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Study Hall: Real Estate Wholesaling with Max Maxwell · Earn Your Leisure

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  Speaker 3: All right, guys, So a lot of people asks us
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  Speaker 4: Let's do it.
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  Speaker 5: My graduates from my school being forts bad, drop bags,
• 2:00
  Speaker 5: drop Mike, drop bag, drop.
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  Speaker 3: Wholesaling, one on one, right, So it's a couple of
• 2:17
  Speaker 3: things that I had looked at and preparing for this interview.
• 2:21
  Speaker 3: So when identifying your market, right, So I so you
• 2:25
  Speaker 3: even talked about it as far as like your zip
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  Speaker 3: code that grandulin all right, So I guess for somebody
• 2:32
  Speaker 3: that wants to get involved in wholesaling and they're just
• 2:34
  Speaker 3: getting started, like how you just got started, you have
• 2:36
  Speaker 3: to formulate a game plan before you do anything in life, right,
• 2:39
  Speaker 3: So I guess the first game plan is understanding your neighborhood.
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  Speaker 4: Is that correct?
• 2:42
  Speaker 6: Yeah?
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  Speaker 5: So understanding like your area, your city, and like every
• 2:46
  Speaker 5: city has what they call gentrification, right, Like what happens
• 2:50
  Speaker 5: is you're you have neighborhoods that are going to transition
• 2:54
  Speaker 5: into mid class likeness. That's what gentification is. So that's
• 2:59
  Speaker 5: going to happen all the time. Whether you're a part
• 3:02
  Speaker 5: of it or not is up to you. So essentially
• 3:05
  Speaker 5: what happens is you need to know what part of
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  Speaker 5: your city.
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  Speaker 6: Is up and coming. That's all it means.
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  Speaker 5: And once you find out that part, whether you can
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  Speaker 5: do visually are driving around because you know your city
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  Speaker 5: you've been there since you were a kid, or you
• 3:17
  Speaker 5: can use technology which we use list source and do
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  Speaker 5: a free method of finding this.
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  Speaker 6: You then find what zip codes are hot. And how
• 3:26
  Speaker 6: they do it is they say, all right, how.
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  Speaker 5: Many cash transactions has happened in this county, and then
• 3:31
  Speaker 5: we break it down by zip code and then the
• 3:33
  Speaker 5: ones that have the most cash transactions that mean somebody's
• 3:36
  Speaker 5: buying these properties.
• 3:37
  Speaker 3: Follow the money cash transactions, like somebody's buying a home
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  Speaker 3: and cash cash. Yeah, And so by doing that, you
• 3:43
  Speaker 3: know if more people are buying homes in cash, more
• 3:45
  Speaker 3: affluent people are moving into the neighborhood.
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  Speaker 5: Yeah, because what happens is when somebody buys a house
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  Speaker 5: in cash more than like there's no financing involved, that
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  Speaker 5: means it needs a flip.
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  Speaker 6: Right, So, because you can't really buy flip property.
• 3:56
  Speaker 5: With bank financing where they won't they won't, they won't,
• 3:59
  Speaker 5: and they won't loan you money on something that needs work.
• 4:02
  Speaker 5: The bank is never going to take an upside down
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  Speaker 5: position on anything. So what's what's the app called lip
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  Speaker 5: sort list list source list source, Yeah, and I have
• 4:10
  Speaker 5: a video like it goes more in detail but list
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  Speaker 5: sources of things that gives you list of anything kind
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  Speaker 5: of you want about people, right, but you can find
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  Speaker 5: out the hot properties or the hot zip codes on
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  Speaker 5: this way we find out how to do once you've
• 4:22
  Speaker 5: mastered your area.
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  Speaker 2: One of the big things that you talk about is
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  Speaker 2: driving for dollars? Can you talk about that technique and
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  Speaker 2: the interests of that.
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  Speaker 5: That's how I got my first deal was driving for dollars.
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  Speaker 5: And that just basically means you're driving around looking for
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  Speaker 5: distressed property physically distressed, right, and these are Yeah, it
• 4:41
  Speaker 5: could be like your gutters.
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  Speaker 6: Are hanging down.
• 4:43
  Speaker 5: Nope, somebody hasn't cut the grass, The bushes are high,
• 4:48
  Speaker 5: old junkie cars in the driveway that have it moved. Now,
• 4:51
  Speaker 5: what happens is we see these every day, but your
• 4:53
  Speaker 5: mind has already been trained to block these out. I know,
• 4:57
  Speaker 5: if you untrained yourself and and and look, actually look,
• 5:01
  Speaker 5: you'll see houses as.
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  Speaker 6: Yo, the house been there for ten years. Ain't nobody
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  Speaker 6: ever looked at it?
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  Speaker 2: Because I was really trained to see like, yo, that's
• 5:06
  Speaker 2: the nicest house on the block.
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  Speaker 5: Correct, and you go past the ugliness. It's just the
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  Speaker 5: way we look.
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  Speaker 3: I mean even as a kid, I remember being on
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  Speaker 3: a school bus and you can always tell like the
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  Speaker 3: house is the worst house on the neighborhood. They never
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  Speaker 3: cut the grass, they never the paint's always chip. But
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  Speaker 3: growing up, you just thinking that people don't care about
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  Speaker 3: their home, thinking that maybe nobody lives there.
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  Speaker 4: Correct, maybe it's a distressed property.
• 5:30
  Speaker 6: Correct.
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  Speaker 5: So once you find that distressed property, you need to
• 5:32
  Speaker 5: find the owner. And so my buddy Dave Lecho created
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  Speaker 5: a map called deal Machine, which allows you to drive around,
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  Speaker 5: take a picture of the property, and it pinpoints it
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  Speaker 5: and it actually will send a postcard to the owner
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  Speaker 5: asking if they want to sell it on your behalf,
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  Speaker 5: on your behalf for you called deal machine Yeah, with
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  Speaker 5: your number on it. Wow, so you can customize this postcard.
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  Speaker 5: So but that that's like fairly new to achnology. When
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  Speaker 5: I started, they didn't have that. We had to go
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  Speaker 5: around taking screenshots of drop pin drops on like Apple
• 6:06
  Speaker 5: maps or something like that, and then go back home
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  Speaker 5: and search who owns it.
• 6:10
  Speaker 2: So we got we got the property and were driving
• 6:13
  Speaker 2: dollars and then you had something called skip tracing.
• 6:15
  Speaker 5: Yeah, so that's important. So skip tracing essentially where that
• 6:18
  Speaker 5: word skip tracing came from. So I used to be
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  Speaker 5: a bounty bounty hunter, bail bondsman. Yeah, like house better
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  Speaker 5: than Doug TV show, This guy shuts it all. So
• 6:31
  Speaker 5: skip tracing means that you're skipping a trade, you're tracing
• 6:35
  Speaker 5: a skip. Essentially, what that means is somebody who does
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  Speaker 5: not go to court is considered a skip and you
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  Speaker 5: need to trace them down. So that's where the word
• 6:43
  Speaker 5: comes from. But now we're not really dealing with that.
• 6:45
  Speaker 5: We deal with people that that own houses that we
• 6:47
  Speaker 5: can't find them. So essentially what happens is you find
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  Speaker 5: that house with the tall grass, you take a picture
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  Speaker 5: of it, you write down the address. You need to
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  Speaker 5: know who owns it? So you go on the county wreckords.
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  Speaker 5: Every single property in the America is owned by somebody
• 7:03
  Speaker 5: or something, right, So in every county there's a tax
• 7:07
  Speaker 5: assessor's website, right, so I can look up town who
• 7:11
  Speaker 5: owns any house in America? So you go to that
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  Speaker 5: county's website. So here I think it'd be Westchester County
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  Speaker 5: tax assessors, right, and then you would put in the
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  Speaker 5: address of the property and it'll say, oh, this person
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  Speaker 5: owns that property. Now I need to get a hold
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  Speaker 5: of that person. So skip tracing is where you put
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  Speaker 5: that person's name and mailing address into the system and
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  Speaker 5: it's going to spit out the numbers that that are
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  Speaker 5: that this person has.
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  Speaker 6: Yeah, yeah, wow, what's it called?
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  Speaker 5: Skip skip trac dot com RII skip dot com r
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  Speaker 5: E I skipped that's yours. Yeah, So that was part
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  Speaker 5: of that was part of how I got big big
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  Speaker 5: because I knew because of my old background of skip
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  Speaker 5: tracing humans. It's the same thing I got skip trace humans,
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  Speaker 5: but now I have.
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  Speaker 4: Their name in or address. Did you get this from
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  Speaker 4: military training?
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  Speaker 6: Like No, it was just something that we developed as
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  Speaker 6: bounty hunters.
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  Speaker 2: So you flipped it because before you were looking for
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  Speaker 2: people that you actually had to arrest. Yeah, and flipped
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  Speaker 2: it into it now I'm looking for the person that
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  Speaker 2: owns this house.
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  Speaker 6: I need your number. I'm calling you up.
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  Speaker 4: That's it went off topic a little bit. When when
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  Speaker 4: were you a bounty hunter?
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  Speaker 5: Yeah, you got that.
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  Speaker 6: I got ten, I got ten. I used to have
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  Speaker 6: a car lot. I used to have all types of stuff.
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  Speaker 5: Man, I was a bounty hunter in between while building
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  Speaker 5: that app and getting in the in the real estate.
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  Speaker 4: Wow.
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  Speaker 5: Yeah, it actually traveled into like I'm still licensed. Yeah,
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  Speaker 5: I'm still licensed bound here because jobs. Yeah, jobs, because
• 8:42
  Speaker 5: I had to have I'm still a licensed bounty hunter
• 8:46
  Speaker 5: and I'm still licensed bonds because I got access to
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  Speaker 5: data most people don't get.
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  Speaker 6: I get the same data in the cops. And you've
• 8:51
  Speaker 6: leveraged it.
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  Speaker 5: Yeah, I leveraged that small you know, license into me.
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  Speaker 3: Now you know. I like because like a lot of
• 8:58
  Speaker 3: our guests have similar stories where they've had troubling times
• 9:02
  Speaker 3: and he had to like figure things out. And then
• 9:04
  Speaker 3: a lot of our guess have seen someone the stories
• 9:05
  Speaker 3: where they they use things in their past to help them,
• 9:08
  Speaker 3: Like you ever heard John Henry, Yeah, of course, so
• 9:10
  Speaker 3: John Henry shout to John. He was telling you know
• 9:12
  Speaker 3: his story. He was a dormant dormant and he came
• 9:16
  Speaker 3: up and he started a million dollar cleaning business. But
• 9:20
  Speaker 3: his marketing plan was to go to other dormant and
• 9:23
  Speaker 3: get them to refer their residence.
• 9:25
  Speaker 4: He paid them.
• 9:25
  Speaker 3: But long story short, he was saying, like, he can't
• 9:27
  Speaker 3: call himself a genius for that because that's what he knew.
• 9:30
  Speaker 3: He knew the dormant in the street because he was
• 9:31
  Speaker 3: a dormant, like you were a bounty hunter. But it's
• 9:34
  Speaker 3: like you knew like I can get people's information from this.
• 9:37
  Speaker 3: Now I'm in real estate. How can I co mingle
• 9:40
  Speaker 3: this and actually make it all work?
• 9:41
  Speaker 5: And that's why your failures are your biggest successes because
• 9:44
  Speaker 5: that failure taught made me make millions.
• 9:47
  Speaker 6: You know, you just put me on and put me
• 9:49
  Speaker 6: in a different category.
• 9:50
  Speaker 3: And that's important for people to understand too, because a
• 9:52
  Speaker 3: lot of times everybody's doing something and even like your
• 9:56
  Speaker 3: path to success might be totally different from what you're
• 9:58
  Speaker 3: currently doing, but you could still use what you did
• 10:01
  Speaker 3: in the past in some capacity to help your success
• 10:05
  Speaker 3: in the future.
• 10:06
  Speaker 6: Absolutely, yea.
• 10:06
  Speaker 2: So now we go at that, we got the address,
• 10:09
  Speaker 2: how do we get the property under contract?
• 10:12
  Speaker 5: So you're gonna call a person and you're simply gonna
• 10:13
  Speaker 5: have a conversation. A lot of people, there were a
• 10:15
  Speaker 5: lot of people fall short. People hate talking to people
• 10:18
  Speaker 5: that they don't know.
• 10:19
  Speaker 4: Elevator script.
• 10:20
  Speaker 5: Yeah you So we've developed a lot of scripts over
• 10:22
  Speaker 5: the time. But it's real simple. Immediately, you need to
• 10:25
  Speaker 5: identify who you are. Hey, my name is Max. I'm
• 10:27
  Speaker 5: a local real estate investor. Right that puts their guards down.
• 10:31
  Speaker 5: But if somebody calls you and says, hey, in a
• 10:34
  Speaker 5: moment of your time, yeah done, I'm hanging out, you
• 10:36
  Speaker 5: ain't even getting past that. Especially in New York. You're
• 10:38
  Speaker 5: not getting past that at all. You mightn't get pick
• 10:41
  Speaker 5: up banging on you. Yeah, so then somebody's intrigued. Okay,
• 10:44
  Speaker 5: you're a real estate investor. I was going to pass
• 10:47
  Speaker 5: the property down on one two three Main Street, and
• 10:49
  Speaker 5: I think you may own it. I was wondering if
• 10:50
  Speaker 5: you were interested in even selling it.
• 10:52
  Speaker 6: All. That's simple.
• 10:53
  Speaker 5: You're gonna get yes, no, or maybe or you're going
• 10:56
  Speaker 5: a lot of f us in between there, right so,
• 10:59
  Speaker 5: or you got the wrong number?
• 11:00
  Speaker 6: Right? Do you?
• 11:01
  Speaker 7: Well?
• 11:01
  Speaker 5: Do you know who owns that property. Oh yeah, I
• 11:03
  Speaker 5: owned that property. Okay, well great, are you thinking about
• 11:06
  Speaker 5: selling it? Well, I got it from my mom and
• 11:08
  Speaker 5: I actually live in the city now, and you know,
• 11:11
  Speaker 5: I don't It's need some work and I really don't
• 11:13
  Speaker 5: have you know, the time.
• 11:15
  Speaker 6: And I don't want to keep paying the taxes.
• 11:17
  Speaker 5: Okay, Well, I'm a real estate investor actually specialize in
• 11:20
  Speaker 5: buying properties like this. Would you be interested in the
• 11:23
  Speaker 5: cash offer? Actually I would be, And then that's when
• 11:26
  Speaker 5: you start that negotiation. Well great, well what type of
• 11:29
  Speaker 5: what number were you looking for? You know, what can
• 11:31
  Speaker 5: I give you cash that would just make you walk
• 11:32
  Speaker 5: away from it? Then that starts. That's called anchoring, giving
• 11:36
  Speaker 5: somebody that making somebody give you a price to anchor
• 11:39
  Speaker 5: themselves on.
• 11:40
  Speaker 2: And that doesn't happen just in you know a lot
• 11:42
  Speaker 2: of people think that can't happen in a fluent neighborhoods.
• 11:44
  Speaker 6: But you said, all absolutely, that's what should be looking.
• 11:46
  Speaker 5: Yeah, I mean for us in the South, like a
• 11:50
  Speaker 5: two hundred and fifty thousand dollars house is a nice neighborhood, right,
• 11:53
  Speaker 5: So I own a couple of those right off of
• 11:55
  Speaker 5: people that you know, just it happens a lot people
• 11:59
  Speaker 5: inherit things that they don't want. I mean not in
• 12:02
  Speaker 5: our culture, but there's a lot where people like really
• 12:05
  Speaker 5: will inherit.
• 12:06
  Speaker 6: A quarter million dollar house.
• 12:07
  Speaker 5: Was makers and be like, I live in Denver, I
• 12:08
  Speaker 5: don't want to go back to mom's house. I remember
• 12:10
  Speaker 5: having Christmas there in ninety three. I don't want to
• 12:12
  Speaker 5: trying to I'm not trying to go back. So things
• 12:15
  Speaker 5: like that, and then just there's so many different ways
• 12:18
  Speaker 5: where people don't want a house.
• 12:20
  Speaker 6: It's like a car.
• 12:21
  Speaker 3: It's pretty common, Like you said, not in our communities,
• 12:24
  Speaker 3: unfortunately never happens. It's pretty common in other communities, and
• 12:34
  Speaker 3: you'll be surprised.
• 12:34
  Speaker 5: But you know, actually it happens more than we actually
• 12:36
  Speaker 5: think of our community. We just don't realize, you know,
• 12:39
  Speaker 5: like because it's considered the hood, so you don't want
• 12:42
  Speaker 5: grandma's house, and you just let it go for taxing Linquin,
• 12:46
  Speaker 5: and then somebody like me comes and buys it for
• 12:47
  Speaker 5: ten thousand dollars.
• 12:49
  Speaker 6: Yeah.
• 12:50
  Speaker 3: So as a wholesaleer, the person you're always offering cash offers,
• 12:55
  Speaker 3: it's always have to be casual.
• 12:56
  Speaker 6: Yeah, because no bank is going to find a bank.
• 12:58
  Speaker 5: Yeah, so you got to go find somebody else that's
• 13:00
  Speaker 5: in the business of flipping property.
• 13:04
  Speaker 2: So we're telling private or hard money loans.
• 13:06
  Speaker 5: Typically, yeah, they can have access to private or hard
• 13:10
  Speaker 5: mini loans.
• 13:11
  Speaker 6: Private is through relationships.
• 13:12
  Speaker 5: Hard money is going to be through your resume essentially, right,
• 13:16
  Speaker 5: you know you flip seven houses this year, of course,
• 13:19
  Speaker 5: will loan your money because you know what you're doing.
• 13:20
  Speaker 5: Private money is based off of yo. I know you
• 13:22
  Speaker 5: got some money sitting in your IRA and you want
• 13:24
  Speaker 5: to put it to work. But yeah, you want to
• 13:27
  Speaker 5: find that person that makes his money through flipping. You know,
• 13:30
  Speaker 5: one thing I understand is that people have money, they
• 13:32
  Speaker 5: got to spend it, right, So it depends just where
• 13:36
  Speaker 5: you at on that food chain.
• 13:37
  Speaker 4: And people that have money always want to make more money.
• 13:40
  Speaker 6: That's how they live.
• 13:41
  Speaker 2: They eye quadron of day life. So we got now,
• 13:43
  Speaker 2: we got the contract. Now we got to get to
• 13:46
  Speaker 2: the closing.
• 13:47
  Speaker 3: Before so I had a question. Sorry, So cold calling,
• 13:51
  Speaker 3: this essentially is cold calling when you're people are because
• 13:57
  Speaker 3: very few people understand cold calling. Yeah, I've done in
• 14:00
  Speaker 3: coke calling before and I don't I don't like it,
• 14:05
  Speaker 3: so but I can see how this can stop people
• 14:07
  Speaker 3: from actually moving forward, right, this is a big thing.
• 14:10
  Speaker 4: It's not.
• 14:11
  Speaker 3: If you don't if you've ever done it before, you
• 14:12
  Speaker 3: can't fully appreciate. It's like one of the most nerve
• 14:16
  Speaker 3: wracking things you can do. Like literally, like you make
• 14:18
  Speaker 3: up every excuse in the world not to Coco. Like
• 14:20
  Speaker 3: you like walk around the neighborhood, you get lunch and
• 14:23
  Speaker 3: you say it's too early, It's it's too late, call tomorrow.
• 14:27
  Speaker 3: You make all kinds of excuses. So how do you
• 14:32
  Speaker 3: because you have to either that or you're knocking on
• 14:34
  Speaker 3: somebody's door.
• 14:35
  Speaker 6: Every comm every deal ends on the phone.
• 14:38
  Speaker 5: Every single deal you do, whether you like it or not,
• 14:40
  Speaker 5: is gonna end up on the phone at some point
• 14:42
  Speaker 5: in time.
• 14:43
  Speaker 4: To like what do you tell people to like ease
• 14:45
  Speaker 4: their nerves to co call.
• 14:47
  Speaker 6: One thing we do is we give them scripts. Oh
• 14:49
  Speaker 6: they have to make it up.
• 14:50
  Speaker 5: Yeah, So I want to give you your scripts and
• 14:52
  Speaker 5: then you're going to give you most common rebuttals so
• 14:55
  Speaker 5: that you can have an ends.
• 14:56
  Speaker 6: Right.
• 14:56
  Speaker 5: So, like I like if you go to your if
• 14:58
  Speaker 5: you're going to ask your mom and you always what
• 15:00
  Speaker 5: she's gonna say, it's more easy for you to ask
• 15:02
  Speaker 5: a question because you already got the answer because you
• 15:04
  Speaker 5: know her response. So it's the same thing like when
• 15:06
  Speaker 5: you go talk to these strangers, these people you don't know,
• 15:09
  Speaker 5: you're gonna, You're gonna they got three answers, three or
• 15:11
  Speaker 5: four different answers they're gonna give you, and you need
• 15:13
  Speaker 5: to be able to rebundle those things.
• 15:15
  Speaker 3: You know what got me over my fear of cocon
• 15:17
  Speaker 3: in too personally, I still don't throw a lot of cocone,
• 15:19
  Speaker 3: but just got me out of my because I had
• 15:21
  Speaker 3: I was terrified by it.
• 15:22
  Speaker 4: I had this.
• 15:23
  Speaker 3: I had to sit down and say, am I going
• 15:25
  Speaker 3: to die? If you're not gonna die, it's not that bad.
• 15:33
  Speaker 6: Did you make money from go call liver?
• 15:35
  Speaker 4: I have? Yeah, I have.
• 15:36
  Speaker 3: And at the end of the day, the worst nobody
• 15:38
  Speaker 3: they don't know you, and the worst they can say
• 15:40
  Speaker 3: is no.
• 15:41
  Speaker 6: Or cuts you out. Who cares? We're gonna go to
• 15:43
  Speaker 6: the next question. Yes, it's just they don't know you. Yeah,
• 15:46
  Speaker 6: just keep going, keep moving. You get cussed out on
• 15:48
  Speaker 6: the subway, here, all the time, anywhere, so that normal.
• 15:50
  Speaker 6: Don't take it personal.
• 15:52
  Speaker 3: It's not gonna kill you. It's not that serious. That's
• 15:53
  Speaker 3: how I look at it. So what is the maximum
• 15:56
  Speaker 3: allowable offer?
• 15:57
  Speaker 5: So the the the m o A is the maximum
• 16:00
  Speaker 5: amount of money that you can offer on this property
• 16:02
  Speaker 5: and still make a profit. So I'll break it down,
• 16:04
  Speaker 5: so like, if a house is worth one hundred thousand
• 16:07
  Speaker 5: dollars fixed up right, we did. We found that out
• 16:11
  Speaker 5: by doing comparable properties. We've seen that the house down
• 16:14
  Speaker 5: the streets sold for one hundred thousand, very similar square footage,
• 16:18
  Speaker 5: bedrooms and baths. The house up there sold for ninety eight.
• 16:21
  Speaker 5: So now we're in a one hundred thousand dollars range.
• 16:23
  Speaker 5: So we know that the flipper is going to fix
• 16:25
  Speaker 5: this and sell it for one hundred thousand. So it's
• 16:27
  Speaker 5: to sell one hundred thousand dollars.
• 16:28
  Speaker 6: Now in my.
• 16:29
  Speaker 5: Market, it's lukewarm. It's not like an La or a
• 16:34
  Speaker 5: Phoenix or New York where you properties go above.
• 16:41
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• 19:01
  Speaker 5: Then beyond asking price a bunch right, so we take
• 19:05
  Speaker 5: off we minus thirty percent from the actual ARV the
• 19:09
  Speaker 5: after repair valuable property.
• 19:12
  Speaker 4: Right.
• 19:12
  Speaker 5: So now if you did that one hundred thousand minus
• 19:14
  Speaker 5: thirty percent, you're at seventy thousand and let's just say
• 19:17
  Speaker 5: you walked that house and you went in there, and
• 19:19
  Speaker 5: you think it needs twenty thousand dollars twenty five thousand dollars,
• 19:25
  Speaker 5: and just say twenty thousand, twenty thousand repairs. So you
• 19:28
  Speaker 5: know that this flipper is gonna spend twenty thousand to
• 19:32
  Speaker 5: get it to the point where he can actually put
• 19:34
  Speaker 5: it on the mark for one hundred, so you're gonna
• 19:36
  Speaker 5: deduct that. So we went from one hundred to seventy disrepairs.
• 19:40
  Speaker 5: Now we at fifty. So if you actually buy this
• 19:43
  Speaker 5: property at fifty thousand dollars right now, it's actually a
• 19:46
  Speaker 5: good deal for the flipper.
• 19:49
  Speaker 6: But you ain't made no money yet right.
• 19:51
  Speaker 4: Assale and those wholesaless you didn't get it right.
• 19:53
  Speaker 5: So if the flipper himself knocked on this door, talk
• 19:56
  Speaker 5: to him, he'd be able to buy a fifty. But
• 19:59
  Speaker 5: you need to make some money, so you need to
• 20:01
  Speaker 5: throw a pad or a buffer in there. So you
• 20:03
  Speaker 5: need to be offering. If you want to make ten thousand,
• 20:06
  Speaker 5: your offer needs your maximum allowable offer needs to be
• 20:09
  Speaker 5: forty thousand, right, So now you're gonna sell your contract
• 20:14
  Speaker 5: for fifty forty for the forty that they got to
• 20:17
  Speaker 5: buy the house ten for your assignment total of fifty.
• 20:20
  Speaker 5: Right now we're back where where the flipper is gonna
• 20:23
  Speaker 5: make some money. But if you want it at forty,
• 20:26
  Speaker 5: you're never going to offer forty. You're gonna offer below that.
• 20:29
  Speaker 4: Thirty.
• 20:29
  Speaker 5: Yeah, so you do over thirty. So typically fifteen percent
• 20:32
  Speaker 5: below what you want is where you want to be at.
• 20:34
  Speaker 5: So that you do that, you put you around thirty
• 20:36
  Speaker 5: six thirty four thousand.
• 20:36
  Speaker 6: Dollars to have the wind built in exactly the wind
• 20:40
  Speaker 6: built in, and you never know, they might take thirty.
• 20:41
  Speaker 6: You never know, right, you can come up with twenty.
• 20:44
  Speaker 3: So let me ask you this because essentially it's like
• 20:49
  Speaker 3: a middleman situation, right.
• 20:50
  Speaker 6: This whole world's about most richest companies in the world
• 20:53
  Speaker 6: are middleman.
• 20:55
  Speaker 5: True Amazon, Walmart, True Uber, Airbnb, Airbnb. They don't own anything.
• 21:02
  Speaker 5: They're middlemen. Amazon is a logistic company. They make products,
• 21:07
  Speaker 5: They house products that other people make.
• 21:09
  Speaker 6: And you buy. They have cloud stores.
• 21:12
  Speaker 5: Part dealerships. You can't buy a car in America without
• 21:15
  Speaker 5: going through a dealership.
• 21:16
  Speaker 6: They're middlemen. They don't make the.
• 21:17
  Speaker 5: Car, they're middle they're middle men.
• 21:20
  Speaker 6: Middle Men make the most money in America. You got
• 21:22
  Speaker 6: to solve a problem with convenience.
• 21:25
  Speaker 3: True, this is true. So that's true. But so my
• 21:30
  Speaker 3: question is a question is all right, but why not?
• 21:34
  Speaker 3: Why is it more appealing in your opinion, to be
• 21:38
  Speaker 3: on that side of it as opposed to just buying it,
• 21:41
  Speaker 3: like just being an investor. Yeah, it's more risk involved,
• 21:43
  Speaker 3: being arrested, It's a lot more risk, more money involved.
• 21:46
  Speaker 5: More risk and more more risk, more money. But do
• 21:50
  Speaker 5: you want a a a fast nickel or a slow dime?
• 21:55
  Speaker 5: Depends on your business model. I see, so I see
• 21:58
  Speaker 5: this a lot. I see where wholesalers think it's a
• 22:01
  Speaker 5: negative connotation to the name and they want to be flippers.
• 22:05
  Speaker 5: And then I see flippers looking at wholesalers and wanting
• 22:08
  Speaker 5: to be wholesalers because.
• 22:09
  Speaker 6: They see the proput margins higher, the.
• 22:11
  Speaker 5: Risk versus reward. Now, can Amazon make every single product
• 22:15
  Speaker 5: they have in the store? Absolutely? Do they want to
• 22:18
  Speaker 5: take that risk of holding inventory that they own for.
• 22:21
  Speaker 4: What a fast nickel or a slow down? I like that.
• 22:28
  Speaker 2: So if we're doing this, if we're wholesaling as a
• 22:31
  Speaker 2: side thing, right, how much did you how many properties
• 22:36
  Speaker 2: you think we have.
• 22:37
  Speaker 6: To do it before it becomes a full time situation.
• 22:41
  Speaker 5: It depends, right, everybody has their free their freedom mark.
• 22:45
  Speaker 6: You know.
• 22:45
  Speaker 5: I always used to say if I made six figures,
• 22:47
  Speaker 5: I'd be great, right, you know that's not you figures,
• 22:53
  Speaker 5: so like it's not, it's it just depends where you
• 22:56
  Speaker 5: want to be at right now. Some people love their job.
• 22:59
  Speaker 5: So I've spoken to school teachers. They love their job,
• 23:02
  Speaker 5: they love their passionate about what they do. But if
• 23:04
  Speaker 5: they can get one property a month, they make an
• 23:06
  Speaker 5: extra ten grand a month.
• 23:08
  Speaker 6: That'll start teaching.
• 23:09
  Speaker 5: No, they're gonna keep teaching because they just supplement your
• 23:12
  Speaker 5: life because it gives you what you want.
• 23:14
  Speaker 6: Now, I've had people say that and then actually quit.
• 23:16
  Speaker 3: Yeah about that teaching, Yeah, it's not coming to work tomorrow.
• 23:20
  Speaker 6: So if it.
• 23:21
  Speaker 5: Depends on your lifestyle, where you want where you want
• 23:23
  Speaker 5: to be at. For me, I wanted to run a
• 23:25
  Speaker 5: multi million dollar company. So we do between like seven
• 23:28
  Speaker 5: and twelve deals.
• 23:29
  Speaker 6: A month sometimes, okay.
• 23:31
  Speaker 5: And you know that's where we're at, and we're not
• 23:33
  Speaker 5: We're not the largest. You know, we got guys across
• 23:37
  Speaker 5: the country doing way more deals than that.
• 23:38
  Speaker 6: But my overhead is pretty thin and we have a
• 23:42
  Speaker 6: good lifestyle doing what we do.
• 23:44
  Speaker 3: So what would be the obviously depends on the market,
• 23:46
  Speaker 3: Like in your market, what's the profit margin on average.
• 23:48
  Speaker 6: Deal for your average deals?
• 23:50
  Speaker 4: Thirteen three thirteen three hundred.
• 23:52
  Speaker 6: Yeah, we track our KPIs pretty well.
• 23:54
  Speaker 4: What's KPI?
• 23:55
  Speaker 5: That mean Key performance indicators? So you're you're your need
• 23:59
  Speaker 5: to know. I need to know how much money I'm
• 24:03
  Speaker 5: spending to get a deal?
• 24:05
  Speaker 6: Right? How many calls do I need to make to
• 24:08
  Speaker 6: get a yes? Right?
• 24:09
  Speaker 5: And then did you start to get an average how
• 24:11
  Speaker 5: much money do I spend on this marketing effort before
• 24:14
  Speaker 5: it turns into an appointment? How many appointments do I
• 24:18
  Speaker 5: go on before it turns into a contract. And if
• 24:20
  Speaker 5: you know your numbers and your business, and this is
• 24:23
  Speaker 5: any business, then you scale.
• 24:26
  Speaker 3: So you're doing thirteen one thousand a deal, you're doing
• 24:29
  Speaker 3: thirteen of those a.
• 24:30
  Speaker 6: Month, so it's like one hundred.
• 24:31
  Speaker 5: Well, our top ends twelve, right between seven and twelve
• 24:34
  Speaker 5: deals a month, so we're average around like ten.
• 24:37
  Speaker 2: Let's say if you do test, you're talking about one
• 24:38
  Speaker 2: hundred a month.
• 24:40
  Speaker 6: A month.
• 24:41
  Speaker 4: Yeah, good calendar, yeah a good month.
• 24:44
  Speaker 6: Yeah.
• 24:44
  Speaker 4: Okay, So what is assignments? Now you have to catch
• 24:47
  Speaker 4: buy you have assignment.
• 24:49
  Speaker 5: Assignment is Essentially, you have that original contract with the seller,
• 24:54
  Speaker 5: and you're going to sign your contract to that person.
• 24:59
  Speaker 5: So let me give you an example. So let's just
• 25:01
  Speaker 5: say you pull up. We're sitting over at the bodega.
• 25:04
  Speaker 5: I'm in New York, can use those words, sit at odega.
• 25:08
  Speaker 5: You pull up, and you be like, Yo, Max, I'm
• 25:11
  Speaker 5: out of here, bro, I'm going to Living Vegas.
• 25:13
  Speaker 6: You know, I just got this new Mercedes right here.
• 25:15
  Speaker 6: I don't want it.
• 25:16
  Speaker 5: I paid cash for it. I paid one hundred thousand
• 25:18
  Speaker 5: for it. I got it two years ago. Yo, give
• 25:21
  Speaker 5: me forty five thousand cash. You can have this.
• 25:23
  Speaker 6: That's a brand new S five fifty. Take that right.
• 25:26
  Speaker 6: So do I have the money sitting at the bodega? Nah?
• 25:30
  Speaker 5: But I know my man down here gotta use car dealership.
• 25:33
  Speaker 5: So I said, all right, meet me back here Friday
• 25:35
  Speaker 5: with the money. I'm gonna have the money for you.
• 25:37
  Speaker 5: It's Monday, so I ain't got the money, but I'm
• 25:41
  Speaker 5: gonna go get it right.
• 25:42
  Speaker 6: Because it's important.
• 25:44
  Speaker 5: So I'm gonna go hit you up and say, Yo,
• 25:46
  Speaker 5: you know I got a two thousand and eighteen S
• 25:48
  Speaker 5: five fifty for fifty thousand dollars for Friday. But you
• 25:53
  Speaker 5: gotta buy it Friday. My man said, cool, I'll bring
• 25:56
  Speaker 5: you the money Friday, all right, meet me at the bodega.
• 25:59
  Speaker 5: You meet me at the bog They with fifty You
• 26:01
  Speaker 5: said you wanted forty forty five.
• 26:03
  Speaker 6: I may hand you the money. You're gonna hand me
• 26:05
  Speaker 6: the key. I may hand you the keys you're gonna
• 26:07
  Speaker 6: give me.
• 26:08
  Speaker 5: I got the middle part. You go sell it because
• 26:10
  Speaker 5: that's your job. Your business is selling cars. You wash
• 26:14
  Speaker 5: it up, you clean it, put some tire set on it,
• 26:17
  Speaker 5: stick it on the car, lote for seventy five thousand.
• 26:19
  Speaker 6: It's still a deal. And you may five thousand.
• 26:22
  Speaker 5: I made five thousand you on a plane in Vegas
• 26:24
  Speaker 5: cause you just sick and.
• 26:25
  Speaker 6: Tied of New York life.
• 26:26
  Speaker 5: And you just supplementing your business. You just made a
• 26:29
  Speaker 5: profit by investing your money. So so I signed my
• 26:33
  Speaker 5: contract to him that I had with you. Now, when
• 26:36
  Speaker 5: I signed that contract with you for Friday, between Monday
• 26:40
  Speaker 5: and Friday, what can you do with that car?
• 26:42
  Speaker 6: So it says nothing.
• 26:43
  Speaker 5: You couldn't sell it because if you sold it, I
• 26:45
  Speaker 5: would assued you for pacific performance of a contract.
• 26:50
  Speaker 6: So you couldn't.
• 26:51
  Speaker 5: You already said to me, Yo, all right, Friday, I'm
• 26:54
  Speaker 5: gonna I wrote a contract. You're gonna You're gonna give
• 26:56
  Speaker 5: me that car on Friday, and I'm gonna pay you
• 26:59
  Speaker 5: the X amount.
• 27:00
  Speaker 6: Now, But do you keep an attorney with you? Oh?
• 27:01
  Speaker 6: You just write in these contracts? How does this work?
• 27:03
  Speaker 5: Once you have a standard template contract, you have it.
• 27:06
  Speaker 5: But this is real estate, like you, nobody's gonna run
• 27:07
  Speaker 5: off with the house, right but people know that you
• 27:11
  Speaker 5: know you made an agreement.
• 27:12
  Speaker 6: And here's here's what happens.
• 27:14
  Speaker 5: When you when you put up with that car and
• 27:16
  Speaker 5: we signed that contract. This is one part I did forget.
• 27:20
  Speaker 5: We have what they call a I gave you consideration
• 27:26
  Speaker 5: on that contract, which means money. So when we sign
• 27:29
  Speaker 5: that contract, I was like, Yo, here go one hundred dollars.
• 27:31
  Speaker 5: Hold on to that, and now I'm gonna get you
• 27:33
  Speaker 5: the rest of the money Friday. So now you accepted
• 27:36
  Speaker 5: this hundred bucks on this contract. Now mean you in
• 27:39
  Speaker 5: a valid contract with actual consideration right now. Typically on
• 27:45
  Speaker 5: real estate contracts, you have what you call a.
• 27:46
  Speaker 6: Due dillage period.
• 27:48
  Speaker 5: And usually at one hundred dollars in my market will
• 27:51
  Speaker 5: buy you ten days. So I know from the day
• 27:54
  Speaker 5: I signed the contract with you on your house. I
• 27:56
  Speaker 5: got ten days to go out and find a buyer.
• 27:59
  Speaker 5: If I can't find a buyer by the seventh, I'm
• 28:01
  Speaker 5: a no in twenty four hours because I'm gonna shot
• 28:03
  Speaker 5: the property out. If I can't find a buyer's I'm
• 28:05
  Speaker 5: gonna call you up. Hey, man, you know I miss
• 28:08
  Speaker 5: something on that house. Either we're gonna renegotiate or we
• 28:12
  Speaker 5: are going to just cancel the contract.
• 28:14
  Speaker 6: How do you find a buyer?
• 28:15
  Speaker 5: Well, they sharks, they have to spend money.
• 28:19
  Speaker 3: I was just thought about something, so correct me if
• 28:23
  Speaker 3: I'm wrong. But all business is kind of the same.
• 28:25
  Speaker 3: So these kind of business principles are very relatable. So
• 28:30
  Speaker 3: this is how I'm understanding it from my thirty minute
• 28:33
  Speaker 3: education so far, the easiest way to go was to
• 28:37
  Speaker 3: be there's people that buy home. There's real estate investors, right,
• 28:39
  Speaker 3: that's the job. But they may not necessarily have time
• 28:45
  Speaker 3: or they don't want to knock on doors and cold
• 28:47
  Speaker 3: co and all that. So now you as essentially the
• 28:51
  Speaker 3: broker in this situation. You're doing that work that they
• 28:55
  Speaker 3: don't want to do. But they kind of need you
• 28:57
  Speaker 3: and you need them. So you establish relationships with big
• 29:00
  Speaker 3: time real estate investors in the neighborhood. You call them
• 29:03
  Speaker 3: with deals. Look, I got this property, Da dada. You
• 29:06
  Speaker 3: establish your relationships with them, and they kind of become
• 29:09
  Speaker 3: reoccurring clients. It makes your job easier because now you're
• 29:13
  Speaker 3: not just winging it trying to just find random people.
• 29:16
  Speaker 3: You develop strong relationships. It makes their job easier because
• 29:19
  Speaker 3: they're not just winging it trying to find random properties.
• 29:21
  Speaker 3: They trust you because they know that you've established good
• 29:26
  Speaker 3: relationships and you know good properties, you know good price in.
• 29:30
  Speaker 5: You've got correct Yeah, you bringing a consistent product. They
• 29:33
  Speaker 5: need to spend money. That's how they make their money.
• 29:36
  Speaker 5: They decided to be on that side of the equation.
• 29:39
  Speaker 5: They don't want to go And that's why this business
• 29:41
  Speaker 5: takes no money because all it takes is hustle. It
• 29:44
  Speaker 5: ain't cost you nothing to go knock on that door,
• 29:46
  Speaker 5: ride down the street. But once you have that house,
• 29:50
  Speaker 5: now you need to be in the relationships where you
• 29:52
  Speaker 5: find people that when.
• 29:54
  Speaker 2: You started, Yeah, how did you develop the relationship to
• 29:58
  Speaker 2: get a buyers?
• 29:58
  Speaker 6: I put it on Facebook market Place that was it.
• 30:01
  Speaker 5: Yeah, And the guy called his wife called me, and
• 30:04
  Speaker 5: then that weekend he agreed to buy it.
• 30:07
  Speaker 3: So do you have like a team of investors and
• 30:09
  Speaker 3: enabled in your area now that you kind of like
• 30:11
  Speaker 3: work with on a continuous basis.
• 30:13
  Speaker 6: I'm six hundred, six hundred.
• 30:15
  Speaker 4: So how do you like email blasted out?
• 30:16
  Speaker 5: To be email blast and text blasts? So we use
• 30:18
  Speaker 5: mail Chimp to send out emails and we sell this
• 30:21
  Speaker 5: send out. We use call loop dot com to send
• 30:23
  Speaker 5: out a blast text message?
• 30:25
  Speaker 6: Are they like fighting over the deals sometimes? Oh? Yeah,
• 30:27
  Speaker 6: that's what you want. I'm frizzy. So you don't want
• 30:29
  Speaker 6: to come buddy buddy with no investor. No, it can't
• 30:32
  Speaker 6: be too close because I'm in a marketplace.
• 30:33
  Speaker 4: Business is business.
• 30:34
  Speaker 5: Yeah, so you say you're going to give me fifty
• 30:37
  Speaker 5: but you say fifty two. That's where I'm going. Everybody
• 30:41
  Speaker 5: gotta eat.
• 30:43
  Speaker 6: I got to eat all facts.
• 30:45
  Speaker 4: This is dope. This is actually pretty dope. I got
• 30:47
  Speaker 4: actually pretty dope.
• 30:49
  Speaker 6: Now for the clothes. I got a question.
• 30:50
  Speaker 2: I saw this in one of your is a double closing?
• 30:54
  Speaker 2: I've never heard that before. What is a double closing?
• 30:57
  Speaker 5: So essentially, people that are now not good with setting expectations.
• 31:02
  Speaker 5: I like to say with the buyer or seller, with
• 31:04
  Speaker 5: your client, they don't know that you are going to
• 31:07
  Speaker 5: make profit from this deal, or sometimes the profit is
• 31:11
  Speaker 5: too much.
• 31:12
  Speaker 6: Now we'll say not all the time. Sometimes the profit
• 31:14
  Speaker 6: is just too much.
• 31:15
  Speaker 5: So a double close is where you said, just to
• 31:18
  Speaker 5: say that house down the street we're talking about instead
• 31:20
  Speaker 5: of thirty, you got it for ten thousand, right, and.
• 31:23
  Speaker 6: Now you're selling it to the end.
• 31:25
  Speaker 5: Now you're selling it to the flipper for fifty thousand,
• 31:28
  Speaker 5: so you're making a forty thousand spread. And sometimes if
• 31:31
  Speaker 5: you don't have the right buyers, they may be like,
• 31:33
  Speaker 5: I'm not paying you fifty thousand. You got it for ten, right,
• 31:37
  Speaker 5: But the numbers really work for him, but he not
• 31:39
  Speaker 5: giving you that. So sometimes you go ahead and use
• 31:43
  Speaker 5: transactional funding to close on that first ten thousand and
• 31:47
  Speaker 5: then turn around the next minute and sell it to
• 31:49
  Speaker 5: my guy over here. But what happens is on a hudsheet,
• 31:52
  Speaker 5: which is a sheet that everybody has to use. It
• 31:55
  Speaker 5: close the property, it's gonna say what you bought it for.
• 31:58
  Speaker 5: But if you do a double close, he's never going
• 32:00
  Speaker 5: to see that side of the transaction. So it's something
• 32:03
  Speaker 5: that I tell people never really I've never done one, right,
• 32:06
  Speaker 5: So it's not really needed, especially if you just got
• 32:10
  Speaker 5: to set a good expectation if you have good cash buyers.
• 32:12
  Speaker 5: And this is one of my things I say to
• 32:14
  Speaker 5: cash buyers, if I find a property for a dollar
• 32:17
  Speaker 5: and the numbers work for you at one hundred thousand,
• 32:19
  Speaker 5: would you.
• 32:19
  Speaker 6: Be upset with me making a ninety nine thousand dollar fee?
• 32:22
  Speaker 6: If they say yes, kick him out.
• 32:24
  Speaker 5: Because when you change your mindset, you realize money is
• 32:27
  Speaker 5: not a limited thing. When I started to think that
• 32:30
  Speaker 5: I had to get these properties because you know, you
• 32:33
  Speaker 5: got money, when I changed it and said, there's guys
• 32:37
  Speaker 5: out here that if they don't flip houses, they don't eat,
• 32:40
  Speaker 5: they need me, you know, so I no longer look
• 32:44
  Speaker 5: at some money as a limited commodity.
• 32:48
  Speaker 4: Attorney state versus title state, what's the difference with that?
• 32:51
  Speaker 5: Let me see, New York is an attorney state and
• 32:55
  Speaker 5: North Carolina's an attorney state. So in states, you have
• 32:59
  Speaker 5: two ways you can close the real estate transaction. Title companies,
• 33:03
  Speaker 5: which essentially due to title research and look up the
• 33:05
  Speaker 5: property and make sure it's free and clear, are called
• 33:07
  Speaker 5: title states their actual companies. And then you have attorney states,
• 33:11
  Speaker 5: where only attorneys are allowed to close real estate transactions.
• 33:14
  Speaker 5: And North Carolina and New York is an attorney state.
• 33:17
  Speaker 5: I believe Philly is a title company state. In Baltimore
• 33:22
  Speaker 5: is a Baltimore.
• 33:23
  Speaker 2: What's the process of setting up a closing with the
• 33:26
  Speaker 2: title company.
• 33:26
  Speaker 5: Yeah, so, once you get that first contract with the homeowner,
• 33:30
  Speaker 5: you're gonna send the contract to the title company or
• 33:34
  Speaker 5: attorney and tell them to start title search. And all
• 33:38
  Speaker 5: title search does is to make sure the property is
• 33:41
  Speaker 5: owned free and clear, no lians on cumbers is on
• 33:44
  Speaker 5: the property, and that it can be transferred smoothly to
• 33:49
  Speaker 5: the new owner. And then once they do that, then
• 33:52
  Speaker 5: once you have that paperwork and you're out finding your buyer,
• 33:55
  Speaker 5: and then you call them and say, hey, look, I
• 33:56
  Speaker 5: have an assignment of that contract I gave you, And
• 33:59
  Speaker 5: all they're going to do is switch your name with
• 34:01
  Speaker 5: the new buyer's name, and your fee is written on
• 34:03
  Speaker 5: that contract. And at the closing you're gonna get your money,
• 34:06
  Speaker 5: and then the sellers are gonna get their money and
• 34:09
  Speaker 5: the buyers are gonna walk away with the property.
• 34:10
  Speaker 4: And the contract depends on each date, it's different.
• 34:14
  Speaker 6: Yeah, yeah, typically it's just different. Easy.
• 34:16
  Speaker 4: Once you have on it's like a template that.
• 34:18
  Speaker 6: Yeah, you keep filling it out.
• 34:20
  Speaker 5: Yeah, my graduates from my school being force.
• 34:26
  Speaker 4: Back, drop Bag Drop, Mike, drop Bag, drop Drop.
• 34:45
  Speaker 5: Hey everyone, this is Tatiana Manning post of Real Talk
• 34:48
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