable interest.
And how do you have that? By either having a contract or an option agreement in place on that property. So, make sure that one precedes the other.
Secondly, locking up a price of whatever they offer, and then negotiating a lower price later… I'm not a big fan of that strategy because I feel like if you go in knowing that's going to be your strategy, I feel like it's deceitful and yucky, honestly.
Now, I will renegotiate with sellers when it comes down to it, when it makes sense for me to do that—I'm not going to make next to nothing on a deal…. I need to keep a profit margin I'm comfortable with if things go weird or if my buyer ends up saying he's got to buy for less—I will renegotiate, but I'm not going to lock it up at whatever price they say and then go try and renegotiate later.
Now, one caveat to that: If I'm negotiating with a seller and we're close, it's not quite the right price, but they're kind of in the ballpark and I know that they just haven't really caught on to reality yet… what I don't want is to leave them with my offer in mind and let them go shop it to the next guy.
When the next guy… and the next guy… and then one of those guys finally gives them that dose of reality and gets the deal, and I didn't have a contract on it—what I do want to do, is if we're in the ballpark, we’re close, we'll say:
“Look, I think you're high on this, but I'm willing to give it a shot and see what we can do. We have to get in and do our due diligence. We have to verify all the repairs. We have to see what our funding partners say. Let's give it a go just to see what they say.”
And so then we'll go ahead and sign it up so that we have control. Then once you have control, come in on the back end with that dose of reality and say, “Hey, my buyers, my cash-funding partners, this is what they're saying.”
That conversation has validity and teeth to it when you have a contract in place that you're renegotiating versus never having had the contract in the first place.
I will NOT step into a deal doing with that assumption in mind that I'm going to do that.
What about you Justin?
Justin Wilmot: Well said.
JP Moses: Alright, next question. I'll toss this one that you, Justin. This is from Sarah: My son's a licensed broker in Georgia. He believes he's not allowed to help me wholesale properties in North Carolina. Is that correct? Or is he just been indoctrinated to believe that?
Justin Wilmot: So, one thing I would say right off the bat is: most brokers believe you can't wholesale, because what people don't know, they run from when they don't understand.
This is a small, tiny niche in the real estate industry, and it takes learning. What I had to do for hours and hours and hours before I did my first deal—it takes time.
Same thing with the attorneys. That's why the attorneys that know the space, they hang out at the REIAs and work with other investors, and that's quite small.
So first off, I wouldn't expect that your son would know it. Now, if he does understand wholesaling, can he help?
Because we don't know enough context really to answer this enough, maybe the question is: Can I help you wholesale even though I'm licensed here in Georgia? I believe not, because he's not licensed there, so he can't get you MLS access. So, what other help will you need?
JP Moses: One thing that pops into my head here, Sarah, is your son may be concerned about the fact that he's licensed in one state and you're asking him to help in another state. If you're a Realtor in one state, unless that state has less reciprocity in place—kinda like gun laws, some states have reciprocity with other states where a gun license in Tennessee is valid in Mississippi, for example, but not in Arkansas.
It's the same thing with some licensure laws…
So if he doesn't, if Georgia and North Carolina don't have reciprocity, he may be thinking he can't help you in an official capacity as a Realtor—but it doesn't mean he can't assist you as a principal in a wholesale deal.
Justin Wilmot: Your LLC can—we help you do stuff, negotiate with sellers, negotiate with buyers, whatever…
JP Moses: Exactly.
What's the process of getting your first house under contract? This is Nick asking you, Justin.
Justin Wilmot: #1. Start getting a really good list—some of the lists that JP was referring to earlier.
#2. Start sending direct mail: yellow letters or postcards.
#3. Make sure that somebody is picking up the call live. There's a lot of people out there who say you can send them voicemail, but I call BS on that. (Though it does work for some people, but you need to have a baller budget.) So, pick up the phone.
#4. Learn negotiation skills. (Maybe you use the book that JP recommended at the beginning.) Learn how to frame and negotiate—and make sure you're adding value to a seller.
#5. Get that property under contract. Find out what it's worth. If it's worth $100 grand, do your best to make a justified offer. Get it under contract for the best price that you can… if you already have a cash buyer willing to pay that price.
So, do some direct mail.
- com for inheritance lists
- Google certain absentee list providers
- Tax deeds
- Tax liens
- Fire-damaged houses
A lot of different options… send direct mail and get someone a contract.
So, you just got to start getting involved. Start one step, and then just start digging deeper.
Look, if this was 2008 when the sky was falling, I would say, “Do whatever you can become great friends with a local broker and start making offers on foreclosures, period.” But that's just not the game anymore.
So, go direct to seller or to start working with other wholesalers and get one of their properties under contract.
JP Moses: Interestingly, you mentioned that you should always pick up the phone and not send it to a voicemail, right? The marketing of our sellers…
We let all of ours go to voicemail. :-/
But I will admit that it's not as effective than if you can answer the phone live. We had somebody answering the phone live, I just couldn't stomach the PATLive budget and felt like they weren't doing a good enough job to be worth their while.
So, in the future, I plan to have an in-house person doing that, but for the moment we use Vumber.com. You can rent phone numbers for like $3 bucks a piece—local numbers—and it connects great with Podio and that kind of thing.
Justin Wilmot: Vumber is a great resource. We use that for our outbound call center stuff. So, my internal team, I've been watching everything they're doing. I have a quota: How many cash buyers have you talked to in each market today? And I love that I can record it and listen to it for quality control.
But dude, inbound, I always have somebody picking up that phone.
JP Moses: This is Gregory: Justin, I love the 10 Hour Wholesaler program. I'm curious about mentorship or coaching opportunities with you.
Justin Wilmot: Oh, cool. Greg, definitely email me at [email protected] and we'll talk about it.
JP Moses: And I will cordially ask, since Justin was ridiculous enough to share his email, that you guys not swamp him with wholesaling questions. Please, if you're interested, just be respectful of his inbox. I'm just gonna step up and say that for you.
Justin Wilmot: Yeah, appreciate it. And I am trying to go home and eat dinner, so if I don't get right back to you right now… I'll get to it.
JP Moses: By the way, guys, if you missed out in the beginning, if you were not here… we’re not trying to sell you anything tonight, but a number of you are asking about the 10 Hour Wholesaler, about Justin's business model and how he does his wholesaling business in only 10 hours a week…
You can find out more at tenhourwholesaler.com/presentation. He's got a little video there and you can see if it's something that's a good fit for you.
Okay, next: What service do you use to text your list?
Justin Wilmot: I still use Vumber to text to a list.
JP Moses: Okay first of all, are you an Apple or an Android person?
Justin Wilmot: Mac—once I went Mac I couldn't go back.
JP Moses: Yeah, I'm not… everybody on our team is Android and Google. And I'm not taking sides… I'm just reframing for answering the question.
There is software that we use. It's an app and then we also use it on our desktop computers called MightyText.
There's a free version of it, but then there's a pro version that you pay a little bit for. It's not super expensive and it lets you basically send and receive text messages on your desktop computer. It routes them through your phone.
[Demo on video webinar]
So, it syncs up with my phone and every text message that I send or receive is here. And I basically send and receive texts all day right here from my computer. So it's pretty cool.
You've got to have your phone on. You've got to have the app installed on your phone in order for the two of them to talk.
But what's really great about MightyText pro is you can set up groups—and usually, when you send a text message to a group, you can tell you're part of a group and it's kind of lame and you're like, ‘Why did you put me in this group?’
But when you set up a group in MightyText, it looks like an individual text message to each person. So we set up a group for each zip code, and every time we add a cash buyer to our list, we know their preferred zip code and we add them to those Mighty Text lists.
So when we have a property, Carol on my team drops it into MightyText and blasts it out just to the people who are interested in that zip code in one fell swoop.
But it's only for Android, you can't use it on an iPhone. We actually have an android phone that just sits plugged in on my desk for Carol to use, connected with MightyText.
JP Moses: Alright, next question: How are you able to use your cash buyer's funds to close your deal? Do you do that ever?
Justin, I know a little bit about when you can and can't do this. Do you want to speak up about using your cash buyer's funds to close your deal? I assume, he’s asking about during a double closing.
Justin Wilmot: That's one of the things I messed up with my very first deal. I was Googling how to do a simultaneous closing and I literally—no exaggeration, dude—I spent 3 weeks straight trying to learn how to do this. I thought I needed to know how it all works.
JP Moses: Well, back in the day when I first started, it was the norm. You would do double closings, but you didn't have to come with any wet funds to closing. If you were the guy in the middle between the two closings, your cash buyer’s funds would fund your A to B transaction and you got a cut in the middle.
Basically after the crash, it was like, “Oh no, we can't do that anymore! We've got to bring funds or get transactional funds or bring a line of credit or something—which costs money, obviously, when you borrow money like that.”
Well, I've just recently discovered that it's not that there's some kind of legal barrier keeping you from that—it has to do with the title insurance.
Title insurance companies are saying, more often than not now, that they're not comfortable giving you a title insurance policy—if you, as the buyer, didn't actually bring any funds to the table… if it's being funded by a different transaction, like the B to C transaction.
Then they're saying, “We don't want to insure the title; it doesn't feel good to us anymore.”
However, not every title insurance company does that. So, there's still some closing attorneys and title companies that will let you use your end buyer’s funds—because the title insurance company that they’re issuing the title insurance through doesn't have that stipulation.
Justin Wilmot: You can do it in all day long in Florida. But there are title companies that say all day long, “Nope, we can't do that,” and they won't… but there are other attorneys that can and will…
So that means ask people who are doing it and just call them up. Don't be scared to call people, because as long as you add value to somebody, they're going to give you something back.
JP Moses: Kurt is asking: Do you have a skip trace service that you use or recommend?
Justin Wilmot: Yeah, I use virtual assistants for that stuff. I've gone beyond even allowing my internal staff to do that. It’s just not a valuable part of our time.
So, I would suggest for anybody starting off: pay people, even go to Fiverr.com, put in “data mining and skip trace” and look for people with the best rating. Some are good, some are bad, sometimes you'll find a good one that disappeared. It's just the nature of virtual systems.
So Fiverr.com and put in data entry in the search box.
JP Moses: We only skip trace on rare occasions, but we use Intelius.com to do it when we do it.
Okay, next from Rodney: I'm a new real estate investor. What's the best way to obtain a tax delinquent property list?
Best way to do it is to contact whoever does your tax sales in your county and ask them where to get it. You can usually download it online.
Next question here is: How do you wholesale a reverse mortgage?
Well, real quick, a reverse mortgage is what old people get sometimes where they don't have to make a payment on their mortgage. But it's weird and it's very hard to wholesale those. You can do it, but basically, they'll take a chunk of money out of the equity of their property… they might get a $30,000 or $40,000 check to use, and then payments are deferred until they die and their estate has to pay everything off is how it works out a lot of times.
So, it's just weird and you can do it, but you need to involve an attorney. Justin, have you ever had any experience with them before?
Justin Wilmot: No, this is exactly one of those cases where I say: be careful who you talk to and ask questions when it comes to wholesaling houses.
JP Moses: Alright, Joycelyn says: I need a good way to get motivated sellers. I've driven for dollars, and direct mail, but nothing is working. What do you say, Justin?
Justin Wilmot: Driving for dollars, doing direct mail, but nothing's working?
Buy a list. You can get thousands of people. You can get like 2,000 people as filtered as possible on a ListSource.com for under $100 bucks. If you don't have the money, find a way to borrow it.
And start using Craigslist and FSBO sites to make your own offers as much as possible—all completely free. Just hammer it out. Spend more time making more offers.
Or you can do the 10 Hour Wholesaler thing and start making relationships with other wholesalers. Get their properties under contract and sell it to your cash buyers. JP Moses: I was going to say, Joycelyn, we mentioned earlier that one of our best sources for deals has been abandoned properties…
If you haven't heard of Abandoned House Secrets, it's another training we released recently, you can go to AbandonedHouseSecrets.com/presentation, just like Justin's presentation on 10 Hour Wholesaler, there's a short video presentation there that will let you size it up and see if it's something that's a good fit for you.
Basically, some friends of ours, Sean and Tracey Flannigan who have an incredible system for getting abandoned house leads and it's a stupid cheap way to do it too—you don't have to spend much money on your marketing at all and it works like gangbusters and nobody else does this.
So if you really want to get some motivated sellers that nobody else is tapping into effectively, I highly recommend AbandonedHouseSecrets.com/presentation.
Justin Wilmot: It's important for people to always find those unique spots—those little niches where everybody's NOT sending to.
JP Moses: Alright, two more questions and then we're done.
Justin, is organizing a team imperative to reaching a high level of success in wholesaling?
Justin Wilmot: Yes.
JP Moses: So, elaborate… and in fact, I know that you've done a couple of training videos with our buddy about organizing your team. So can you talk a little more about why that is?
Justin Wilmot: I started off wholesaling with the dream to get into buying and renovating big beautiful homes. And I did that, and it was cool until I got so insanely burned out…
I couldn't understand why I was in the space. I'm driving around in nice stuff and a nice ocean-front luxury condo… and the lifestyle sucked. I could not leave. I don't care what anybody says. Now some people have figured out… having a good, successful fix & flip company…
But guess what? I will challenge anybody… and there's some really successful guys out there, but I just got back for over a month traveling in Costa Rica and Central America with my family and deals got done.
We made thousands and thousands of dollars—over $40,000 bucks. No way in hell could I have done that fixing & flipping properties. Period. It wouldn't have happened.
So, my point is having a team is essential. And I could only have done the wholesale deals because I had a team. I'm a wholesaler because I personally found it easier to set up a system for a team and wholesaling houses.
It’s much easier for me because wholesaling houses is just marketing… it's building rapport with people. So, if you want a highly successful business, I'm just going to be blatantly honest and say it: You need a team. You have need a team now.
I do have some students that I'm almost jealous of. They figured it out—I've helped them do it, but not to the caliber that I thought they were going to get to. They're doing 5 to 6 deals a week and have zero internal team members.
Now, they work more than I do. They couldn't spend a month and a half away. So, I designed my lifestyle, and I built my business around that. So you define what success is to you, dude.
How many mills do you want in the bank account: $2M, $4M, $5M, $10 million? You should want that. But you’ve just got to make the decision. I'd be very, very clear on how you're going to get there and build your business around that.
What does success look like? Let's say you want to be traveling the world, spending any amount of time you want—while business is getting done, you're going to need a team. Can you do it virtually? You can do it virtually. For me, I like it in my house. I like it in my office. I like to kind of look over people's shoulders and have weekly meetings and stuff.
So, in my opinion—absolutely—no question, the team is more than necessary. It's imperative.
JP Moses: Yeah, I agree, if you're trying to build a business. Now I know a lot of people who wholesale houses, but they're not trying to build a wholesaling business. It's just a hobby, it’s an add-on to whatever else they do.
If you're a rehabber and you rehab houses, it’s one at a time… and then you get leads that you don't want to rehab and you wholesale one here and there. You don't have to have a team to do that. You can just do it.
Or if you're brand new and you're thinking, “Oh my gosh, I can't really even get started until I build a team of people to do my business for me…” then you're putting the cart way before the horse. You need to kind of cut your teeth in the hustle…
You’ve got to wear all the hats and get out there and use that fire in your belly to fuel your first few deals, and then earn that team that you're going to build when you're trying to build a business. And then everything else Justin said.
Justin Wilmot: This is why I love doing stuff with you, JP. Because it's necessary to have the conversation because it's true…
I failed to mention that you need to learn too. I did an insane amount of deals, obviously, before I built a team.
JP Moses: Yeah, I spent 8 years hustling by myself before I ever hired anybody. And part of that was because I was just too dumb to know that I was caught in the hustle. I thought I was living the dream, and then one day I was like, this is the hardest job I've ever had in my life! The sex appeal just went away. And I was dying there.
Justin Wilmot: Because the sexiness is “I'm doing it, man!” But, then it’s, “I'm paying the price for doing it!”
JP Moses: Man, Gary Vaynerchuk, you can have the 18 hour days! Justin and I will take a lot fewer hour days than that. We want a lifestyle business. Those of you who follow Gary Vaynerchuk, I was just listening today to somebody interviewing him and he was like, “I just feel sorry in my heart for people who don't have the fire in their belly to work those 18 hour days…” and I was thinking, “Oh, this is freaking me out!”
I'm 41 years old, I want to spend time with my family, right? This is not about someday for me. Yes, I want to build a business. Yes, I'm wired to conquer and build a big successful empire, but not to someday enjoy life. I want to enjoy life now.
I want a business that serves my life, not a life that serves my business.
Justin Wilmot: Not getting all religious… but everybody here is blessed, dude. We're living in this country, in this time with the internet. Come on guys…
Write a list right now of the top 3 things that you want to get done. Go to Fiverr.com and freaking hire someone to do it and start building the wheel to start getting stuff done, without you physically having to do it.
Because let's be honest here—after this call, you're going to want to go eat dinner, like I'm wanting to go do. Or maybe you're going to go watch the Kardashians or something and you're like, “Oh, but I know I need to get that list of those cash buyers.” Well, hire somebody for $5 bucks.
I mean, it's 2016, you can have it. Look, I love Gary V., and I watched him as an inspiration and I love people who push the hustle, like Grant Cardone, another great mentor, phenomenal, actually…
But in my opinion, I don't work to eventually one day live life. I enjoy spending a month in Central America. I enjoy taking my family out boating and fishing all weekend off-shore, 40 miles out… and business is still happening .
I'm not looking for the $30 million in the bank. I like mills, but I mean at what point?
JP Moses: Yeah, that's the thing. I respect the hustle. I don't want to be a slave to the hustle. I want to hustle because I'm passionate about what I'm doing—but I want the hustle to fit my life not to own my life.
So, there's where I part ways with a lot of those guys who are all about the power. I get that… again, that phrase comes to my mind: Is that fire in your belly? I get that, and I have that to an extent, but not at the sacrifice of things that, frankly, are much more important.
You never hear anybody who on their deathbed looked back and said, “Man, I just wish I had worked more 18-hour days.”
Justin Wilmot: Didn't happen. They say the opposite.
And don't confuse this with laziness. You have to work to make what we're talking about happen… to make a lifestyle where it pays for you to have a company and a business… that pays for your lifestyle. And we don't worry about bills takes hustle, just not to the degree where we're working 20 hours.
JP Moses: Alright, final question here: Can you suggest the best CRM for a wholesaler to use?
Justin Wilmot: I still use FreedomSoft.
JP Moses: Well, you say “still,” FreedomSoft is coming out with some incredible upgrades.
Justin Wilmot: Dude, Rob's doing a good job.
JP Moses: Yeah, it's good, Rob's a buddy.
Justin Wilmot: So, there's always something new coming out. I'll be in my office, and I hear my team go, “Oh, they just got a new text app on FreedomSoft!” We're thoroughly enjoying. It’s just a one-stop shop for us.
There is a level of comfort, I've been using it for so long and training people on it for so long, creating training modules for my internal staff. So I just keep using it. I enjoy it, it works well for us.
JP Moses: We use Podio for ours, and I've used FreedomSoft in the past.
I'm kind of toying with the idea of trying FreedomSoft again. When we left FreedomSoft, it was lacking a lot of options that we could get through customized Podio.
The downside of Podio is there's a learning curve with it, but the upside is it’s limitless in its flexibility and things that you can do with it. It's not just for real estate investors… you can use it for anything, it's almost like the sky's the limit.
But now that Rob Swanson is in control of FreedomSoft, he's taken lessons from how investors are using Podio and integrated those things into FreedomSoft in really powerful ways.
So, the benefit to FreedomSoft: it has a much lower learning curve, and they are continuing to really improve it for the real estate investor experience to be a competitor with Podio.
So, they're both solid. You really can't go wrong with one or the other.
Justin Wilmot: If you want it to be simple, for me, I'm just gonna recommend FreedomSoft.
JP Moses: Yeah I think FreedomSoft is going to have a lower learning curve for sure.
Justin Wilmot: Less learning curve, and you can go in there and make your own folders and you're good to go.JP Moses: So that is the last question we have time for, but don't go yet. A couple more quick things before we go…
First of all, thank you guys so much. I know we scratched the surface of the questions you asked. There's so many here. We just didn't have time to get to them all. I mean, I knew there was no way possible we'd get to them all… and if you asked a question and we didn't have a chance to get to your question, please know that it was important and valuable, and I regret that we weren't able to fit it in.
And, like we said earlier, if you want to learn how to be a 10 Hour Wholesaler like Justin, you can find out more at tenhourwholesaler.com/presentation.
Justin Wilmot: Go there. I'm telling you, it's so worth a couple minutes.
JP Moses: I also want to remind you that tomorrow we have a fresh, hot and tasty blog post coming out at AwesomeREI.com, about one of our favorite motivated seller postcards.
So if you want to swipe and deploy one of our favorite motivated seller postcards—and there's an entire video on why we created this postcard and the psychology behind it that’s also going to be published with it—then stay tuned for that tomorrow
And stay tuned for more from our shiny new plan of awesomeness Knowledge Bomb training, our AwesomeREI Tips podcast, more swipe and deploy goodies coming out too.
And these webinars are now officially occurring on the first Monday of every month in the evening. Real, live just like this. So if you want to go, it's all there.
Justin Wilmot: Ask and you shall receive
JP Moses: It all happens at AwesomeREI.com.
Justin, I'm going to give you a high-five over here.
Guys, thank you so much. Would love to know what you thought about this. If you want to, just drop a little comment and let us know what you think about this. We love your feedback and appreciate it from this point forward.
If you want to go check out any of that stuff, go check it out at AwesomeREI.com. Thank you, guys.
Goodnight, we're outta here.
Yes, we'd love to hear them–please leave a comment below.
(NOTE: Want to be a true lifestyle wholesaler? Let Justin show you how he makes a killing wholesaling houses in only 10 hours a week.)