BiggerPockets Real Estate Podcast - 158: An Easy-to-Follow Blueprint for Building Your Real Estate Deal Pipeline with Jeff DeCarlo

Episode Date: January 21, 2016

Great real estate deals can be hard to find in a competitive market. So how do some investors manage to find multiple deals every month? That’s the focus of today’s show, where we sit down with active real estate entrepreneur Jeff DeCarlo as he shares his step-by-step blueprint for getting hundreds of leads from motivated sellers! You’ll love the “extra mile” Jeff goes to ensure his real estate pipeline never dries up! In This Episode We Cover: What Jeff did before he started investing How he was laid off during the crash The first wholesale deal he completed How he learned things that courses don’t teach The details of Jeff’s first deal What transactional funding is What investors should know about wholesaling Two different ways to close deals when wholesaling The costs involved in wholesaling deals Great tips for getting a mentor The main focus of Jeff’s business today How to wholesale 4 deals per month What to do when problems arise How to stay in control of your deal The strategies he uses to invest What you should know about direct mail marketing What to do with bad addresses How Jeff puts together his mailing list How to get deals despite being the “smaller guy” The difference between those who persist and those who don’t Tips for estimating repairs A discussion on partnering with other wholesalers And SO much more! Links from the Show BiggerPockets Courses Intelius BiggerPockets Webinar Vumber Podio Books Mentioned in this Show Pitch Anything by Oren Klaff The Book on Flipping Houses by J. Scott The Millionaire Real Estate Investor by Gary Keller The 10X Rule by Grant Cardone Tweetable Topics: “If you never get to your first deal, you will never figure stuff out.” (Tweet This!) “The experience is worth more than even getting that big first cheque.” (Tweet This!) Connect with Jeff Jeff’s BiggerPockets Profile Email Jeff Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 158. You know, that's the kind of things that you don't learn in these courses. They don't tell you what to do. I mean, they say, get the deal, go out market it, sell it, make cash, and, you know, you'll be forever rich. But there's kind of that second layer of, you know, doing the time. 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. 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, Mr. Brandon Turner. What's going on, Brandon? Not a whole lot.

What's going on with you? I'm good, man. Are you thawed yet? I'm getting thawed, yeah. I was just flew in from Minnesota where I went to the, this show actually comes out a week and a half later. But I went to the Viking Seahawks game in Minnesota because I was born and raised in Minnesota,

but I've converted to a Seahawks fan. You're a traitor. A lot of people have said that. It was negative six degrees in an outdoor stadium for five hours of standing there. And Seahawks won in the last 20, what's 25 seconds. That was a great game. It was an amazing game, best football game I've ever watched. But a very sad, bittersweet ending to it because nobody wants to win by the other team missing a field goal,

but whatever. Yeah. I'll take it. Win's a win. So your toes have... My toes are getting unthoded. Yeah. That's awesome.

That's awesome. Cool. Well, welcome back. Thanks. Welcome back. Cool. So yeah, no, everything's great with me. It's been a crazy first couple weeks of the year.

Just lots of stuff happening. Lots of excitement happening here in bigger pockets. I love January because of that, right? Because people love real estate in January. It's like they got their goals and they're like, I'm going to go and like, traffic just explodes or listeners on the podcast explodes. Everything just explodes. It's great. You guys are awesome. Yeah, I've been calling it the January effect for the past like decade. It literally is such that every January we see a pop in our traffic and across the board you'll see that in

the real estate space and personal finance and things like that because everybody's made their New Year's resolutions. They're super excited and they're ready to go. Well, this is a perfect show for January because this is chop full of action items and we're definitely going to help lots of the beginners and there's actually a ton of cool stuff for folks who've been around for a while as well. Today's show honestly is one

of my all-time favorites. I think if I always say that all the time, right? But like in terms of actionable content that I'm going to apply to my life, this show is definitely one of my favorites. You guys will love it. Well, I think what I like best about it is a lot of people ask about how to do things and

they go and they do them. But there's always going to be contingencies, right? So I believe it's Charlie Munger, Warren Buffett's old partner, Buffett and Munger. He talks about looking for alternatives, right? So what's going to go wrong? Before I proceed, what's going to possibly go wrong? Well, the cool thing about this show is not that it's what's going to go wrong and using that to stop you from doing things. Things are always going to go wrong. And what this show looks at is, you know, when things go quote unquote wrong, what can you do to move forward. And what happens is most investors, most people stop when the quote unquote wrong happens. And as you listen to the show, you'll get a better idea of what I'm talking about. But most people stop there.

And what Jeff does are our guests who I'm going to introduce shortly, he takes it a step further. He does the things that the average guy does not do. So this thing is amazing. There's so many little tidbits. And so we're super charged about it. Before we get into it, big thanks to everybody who's been listening to the show. We've seen a nice pop in the amount of people who've been listening to the show this January, so we're super excited about that. If you are not yet somebody who's left us a review or rating, please, we love these things.

They help us out. They help spread the word. Jump on iTunes and leave us a rating and review. And subscribing helps us a ton as well. Oh, subscribing is huge. Absolutely. Subscribe to the show. Otherwise, let's get into this.

So let's talk about today's quick. Quick tip. All right, today's quick tip. I'll make it short. We probably mentioned on the show before, but in case we've never spent time on it, we have a free video course on BiggerPockets. It's like five or four and a half hours of video lessons with over 60 lessons. It's called the Beginners Guide to Real Estate Investing course. And it's just a free course you can go and take right now at biggerpockets.com slash courses. So check it out. Cool. Yeah, we took our ultimate beginner's guide and made it into a video course because different people learn in different ways. and so check it out. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now.

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Talk to NREG and get investor-specific coverage from specialists who actually understand real estate at NRE.com slash B-P pod. That's N-R-E-I-G-com. slash BP pod. Awesome. So let's get to the show here, man. Jeff Ticcarlo is our guest. Jeff is a resident of the Pittsburgh area.

He's been investing only for a few years, but he's really crushing it right now. Didn't he say like 75 deals or something like that, wholesale deals so far, plus multiple rehabs going on at one time? I don't know. I wasn't. Do I ever listen to what I say? Yeah, he's doing a lot of stuff. He's doing multiple deals every single month. He's crushing it.

Yeah, consistent deal pipeline just coming in, deals, deals, deals coming in. He's going to teach you exactly how he does that on today show. And he does focus on wholesaling primarily. However, if you're a buy and hold, if you're a flipper or if you're a wholesaler or anything else, the techniques that he talks about are going to help you. They will help you get more deals. So definitely pay attention. Let's bring him in.

Jeff, welcome to the show, man. It's good to have you here. Thanks. Appreciate it, guys. Yeah, that should be fun today. Oh, thank you. Thank you. Appreciate it.

So we're going to talk about marketing today, and we're going to talk about a little bit of wholesale, a little bit of flipping all that good stuff. You do all that, right? Absolutely. Yep. Awesome. Awesome.

So one of the reasons I wanted to have you on the show, which is excited when I thought you were coming on is because I want to take up my direct mode marketing to a new level. And so I'm going to pick your brain a lot today. The show is about me and you. Josh is just here to, you know, entertain. Do you listen to our podcast at all, Jeff? I listen to every one of them.

Yeah. Okay. Yeah. So I don't know. if you noticed, but every time we, we have somebody who does marketing, Brandon says, I'm going to take it up a notch. And then does he? No. I sometimes do. No, I really am, though. Like, I seriously, I was on a plane ride yesterday and I sat for like an hour because I didn't have my computer because like it was dead and it was just, it was a long flight. Anyway, so I sat there and I just

worked out like a funnel, like a direct mode marketing funnel. And I was like, I really should be doing more of this. Like, so today I want to learn the best way to do it. And you seem like they got to talk to. Is that right? I am, I guess. Yeah. I've been in the same position, you know, knowing I needed to do more and just like everything else, got to do it. So it makes a difference. Yeah. And I mean, because the reason is for me and for a lot of people listening right now, the MLS is getting more and more and more difficult to find deals on. Like, it's all like when, I mean, even like a, even if I'm the first one to offer on a property, there's like six offers now on a bank repo in my area. And so like I can't even rely on those anymore for consistent leads. And so I need to come up with a better source for consistent leads. So that's what we're

talking about you. And it's not about you. So why don't you stop talking? No, I was getting to Jeff. I was, I was transitioning, Josh. Yeah. All right. Listen, we're done with this guy. Let's talk about you. You work for an auction company. You work for a real estate auction company. And then something didn't go so well. And tell us the whole story. How'd you get the game going? Right. Right. Well, yeah, I worked for a real estate auction company. I was doing business development. So basically, my job was to wine and dine bank executives to get them to give us their what they call special assets, sports complexes, funeral homes, restaurants, things that didn't fit into that traditional mold for the MLS that they could put out there. We would come in, we'd advertise it, we'd auction it, and hopefully sell it, and sometimes sell properties even for higher prices.

But in the recession 2008, I was laid off. We were the first ones to go. We had company cars, expense accounts, phones, phones. I mean, we had, you know, everything, but we were the first ones to go when the crash hit. And people say, well, how do you get selling bank foreclosures when there's more bank foreclosures? But it was at a time when, you know, $3 million special asset properties were selling for one or less. And it just, everyone put the brakes on it and kind of just were waiting for the recovery. And again, we were the first ones to go. So I myself started, you know, in buying MLS properties as well. and then same case as you had to dry up and had to look for other sources and realized it wasn't a business model that could sustain and, you know, an income in something that's predictable on a monthly basis.

So how'd you end up in the business? How'd you, I mean, had you followed by this auction job? Well, I actually, right out of college, I started selling cars, right? And it's a tough grind, but you really learn all the sales, you know, you need from there. and I rewind a little bit more, had sought an advertisement in the paper, someone was looking for someone to help with the real estate investment business. And it was a guy who was doing lease options and long story short,

he really didn't have any of the sales aspect down. So people would call, he'd send me out on these and give me the script and these CDs to read to listen to. And he was sending me on a ton of just no deals. And I got some experience there, but even when they did come through, he wasn't able to pay me and such. So I basically applied for a, they also wanted an auto auction.

And I applied for that job. And they said, well, you do have some real estate experience there. It's always been a passion of mine. And kind of just fell into the job with the auction company that way and, you know, really enjoyed it. And it's a passion now. Right on. Right on. So you got laid off.

And where's your mind? And how did you end up kind of taking those first leaps into actually doing your own deals. Right. And, you know, like a lot of people, I just started studying, everything I could. And I've always had an interest in it. And I think probably like 95% of the people out there, I mean, I knew everything. I could talk at a party with it, you know, had real estate fever where, you know, at a party, they're like, oh, here's this Jeff guy, he's going to talk about real estate. But, you know, and people would say, oh, great, how many houses you have? And I, well, you know, none. And I didn't. I didn't have any, you know, but I did all the research and bought a lot of programs and, you know, got to a point

where money was getting tight and I found a program on wholesaling HUD houses and actually had to borrow the money from my girlfriend at the time, not my wife, to buy the program. And so really I just had, you know, burn the bridge. I had to make it work because it was, oh, another program, you know, you need and now you're involving me in this. It's costing me money. So just studied it, learned everything I could. And that's how I got started was buying and wholesaling HUD properties and buying them

off the MLS and it started off good. You know, there was the first one I made every mistake in the book, you know, kind of just trusted the process and it's even a joke now with one of my best buyers is I got it under contract and it was two days till my contract

expired and I put it on Craigslist. He came, looked at it. He's like, all right, I like it. And, you know, you read all these guys. Oh, people can close in two, three days? Cash buyers. And I was like, great, can you close in two days? And he's like, well, did you you know, how's the title work? And I just kind of fumbled my way through, oh, it's a HUD deal. We've never had any issues with those in the

past. He's like, no, I understand that. He's like, but have you done the title work on it? And I was like, well, yeah, it's being done. But, you know, that's the kind of things that you don't learn in these courses. They don't tell you what to do. I mean, they say, get the deal, go out market it, sell it, make cash, and, you know, you'll be forever rich. But there's kind of that second layer of, you know, doing the title work and doing inspections, and we have to do what's called dye tests. It's plumbing to make sure that your gutters don't go into your sewers. But these are little things that I had no clue about.

And if you never took that first step, never did that first deal, you're never going to fumble your way through and figure that stuff out. And that's kind of the other side of the shiny object is, you know, how can you figure this out and just fumble your way through? And now the guy, you know, is one of my best buyers. He probably buys 10, 15 properties a year from me. But that's everyone's biggest fears. What if I look stupid?

What if I say something wrong? Which was my fear, I'm sure yours at some point as well. But it didn't kill the relationship. And now again, he's one of my best buyers. So that's really how I got started. There's a ton of stuff in there I want to dissect. Let's talk maybe first about the idea. So you bought a course of some kind.

And I like what you said there. You know, like we talk about courses and gurus and things like that quite often here on bigger pockets. And generally we're we like to, you know, like to, We like to tell people you don't need them necessarily. That said of people, I'm sure there's good information out there. But what I like what you said is like courses tell you a little bit. They don't tell you everything on how to do it, right? Right.

The courses just give you enough to get started. And, you know, there was good information in it. And it kind of gets you over that hump of how to do the mechanics of it. But there's a whole second layer in another aspect of once you get this property, what do you do now? You know, how do you sell it? How do you do the next steps to get into the title and to get the permits? And that's what I didn't know.

And the course didn't tell me that. And every area is different. So I guess it really can't tell you that. But that's what I think a lot of the courses are lacking is what do you do once you get it? Other than put it out there, try to find a cash buyer and close it and make big checks, you know, that's it glossed over. There's some of the behind the scenes that really, if you almost didn't know before you started, and it might prevent some people. And that's maybe what it is. But it's, again, it's stuff that just needs to be figured out and done,

and that's where I had the next step from there. Yeah. Yeah, I mean, and that's kind of my whole thing. It's like, yeah, these courses are sold as the end-all be-all. Like, hey, you're going to take my course, you're going to be rich, you're going to have the tools you need, and you don't. You don't have all the tools that you need. And, you know, you're still out there fumbling and making mistakes and trying to figure it out.

And it's like, okay, this is the problem. This is why Bigger Pockets was born. is, you know, I have issue like that personally. So as such, you know, the BP was created. But, okay, so you've gotten through this. You've taken the courses. You kind of fumbled through figuring stuff out. And you survived, right?

You got that first deal. Do you remember what it looked like? Can you tell us about it? Yeah, I can. It was a $25,000 property. It was in a blue collar part of town, but it still has a good school district. So I knew it was, you know, a part of town. I could probably sell a good rental area, got it under contract.

And the real estate agent was actually a friend of mine. And we still joke too because she called and they accepted it and said, well, I guess it's getting real now. We've got to figure out what we're going to do with it next. And so I put it on Craigslist and went to the real estate club meetings and was trying to, and some people said, that's not a deal. And you kind of, oh, shoot, maybe it's not a deal. And you start to second guess yourself.

But you have to put a down payment on it too. And again, at that time, I was pretty broke. So not only did I have to borrow the money for the course, but I also had to borrow money for the down payment and the permits and everything too. So, you know, I think it really helped me looking back in retrospect because I had to make it work because it couldn't be another one of those. Oh, you know, now I'm involving other people in my trials and tribulations, if you will, and just, you know, had to figure it out, had to make it work.

And like I said, put it out there in two days before my contract expired. I did find a buyer. And with the HUD deals, you actually can pay that money. and extend those contracts out another 15 days. So we were able to do that, able to get it closed. And I think I made about $2,000, but it was proof of concept. You know, it didn't solve all my problems. I wasn't rich immediately, but it proved that it worked.

It proved to the people who lent me the money that it worked. But there's another aspect to, you know, MLS deals and HUD houses is you actually have to come up with that funding, whether it be transactional funding or borrowing it. And that's another thing, too, because again, as you're not, said, Josh, the courses don't tell you that. They say there's transactional funding, but, you know, the title company is saying, okay, great, well, how are you going to come up with this $28,000? Well, I don't know, you know.

And they also say, too, market up $5,000, you make $5,000 with the MLS and with the HUD properties. You have to back-to-back close them. So I actually have to pay full transfer tax on that front end because they're exempt. And, you know, exam should mean nobody pays it, but exempt means they don't pay it. you pay front and, you know, their side and yours. And then the title, and then I had to pay it all over again to sell it again. So to price it up $5,000, I think I walked away with about $1,900 at the end of the day.

But it was a huge learning lesson. And I think, you know, it really taught me what's on the other side once you do get the deal and how you need to move it through to a place where you can't close it. Yeah. So I want to go back and touch on a few things you just said there. For people who are listening, that might be completely lost. And they're like, wait, what's wholesaling? What does a HUD house?

What does all that mean? So maybe we can just take that from the beginning. First of all, when you're talking about wholesaling, what does that even mean? Well, what that means is that I'm going to put a property under contract. And within the 30, 45, 60 days, whatever the time frame that I've agreed to or the bank has agreed to, I'm going to try to find another buyer to buy that property at a higher price than I did. That first deal I got under contact for $25,000 with HUD. And I put it under contract with my end buyer for $30,000.

and I thought it would be as easy as I get to make the spread in between. And that's really the difference with bank-owned properties, HUD houses, which are bank-owned properties on the MLS and doing direct-to-seller marketing, is because there's two different avenues and two different ways to close these deals, especially as a wholesaler. You can't assign the deal, which means I would just assign my rights or my interest to another buyer for a fee, which would be the difference from the $25,000 to the $25,000, to the 30,000, where if I'm doing it with my neighbor next door and buying his house, I can just assign

those rights, take that $5,000 difference and walk away and they can step in. But we might be getting ahead of ourselves there. Sure. Yeah. And that gets a little bit confusing. I mean, the idea of assignment versus back-to-back closing, you know, there's a lot of articles on BiggerPockets. In the show notes of the show, I'll put a link to a few articles about that. So if people want to dive into that, just go to biggerpockets.com slash show 158. And I will link to a few really good articles on what that exactly means. But so when you're saying you do it back-to-back clothes with a HUD home, which is a home you, right, you purchased from the housing, what is it, housing and urban development or

something like that, right? Correct. Yes. Yeah, it's, you bought the repo from them. So you, you buy this house and then you immediately resell it. I mean, like, within the same day, right? Within five minutes. Five minutes.

So you're only owned the property for a, for a short time. But because you do that, you then have to pay the, all, the, the, the transfer tax for the county or the city or whatever they have their tax. You used to pay that twice because you just bought it and then you sold it again. Right. That's why you didn't make the $5,000. That's why you only made around two because of the extra charges of doing that. Right.

Exactly. Makes sense. And, you know, again, that's something that was tested and figured out. I had no clue that, you know, they're exempt what the closing cost could be. And that's, you know, I had a, my sister has a friend that works for one of the large, we buy houses companies. I'm sure everyone has them in their city. They have billboards and everything.

And he was actually awesome. I mean, he was really helpful. And I did have someone I could ask. And that's always a lot of questions people have on bigger pockets as well. How do you find a mentor? What do you do? You know, and you've said it before too. You started going to lunch with everyone.

And I tell people, you know, anyone who's in the business who's doing it right, lunch isn't really going to sell them. You know what I mean? It's, it's, I always tell people, you know, go find a property. Get that first hut house. Get that first one under contract. Then take it to somebody who's in the business and say, hey, I'm willing to, you know, cut you in on this deal.

Can you help me? What do I need to do next? where a lot of people like to put the car before the horse, they want to find the mentor first, and then they want to go find a deal because it gives them the warm and buzz you feeling. But, you know, I think it's just a matter of get out there, get the deal, get it under contract,

and then, you know, and if you don't have a sister who has a friend with a big flipping business, you know, who ultimately I'm his competition. So it's not that necessarily, you know, he was just a good guy and he helped me out, and I didn't have to pay him, but I would be willing to.

And, you know, the experience is worth more than even making that big first check. But get out there, get the deal, and then try to find someone. And I get a lot of people, too. I've posted a few on Bigger Pockets about Hutt houses and answered a lot of questions. And people come to me and say, I have no money for marketing. I have no experience. How can I wholesale Huddhouses?

And I try to actually point them in the direction of the Bigger Pockets podcast and a few other ones to learn and to get there. But, you know, myself or anyone else is not going to be the savior for you. It's taking that action, getting out there, talking to people. and making some offers and getting them. And then once you get it, make the mistakes like I did, look stupid in front of people. You know, pretend, oh, we've never had a problem with title. Yeah, sure.

You know, he knew, but I didn't know. And it's still a joke today that we make. But again, he turned out to be my biggest buyer. And that's everything to a lot of people say, well, there's a lot of competition in my area. And what I found is that the competition is going to be your buyers and your sellers. And so instead of looking at them as there's competition, I don't know, I shouldn't get started, how can you get to know them? How can you get to meet them? Go to the meetings and say to them, hey, if you need someone to take some pictures of a property for you, put a lockbox

on it, I'm your guy. You know, not, hey, can I buy a $10 Panera lunch and will you give me all your info? Yep, I love, I love that, Jeff. I love the part where we talk about, you know, the competition being your allies as well. And we always say that, but, you know, a lot of new investors are really fearful. You know, they're afraid that, and, and, and, and, we always say that, not just new investors. There's old investors who've been around the block a long time. We're like, oh, well, if I start helping other people, it's going to hurt me because they're going to get all my deals. And that's nonsense. There's always a limit. There's always a cap on how much you can do, how much business your company can do. And frankly, like you said, the other folks in the market, they're your buyers. They're the other folks who are going to be doing deals and doing business with you.

So, yeah, it absolutely makes sense to get out there and get to know your quote unquote competition because your competition. is going to be your partners as well. Exactly. And that's what I found. You know, I mean, the guys who have the signs out there, the guys who are doing, they're the ones who are doing business. You know, so if you want to go with, you know, myself four years ago who could talk to talk but never bought a property, you could do that all day. You know, and there's a lot of them out there. And I was one.

So I'm not bashing them. But, you know, you got to get out there with the guys who are doing deals. And again, offer to bring them in. If someone comes to me with a deal and says, hey, I'll pay half the fee, three, four, five thousand dollars. Can you help me walk this through title? Herman, heck yeah, we're going to do it. We'll do it all day. It makes so much sense because, yeah, I mean, I go to lunch with people occasionally and

we'll talk and that's great. I like eating lunch and I like getting free dinner. But like somebody comes to me and they say, I mean, they did a couple weeks ago. A friend of mine who wants to get into real estate came to me and said, hey, I got this deal. I think we should, do you want to partner on it? If I can get it, would you partner with me in exchange for showing me how it's done? Like, of course I will.

Like, I would be happy to do that because I don't have to do any work to, I mean, like physical work and you brought a deal to me. It shows that you're enthusiastic. It shows you you have what it takes to succeed. And, yeah, I think it's a fantastic way. So, okay, so these people, they should bring a deal if they want to bring a mentor, but they don't have any money or they don't have experience. How do they find that deal?

So maybe we can shift focus and talk about that a little bit. But before we do, what kind of, I mean, like, just let's give a broad overview of who you are and what you do today in terms of what's your main focus, how many are you doing? What kind of stuff are you working on today? Right. Yeah, I mean, probably 85% of my business is wholesaling. I did start doing rehabs in the last year and a half. And it's, you know, coming from a wholesaling perspective, it's a lot more work.

You know, I enjoy doing it. And people ask, well, you have this wholesaling. Why even rehab? But even to back up, that's another question about someone getting into wholesaling is, well, why would these rehabbers buy a property from you? You know, what's the point of it? You know, why wouldn't they just buy it themselves? Why are you getting such a good deal? And, you know, the real answer of it is because these guys are out rehabbing properties eight, nine hours a day.

They're not spending hours putting in HUD bids, taking postcard letters, sending out 5,000 postcards to get 200 phone calls, to get five meetings, two deals. And that's even a question that I have myself. And if everyone says you tell people, oh, yeah, I'm going to go find a property on the MLS and sell it someone to 5,000 more, who's, A, more experience than me, and B, has more money than me. They're going to say, well, why would they do it? But, you know, those guys are out there and they rely on good wholesalers.

And you also get the question too, well, if it's such a good deal, then why are you selling it to me? Why are you not keeping it? You know, and it's like, well, because I'm a wholesaler. I don't have contractors. I don't have private money. I don't have everything on that back end lined up. I dig up the deals and I bring them to guys like you. And that's a valid question that a lot of people have is, well, why would they buy it from you?

What do you bring to it? And again, most times when you're starting, you're going to sell it to guys who are more experienced and have more money than you. But, you know, and I'm not saying you pretend you're Donald Trump and have been in the game forever. but, you know, learn the lingo from Vigure Pockets, from books, from other places, and just try to fumble you away through the first deal or two. And so right now we wholesale probably about, you know, anywhere from four deals per month. And then we have about two to three rehabs going on, you know, per six months time. And, you know, just this morning where I was out, we had an inspection for one in the pipe froze. And so I'm out there trying with a heat gun truck.

trying to get it unfrozen, you know, and that's not something I prefer to do. Wait a second. So you're saying you're in real estate, but you're not sitting on a beach, you're not just relaxing and doing nothing. You're actually out there with a, with a, with a torch. Despite what the courses would say. Right. Exactly. I'm out there with a heat gun trying to unfreeze a pipe so my property can pass inspection and close for $310,000 next week. And yeah, you know, I'm out there meeting it. You're right. You're not on the beach. And again, a lot of those ones, especially with the HUD ones. Oh, I do it from the beach.

I do it from the other country. There's guys that do do it. But it's not me, you know, maybe someday, but you're going to have to get in there. You're going to have to work and learn. And that's, you know, you have to have a passion for it. You have to like it. You know, and we're lucky in this business as real estate investors to have this opportunity.

You know, my sister-in-law is a doctor and probably makes $300,000 a year. But she went to school for how many years, you know, 25. And she can't believe that anyone can make as much money as she can. And we have the ability to do this. that, you know, if not more, if not four times as much more. So, you know, we're fortunate. I can't say, I want to be a doctor tomorrow. I want to be a lawyer and be able to go out and do that and make the kind of money they can, if not more. But real estate does give you that opportunity, but you got to work at it, you know, and those guys sell courses from the shiny object syndrome. And, hey,

if that's what they do, they do. And there's good information. You know, don't get me wrong. That course really helped me walk me through step A to Z, but it didn't give me every piece of the puzzle. the action. It wasn't going to make the calls for me. It wasn't going to make the bids for me. I had to get out there, do it and take action. You know, and you guys ask that question at the end. What's the difference? It has me screaming at my pod. iPod all the time. It's action. Action is what's going to do it and taking action, making mistakes and solving problems. I love that. I love that you've said multiple times in this show now, just get out there and do it. I mean, I'm telling people that all the time, like, I've used an analogy before in the podcast, but I'll say it again in case you haven't heard it. It's

like driving through fog, you know, like you can't always see a mile ahead of you, but if you just keep driving forward in that fog, you can always see 50 feet in front of you. And, you know, when you get to that 50 footmark, you'll see 50 more feet. You know, just keep pushing through and you might get, you might get 70% of the first, you know, through the first deal and then it all fall apart. And the next time you'll get 80% through it. You might hit a deer on the road. You might hit a deer in the road. But you know, eventually you'll get there. And then from then on, it just becomes so much easier once you get that first deal for a couple deals. I'm like, it's kind of snowball. So I love that you take that approach to it.

it. I think that's fantastic. Right. And it's always learning. You know, I mean, the same deal that I'm de-freezing the pipe on had a lot in the back that somehow, some way, the deed didn't get transferred correctly. And it was still in the owner's name from 1950. And if a house that was bought in 1950, we're now in 2016, most likely they're not alive, and they're not. You know, so we had to figure out who owns this lot, who the heirs are.

and, you know, I couldn't just again sit on some beach and do it. I had to go out and get these people to sign it and, you know, get them to sign it over to me, not just in general, but for a dollar and say, hey, there was a little mistake here. Your parents owned this lot in 1950. Oh, the bank took it away, but they messed the deed up and you're still attached to it. And the lady called me on Friday and she said, what do you mean I'm attached to it? And I said, well, you know, it just kind of, she said, I own it, right? And I was like, yes, you own it, you know, because you're not going to lie.

to him. And she said, and why is nobody paying me for this? And, you know, it's a lot more complicated than that. They've been paying the taxes for 10 years and blah, blah, blah. But you're always going to learn, you know, and that's, you have to be a problem solver. And that's really what this business is about. I've had wholesale deals where we've closed them, you know, in five, six days. And that counted me picking these people up and driving them to the vital records to get the death certificate of their aunt or uncle. And you have to be willing to do it, you know. Let's rewind. I want to hear how that story close, well, where you are with that story, with the old lady, with the dollar.

I mean, with the lot. Yeah, why? I mean, how is she going to give it to you for a buck if she thinks she owns it? How does that work? Well, she does own it. And what it is, it's a property that, you know, we have under contract to sell for $310,000. You know, I bought it for $73. We put about $120,000 into it. So I have a lot of money in time tied up in this property. And we bought three properties at once.

I wholesaled two of them and I kept the best one, if you will, for myself to rehab. And we closed it and the guy said, oh yeah, this lot comes behind it. And it's an up and coming part of the city town where parking is at a premium. So we were like, great, we're going to turn it into a parking. It's going to make us that much greater than everyone else. And we, they closed the deal and they didn't have the, they missed a lot. The title company missed a lot. Again, there was two wholesale deals, me closing on the rehab.

There was a lot going on. And so we noticed, hey, that lot didn't transfer. Actually, the guy who sold it to me did. And I went to the title company and said, hey, this didn't transfer. And they're kind of like contractors sometimes. They'll tell you what you want to hear. Oh, yeah, it's just a simple sign here and there. So I was like, okay, great, we're going along with this.

And I'm thinking he's working on this lot the whole time. And six months later, we're now to the point we're putting it on the market. And I'm like, hey, what's up with this lot? do you have this done yet? You know, we're putting this on the market. And he's like, well, there's a little mistake. And what it is, the front property was owned by the people from 1950. And they lost it to foreclosure.

They had bought the lot three years later. And when they lost the front of foreclosure, they assumed the lot went with it as well. And so did the county. So when Wachovia Bank sold it to my seller, the guy before me, they gave him the paperwork and said, here, this lot comes with this. been paying taxes for 10 years on the lot. He thought the lot was his. You know, so he said it comes with it. So little did we know that when push comes to shove and the title guy actually did the work he was supposed to do, he doesn't own it. He has no right to it. He's been paying the

taxes for 10 years. And, you know, again, we could sit there and say, oh, boohoo, me, what am I going to do? No, I had to figure it out, you know, and we needed to find who owned it, who the errors were. And I had to call him. And that's an awkward call. You know, hey, this lot was supposed to be transferred from your mother and father's name. It wasn't. I have this whole list for my attorney of your heirs and your aunts and uncles. Who's still alive? Who's not?

And you've technically been responsible for the taxes for 10 years. We don't want any of that. We're not going to come for that. We just want you to sign it over and get it taken care of so you're no longer on the deed. I think the biggest part of this business is how you word things. And if I would have said, hey, it's your lot. And I need you to give it to me for a dollar. They'd be like, well, you really need it to sell this property.

for $310,000, give us $20,000 for it. But, you know, approaching it from the avenue of, hey, this was a mix-up, you're still on title, you've been responsible for 10 years, we don't want anything from you, we'll pay your inheritance, that's right, and I'm still dealing with it. You know, I went, and the aunt is difficult, you know, it's an aunt, and then her niece and nephew, who are 30, the niece and nephew, and the aunt is, you know, 50 or 60, I think I haven't met her yet, actually, because I'm still dealing with it. And she called and said, well, why is no one paying me for this and we got over that and she said well i'm not going to find a notary and i have to drive all around and pay and i said no i'll bring a mobile notary to you you know we'll make it

as easy as possible and they were all supposed to meet me out of notary right up the street and she was waiting for a refrigerator to come that didn't come and was having a bad day the brother and sister met and the the sister says she's having a bad day i'd maybe just just call her tomorrow so I still need her signature at this point. But I've talked to her. She's willing to, but it's a touchy subject. And technically they could, hopefully they're not listening to this. They could charge what they wanted for it.

But it's all part of being a problem solver and figuring it out. And three years later and have done over 75 wholesale deals, still figuring it out. And how do I do it and what do I need to do? And I can't just sit back in hopes, somebody's going to take care of that problem for me while I'm sitting on the beach. You know, I have to go out. And I can't just say, well, they're going to take it to a notary and sign it.

You know, I have to take the bull by the horns and go drive to that notary. And I had to go there twice and meet the brother and sister at different times. And the aunt is obviously going to be another time too. But, you know, that's what it needs done. And to make, you know, the deal closed. And that's what you got to do. And that's why we're the problem solver. You know, and that's why people sell to us because not everyone's in a position.

You'll do the marketing and people say, well, how much are you going to give me? You're in this business. Tell me now. Tell me now. And it's back to, I think you guys have mentioned the book, pitch anything. You know, whoa, slow down. We're the prize here. You don't have somebody lined around your buck with cash in your hand, willing to buy your piece of junk property.

You know, let's find out if it's even something we want to buy and then we'll cross that bridge. You know, but people are going to try to push you around and, you know, you tell me what you're going to do. And just dealing with people and solving the problems is basically with the business. business is, you know. Yeah, I look at it. Great plug on Pitch Anything, awesome book for anybody who's doing wholesaling or any kind of sales

stuff. It's a great book. It is. And it really changes your mindset because you can get beat up taking these calls all day, you know, and having these people tell you, you know, go pound salt or I've had people call the police on me, you know, for sending him a postcard with their name on it. You know,

do they call Papa John's? No, but why are they calling and yelling and screaming at me and trying to ruin my day? It's just, you don't want to sell your house, great. Throw it in the trash. You know, but it's people do get defensive. And that's again, you know, it's not all sunshine and roses like they do make it sound in the books. Hey, buy it. You're going to sit back and collect $15,000 checks. But if you have a passion for it, you enjoy doing it, it's a great business. You know, it's something that can really, you can mold your lifestyle around.

We have a baby that was born four weeks ago and I'm able to be home in the mornings and stay with them and help my wife out for the first few weeks of it where I've had desk jobs that sucked, you know? And I couldn't. And I hated going to work. And no matter if you had made 100 phone calls or 10, you made the same money, you know. And it's just not more. Yeah.

I totally appreciate that, man. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking. I could be contributing right now. Your side room wants a side hustle.

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I can tell. I love it, man. Real estate fever. People at the parties go the other way. He's going to talk about real estate. Here he comes again. Yep. All right.

So where are you finding your deals? What's your strategy? Are you doing just one thing? Do you have multiple sources? Like just what's the low and dirty on that? Right. And so I was, you know, doing the HUD deals. And about three months into it, I actually got four HUD deals under contract in one month and had them all sold.

And I was like, hey, great, look, this is it. You know, life is set. I'm going to be sitting on the beach. I figured it out. But you're really at the mercy of what's out there. Like Brandon said, you know, you make bids on it. There's a lot more. There's less bank-owned properties out there.

So we had to transition and try to find a way to dig our own deals. and to base your business on bank-owned properties is tough to do because it's not predictable. You know, direct mail is predictable. You can say, well, my numbers and testing have shown that if I send X amount 5,000 postcards, I think I mentioned briefly before, I should get, you know, 200 calls, 20 meetings, and three deals out of that. And so we had to really find a different way to get a more predictable business and find a way to do that. And direct mail has been that way for us. Okay, so let's go back and talk about basics for those who don't.

No, no, what is direct mail marketing? What does that mean? Sure. And direct mail marketing is basically sending the homeowner a postcard that just says, hey, how are you doing? We buy houses in your area, and would you be interested in selling your house for cash in as is condition? And what we do is we basically send a lot, you know, and people have said it on bigger pockets on the podcast, absentee owners. We like out-of-state absentee owners, especially in my area. my sister and brother-in-law owned a few properties and moved, got relocated to North Carolina. And I said, hey, are you guys getting postcards from anyone on those properties you have saying, you know, we'll buy it? And I said, no.

So I kind of knew that there was a lag in the area, you know, my area in that. So we focus a lot on out-of-state absentee owners. And what that is is someone who owns a property like my sister and brother-in-law and maybe live out-of-state or transfered out-of-state, but they still have those rentals in this area. So their name is going to show on the tax record as the owner. But if you look under the tax record for the property, the owner's address, it's going to be somewhere other than that property. And that's how you know that they're either absentee or out of state. Okay. So you mail to these guys.

What's the approach? Is it, you know, hey, are you tired of owning your property? I mean, how do you kind of hit them? Yeah. And, you know, that's where the difference can make a difference in direct mail, you know, because everyone goes. back and forth. Do you get the big vanity number? Do you play the small guy? And I've done both. And I've found myself, and I'm sure there's people will debate me on, you know, bigger pockets all day about it. But the small guys work better for me of just saying, hey, we buy properties in the area for our own rental portfolio.

If you'd be interested in selling it as is for cash on the day of your choice, give us a call. You know, and it's not for everyone. And direct mail, no matter what you're doing, you will make people angry. It's just, it's the name of the game. I don't know why. It's just let it roll off your bag. Anyone who sent any amount of direct mail and hasn't made somebody angry, then they're trying to sell you a booker and their guru or something. People are going to get mad for whatever reason.

They get angry that you know their name, that you have their address, that you know they own a property. You know, people aren't as aware of public records as we are and they really can get defensive about it. But again, it's all part of it if it was easy. everyone would be doing it's digging through that, getting those leads and getting it to the end buyer or yourself if you're going to keep it. So why a postcard not a letter? Or do you do both? I do both. But most times, and I think someone talked about it briefly under one of your recent shows,

is we'll send a postcard first because they're a lot cheaper. You know, yellow letters are more expensive, the envelopes, the stamps, the whole process is. And you're going to get a lot of them back, bad addresses, which is a whole other subject, but there's a gold mine in those ones that come back because that's where a lot of people stop and they don't try to dig and find those owners. But we'll send that first, and it's inexpensive way. The difference could be anywhere from 50 cents a postcard to a dollar 50 for a yellow letter, which, you know, the letters work well, but it just depends on who you're going for. And if you're going for a more mass approach or a more smaller targeted approach, we would probably use the letter.

But if we're going to send $5,000 to just the general absentee, we'll use a postcard to try to read out who's there, who's not, and, you know. Okay. Hey, Jeff, you open the door, man, I got to go there. Bad addresses. What are we doing with the bad addresses? Well, you know, it's, what we do is we actually subscribe to a couple different sites. And you can kind of skip trace these people and try to find if they have addresses or phone numbers that are for them. And there's guys out there that make, you know, their only businesses just trying to call these people.

And it's cost a few dollars per name, but it could be worth a $3,000 deal. So once those bad addresses come back, then we'll work on those. Set them to the side and we'll try to find just doing even the basic research. Go on white pages, see if their address wasn't updated on the county website. And if it's not, then you can move on to some of the more high tech like Intellius and some of these other programs. TLO, pretty expensive. But again, that's your business model. It's gold because a lot of people just throw them away and say,

oh, nobody's there. Forget it. Yeah. Those are the people that nobody's talking to. And you're getting through to them because nobody else is, you know? What percentage, are you having a higher success rate with those bad addresses than with your typical mail? Well, you know, I think it's just there's less competition. You know, if we get a hold of them and we talk to them, there's not many.

other people. You know, if you're marketing the hot areas of town, most people are going to say, well, I've got two other guys coming. And that's fine. And it's not going to stop me from going going to change what I may offer on the property. But a lot of times when we do get through to them, they haven't talked. And they're kind of surprised. Hey, how did you, you know, find me there? And it can be kind of awkward giving that cold call some time of, hey, you own a property here. You know, some people may be your best friend. Hey, you want to give me 30 grand. This is great. Or don't ever call me it again. You've got to be willing to roll those. dice, you know?

Yep, yep. Well, let me go back a step. I was going to ask you this. Where do you find that list? I mean, how do you get a list of people? I mean, you talk about public records. How do you get that? Right.

And there's a lot of list service providers out there. U.S. lead list and, you know, no affiliation with them. That's just where we pull ours. And you can pull anything from absentee owners, out-of-state absentee owners, free and clear properties. You can have mortgage values. if they're in foreclosure starting in default. There's also some monthly subscriptions to vacant properties

and things that we've actually joined and found have been pretty useful and have worked for us. But usually they're anywhere from about 9 to 15 cents per name, but we'll continue to hit that list three to four times. We'll find out who's on there, take them off so we're not wasting the money on them, like we talked about the ones that aren't getting the correct address. And then we'll continue to hit that list three to four times.

and most times we'll have people even that keep postcards for a year or two. I mean, we get a deal. We just closed in seven days that the guy got my postcard a year and a half ago, set it to the side, needed money, was ready to sell, called. And we went out, saw it. And, you know, they had two other people who they were going to have postcards from. And we just got out there first. You know, some of these bigger companies, they just don't have the time.

They can't get there. Sometimes being the smaller guy, you know, I was out there that next afternoon, made the deal with them. She said, well, should I tell those other guys not to come? I said, yeah, probably. And we closed it in seven days, you know, and we solved their problem. Send your competition. Come on.

Yeah. And she's one of my best referral sources now. I mean, she was so happy that we closed it. We paid her $55,000, which was a ton of money for a house that, you know, they were going to fix up. They were going to fix up. They were going to. And they just, they never did.

And there's a lot of people like that that think, oh, these shows make it look easy. A half hour plus commercials. 90 grand time to find another house to flip. And then they realize it's not that easy. And they're like, well, we were going to fix it. And we just realized it was too much for us, you know? Yeah. Let me, you mentioned this a couple times and I want to kind of dive into it.

Because I love funnels. If you guys have, you know, listeners have ever been on a bigger pockets webinar. I talk about them on every webinar we do every week. You can sign up at biggerpockets.com slash webinar for the next one. But I love the idea of a funnel where you get a certain number of, you reach a certain number people, a certain percentage of them are going to call you, a certain percentage of those are going to, you know, show you their property, like invite you to look at it or whatever, and then a certain percentage of those are going to accept an offer. So can we kind of talk about that funnel of yours

in percentage-wise or ratios? Is there an average that you typically see? Is it always different, or what are your averages look like? Well, you know, I mean, we have found averages just from testing incendium. You know, we find that if we send a thousand postcards, we're probably going to get somewhere in the nature of about 40 calls, 40 to 50. It doesn't sound like great numbers. But, you know, again, that's right off the bat. That's two, three days after that postcard hits.

Then they're still going to be the people that set it aside. You know, and that's important to keep the phone numbers. But if I could back up quickly, what we use is called Vomber. It's a virtual phone number. And then we have our calls go to a 24-hour recorded message. And our postcards say 24-hour recorded message, it's a little less threatening for these people to call, hear our message rather than think, well, I'm going to talk to this, you know, a shifty guy who's going to talk me into selling my house for nothing very quickly. It's a little bit less aggressive. So we send all of ours to a 24-hour recorded message, and then we actually have a podium set up.

And I know some people have mentioned that, but it's a database system where you can actually put your Vomber in there. And it's awesome. It will come to my phone, my computer, my email, and say you have a new phone call, a new voicemail, and then if you have other team members, you can send back and forth between there. But that's how it all starts. And we find, you know, it's probably not a high percentage that you're going to get the calls on, but the ones that do call, listen to your voicemail and leave a message are going to be a lot more motivated than we do call the hangups too. You know, the deal I mentioned that we got three houses. I wholesale two, rehab one. was a hang-up. You know, they just, oh, we don't want to call. And it's just, just talking to them,

hey, we saw you called. And they said, well, I thought it was going to be, you know, this or that. And just, you know, what's your issue? What's your house? And those people had section eight people in there wanted to get rid of it. But you have to call them back. If you're spending the money to buy the name, to send a list, to have the system, you got to do the work. And you can't be afraid. And that's the first thing to answer the phone when they call. That's such true. I love how persistent you are. You know, you'll follow up with those bad addresses, you're calling the hangups. I mean, I think that's the kind of thing where, you know, that's separating the wheat

from the chaff, right? That's the successful guy versus the unsuccessful guy. That's, you know, the newbie saying, oh, this doesn't work. I just spent all this money and I got nothing. Well, did you do all this? Did you do everything that you possibly could do with the list that you got? And you're doing that. And that's awesome.

And I think it does. that's the difference from the low-hanging fruit where there's going to be two or three guys coming in after me to, I'm the only one there to solve their problem and have found it. And somebody else said it before too, you start a real estate business. And all these books and growers make it sound like you should be making tens of thousands immediately. But if you opened a hair salon or even a bowling alley, whatever, you wouldn't expect to make money for one or two years.

But if somebody starts this and puts some money into it and doesn't make it in two to three months. Oh, this doesn't work. My area doesn't work. You wouldn't give up on your hair salon. You're bowling alley in two to three months. You would expect not to make money. It's going to take some work and some time. And you can see how passionate I am about it. I don't shut up. I talk a lot, but it's because I enjoy it and I like it. And that's part of it, too. Hey Jeff, so 40 to 50 calls for every thousand. How many of those calls end up in appointments? How many of those appointments end up in actual sales?

Can you kind of walk us through the rest? Well, and we try to, there's a couple different ways you can do it. You know, we found that if you just ask them, hey, what's your lowest invest cash price? You know, it's a little different than sometimes if you go and see the house and talk with them and meet them. But you could sometimes waste your time doing that. You know, I've had ones where the guy tells me he wants 150 and I think, uh, he's just being, you know, tough guy with me. I think he'll take less and I've gone and he's stuck on it, you know.

And I've had other ones that I've gone on it, looked at the house, didn't work, but the neighbor was out and said, oh, who's this? And she said, oh, you know, he buys houses and he's, well, come look at my house. I'm selling mine. And I actually got a deal that way from a neighbor. The lady was not really realistic. And we bought the neighbor's house for 15 graless, which was identical. to what hers was, but you never know unless you go out there. I found deals in the newspaper.

You know, it was an older couple that doesn't use Craigslist and, you know, have I found one since? No, but do I still look every week? Absolutely, you know, because I made $9,000 on that wholesale deal out of the newspaper. And that's what I tell some of these guys, I don't have money. Well, drive around, look for vacant, you know, especially right now here, it snowed four inches today. You can tell if houses are vacant, you know, in the summer, the grass is high. write the address. I keep a notepad in my car right next to me. Every time I see something, you know, my wife will almost be like, oh, roll her eyes again, we're backing up, we're going in there. You're going to talk to the neighbors. Yeah, I am. I'm going to go there. Ask the neighbors,

hey, what's up with this house? They don't want it as vacant as much as I want to buy it, you know. That's a good point. They're going to help you to find them. They're going to know, they might say, I don't know anything. Once you light them up, you'll find they know everything. They know if it was foreclosed or there was a divorce, what the kids are. case is, but keep your eye out. Once you're looking for properties, you know, you'll find them. Well, I mean, so this is one of my fears in doing a lot of direct mail marketing is that I don't have the systems yet set up to be able to go out and do 40 or 50 phone calls. I mean, actually, I'm not phone calls, 40 or 50, you know, appointments. So how many do you think, like out of the,

let's say you got 40 phone calls in a month? How many of those would you actually go to their house and make them an offer, do you think? I'd probably go, I'd say, five to 10. You know, 40 people, that called, listen to my voicemail, left a message. I'd probably say about five to ten. And then once you go out there and you look at it, you might find it's not what you're looking for. You don't have a buyer for it. Or you might find that they're not realistic,

but they might be realistic. And that's another thing too is we always send an offer to them in the mail. And we've had people call us back and say, hey, is that offer still good? Will you still take it? And that has really been the difference that we started doing that last year, sending that offer in the mail. Even if they say, no, you're crazy, don't ever call me again. You know, six months down the road, they really need money.

Their situation changed. Now they don't hate me as bad. And they're willing to take my, you know, has priced offer or at least talk further about it. So you're saying you make an offer to them in person and later on, you send them a letter to matter what, correct? Right. If they turn you down. I love that. I think that's fantastic.

Again, that's really good. This follows up with everything else that we talk. about him. You do the extra things, yeah. Right. Yeah, I love that. Okay. Yeah. Go ahead. Yeah. I mean, I was just going to say briefly, it, you know, it does add an extra couple minutes a week, but we've got multiple deals from it. And people have said, hey, we forgot about the guy who left, but your offer was here and will you still take it? So it is that little extra step that sometimes separates you from the guy who does one or two deals a year to, you know, doing three to five times more than that. Awesome. And that was brief, which was even more awesome.

I know. I try to keep pretty... So, okay, the last question, I mean, like, not last question, but... So you get, let's say you get five people to go and look at their property. Five to ten people you went and you actually show up. Do you have an estimate of, like,

how many of those are going to say yes to your offer and how many of those are going to laugh you off? You know, and it's just going to depend on the house, the area and who these people are. You know, and that's part of the game, too. You may go on five duds where they all tell you, you're crazy, it's too low. And you might go on five or four of them and say yes.

You know, it's just, it's a number. It's going to be a numbers game. If you're going to wholesale and you're going to market, it's a numbers game. And they've said, you know, other people have said it too. Once you start doing that, you really, you can look at it as, you know, you're in the marketing business because you need to be continuous. You need to be sending them out. You know, we used to send out 5,000. We'd get deals run around. And then we'd get a few, wouldn't send any out. Then we'd say, oh, shoot, we don't have anything coming in and start the cycle again. If you can keep your foot on that and keep it consistent, that's how you're going to get that funnel and keep it. you know yeah yeah i love that love it hey jeff how many uh so how much mail do you send a month uh we said for about 5 000 postcards a month on average you know we'll switch it up we'll do absentees we'll do the out-of-state absentees um and then to rewind quickly here if i do find a driving for dollars a vacant house i'll always send them a yellow letter i'll try to get them more than the mass market i'll try to say hey i noticed you have a property at one two three main We buy in that area.

Would you be interested in paying cash? And I get a lot of calls from those. I mean, if you can find a good address on that, our numbers are different. You know, it's not like when we're just doing the mass spread marketing. That's a more targeted. You know that person needs or wants or has to sell that house. It's vacant. People just don't like tens of thousands of dollars laying around.

There's a reason it's vacant. There's a reason they haven't sold it. And it's my job to get a hold of them and find out why. Yeah. It's a great point. Yeah. Yeah, this is awesome. Chalk full of wisdom.

here, huh? Yeah. Thanks. Yeah, I love it. All right. So I got a couple more things that popped up here just thinking about, you know, the 40 or 50, let's say phone calls you get. I'm just, you know, hypothetically a number. Do you have any good tips on how I can weed out so I don't have to go do 50 appointments and that I can reduce that to the ones that are really actually going to work out? Well, and I think having a recorded message will do that. You know, having that recorded message saying, you know, we buy for cash, we buy it as is. And we even have, when we varied it to where we say, you know, we're not realtors. We're not. We're not. looking for properties in pristine shape that you fixed up is the nicest on the block. You know, we're looking for properties that need some work, need some love. And if you have the one that's nicer than all 10 of your neighbors, which most people will tell you is, you know, we're not going to be your guys. And that kind of weeds them out. Or they might tell you, hey, on the voicemail, I'm looking, you know, to sell this with a realtor, please take me off your list.

And we get a lot of voicemails of please take me off your list. And that's fine. You know, I'd rather them tell me that than spend the money sending to them again and again. Yeah. It's great. Okay. I like that. And then lastly,

one thing that a lot of wholesalers, flippers, everyone struggles with is this idea of estimating the repair cost when they get there. I mean, you're going to go there and look at a property. You're going to run the numbers basically right then and there possibly, or maybe you'll go back to your office and run them more in depth. But, I mean, that's, most people would know the difference

between a $20,000 and a $50,000 rehab project. And that's a wide number to be able to make an offer to somebody when you meet them. Do you have any tips on estimating repairs? You know, and that's just part of doing it and going there and getting that experience, you know. And honestly, I found the Bigger Pockets book on Estimating Repairs. I read it and I used it when I first started to give you a basis of doing that. And that's not something we talked about or you said to do, but it really helps. I mean, because you're never going to have the exact repair.

And what I found, too, is these rehabbers are going to have their own number two. I'm just trying to give them a base for it. I'm trying to say estimated repairs you're looking in this neighborhood, but it is difficult. You know, get some pictures, get some photos of it. And it's okay to tell them, you know, hey, I need to do some more research on this. Let me get back to you. You don't need to give them an offer there. Take some photos.

And then again, go to someone that is experienced and say, hey, I got this. I think it's a deal. Here's the photos. Here's the numbers. Here's the research I did. I think it's a deal. Do you think it is? Can you, A, help me, you know, close this deal?

And B, do you have a buyer that can help me sell it? I partner up with other wholesalers all the time, you know, that maybe have more buy and hold in this area or renovated. It doesn't work for my, you know, top five guys. And that's the other thing, too, is that a lot of these other places, you need to build your buyersless, build your buyers list. And everyone's so worried, oh, I need to build it. You're really going to have probably five to ten guys who buy from you. You know what I mean? You're going to have five to ten serious guys.

There's a lot of tire kickers out there, but you're only going to have a couple guys who are serious and buying. They're going to continue to buy from you. They buy, make money. coming back, what do you have, what do you have? They're calling you. What do you have? What do you have? I will charge you $25,000 to teach you how to build the biggest and best buyers list in the world, Jeff. You know, don't listen to Jeff. All right, really quick. You mentioned the book. The book is the book on estimating rehab costs. You can find it at www.biggerpockets.com slash flipping book. It's also on Amazon. And yeah, it's fantastic. I've got one last question before you move on.

to the next segment of the show, which is, what are you doing, man? I mean, you're wholesale and you're kind of doing some of this flipping stuff. You've been at it for a couple of years. Where are you going to be in 10 years? What's the plan? Well, 10 years, you know, we're trying to start buying some of our own rentals for long-term, you know, taking the wholesale fees, the rehab cash out and buy $30,000, $40,000 rentals. We can in our area.

You know, we're lucky to be. In a market. No, we're in Pittsburgh, yeah, number one market. Oh, that sounds like that's right. Send you the link after. But that's the best part about it. You know,

you could buy a $30,000 house. You could be in a blue-collar working neighborhood. And, you know, it will bring in $700 a month. So we're trying to just buy, you know, six rentals. Five to eight is actually our goal. I know you said brand new and your wife made your goals and done the same. And I like to buy six rentals and then just start stocking away.

So 10 years from now I have. have a hundred of them. And that way, I can be on the beach or I can be sick or on vacation. We're dead. And my family has income coming in and is being taken care of. And, you know, it's, even if I hit the power ball tomorrow, the $1.5 billion, you know, still buy the houses and still keep them as, because I enjoy doing it. And I really think that's the best, the best retirement method, you know, especially with what stock market and everything's doing. Real estate's always going to be there. It's a physical asset. You can always improve it. And so we're just looking to really put systems in place, systems in place for our marketing, systems in place to handle the leads when they come in, and systems in place to get these deals out to our buyers.

And it's like starting all over again when you need to learn the rehab because it's a whole different game. I said it before, these guys, the contractors will tell you what you want to hear. Can you do it for 10 grand in two weeks? Yeah, sure. And then 10 grand, two weeks comes and you're already that far into them. You know, that is one of the hardest things. You're never going to have all the rehab numbers. You know, I've done a bunch of projects.

I still don't know all the rehab numbers. You know, we estimate and hope what it's going to be, but it's part of the learning and solving the problems because it's always going to change and something's going to come up. Yeah, awesome. I love it. And I only bust your chops about the town where the penguins play because, yeah, well.

Yeah. You're not doing very good. You ask me to, man. Yeah. I know, they're not. All right. Well, let's shift gears. We've got a few more questions,

before we get out of here today, this show has been amazing. I mean, just chocked full of actionable stuff. I mean, this is going to change people's lives. Show 158 on the Bigger Pockets podcast. Check out the show notes at biggerpockets.com slash show 158. That you should, that you should. All right, so let's move over to the world famous Fire Round. It's time for the Fire Round.

And now let's get to it. These questions come direct out of the Bigger Pockets forums. We're going to throw them at you. what are some clever ways to really get your phone ringing when you're trying to start a lucrative wholesaling business? Well, you know, I think there's always the best way is to just, you know, send some mail. It doesn't have to be 5,000 pieces. You know, you can start by sending 500. If they're going to cost you 40 cents a piece, it's 200 bucks.

You know, it's the same as a latte every day. You know, set it to the side, send it out there, start taking those calls. I wouldn't recommend if you started tomorrow to send 5,000 postcards. Send 100, send 200, get used to on the phone. and drive for dollars. That's going to always be a way that is out there and find the owner, do a little legwork, and you'll get your phone ring. Perfect, perfect.

All right. As a beginner in wholesaling, what do you recommend are my first steps? And it may be what you just said. Well, you know, and back to the HUD deals, I think they're still there. It's changed a little bit since I started three years ago. But I'd always be looking there. And to be brief, you can just throw in bids. You don't have to sign a 20-page contract, find an agent or someone who is.

and just do the research. And if it looks like it could possibly be a deal, put the bids in. It's not going to cost you a dollar to bid on it. You only have to pay any deposits when you get it under contract, and then you can try to find your buyers or, you know, start trying to drive around, find vacant houses. And if you have some money, buy some list, buy some absentees, some out-of-state owners, and, you know, send them some postcards. Cool.

Cool. All right. I'm new to rehabbing and I'm looking for a 100% hard money loan or a private money loan. Is that realistic for me? It is realistic. You know, there are the lenders out there that will do it. You know, and it's going to be expensive. You're probably going to pay 15 points, 15%, I'm sorry, and three points, which is another percent of the deal. But it is realistic. And if you have an actual deal and the numbers work, they're most times only going to lend, especially on your first deal, 50 to 60 percent of what they think they have to repair value. But it's out there.

You know, there's money and there's hard money lenders who will fund them. Yeah. And those rates are going to differ depending on where you are, who you're doing with, what your experiences, so and so forth. Yeah. All right. So how do I know if a location is a good location to flip a house? Well, I think, you know, everyone needs to have an agent on their end or have their own license

because you have to look at what's selling. You have to look at the multi-list system. And that's what's going to tell you what areas. areas are hot and what are selling. There's also a lot of the areas out there too and some of the sites that we mentioned that you can find a lot of the cash buyers in. You don't have to necessarily build your list, but it's going to show you where a lot of those guys are paying for cash deals. Just like you can find an out-of-state owner, those sites will allow you to find cash transactions. So another tip is I'd have people go there, pull the cash transaction areas. You

don't even have to buy the list, but it's going to show you the zip codes where the highest cash transactions are. And then now you know what areas that are the high, you know what areas that are the highest for buying, you know, cash deals. And those are going to be your rehabbers and your wholesalers. Great tip. Yeah. Very cool. Very cool. Awesome. All right. Let's begin to wrap this thing up by transitioning to the world famous. Famous for. All right, these questions are asked of every guest every week. And I know you've listened to our show for a while now, so you know what's coming. So let's start out with question. Yep. Number one, what is your favorite real estate book? Millionaire real estate investor. It's a great book. And I think you'll

always need to be continued learning. I have a lot of them, but that's probably one of the top favorite ones. Right on. Okay. Cool. That's a great book. Gary Keller, J. Pappasan, a bunch of good stuff. Good stuff. All right. Next. Our favorite business book in non-real estate. Non-real estate. And you had them on your show and he talked about the book, Grant Cardone 10X. Grant Cardone, killer sales stuff. All his books are great. Ten X is great. Pitch anything's great. I think listen to those two books and it will point you in the right direction for sales, that's for sure. Right out.

All right, hobbies, what do you do for fun? For fun, like I mentioned, just had a son four weeks ago, so that takes a lot of our time. But I have a couple dogs, and we have a county park up here that has about 700 acres. We love taking them hiking all through the woods up there and just hanging out, relaxing. Cool. All right. My final question of the day. Jeff, what do you believe sets apart successful real estate investors from those who give up, fail, or never get started?

Action. Action. Action. I think you have to be passionate about it. You have to enjoy it. Someone can tell me you can make a billion dollars in stock market tomorrow. I wouldn't care. I don't enjoy it. Real estate, you've got to be passionate about it. It's going to pull you through the long days, the nose, and take the action. It's the only way to get out there and learn. You're not going to learn everything in a book. You're going to learn from doing it. and making those mistakes and tripping. And that's how you're going to build a confidence, getting out there, meeting sellers, and making the mistakes.

It's going to happen. You can't avoid it. I'm shocked by that answer. Different. Yeah, I know. I'm sure you've heard. Read all the books you can and sit back and wait for checks to come in. But you've got to take action, man.

And to avoid looking silly, just have to take action. You're all going to make mistakes, but that's how you're going to learn. All right. All right. Cool. Jeff. Where can people find out more about you? Well, I'm on bigger pockets.

You can get a hold of me there. A lot of people do about HUD questions. And then you can also email me directly at pgh. Holesale at yahoo.com. We're also working on some stuff to help people with some direct mail marketing. If you're interested, send me an email there, and I can explain more about it. Awesome. Great.

All right, Jeff. Thanks so much for coming on, man. We really do appreciate it. And I think you're going to get a lot of email. And I think you're going to be very. busy responding to folks. Also on the show notes, again, everybody at biggerpockets.com

says show 158. That's Biggerpockets.com slash show 158. Jeff, thanks so much for coming on, man. We really appreciate it. Appreciate it, guys. Talk to you. Thanks. All right, Jeff, thanks so much for coming on the show. That was awesome.

I know you're like drooling wipe the drill. I know. I'm like, I seriously like we were, I was taking notes while he was talking of things that I need to do in my in my plan. Which is rare, right? Which is rare. You and I sit here in church. You take more north than I usually do.

Right. Yeah, but today I was like taking notes. Like I got to do this. I got to do this. Like little things that he said. Like, I mean, there was one that I thought was just great where he said,

let me if I can find it. I mean, obviously, oh yeah, he said, what's your lowest and best cash price? Just that phrase. So I wrote that down. I'm like,

oh, that's really good. I really like that. And then the whole, the send mail, even if they say no, send that offer. That's so easy, but I just love that.

Yeah, that's one of those clever little thing. or the average guy's not doing, and that's how you win. I'm a funnel guy. I said on the show, right? I love funnels. And the beauty of what he does is like, you do these little things,

and they're not going to make necessarily a massive difference. It's not like just by sending that card, you're going to get twice as many people to say yes, necessarily. But when you improve every point of that funnel, just a little bit, a little bit here, a little bit there, you might 10x your final result at the end of the day. Just by improving and doing the little things throughout the funnel,

that just give you that little edge on every part of it. And it's just, yeah, you can just see that in Jeff's business, how well it did that for him. Awesome. Perfect. I love it. I love it. I love it. All right, guys, great show.

Thanks again for listening. Again, please get out there. Spread the word about the Bigger Pockets podcast, whether you tell a friend or share the show on social media or, you know, whether it be this particular show, you know, whether it be this particular show. Go to BiggerPockets.com slash show 158 and share that link with your friends. Share it with the people that you know. We're just the podcast. Spread the word. the more people that we could get to, you know, improve the better we all do as a community.

So get out there. Otherwise, of course, jump on biggerpockets.com, join the community, interact, engage with other folks just like Jeff and yourselves. And we'll look forward to seeing you there. So again, make moves, guys, make it happen. I'm Josh Dorkin. Sign it off. You're listening to Bigger Pockets Radio. simplifying real estate for investors large and small.

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