BiggerPockets Real Estate Podcast - 335: 70+ Units Per Year and How Exactly to Make a Lowball Offer with Ryan Dossey

Episode Date: June 20, 2019

A whopping 73 units a year without negotiating your own deals! Today’s guest Ryan Dossey breaks down his business and shares how he built a deal-finding pipeline he runs without doing the work! Ryan gives great insight into how he finds deals directly from sellers, has team members meet with and close deals, then decides if he wants to keep them or wholesale them. If you’ve ever been interested in how to build systems to get your time back, this is a show for you. You won’t want to miss how Ryan used BiggerPockets to start and grow his business, how he began wholesaling, and how he uses NONE of his own money. You’ll also love hearing how Ryan made $10K in four hours on his first deal and how he built a conveyor belt to close deals while he’s out of the country. Plus, he gives investors AMAZING advice on approaching a mentor the right way! Ryan is a great example of how to use BiggerPockets to grow your wealth and portfolio, and he shares some powerful tips about how you can do the same. Download this one today! In This Episode We Cover: How Ryan got into real estate in spite of never graduating high school How he learned to see the world from a different perspective than everyone else Why he markets directly to sellers How he used BiggerPockets to build several different businesses How he got his first wholesale deal (and made $10K in four hours doing so) Why he went full time into RE and how he knew it was the right time to do it How he chooses his markets What no one tells you about the RIGHT way to approach a potential mentor How he built a conveyor belt to close deals while he’s out of the country Why he invests in multifamily The No. 1 thing a newbie needs to know to get started wholesaling Why focusing on one task is key to being successful faster And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar GoBundance BiggerPockets Airbnb Calculator BiggerPockets Podcast 068: Being a Superhero House Flipper, Investor, and Team Leader with Mark Ferguson InvestFourMore Podio Deal Machine (App) CallPorter  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 335. I mean, there's times when I've straight told people you should not sell me your house. And they're like, well, no, I want the easy option. So I think it's just positioning it as I'm an option. The perk with me is it's faster. 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 business.

others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. How you doing, David? We're doing fantastic. We're hitting the peak of the home buying and selling season, and we're selling homes and making dreams come true and all that other cheesy stuff you hear realtors say. There's a lot of cheesy stuff realtor say, but that's all right. That's cool. It is the springtime here when recording this.

Hopefully you're listening to this now. If not, you're listening to an old version of this podcast, which is cool too. You know, you got to listen to the old stuff. And speaking of old stuff, how you been? That's funny. You're calling me old. Look at that. I'm a funny dude.

I'm like, see, what happens is Brandon runs a triathlon and then all of a sudden gets super cocky and starts calling people old. But he's kind of earned that right because he did a very, very hard thing. And all jokes aside, I'm actually very proud of you. I think that was incredible. that you signed up to do it. And I think I heard people in Go Bund and say, you did it in the shortest amount of time anybody ever has in the group for training

for something like this. Yeah, I don't know if they track that. But I did it in eight weeks. So I don't know. It was not the 12 or 816 that they usually tell you to do. But yeah. You know, actually, yeah.

I think it's one of those things like this is just about all life in general. I think people oftentimes assume things are much bigger. Like you have to prepare way more like getting to real estate, right? Or you have to prepare way more to become a real estate agent. or, you know, I got to make sure I have all my ducks in a row before I get into something. But I'm much more of the, like, jump and build a parachute on the way down kind of guy. And I think you are kind of as well. And I think that skill actually helps in almost every area of life of like stop letting fear be like, well, I don't have enough time.

It's just like, well, I'm going to do it. Well, the reality is you had no idea what you needed to be able to do to actually do a triathlon. So now that you've done one, you're like, okay, now I know if I want to do another one, what I need to do, what I need to do. And I feel like I found that is the case with a lot of things in life. Should I go take this test? I haven't studied enough. Just go take the test.

Then after you fail it, you'll know what you need to learn to study. And your studying will be a lot faster. That is very true. Very true. Well, anyway, so yeah, it was a good time. I was hot and sweaty. I got sunburn on my back because here's the funny thing. I'm sure there's an analogy for this, but they handed out the sunscreen.

And then after the, so it was like a, was it a 1.2 mile swim, a 50 mile bike, a 56 mile bike ride, and then the 13 mile run. And after the bike ride, they give you water and then give you water and then give you a wet, icy cold sponge and then give you sunscreen when my hand is sopping wet with a wet sponge. And so, like, the sunscreen's all like wet and gross and smeared. And so I put it on and it didn't even work at all because it's got all watered down. And so I got nice and really toasty. Yeah, that's a great strategy if you're trying to sell aloeira at the end of the race. There you go. Yeah, this morning I put on my Instagram, I put a picture of my journal. Like,

every morning I do the 90 days of intention journal that we have a bigger pockets. Every morning I do this. And there's a spot for a today I'm thankful for. Today I'm thankful for Alavira. Yeah. Thank you, Jesus, for Alavira. So good. All right. Anyway, let's get on to today's show.

So today's show is really, really fantastic, full of really great advice, information on building a deal machine. Today's guest is Ryan Dossi. Ryan is just a legit, legit real estate investor. I mean, the guy came up through the ranks of bigger pockets. He found BP early on. He used BP to, like, interact, network grow. and today he's done, he owns over 100 units.

He does like 30, 40, 50, 60, 70, you know, depending on the year. Wholesale deals every single year. The guy's just crazy. He's awesome. And he just has a really good way of looking at business, like a really good way of looking at like why you shouldn't be involved in every single part of it and how to do that. He goes through today his exact script from making lowball offers that don't offend somebody, which is really good.

He talks about how he doesn't even go look at deals anymore. You're going to learn how he is able to buy that many without even looking at property, which is really, really cool. And even how we didn't even graduate high school originally. And that is a phenomenal story. So hang tight for all that. But before we get into this show, let's hear from today's quick tip. Today's quick tip.

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Just go to biggerpockets.com forward slash Airbnb dash calculator. That is a long URL. You could also, I think, just go to like calculators and you'll get there. But anyway, check it out, biggerpockets.com slash Airbnb dash calculator and see what you could do in your property. And that is it for today's quick tip. We all joke that rentals are passive. but if you're spending nights matching receipts or guessing what a property earned last month,

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That's N-R-E-I-G.com slash B-Pod. And now, without further ado, let's get to today's show. Today's guest, like I said, is Ryan Dossi out of the Midwest. You'll hear a little bit of how he's built his portfolio in several. different cities and how he's able to do that, how he's able to make this lead machine just work. It's awesome. So without further ado, let's get to it. All right, Ryan, welcome to the Bigger Pockets podcast, man.

Good to have you here. Thank you guys for having me. It's been a long time coming. Yeah, this is exciting. It's exciting. I've been following you actually on social media for some time now. And so, like, we interact, but I have never actually talked with you at length. So this should be a good time to get to know you a little more.

So why don't we start with the very beginning? How did you get into real estate? What did you do before that and how'd you get into your very first deal? Yeah, so I did car warranty sales for anyone who's seen American Green. It was pretty much like that through and through. Yeah, so I did that for a while. Actually, my older brother did me the courtesy of getting me a full-time job in it at 17. So it didn't technically graduate high school.

I was really good at. Really? Yeah, I was actually homeschooled from eighth grade on. And my mom went back to work. So Halo was pretty much like 11th and 12th grade. Oh, nice. Yeah, it was fun. The one thing I do throw back to that experience, though,

is it taught me that normal rules didn't apply. So everything I've kind of looked at is I don't have to do things the same way other people have or the same way everyone else has done it. So I did that for a while, made really good money. By the time I was newly married in 20, kind of the carrot kept getting kicked further and further down the road, got to the point that I think my last year pre-tax, I made 23 grant.

Okay. In that time frame, we had a coworker who was, you know, kind of talking about wholesaling, mentioned that he used to do these in the past and recommended I read Rich Dad, Poor Dad. So like every other interviewer, I went out and read it. I really liked it, but it also

kind of pissed me off because it taught me nothing. So I was like, wow, there's a new way to handle money. I don't have money. So what do I do, right? So I actually found bigger pockets on a whim. I was Googling other books like Rich Dad Portad and stumbled into the forums.

I'd done quite a bit of stuff on forums with motorcycles. So I I was kind of like, this is home. And I kind of have told people on bigger pockets as a poster boy, because I started with you guys. You guys can go back and find my original posts of like, I'm 19. I have no money in good credit.

What do I do? Right. So logically, I found here in the forums, yellow letter provider. Yep. And put like $2,000 on a credit card that I couldn't afford to pay off without telling my wife. I had a business partner in it. Another one of my coworkers who read Rich Dad, Poor Dad, and we got our first deal within 30 days.

Did everything like totally wrong, right? My posts are like, I have it under contract, now what, right? We listed it on Solo as a for sale by owner, like just broke every rule in the book. And a couple came through and they were like, hey, we want it. And I was like, okay, cool, I'll be right back. And I went back to bigger pockets and like, so do I just have them sign this? the same contract, like what do I do? We ended up making, I think our gross was about 12K on that deal.

We netted about 10. So as somebody who was making $23,000 a year, I kind of had a like, wait a minute, just made $10,000 and four hours of my time. What am I doing? And I was pretty much ruined as an employee at that point. So that was the beginning. That's awesome. Can you just, I like to do this just in case people are listening to the show and they

haven't heard because whole stuff is not the world's most popular, you know, like strategy. So some people don't know what it is. Can you walk through people? How did you make 12 grand on a deal? Then you said you bought it and sold it. Like, can just walk us through the basics real quick and move on? Yeah. So, um, quick and dirty basics of it. Found a property negotiated a good deal. Went under contract as the buyer. Found somebody else to buy it from me for more. Went under contract with them as the buyer and myself as the seller. Found a title company that would do the paperwork. And buyer sent in their funds. Basically bought the property for me. paid the seller and then I got cashed out in the middle.

There we go. So, yeah, typical, it wasn't an assignment. It was a double close, which there was just two sets of contracts. Okay, so you actually like for lack of a, I mean, for simplistic way, you basically bought the property, sold it again five minutes later. It's kind of what a double closing is. And sometimes you sell the property and then buy it five minutes later. Anyway, yeah, basically that's what you're doing there. So all right.

So in wholesaling can be a good way. Obviously, in some areas, I always like to put the disclaimer. Some states are very anti- wholesaling. And there's ways to do it right. There's ways to do it wrong. And there's legal ways. There's not legal ways. So just if you're jumping in it, you're like, wow, this sounds like the best thing ever.

I want 12 grand in, you know, four hours of work. Great. You can do it. Just learn how to do it. Don't just go and do it, right? Can you walk us through like overall, like your whole real estate, like what you do today? And then we'll go back to your second deal and stuff. But I'm like, what do you do?

Like, what is your overarching like real estate investing strategy today? So I'll kind of walk you guys through a quick. timeline. I think that's the best way to do it. 2014, we kind of started. 2015, we maybe did three or four deals, got enough cash together to do a 25% down payment on two rentals that my old business partner still owns in St. Louis. 2016, I decided to go full-time. I had a whopping $3,500 to my name and $3,000 a month in bills.

So, you know, that's the logical point to quit your job. Went full-time in 2016, barely paid myself, barely kept a float. I was also putting my wife through grad school. And my big problem in 2016 was I was waiting on other people's promises to come true of, hey, we're going to bring you on this deal. We're going to make you do this. You're such a great marketer. You've got all these assets.

We're going to make you a partner. None of it ever happened. Right. So I decided 2017 that I was going to get serious. I was going to treat this like a business and I was going to go all in. I was kind of like, I was kind of a wholesaler, but I was like kind of being an agent. And really what it came down to is if I split my focus and it failed, it was what failed. it was what failed not me, right? If I went full time and one particular niche or side hustle and it

failed, well, I failed. So 2016, I kind of got over that. 2017, I decided to get really consistent about my marketing and my follow-up. So 2016 did six deals. 2017, I did 74. Whoa. Are those wholesale deals mostly? Yeah. So those were pretty much all wholesale deals made obviously a lot more money than I made in 2016. End of 2017, I had a group approached me that wanted to buy deals from me, wholesale deals and stewardship properties. They instead offered to bring me in as an equity owner. And so, all right, that sounds good. So we bought four properties with them all bought off market direct to seller. In the end of 2017, 2018, I did about three dozen wholesale deals and we actually closed on 73 units. And so far, year to date, I've inked 62 units just this year. We've

closed on 54. I'm actually supposed to get a triplex and duplex back under contract today. And we're expecting an eight unit to sign on Wednesday. So, yeah, yeah, we kind of went all in on the buy and hold side. Okay. Why the shift from the wholesaling and making good money that way? I mean, like doing 60, 70 deals, I mean, even 30, 40 deals. I mean, that's a lot of money coming in. Yeah. So real estate for me has always been a means to an end. I'm not somebody who like lives and breathes houses, right?

I'm not just like, oh my gosh, I'm so excited about this rental in a C-class neighborhood. So when you're doing wholesaling or flipping at volume, what you really own is a transactional business that requires you to be a piece of it. You can build out kind of systems and teams and stuff to help with. that. But I wanted to build long-term wealth. So doing buy and hold investing, I mean, if you're wholesaling, right, the government's going to take 25 percent, a third of the deal, like right off the top. So I did some flips that kind of like, that sucked. I mean, I think I had one that went decently. And I kind of realized if I'm going to spend this much time working on a

property, I just want to keep it indefinitely. Mark Ferguson of Investor More, I think you guys have had on was a huge inspiration to me. I'm a car guy. That's actually how I found real estate. I remember Googling like, you know, at 17. How do people afford Lamborghinis? And I actually found. I wonder if that's why he bought that car. That's actually really smart now that I think about it. I mean, I think he's made a lot of money.

I know that car's appreciated quite a bit. Yeah, I'm sure it's paid for itself with the business it brought into. Oh, absolutely. Yeah, I read something recently he wrote about that. He paid like, I don't know, 80,000 or something like that for it's worth like 300 grand today. I'm like, man. Yeah, he like doubled his cash on it. I mean, something crazy like that, yeah.

Brandon, in your next book, I'm going to write a chapter about the Lamborghini strategy. There you are. I'm going to try to do what Mark did. All right. That's awesome. Okay. So you jump from the whole thing because you wanted to build wealth, not just the job. And that's what, what, I mean, there's nothing wrong with wholesaling.

Nothing about flipping. But what most people don't realize, or maybe they do and they just have no other options. Like that is a job. That is a career. That's a business. It's just like, yeah, you're selling. It's like being door or a salesman. Like you stop selling.

It stops coming in. And you can build up a business and stuff, right? But it felt very, very similar to me to back when I was a car warranty salesperson. I was putting in a lot of hours. I wasn't spending time with my wife. You know, she'd go to bed alone. I'd go to bed a couple hours later. She'd be up before I was up.

I mean, it was kind of just this like, it wasn't the lifestyle I wanted. The other thing is I told myself at a really young age that I wasn't going to have like a nine to five. And I ended up with something worse than that, right? It required more than nine to five out of me. So that was a big part of that shift. Yeah. Okay. So let's talk about where you're doing all this business at. Like where, where did you start and where are you doing it today?

So currently we own a, we own 110 units here in Indianapolis. I've got another seven in St. Louis, Missouri and 10 in Louisville. Okay. And why those areas is just, that's where you have teams? So I was from St. Louis. So that was kind of a no-brainer. And then Louisville actually, there was a kid who hit me up through Instagram who I don't know. I'm like, you probably get this all the time. I'm like, how do I make money in real estate? And somebody caught me on a slow day. So I hopped on the phone with him for two hours, walked him through like scraping public records, marketing, all kinds of stuff. And I was like, I'll never hear from him again. And it was about two months later, he called me and was like, hey, I did what you said. And I made like $37,000. And I was like, okay, you've got my attention. So we were looking for another market to go into. It's about an

hour south of me. He was obviously an action taker. So went down and, you know, and he was a lot of we've bought a couple of units with him. That's awesome. So everyone, just so you know, if you send an instant message over to Ryan, he will get on a phone call with you for two hours. Everybody knows. David Green will do the same thing. Just send him a message, two hours, free time. That's a joke.

So, okay. No, but I think that's cool. I got one of those this morning. It was like five pictures of Bigger Pockets Calculators. And someone saying, hey, this is my first deal. Can you look at this for me and tell me what you think. Should I do this one? Yeah.

Actually, let's talk about that for a minute. Why is that not the best approach when you're trying to reach out to somebody? I mean, you've been around BP for a while, so. Yeah. So I'll be blunt. Please. I really, really value my time. Yeah.

Like more than money. If I can save myself time and exchange money for more of my time back, I'll do it all day long because I don't know how much I've got, right? If I live to be 100, me swinging a hammer on a project to save a couple hundred bucks could be a good deal. If I die at 40, not so. so much, right? So the, like, will you take me out to lunch? Can I buy you coffee? That kind of stuff. Like, you're talking to people who value their time and are good at making money. I would rather, like, the people that I've typically done stuff with are the people that reach out

to me. And they're like, hey, I'll pay you like 500 bucks for lunch if you'll come out. And I'm like, I'll tell you what, you know, I'll come out to lunch. You just pick up the tab. But it's showing that you value my time. I view my time is worth over $1,000 an hour. and that's honestly how I treat it. So, you know, buying me a $9 cup of coffee and me giving you all my secrets for the morning doesn't typically sound like my idea of fun. Other thing I'd recommend if you're going to reach out

and somebody does show you the courtesy of taking you to coffee, lunch, whatever it is, be super, super respectful of their time. I've had times when I've done this and I plan to be there for 30 minutes and we're at like 45 minutes and they're like, oh, well, just one more thing. And then it's an hour and a half later in my entire morning's blown. So, you know, view it like they are literally losing money to be there for you. So that's that's my thoughts.

Yeah. David, you want anything that? Then you get that as well. Yeah, this is like actually becoming a huge problem for me is that people are reaching out saying, I want to come intern for you or I want to work on your team, but they don't live in California. What they really mean is, well, I'm in Wisconsin and I want to learn from you for free. and I'll say, well, what can you do to help us reach our goals? And they're like, I don't even know what your goals are or, well, I don't know anything about real estate.

And I think people have a, like their time matters to them, right? Like, Ryan, your time matters to you. But that doesn't necessarily mean your time is valuable to somebody else unless you can bring them value with that time. Right. So people can say, well, I'll come work for you for free. And I say, well, that's great. But what can you do? What you're really asking me to do is to stop what I'm doing and mentor you to help you reach your goals.

And that's not necessarily going to help me reach mine. And I think that the smart people understand that it's not about them, that the right partnership is, I can help you and you can help me. And we have the same values. And it's hard to find people that are kind of like, that are going to match up in all those ways.

And then the other thing is you could stop and you can give somebody what you said was 30 minutes and they try to take up an hour and a half because they're going to. And you'll tell them everything you know. And it didn't even benefit, it didn't benefit you and it doesn't benefit them because they don't go do anything with it.

They go, oh, that was so cool. He gave me a bunch of good ideas. and they never move anywhere. So what I would say is don't even ask somebody what to do if you're not ready to go take what they say and go run with it. You're not actually helping yourself. You're just kind of like patting your ego or telling yourself of that. So cool, I got to talk to Ryan.

Now I'm cool because Ryan talked to me, but it didn't benefit anybody. Those are the things that I think about. And I don't reach out to someone unless I feel like I have a plan in place of what I could do to help that person with what matters to them. What about you, Brandon? Real quick. Yeah, please. Yeah, please.

So my business partner and my buying whole. The first deal we did, when he came out, I already had the property under contract. Perfect bird deal. We've actually refied, got all of our cash out, and it's cash flowing, like, perfect deal. Not only did I have the deal lined up, I had a meeting lined up with the lender who funded the deal. So I said, hey, you're going to partner with me on buying whole deals as the money guy. But on this first one, I've got an A-class property built in 2007 and great school districts. It'll cash flow over $200 a month. Oh, and I brought the money for it as well. Started that off great, right? Yeah. Yeah, it's so important to, yeah, what are you bringing to the table when you

want to meet a mentor? Like, mentorship is, I mean, it's so powerful. It's so needed, right? Like, I needed a mentor when I guess, I mean, I didn't necessarily need one, but like, it helped so much to have somebody that I can help me. But like, at the time, what am I doing? And I've told stories before on the podcast of where I would go in like, you know, I managed this friend of mine, Kyle, his entire portfolio, out of 30 units. I did all his phone calls, did all his maintenance work. I did everything and I made probably $2 an hour for like five years. I didn't get out of it until like, I mean, I was well into bigger pockets life when I got out of work and his stuff because I felt

like I owed him for, you know, the fact that he was always there as a sounding board. So what can you do? Can you, yeah, what kind of value can you bring? Also, like, I would encourage people to think if you're trying to reach out to somebody, instead of just like an open-ended question, right? Like, what do I do? How do I get started? It's more like, I want to send a direct mail letter.

I'm going to send a thousand direct mail letters this month. Can you look at this three sentences and tell me if you think that's appropriate to send? And then that's really easy for Ryan or David or me to be like, yeah, actually, I really like that. Good job. Go do it. And then don't come back until you've sent those thousand letters and be like, hey, man, I sent the letters. I got only like two phone calls. Here's the alteration I'm thinking about doing.

Like don't leave open into questions to somebody you're trying to get a mentorship from is instead ask some specifics. One if you've got somebody like the three of us who already have a ton of. ton of content out there. Look through it first. Yeah. Yeah. Like if you see me post something on Instagram and you're like, dang, I wonder how he raises this money.

I've got a video on YouTube on how I do it and what I sell my lenders on, you know? So it just, I think it shows like I'll have people, how had you get started, been on a couple podcasts. Have you checked one out? Yeah. Yeah. I don't know that they understand that what we're hearing when someone messages me and says, hey, David, can you explain this part of the refinance on the Burr method?

And I just wrote a book that describes it. What I'm hearing when you say that is, I don't value your time as much as I value my own. So can you tell me what you wrote down so that I don't have to go read it? What their words are saying is, hey, I love you. I love your show. But what we're hearing you say is that I'm lazy. I don't want to go look this up or watch this video or listen to this stuff. So can you just cut to the chase and help me with what I need so that I can go be successful?

But you save me the 2499. Yeah. Yeah. I mean, that's, and that if you said what your actions are saying it with sound effects, which is why they don't say that. But smart people can read through your words. And what we're going to hear is your action. So when that person says, can I take you to lunch?

I'll pay for your coffee or whatever. What they're saying is your time is worth $9. And that's what I'm going to give. And that is offensive. So I think that's, and I don't mean to be rude, but that's how it comes across when you're reaching out in that way. And that's probably why you're not getting your good response is because that's what the other side is hearing. Yeah.

Hey, Ryan, what do you, how do you? how do you look at mentorship today? As somebody who's already successful now, you've done a lot of deals. Do you have mentors in your life now that you learn from, that you're gaining knowledge from? And how do you approach that today? Yeah, good question. So I look for people that are uniquely successful,

uniquely qualified, or in a position I want to be in. So I hired a mentoring, coaching, consulting group for a different company I own to the tune of over $90,000 last year. Wow. And yeah, it was it was one of those like, we can afford this, but just barely, kind of a kind of a deals. And the reason I did that was I saw they were uniquely qualified, uniquely successful, and they were at where I wanted to be. One of the best ways I've ever heard it put, you've got where you are and where you want to end up, and there's this gap. People will pay for what's in the gap.

So for me, it was you can shortcut where I am to where I want to be 10 years from now and get me there in a year. And that group taught us a lot about Facebook advertising things of that nature. We actually grew our answering service call Porter by 450% in 2018 with only 32 grand spent on ads. Wow. That's awesome. That was worth the price of entry. So yeah. Yeah. And I do want to talk about call Porter in a little bit because that's like a really, really cool business model. But before we get there, I want to go to like, let's go back to the smaller deals first and then we'll move into the bigger deals. and a call porter will, I'm sure, work into this as well. Finding wholesale deals or like deals that you can wholesale or even maybe do do any flipping

at all? Or are you just straight wholesale? Not anymore. Yeah, keep her sell. Okay. So the wholesale deals, let's talk about those. How are you finding them today? Like, what's your strategy for finding deals that you can wholesale?

Good question. So I don't do any gray area marketing. RVMs, calling pretty much anything that like you're kind of flirting with fire with, like RVMs. I know some people that have got. RVM. Ringless voicemail. Okay, yeah.

You know, I know some people that are in some serious hot water off of it. You know, things like bandit signs, I'm sorry, but I don't believe you can claim you're serving a community that you're actively littering in for profit. Yeah. You know, I get into the bigger pocket standpoint. Yeah. So I do direct mail and also SEO. I have the number one ranking.

We Buy House's site in something like 17 cities at this point. Awesome. So we do that. And then I own a company called Ballpoint Marketing. We do custom direct mail pieces that are branded for the market and actually written in ink. So that's how we're getting in front of sellers that goes into Call Porter and then our team is working the leads from there. How do you how do you get them actually? I mean, because there's a couple ways they do direct mail, right?

Some people will just print them on a postcard and just, you know, print out a thousand postcards. And some people have success there. Some people will actually like sit down at their kitchen table and handwrite 50 letters and send those out. But that's hard to be scalable. You're saying you actually have a service like how are you able to do this? that in ink. So it actually isn't just a printed, you know, mass-generated. So there's companies you can find that make machines that do this, but they have a cap on how many they're allowed to sell. Let's just say I'm far past that cap. Okay. So it's actually written in ballpoint ink, in cursive,

smears, smudges. It's indistinguishable from me hand-pening you a letter. That's awesome. That's fair. And why does that matter, do you think, having it like that versus just a printed postcard or a letter? So I do that. I also do everything branded. I think people want to work with people that they can tell are legit. So it's a combination of it ties into that. We build like local community brands that are verifiable. They've got reviews online. Think of like Amazon or Yelp, right? I'm not going to buy some like, you know, two store, two star insert anything. I want something that gets good reviews. So I think it just ties into that approach of like a local community brand, somebody that cares. A lot of people do like dishonest marketing, which I'm not a fan. of the like third notice, your cash offers expiring. I just think it's crap. So we do everything more like how to win friends and influence people based. So our typical like copy is Dear John and Sarah.

What are your plans for one, two, three main street? I prepared a cash offer for you. Please give my office a call at your convenience. You can reach us at phone number. Thanks, Brian, website at the bottom. So it just, I think kind of ties into that approach of like, we want to build a relationship with you. I'm not just looking at you as a meal ticket.

Yeah. And I think that's smart. Because again, like in today's market, there's a lot of people doing wholesaling. A lot of people doing direct mail marketing. A lot of people trying to get deals. I'm sure the people you're reaching out to are probably getting potentially, I mean, maybe your list is fantastic and nobody else knows it. But like you're, they're probably getting hit by multiple people.

They got multiple stacks of letters on their table saying, hey, I want to buy your property. So it's kind of the apple tree deal. That's how I describe it. With what I send, you know, you can send like the trashiest mail there is. If somebody's at the bottom of the tree, they're desperate, they're going to call. With what I'm sending, I'm getting the people who don't even look at a post. card. I'm getting people who are wealthy. They're affluent. They want to trade equity for an easy transaction. It's why a lot of our rentals are like vinyl village stuff that's built post-2000.

They're not going to call a, you know, third notice your offer's expiring deal. They're going to call, hey, he wants to know what our plans are. And well, we'd like an easy exit. So I think it just kind of ties in with our whole approach a lot better. Okay. That's cool. And are you doing a, so it's not a postcard. It's an actual letter stamped like in an envelope. Yeah. So do a couple things, but our big thing we're known for is we'll actually do a custom full color envelope and full color insert designed for that person's brand for the market. So it shows up and this person's obviously local, right? Yeah, I won't get into too much of it, but the guys I work with on average get a deal for about every 2,500 letters they send. That's cool. I'm messing with a guy right now. I've JVed with

in downtown Los Angeles and we're getting like a 1.8% response rate in downtown L.A. So direct mail's not dead. Yeah, yeah, Direct Meals not dead. It's just, you got to ask yourself, how can you stand out a little bit? How can you do a better job than everyone else? Like, in any area of life, it's kind of like, anytime somebody's telling me something's too competitive or too hard to do or, you know, you can't find multifamily, you can't flip houses, can't do this, can't do that. I always just like, yeah, well, I mean, if you're just like everyone else, of course you can't. Like, if you just want to be an average person, an average business owner, you're right. You probably can't do it because the average is too crowded.

We take Facebook's approach of like the customer experience is my number. one concern. So that's why we use call Porter. Our calls are all answered live. They're booking appointments for our team to go out and meet with them. Before our team goes out to the appointment, they get a text message reminder a couple hours before. Our guys show up in branded polos, hand them a business card, leave them with a credibility package, and every single person we meet with gets a thank you card in the following day. If I'm going with somebody on that deal, I mean, chances are they're not doing all those things we're doing. Credibility package, what's that? Just leaving them with info about us kind of what we've done who we are our track record that's cool all right so you got i mean you've

got this like what i'm sensing from you is like you are not a fly-by-night wholesaler who's just like throwing out some crap hoping you get something like this is a business like the guy who owns a McDonald's that's producing well you got systems you got processes uh can you walk us through a little bit of your like i don't know if you call it a CRM if that's what you if you'd call it if you're using like how does a lead go from you know you send out the letter how are you tracking you who you're sending to, who are you sending to? And then where does it go from there? You said, you know, Call Porter is a company you created, right?

Yeah. Because it definitely solves a niche. So kind of walk us through like that, what they're saying on the phone. And then how does the lead go from that to you closed it? And I don't know, that's a big open-ended question, but I'm just curious how you know. I mean, that's easy. So as far as who I'm mailing, the number I threw out of like 2,500 pieces to get a deal is just absentee owners with equity. Okay.

Here, I also, we've built some bots and scrapers. We do some like light hacking. So I get every divorce, every pre-foreclosure, every probate, every eviction, every single week. Our data is actually so fresh that we've mailed in the past. We made the mistake of saying why we were mailing or why we were calling. And we called the guy who was getting divorced and he didn't know he was getting divorced yet. Ouch, right? Yeah.

So we're using the niche data. We're also using stuff like absentee owners, seniors with equity. absentee owners with bad credit, some of that kind of stuff. So we're doing letters, sending them out. The calls are answered live by call porter. They're screening for equity, motivation, condition, and then they're actually booking appointments with people. So my acquisitions managers just go and show up.

So I don't even look at properties anymore. So the guys will go out, run a call. They'll take detailed, detailed notes, take about 100 photos of the deal, come back to the office. They'll analyze the deal, figure out what we want to pay, pool comps, all that good stuff. they'll then call the seller within 24 hours and make our offer.

It's pretty rare we make an offer on the spot unless we've got competition, but kind of following that customer experience, they called us for an offer. We're going to make sure they get one, even if it's one they don't like, right? So we kind of go out. Our approach is very, I'm not a high pressure sales guy. I had to do that for a long time when I did car warranty sales. So our approach now is just, hey, here's your options. Here's where I'm at.

This is what makes sense for me. If it works for you, great. If not, you know, no big deal, hard feelings. So from there, most people actually will tell us no on our offer. And in our CRM, we have the ability to automatically schedule follow-up sequences based off their niche. So it's a owner-occupied absentee. If there's financial distress, emotional distress, we have different sequences we'll pick that will actually send them text messages for a year without us even touching it. That's cool.

Yeah, I pulled our CRN this morning. We've had over 1,200 leads come in so far this year. And we had a guy from two months ago who replied to one of the. these automatic things and said, well, you know, I'm doing okay, but I really just need to offload the property at this point. We wouldn't have remembered to keep talking to that guy. So once they say, yeah, we've got a deal. We have it built into Podio where they get sent a contract. It's e-sign. They sign it. It uploads it back into Podio. We send it over to Title, Schedule Closing. Okay, so you use Podio for kind of manage that side of things.

Yeah, Call Porter, we spent a lot of money for our clients on building out. Basically, we test anything we're going to do on my stuff first. So we built a CRM for me. So it's kind of their default thing they offer. Okay. That's cool. Yeah. So Podio is like an open source, right? If I get this right, it's like an open source CRM to track leads that are coming in.

But you can build things on top of it, right? It's basically like a project management tool. It's really not even meant to be used for investors. We've all just kind of like tweaked it. Yeah. Because it's free. And that's exactly why everyone does that. Yeah.

I don't know that it's free anymore. I think they removed that or it's like free if you barely do anything at all. Yeah. It's a veil. little free will bait the switch. Yeah. First one free. Like that. What about when you make an offer, and I'm just drilling you and David, I'll give you

you a chance to talk in a second. No, you're fine. Any idea on your rejection rate? Like, I mean, like, or, or maybe not even, yeah. 90%. Yeah, I was going to say, like, if you make an offer, like, what percent of, like, how often do you get turned down? Because that's what I'm at, but nine out of ten of my offers get rejected typically.

Yeah. Yeah. I mean, it depends how much you whittle down who you're making offers on. I know guys that close at like 35 percent, but they weed out. most things. Our approach, general rule of thumb, coffees for closers, old school approach, if they have equity and they want to sell, my guys have to go meet with them and they have to make an offer.

I've bought more deals from people that wanted too much money for properties that were too nice for them to sell to me to do it any other way. So that's kind of how we do it. Yeah. So why would they sell it to you? Let's go like basic fundamental. Why would somebody who could go and get, and they know it's a good market right now? They know it's competitive.

They could probably put on the MLS. Why would they go to you and sell it to you for less than they could probably. probably get on the MLS. I mean, there's times when I've straight told people, you should not sell me your house. And they're like, well, no, I want the easy option. So, I mean, we had one last year that was a wholesale deal, right? We closed on it and then listed it and sold it. We made $80,000 in 30 days. The seller had a particular dollar amount they needed to close on another property. I told them, I'm a licensed broker. I was like, I'm not going to BS you. You need to list this. It'll sell quick. It's in a good area. And it was no, no, no, we want you guys to take it. You know,

We need cash in like, there was like four days, something nuts. So we cleaned up on it. So I would say a lot of the times it's the property needs work where a retail agent doesn't really want it or there's something else going on. There's a divorce. They don't want the neighbors to know they're selling. I had a guy that just, I was on the phone with yesterday who his mom left him the house and he's very like proud of how his mom maintained this house.

But they haven't updated anything in like 50 years, right? So it's one of those ones that, you know, his agent told them, well, it could be worth 240, but we should probably list around like 210. So where I always start with on something like that is, well, let's talk about the number you're going to net. After commissions, after commissions, it starts to get pretty close to kind of that 75% minus repairs. So I think it's just positioning it is I'm an option. The perk with me is it's faster.

Yeah. Yeah, that's smart. You said a couple of things in there that I think are solid gold that I want to make sure people don't miss. The first had to do with, I don't remember what you said, but I know that you're making the point that this is almost like a courtship. You can't go in there and say to somebody, hey, I want to buy your house for 180, even though it's worth 240. And they go, okay, there is a tiny, tiny percentage of people that that will work on for whatever reason. And the guys with the really high conversion rate are just looking for that. That's all they care about. They're just getting in

there. Can we do this thing? No. Okay, they move on. The smart business people, in my opinion, are the ones who understand most human beings need a courtship process to get comfortable doing something. So what you're doing is creating systems to help move them along that process. And I recognize this because as a real estate agent, I do the same thing. Very few people that I come across will I say, hey, do you want to sell your house? And they go, you know what? As a matter of fact, I was going to put it on the market. I just hadn't called an agent yet. Why don't you come talk to me? Here's a listing agreement. That'll happen less than 1% of the time. So if that's all I spend my time doing, I'm never going to find a deal.

And for a real estate investor, it's the same thing. It's more when you're going direct to seller, you're getting to know somebody, hey, here's letters, I buy houses, remember who I am, I'm here for you. At a certain point, maybe they call, hey, this is what we do. Will that work? No, not yet. Okay, well, let's stay in touch. Let's have a relationship.

Here's the value that I offer. Then when they feel a little bit more motivated, they're reaching out to you more frequently. Then they get to the point where you can actually get in front of them and you can propose what you have, but you're being very honest and you're saying, here's why this would work for you. Here's why this might not. what do you think is best? You're slowly moving them to the very end of a funnel where you can actually convert that into money. And you will overall have way more success than the people that are just trying

to like, hey, do you want to marry me? No. Okay, let me go on to the next one. Right. If something about business makes people forget the way that everything else in life works, you never meet a complete stranger and immediately think, yeah, I want to do whatever that person says. I completely trust them. So I love that you're incorporating that into the business that you're running. We do a lot of soft passes. So, you know, hey, Mr. Smith, man, I really love to buy your house, but your asking price is just too high. You know, I want to hurt your feelings. I'm not here to lowball you.

I'd love to buy it, but your asking price is too high. If something changes with your asking price, give me a call. I'd love to make you a cash offer. What does every single person say? Well, what would your offer be? At that point, they've invited it. So I don't have, I've got like 25, 30 plus five-star reviews online from sellers that we've worked with people we've made offers to. I don't have a whole bunch of like this guy's a low balling D bag type of reviews.

So we just, we don't. Yeah. Because you prepped them. You can get away with a lot if you prepare the soil before you plant that seed. Yeah. And realistically, if you say, well, my offer's 210, he wanted 240. He's probably not going to say, okay, deal. But he is going to think about it.

It's going to turn over in his head. He's going to talk to a couple agents. He's going to feel the pressure of why he needs that money. And a week, two weeks, three weeks, a month later, he may come back to you, say, hey, are we, are we still in business at 210 here? Yep. And that's what I just want. people to understand is that's how human beings work. And if you try to take a human being

and force them into your model of how you want to buy a home because it's more efficient for you, it doesn't work. You have to create your model to fit the way that human beings make decisions, which means that you have to systemize things because it's not always going to be a one shot. I get in there and I get out and I have my deal. And I feel like this is why a lot of investors fail looking for deals, trying to build a wholesale business as they have that one shot approach. What you've got is if you know, let's say you came up to the 10, steps of I just met someone to they're ready to sell a house and each of them has a phase that this person has to go through. You've put people in charge of every phase for running that part of it,

preparing them and moving them into the next one so that you actually can take your hands off this whole thing and you've got this conveyor belt that, of course, at every step you lose a couple people, but the more you put into the front of the funnel, the more will be left at the end and the more that's left at the end, the more you're going to make. And that's how business people think. And you've got to get your brain to understand this is kind of the rhythm of how business gets done. And then you can apply it to wholesaling, finding multifamily deals, finding single family deals, flipping. Whatever your flavor is, this is what you have to learn to build. Yeah, I was in Paris with my wife for the first two weeks of May.

And this was like paradigm shifting even for me. While I was out of town, our team closed on 21 units worth a million dollars. They raised the money, closed on the deals, started the construction. My phone didn't ring. You know, I'm moving to San Diego in a couple months. I'm currently in Indianapolis. And everybody is like, what are you going to do when you leave? and I kind of have to laugh and fess up that I don't really do much on a daily basis.

My team does, right? Yep. You know, there's the book, The E-Mymyth or E-Mith Revisited with Michael Gerber. We had him on the show a long time ago. He makes the analogy in that book that a business should operate, like an ideal business should operate like an engine, that any part is replaceable. And ideally, the owner of that engine is not part of the engine, right? So, like, it feels like that's what you've done.

That's what I'm trying to do with mine. And David's trying to do with his is, like, how can you create an engine? engine that yeah, you have to still go in there and oil it and you replace a part every so often or hire someone who replace a part ever so often. But like the engine just works. This part connects to this one, this one, this one, and this one. And a lot of what we've been talking about today are the tools and processes that you use to make all that happens. That's why I asked you that big picture question earlier about how does it move to the engine? How do all those pieces move? And I think it's phenomenal. Yeah, I mean, I start any any company that I'm going to own or run.

Yeah. My goal is to be totally removed from day to day operations. You know, people reach out to me and be like, hey, I need to change my form of billing for Culportor. And it's like, guys, I haven't handled billing in two and a half years. Like, you don't talk to this person. So, I mean, that's, I think that should be most investors' goals. Because you get to the point where it doesn't cost you any time, right? Most people don't take their time into account when they're analyzing deals.

But if you can even use other people's money, which is our model, I don't have any time and I don't have any cash into this deal. That's pretty. Yeah, that's pretty amazing. Yeah, I'm, you know, I'm working on this mobile home park, you know, a thing right now. I'm trying to like build up a machine, an engine, right? And so I've got a team of people who are analyzing deals, a team of cold calling these parks. I've got a partner who's running the analysis. I've got another partner who's, you know, doing, leading that team of the analysis and making offers. And at the end of the day, like, my goal is like, how can I build this? And I keep thinking that every day, I think, how do I build this? So I have to work less than a couple hours a week. And if you just always take that approach of how do I, I'm not saying I'm working a couple hours a week right now, but every decision I make is, am I getting closer to this idea where it's a machine running on a few hours of a week? And no matter whether you're doing rental properties, flipping, burr, house hacking, doesn't matter. If you just keep that mentality of how do I build this so that I'm not stuck in it.

You're not going to be the guy who's working 80 hours a week at your own business just so you don't have to work 40 for someone else. That's just a limiting belief. You should run your scorecard, which runs your business and that's it. Yeah, yeah, I love that. That's a great quote. When I bought my first rental, I thought collecting rent would be the hard part. Nope. The admin crushed me.

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about the multifamily. So we talked earlier about why you switched to that. But I'm wondering what your technique is today. Are you doing direct mail for those as well? Or are you going straight MLS? Like, let's talk about how you're finding them. Yeah, no. So we're doing direct mail. We're going direct to seller. We've primarily been targeting properties like under 20 units. I bought several eight units, a couple six units, a couple five units. We're just now, actually, we kind of realized why are we playing small? So we are currently amassing kind of our database of multifamily properties, 50 plus units. So on those, it'll be kind of a combined approach of direct mail and then following up on that mail with a phone call after we've skipped trace that person.

And, you know, hey, just checking to see if you got my letter. You know, I really want to buy your complex more of that kind of an approach. Have you found a difference in? the way that you reach out to people from a single family house to these smaller multi-family or mid-sized multifamily? Or is it pretty much the same letter? Single family, you can pretty much just like blast whenever you want with multifamily. I approach this the same way I'd approach any other business owner of, you know, hey, I'd like to have a conversation with you. Here's my track record. Here's honestly what I'm wanting.

So my intentions are clear up front. If you have an interest in selling, let me know. And then we tag on to it. Hey, last month, I sent you a letter. I didn't hear back. here's where I'm at now. I actually bought a couple other properties since we last spoke. You know, this is, it's not me. It's somebody on my team, but we give them, those are the only calls that we don't put into call Porter is these large multis because you have to be able to hop into cap rate, occupancy, vacancy,

condition of the building, some things that because of how we treat those leads, we want those going straight to one of my acquisitions managers. Okay. That makes sense. That's cool. There's a book out there called The Ultimate Sales Blueprint by a name Chet Holmes. And Chet passed away for years ago. but he was like a big business guru kind of like sales guy. Anyway, in that book he talks about,

and I think I mentioned this on the podcast maybe a long time ago, but he mentions what he calls his Hot 100. I mean, this has nothing to do with real estate. It has to do with sales. And so when you go, he's like, like,

you know, you know, just classic, you go to sell something. Like you go to a company and you, you sell something. He says, rather than blasting to everybody in the world trying to send out everyone,

instead define your hot 100, like your top 100 most ideal clients in the world that you want to sell to. And just like get a list on your, wall and you know who they are, you know what their kids' names are, you know when their birthdays are, you know everything you can about these 100 clients. And I've been thinking a lot lately about that and kind of instituting that in my own life of why not apply that to real estate and say these are my how, it doesn't necessarily work with the wholesale deals because it's a broader funnel. But with the larger multi, can you just say, this is my top, this is my hot 100,

these hundred apartment complexes in this area. Because on average, people sell properties every, let's call it 10 years, multifamily. I don't know if that's true. It might be. five might be 10, but somewhere in there, right? Between five and 10 years, they probably sell. Which means every single year, five to 10 of those high 100 are going to be like, yeah, I'm ready to sell. And five to 10 more are going to be like, yeah, I'm getting ready to sell, which means at any given moment, there are probably, you know, five, 10, 15, 20 people on the verge. And if you're reaching out to them monthly or regularly and you, you know them and you, you meet with them for lunch maybe even occasionally once a year, would it be like, who are they going to go to? The guy that they don't know, are they going to listen to, they'll go to you at least to get an offer first, right? We never down to 52.

Perfect. Yeah, I love that. So, yeah. Yeah. And then you just focus on those. And so, yeah, anyway, anyway, if you're listening to the show right now and you're like, well, I want to get, you know, I want to get a small multifamily in my area. Okay, go make that list. Go make your hot 52.

And how do you just keep on those people? I mean, that's essentially what you're doing? Yeah. Yeah. I mean, just staying in front of them, being relevant, being persistent, just kind of letting them know where we're what we're up to. Believe it or not, we actually, we did a lot of marketing to brokers on these deals and didn't really get much because they typically have kind of their known player who they've made money off of before, right? So we kind of realized, okay, we need to go direct to the owner on

these and kind of revamp what we're doing for, you know, for residential, SFR through four units and applied it to kind of the larger deals. Yeah, that's awesome. I love that. Okay, so you're, that's how you're getting the deals. They come in, same thing. Are they going through call Porter and setting up appointments to go look at things or do you have a little different process? Our multifamily, those go straight to my acquisitions manager who analyzes those deals. Just that way, the process, they deal with just one person. There's a smaller audience. Makes sense.

And what do you look for when you say analyze? Like what kind of metrics are you saying, hey, that makes it a good deal? Or I will buy that one. I won't buy that one. Good question. So typically we're trying to buy in at a 10 cap from day one based off of current actuals. And I mean, that's including like everything. our spreadsheet to look at these things hurts.

Yeah, yeah. It doesn't always happen, but that's typically our goal. And then the other thing we look for is if I 100% finance this thing, does it still cash flow? If I can check those two boxes, it's probably a deal we're going to do. That's cool. Very cool. All right. So I want to ask you, Ryan, for a newbie who wants to get started going direct to the seller,

what's the number one thing they need to understand if they want to be successful doing that? So I actually posted about this on Facebook a little while ago with regards to raising private money. I think anybody who's under the age of like 50 right now, they're going to have a problem raising private money or starting to go direct to seller because it's so relational. There's kind of this inward trend in our culture to stay at home, have your food brought to you, have your groceries brought to you, dive into your phone instead of build a life, make relationships, right? So there's never going to be an app, right, for like, oh, I want to sell my house.

please get me 100 wholesale offers. I mean, it'd be great, but it's just not going to happen or it's not going to happen anytime soon. So I think the first thing they need to do is read how to win friends and influence people and just start to play with it. I treat this stuff like experiments. Like, I'll go to the coffee shop

and I'll actually make eye contact with the girl who handed me my order and smile at her. And you notice that she notices that I smiled at her, right? So it's figuring out how to build a relationship with somebody you've never met whose guard is up, how do you lower their guard and get them comfortable where you can talk, you know, man to man, man, a woman, girl, whatever it is. So that they'll actually get to the point of you're having a conversation that could potentially

lead to a conversion. That's great. Yeah, you know, people have this guard up, right, when you talk to people. Everyone kind of does. They have like this automation and like you're just part of what, it's just what you do. Like the same response to give people all the time. You go to the coffee shop. But you just got to, if you can break through that and have a real like you actually connected

with that person. And that's like such a valuable skill for real estate. I love answering people honestly when they hit me with like a how's your day. You know, actually today's been pretty rough or like a, you know, this is actually one of the best days I've had all year. Yeah. They're kind of like taking a back that you didn't hit them with just like fine or. Fine.

How are you? You know. Yep. Yeah. That's super cool. So what you're saying then is basically the number one skill someone needs if they want to have success direct to seller is the ability to form a connection with another human being. Absolutely. It's not an app. It's not a bit of knowledge. It's not an ability to run a number.

It's not a marketing technique. It's not a software. It's not. No, it's it's, um, can you get thrown into a party with people you don't know and leave with one person who you had a meaningful conversation with? If you can't, you're better off talking to realtors. You know, um, we, we had a friend who had an acquisitions manager that they're really struggling with. And I was like, dude, this guy's creepy. Like, that's your problem. You know, so yeah, make, learn how to make friends and build relationships with people. I think a lot of people forget that a lot of the people that they're going to meet with are hurting. I told somebody I've, I've never met somebody who needed to sell a house quick for cash due to life going well. It's typically financial,

relational, you know, lifestyle changes. There's something going on that if you come in and you're just like, well, you know, I'll give you half of what you want because that's all this dump is worth. You're not going to get that deal. Instead, you sit down and walk them through their options, explain why you're the best choice, get a much better shot. Yeah, I really, really like that. Yeah, that's really good. I think people need to like, again, listen to that again. Like, there's a, there's a heart issue at play here when you're a wholesaler or your real estate investor in general that, like, this is real life people in their real life lives, like that we're dealing with. And it would do a lot of investors good to realize that.

So very good. So all right. So let's, let's, uh, I want to shift a little bit here and, and talk about one of your deals in particular. So I think we should head over to the deal deep dive. Deep dive. All right. This is the part of the show where we dive deep into one of your particular deals. So Ryan, you got something in mind that we can, we can dig in on?

Yeah. Yeah. Yeah, I've got a really good one. All right. All right. Let's start with number one. What kind of a property is this and where is it at? Uh, single family rental south of downtown Indianapolis and an area called Bates Hendrix.

Okay. How did you find it? This one actually came from a wholesaler. Over 89% of all my assets have been purchased direct to seller. This is one of the 11% that I bought from another investor. Cool. I love that you know that number, that you track these things. Here's one thing.

Side note from the deal deep dive, but the best real estate investors I know typically know their numbers like that. Like their rejection rates, they're, you know, where their deals are coming from. Like they track that stuff because it's important. right? What you measure matters. Isn't that a book? So like, anyway, I love that you know that. It's actually 89.4 if I'm showing off. I love it. How much was this house that came in from the wholesale? How much did they want for it? So we paid $62,000. I don't remember what they wanted,

but my approach with any wholesale deal I get, if it looks remotely interesting, I treat it like a direct-to-seller lead. I give them a number that works for me. That was one of those. Okay. All right. So no real negotiation there. It just, You gave him the price. Yep. Yeah, he'd been sitting on it for a little bit. We saw some potential in it that we'll get into of kind of why I went after this one. Okay.

All right. How did you fund this deal? 100% funded with private funds. We pay 8 to 9% interest on a two-year term. Okay. How do you find these people? It's a mix. I've actually, I post pretty often on bigger pockets that I'll look at any deal for anyone for free at any time,

especially in Indianapolis, especially if they're out of state. and I had a guy recently that was a California investor was looking at funding a deal for somebody else. They straight fudged their comps. It was one of the worst parts of Indiana as a whole. And I just told them, hey, I wouldn't touch this deal. And that was it. There was no pitch.

There was no like, you know, you can send your money to me. And he reached out to me a couple weeks later and said, you know, hey, I decided not to do that deal. You know, I've got to figure out what to do with my cash now. I was like, you know, well, we have opportunities. And I believe that guy's invested $400,000 to half a million dollars with me at this point. That's so cool. What a great story about like, you know, giving, like how giving to people can like, like this is where people I think oftentimes are like, well, I don't see a direct value in in helping somebody else or engaging on the forums or getting involved in a community or going to a meetup because I don't see a direct one-on-one return right now for my, for my time. But you're just saying like, hey, I'm just going to give. I'm going to help people, give my opinion on the market, on the areas. And I know that at some point it's going to come back to me. And that's a good tangible example of that happening.

I mean, that's literally been my entire bigger pockets experience. If I didn't find bigger pockets and I didn't give back and I didn't help in what I could, don't like just regurgitate stuff you've read that you have no experience in, but help in what you know, I'd probably still be working for someone else. Yeah. And if you want to have something to give to people, you have to know what you're doing. And if you want to know what you're doing, you have to pursue things hard. And I think that's, you can't skip that step.

That's what we're always saying is you got to learn what you're doing. You got to pay attention. You got to build up that tool belt. if you want to try to ascend to the top without understanding what you're doing, you have nothing to offer someone. And a smart person doesn't take them long to realize this is a hollow relationship. Yeah. All right. Enough of my grandstanding.

And so much. Did we ask you what you did with the property? So we kept this. This was a classic bird deal. So we bought it for 62,000. We put right at $44,997 exactly into it in renovation. What I liked about this property, it had a detached, heated, eight-car garage. So it was a, yeah, super weird, right?

I looked at it and I was like, somebody's going to pay a premium for this. It's in an area that was super gentrifying now. It's like it's totally exploded. Good luck finding anything there. But at the time, it was like this was kind of on the outskirts of this area. It was kind of a rougher deal. But I was like, it's got this eight-car garage. I'm a car guy.

Some car guy is going to want this, right? Yep. So rent comps at the time were $800. I threw it out for $15.75 because, you know, why not? Well, he's saving money on the garage space that he had to rent for all these cars. So interestingly, we ended up with a family in it who had other stuff and other storage units from when they owned a larger home. And they just packed it with all their storage stuff and it actually cut down their monthly living costs. That's awesome.

You got the $1575 then? Yeah, yeah, I got the $1575. year to date in like the past like 13, 14 months since this thing has been rented. We've cash flowed right at 3,179 bucks, so right at 220 bucks per month. I thought this deal was going to be worth about 140, 150. It was pretty conservative up front. I was going to end up all in for 110. My bank appraised it for 240.

Whoa. So, yeah, that didn't hurt. We actually pooled, you know, tax-free payday, $54,000. bucks out of the back of that deal. I wonder if the reason that it appraised so high is they were forced to go to a really nice neighborhood to find a cop with an eight-car garage. No, the area in the past year, like everything around it was either redone to the studs or built new.

So all the other comps for, you know, three-bedroom one baths that were 14, 1,500 square feet were 250. So they were even like, we don't really like this one, but here you go. Yeah. I do want to point out, not all of them are. like that. We refined this deal in a package of six other parcels. I think there's like eight or nine units total in it and a purchase of a 12 unit multifamily. But across the board on this refi, it was right at a million dollars. We pulled out 64,000 tax free. So we did really well on this house.

A couple others came in low. A couple others came in pretty decent. But we were able to perfectly bur out with a $64,000 check on that refi. So that's so cool. All right. So just to recap and keep it a little confused. We're talking about a burr strategy. David Green wrote a book on it. You should buy it. It's, you bought it for 62. You put 45 roughly into it. So you're at, you know, we'll get at 110 total into it. Yep. You were hoping that it'd be worth, let's say 150 so that you can go to a bank and refinance it.

So you can pay off that private lender. Yep, paying off that private lender. So now you can go from the 8 or 10 percent. You're paying other people down to the 5-ish percent from a bank. The bank appraised it though at 240. So you were able to refinance price 70 percent or whatever of the 240. 75 percent. Yep, which is where you were able to do that.

last time before we moved to the last one of the deep dive, but you said it was a group refi. I mean, how did that, like, was this a local bank that did this? Yeah. A commercial loan. I mean, how'd that work? Yeah, so local community bank, it's kind of a goofy product because it's a commercial product that's offered on residential properties. And we bought a 12 unit and did this in with the loan as kind of our way to sell the bank on,

hey, we'll give you this, this, you know, decent 12 unit, but you're also going to refy these for us. Nice. So we did, I think it was five houses in a dupe. complex. So yeah. All right. And last question then. What did you learn from the deal? Sorry, David, I took it from you. What did you learn from the deal? Good question. I think I didn't so much learn. I'm more reinforced. I went full time with 3K to my name. I've had more times when I've bet on myself than I should have and I haven't gone broke yet. So that was one of those ones where I looked at it and I decided, even though the data wasn't totally there, that there was something

here, you know, trusted my gut, my intuition behind it. And I mean, that's a beautiful deal. Yeah. Fantastic. Fantastic. All right. Very cool. That was an awesome deal deep dive. Now, let's head over to the next segment of the show. It is our world famous Fire round. Fire round. It's time for the Fire round. All right, let's get to the fire round. These questions come direct out. of the Bigger Pockets forums, which I know Ryan's in, David's in. I'm in. It's a great place to connect with people and learn, grow, network, whatever. So go check it out, BiggerPockets.com slash forums. And now let's get to the questions from the forums. Christopher from Powder Springs, Georgia, said, hey, I've been reading and studying real estate for some years now. I'm having a hard time

pulling the trigger and getting that first wholesale deal under my belt. I currently got an hour or two every day I could dedicate, but I have some friends and family that are willing to assist me as well. Can anyone offer some advice on how I could possibly delegate some of the grunt work or how I can make the best use of my limited time? I'll take this one. There's an app called Deal Machine. It's a driving for dollars app that these are actually the only postcards I would ever send. You take a picture of the front of the house, sends them a postcard. Their metric is like one of their members gets a deal for uploading 250 properties and mailing them six times on average.

Nice. $12,300 bucks. Make your Uber drivers do it. You know, you can sell Uber drivers on, hey, I'll pay you a commission, friends, family, even yourself, to and from on your way to work, take a little bit of a different way home every day. That's absolutely what I would do. All right. I love that.

That's great. Yeah, a deal machine. I actually have that on my phone as well. And I just did a test send because, like, I sent it to myself at my own house. And I got the postcard. And I was like, this is awesome. Like, that was so easy. Yeah.

I know the founder of it. And he's an incredible guy. Yeah. I stand 100% behind that recommendation. I actually just met him at a conference a couple weeks ago. That's why this is familiar. Brandon, you were the one that was telling me about it because you had just met him. Yeah, I just met him at the conference.

Yeah. And anyway, I think they're going to be eventual sponsor of the show or something on bigger pockets. But anyway, they're not right now. I'm just totally like, it's a cool app. Like, even I'm not paid to say that. It's just a cool app. And there's a few of them out there, but that's the one I'm playing with right now. And I really like so definitely check it out.

So I like that. So basically, don't just find a family member to do the grunt work. There are things like an app you can use. used to do rent work for that stuff. Okay. Yeah, they got an hour or two a day. They should be able to get some, you know, work done in an hour or two a day, seven hours a week. That's enough time to find some deals. My favorite thing when I have that problem is I make a checklist. Okay, everything from the deal coming into the deal closing, what's all this stuff I got to do? Now I've got like 15 steps or 20 steps. And then I start looking of all these steps, what app or software could I use to do it

for me? And then what person could I use if I couldn't find an app. And you just kind of systematically eliminate and you're like, oh, I only really got to do two things and just get really good at doing those two things. So next question, we have a tiny duplex in a rundown area, which we are sure will be hot in two years with billions of dollars of development underway. We are approached by an Airbnb super host to rent both units at the rent amount we are asking for. Is this too good to be true?

Is there something we need to be aware of? I mean, no, I'd do that in a heartbeat, especially if you're having a hard time renting it. It's actually Airbnb arbitrage. It's a pretty common business model where you approach people with rentals, offer to pay their rent, and then rent it out on Airbnb for a premium. They're taking all the Airbnb risk.

No other tenant's going to clean your place, you know, three to five times a week. Yeah. It's going to have the kind of insurance they have. I know people that have done both sides of it, and I think it's a really, really cool model. You know, if you're somebody who doesn't have cash to get started or has a little bit of cash, it's a potential option.

So it's basically subletting, right? It's basically like, subletting where you're very, very clear up front that you're going to be subletting for a profit. Yeah, I'm not a fan of the whole like Airbnb arbitrage when you try to deceive the landlord and like go rent a bunch of places, pretend you're moving in and then you actually. Yeah, that sucks. But yeah, tell them. But I would love if somebody came, like one of my tenants came to me and said, hey, you know, like I'm going to do Airbnb on this thing. Because I know, yeah, like you said, they're getting, the house is getting clean three or four times a week.

And there's no long term tenant going to be stuck in there that after than evict forever. And like, I mean, it's just I would love that. And then Airbnb even has their own insurance against damages. And like, yeah. So like there are, if you want to get into Airbnb arbitrage, there are plenty of landlords out there. Have you explained the benefits to them? They would be all for that.

You can get into real estate with no money down and start making cash flow. It's a cool strategy. I think you've got a few of them right here. Yes, yes. Yes. So, yeah, very cool. All right. Number three, I'm a new investor in D.C. area trying to get started with rental property or

Burr. My question is twofold. What happens to rents in a recession? Like, what happens if, you know, we have a recession or all my rents? rent's going to drop and I'm in trouble. And then also, what does, do you have any effective strategies to recession proof and investment property? So I actually got this from a guy named Tim Bratz. And he calls it Hardening, which we've now done on all of our rentals. So any property we have, we're doing granite,

we're doing vinyl plank flooring, we're doing stainless steel appliances, we're doing can lighting. This is a nice looking place. Reason being in the event of a recession, the people that are in the A class stuff are going to come down to my A minus. might be plus. It's kind of like if you've ever driven or owned like a Mercedes or a high-end car, you're going to have a hard time owning a Toyota Corolla and feeling proud of it. Right. So it's you kind of, people get used to having nice things.

They can come down a level to your place and still have most of the things they're used to. But then at the same time, people are going to fight really, really hard to stay in that asset class before they drop down to the, you know, slum lord using church carpet from the 1980s that he's thousand times. Church carpet. Yeah. As far as like rents go, I think you'll see a decline. Reasonably, I'm in the Midwest.

So I don't quite have the concerns of, you know, if I was a California investor, we don't have the wild appreciations or growth. But I know from a lot of the people I've talked to about the subject of, you know, I haven't been through a recession as a buy and hold investor yet. How do I recession prove my portfolio? How do I make sure I'm not one of the guys who had 500 units and lost it all in a year, right? one of the big things I've heard is making sure you're actually getting good deals. So we've got the equity cushion. All of our properties are at a 1.25% rent to cost ratio. So they're covering their

debt service coverage. But then on top of that, if you own stuff in nice areas, I'm envisioning we'll probably see more people, you know, family members kind of move in and stay together. But you're also going to be more likely to have people get creative and find options if you're in a nicer area than if you're in kind of a really rough area that family doesn't want to live in. Yeah. Yeah, yeah, for sure, for sure. Number four. All right.

Next question. Hi, everyone, meaning hi, Ryan. I'm looking to buy my first rental property around Pittsburgh. I found a potential great deal in a great school district for $30,000 when comps in the area are selling for $60,000 to $100,000. Problem is, there's mold everywhere. Every wooden surface in the house is covered with mold. Should I forget about this place and move on?

Or can the mold situation be fixed without costing a fortune? So my first concern is comps can't be a $40. thousand dollar range. You need to get better at running comps is my first, you know, blunt thought. Because if you're into it for 30 and it's only worth 60 and there's mold everywhere and you haven't started rehab, that's not a deal. It's 100, 110, 120 maybe. You could be looking at something.

Mold is one of those things that I would get somebody who knows what they're doing to look at it. You don't want the guys off Craigslist who are going to just bleach it, you know, hang sheetrock over it. But my other big concern with that property is where did the mold come from? Mold is typically a sign of water intrusion from somewhere. And if it's everywhere, I think you have a big problem on your hands. So I think if it were me, given that there's kind of this huge range in comps,

and it sounds like this thing's pretty dang gross, I'd keep looking. That's a good point. Mold is a symptom. It's not actually a problem. You have a bigger problem that's causing mold. Yeah, very good. All right. Well, that was a great fire round.

Now it's time to head to the next segment of the show. It's time for the famous four. All right, before we get to the Famous Four, let's hear about what's going on this week over on the Bigger Pockets Business podcast. Hey there, everybody. If you listen to just one episode of our show, this one should be it.

Our guest, Alan Donegan, walks us through how to start a business step by step. And most importantly, he tells us how we can do that with no money, very little time, and very little risk, using techniques that they're not going to teach you in business school. Now, whether you're a real estate investor or someone who wants to start their own business, this could seriously save you tens of thousands of dollars and put you on the path to success much, much more quickly. So find the Bigger Pockets Business Podcast in your favorite podcast app

and subscribe today. See you on Tuesday. All right, with that, let's get to the famous four. These are the same four questions we ask every guest every week. So, Ryan, we're going to throw them at you. Number one, do you, or what is, your favorite real estate related book? So it's an old one, nothing down for the 2000s. This was kind of like the precursor to what we now call the burr. Nice. And really kind of got the wheels turning for me.

I don't find much of any of it applicable in today's markets. But for me, it was kind of the paradigm shift that led me to the Burr model. Okay, very cool. Yeah, Robert Allen. Cool. What is your favorite business? business book? Favorite business book? I would have to go with the seven habits of highly effective people. Cool. Stephen Covey. Good choice. Number three. What about hobbies? What are some of

your favorite hobbies? So good question. I like to travel a lot. I'm also a guitar player. Self-taught played on stage a lot when I was younger. And I'm actually in the process of getting certified for paragliding. Oh, that's cool. Yeah. She just come out here to Maui. They have a paragliding course right in the side of Haleakala, the mountain. Where we're moving will be like 20 minutes from Tori Pines, downtown San Diego. So that's where I'll actually finish getting certified. So I'm super looking forward to it.

That's awesome. All right. Number four. Ryan, what do you believe sets apart successful real estate investors from those who give up, fail, or just plain never get started? I think I would say focus. We kind of touched on earlier of if you're split between different. things. If you're trying to wholesale, trying to build a brokerage, trying to be a real

estate agent, trying to flip, trying to get into buy and hold, trying to do lease options, trying to do like all these weird reverse, you know, things that I don't even know what people are doing anymore. If you, if your interests are divided between all of these things, you're kind of running with the, if this one fails, I still have all these others. But I think really what it comes down to is if you go all in on one thing and it fails, you're afraid that that makes you a failure. So I know for me personally, the big shift from 2016 to 2017 was me deciding, I'm going to go all in on this. I set the goal of doing 50 deals when before I'd done five and we did 74. So I think I would say focus and I also think it kind of

ties into their why. Really being focused on something that you have no passion or real reason for, you're going to give up. Whereas if you've got a strong why behind that focus, I mean, you're pretty much unstoppable at that point. Awesome. Awesome. All right, dude. Well, this has been a ton of fun today. So I'm going to let David ask you the final question. I won't steal that from you. Yeah. Where can people find out more about you, right?

So probably the best thing to do. I put together a like 27 page long guide that outlines how we did 73, basically, bird deals last year with none of our own cash. It's just Ryan Dossi.com. That's got videos of me walking through stuff in it. They'll get my email and everything through that as well. So that's probably the easiest way to do it. Cool.

Do you want to shout out your business as well? You have Call Porter. Yeah, so Call Porter, live answering for real estate investors. We take over 10,000 calls a month, been featured in Forbes, all kinds of cool stuff. Americans that only take calls for real estate investors who will actually book appointments based off of your availability. Ballpoint Marketing is our direct mail company, which ballpoint marketing.com, call portermarketing or callporter. Awesome. All right, dude.

Well, this has been fantastic. Thank you. And everyone go check it out. And without further ado, I'll let David Green take us off because I got nothing really to talk about. So we'll just get out of this show. David, you want to take us out? Thank you, buddy. Thank you, Ryan. This is David Green for Brandon. Will you be my mentor, Turner? Signing 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 height,

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