BiggerPockets Real Estate Podcast - 593: The Ethical Wholesaler: Putting People Before Property Profits w/Jamil Damji

Episode Date: April 7, 2022

The words “ethical” and “wholesaling” are rarely used in the same sentence. For the most part, many real estate investors and agents look at wholesalers as deceptive, hard to read, and for the most part just looking to make a quick buck. While this may be true for many new wholesalers, it's far from the truth for Jamil Damji. If anything, Jamil wants to put an end to inexperienced, and often financially dangerous wholesaling. You could say Jamil was made to be a wholesaler. He had hustle, cold calling skills, and the will to succeed after being rejected from medical school simply due to his age. He set up a website-building business and got the hang of cold-calling quite quickly. After overhearing a discussion about a real estate deal between his partner and his partner’s father, Jamil decided to take his sales skills and turn them into something a bit more profitable. He made a phone call to a local property owner, secured a deal for his partner, and walked away with a $47,000 assignment fee. Now, Jamil runs one of the most respected wholesaling companies in the United States. He’s set up an “everyone wins” style of wholesaling where sellers, buyers, and intermediaries in between all get paid fair prices while incentivizing each party to do what’s best for the other. This is a brand new concept in the field of wholesaling and one that Jamil wants to see flourish throughout the industry. If you want to learn how Jamil and his team do sixty to eighty deals a month, all while building a loyal customer base, this is the place to be. In This Episode We Cover: How wholesaling works and why so many new investors start with it The best types of listings to call to find motivated sellers plus where to build your buyers list Why illegalizing (or at least licensing) wholesaling would be favorable for the industry How wholesalers can work with agents to build each other’s businesses faster The biggest mistake wholesalers make when trying to assign contracts to buyers Building a “win-win” system so everyone in the transaction becomes a repeat customer And So Much More! Links from the Show: Coming Soon: BiggerPockets's On The Market Podcast Triple Digit Flip Show Robert Abasolo's Instagram Robert Abasolo's TikTok David Greene's Instagram David Greene Real Estate Youtube Channel KeyGlee Funny or Die Upright Citizens Brigade The Second City Craigslist U-Haul The Comedy Store D.R Horton Company Website Saturday Night Live Brandon Turner's Instagram Connect with Jamil: Jamil's Instagram Jamil's YouTube Channel Check the full show notes here: https://www.biggerpockets.com/blog/real-estate-593 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 593. If you're a realtor and your job is to talk to people about value, to talk to people about what is, you know, how much a house is worth and how I came to this price and what I can possibly get you on the open market. Yet I've not been taught how to do that in licensing school. That's a big problem. And nobody's talking about that. Nobody's talking about the fact that that even the education that they're putting realtors through isn't. standardized. We don't have agents learning the adequate things that they need to learn in order to speak intelligently about real estate and real estate value.

What's going on, everyone? My name is David Green, and I am your host of the BiggerPockets Real Estate Podcasts, the best real estate podcast in the whole entire world. If you're looking to gain financial freedom through real estate, you, my friend, are in the right place. BiggerPockets is a community of over two million other people, all trying to do the same thing as you. Build well through real estate, create a better life for themselves, and find financial freedom. We help you do that by bringing in experts in the field to talk about how they do it, creative minds to sort of wake the juices up in your own, and people who have walked this path before you to share how they did it. Today's guest is fantastic.

My co-host, Rob, and I are interviewing Jamil Damjeet. Thank you. We're not editing this out. You stalled. I win. Yeah, I can try to remember if it was Damji or Domji, but it is Damji. Thank you, Rob. You got that. Right. Who is a wholesaler who gets deals from a variety of sources, but he does it differently than other people.

Jamil's entire philosophy is to do this ethically where everybody wins. And he's actually created a sustainable business model where lead after lead after lead keeps coming back to him. And he doesn't have to worry about ripping somebody off and then running into them at the grocery store and not wanting to be able to share his face. Jamil is a new member of the Bigger Pockets family, so he's going to be joining Dave Meyer at the new On the Market podcast. And this was our first time getting to know him, and he is an impressive individual. I think you guys are going to love today's show.

It is equal parts inspiring, practical, informational, educational, eye-opening, and even a visionary element in a sense as we talk about what the world of real estate should look like with mixing the on-the-market deals you get with the agent on the MLS and off-market stuff you find. with a wholesaler. And we made some pretty funny jokes at Rob's expense. So there's a little bit of the Brandon Turner vibe that shows up again today. Rob, what did you think about the show? I also got the opportunity to coin a new term called hold sailing. We'll get into that a little bit later. Yeah, you want to make sure you stay all the way to the end because hold sailing is a, you don't want to miss that. I'm actually writing the book for hold sailing right now for bigger pockets. We made a lot of progress in the last hour since recorded this podcast. But, Yeah, man, this one went off the rails a little bit in the best possible way. And what I mean by

that is like we always kind of have an idea or like a topic that we're going to talk about. But I think you kind of, you asked a really hard question in the world of wholesaling. And honestly, I kind of think that Jamil had a bit of a hot take in that the way to approach wholesaling is kind of working a lot harder than what we're typically taught wholesalers are doing. And he's taking on a lot of risk. He has a lot of reserves to be able to actually. actually close on any wholesaling contract he goes into. And it's just refreshing, honestly, because he really did change my perspective, I think, throughout the last hour. Yeah, you're going to want to listen to this one because Jamil shares a method that works

without spending a ton of money. He's not committing $10, $20, $40,000 a month to direct mail. He's not paying a ton for SEO leads. And because he's not putting a ton of money in, he doesn't have the pressure to rip somebody off to get all that money back for the next one. He's actually using relationship building and problem solving to create lead flow so he can create a fair deal for everybody. And this is a fantastic show. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund.

Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features 4,700 a single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought-after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio. check out historical returns and start investing in just minutes.

Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund. Fundrise Fund funders' prospectus at fundrise.com slash flagship. This is a paid advertisement. If the new year means getting rentals back in order, listings are a good place to start. Avail, part of Realtor.com makes it simple to list a rental for free and get it in front of millions of renters. One listing, one click, post it across 24 top rental sites. Avail even helps generate listing titles and descriptions to save time. More visibility means fewer days sitting vacant and getting your property rented quickly. It's a fast, free way to find renters without the usual hassle. Get started at Avail.co.com.

That's A-V-A-I-L-C-O-Bigger Pockets. 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. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully

capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications, it can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taking care of and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host but could use some help find a co-host at Airbnb.com slash host. Do we have a quick tip for today?

Quick tip. Don't rip off people. Today's quick tip. Be a good person. And also check out the new Bigger Pocket show on the market hosted by Dave Meyer, as well as a couple different personalities that all bring their perspectives. And if you guys watch TV, there's a few people out there that probably do that. Check out Jamil on his A&E show. Triple digit flip. I mean, I'm just bailing you out this whole podcast. This is why you're here, Rob. That's exactly right.

I'm the doctor and I just say scalpel and you put it in my hand and say, check. I appreciate that. You know, I think it's really crazy. We actually went through this entire podcast. We spoke for 60 minutes and we didn't even talk about the fact that he had a TV show. Isn't that kind of crazy? That's like, I feel like we didn't even, we usually lead with that. Like we have a TV star in our midst.

But yeah, that's a fun fact about Jamil. Yeah, you guys are going to love Jamil. so I'm excited for you to get to know him. Please go follow him on social media. Also give Rob a follow here. He is Rob Built, and I am David Green 24. And without any more of that, I do. Let's bring in Jamil.

Mr. Jamil Damjee, welcome to the Bigger Pockets Real Estate podcast. It is so nice to have you. Thank you. Thank you, David. I'm absolutely excited and honored to be here. I've been trying to be on a Bigger Pockets podcast for, I think, two and a half, three years. but you guys just put me on. So thank you.

Well, welcome to the VIP lounge. You finally made it into the backstage. And I suppose now is a good time while you're here to announce to the world that you're going to be joining the family. So welcome to the family. You're going to be on the new podcast with Dave Meyer on the market. And tell us a little bit about what you guys are going to be discussing. Well, it's an extremely exciting situation for myself, Bigger Pockets as well.

David Meyer, as you guys know, he's the vice president of data and analytics at Bigger Pockets. And what we're trying to create is an incredible show where we take the mundaneness of data and analytics and we bring it to a digestible and fun way of understanding and really taking those topics in and making them mainstream. So the goal is- I got to say, you sound like the algebra teacher in high school that says, I'm going to make math fun. Is this a bait and switch? Yes. No. Could it be a bait? Because it's not fun.

No, here's the thing, right? You see and you hear all these numbers. And the facts are is that if you go to one website, you can read a report, you can go to another website, you'll read another report, and another one, and another one, and they're all going to say different things, and they're going to have different experts saying it. And you still have to make informed decisions about what your investment activity is going to be, what your strategy is going to look like. And it's very hard to make sense of all the noise and all the chaos. Well, what I think Bigger Pockets nailed is it brought some of the industry's best experts and an incredibly gifted data and analytics individual brought us all together and said, figure this shit out. And that's what we're trying to do.

We're trying to figure it out. And we're really bringing to the conversation our points of view, our histories, as well as intelligently and truthfully looking at the data and trying to make sense. sense of it because if we're going to look at numbers, a lot of people will say, these guys are just saying this because they're real estate people. These guys are only feeling this way because they're in the business, they're in the market, and they have an incentive to tell people that real estate isn't going down or real estate isn't super risky or that we're not in a bubble or whatever that might be. The facts are is we're all just as interested as the general public, or people that are just getting started in their real estate investing careers, we're all as

invested in that information. And we're trying to make as much sense of it as you are. And that's what this show is about. Watching us make fools of ourselves, trying to understand and make sense of this crazy, crazy world of data and analytics when it comes to the space of real estate investing. You make up a good point that we're all looking at data and trying to make sense of it. And it is easy to critique those of us that are in this space for giving our opinion on things because we have a vested interest. However, I would say the fact that, we have a vested interest in it makes us even more vulnerable and more reliable because we're putting our money in this stuff we're talking about.

Right. To me, it's easier for the person who's not investing in real estate to give advice because they have nothing to lose. It's easy for them to say, don't do this or do this if they're not doing it. It's the people that are actually investing their money tied to this industry that are going to be looking at it from the lens of the listener who's trying to figure out what to make sense of it. So I'm really glad to hear that we're growing. We're bringing in new perspectives. And I think

that's what people are looking for. In general, we all have access to the same data. We're trying to figure out, what do I think? What do I make of this data? What lens do I look at this through? So I'm excited to get to know you better, Jamil, to hear about your background, to know more about the lens that we are all going to be looking at things through. So would you mind tell me a little about how you got into real estate investing in the first place? Man, I'd love to. So let me just start off by I invented wholesaling. I'm kidding. I didn't. I thought I did, though. I truly, I truly thought I invented wholesaling because in 2002, I got my start in real estate investing, and it was by complete accident. At the time, I was just coming off this devastating blow of not getting into medical school.

So I'm East Indian. My parents bred me to be a doctor, right? That's what I was supposed to do. I was supposed to become a doctor, make them proud. and join my cousins and the rest of my family in our medical practices in one giant strip mall in Calgary, Alberta. What happened was, what happened was, I didn't get in. And that was, that was devastating for me, because I had a near 4.0 GPA. I did, I, you know, volunteered. I had all the extracurriculars. I did everything that you should do to be the pedigree for somebody who gets in a medical school. The problem was, is I was so good that when I applied, I was too young. And they had told me that. They said, you're just too young, try applying again. But that broke my heart, broke my spirit. And I thought, you know what,

I can't do something where other people get to decide my destiny. So I decided to make my step into entrepreneurship. I picked up a book, Rich Dad, Poor Dad. I think a lot of people get their start in real estate investing and entrepreneurship from reading a book like that. And it got my mind thinking and I started looking at the world in a different lens. Well, I had an opportunity to get involved in an entrepreneurial venture where we were selling websites. All right. So this is 2002 where the internet was still fledgling and people weren't really adopting it in their businesses. It had been around for a bit, but it was still like pornography and dating sites. And so what my job was is I was going through the yellow pages and I was convincing business owners that they

should be advertising and moving their businesses online. And my job was cold calling. So I'd cold call all these businesses. Well, I had a business partner at the time whose father and him were in development of real estate. And they were knocking down these old houses and they were building these duplexes. And they were talking about this deal they were in where they made $160,000. Now, as a person who was selling these $600 websites, I was literally losing money every time I made a sale. Every time I made a sale for a $600 website, it ultimately cost us $700 to make that website. So I lost $100 every time I made a sale. I was not in a good place. I listened to these guys talk about a deal where they're making $160,000 and I'm trying to figure out how I can get involved. And they're telling me there's

nothing I can do. I have no money. I don't have credit. I'm not a realtor. I'm not a construction worker. There's nothing that they could see that I could do to add value to their situation. But as I listened further, I heard them griping about needing more building lots. They were looking for more houses to demolish. And I asked, what type of properties are these? And they gave me the criteria. They said, we need something that zoned R2, 50 foot frontage, 120 feet deep minimum.

If you can find something like that in one of these neighborhoods here in Calgary, let us know and we might be a buyer for it. The next day I'm walking my dog and I actually rent a property. I'm living in a rental in the neighborhood where they're doing this development. I'm walking my dog and I passed by a house that I'd actually tried to rent three months prior. But it was $200 outside of my budget. It was just $200. $200 made her, was making or breaking me at that time.

Well, I called the for rent sign and I asked the lady if she'd be interested in selling her house instead of renting it. Because it had been three months since I tried to rent that property and was still available. Her answer was yes for the right price. I asked what that price was. She said $350,000. So I head back to the office. I see my business partner and I ask him, how much would you and your dad pay for this house?

And he said $400,000. So now I've got a $50,000 problem to solve. I know I can't buy this property because I have no money, but I know that I can sell this property if I can figure out how to buy it for a $50,000 profit. So I do what I know how to do, which is cold call. I get into the phone book, I start calling real estate lawyers. And I get all the way to S.

And this man, David Steed, I'll never forget him because he answered his phone. He was so fresh out of law school that he didn't have a secretary yet. He answered the phone and he very quickly told me how I would do that deal. He said I needed two contracts, one where I was the buyer, and I had my name and or a signee. And then the other contract where I was a seller. And when I brought those contracts filled out to him, he would do the conveyance and my deal would be done. And two weeks later, I had a check for $47,000 in change. That was it.

Dang. All right. So you kind of went from, would you consider what you were doing before wholesaling websites where you're going buying the domain and then going to businesses and reselling it to them? So what we were doing then is we had developers in India and Pakistan who would actually build these websites for us. So we were selling hosting because hosting was recurring revenue. but we would just sell these small little five-page websites, which we would actually pay to have developed. So I wasn't wholesaling them. I was a part of the company that was contracting to have

the actual websites built. We just didn't have an understanding of what our costs were. That's why I lost money every time I sold the website. Okay. So you kind of go from this like, this digital shop of sorts, all the way to stumbling upon, yeah, accidentally wholesaling. And so what was that like? I mean, just for a frame of reference, how much was like $47,000 to you at that time? So I grew up very, very working class. My father, he was very rarely at home. He spent his entire days working at a truck stop, shoveling gravel. My mom was a data entry operator. And my sister basically raised me because my parents were at work all the time. So we grew up very, humbly and $47,000 to me was literally like winning the lottery.

I didn't cash the check for four months. I had the money order, the cash, the money order that the bank got me. Well, the lawyer got from the bank. I had that money order folded up in my wallet and I kept it for four months until somebody told me that it was going to expire in six and I had to deposit it. I just was so shocked that I had that money. And I didn't have a life where I wanted to go spend it. I wasn't trying to go and buy a gold chain and buy a car and do this and that.

I really just was shocked that I was able to make that money. But then my thought was, how do I keep doing this? How do I do this again? And it was until I had two or three of those checks. And I continued to do these deals. They were very easy for me once I did the first one because now I knew exactly what I was looking for. And I was literally getting a house under contract every seven to ten days calling for rents. Just the classified section of our newspaper would have all these properties listed for rent.

And I would call these for rent by owners. And I would talk them into accepting an offer or potentially selling their house and get them under contract and I'd sell them to these builders. It was crazy. So was this easier because you had the specific buyers already in place? Yes. Or at what point were you, able to, you know, say, hey, I really like you guys. I'm going to continue working for you. But then, you know, as I understand it, you need to start building up a buyer's list when you're in wholesale. So when did you start kind of moving towards that side of things? So that didn't happen for a while, actually, because in Canada, it's a little different than it is

in the United States. They don't have access to the same kind of information as we have over here. So in Canada, you don't get access to sold data. You don't know what things are selling for, so you don't really know how much stuff is worth. You can't pull tax record data. and skip trace LLCs and get members, phone numbers, and all of that information that we have the luxury of having access to here in the United States doesn't exist there. So yes, I had to start with my buyer. But how I evolved from one or two houses a month was I went from that. I realized that if I found where construction or development projects were happening,

then there would be a potential buyer there. And if I can go and approach them and see what kind of product they're looking for and find the person who's buying them or making the acquisitions for those developers, they may look at my product. So I went from houses to apartment complexes. I saw that these developers were doing condo conversions in my area, and I would just call all the salespeople on the phone on the big development signs that they'd have posted outside of the project.

And I would find my way to their acquisitions person, and I would drive around and I would find all these old apartment buildings that had handwritten for rent signs that I knew were self-managed because of the way that those rent signs were, you know, sharpied in. And I would just ask if they'd be interested in talking to me about potentially selling the building. And I would wholesale those buildings for a $100,000 lift just to these developers that were looking for a new product to turn from apartment buildings into condo conversion. So in Canada, for me, I had to start with the buyer because I didn't have access to the information that I have now. Now in my business, Kigli, which is one of the nation's largest wholesale operations,

that I helped co-found, we will do anywhere between 60 to 80 transactions a month. So the volume that I was doing back in the day is not even close to what we're able to do now, but we're able to do this volume now because we've got systems, we have access to information. And because of that, we're able to scale in a completely different way. So the evolution of me being a big wholesaler doesn't happen for about a decade from my first deal to what it is now. Yeah, at what point I'm kind of curious, did you, because you said jokingly, you invented wholesaling or you thought you did, when did you meet someone else in the game?

Was there ever a moment where you're like, you do this too? I thought it was the only one. So it wasn't, it's funny, another funny story. So I lose all of my money in 2008. I'm wholesaling. You know, we call them skip transfers in Canada. It's not even called wholesaling there. That's why I thought I invented it, right?

It's just a legal process called a skip transfer. But I got into development in 2007 thinking, I want to be like these developers that are building these duplexes and doing these condo conversions. I'm tired of just flipping these contracts. And so I took all of the money that I had been making wholesaling and I put it down on four development projects at the worst time that you could ever do that in the history of real estate. And I got caught in 2008. I lost everything. not only did we lose all the money that we made flipping houses and flipping buildings, but I'd ask my parents to co-sign on those construction loans for me.

And within a matter of months, myself, my mom, my dad, my sister, her husband, our 150-pound dog, and my niece were all homeless. And we had to go borrow money to rent a two-bedroom apartment because the bank had taken everything from us. So I left Canada in 2009, the beginning of 2009, and I moved to Los Angeles to become a stand-up comedian. So are you going to do your type five for us right now? Well, no, I didn't make it as a stand-up comedian, Rob.

I continued in real estate. But what was fun is for about four years between end of 08 to 2012, I was writing sketch comedy. I was writing sketches for Funny or Die. I was at the Upright Citizens Brigade training there, Second City. I trained there. I was really pushing. I was doing open mics, doing all the things, but, you know, Hollywood just wasn't ready for me.

So, so I, I, I realized that, you know, I needed to do something else. And in 2012, I got back into real estate. So I started noticing in Phoenix, you could buy these apartments that had sold for $400,000 for like $25 grand. And they were renting for $800. bucks. And so even though I was doing comedy in L.A., my thought was, why don't I arbitrage and pay for my life here in Los Angeles by buying rental units in Phoenix and supplementing my life? And so that's what I did. I started buying these short sales in Phoenix, Arizona, and using the money that I would make in L.A.

and putting them down on a, putting a deposit down in a condo in Phoenix. And I just kept doing that. And this is how I got introduced to wholesaling and what it was is I was writing these comments. contracts on these short sales. And if any of you were buying short sales back at that time, you'd know, you would write 10 contracts for 10 different short sales and you might get one of them under contracts. So you would basically throw everything you could at the wall and see what stuck. Well, it just so happened that two properties that I'd written contracts on came to fruit that I couldn't close because I had just purchased two other apartments. And so I did what I knew how to do. I went to Craigslist and I wrote an ad and I said, I've got these two contracts for sale.

and this is before the banks were putting on deed restrictions allowing you that that would actually stop you from being able to assign a short sale contract. They were still letting you do that. So I marketed these two contracts on Craigslist and within a few minutes, a wholesaler from Phoenix, Arizona named Tim Wynn called me and asked me the addresses of these two properties. He drove by them and about 15 minutes later told me he'd buy them. And I made $18,000 off a Craigslist ad. from Los Angeles, flipping two contracts in Phoenix, Arizona, and I thought, what am I doing

in this dumb town trying to tell jokes to people who aren't laughing at me? I have to continue my world in real estate. This is where I belong. And so I packed up my bags. It was actually my birthday, 12, 12, 12, 12, 12, December 12, 2012, I packed up a U-Haul and I drove from L.A. to Phoenix to begin my career as a wholesaler. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little

as $10. The portfolio features $4,700 single-family rental homes spread across the booming sunbelt. They also of 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship fund before investing. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement.

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. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport, while your staircase at home is full

capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications, it can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taken care of, and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host, but could use some help, find a co-host at Airbnb.com slash host. All right, rental property investors, listen up. Our friends

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All right, I want to ask a question, and I don't want to kill the flow here. I've been scared to ask this, but I just, it's going on in my head all the time. So I want to get your opinion on it, but I don't want to kill your vibe. Have you thought about what you're going to do if at any, point wholesaling becomes illegal. And I asked that because so many people are getting into it, we already have a housing shortage. There's less homes making it to the MLS because wholesalers are getting them before they go to agents. In many ways, wholesalers sort of act as an agent. And I can absolutely see people taking their complaints to politicians and saying there's not enough homes.

All these investors are buying it from wholesalers make wholesaling illegal. So I actually love the question, David, and I'm glad that we're getting to talk about. about it. So what will actually become illegal is not the process of buying and selling real estate as a principle. No one can ever make that illegal. What they will bar you from doing is unlicensed activity or an assignment. And personally, I'm not against that. If you look back at my history, I've been advocating since I got in the business for people to get licensed. I think when you are in the business of underwriting property, of having conversations with homeowners, of acting in a way that you're advising people or you're providing information to people about the efficacy of a project,

it's important that you have credentials to do that. And I'm not opposed to people being required to hold a real estate license to wholesale. The other side of that, the assignment, I understand the reason why they want to ban the assignment because people are out there writing offers for properties that they can't actually purchase. That's a problem, right? Because if you're intent when you enter into a contract with a homeowner is different from what you can actually do, that's fraud. That's a fraudulent contract, right? And let's talk about the ethics of that. That's not ethical.

It's not ethical to go into a contract with somebody. and say, I'm going to offer you $300,000 for your house and not have access to $300,000 or a partner or a situation where you can get $300,000 to actually perform on that contract. And so I don't agree with activity that promotes that. So how to combat that? Well, first and foremost, I advocate for getting licensed. And second, I believe that if you are going to write a contract on a property, you should have the financial capacity to close on it, which is why everybody who is a part of my astro-flipping

community, I actually earmark $2 million in cash that I put in an account where I act as a private lender to my students so that when they're out there writing contracts, they're actually backed by real dollars so that they're not writing contracts that are fake. They actually have a joint venture partner, a capital partner, a private money lender who's there backing their contracts so that when they're actually entering into these agreements, they can perform on them. I really appreciate you saying that because I see, like, I bought a house from a wholesaler six or seven years ago. I bought a lot of homes from wholesalers.

But this one in particular, they gave me the information. They said it was like 1,800 square feet. I ran my comps. I came up with an ARV. I hit it exactly on the head. It was like the perfect burr. I got 100% of my money out if it hit that number. But it turned out the house was 1,300 square feet, not 1,800 square feet.

Right. And I didn't have any recourse to go back and say, hey, you told me this because they're not licensed. There's no oversight. There were none of the protections that are normally in place. So while my price for square footage was dead on, I ended up paying exactly what the property was worth. It wasn't any kind of a deal of a deal.

And so I left a lot of money in it. And I just realized that's the risk you're taking or one of the risks you're taking when you're dealing with a wholesaler is they are not obligated. They're not a fiduciary to you. Right. And now as an agent, man, there is so much oversight. It is like pulling teeth sometimes to get through this business with the continued education and the testing and the licensing and the exposure to lawsuits and all of the things that come with it because there's regulation. And then wholesalers are kind of like wild, wild west.

They're just running out there slinging stuff around telling people like you said, oh, I'll buy your house and then secretly going to try to assign it to someone. And if they can't find anyone, oh, turns out I'm not going to buy it. I can see that that may not be the case forever, especially as we see more and more pressure starting to come. And I think that's very wise that you're saying, well, if you just get licensed, then you can avoid that. And the other part of it is just the assignment issue really needs to be spelled out clearly. If you don't have the funds to buy a house, you shouldn't be putting in a contract. Absolutely. I appreciate you saying that. I do think... I guess I'm curious about this really fast because you're saying you're not opposed to people getting licensed for being a

wholesaler. Is that something that exists in any capacity right now? Or is what you're advocating for? Oh, real estate license. A way, like a light, oh, okay. Hold a real estate license. Yeah. Be a realtor or whatever. Yeah. You know, Jerry Norton, a friend of mine, has been talking about a wholesaler's license and association, all that. And that's, you know, could be years away. And that's possible that that gets adopted and we can organize in a meaningful way to create that organization. However, I think that it's still a couple years down the road and legislation's fast moving right now to bar assignments to require people to get their hold their real estate license. I think in all honesty, wholesalers are going to become realtors that are investors. That's what that's what it is.

And I don't have a problem with it. Here's the thing, though. I deal with a lot of real estate agents. I love realtors. In fact, I build my business in collaboration with real estate agents. And one thing I've learned is that not all real estate agents know what they're doing either, right? Even though they have to act as fiduciaries, even though it's their job to have everybody's best interest at heart, I have asked rooms of hundreds of realtors if they were taught how to comp in licensing school. By a show of hands, please show me.

How many of you in the room here that are licensed agents were taught how to run comparables when you were getting a real estate license? I have yet to have one person raise their hand. They're not taught how to underwrite property. If you're a realtor and your job is to talk to people about value, to talk to people about what is, you know, how much a house is worth and how I came to this price and what I can possibly get you on the open market, yet I've not been taught how to do that in licensing school. That's a big problem.

And nobody's talking about that. nobody's talking about the fact that that even the education that they're putting realtors through isn't standardized. We don't have agents learning the adequate things that they need to learn in order to speak intelligently about real estate and real estate value. So I think that there's a lot of work to be done. However, let's not ignore the fact that if you do have a realtor's license that you will basically carry a badge of credentials with you that will make people feel confident.

comfortable and confident to get advice from you. I think we need to up that game a little bit and teach people how to underwrite. Yeah, what real estate licensing is like, it would be if, Jamil, you applied to work for my construction company, and I said, okay, I'm going to use you to build decks. And I'm going to need to, you're going to use a nail gun and a saw and a hammer. And you showed up to take the job, but instead of getting training on how to use a nail gun and how to use a saw and a hammer, I gave you a test on where the parts for, the nail gun come from and how they are assembled and what voltage goes through the nail gun and all

these things that have nothing to do with actually doing your job that if that if anything went wrong you would not be the person i would go to to fix it i would take it to a completely different human being to fix the nail gun so you don't need to know how it works and it's archaic and frankly it's why the whole door has been open for wholesalers because realtors should have been doing this they're just sucking at their job in most cases. They're also afraid to do what you do, which is to go talk to people. They want to get leads from online sources. They want someone to come to them. They don't want to go look for business and they don't want to understand the industry themselves. And so it puts the consumer in a terrible position where I use a licensed professional so I

feel safe, who knows nothing. Or I use a person who understands business, but they're not licensed and it's the Wild West and I have no protection and who knows how ethical they are. And you're sort of trying to navigate this world between the two. So I agree with you. I think the perfect combination is to bring them together and to sort of have agents run their business more like what wholesalers are doing and have wholesalers get licensed. And what would probably happen is wholesalers would get licensed. They would come over some more oversight so the industry in general would be better. And it would push out more of the bad agents who shouldn't be there. 100%.

And when you look at what wholesaling really is, you're selling potential. That's all wholesaling is. as a wholesaler, your job is to see, is there a potential for a value at? Is there a potential to create value in this situation? And if there is potential for creation of value, I'm going to forego going vertical or extracting all that value. I'm going to sell the majority of that value to somebody else for a portion of it. So our jobs as wholesalers is to spot or create value. And if we're able to do that, we'll be successful at it. agents are not taught that. They're taught how to stay out of prison.

That's it. Yeah, that's right. Or how to make someone imagine how their kids are going to be playing in the yard. Yes. And I don't think that there's a correlation there. And there might be for people who care about what their kids are going to be like, look like playing in the yard. Cool.

Kudos to you. I get that. Have fun with that. And yes, you should know the laws and you should know the codes of ethics and you should know the things that are going to keep you from getting in prison for trading in real estate. That's also real. But let's talk about the fact that we need to know what things are worth.

Why are there people out there right now paying $40, $50, $100,000 over list, waiving appraisal gaps, waiving appraisal contingencies, being so dramatically fleeced on the retail market, and yet they're still being represented by a fiduciary who's pressuring them, telling them, if you want to be competitive in this market right now, You are going to throw away all of the protections that are given to you in this contract so that you get the house. And I'm going to help you and I'm going to advise you with the verbiage and the things that you're going to need to do to put yourself into that situation. How crazy is that, David?

So let's unpack that because it is a very real problem. If you are trying to buy it, here's how I see it. You've got less inventory hitting the MLS. Part of that is because wholesalers are grabbing it before it gets there. And part of that is because we're just not making enough homes. but you've got several things contributing to this lack of inventory. If there's a lack of inventory and there's consistent or growing demand, you're going to get an imbalance in the force.

There's too much demand and not enough supply. So if someone doesn't waive their appraisal contingency, somebody else will. And with the market increasing like it is, in two or three months, your house is worth more than the 50 grand over asking that you paid. So on one hand, you've got all of this crunch with MLS on market deals where everyone's going because they want the realtor. They want to take their time knowing what they're getting. And in the wholesale realm, if you are the person who gets the deal directly from the wholesaler,

you're probably avoiding all of that competition. So you're not having to go in as crazy. The risk is coming from something different where you don't have a fiduciary looking out for yourself. So is your advice that people looking to buy property shouldn't be going to the MLS and they shouldn't be going to agents and they should find a wholesaler? Like, how do you mitigate the risks that are involved on both sides? I love that question. So, David, the answer to that question is, is it's not any of those things, actually.

So I'm going to give you Kigley's business model. And this is the fun thing. Most people, especially in the wholesale world, they don't want to give away their secrets, right? They're like, oh, I can't tell you what we do. We'll be competed out of business. Then I don't believe in that. So Kegli, which is my wholesale operation, we're franchised in 104 markets in the United States. The primary source of our deals are realtors.

agents. We are working with networking with agents and we get those opportunities that are unfinanceable that are in too distressed condition to be able to be bought with a loan or, you know, on the retail market. And we make that deal as a pocket listing. And so the majority of the business that we're doing are coming from agents. So representation is still in the conversation. I never advise a homeowner to make a deal off market or not have a fiduciary or have their agent involved. We are actually offering 100% of as-is value. I'm not ever offering a seller or taking equity from a seller. I'm just saying that with your house right now, in this condition, I need to spend $50,000, $60,000 to get this retail price.

But it will never be worth that until I take a financial risk to get it there. In its condition right now, this house has to be bought with cash. No lender is going to loan on this house. It's not financiable. So if you're going to attract a cash buyer, what will a cash buyer pay? I want to be the highest that a cash buyer will pay. That's it. That's it.

That's the difference. It sounds almost like what you're saying is you're looking at, and there's always subjectivity to this, but if I'm hearing you right, as objective as you can be, what is the house actually worth to the seller? What is it worth in its condition to the seller? And what is it worth to a buyer? And let's just get in the middle so everybody's getting a good deal instead of how do we rip off grandma, give her less than the house is worth because she doesn't know what she's doing. Or how do we rip off the new super excited Bigger Pockets listener who's going to go buy this wholesale deal because they've been getting skunked on the MLS. And they pay too much for the deal. And they pay too much

for the deal. You're like, let's just cut it right down the middle and give everybody a fair shot. 100%. Yeah, let's, I'm kind of curious about this, Jamil, because you're talking about like, okay, so you want to go to somebody who's selling their house wholesale. Let's just putting numbers to this. As is cash value pre, pre, like, renovation and everything, $100,000 is what it's worth. Now, you're saying to this person, a cash buyer would be willing to pay you $95,000. to $105,000 and you want to come in at that $105,000 range so that you're giving them what you consider a good deal on a cash offer? Correct.

Is that correct? Correct. So it's interesting that, you know, because I watch a lot of people who teach wholesale and I've consumed the information on YouTube and a lot of it makes me shake my head. When people talk about, you know, this formula for WMAO, which is, you know, your maximum allowable offer, right? that number is ridiculous. It's ridiculous.

The amount that people and how subjective that is. So a lot of people will use this formula. Maximum allowable offer is 70% or 82% of ARV minus repair costs minus wholesale fee. First and foremost, who's calculating repair cost? Okay. Who here in this equation understands how much this house is going to cost to repair? Second, who's calculating? wholesale fee because I've seen some guys think the wholesale fee should be $100,000, right?

I've seen people who think that every time they do a transaction, they should make that money, that much money. How will you ever do business like that and tell me how that's not predatory? It is. It's predatory. But when you are looking at it... If it was being overseen by a regulatory agency, that is how it would be perceived. 100% that's predatory.

That formula is predatory. It is. when you look at it from the point of view of, but let's look at it from its fairness. Let's look at it like, what could I actually pay and still be able to make money if I did a renovation here? What's the most I can pay? That's the place that we're coming from. That's where I teach. That's where everybody who comes into my community is learning how to do the business because the facts are is we can pay more. We can pay more and still make a $10,000 assignment fee and the fix and flipper can still make their 10% profit margin. and we still helped grandma. And nobody got fleeced or taken advantage of in the process.

Why can't we all just have the conversation where everyone wins? So, Jamil, I'm so glad this is such a cool show. This is why people ask me, why have you not got into wholesaling? What you're saying is why? Because I, in my own conscience and as a businessman, cannot rip off grandma to make more money on that deal. I'm going in there saying, like if I was to list your house, I would be doing every possible thing I could to squeeze every dollar out and get you as much as I could and then help you reinvest that money.

And I literally study, write books, take negotiating courses, dive into the psychology of buyers, everything I can so that I can get our sellers as much money as possible. So when someone says, hey, this person has a house to sell, I know they would sell it to me fast for cash and I could get it for half of what it's worth. but that's because they trust me. This is the hard thing. I was told that you're David Green and you have my back. And so grandma is trusting me to sell her house.

And I can't go in there and take that, right? I'm going to help her fix it up and put it on the market and sell it. So what you're describing is sort of like the conflict in my soul between doing the right move from a business perspective and doing the right move from a human perspective. And I always err on the side of taking care of the person and make less money. So if there was a way where we had a market like what you're describing. And again, what we're talking about is blending the MLS with these off-market opportunities and kind of bringing them together, then we could all have a clean conscience

and there would be a whole lot less predatory actions going on. Rob, what are you thinking? Man, this, because so I do a lot of content on my YouTube channel and mostly short-term rental related. And I had a buddy who came on and he's a wholesaler. And I had him on for a collab and we talked to the, the whole wholesaling process and everything. I thought it was one of the best videos I'd ever made. It was by far just not even a question. I mean, generally, I would say my comments are like 98% positive. This video was 98% negative. Everybody hated it. Everybody liked me a little less.

Everybody just completely poo-pooed the art of wholesaling. And they're like, I can't believe you would bring this idea onto your channel. We loved you, but you're just, you're just praying on grandma basically kind of thing. And I was like, well, first of all, I'm just trying to give access to entry points into wholesaling. But I could understand a little bit where people were coming from because I was like, yeah, if you only see the extreme side of it, then yes, wholesaling can be looked at very negatively. But for me, I was like, there has to be, there has to be a happy medium here. I just had never seen it up until talking to you over the last 40 minutes here where I'm like, this makes a lot of sense. And it's the same thing in my whole career in general.

talking to realtors. If you ever drop the idea of wholesaling or working with the wholesaler to a realtor, they're going to be like, oh, yeah, you don't want to do that. They're horrible. That's so bad. You're stupid this. I'm always like, you ever scared a cat? It's like I can never actually have a fruitful conversation. Right. You ever scare a cat? You ever see what a cat looks like when you scare the out of it? That's what happens when you say wholesale to a realtor. That's exactly what happens. Okay. They're like, they're like, David Green analogy right there. Their spine stands up. They contort. All the things happen.

They hiss. It's like that's how they feel because I get it. And in the past and the way that things have been taught, it's not been to people's advantage. It doesn't make, because they feel like you're not even a real buyer. You don't even have real money. If you're going to write, look, if you're bringing a solution to my seller, if you're bringing a solution to my seller that they're going to take knowing that they're giving

you a deal because they need this closed in seven days and they're willing to accept that and they're okay to do it and they're happy to take it. They just want the convenience. Okay. Great. Then close. Yeah. Then freaking close.

Honor your word, honor your contract and close the dang deal. That's the problem, guys, is what's happening is people are not learning how to underwrite. People aren't learning that what number they should be actually going into a contract with and for. And then having an honest conversation with the homeowner or the agent or whoever is involved in saying, look, at this price, I can still make a profit. I can still go in. I can fix the house. I can spend $40,000, $50,000, and I can walk away with $20,000 or $30,000 in profit,

and I'm going to be happy. Maybe I'll make a little bit more. Maybe I'll make a little bit less. Maybe there's mold here. I don't know yet. But these are the things that I'm willing to take on as risks. You're taking on the risk of knowing that you're not going vertical and fixing up your property yourself, maybe because, A, you don't have the time, or B, you don't

have the resources to do that. So you're willing to trade a portion of what could be. realized an added value to your property to let me take on that responsibility and let me take on that risk. And we all know that for that there's going to be a little bit left on the table. And we're accepting that. We're all accepting that and we're trading that as business. Look, in every business, there's a step up in the wholesale chain. When you look at McDonald's, you go and eat your Big Mac. You pay $6 for your Big Mac. But the pieces of the Big Mac aren't six bucks, right? The ground chuck and the cow was probably worth 30 cents. And when you got the

lettuce and the buns and the cheese and the sauce and you put it all together, it got stepped up in value every way it went. The same thing happens to a house. It gets stepped up in value as we break out the drywall, as we add the addition, as we put on a new roof, when we change the electrical, when we upgrade the plumbing, when we put in the designer faucets, when we put in the designer faucets, We do all these things. We're stepping up the value. And all these people were paid and made money in the process of adding value to the house, which is basic commerce and capitalism.

Yeah, that's how economies flourish. And that's how it works. But what we want to do is we want to do it in a fair way. We want to do it in a way where everybody knows what we're doing, where everybody understands that this is a business. And I have to be incentivized to do business, but I'm not going to be incentivized to screw you in the process. Well, I think we make that we create this problem by telling, and when I say we, I mean the real estate investing community, not necessarily bigger pockets. We tell people, oh, you don't have any money. You don't know what you're doing.

You should get into wholesaling. Yeah. It's the absolute worst advice ever. Go into this high risk, like, unethical situation where you're making promises to people that you can't fulfill and you're the least experienced person with the least amount of resources. Like, wholesaling is where the big dog should be playing. You've made it to the top of the heap and you've got some money behind you. And like you said, Jamil, you can keep your word. You know how to comp properties.

You have resources like construction people that you just mentioned that you're going to bring in. Wholesailing, in my opinion, is like the end game. That's what you're building towards. It's not where you should be starting. And the other thing is if you take unregulated opportunities like in the financial world, you have to be an accredited investor to participate in them, right? If the SEC's not overseeing this, they only let people get into it that know what they're doing or are presumed to know what they're doing because they're accredited investor.

It's kind of the same thing with this. If you're dealing with unlicensed people, it should, there should be some, like, the only person they could buy from them is somebody who, or sell to them is someone who has shown they are an accredited investor in whatever sense that makes sense. Like, grandma shouldn't be able to do this, right? If you're already worth $6 million bucks and you know I'm taking a haircut on this thing, I just need the capital quick to give to someone else. Those people, that should be fine.

But part of this problem is what you said is you're dealing with people who don't know what their house is worth or are in such a financial bind that they're just not thinking clearly. And now they're trusting a stranger. They didn't know who's telling them I'm going to close. You probably can't close. So yeah. I love what you're saying.

I just directly, what is Kigli doing to salt? What are you guys doing differently than other people? Is it an ethics you're promoting? Is the actual system set up differently? How are you approaching this? From an ethical standpoint, the foundation of our company, and I know this is going to sound corny to the people that are listening, and I apologize for the corn, okay? But here's the fact. We actually build our company on a foundation of love.

And I mean that in the real sense. If everybody isn't being loved on in all ways possible in this transaction, then we don't want to be a part of it. So is everybody winning? Are we all doing our best to make sure everybody's got value out of this? If yes, check. first and foremost. Secondly, everybody in my organization is licensed. So I don't bring people in and say, come in, operate without having your credentials. No, that doesn't exist. So everybody that's in my company is licensed. Third, the majority of the business we do is with real estate agents and wholesalers.

So the wholesalers that we're doing business with, we're, A, checking their contracts, making sure their contracts are ratified, be, making sure the sellers have all the disclosures done. see, we're actually bringing liquidity to a situation where the wholesaler wasn't going to be able to make their obligation. And imagine this, David, my company flourished, Kegley flourished because we brought to the table buyers, liquidity. When wholesalers were out there writing all these contracts and putting all these deals under contract and they couldn't sell them, these deals were all falling apart.

We bring to the table the investors, the vetted people that will actually close. if they don't close, we close. Like, we actually bring a solution to the table. And so we've helped, and it's been over 5,000 deals now since we started, over 5,000 transactions that wouldn't have closed if we weren't at the table because of the business model. That's it, yeah. That's a lot, man. That's a lot of deals.

That's a lot of deals. So I guess I want to clarify on this because you did mention earlier, you have a $2 million, I guess, fund or set aside to be able to be able to. close on this. So that's just for my students that that's just for my students. Kigley holds Kigley holds millions of dollars in its account to close deals. Me personally as a coach, I hold $2 million of my personal money in a personal account where my students, if they have a deal and they're, and if they're going out and writing a contract with a real estate agent to write to, to, to buy a house, they need a proof of funds. They need to be backed. I will personally underwrite and

back that deal with my own funds so that when that students, out there writing that contract, they're not lying. Okay. So now let me dig into this a little bit. So let's say they are unable to find that buyer. You're backing it in the event that they can't buy the buyer. You're then going and actually you're legitimately closing on the house. And then what do you do? Do you go and rehab it, flip it? If we happen at this point. If we underwrite it and we agree with the value and we agree with the deal, we'll close the deal and fund it. If there's no buyer to be found. And we will then rehab out of it and sell the deal. So yes, we've, we've bought plenty of houses that didn't

pencil out and didn't work for us, but we've gotten very strict with our underwriting criteria. And so we're not typically buying deals that aren't going to work. But yeah, if there's no buyer that's able to be brought to the table, we'll close it. Okay. So I suppose this is a pretty good moment to sort of jump into one of the bigger pillars here, I think, of wholesaling, which my, or my assumption here is someone that hasn't really done it, but deal flow and actually getting these wholesaling leads through the door, because that's obviously going to be the foundation and the lifeblood of your business. How do you approach that? Is that, you know, is there a special strategy that you're pursuing on something like that? So twofold, right? The majority, as I had

mentioned, the majority of our business is done from two sources, real estate agents and wholesalers. For agents, we're able, we have a process called agent outreach. I do this live on my live streams all the time where I teach people how to communicate with agents and have them bring you opportunities. So we do agent outreach. We communicate with real estate agents and see if they've got any nightmare houses. Now imagine this. David, if I called you, hey, David, I noticed you're a real estate agent here in Phoenix, Arizona. I was wondering if you have any nightmare houses that you've walked in the last couple of weeks where you had to throw your shoes out after you left the listing appointment. Do you have anything that might not be financeable or is a complete nightmare that I could

take a look at and give you a cash offer on right now. And nine out of ten times, the answer is going to be no. But one out of ten times someone is going to have a lead or is going to have something that they don't know how to solve. And that's the conversation that we're having. Those are the deals that we're looking at. The second type of outreach that we're doing is to wholesalers. And that's where my company is reaching out to wholesalers and saying, are you in contract on a property right now that you're not going to be able to close or that you don't have a buyer for. Can we take a look at it and underwrite it and see if it's something that we want to commit to or sell for you? And that's what we'll do. We'll look at the deal. We'll underwrite the deal. If we like the deal, we'll commit to it

and we'll commit our funds to purchasing it. So it almost sounds like you're hitting up agents to say what you really get, what I heard when you said that is, do you have a listing that you are going to take, but you're dreading it? You're like, oh, God, this is the one I don't want to sell, right? I can be your quick solution. And you're going to wholesalers and you're saying, did you screw up? Do you want a way out of your pain? Do you go write a check that you can't cash? Come to me and I can bill you out.

Is that more or less what the system is? 1,000%. 1,000%. And I think because we've, we recognize that there was a major gap, that there was a hole in this business model and we filled it, that was the reason for our success. It's very interesting. Do you do anything to spin those connections into getting them to come to you instead of going to the person who screwed it up for them in the first place after

you close and you have that relationship? So unpack that for me. You mean, is there, am I, is there a way that I go direct to seller or? Yeah, like, now that you've got that seller's information, do you put them in your database and market to them so that they don't end up having the same thing happen again? No, because it's very rare that a seller has more than one house to sell, right? It's, it's rare that that, that's the case. However, it's not, and this is why.

what we do and what I teach in astrophlipping is so different from like your your average wholesale real estate course right because a lot of these courses that you're seeing out there they're telling people hey go text people go do reverse ringless voicemail go cold call people in the middle of dinner and and and ask them if they want to sell their house and it's dreadful dreadful dreadful work right the difference between what we're doing imagine this every time you talk to a homeowner or get a homeowner under contract and, you know, say you do that deal, that relationship ends. That homeowner sells you their house. They don't typically have another house to sell you.

It's over. It's done. They're gone. You're gone. Deals done. You made your money. They sold their house. The way that I look at it is let's build a relationship with somebody who's the conduit to that deal

and let's actually perform so that they bring me business over and over and over again. And I talk about this all the time, but I've got realtors that I've done hundreds of of deals with. There's one of the top agents here in Phoenix, Arizona. Her name is Monique Walker. She's the number five agent in the state. She provides every one of her listing appointments, different data points. This is what I could list your house for in its as-is condition right now. This is what your house would be worth if you did a full renovation to it. And this is what my cash investor will pay you for your house right now. And you leave all the junk, all the garbage in your home and he'll just close. He'll let you stay here an extra couple of weeks if you need.

But these are the three options. These are what I could do. And she says, I can't believe, Jamil, how often people are interested in your option. Even when I say to them, I can sell your house for more money on the MLS, but it's going to require people to come and walk through and look at the house and all the things. I'm going to have to show it. They will more often take your offer than selling their house as is on the MLS because they don't. want the shame of people walking through their home and judging the way that they've lived. They don't want to go through that process, right? So that one real estate agent, Monique Walker and I, we've made millions of dollars together. And you want to know what her sellers say after we're done

our deal? Thank you. Thank you. Thank you for helping me in my situation. Thank you for bringing this cash buyer to the table. Thank you for giving me the dignity that I needed in this transaction and understanding what my best solution was. That's not predatory. when you're being thanked for people that know that they might have left a couple of dollars on the table for you to make money and they thanked you for it because you brought an honest solution to their problem, that's beautiful. And I don't go to have to work over and over and over again to go get that lead. See, Monique, that's an inbound lead for me now. She calls me when she's got a house. She asks me for my buy number.

Every listing appointment she goes on, she sends me the address. I send her what my cash offer will be. And then when she's in her listing appointment, she makes the presentation. And then are you just paying her part of the wholesale fee? She's losing out of the listing. So what happens is she'll lose out of the listing, but she'll tell the seller,

my buyer will pay my commission. So if I buy the house and I fix and flip the house, I'll pay Monique a portion of my profits from the flip. If I wholesale the property, I'll pay Monique a portion of my wholesale profits. That's it. So she gets paid for me. Now her seller is even happier because they're not on the hook for having to pay a real estate commission.

They're getting a net offer, net price. I pay all the closing costs. And it works. Monique's pay is based off of the improved value of the property if you go in and do a good job. Correct. As opposed to the condition of the property's in and its current condition where it's not as much. So that is, that's a win for her as well. Yes.

I mean, that, yeah, you're definitely looking at this and saying, how do we do this the right way. How do we make a property worth as much as we can and pay people as much as we can in a fair way, rather than the lopsided way, which is some whole sother comes and rips off grandma. They make an amazing fee that the fix and flipper makes an exorbitant amount of money, and grandma just completely pays everybody else's salary out of the equity they could have had. Right. I really like that approach. I love that you're saying that. I appreciate it, man.

You know, it works. Everybody's winning now, you know, it, I don't know. I think it's impressive because you're doing it the hard way. I think the easy way is to, you know, go and like make whatever offer, try to make as much money as you can and you're kind of done with it. You're, you are agreeing to make less money and take a bigger risk in case you do have to go and rehab it. And, you know, what if that rehab goes over budget? You just said a lot of those deals didn't pencil out for you. Most people don't want to do that.

They really don't. They just want to make the big, you know, I think wholesaling the big misconception is you can make tens of thousands of dollars, $50,000, $100,000. and it's quick, easy money. I just sold the paper. I just made $5,000 selling paper. And like, no one really is willing. That, to me, is easier than what you're proposing. And yeah, I think I just have a very new perspective on what wholesaling can be.

I appreciate that. And let me share with the viewer, something, listeners, something really quick. I just did a deal on a multifamily building that was completely, had been completely improved. It was a sixplex here in Phoenix. all the units were, five of the units were rented. One unit was vacant. The seller thought, I am selling this for maximum price. I bought the sixplex for $1.2 million.

Okay. Now, I would say that the seller had squeezed out every dime of equity in that property in its current financial situation. That one vacant unit during my S-Crow, period, I was able to find a committed renter who would rent it for $1,700 instead of the $1,200 that the other units had been rented at. I closed on the sixplex and then I entered into a contract five days later and I sold that sixplex for $450,000 more than I bought it for. Again, I paid top dollar for the building in its current state. I don't have guilt for. For

making 450 grand because I saw a rent gap that existed that the seller hadn't found. And probably didn't want to find, which they were willing to leave that 450 grand on the table. Right. Because they would have had to do the work that you had to do to deal with the tenants and get the rents pushed up. And yeah, it's the same as a rehab. You don't want to fix up your house. I get it. And it's current condition, it's worth this.

If you don't want to fix it up, somebody else will. And then they're going to make the money instead of you. Correct. So what we're, simple way of looking at it, right? We're teaching wholesale from the point of view, how do you find an ad value, not rip off grandma. Which is how money should be made in real estate.

That's exactly right. How do you create something? Not how do you take something from somebody else? Like if it's worth 400, the answer shouldn't be, how do you get it for 200? Right. If it's worth 400, the answer is, can you make it worth 600? That's it. What would that look like?

So I really like that. It's a better way of approaching it. And I'm hoping that today's podcast becomes like a futuristic. vision for how wholesaling and agents can sort of mesh together. And agents can have their skill level, frankly, improved. And wholesaling can get into more of an ethical way of doing stuff. And then everybody wins real estate investing as a whole, gets a better look. You have tons of people trying to improve the values of properties, which just makes the world a better place. You're putting handyman to work, contractors, electrical people, roofers. They're all making money.

They're all paying taxes on that. That would be a wonderful blessing. So, Jamil, I hope you are the futuristic space alien that's coming here to fix real estate. And I am very glad we have you in the BP family. I was planning on laying into you, Jameel, because you said I'd look like a mixture of Robert Downey Jr. and Polly Shore earlier, but you've won my respect. I appreciate that, Rob. And I only said Pauly Shore because I actually really like Pauly Shore.

I really like... What happened to Polly Shore? No, nothing's happened to him. He's amazing. He owns the comedy store in L.A. His mom used to run. Mitzie Shore used to run and own the comedy store in L.A. And she passed away.

And Polly Shore has taken over. And he's like, people don't realize this, but he's one of the most powerful men in comedy. The comedy store is like the spot. That's where stars are made. The Garden of Eden. Stars are born. That's awesome. All right.

And what you said yours died at the comedy store? My dad at the comedy store. Yeah. Hey, if you made it to the comedy store, that's pretty impressive, man. I'm going to totally go with Teddy Roosevelt's The Man in the Arena. I got this right here in my office. Nice. You have born the blood, sweat, and tears, but I'm glad we got you in real estate instead of comedy.

Yes, sir. All right. I'm going to move us on to the next segment of our show, the deal deep dive. This is the segment of the show where we dive deep into a deal that you have done. Do you have one in mind that we can dive into? Yeah, what are we talking? You want to talk multifamily, you want to talk residential, you want to talk land. What would you prefer to discuss?

I mean, we could discuss a wholesale deal you did. Yeah, let me talk about a wholesale deal that I did. So Rob and I will fire questions at you and we'll let you answer them through there. So the first kind of question is, what kind of property is it? It was four acres of land in Phoenix, Arizona. Okay. Okay. Second question here.

How did you find it? Door knocking. How much was it? total acquisition price was $1.6 million. How did you negotiate it? Individually, I had conversations with the different property owners, and after speaking to one, the one gave me the phone number for the next neighbor, which gave me the phone number for the next neighbor, and I actually did a land assembly.

So I put all these different fourplexes and these little pieces together, and I knocked them down, homeowner by homeowner, seller by seller by actually asking the next up how to get a hold of the person that owned the property next door. I love that. So normally we say how'd you fund it, but was this a wholesale deal so it wasn't funded? I did actually have to close it and then I resold it. So I did fund it with hard money. And what did you do with it? Was it a flip, rental, burr? It was a flip. It was a flip. So I would call it like a wholesale because we didn't hold it very long. But I bought it. We took it, got entitlements made, got the entitlements done. A lot of had already been done on the property, but, you know, behind the scenes, we got the entitlements done,

and then we flipped that to D.R. Horton, and they ultimately built 38 townhomes. Wow. So that's the outcome. They ended up 38 townhomes. Yes. What lesson did you end up learning from the deal? The lesson I learned from the deal was I could have sold the contract and made more money than having closed it. So, A, I closed the property because I thought I was going to make more going through the entitlement process, and I didn't because the entitlement process took me a little bit longer and I had to hold it. And because I was in hard money, I had to make payments for that time. I could have wholesaled it to the same buyer and I would have made less money off the front, but after closing it, holding it and then selling it, I made, I made less money. So I would have

made more money if I had just sold the contract. And then the second thing I learned, I want to add this in here. I actually saw D.R. Horton wholesale a portion of that. So I know that publicly traded companies also wholesale. Interesting. Yeah, you know, there's a term for that. It's called hold sailing. And so it's whenever you close on it. No, I'm just kidding. I just made that up. But consider this my foray into coining new terms. Awesome. All right. That's awesome. We're going to head to the last segment of the show. It is the world famous. Famous for. In this segment of the show, we asked the same guess every four questions, every episode.

And we are going to start with you, Jamil. What is your favorite real estate book? I feel so cliche saying it, but it's Rich Dad, Poor Dad. Favorite Business book? My favorite business book will be Think and Grow Rich. Even though I think it's more of a mindset book, I think for me, it really taught me the concepts of visualization and masterminding as a key to successful business development. Okay. So what about outside of wholesaling and scaring cats, what are some of your hobbies?

Outside of wholesaling and scaring cats, one of my hobbies is I love going to the movies. I'll go to the movies by myself. My wife does not like to see as many movies as I do. I'm a fan. I'm a fan of cinema. I can sit and watch a movie. I'm a movie. After movie, after movie, it's my favorite thing to do that and eating chicken wings. Nice. I just went to the movies by myself last week. Awesome. It takes a strong man to do that.

He went to the movies and I said, I eat chicken wings. We both took very different things from what you just described there. I'm a little bit of both of you guys. There it is. Just like Rob is a little bit of Robert Downey Jr. And Polly Shore. He's going to hate that. He's like, that's the worst ever thing anyone never said to me.

But Polly Shore is great. You should give him, you should look into him. He's an awesome guy. Are you old enough to remember him, Rob? You can be honest. Yeah, yeah, yeah. Of course. He's a biodome, right?

Biodome in the Army now. That was a classic. It's really good there. Yeah. SNL, obviously. I hope. I don't know. I'm pretty sure.

He was on SNL, right? He's been on. Everybody's been on there at some point. SNL is the comedy store of TV. A good way to put it. All right. Well, Jamil, thank you very much. I really appreciate your transparency, the candidness that you talked about, the way that you

approach things, the ethics that you're trying to bring into our community. And I'm really glad to have you in the family. So thank you for sharing what you did. I look forward to getting to know you better. Is there anything you'd like to leave our audience with before we get you out of here? Absolutely. Just keep in mind, guys, that you actually have a connection to every single human being on this planet, whether you know it or not.

And so how you feel and how you think will draw those people to you. Change the way you think. Change the way you feel. And the life you live will reflect it. That's it. Rob, anything for you? Well, I'm processing that. And that's perhaps the greatest ending line we've ever had on the podcast.

Well, you know, a little known fact here, Jamil. I'm actually a UCB alum myself. So maybe on the next podcast, we can have David give us a one word suggestion. Yay. A little improv. Yes. Yes. And my friend. Where can people find you, man? You can find me on IG. Yes and. At J-D-A-M-J-I. And also on YouTube. Just YouTube.com slash Jamil Damji. That's J-A-M-I-L-D-A-M-J-I. Rob, where can people find you? You can also find me on the YouTube's. You can find me at Rob Built on Instagram at Rob Built on TikTok at Rob Bilto. There it is. You can find me on YouTube at David Green,

real estate, very boring name. You can also find me all over bigger pockets YouTube, so make sure you're subscribing to that if you're not. If you're only listening to the podcast, there's more stuff on YouTube that you can be checking out different interviews that we do, more specific content, some like more fun stuff. If you're looking for a laugh, you can get some good stuff there. And then I'm David Green 24 on social media. Please follow me. I normally don't ask this. Here's what's bugging me. Brandon Turner, the former host of this show, has not been on the show and is still destroying me when it comes to follows. Now, I recognize Brandon's charismatic.

Brandon's fun. Everyone likes him. But still, like, he's got double or more than double where I'm at. So I'm asking for a pity follow. I'm okay to say that. Like, I just can't stand this guy rubbing it in my face every time we talk that he's destroying me. So please help me out there and then also follow bigger pockets.

Jamil, thank you very much for your time, man. Looking forward to seeing you. Hopefully I get to go on your show. Can talk more there. This is David Green for Rob Polly Shore Abasolo. Signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe content. And editing is by

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