BiggerPockets Real Estate Podcast - 102: How to Struggle and Still Succeed at Real Estate with Scott Costello

Episode Date: December 25, 2014

Have you ever struggled to get to the next level with your real estate investing? On today’s episode of the BiggerPockets Podcast, we sit down with real estate wholesaler and self-proclaimed “struggling investor” Scott Costello. In this riveting interview, you’ll learn why real estate investing is never as easy as it might appear and how to overcome the struggles that everyone faces to find success. Listen for awesome tips on how to break into the real estate industry, advice on getting into wholesaling, and how to motivate yourself amidst the everyday struggles investors face. If you’re looking for some great motivation and useful tips, don’t miss this inspiring interview! In This Show We Cover: How Scott got started in real estate thanks to a book What took him so long to get his beginning How he used wholesaling to get his foot in the door Why personality matters in deciding what path to take in your investing General advice for wholesalers The ins and outs of starting real estate with a full time job How to find a partner to invest with Scott’s method of targeting absentee owners from tax records What keeps him going as an investor The everyday struggles real estate professionals face Things Scott would have done better if he could do it again The importance of establishing a website The best and worst deals Scott has ever done Tips on using the Internet to market your next wholesale deal And MUCH more! Links From the Show: BiggerPockets Webinar Blogmutt.com BiggerPockets Marketplace BiggerPockets Plus and Pro Accounts Books Mentioned in the Show Rich Dad Poor Dad by Robert Kiyosaki Brandon Turner’s The Book on Investing in Real Estate with No (and Low) Money Down How to Win Friends & Influence People by Dale Carnegie Connect with Scott Scott’s BiggerPockets Profile Scott’s Business Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast. Show 102. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin. host to the Bigger Pockets podcast

here with my co-host Chris Cringle himself Mr. Brandon Turner. What are you calling Chris Cringle Grinch? Ouch. Just kidding. You're not the Grinch. That's not very Christmas light. No, you are not the Grinch.

You are like, I don't know, what's another good Christmas person? Like Rudolph. You're like Rudolph. You're like Rudolph over there. You know, everyone likes Rudolph because he can fly and he's got a red nose. I don't know why that's like you, but trust me. I don't know either.

I don't either. All right. Merry Christmas. Yeah. Thanks. Even though most people probably aren't listening to this on Christmas because they're with their families. That's right.

That's right. Am I allowed to say Merry Christmas? Of course you're allowed. Merry Christmas. Happy Hanukkah. There you go. Thank you. I'm culturally sensitive.

Look at me. There you go. Awesome. Awesome. Well, what's going on, man? How are you? I'm good. I'm good.

I'm really, really pumped for 2015. And I am. I have like goals I'm setting for myself. So it's going to be a good year. very good. Nice. That's awesome. Congratulations.

And I'm going to Hawaii in 2015 in like a month. I've been told. Yeah. I know you keep reminding me. Every day. Yep, pretty much. It's going to be awesome. Can't wait for you to be gone.

Yeah. Have a good time. By day without talking to Brandon. I love it. Yeah, there we go. All right. Well, today, let me get to today's quick tip.

Today's quick tip is we've said this before, but I want to reiterate almost every single week. We do webinars on Bigger Pockets. We invite anybody to, if you want to show up, show up. If you want to know what the current webinar is, just go to biggerpockets.com slash webinar. And I update that URL every week or two with the new webinar. So if you want to come, it's free. We usually only have them like save the webinar for a week. So if you want to come, just show up. And then if you can't actually make it to the event, just sign up

anyway. You can watch the replay later. And then the following week, we'll have another webinar. So anyway, you should come. That's a quick tip. Good tip. Good tip. Awesome. All right. Well, today we've got a cool show for you guys. Our guest is a guy I've known for years, but haven't really had a lot of conversation with. And it's, it's really cool to kind of hear more about his story. Scott Costello, Scott's a very, very savvy web guy. And he's a, he's the essential struggling investor. And I don't know. I mean, I think it's so cool talking to guys like Scott to hear it's not, you know, real estate just isn't as easy as they say it is all the time. And for some people, you know, it takes work and it takes time and fortitude. And, and if you can,

stick it out, you know, things can start to come together. And I really enjoyed this episode. Yeah, I did too a lot. It's nice to hear that people aren't like, I don't know, this is easy and this is, you know, anybody can do this. Like, it's nice to hear somebody who's worked through the struggles and the overcoming those problems and those pitfalls and those snags that everyone goes through, but nobody likes to talk about. And Scott's very open about those struggles. And I love that. So that's great. Yeah. And for those of you who are listening, who may be struggling, you know, I, be at John listening, I mean, really take heed of what he did because I think his strategy for getting past the I'm not going to get started ever phase because of X, Y, and Z, listen up and, you know,

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One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NREG.com slash BPPod. That's N-R-E-I-G.com slash BPPod. All right, guys. Well, let's bring them on board. Scott, welcome to the show.

It's good to have you here. Thanks for having me. I'm excited to be here. It's a joy. I've been listening to you guys for a while. I can hear the joy in your voice. I'm a laid-back person, so you might not be able to have my emotions. That's all right. That's all right. Me too. Me too. I wish I was more laid-back, though. I got to figure out how to get more laid-back. I don't know. I stress too much. You got any tips for that? We're going to start out with that one. Any tips? How do I become more laid-back, Scott? Just clear your mind. It's easy for some people. I'm going to work on that. I'll work on that. I think that's possible because he started with nothing. Oh, oh, look at that burn.

All right, Scott. Scott, how do we do this? How did you get started, man? Tell us about the origins of you and real estate. It was a very slow start. I mean, I've always been interested in real estate, at least housing, and it's going through open houses on my free time. And I decided to take a look at this book.

I heard about Rich Dad, Poor Dad, which everybody, who I know was an investor. read that book, so it's not that groundbreaking. But I read it on my honeymoon on our cruise ship in the Caribbean. Nice. Where'd you go? We went Eastern Caribbean cruise, and then Aruba afterwards. It was a nice two-week vacation. That's awesome. I just did that last year, and so I did the Eastern Caribbean. It was great. Yeah, very good. Yeah. Okay. So anyway, you read Rich Dad Porta on the cruise. I'm trying to throw you off here. That's my goal today. Good job track. All right. So you read Rich Dad Portaad on the cruise, and what did that ignite in you?

It changed my way of thinking about how I can make money. I mean, before I was happy with my stable nine to five job. Which was what, by the way? It's a software developer for an engineering company, create their in-house software. And once I read that book, I'd walk into work and it was just like, I really want to walk down these halls, say hi to the same people every day. No matter how hard I work, I make the same amount of money, and I'm just making someone else rich. You're a New Yorker? I am from New Jersey.

Okay. So close enough. Our ugly steps are similar accents. Yes. Yeah, nice, nice. All right. Now, that's cool. All right.

So your mindset was kind of changed. And you said, you know, the origins took a little bit of a while to kind of get things going. And you've got a website, the struggling investor, right? Struggling to get started. Yep. So you talk about that. Well, so why do you think it took so long?

You know, what was the challenge for you? What kind of kept you from just going? you know, write in and doing your 15th deal. There's definitely a couple of things that were the reason why. I mean, I'm a kind of a cautious person in one sense that I like to know some answers before I get started in things.

I can't just jump in and then go and then figure things out later. I'm a little too shy for that. And I was just starting a new family and I didn't want to jeopardize that going forward with finances and stuff because you always hear about horror stories. losing tons of money, investing in a bad house. So I wanted to be sure. And I couldn't spend a lot of our income from our jobs on this,

or else my wife would be less inclined to let me do it. So I had to come up with ways to invest without really spending any money. Nice, nice. And I'm sure you and everyone else listening knows that Brandon wrote a book on that very subject. I had to preempt it and plug it because he was bound to do it. the book on low and no money investing back at bigger pockets.com slash no money. It's got all sorts of stuff about that. But he was going to do it.

So I just decided I would. Thank you. Thank you. Yeah. Well, so what did you end up? You know, there's all sorts of ways to do it. What did you end up deciding would be the best path? And I do think it's interesting because, you know, you're not alone, right?

There's a lot of people who are like, how do I get my spouse on board? They don't want me to spend money. really throw down a lot of cash to do this. You know, I got to do something to kind of get them excited. And it sounds like that was your plan. Yeah, she still's not excited about it. So we don't talk about it too much. It's just kind of in passing.

It's getting a check when she's happy. But then we'll use a sit on the name of the podcast. So, you know, she doesn't know this is about you. Thanks. So, okay, so what was your first deal? Well, let me ask you this first. What did you get into? What is the strategy for those people who don't know?

Well, I got into wholesaling properties pretty much strictly by like assigning the contracts. Okay. Okay. So let's talk about your, well, first I want to know this. Why wholesaling to start with? And then we'll talk about your first deal. So why did you choose wholesaling as the kind of the avenue to get into? Mainly because you could start it from home.

You can not spend a lot of money getting into it. You can kind of feel your way around before you really jump in full board. You can send out 100 mailers here, 100 there, see how the phone calls come in, start talking to people without getting overwhelmed with having to see 10 properties a week or handle hundreds of phone calls. Yeah. So it gave me a feeling outstage to where I can start getting comfortable talking to other people. Yeah. And you bring up a good point. And I think a lot of people believe that you have to jump in and send 10,000 mailers in order to get X number of people.

and create these funnels and that works, right? But it also works to send 100 and send another 100 and another 100. It may take a little bit longer to get more leads, you know, because you're sending out less mail. But, you know, you go at your own pace and, you know, there's no rush. And I think, you know, a lot of people push. You got to do a million deals, a million things at once and you don't. Exactly. Let me ask you this.

Do you think wholesaling is a good way for other people to start? When you look back on your journey, do you think that was a good idea or do you recommend people start a different way? It really depends on your personality. I mean, if you're a cautious person, doesn't like to throw down a big chunk of change on a rehab or get involved in a buy and hold and a rental property. I think it's a great way just to kind of learn the ropes and figure out the business. I mean, because you're going to learn about rehab costs and you're going to learn about what a rental, what it takes to rent a property. pretty, it's definitely a great way to go. Okay. Yeah, I don't disagree at all. I think, you know, a lot of people choose wholesaling because it's what a lot of the gurus kind of pushes the

easy thing, but you know, you've kind of always said, you know, you're the struggling investor, right? This takes work. This takes effort. And so I always tell people, yeah, I mean, wholesaling is a good strategy for getting started. It might not be the best for everyone. It's probably not the best for everyone. But I like the idea of wholesaling as a beginner strategy. If for no other reason. It helps you see kind of the whole picture of the rehab. You get to interact with rehab people. You get to interact with, you know, some landlords. You interact with motivated sellers. You get to learn marketing. You kind of learn everything with wholesaling. Yes, absolutely. It might even be like the most difficult like thing to actually learn just because of the sheer volume of stuff you need to

kind of know. So I mean, do you have any tips for people just getting started with wholesaling? They're just starting today. They want to do it. What's your big piece of advice for that? Just start sending out mailers and getting people. to call you because nothing happens unless people are calling you. You could read up about all the ways to do it, how to assign a property, whether you want to go after a REOs or probates, and just like me, I spent a year just reading about all those things and I got nowhere. And you just got to send out mailers or call people or get people on the phone and talk to them because it's the most important thing without that. It's not happening. Yeah. Nice. Nice. Well,

So, you know, given the struggle, and we're going to get into kind of what everything looked like, why did you stick it out? I mean, you know, it sounds like it was kind of tough, and you know, you did a lot of stuff with little results, as my guess. And so, you know, why keep trying, you know, instead of just giving up? And this is, I'm stealing Brandon's thunder for our famous four, but, you know. I think it's just who I am. I enjoy the challenge. I need to build. something. My hobbies are like woodworking or developing software. And this is sort of like the same thing. I'm building on top of my past activities until I can finally achieve what I want to.

Sometimes this process is more exciting than actually reaching your goal to me. Yeah, yeah. That makes sense. Well, tell us about the first deal then. Let's kind of get into that. And how long from, hey, I'm going to be a real estate investor to, hey, I got a check in my hand. I just did my first deal. What was that like? That's about half my investing career between those two moments. Well, it took about three total years before I got my first wholesale deal. Wow. Half of it was just reading up, sending out a mail or here and there.

I'm a shy person, so just getting the nerve to call people back when they left the message. And I don't really have a lot of time to spend with my nine to five job, which doesn't allow me to make phone calls during a day. And my son came around a couple years ago. It's like 10 o'clock to midnight is my free time. Yeah. So I'm not making phone calls. So I needed to get a partner.

And after the first two years, I found the partner. His name is Lance. And we worked together great because he had no money. I had some money. I sent out the mailers. And after about six months working together, we finally got a call. And Slady was, her mother was in a nursing home. when she needed to sell her house, her mother's house.

And at first our offer, she didn't accept it. But a couple weeks later, Lance called me up. He said, you'll never believe this. She accepted our offer. I was at work. I about, I couldn't really jump up and celebrate, which took away from it. But it was still great.

So it took about three years from the start. Wow. Wow. So it took three years. I want to do it to the point I did it. Now, you're the first person. we've spoken to on the show that said, hey, I went and took a partner to get started as a wholesaler. I've not, I haven't heard this strategy before. And I think it makes sense. Like,

you're a guy who's stuck in that nine to five. You got your kid afterwards. You know, you can't make those phone calls. Plus, you know, you're not the, you know, the most, you're a shy guy, right? So absolutely. No question. Outgoing was the word I was looking for. It wasn't coming to my brain here. All right. So, so you've got this. you've got the partner who probably has, you know, the go-getterness that he wants to get on the phone, he's ready to do it, ready to do it, and he'll talk to anybody, right? Yeah, it was a necessity. I wasn't going to get where I wanted to go unless I partnered up with somebody. There was no doubt about it. So what did that look like? What did the actual partnership?

Like, how did you decide to bring this guy or how'd you find him? And was it just like a 50-50 thing? Well, I found them in a coaching program that I joined up with. Okay. And I joined up with that coaching program because I offered to trade some of my technical skills for this guy coaching me. And he was coaching a couple other people and Lance was part of the coaching program as well. And he was having issues because he didn't have a job and he couldn't spend any money. Gotcha. And my coach actually had a light go off in his sentence that you guys should partner up.

It's like sold. Yeah. Yeah. Well, that just demonstrates why I love the idea of partnerships. I talk about them all the time. I think chapter three in the book I wrote is all about that. And it's because like everybody has their strengths and weaknesses, stuff that you're good at. It was bound to come up.

Right? Yeah. I didn't say the word. I didn't tell people that they could go to biggerpockus.com slash no money to buy it. No, but I love the idea of partnerships because I don't know. I mean, there's so many things that I'm not good at in life. And one of those is having cash. I could invest to the other 9,000.

Yeah. Yeah, there's a lot of things I'm not good at. I mean, I don't like answering the phone. I'm kind of a shy person as well, which would probably shock a lot of people, but Josh knows that. Like, when I get into a crowd of people, like, I'm like, uncomfortably, yeah, I'm uncomfortably shy. Yeah. That is me. Yeah.

Yeah. So I don't like answering the phone. So like, anyway, partnerships really resonate with me quite a bit in that regard. So maybe we can kind of, you know, focus, talk about partnerships a little bit because I know a lot of people out there on this kind of the same boat. So you found your partner at that kind of thing. Where do you recommend people today finding partners? Like, where should they go to look for a partner?

you put that on Craigslist? Or how should you go back looking for one? And how, sure. It's a tough thing. I mean, it kind of just fell into my lap because I wasn't looking for a partner at that moment. It was sort of like a realization after my coach said that you should partner that this could be a good thing. I mean, he's just having to compliment my weaknesses very well. And that's kind of what you should look for.

I mean, you should recognize what you're weak at and then just build relationships by going to real estate meetings. and just talk to people. And eventually you'll find someone who just really complements what your weaknesses are. And then you guys can explode from there. Yeah. What did you guys do on that first deal? How much would you make on the wholesale? We made $10,000.

Okay. Just pretty much. And from the start to the end of the actual deal, it sounds like it was a probate. No, it wasn't a probate. She was in a nursing home. Yeah. It was almost like an executor. like the woman's daughter had the right to sell the property.

Okay. So we bought it from her. And it came together pretty quickly once she agreed on it. It was pretty straightforward. We assigned it. We found our buyer within like a week. Do you remember how you found the buyer? It was through a connection we made at one of our local real estate meetings.

Okay. Nice. Nice. And were you specifically targeting that kind of lead when you guys had come across it? Or where did they come from? How did you kind of come across these people? This was an out-of-state owner, so we were targeting out-of-state owners, absentee owners that we got from the tax records that we pulled. Gotcha.

In New Jersey, they're right online, so I can just download an Excel file, filter it, and then just put the mailings together. New Jersey. Yeah. Nice. Nice. All right. So you got this first deal. It took you three years.

It took Lance. You guys closed. You're ecstatic, but you couldn't show it. Then what happens? You know, now are you like super hyped up? Are you motivated? Did you increase the amount of mailings you were doing? You know, what was kind of like the next progression in your investing?

Well, after the euphoria that actually, Colson can actually work. We got excited. We pumped up the mailings a little bit, but not too much because we didn't want to run out of money. Yeah. So just kept sending them out. We'd get some close ones and nothing came for another six months to a year. Wow.

So it's been really. Was that because of the number of men? I mean, I'm assuming you were getting phone calls. You know, you make it sound like nobody was calling. I'm assuming you're getting the calls. Yeah, we'd get the phone calls. But, I mean, our volume wasn't that high because, I mean, we didn't have a lot of funds because we only had one deal working behind us.

Yeah. So it was, I mean, we'd get 30 phone calls a month. After why, you should get some deals. I don't know if it was our market or just us, but it was, it's still tough. I mean, even to this day, we struggle between deals that, I don't know, stuff to say. It's one of those nice trackers. Listen, you're not alone in the struggle, though, man. I mean, that's the beauty of kind of what we do, right?

I mean, bigger pockets, we're all about, you know, trying to help one another be successful, and everybody's kind of, you know, we don't all goes from zero to hero overnight. Like, yeah, the TV guys will make you believe, you know. So there's a lot of people who are going through what you've gone. through A and B, you know, what's unfortunate is there's a lot of people who went through what you went through, but they stopped after year one. They stopped after year one and a half. They stopped after year two. And they didn't get to the point where they got the first deal in the second and so and so forth. And so, you know, what do you say to those guys? Because, you know, I think you're probably

the best guy we've had on the show. And what is this? Show 102 and 102 shows to tell them. Like, you Now, what advice do you have for those guys? Well, it's, I mean, you have to kind of analyze is it right for you after a while. I mean, there's many highs and lows. And what keeps me going is, I mean, having a partner helps because you can talk to him. But you have to surround yourself with other like-minded people. I mean, bigger pockets is key because you're always talking about real estate and different ways to go about it. And maybe you're just not hitting the right angle for you.

and you have to adjust and change your way of going. I mean, you can't look at how other people are progressing for real estate. You have to kind of take it at your own speed because I see a ton of people starting up last year who are well beyond my point. But I just have to keep reminding myself that I'm on a slow path. It's not going to go quick right now. And I just have to see it through, just keep going at it. and eventually things will pick up. I'll hit a breaking point where it'll just explode.

That's great advice, really, really good advice. And I think the, you know, I think anybody listening really, really needs to take that in. Because, you know, life is not a race. I'm not racing Brandon. I'm not competing against him. You're not competing against him? I haven't struggled for years to try to beat you. I mean, come on.

Whoa, whoa, easy, Tiger. Hold on now. is that what that little laser pointer on my head always is? That is. I'm coming for you. Yeah. No, I mean, you know, we're all kind of living our own path, right? And so, you know, don't let it get to you if, you know, that other guy's kicking butt and you're kind of slow or whatever it is.

You know, take things little by little and do what works for you. As, you know, Brandon and I talk about a lot, you know, there's no one path to success. Yeah. Exactly. Yeah. Just to add to one more thing you said, too. that kind of accent it. You talked about, you know, hanging out with certain people that are real estate-minded is so important. One of my favorite, I just wanted to share one of my favorite quotes of all time. I think Jim Rohn said it first. And we've said it on the podcast before, but you are the average of the five people you hang out with the most. I love that quote because it's so true. Like the people that you associate with the most in your life are the ones who you end up being like. I believe it. Yeah. Yeah. Look around. I mean, like to all the people listening, look around. Who do you associate with the most, the five people?

write those people down and then look at you are the average of those people. And if they're not the kind of people that you want to be, I'm not saying dump your friends, but pick up some new ones. And I mean, that is why I push people all the time. I say like if nothing else, if you're brand new, hang out on bigger pockets or listen to the podcast or go to real estate clubs,

whatever, even if you have nothing to contribute yet, just hang around and get involved in those conversations because you will become like the average of those people you hang around with. So that's just my call to action to people is to, you know, start hanging around with those five people. It's amazing. It's amazing how you'll notice that your friends will shift once you start really focusing on one aspect like real estate.

You'll forget the people who are in the sports or just hanging out on the weekends to be more motivated and wanting to get stuff done on Friday and Saturday nights instead of just going out to the bar or something. Yeah, yeah. Nice. Nice. Well, so back to the partnership thing. What if, you know, what if somebody feels they have nothing to bring to? to the table. You know, they're brand new. They're like, hey, I don't know what I can bring. You know, what would you tell that person? Maybe they don't have money and they don't know a lot, but they're looking for somebody. Maybe they're willing to work. Is that enough? You know, the hustle? Could be. I mean, I needed someone to work and do the hustle things because I couldn't. Yeah. There's always something that you can compliment someone else on. If it's hustle, it's hustle. And you said something earlier that, you know, I meant to touch on earlier, but you mentioned that you got

connected to that coaching guy who, you know, helps you kind of mentor you and how to do stuff based on the fact that you knew how to build websites or software development, right? Yeah, I helped them build those websites. Right, yeah. And I love that point is that you had a skill that was not real estate related. I mean, maybe sort of. But like it was a real world skill that you just had from your day job that you could then apply to help somebody else.

And there's so many tasks for like an experienced real estate investor that people could do just like that. I mean, maybe you don't know how to build websites, but maybe you know how to you know, fix a leaky faucet or maybe you know how to drive a car, you know, a door knock. I mean, there's so many things that investors need. And the fact that you did that, I think it's just cool. So the driving a car and knocking on doors is a highly set out scale, Brandon. That is, right? Like that's, I mean, if you know how to drive, that puts you better than half of the world population. So, you know, like you said, everyone's got something.

All right. So what qualities? I mean, like talking a little bit more about the partner things. what do you recommend, I guess, I don't know, in looking for a partner, let's say I'm a brand newbie right here and I have no idea what I'm doing. And I find a guy and he says, yeah, I want to be partners with you. You know, what next? I guess what do I do? How do I look into that person? What happens? Well, the main thing that has to work is you kind of got to be, have the same morals and values.

I mean, if one guy is all about the money and you're not. It's not going to work out. If he's always trying to scam someone and you just don't feel comfortable with the way he, maybe he's walking the gray line all the time. And if it's not you, then you can't, the partnership won't work. You'll get into a fight. Yeah. And you also can't, I don't think you can, I don't believe you can be partners with a close friend either. Really?

Because business will just get in the way. I mean, I've seen it, money and just in your morals because you find out a lot more about your best friend. That's all you did beforehand. That's funny. Yeah, and I think people choose their best friend because it's convenient sometimes. Like, people choose partners based on convenience and not based on quality or skills. And I think that's a mistake. And I think that's, you know, probably kind of what you're getting at.

And, you know, like, yeah. Yeah. Just because it's your best friend doesn't mean you're going to be good in business together. So. Correct. Here's the truth about passive investing. If the strategy isn't right on day one, the returns won't save it. Multi-family real estate offers structural advantages.

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Have NREG review your insurance with someone who gets investing at NREG.com slash BPOD. That's N-R-E-I-G.com. slash BP pod. Tax season reminder for all the real estate investors listening. If you own rental properties, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS compliance strategy that lets you accelerate depreciation on your properties,

which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost segregation guys is the go-to firm, having done over 12,000. thousand of these studies with 500 million in total depreciation identified. Head to cost segregationguise.com slash BP to get a free proposal and see your potential tax savings. Looking back, if you were to start over, you know, looking at the past few years of your investing from the very beginning, what would you do differently today? I would cut out the year and a half of educating and just start getting the mailers to come in,

or calls to come in because that stunted my growth greatly. Yeah, yeah. And I'm going to be far behind because of that. But you're not behind anything now, right? What are you behind? Yeah, it's true. My expectations, I guess. Okay, there you go.

So. Okay, so starting over today, would you still do the mailers, like the actual physical mail? Would you send that out? Or would you focus more on like online? Or would you focus more on, you know, other avenues to get leads? I'd change a few things. I'd start up a web page right away. Whether I'm driving leads to it or not, I'd start it up because there's value in the age of the website, whether it's been around for two years or seven years makes a difference, and you can't make that up.

And I'd also hire out putting the mailers together. I've met a few people on bigger pockets that can do that type of thing, and it would save me a lot of time because I was in charge of putting the mailers together, and I didn't like those nights. Yeah. Yeah. Yeah. that's something that, you know, you can, people can budget for, right? I mean, you know, your time is worth money and, you know, staying up stuff in envelopes, getting paper cuts and, you know, licking, licking things or it may not be for you. And so, you know, save up and pay somebody to pay service

to do it. Put that in the budget, you know. I'm totally doing this out of order. I probably just interrupted you, Josh. I just wanted to make sure I said this before, before we gloss over it. The fact that you said get a website right now because of time matters, I just wanted to emphasize that point that if you are out there, a listener listening to this show right now and you don't have a website, even if you don't think you're going to need one for another six months to a year, like you said, get one today, just put up something now. So that way a year, six months from now, whatever, two years from now, it's starting to get seasoned and kind of more friendly in Google's mind.

So anyway, I just don't want to gloss over that because that's a really, really important point. And it's cheap, too. It takes like $10 and you're up and running. Yeah, exactly. Seriously. Yeah. And, you know, straight up, if you don't have 10 bucks to put into a website, you probably don't, you shouldn't start investing.

I mean, you know, I'm the guy who keeps dissuading people from real estate. If you can't cobble together 10 bucks, don't do this. Go, go get a, you know, a job, start saving money. I mean, you need a little bit of money to start doing this. You really, really do. So, and we're going to come back to websites. We want to talk about that. But before we get there, I had a couple really, really quick questions on more

of the deal stuff that you've done. Sure. I'm not sure how many deals you have done, but like what was, say, like, what was the coolest deal that you've done? I can't say there's one that's been cool outside of the one that made me the most money. Okay, what was that?

We made about a 15 grand. It just means a straight up wholesale deal. It took a little bit to get working because in northern New Jersey, sellers always need to get a lawyer involved. So it just, it takes months sometimes just to get through all the lawyer back and forth because you're working on their time.

Yeah. That was frustrating at the time, but it was cool and the best deal in the end because we made the most money. And what was the most harrowing experience you've had from a deal perspective? We had one deal where we negotiated a contract and we couldn't find a buyer

because they just weren't going to give us enough money. So luckily we were able to go back to the seller and we negotiated so we can make $400 on the deal because we had a buyer, we knew exactly how much they were going to pay us. So, I mean, who's going to wholesale deal for 400 bucks? But we had the money. We have the money in hand, so why not? And why did they do that? I mean, you know, they got a contract with you. I guess you could have just walked, but, you know, what was their incentive to renegotiate? They just probably, the house was on the market for a long time.

They needed to get out. They didn't want to go through the whole process again. It's just easier sometimes to just take what you got and go. Makes sense. And have you done anything other than wholesale deals or has that been all that you've done? That's it. I have dreams of rehabbing a property. Yeah. And I debate all the time about being a landlord, but I'm not too sure about that. Yeah.

You figure it out, man. You figure it out. Cool. All right. So, you know, one of the keys to wholesaling is marketing, right? I mean, you've got to get leads, you got to get good leads, and not wait around for three years and pulling your hair out for those leads, right? So you've become pretty adept at website lead, Jen. You know, I guess what would you tell somebody who says, all right, you said I need a website?

Great, now what? Well, now, if you decide to want to get leads from that website instead of it's just being a company website, you got to start putting in a lot of hard work in terms of attracting those people to your website. And that's where it comes in. You start having to write articles that show up high on Google. And that's where having the age on your website comes in handy. And then you have to know how to do keyword research. And eventually you hire it out and you have someone else do it for you. Nice.

There you go. It is pretty time intensive. The whole SEO process, search engine optimization is a time intensive process. It's, you know, one of the jobs I do here at BP is, you know, writing good articles and stuff. And it takes a long time to research and to write stuff. And so what can people do, I guess, what kind of articles should people be writing? Am I mean, you're writing about, you know, how to, I don't know, make popsicles in your freezer? I mean, like, what do you write about on this website?

You basically have to put yourself in the mind of your target audience. So you're dealing with probates. You have to put yourself in their shoes and figure out that you're going to have questions. And as the investor who's creating the content, you have to answer. answer those questions. And then using like keyword research, you find the best term to include in that answer. And you're writing an article. I mean, it doesn't have to be long, but it has to be good and it has to build trust with the reader. Do you have any suggestions on what like, what are the questions that people are at? I mean, what are people typing into Google? I don't even know your

exact keywords, you know, but like, I mean, what kind of things do people ask for on the internet to try to get to your site? Really? Do you really want to know that, Brandon? What do people ask on the internet? Because I've seen some of your searches. And I can't talk about them here because it'll offend a lot of people. Yeah, yeah, yeah, yeah. All right. So yeah, what are they searching for besides cat videos? They're searching for, like, how do I sell my house within the probate process? Okay. Can I sell my house before the whole estate has been settled? What do I do with the house that I inherited? Are there any taxes? That sort of thing.

I mean, it's down to the nitty-gritty. You want to be as specific as possible. You're not after a wide audience. You're after a small subset of that audience. And by writing multiple articles about small, precise things, you'll eventually build up to where you're getting a lot of leads. Now, are you targeting your content to specific localities? I mean, how do I buy a probate in southern New Jersey?

How do I buy, you know, how do I, what's the probate? process in, I don't know, Atlantic City. I mean, is it that specific or are you doing a little broader? You can't. Since New Jersey is not very large, I target the entire state. Yeah. But the more specific you are, the better. I mean, if you can just target a specific city, that works out to your advantage because you'll have less competition. Yeah. And people are always going to be looking for, how do I sell my house in Marstown, New Jersey? Yeah. All right. So you got people coming to your website. You've got this content that you produced. You know, why are people, what are they going to do on your site now? You know, they've made it to your website. What next?

Well, they're going to hopefully read the article, enjoy it, and have some trust in my answer. And then they'll most likely be somehow funneled toward a content fill-out form where they can enter in their basic information. I don't want them entering in everything right off the bat because it's too daunting. So just like their name and their phone number and their address. And I'll get a notification and they'll get forwarded to a secondary form if they choose to fill out, which will give them opportunity to give me more detail information about why they're selling a number of bedrooms and bathrooms and what kind of repairs they need and what they're looking for. Yeah. So it's kind of a two-step process that is proven to work much better than the single form. Interesting. Makes sense.

Makes sense. So, you know, is Google the only place that matters, you know, or do you get leads from Bing and from, you know, I don't know, actually other search engines? You know, Yandex and Russia, I don't know. I don't think I've gotten one from there yet. There you go. There you go. But, I mean, it's the major player in it. I mean, you'll definitely get leads from Yahoo and Bing and some other, like, askme.com, some weird places.

but yeah and I just focus on Google and then the other ones kind of fall into place after that. Yeah. And are you doing beyond the SEO, are you using like Facebook or any kind of like paid traffic to your website? You know, hey, putting up ads for like, you know, we buy houses or I buy houses and wherever the heck you are. Are you doing any of that stuff? I haven't started doing that yet. It's a plan for next year possibly depending on my budget. Get a few more deals.

I'll definitely do it. but it's a tricky trial and error process where you kind of got to hone in on which keywords you want to use because you can spend a lot of money and get nothing if you do it wrong or not paying attention to it. Yep, yeah, absolutely. And we do that a lot. I mean, we do pay traffic and it's, you know, if you get it wrong, you could spend a lot of money.

You can definitely blow a lot of cash. What are the tips do you have in terms of using a website, right? You know, or in terms of just building one, you know, Should somebody have a website if somebody were going to be a wholesale? Should they have a buyer's side to attract buyers, a seller site to attract sellers? Should they have separate sites? Should they put them on one single site? What's your theory on that?

I definitely go with having separate sites for your main focuses like sellers and buyers and then your company's site. Just because if you don't want your potential sellers to see all the information about your buyers, It's just either you're hiding that from them or you just don't want to overwhelm them with information. You just want to have them focus. You want them get them to the contact form, have them fill it out, and that's it. You don't want them browsing around, see what you do after you get the property or anything like that. It keeps the website simpler.

Makes sense. Make sense. Do you have any other final tips about just building a website, creating leads on, websites, anything like that? If you can find someone to write the content for you, I mean, it's your business site and the keyword content, it gets kind of boring to write it and it's not worth your time. So if you can hire out someone for 50 bucks to write an article, do it. Yeah, yeah. You know, a good friend of mine, I'm going to give a shout out to him. He's got a company called BlogMut. And, you know, it's a professional blog writing service for pretty much

any vertical, they've got professional writers and they'll do it. But there's other companies that do that as well. And so, yeah, it's not a terrible idea to outsource that job. It sounds like it costs a lot of money, but it's not really, it saves me so much more time than, I mean, I'm a slow writer, so it's been a godsend when I found this person to write them for me. Awesome. Cool. And just, I mean, that is another thing, just people, just an idea for people. If you are a bigger pockets pro member, go right in the marketplace. You know, put up a marketplace posting, hey, looking for somebody to write articles for me on my site. Because some people, going back to what we talked about earlier, are really good at certain

things, like writing. You know, they could knock out a 500-word article in 20 minutes or whatever. And if you paid them 50 bucks, they'd be a static for that or even 20 bucks. they'd be a static for that, right? And some people, you know, I don't know, aren't good at that. So, anyway, if you're a pro member, go put that in the marketplace today. And if you're not, if you're not. Great.

Yeah, there you go. There you go. It's a good reason to do it. Biggerpockets.com slash pro. All right. Well, why don't we move on to our deadly. it's time for the fire round I've been waiting for this

All right These questions come to you straight from the Bigger Pockets forums And I know you're in the forums So you've probably seen some of these But let's get started here Number one Is Craigslist a good source to start with

When searching for buyers and sellers To start wholesaling I've always found it better for buyers and sellers Okay interesting Why do you think that is? I don't know. It's just probably a trust factor in terms of people going on there to sell. They may not trust the people that they attract. Just my guess. I haven't been a big Craigless person, so I don't know. Okay. Okay. Cool. Cool. What about your favorite strategies for finding wholesale opportunities?

Favorite strategies would be direct mail and the website. Just website I like just because it works passively in the background. I get emails at night when I'm not even doing anything and throughout the day. But it doesn't bring in the volume that direct mail does. And really quick, because we didn't ask before, you had talked previously about targeting out-of-state owners. What other strategies in direct mail do you use? Do you target anyone else? We target probate and out-of-state owners strictly. All right on.

All right, cool. Next question. Do you have any good advice for creating a buyer's list? And can I add to that? Is one necessary? For me, I mean, I haven't put much effort into creating a buyer's list at all. I mean, you hear about it. That's the first thing you should do. But I've never had problems finding a buyer once I had a good deal in my bill. I mean, I probably have four people

on my buyers list. You don't need 100? No, definitely not. Basically just need one or two good ones. Come on. Our software will build you a buyer's list today. By now. All right. Next question. All right. Is it necessary to discuss how much you would make wholesaling a deal to a seller? So if you're talking to a seller, do you need to say, hey, listen, I'm going to take this deal. I may, you know, sell it on, transfer to a partner, you know, do whatever language you use. And I may make X, you know, is that something you talk about? We don't talk about it. I mean, if they ask, we probably will tell them, but we're not going to disclose it to them that say we're going to sell it for $15,000 afterwards to another buyer.

I mean, they should just be happy. I mean, they should just be happy, but that sounds terrible. You're getting rid of a problem for them. Yeah, yeah, it's, they're happy just selling the house. I wouldn't rock the boat with. Yeah. You know. All right.

All right. Is it good to find wholesale deals using the consumer MLS? Can you find good deals on the MLS to wholesale? I'm sure you could, but I have never found any. Okay. There you go. There you go. All right.

my last question how does somebody write up an assignment contract and what clauses should they include and mind you scott is not an attorney so talk to your attorney please on this question i don't know why i'm even asking it but like what you know what's the key to a wholesale contract well we simply just used the standard new jersey state real estate contract which doesn't say you cannot assign the property so it's assignable so we just assign it from there okay okay And I know some states are like that. I know Texas is like that, too. Unless it specifically says you can't assign it, you can.

And I don't know if all states are like that, but I know that some are. So anyway, another reason why you should talk to an attorney because every state's a little different. Yes. Cool. All right. Let's move on to our world famous. Famous for. Famous for.

Let's see. Number one, you know these are coming. But number one, what's your favorite real estate book? Rich Dad, Poor, Digis, because it changed my thinking. Cool. Me too. Nice. Right on.

Right on. What about favorite business books? Favorite business book? I mean, I don't know if this is considered a business, but I love the How to Win Friends and Influence People. Dale Carnegie, good book. Yeah. I think that, you know, and I wonder if we should add like a third book, like a, you know, personal development book. We could ask, like, what's the last book you read? We could add that and make it a famous five. What's the last book you read? I mean, mine would be like, what's your favorite sports team? That would be my famous five. That would be the Yankees, but there you go. Last book I've read, I haven't read one in a while.

Yeah, right. That's all right. We're not going to add that question yet anyway. I like fitness for. All right. No point in rocking the boat just because we're in the new year. So, whatever. So we got business book.

What about hobbies? What are your hobbies? And since this is the new, you know, this is a New Year show. This is the Christmas show actually, Josh. Well, New Year's is coming. You know, what is your plan for 2015? So what are your hobbies? And I'm just screwing this whole thing up.

Let's start with your hobbies. And then you got to tell me what your plans are for 2015. My hobbies. I love playing sports as long as I don't hurt myself, which I did last year. And I just came off ankle surgery. So that was fun. Yeah. And fantasy sports.

Nice. Playing golf. Those are my free time hobbies that I enjoy doing. Now, knowing that golf is the one sport that you really can't get hurt, I hurt myself every time I play. You can get hurt playing golf. Oh, man. I throw my back out.

It's so bad. I had a vision, Josh, of you like golfing and then like going back to swing and then hitting yourself in the head with your like, what's it called golf club, right? Just bam. Golf is like the least, you know, like machismo of sports. And it's like the one sport I cannot play because I keep hurting myself. That's funny. That's funny. All right. All right. 2015, your plans. What do you got lined up? My plans for 2015 are fairly similar to 2014. Just kind of keep advancing my website. get some more, try some paid advertising and get some more wholesale deals and maybe look into rehabbing. Right on. I mean, I try to keep it simple because I don't have a lot of free time. So there's only usually two or so goals that I set every year. I think that's good actually. All right on. All right.

My final question, what do you believe sets apart successful real estate investors from those who give up, fail, or never get started in the first place? It's a loaded question. Yeah. It's just determination and, you know, to keep your head down through the bad times and just having a proper mindset. I mean, it all comes back to that. It's most important and it helps you build relationships because you're positive and people want to be around you. So that's the way it goes.

Awesome. Awesome, man. All right. So where can people find out more information about you? Yeah, you got your website. So, you know, plug away and your blog. My website, Struggling Investor.com, is my blog. It's the best place to find me and ask me questions or just figure out what I'm doing.

Cool. Nice. Cool. And we'll also link to that and to your BiggerPockets profile in the show notes at biggerpockets.com slash show 102. Awesome. Great. Well, listen, man, we're very thankful for you coming on the show.

Definitely appreciate you talking a little bit about the struggles before I let you go. anything you want to add, anything you want to, you know, any, you know, any wisdom you want to bless us with, anything you want to impart upon the listeners. Hey, go to biggerpockets.com. Oh, there you go. That was great. That was awesome. Cool, man.

Well, listen, thanks again for being part of our world. Thanks for coming on. We definitely appreciate it. And happy holidays to you and yours. And we'll look forward to seeing around the Bigger Pockets community. Well, thanks for having me. Same to you guys. Thanks.

Bye. Bye. All right, guys, that was Scott Costello here on show 102 of the Bigger Pockets podcast. Once again, thank you to Scott for coming on board and being so open about his story. Otherwise, big thanks to everybody. This is Christmas. And my Christmas gift to me is just having all these awesome success stories that you guys have shared with us. And if you haven't shared one already, please do.

please let us know how the site has been helpful to you. That would be a really, really great gift for me and for the whole Bigger Pockets team to hear how the site is impacting you in your life. So take a few minutes and share with us how you're doing. And not only does it help us kind of feel good about ourselves, but it also helps you get more business because when people see that you're successful, they're attracted to you. Success forget success. So sharing success stories does that.

And you can find those on the forums at BiggerPockets.com. slash forums. Otherwise, that's it. Merry Christmas. Happy holidays. Be safe. Enjoy your family. Follow us on Facebook. Follow us on Twitter and all that for all the latest updates from BP. But enjoy your holidays. And we'll look forward to seeing you next time. Show 103, which is our New Year's episode, isn't it, Brandon? That it is. All right. Looking forward to it. All right, guys. I'm Josh Dorkin. Sign it off. You're listening to Bigger Pockets Radio. simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype,

you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer.

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