BiggerPockets Real Estate Podcast - 71: Finding Great Deals and Getting Started as a Wholesaler with Phillip Vincent

Episode Date: May 22, 2014

On today’s episode of the BiggerPockets Podcast, we have Phillip Vincent, an acquisition specialist who hails from the St. Louis, Missouri area. Phillip is part of a large real estate investment firm, handling all the ins and outs of getting properties under contract. This week’s podcast goes into great detail on how to interact with distressed homeowners, how to generate leads from the high-end price points  and walks you through the best way to handle Probate leads. Additionally, Phillip is particularly knowledgeable in wholesaling and shares excellent insight on exactly what you need to do to get started in real estate, ethically. This is an action-packed show, so let’s get into it! In This Show, We Cover: Powerful and unique lead generation The benefits of having a real estate team How to flip a $1,000 house How to actually purchase in high-end markets How Phillip lost $200,000 on a spec build Time Capsule Homes and why they make great investments Using SEO and PPC to get deals A snapshot of the life of an Acquisition Specialist Why marketing doesn’t really cost you any money… How to leverage wholesalers and newbies for lead generation The importance of being ethical when wholesaling How to network effectively And a whole lot more! Links Mentioned The BiggerPockets Marketplace How NOT to Flip a House: An Embarrassing Story of Wasted Time, Money, and Opportunity Automatic.com Books Mentioned in the Show Rick Dad Poor Dad by Robert T. Kiyosaki The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes by Bryan Burrough Tweetable Topics “In real estate, don’t buy weird.” (Tweet This!) “Find people in your market that have too many leads and simply go help them with those leads.” (Tweet This!) Connect with Phillip Phillip’s BiggerPockets Profile FasterHouse Website: http://www.FasterHouse.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 71. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dork and host to the Bigger Pocker. Rockets podcast here in the hail capital of the world, Denver, Colorado with my good friend,

Brandon Turner. What's up, Brandon? Not much, Josh. I saw that hail storm earlier in your area. I saw that look pretty exciting. Yeah, we were evacuated thanks to tornado warnings and wicked hail. It's been kind of a hairy afternoon, so to speak. Nice, nice. Well, I miss those tornado warnings, you know? Yeah, you could just get rain and misery every day, so, yeah. There you go. There you go. Yeah. Nice, man. Nice. Well, today's a pretty cool show we've got with us, Philip Vincent, a wholesaler from the St. Louis area, and he's got a lot of great tips for us before we get to Philip. I know we wanted to do our quick tip. Yeah, you sound like a dying bird. Maybe one of the birds that are in your wall just came out.

No more birds. Patched up and done. Fabulous. Fabulous. So today's quick tip is, if you, you've got any kind of deal, any kind of opportunity that you want other people to know about. Put it on the bigger pockets marketplace. I think it might be obvious to us to do it, but to others, it may not be as much so. Here's a quick story. I got an email today from a guy. He's a commercial real estate broker, I believe. He's like, he said, you know, listen, I just want to thank you guys. I was really hesitant to put something up in the marketplace. I didn't think it was really worth it. So I just did it on a whim. I thought maybe I'd get a couple of people to check it out over the course of a month. He said something like within a week, he had seven people reach out to him

and contact him who want to work with him. So I think, you know, that kind of speaks to the power of the marketplace. It speaks to the power of the volume of people we've got on bigger pockets. And if you have a service that you provide to real estate investors or if you've got deals or opportunities and you think, oh, well, why would I put it on bigger pockets? Nobody's going to care. You might as well try because it would shock you how many people are on bigger pockets. There are lots and lots of folks and they're always looking for something. So get out there, post on the marketplace at biggerpockets.com slash marketplace. And that's today's quick tip.

Nice. Good job. All right. So today's show, let's get on to it. Like Josh said, we have Philip Vincent and he's a wholesaler and he is doing a lot of cool stuff. So we want to get to that interview. Before I do though, real quickly, ask questions if you have any in the show notes on Biggerpockets.com slash show 71. You can talk to Philip there and ask any clarification or you want more information, whatever.

That's where you find it. Also, we're going to have a video of the Hailstorm that Josh was in, so check that out too. Yeah, I don't know if that video actually ended up surviving the Hailstorm, but we'll try and get up. Real estate investors, the April 15th tax deadline is coming fast. If you own rental property and haven't visited Costsegregation.com yet,

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Thank you, guys. Thank you, Brandon. Joshua, I can't look forward to being on the show with you guys. Great. And we look forward to hearing from you. So today we're going to talk a lot about finding good deals. and you're kind of an expert at that. And I know in today's market, it is very difficult for a lot of people to find them. So, yeah, I'm excited to learn from you. But before we get to that, you know my first question. I always ask, how did you get started in real estate?

For me, I have two cousins that are a little bit older than me, and they both have been framers, house framers, since the age of 15. And they're now in the early 40s. So each one of them have over 25 years experience. and they've graduated all the way up into building multi-million dollar homes for custom builders here in St. Louis. And yeah.

So I'll never forget us. Go ahead. Sorry, so you have construction background. I do. Interesting. Tell us more about that. I'll never forget a story. My cousin told me.

He said that he worked for a builder. He built a house and the builder had about a million dollars in the total project. That was an acquisition of the lot. and it was the acquisition, or I'm sorry, the complete build out of the house. He had $1 million in the total project. So he was going to go list the house for about $1.4 million. And about the time that he did it, the neighbor across the street listed their mid-century house, albeit it was updated, but he listed that house for $1.4 million as well.

So the builder said to himself, well, man, if that old house is worth 1.4, I bet my house is worth more. So he decided to list it for $1.4.4. $1.8 million. And about a month later, he got $1.8 million for the house. And so I'll never forget what my cousin told me. He said, man, I'd hate to be that guy. He's got to pay taxes on making $800,000. And I'll never forget it. It hurt my brain when he said it. I was like, that is exactly the kind of problem I'm looking for. I want to make $800,000 in one deal. And so I think ever since that time, I realized that real estate's one of those businesses.

is where you can make more than some people making their whole lifetimes on one deal if you just do it right. Yeah. And it's interesting because, you know, what your, was it your cousin or your friend or whomever it was that that said that? We've heard that quite a few times. I know we hear that on the site. I've heard it in discussions and it baffles me. It really does. I mean, like, that's probably the best problem you can ever have is to have to pay a lot of money in taxes because you made a lot of money. Yeah, especially considering he thought he was only going to try to make, you know, the attempt at 400. So to make 800, your taxes for her to pay. Yeah. Yeah. That's awesome. Right on. So you got, you got this inspiration. And, you know,

how did you actually start getting into the biz? What did you do? So because of my cousins and my father, he also built our homes growing up. He wasn't doing it for a living, but I was always around it. So just talking with my cousins, they always had the plans of the builders that they built for. So I got to see a lot of building plans. And they said, hey, you know, we build this one a lot. It sells a lot. They knew which ones were popular, which ones they were building more of and what styles, what sold. And so at the age of 21, I actually built my first house for myself.

So that was my first real estate project. It was general contracting my own house for myself. That's 21. That's awesome. Yeah. I was, I don't know. I don't know what I was doing at 21. I definitely wasn't drinking a lot of beer.

and keg stands. Whatever, man. Were you in a fraternity, Josh? That's what I thought. You know what? Let's just move on. I mean, really. This is not about me.

This is about Philip. All right, Phil. We're not going to go there. All right, so you built your first house at 21 years old, which is impressive, not many people. Very impressive. Yeah, it's not just impressive.

I think it's more impressive than Brandon does. Just so you know. Thanks. So how did you parlay that? I mean, how did that, where'd you go next? Did you go right into real estate investing, or did you live for a while? No, I lived in the house for a little bit over a year and I sold it.

I think I made somewhere around $60,000. And I remember thinking myself, well, that was pretty easy. I'd like to do that again. And so at the time, I actually owned some cellular phone stores. And so that was my primary focus at the time. But then I said, hey, I'd like to get more into this building. And so I started to build some spec homes in the early 2000s. So, I mean, it sounds like you're an entrepreneur at heart.

obviously you went out, got into the mobile store business, and all of a sudden you're popping into real estate. I wonder, I think most successful investors tend to have that mentality. Would you agree? I totally agree. Yeah. Yeah. You have to have something, right? And I think that's it. So you got into spec building, which is pretty similar to what your uncle was doing and cousins. I can't keep up with your family. You got too many people going on here. It gets worse. Oh, boy.

So somebody's in there. You decided to get into spec building. Tell us about the first spec that you did. Oh, you guys, I love this story. I built a house, I believe it was 2003. I bought a lot from a friend of mine. found a plan that I liked, started building it, and everything was going great. I even, through my cellular phone store, I had a real estate agent of all people who come into my store.

He told me he was getting ready to buy a house, and I said, I happen to have a house that fits exactly what you're wanting. And I sold it to him. I didn't have to pay a commission on either side. I sold it to a real estate agent, and I finished it out the way that he wanted from the rest of the way in. Wow. So it was a custom build, not just a spec, but it was a total custom. Yeah, I'm a custom builder. I would consider myself. Yeah.

Yeah. So did that change? I mean, did that change how you kind of did things? I mean, so did you, had you broken ground at that point? Or was,

oh, you had, okay. Oh, yeah. We were framed up. We were just waiting to put the drywall in. Okay. Gotcha. The unique thing about that story, too,

is, you know, I've listened to all of your 70 podcasts. I've never heard anyone talk about this. I had a situation in St. Louis where the title company, the owner of the title company, stole $11 million.

Whoa. Wow. 30,000 of which was my money. Oh, boy. And I'll never forget what it transpired a few days before the story broke was that when you're, when you, when you get draws from the title company. It's like a checkbook, right? Okay.

So you ask him to draw it from the bank. And so I asked her to draw 30,000 or I actually asked her to draw 50,000. And she said, do you need that much right now? And I said, well, I think so. I said, probably only need 30 or 30,000, but I'd just like to have it there. and she says, well, let's just go ahead and do 30, and if you need it, we'll come back and do another one. So it turns out, had I taken the 50, I actually would have lost 50,000.

Wow. Yeah, that's great. Well, I lost, I lost, I've had quite a bit of money stolen for me in the land of St. Louis as well. So I feel your pain, my friend. Who was it? I probably know him. We'll talk about that another day.

It is. It is indeed, man. Well, all right. So you did the spec build. you lost 30K. Did that get recovered through like insurance or anything like that? $6,483 of it did. Wow. I got the check and I remember thinking to myself, well, the only people that won in this deal was the lawyers.

Yeah. That really sucks. That really sucks. All right. So you get this first spec. What were the final numbers in terms of profit and cost? I would have made 70. Well, he added some numbers under the tops.

So I would have made 70. I think he added a commission onto the build price and gave it back to himself. Interesting. Yeah. Yeah, that is interesting. It is. Is that kosher?

It worked. I ended up making about 30,000 instead of, well, 40,000 set of 70 on that deal. Interesting. It's still not a bad. First deal, right? No, 70 would have been better, though. Yeah. All right, so you knocked it out and do you go and do another one?

Or what's next? Well, that's when my life takes a little bit of a change. I owned a website, an automotive website, to remain nameless, but they used to put fish tanks in cars, if that helps you at all. And so I made my living actually through AdSense and AdWords, pay-per-click advertising. And so I was making a lot of money, and I was parlaying it back into real estate. Gotcha. Cool. Well, like buying holds? No, actually, new construction. I went with that cousin who told me the story of the $800,000 guy. We decided to do a joint venture where he would put up his time and effort, and I would put up my cash, and we would build our first million-dollar spec.

The year was 2007. It's a good year, especially to build the first spec. Yeah, first million-dollar spec, and that's actually why I got my real estate license. I knew on a million-dollar house, you're going to pay $50 grand a commission, and I wanted to not give $50,000 away, so went out and got my real estate license at that time. Nice. Good idea. I think. How'd that work out?

Horribly. Sorry to laugh. I mean, we laugh with you, not for you. No, I'm not with you. I drive by that house still. It's in, it's in Chesterfield. Do you egg the house when you drive past it? No, I love that house.

I'm proud of what I built there. I just, my pocketbook doesn't reflect what happened. Yeah, yeah. But that's okay. You learn from those mistakes. I would definitely learn from all of my mistakes. So it was a million dollar house. I got to ask, how much did you lose?

200,000. Ooh. All right. So we're net negative, lots of cash at this point. Yeah. And we're thinking, shoot, this is a real estate business might not be the right business. Well, for a million-dollar spike bills in 2007 and eight, yeah, it was not the right time. Yeah.

Yeah. So obviously you had to have transitioned your course. I did. Because I had my real estate license, I was able to fall back on that. I was out of the cellular phone business. I had sold those in, I think, 2002. And the internet money had dried up as well. So I had to look for something else.

And we started to buy, fix up, and sell. So normal rehabs to retail. Okay. And so you became basically a house flipper? Yeah, with my father. I was actually listing his properties for him. And our goal, my goal was always to try to get in front of the deals. Where were the deals at?

And that led me on my course to find eventually wholesaling. in the company that I work for today. Okay, so why don't we walk through that, just that transition real quick, that you went from from house flipping to working for a company who wholesales lots, or you're wholesaling for a company that does a lot of, what, flips or whatever?

Kind of walk us through that transition. So, you know, 2007, 8, 9, there was a lot of foreclosures, and we went a lot on your auction.com, your Hudson and Marshall, your auction sites. And we would go and buy them. And I'll never forget that feeling

of when it was auction day, because they used to be on site or in a big ballroom. And it was so exciting because I had already done my due diligence. We had already been in the house. We figured what the ARB was, what their fix-up costs would be, and we knew where we had to buy it. And so that the adrenaline rush of going there that day and trying to bid on a house, the problem was is that when retail buyers were there that day, you would never get anything bought because they would always outbid you. So there wasn't enough auctions in our town to keep us busy enough.

So it made me try to go out and find more deal, how to get in front of the deal. So I thought I should go work for an REO company. They have all the bank home listings. I should work for them. Well, it turned out it didn't work out that way. It was unfortunate because I would know about deals 90 days early, but because of the owner occupancy period, the 15 days or 20 days or 30 days where they had the first right to buy it, I would know about this deal 90 days before it was even listed, but I still had to wait

to day 31 sometimes. to put my offer in. So it wasn't, it was not, I wasn't in front of the deals like I thought I would be. There was no advantage. No advantage, whatever. In fact,

it was just more frustrating than anything. Yeah. Gotcha. Okay. So, go ahead. Go ahead. Well,

you'll say, how did you get from that to the current job? So I kept going. I knew that wasn't going to work. I reached out to my local RIA. There's RIA here in St. Louis called the South Side Investment Club. And they have about 2,300 members.

So I started going to the, to the meetings. and they have a very vibrant community where they post, you know, I'm looking for gutters, I'm looking for a lawyer, you know, whatever there is, kind of like bigger pockets, you know, just on a smaller scale. And it was, I get my, because there's about 40 emails a day, I get them in one email at 5, 10 in the morning. And I'll never forget, I woke up.

The very first one was said, Faster House is looking for an investor. And then I read the job description of what they were looking for. and I looked at my wife and I said, this job is what I do best. And so I called Brian, who owns Faster House and set up an interview. And within about three weeks, I had the job. Nice. Cool. All right.

So what were you hired to do exactly? So my job is to take the leads, go meet with the people, figure out what the rehab cost is going to be, what the ARV is going to be, and get the house under contract. And that's all I really need to do. Then the opposite side of it, so once we buy a house, house, then if I'm going to wholesale, then I also need to find the buyer. So I do a lot of networking with other wholesalers, other investors, other rehabers. Gotcha. Cool. So, well, let's start with the leads then. I mean, how are you guys now that you're there? And you've been working there, it sounds like a

number of years. Yeah. Yeah. So first step in the process, right? You got to find the leads. So where are you guys finding them. What are you doing? What are your sources? I know you guys don't like Bandit Signs, so I'm happy to say we don't do Bandit Signs. We do a lot of direct mail, yellow letter campaigns, probate leads, absentee owners, a lot of pay-per-click, online SEO, natural SEO. We create a lot of content. We try to do a lot of testimonials, a lot of video. Brian and Debbie are very good at building the company right. So as far as the little guys go, we're actually pretty big.

Brian's bought over 60 houses a year for the past decade. So even through if you think about, you know, through those dry periods, he was consistently buying that many houses with his marketing efforts. Gotcha, gotcha. So, yeah, I mean, those are kind of the traditional methodologies. What are you guys finding? And are you focusing on the St. Louis area?

I am. Okay. Yeah, we bought 77 houses last year, and so when people ask me, where do we buy, it's almost easier for me to say where we don't buy, which is North City. Just about everywhere else in St. Louis area and St. Charles area, counties that we buy in those areas. Gotcha. And do you guys focus on the A, the B, the C, like what neighborhood types? Are you focusing on the high end, the lower end?

We definitely focus on the high end. I've started to get myself into the lower end. There's a lot of reits in town that are buying up houses and they're almost paying retail prices for them. So there's money to be made. So I try to find those deals as well. Gotcha. So you're saying you start with the high end.

Now, I feel like most wholesalers or investors or whatever, myself included, we all started with the cheapest, ugliest, dirtiest houses. I mean, like, there's a house for $5,000, you know? I mean, that's what a lot of investors go for. So how does that compare with what you're doing and why do you guys do the higher end ones? What does that look like? Well, I mean, with the higher end ones, we always look at the school district. If there's a lot of people looking for that school district, it's always easier to sell it.

And so when I say higher end, I mean, St. Louis prices are not like Washington or Denver's prices. Not even close. Not even close. You know, I could almost say 300,000 plus as a higher end where I think in Denver, it's about your median price. Yeah. And I bought it. My first multi in St. Louis was 90,000 for four. What street? We'll keep off that.

It was South City. It wasn't good. Yeah, yeah, yeah. That's tough area. A lot of people like South City, and I think it's definitely going the right way. But, you know, this was years ago that you're talking about. Yeah, I was there at the wrong time. So, but, I know you had a point on that. Well, I just want to know, like, I mean, what does that mean? I mean, what are these conditions of these houses that, what's an ideal property that you're looking for?

Are they three-bedroom, two-bath, nice houses, you know. Sure. Ranches. Okay. We try to stay away from weird. Designs that don't, you know, functional obsolescence doesn't sell well. We like normal brick ranches that need the updates, you know. We buy a lot of time capsule houses.

You know, I think the generation that we buy from, they had the feeling. that if it wasn't broke, they weren't going to fix it. So we just bought a condo in a nice suburb, and it still had lime green countertops, you know, orange dishwasher. I can't believe a dishwasher made it since the 70s, but it did. Wow. They didn't fix it. Yeah, they don't make them like that anymore.

No, apparently not. And so the time capsule houses are great. We really try to buy houses that people took care of. We'll buy some junky ones too, but we hardly ever rehab those. we like to rehab houses that were taking care of because just the pride of ownership and people that took care of the house over their whole life of owning it

it always seems like those houses are easier to rehab versus the houses that you know they just neglected everything yeah that's for sure I walked through a house yesterday that it was I mean just a pit like they neglected everything and wasn't just outdated it wasn't it was just terrible and so we're not going to do anything with it

because it was just far more than I think it's worth putting into so yeah I I wish I had done more when I was starting out with the good houses and good neighborhoods that were just ugly or whatever. I wrote a post a while back called How Not to Flip a House. And I'll link to that in the show notes that BiggerPockets.com slash show 71. But in that, my largest mistake in that property, I mean, it wasn't a $200,000 like, you know, spec build. So, I mean, you take the cake on tragic stories. But like, I made no money on this deal after like two years of.

work. And the reason why is because I bought something that was functionally obsolescent. It was a duplex that I decided to turn into a single family house. Terrible. Absolete. Is that right? Okay. Fine. Thank you, Mom. So I bought a house that was a duplex and I wanted to turn into a single family house. It was huge. I mean, I thought a big huge house would be awesome. But what's that quote you said a minute ago? Like, don't buy weird. I should have. We don't buy weird. Yeah, I should have learned that lesson up front. That's a huge tip.

for anybody listening, I think, is... Yeah. Especially when you're starting out, don't buy weird. Right. Yeah. Some guy... And making moves like that,

you know, because I made a similar... I turned a four into a three once, and that was a big mistake as well. So, you know, I think, you know, if you got the guts, if you got the framework,

if it's built, you know, for a specific purpose, you usually want to kind of keep to that because there's typically a reason. I totally agree. Yeah. Yeah. Right on. So you're picking up these properties. And ultimately, as part of this company that you're at, your goal is to wholesale them. Are you guys doing any flips or are you really just turning them?

Sure. So out of the 77 last year, I would say half of them we rehabed and sold retail, but the other half that we wholesaled the properties. And the way we do it is we have two full-time crews. And so when the crews are busy, we look at wholesaling. When the crews are not busy, they move on to rehab them. that's interesting. I mean, I never really heard that model before. It makes sense for a big company, like a larger company to do that, though. Sure. Well, it makes sense for somebody smaller too, though. Yeah, it really does, right? Like, if you've got the leads. Yeah. Yeah, we don't fall in love with any deal. I mean, it's almost like don't go against the stream. If, you know, if you can sell it and make a good dollar amount, just get it gone and move on to the next one. Well, I think the key is, you know, deal flow, right? Sure. What you guys, it sounds like, are doing is you're pumping out a fair amount a deal flow and you're getting a lot of leads and you're going through them and you're not

tossing them. If you're tied up them one way, you're using another strategy. And I think that's something that not enough newer investors do is have the multiple exits know that, you know, okay, well, this doesn't meet my criteria for A so I can do B or C with it. Or A, you know what, I'm so tied up doing A and B that I can't, I got to let this. deal go, I'm going to throw in the trash. Well, don't, why would you throw it in the trash? That's money, right? Yeah, I don't ever let anything go in the trash. I bought a house a few weeks ago for $1,000 that I sold for 2000. There you go. And I get just as excited about those deals as I do the big ones because in this business, I think I try to do, I try to look at it backwards. I'm trying to figure out

what my buyers will pay and then I buy it for less. So a thousand dollar house, are we buying in Detroit or what are we doing here, man? Oh, we've got some Detroit-esque areas. Yeah, St. Louis is way Detroit-esque man. Yeah, it's certain part. Not where I live, but... East St. Louis. Come on. I bet you spent a lot of time there, didn't you? I did not spend a lot of time there if you're inferring anything like strip clubs and gambling. 1 a.m. to 3 a.

I don't do those things. Thank you very much. But, you know, thanks for playing, Philip. I want to hear about this $1,000 house. What was it? What did it look like? How'd you find it? It was horrible. I think the person was going to buy it and put $10,000 in it and turn it into a rental. Okay. So do you mind me asking, like, how did they, how did you get the lead for that? Do you remember how that came in?

You don't have to know. I think it was. No, it was another wholesaler brought it to me. Okay. That's the other thing. You know, you guys have asked me, how do we find our deals? We work with wholesalers a lot. Young wholesalers that don't know where to sell their house.

they go through all, you know, they have the Cajonies to go out and put the sign out and go get it under contract. And then they're like, now what in the world do I do with it? And with Faster House, we have a reputation that's very, very good. And if we say we're going to buy it, we're going to buy it from you. And so I think we help solve that issue

for a lot of young people starting out. They don't know who's going to be their buyer. We buy just about every house as long as there's meat on the bone. So people like to work with us. So we have a lot of referral business. Okay. I want to actually go back a little bit.

I know we're talking about the deals and stuff, but it occurs to me that we never really talked about, you have a job. I mean, it's a position, a job at a company that does this stuff. And that is something that we recommend people all the time that if they want to get started in real estate, they should pursue that kind of avenue. So what don't we talk about?

Why do you, like, do you recommend other people start that way is to go work for maybe a larger investor and learn the business that way? Or what are your thoughts on that? So January 1st, I pulled my brother and my brother-in-law into wholesaling from their corporate jobs. And so both of them have aligned themselves with other people that have been in the business. And they've come leaps and bounds in five months. They're making more.

Both of them last month made more in one month than they did their previous year at their secular job. And so aligning somebody with that's already, you know, doing it on your own. it's kind of like you might be lost in the desert. But if you're joining a group, you might not make some of those mistakes, like you said, buying the $5,000 house in the bad neighborhood and putting $50,000 in it. You probably won't do that if you're with somebody who's seasoned. I strongly suggest aligning yourself with somebody. Nice.

So let's talk about what your day looks like. Because to me, you know, I think it'd be interesting for, you know, investors, new and experience to kind of hear what what's a day in the life. life, what's the day in the life like? So yeah, I have a great life. Yeah, about 9 o'clock, 930, I show up at the office. I usually have my first appointment around 10. I usually like to eat. I hate to eat alone, so I like to do a lot of networking for lunches. Usually have appointments, one, three o'clock, three o'clock, you know, however many I can stack up in a day and I go meet with the families and try to get them under contract. Okay. So your role is really, really exclusively. You're the guy who

goes out and deals with the folks once you find, once somebody at the firm finds the good lead. Sure. I mean, I'll vet them a little bit. I'll get the lead through the office and I'll call them to make sure that there is equity there, or at least the chance at equity. And then I'll try to set it up immediately. I like to go out. Sometimes I'm always, or a lot of them, the first guy there, and sometimes that's bad because they want to get three or four prices and then they just use my number against me. But I still like to be the first guy there. We try to do a lot of value add. These people when they're selling these houses, a lot of times it's the first time they've ever done it. They don't know what to do with the stuff or the car or the jewelry.

And so we have people that we work with for all of those. So I feel like even if I don't buy their house, I'm still giving them a value ad for being there. And I think people like to work with us because of that. We just, you know, we tell them that we're an option for them. We're not used car salesmen. We're a very positive company. We try to go in and say, hey, here's what we're, can do for you if this works great. And we've had good success because of that.

Cool. Cool. And I think that's a good way to look at real estate in general. If you can just add value to somebody's life, you may not get every deal. And that's okay. You're not going to get any deal anyway. But if you can just build that reputation and, you know, help other people in the process, I think a lot of real estate investors would have not such a bad name. So anyway, kudos to you on that. Can we walk through the conversations that you have with people with motivated sellers? So when a lead comes in, let's say a lead comes in through yellow letter or whatever, you know, you send out a mail, and they call in, do you take that initial phone call? Does it go to a voicemail?

And then what do you say on that call with somebody? So it goes into the call center and then they take the lead and it comes back to me in a text form, or an email form and then I call them back. Okay. And what do you say to? During business hours, during business hours, we do have a live, Heather answers the phones where it's there at the office. Okay. And what information is actually given to you? specifically. To be honest, I just need their number. I'll find out everything else on the phone call, but I mean, I do know quite a bit. I usually know the address, why they're selling. And just from

the address alone, I can know a lot because I try to know, I mean, every zip code in my city. So if I just have their name and number, I can usually take it from there. That's cool. Do you then ask, I mean, like, do you do a little bit of research ahead of time, look up there, you know, the county records or whatever? What do you look for beforehand? equity. I'm looking for meat on the bone. That's it. And how do you do that? A lead that has potential is what we call it. And when you say that sentence, you think maybe it just means a house that,

oh, they are a willing seller. That's not what that means for us. A lead that has potential, to me, means that the person owes less on the house than what faster house is willing to pay for it. Yeah. Plain and simple. Okay. So a lot of the houses we buy have 100% equity, obviously. but any house where they owe less than what we would buy it for, that's a lead that has potential.

So I will go out on that lead and I'll try to get a bought and, you know, I have a pretty good close ratio. Okay. So, well, I mean, I want to know this because I'm not good at the side of things, right? So somebody calls me, two days ago I talked to a lady who calls me up and says, I want to sell my house. And she's like, can you come out and take a look at it? What do I say to her? I mean, do I say, well, first of all, let's talk about how my equity you have. or, I mean, because that would be a rude question to just throw it.

No, you don't ask it that way. You got to be a little smoother than that. Yeah, Brandon. Well, I want to hear your, I want to hear your GQ smooth over here is Fumbolina. I love this business because they're selling me a product, right? They're selling me their house. So they want my answer.

They want to know how much I'm going to pay them for it. And so it's a different than sales, you know, where you're trying to force it back on them. They want me to give them the number. And you just, you get in the conversation, you know, how long have you owned the home? Why are you selling the home? One I've started to implement is what style is the home. A lot of people have no idea what kind of houses they live in. And usually it's the time for them to go, oh, it's an old piece of crap, which is not a style of a home,

but it tells me a little bit more about what they think their home is worth. Interesting. You know, it gets them talking. We buy a lot of estate properties. So I feel like a shrink half the time. When you say when I go on these calls, I'm dealing what I always call with the most responsible child, the executor of the estate. Yeah. And so, you know, it's an emotional time for them. They've got other kids or, you know, their brothers and sisters that are usually out of town.

I think it's worth a million dollars, you know, so they're fighting them off. And, you know, every day, it's like, well, Jerry lives in Chicago. He hasn't been down to help me. And, you know, by that fourth weekend, their back is hurting. and they've just now gotten over the hump of how much stuff that people have, and they're just ready for some help. And so, you know, I think that we do a good job at, you know, selling that house might be the hardest part.

And if we can make that easy on them, you know, people love to work with us because of that. Okay. So you said earlier you had a good close rate. Do you happen to like have a percentage or do you just, do you say you close most of them, a quarter of them? No, not most of them. I wish. that would be that would be nice.

That would be nice. What's good? What's a good close rate when you're meeting with somebody? Well, how many leads I go on versus leads that actually had potential, you know, that out of a given month, if I buy, you know, I buy four, probably four houses myself out of 20 good leads. Okay. All right. So, and what about the, do you happen to know, like good leads versus not good leads? You know, like, let's say 100 calls come in. Yeah. Out of them, what do you think would actually be meat on the bone lead that you're?

going to pursue? 30%. Okay. And then out of those, you maybe close a few out of them. Yeah, a few a month. I mean, just because they have equity doesn't mean they see it your way or they're going to want your price.

Yeah. That makes sense. Hey, man, I could talk to my parents all day about what their house is worth, but they don't want to hear it. No, they have it in their head. I like it when people tell me what they want to sell their house for based on what their bills are. Nice.

We owe this to the doctor, so we need $64,000. I'm like, well, your house isn't worth $64,000 just because you need it for a hospital bill. You know, it doesn't. Yeah. Yeah. Well, so you make a lot of these calls and you talk to a lot of these people. I wonder, you know, is how much of this is a generation gap? How much of this is just pretty much, you know, are you, is it anybody who's got a house and they've been there for a few years?

They don't have a clue? Or are we talking, you know, the, the old generation, you know, the 60s? 70, 80-year-olds that are just kind of not all on the ball with what their properties are worth. It's their kids that we're dealing with. So the boomers' parents whose houses were buying in general, when you say the generations, the baby boomers still live in their McMansions and still have debt and they're very busy. Their parents paid off their house from probably the 60s or 70s, and they never moved. And those baby boomers don't want to move into Mom and Dad's house, at least in St. Louis.

They don't want to go back there. They have memories there, but they're not trying. And honestly, if they were going to fix it up and put their kid in it or something, I would have never gotten that lead. So I'm only dealing with houses of people that don't truly want the house anymore. It's a burden for them instead of an asset. Yeah, that makes sense. Do you have an idea of how many, I mean, this is, I'm jumping all over the place today.

I'm sorry. But how, what do you think these leads? He's frantic people. Well, I just, I have a lot of questions that I don't know where they're throwing on. So my first question, I guess, is the leads you talked about SEO, you're getting them from yellow letters, you're getting them from, you know, a lot of different places like that. What is most effective for you? Like, do you know your company? Like, what's driving the most leads? The most profitable or the most amount? Oh, good question. How about, I don't know,

either? Well, I mean, there's a lot of low-hanging fruit in some of the lower end areas cost-wise. I mean, we can buy houses for 15 grand and sell them for 30 grand. Do that pretty consistent. consistently. But your bigger dollar houses are the ones that you are in the higher-end areas, the nicer areas. Gotcha. And what leads then? Yeah, I was going to say, what leads do you think are best for like the higher-end areas? Is this state sales? Probate leads. Oh, yeah, probate leads. Okay. Okay. That's good. They're harder to find, but when you do find them, they're usually more fruitful than just somebody that bought their house three years ago. Those kind of deal, you had said about, are they young people calling in? Hardly ever are those the houses that we buy. Okay.

We're buying time capsule houses that have been in the family for 30, 40, 50. In fact, I went on the lead the other day. The mother lived in the house since 1931. Wow. Whoa. That's a long time. That is a long time. That is.

So where do you find your probate leads? Is that through like mailing lists? So we subscribe to two local, the county end, which is the St. Charles County paper and then the St. Louis Business Journal, which is the St. Louis County. And we go through there. Just because the probate's open does not mean that they own. owned property. They could have lived in an apartment or with somebody else. So we have to match it against the tax records to see if that person did in fact own property. Then we need to look up to see

if there was a loan taken against it recently. We're trying to look for equity plays. And once we realize that there is equity and the probate, you know, it's a house that's going to be sold. That's when we start our marketing campaign to the probate. So what are you finding exactly in these papers? Are you finding like a death notice? Or does it say, you know, probate or estate sale or something like that? What exactly, what information are you seeing there? What you just said, the death notice. Okay. Oh, so you, okay, so you guys are literally going through whenever people pass away and you're trying to see if they have assets, a property in their name. And then how do you actually find out who's in charge of the estate

at that point. Fortunately for us, in that information, they also put who the attorney is. Okay. So we send letters to the attorneys as well. Gotcha. This isn't the obituaries, is it? No. This is like a legal death notice.

This is open probate cases. Okay. Okay. Someone has passed away. You have to open probate. It's like a year. And you know, you're shouting from the rooftops. Hey, did George owe anybody any money if you did?

Now it's time to come get it. Well, during that time, that's when we start to market to them. because most likely they're going to have a house that they want to sell. And what's the amount of time it typically takes between the beginning of marketing on one of these probate deals and the time at which you guys close on the ones you close on? That's a good question. We try to touch them about five to seven times, including the attorney as well. So that's 14 touches.

I think because we CC the attorney, people take us a little bit more serious that they almost think that we're working with the attorney. because our letters say, hey, we've also C-Ced your lawyer about this if you guys want to sell it. So I'm going to say five months once they start getting it to closing. I had one closed the other day that it took us three months

to get to the closing table for many, many reasons. And so fortunately for us, when you buy as many houses as we do, it's okay if it takes that long because we're buying houses every single month in the year. It's not like we have a slow period or, you know, we're buying houses every month. So we go along on the ride with them.

They have a goal to sell the house. We have a goal to buy the house. And so together, we work together and we're flexible. I like the idea of copying the attorney. I think, I think A, I think it kind of extends some kind of level of professionalism because I think the property owners, you know, if the attorney, if you were doing something that wasn't on the up and up and you're not, then you wouldn't be ceasing their lawyer. So I think it actually probably gives them a little bit level of comfort.

to know that the lawyer is in on the picture, sees that you guys exactly what you're doing. Right. I agree. Yeah. Now, that's great. That's great. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect

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to get a free proposal and see your potential tax savings. All right, so you had talked about on the lead side, the website, and you seem to have a pretty active website. How does that do as a traffic source for your leads? And how long did it take you to get that to start working as a lead engine? I've been at Faster House for a few years. And I've noticed a change even in that short amount of time that we used to get a lot of yellow pages calls.

And those have almost all gone away. And now they're almost all internet marketing leads. Can you clarify that? So what do you mean you're getting yellow pages? pages calls. So yellow pages, I don't know what you call it. The phone book, yeah. The phone book, and the phone book. And so those leads have dried up over time. We still get them every once and a while. I mean, it's still probably an effective marketing tool. It's just not our business. You know, we'd only do probably five houses a year if we relied only on the yellow pages.

But with the internet, we probably get, I would say 70 or 80 percent of our leads are through paper click or just naturally ranking high for keywords here in the business market. So you're also putting ads in the yellow page. This is what you're saying. Sure. We've done it for years. We've continued to do that. What I'm saying is in the two years, I've noticed the change and switch from what used to work to what's working today. No, that makes sense. That makes sense. Okay, so you're doing pay per click and you're doing organic. What type of content are you guys producing that you would say is driving people? Because you said go out and produce decent content.

What might an example of that be for somebody who's not in the St. Louis area? Nothing's better than a good testimonial. How does that look? So if I know it's going to, I mean, well, sometimes their personality is better than others

and so you know they have a little bit of character in them. So I'll show up at the closing, say, how is your experience with Faster House? And I'll throw the camera on. I won't even tell them what's going to happen. Because if they have to think about it, people get nervous, I'd rather be natural. And I say, hey, how is your experience with Faster House? And they'll say, you know, it was great.

You said what you were going to do. And, you know, it's less than a minute long, but it's some of the best content because it's not prompted or scripted. It's from the people that were actually buying houses from. That's cool. So you do you throw that up on YouTube and then put it on your site then I'm assuming? Or how does that work? That's correct.

We do. Okay. That's a cool idea. That's very cool. I mean, just in like internet business in general, that's always, I mean, that's just kind of a common thing. imagine internet business, but all business, right? Testimonials are always one. When they're real.

Yeah, when they're real testimonials. When they're real, you can see through them when they're not. Oh, it's so easy. John P. says this, and there's no link, and there's no picture, and there's no video. You go to pretty much every guru site, and you'll see John R and Mike P. And there's, yeah, yeah, okay, I believe you. Ours are pretty funny because they're so natural. I remember a couple recently, when she was done talking, she elbowed her husband for him to start talking.

You know, you're just not going to get that. Yeah, yeah. Kind of how Brandon and I point to each other on the podcast here. Yeah, exactly. A little ribbon going on. That's pretty awesome. That's funny. You talked about SCR.

I mean, it's like paper click ads. Is that Google or Facebook or Bing or what are you doing? What are you guys doing for paper click? What's Bing, Brandon? Yeah. I hear it's a search engine people use. Correct on all three. Google is the, to me, Google is the internet.

If you're going to do searching, you know, they have most of the traffic. Facebook is a different animal. And I'm already starting to see the shift there too. If you think about the stickiness of Facebook, the average person spends 45 minutes a day on Facebook. That is just a ridiculous number. So the amount of eyeballs that they have there, it's a different type of marketing. So if you type in, buy my St. Louis house for cash into Google, you're probably looking for me. Where if you're saying, hey, I need help selling my house.

And then the ad shows up on the right side with Facebook. it's a different type of advertising, but it's so much cheaper for those clicks that I think Facebook has its place. And in fact, I think Facebook is doing it right. They have so much data about who the people are. You can really, really get targeted on your marketing efforts with Facebook. Yeah, I find that I get a lot of clicks. I'm advertising Facebook.

I don't do much with Google at all right now. But I get a lot of clicks on Facebook, but I don't know if I get a whole ton of good. Conversion. Yeah, I don't get, I mean, I haven't done, in the last, what, month I've been doing Facebook ads pretty heavily. I haven't got one single deal yet from it. But I don't know. It's hard to tell. I mean, it's only a month. So it takes time. Obviously, they got to build up a brand name and all that good stuff. Sure. Are you doing one blanket ad for your whole city? Or are you trying to get it down, broken down into smaller campaigns? I'm doing one for my whole city because my area is really small.

I don't live in a large area. There's like six people in a city. Okay. Yeah. I do like my counting. So what I mean, here's what I did. I mean, here's what I did. My ad just says like, you know, like, what does say? Something about Aberdeen in the title of it. Southern people are like shocked there's a local ad because we don't people don't advertise on Facebook in my area and so yeah I'm getting a lot of clicks I don't know if it's worthwhile but I think total in the past month I spent like $200 and I probably had a dozen phone calls or so and so that's still pretty good actually yeah I think yeah I mean if it takes me 50 phone calls to get my first deal out of Facebook and it tossed me a total of three or four hundred bucks or $500 I mean that's

still worth it sure and even if for the whole year it's only $2,400 a year, you're probably going to get one deal done and make more than that. Yeah, yeah, exactly. So I won't stop it anytime soon. I think that's a lot of people stop their direct mail or their marketing or whatever way too soon. They think, oh, it didn't work this month. I better quit it. That's good for me, by the way, when people do that. I work with a mail, a printer, and he says 90% of the time somebody will buy his list and mail to them and they'll never come back again. Just send it once, yep. And then complain. There's a lot of complainers out there. and they just don't listen.

The guy's saying, hey, you need to continually touch these people over and over. They just don't believe in it. You have to look at marketing as the, it's not costing you any money. It's actually making you your money,

if you do it correctly. Yeah. And they say seven touches, you know, to get somebody. But, well, then let's go back to what Brandon was talking about

with the ads. You know, I think a lot of newer investors give up too soon. You know, we've talked about that a lot. particularly with like, hey, I just spent, you know, $200 to acquire a lead and, you know, 20 leads and none of them have panned out. Well, I should just stop. This method sucks. Well, you know, had you gone a thousand, you might have gotten three and the next thousand might have gotten you three.

But guess what? Those three leads that actually closed and that you spend a grand on, you know, brought you a hell of a lot more money than it costs. you. So you really do need to be patient and just kind of buy yourself a little bit more time, I think. Yeah, I think you know what I think should almost go into it with a six-month strategy. If you're not going to do six months worth of advertising, you probably shouldn't even start. Yeah. Yeah. I think that's what do you think would be a fair budget then? You know, for somebody who says, you know, because I think a lot of people are like, well, you know, I could get into real estate for nothing. I don't have, I don't need money to buy the property. I don't need money to lock it in. I can wholesale it.

it's not going to cost me anything. Well, that's not true. I mean, I actually, you know, it's funny, when I started as a real estate agent, I kind of had that mindset. I was like, well, you know, I don't have a ton of cash that I want to spend on my marketing. And, you know, it can't cost that much to be a real estate agent. And I very quickly learned otherwise, but I was fine. But I think most people find themselves in a position where they're not fine. And they find themselves where they they under budget the actual cost to get in and the under budget the cost to do some marketing. So what would you say a new investor should have in pocket

to be able to start getting those deals flowing in terms of marketing cash? I mean, I like the number of about $1,000 a month to really do it right. You can get started super cheap. We actually, I saw a guy the other day took cardboard paper and sticks and made, buy a house of signs with them and stuck them on the side of the road. We see a lot of guys starting

up with the bandit signs. I don't know why that's the go-to for people, but it seems to be. That's because the gurus like it. Sure. And they honestly work. They really do work. And so we don't do it. We think it's tacky. Yeah, we think it's tacky. But I mean, we do buy a lot of houses from people that do do it. So, you know. Guilty by association. You're off the show. Sure. Let them do the dirty work, right? And so when you said when they're getting started, I mean, reaching out to your local Ria is obviously finding guys like us that want to buy your houses. So, you know, I would say it's a marketing business and then it's a people business. So if you're going to go through all trouble of marketing, you need to also have the people

behind you that need to want to buy the houses because then you might let deals go away because you didn't have someone to buy the house from you to take it down. Yeah. Yeah. Yeah. Yeah. And I think that's fair. I think a thousand bucks a month is probably, you know, say six grand, assume six months is is probably fair. I hate when I see somebody say, well, I've got 500 bucks in the bank or whatever it is, and they think that they're going to be an active full-time real estate investor. And I always say, it's probably not a great idea unless you have some kind of money sitting there in the bank. 500 bucks is just not enough to really get the ball moving, at least to produce a living wage in my estimation. What would you say? I totally agree. I look at people. I look at people,

that there's a dog grooming company in our town and they charge like $11,900 for a month class to become a dog groomer. And so, I mean, that might be a great profession, but I don't know any dog groomers that make $300,000 a year, you know, and I think there's some wholesalers out there that can. So if you're going to invest in this business and do it right, if you can't at least put, you know, like we said, a grand a month into it and maybe give yourself at least six months, you probably shouldn't start. It doesn't mean you can't network. I talked to a It's funny, guys, I put a wholesale deal out to a group of wholesalers that are starting off. They market it.

And then I get a phone call from somebody else saying, hey, I got a deal. And it turns out it's actually my house because guys are getting started by just middling deals. Which is fine. It's a big part of this business. But it's a good way maybe to get started without any money. You know, you talked about having that nest egg before you do this on your own. It's a marketing business and then it's a people business. So if you can team up with somebody that's already doing the marketing, you can take their leads and help them sell them and still make some money to get started.

Are you talking about wholesalers who are promoting your deals back to you? Yeah, it happens sometimes. And I say, well, that's funny because that's my house. So it goes out into the small town of St. Louis and it comes back to me sometimes because it gets, you know, and it's even funnier when it's 11,000 more than I price it. It's like the telephone game. You know, I'll say, I'll sell it for 40. And somebody calls me back and said, I got a deal at 51. And I'm like, yeah, that's my house.

So these guys, so these are guys who have no interest in the deal that are basically just trying to market a deal that they found and a pitch to you. See, I think that's absolutely horrible. I think what they're doing gives a terrible name to investors. I think, you know, I've, I've had a lot of people come to bigger pockets and scream at me that somebody was promoting a deal that was theirs, that they had no right to do. And I get it. I get that they were mad. and I would be absolutely livid. Now, granted, I understand that it's a business where it's all about marketing, but don't market something that you don't have a right to.

Sure. Now, the guys I've dealt with have usually asked me, but then they push it out. And then, you know, once it starts, the web starts to go out, you can't really control it from there. No, no, no, I don't get mad about it. I mean, it's, you know, it's just guys, if you're going to be successful in any business, you need to hustle. Yeah. And so these guys that maybe have no other option are at least trying to get their feet

wet in a business and I don't think they're doing anything wrong. It's just a matter of can you find a buyer for the property. I think they're doing something wrong. I mean, I disagree on that and, you know, we're not here to debate it. And I get your perspective and I respect. I'm not bashing you whatsoever. I'm just saying like, you know, the first guy that you gave permission, cool. The next guy who jumps in who doesn't have the right to do it is, you know, he's just making a mess of the whole picture. he's he you know frankly you don't know this guy from adam you don't know what tactics he's using you don't know how he's promoting the message and and so you've now lost any and all control of the marketing of that property uh i think it's potentially dangerous for you and your business uh when

that happens as as as one piece of the picture and i think there's other components as well it's and i think it's unethical i think there's a lot of lot of stuff that goes with it but that's again my opinion and you actually yeah i actually do disagree he's like with that. I mean, I agree that you could lose control. But if I was selling my house and I was motivated to sell my, like, I want to sell my property right now. And Josh, you were to come to me and say, hey, my buddy Jim wants to buy your house. Well, of course I would be like, great, Josh. Thanks for finding that buyer. Here's some money. Right. Like, I don't care if you're marketing. I don't care if you marketed to a guy who marketed to a guy who marketed to a guy who marketed to a guy.

My house sold for what I wanted. I'm happy, right? That, like, why would I care who who was making a profit on it? You know what I mean? I agree with Brandon. I mean, I almost think, Josh Do you do a lot of wholesale deals? I don't do any wholesale deals. Well, that's what I figured because that is wholesaling. I mean, so it's wholesaling wrong, then. Do you think wholesaling is wrong? I do not.

But I don't see how it's any different. Somebody has an interest in the deal. Right. You mean, actual, like, a contract. Yeah. I mean, I've had properties I've had to get, I've had property I've had to get rid of. And I've told investors, go find somebody to buy it.

And, you know, if I've, if I'm, if I'm, giving them the right to do it and they're that point of contact. It's a semantic argument. I mean, it's, you know, I have an issue that somebody just out of the blues like, hey, yo, what's up? I got a piece of this property. You want to buy it? Well, dude, you don't have Jack. You know, don't pretend that you do. You're, you know, you're misrepresenting yourself as what you're doing. And that is just as bad to me as the whole band had signed thing. You're lying. You're a liar. You're a big, fat liar, and I'll never do business with you. Right. No, straight up. I mean, like, You're a liar. So you, in your first thing that you're doing is lying to me, how could I possibly

trust anything that you say to me from here forward? Right. You're right, Josh. And I don't think that they should represent themselves wrong. They should say, hey, I'm, you know, I've got this deal. Here's what we can sell it for. And to be honest, these guys, I compete with these guys every day in business, right? Sure. Sure. They're there, you know, two minutes after I'm there. And I love competing against them because my company is very unique. We don't do any weasel call, clause whatsoever. There's no more inspections. There's no 72 hours for somebody to come through it.

When I write a cash offer, it is as clean as they're ever going to get. And so I'll just say to the people, hey, I know you got a guy offering you three grand more, but does it have a 14-day or 21-day inspection period? Yeah. And then I just explained them that they're just getting, you know, getting admitted. So, I mean, I don't mind competing against those guys. I can't really stop them from what they're doing. Yeah.

We do our business, you know, we control the deal with the content. contract, you know, that's, you know, and I think that's great. That's, you know, that's a powerful thing to do. And I think that puts you, you know, I get, you said it, you know, that that gives you a much better deal than somebody who's going to make a higher offer because they know your deal is, is going to close, you know, when you say it's going to close, right? So. Right. Yeah. People like that. Yeah, for sure. Well, and, and, and the whole argument on, you know, the, the, the, as I call them, the Weasley wholesalers, not all wholesalers, but the guys who don't have a right to it in my estimation.

Yeah. You know, it is what it is. We all have different opinions and I, you know, I don't think that you're bad for having a different opinion. And just to be clear, we don't do that. It's happening. Oh, no, I know. I put them out and they come back.

It's not something I'm doing. Oh, I'm totally clear on that. Yeah, I get that, man. I know you're, I just, I have an issue. If there's, you know, we've got a lot of people, we have 25,000 people who listen to our shows. If somebody sits and listens to the shows like, yeah, that'd be a great idea. and, you know, let me go do that.

Don't do it because, you know what? You run into somebody like me. I will blackball you to the end of time. If you do that to me, you will never do business with anyone I know. I think they should partner with somebody that has a lot of deals and get the permission. They don't need to do it shady. They can do it on the up and up, no problem. Absolutely.

Absolutely. And I think it comes down to two is what you're pretending. People come on the Bigger Pockets forums all the time. They're like, I've got deals in all 50 states. and I've got $100 million, you know, like crap like that. Like that is flat out line, right? Like, they're saying that they're deals. But if you say, if I say, hey, Philip, I got this lead that I'm, you know, on a house for $12,000.

You're interested in it. You know, it's not my lead, but I got a connection. Can I hook you guys up? I mean, there's nothing wrong with that. If I don't have it under contract, I don't think, I mean, unless there's something legally wrong with, you know, not having a real estate license. I don't know. But, right. I mean, if I get a lead on something from somebody who told me, of course, that's just,

that's how business is done. There's always middlemen and everything. Always. And maybe it's in the presentation. Yeah, and I think heavily it is, yeah. Yeah. So for me, I work with a lot of the young wholesalers who are just getting started. So they'll, because they trust me, they bring me in super early.

So like, I know all the numbers of the deal. So sometimes they'll say, hey, I just want to make three grand. Can you go ahead and just buy this house too? they'll bring me the deals and kind of almost step aside because they're almost scared to pull the trigger on any amount of money because they don't know if they can turn around and sell it. So I like to work with the young wholesalers and go in and say, hey, here's what we're willing to pay. I think the other reason why wholesalers like to work with us, because we do not get insulted over how much money that they're making.

We understand the game. As long as we're buying it at the number that we want to buy it at, I don't care if they make 15, 20 grand on a wholesale deal. It's only a matter of, you know, we look at the numbers. do they work for us. Yeah, that makes sense. So for anyone who's listening, what advice would you give to new wholesalers

in terms of how to get the ball moving other than the, you know, you probably want to have some cash for marketing. What else would you have to say? You have to join your local Rias. You have to be starting networking. In any business that you start, there's going to be this learning curve

that's going to cost you a ton of money. With this business, It's kind of unique because you can get started with no money. If you do your job well and you understand what it costs to rehab and understand what an ARV is, you can get involved in this business and make a lot of money. So I think the more knowledge you can have, the more people that you can align yourself with that know what they're talking about versus just going at it on your own is very valuable. So I suggest joining your local RIA and I also suggest finding someone,

there are people in your town that have too many leads. So you need to go out and find that person and try to work with them on their marketing or their efforts and try to learn the business. That is probably one of my favorite pieces of advice that anybody has said on the Bigger Pockets podcast. I seriously love that. Go out. Not just find experienced people, but find the guys who have too many leads that they don't know how to deal with and help them deal with them. Brilliant. Brilliant. Awesome.

All right. All right, well, the last question I have before we want to move on and start wrapping things up. But what is your plan? I mean, wholesaling is not a, you know, 50-year strategy to retire on a beach, right? I mean, what's your goal with all this? Where are you planning on seeing yourself next? My company has 154 rentals right now. And so while I don't do anything with the rental side of the business, I'm around a pretty big, you know, that's a lot of houses.

So I get to see the pros, the cons of all of that. And so just like anybody that's red, rich, dad, poor dad, I want to put my, you know, make my asset column be large enough to where if I, if I didn't wholesale anything for a year, I'd be okay. Cool. Cool. Gotcha. All right. Well, why don't we move on then to it's time for the fire round. All right. All right. The fire round. These questions come straight out of the bigger pockets forums. So let's see what you have to say. Number one, what is your take on the 70% rule that a lot of flippers and wholesalers use. Do you use that formula in your business? And Brandon, why don't you define

it before? Sure. All right, so 70% rule basically says that whatever the after repair value is, if you multiply that times 0.7 and then subtract out your repairs and then subtract out... That's your offer price. Well, yeah, and if your wholesaler subtract out your offer price, that's

what you should pay for a property. What are your thoughts? I love that. We use it a little bit different. We actually have an 80% rule. And so when people hear that, their ears perk up because it's higher than the 70% rule, obviously. What they don't know is that we're pretty conservative on our ARVs. And so you can kind of control the deal because, yeah, there might have been a count for 149, but, you know, if you tell yourself it's 129, you're probably a little safer. So that allows us to be an 80% rule instead of a 70.

That's smarter anyway. Yeah, in areas we don't like, we definitely use 60%, 70% rule. It's all a matter of the school district and how much do we like the property. Yeah, makes sense. And that's just smart to be conservative in your ARV anyway. It's always better to have more upside later. I mean, it's not a hard, fast rule with any of this. You know, some people, like the young guys will come and say, well, Phil, I got it for you at your 70 cents on the dollar.

But then their ARVs are way out of whack and the repair numbers is actually where they're always the worst. Yep. You know, they don't see, oh, it needs a new roof. It's like, well, how did you not see it? you know, so, so yeah, we use an 80% rule, but it's, you know, it's not a hard, fast rule for any of it. It's just a good way to look at it. Okay. Gotcha.

Gotcha. And do you get mad at them for calling you, Phil? No, I'm okay with you. Just me, huh? Just you. Nice. All right. So would you pay cash for your primary residence?

Next question. I would, but I would turn around to just get a line of credit back against it and put it back in the market. So it's just an arbitrage play based on. what my interest rate and what I can get a return on my money. Okay. All right, that makes sense. All right. This is kind of a cool question.

Never asked this before. Do you think that driving luxury vehicles sends a negative message to renters or sellers? I love this question. When we get to the final what my hobbies are, I was going to kind of go into that a little bit. So do you want me to do it now? How do you know we're going to ask that question? Well, you always do. It's the famous four.

All right, fine. Somebody who actually listens. Yay. Yeah. Yeah. No, so my hobbies, I consider myself a car guy. Okay. The people always say, oh, what kind of car do you drive?

I drive a Toyota Camry. It's white. Nice. And I've recently been looking at some very, very nice cars, and I can't bring myself to do it. I can't pull up in a $90,000 car to try to buy an $8,000 house. Yeah. It just looks bad. Yeah.

And so, no, I think it could be a detriment. And I think if you're going to have a nice car, that's great, driving on the weekends, you know, in this business, at least for our area. area. We're very blue collar. The showy vehicle probably won't help you. Yeah. Overall. Yeah. Pickup truck or just kind of a down-to-earth average show car. Yeah, a pickup truck's great. I just drive 30,000 miles a year, so I don't want 14 miles a gallon. So that's why I drive there. Well, you should get the, what's that little toy you picked up, Brandon? What's that thing you plug in to your car? The automatic. Yeah, it's kind of cool. There's a device called automatic. You plug it into your car, like, any car from like 1993 and on. And it'll like help you get better gas

mileage. It's kind of cool. Yeah. Automatic.com. It's kind of cool. It's, it's Really? And that is not a paid endorsement. It's just something. I improve my gas mileage driving on my Prius from 42 to 47 just by having this device installed because it beeps when I stop or speed up too fast. That's the main use of it. It trains me to drive a little better without me even noticing.

Which is amazing because Brandon already drives like a grandma. Yeah. Yeah, me and my little pup, putt Prius. All right, next question. Good good stuff. All right. Do you think traditional education is necessary for success in real estate? And if so, what degree would you suggest? You know, that's a great question.

Me growing up, college was never championed in my home at all, not once ever. And so to say that higher education is what you're going to have to have to get to where you want to be. I don't believe that at all. It's your own drive. Do I think it's beneficial? Sure, especially, I mean, Joshua, you went to wash you very, very good. school. And so you've learned a lot from that. And I think just about any person, we all learn from the experience that we've had in life. So for real estate, I think you just need to get in there and

start doing deals, whether they're good deals, bad deals. You just need to continually push on. I mean, a lot of people after they would have lost $200 grand in 2007, 8, might have quit and never even looked at real estate again, but I just kept pushing on. So I don't think it's necessary, but I'm very biased because I never went to one day of college. Right, right. Well, I mean, I learned how to do a kickstand at college. Yeah, I know. I mean, everything that I've learned in my business, I've taught myself. 100%.

100%. And yet, you know, it's funny. I think it really is based upon your upbringing. You know, college was like pushed in my brain. You got to do college. You got to do college. And, you know, I certainly learned a lot of things in school besides just doing a kegstand. But in the end, you know, was it valuable?

Absolutely. Could I be where I am without it? Sure. But to your point, I think there's a lot of people skills and other skills that you do get. I mean, I think it's a good path for folks. It's not going to guarantee a job, that's for sure. Yeah. Sure. And I've heard that really good wholesalers, a lot of times have a sales background. Yeah. And so for me, that just has always come naturally. I'm not afraid to talk to people. And so that really helps me with what I do every day. Nice. Awesome. I agree. A sales background does help. And that's probably why I struggle more with. I don't like talking to people because I don't like sales. So I need to get a job at like, I don't know, Verizon or something. All right. Final question in the fire round. This one's actually my forum post. There's a baby bird in my wall. It's like there's birds in my wall. What do I do? Do I clean them out? Are they still there? No, they're gone now.

Have they started to smell? No, they're alive. Like, they're just, they built a nest and there's baby birds. What would you do in that case? You got baby birds in your wall because you had a hole in your siding because you were lazy and didn't patch it up. Would you wait until they fly out of there? Yeah, when they die, they're going to smell really badly.

And so is it a rental house or is it a house you're going to sell? No, it's actually my own personal residence. Oh, crap. You wouldn't get them out of there. But if they're not dead, I mean, they're just, they built a nest. and they're inside my wall, nesting. Do you wait until after the birds are gone? Do you pick them up and take them out of there?

Yeah, I get them out. You put your hole in the wall. What the hell kind of question is it? Wait until they die. You cut a hole in the wall and you save the birds. Maybe it's time to rehab that wall or blow it out or something. Yeah, man. Well, what I did is I took the wall out of the outside.

I took the siding off the outside, and that way I could just put it because I have cedar shake siding. Just put it all back in place. Well, not to want up your story, but I bought a house a few years back and the family had 13 raccoons living in the attic. Wow. Did they do that the wreck? Were they aware?

No. They were actually out of town and the house was vacant until they came back and found just a huge mess. There was about a $5,000 bill. They had to replace all the insulation and, you know, some drywall work. Fortunately, they stayed in one corner of the home, so that really helped. But you got to get critters out of there. There's a saying no good could come of it.

So you got to get them out. All right. All right. Good advice. Good advice. All right, well, why don't we move on to the last segment of the show, which we like to call the Famous Four? All right, the Famous Four, these questions are the ones we ask everyone.

You've listened to every one of our shows, Philip, so I know you know what's coming. Number one, what is your favorite real estate book? Well, guys, I have a confession to make. I might be the only person that hasn't read Rich Dad, Poor Dad. So knowing that I was going to be on the show, I read it last week. And it's a great book. I mean, so I hate to be cliche and go. with it. But what I really, really liked about it is that I'm kind of already putting a lot of

those things in my life into place anyway. So it was just more of an affirmation of, hey, you're on the right path. But I do think anybody should read it. That's just right on. That's what it was for me. When I read it, it wasn't so much that it taught me. It's more to it affirm. That's a good way saying it. It affirmed all those things that were like swirling around up in my head somewhere and like put them on paper. And I was like, oh, somebody else gets what I'm trying to say. And then I find out there's like a whole community of 170,000 people who agree with them, trying to say. And kind of for Joshua, too, you know, we talked about education earlier.

I mean, we've been taught so many things that have nothing to do with what life is like. And so I think that that book kind of made you look at life a little bit differently. And a good example is that we're getting ready to talk about the hobbies and the cars and expensive cars again. Instead of me going out and paying cash for our expensive car, I'm looking at ways to what, how many asks us, do I need to buy to pay for that car? And I just think that's the greatest part about it, is that we have to change our brains a little bit. All right.

So next question is, what is your favorite fantasy novel? I'm going to go with my favorite business book. Oh, is that the question? I don't read. Oh, who changed my notes? Come on. Yeah, no fiction for me. I'm kidding.

I know. Yeah, what's your favorite business book? For me, it's a book called The Big Rural. Rich, Brian Burrow. It's about the history of the oil business, how it's changed this country. And it's just a great read. It's, you know, has some huge arcs. One of the, what was the family's name, the Hunt family, he decided he was going to buy all the silver in the world. Wow. And it backfired on them. And so just, you know, these guys, these entrepreneurs that, you know, said they try to do things that couldn't be done. And it's just a great read. It's one of my

favorite books. Cool. I haven't read that one. I'll check it out. All right. Josh, I want to take the next one? Oh, yeah, yeah. Sorry, I was sleeping at the whale there. Whoa. All right. Did you forget to unmute your mic? I did. I completely, you know, there's like a wicked thunderstorm happening right now, so I've got to mute it every time.

Nice. There's, I'm not talking. So, yeah, next question. Hobbies. Other than your fancy, expensive cars, you show off. No, I don't. I'm just, I'm kidding. I'm kidding. You know, I like to look at them. Fortunately, I have a joint partner that I do have some side deals with. And his family actually hit oil down in Texas. Oh, nice. He has an Audi R8 and Nissan GTR and he's buying a Tesla. So anytime I get the it, he just throws me the keys. So that's really, really helped me. I need that friend. We all do. He's a great guy.

He's like the friend of anybody who wants a boat because, you know, the two worst. day on a boat owner's life of the day you buy, the best days of the day you buy and the day you sell. So, yeah, right on. So yeah, that helps me with my, as far as hobbies, it's sick to say, but I really like to look at real estate. My wife and I just went to Los Angeles and we spent half the time or more just looking at estates in Beverly Hills. Nice. And Malibu and, you know, just just looking at real estate. I saw a $20 million lot. I was on the water. I just like to look at, I mean, I really love real estate. So it's what I do even for a hobby. Yeah. And you said you have a son when I cut you off earlier in the show. It was a big fat jerk about it. So let's talk about your boy now.

Sterling, he's 20 months old and my wife is pregnant. We'll have another baby in August. Mazel tonight. Kids, yes. Congrats. Very cool. That's great. It's great. I love being a dad. Yeah. Awesome. All right. Well, final question. What do you believe sets apart successful real estate investors from those who give up or fail? I have a couple, but let me just, I'll just read them. I start. I start. Stop blaming others for my failures. People don't do that. They blame everyone else for everything that's wrong.

And once I stopped blaming anyone else for my failures or my shortcomings, it's really helped me be more successful. The other big thing is I play ping pong all day long. And what I mean by that is in business, something comes my way. I try to hit that ball back as soon as I can, put that whatever's needing to be done back in their court. So that way, when I go to bed at night, I don't think. oh man, I forgot to send that lead-based paint or I forgot to do whatever it was.

I go to bed at night knowing that everything else has been pushed back that I can push back into the other piece, you know, the other side of the table, I guess you'd say. Gotcha. That's great. Yeah, I think I've never heard it described as ping pong, but I think I do the same thing. And, you know, although that could lead to a frantic and very busy, I'm always having to get back to somebody type of feeling, which Brandon's actually been yelling at me about and I'm trying to do less of that. Sure. My wife yells at me about it too.

So I'm trying to take some time in the evening to where the phone's not on, you know, just to kind of help with that. Now, that's great. That's great. Awesome. My other big thing is I'm really never satisfied with being mediocre. I look at life as a, you know, if there's a game to play, I want to win that game. Yep. And so that's just a drive that's inside of me. So I think that sets me apart than a lot of other people as well. That's awesome. Nice. Nice. And really quick, thank you so much. Where can people learn more about you? And by the way, as I was telling you guys, there's a storm because I had to mute. We are now in a full-on hail storm. It is wicked. The car is outside. There's like almost golf ball-sized hail

cranking around out here. And you could hear it if I shut up for a second. Nice. Nice. Nice. Be careful. So, yeah, I'm inside. where, where, don't have to worry about it. Where can people learn more about you? You can find me at fasterhouse.com. It's like run faster. And you could also email me at Philip P-H-I-L-L-I-P at faster.com. Cool.

Very cool. And of course, you're on Bigger Pockets all the time. I see you there in the forums. And we'll point to that in the show notes here, all those links. And at BiggerPockets.com slash show 71. and Josh is taking a video right now of The Hail, so he'll put that up on the show notes as well. The hail, yeah, this is awesome. We're going to put that on the show notes.

With that, Philip, thank you very, very much. This show has been incredible. We've had a good time. I learned a ton from you. Yes, did I. Yeah, yeah. Watch this, Josh. Despite our debate.

Despite your debate. Okay. Listen, I wasn't mad at you. I'm not mad at anyone. I'm mad at the people who are being shady. I hate that. Yeah, yeah. I agree.

All right. Well, I'm going to take us out then because Josh is busy making videos on his phone. Oh, it must be nice. Yeah, take it out, Brian. Take out the whole, let's do the whole tail end of the show right here. All right here. Here to go. All right, everyone. Philip, once again, thank you.

Everyone else, you can listen to the, you can, oh, I screwed it up already. This is why I do it. All right. Fine, do it. Do it, Josh. Take it. Oh, come on. I'll give you a show up there, big guy.

Come on, Slugger. Forever. Okay, here I go. I can do it. For everyone else, everyone listening to show can find the show notes at biggerpockets.com slash show 71. As always, we love reviews and ratings on iTunes. So please, if you've not done that yet, it really helps us stand out. It helps people learn more about us to find us on iTunes, all that good stuff. So please do that. Also connect with us, Facebook, Gplus, LinkedIn, YouTube, and Twitter.

I'm a big Twitter fan. And jump on bigger pockets. We love, we love interacting in the forum. So come say hello. And with that, this is Brandon 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 hype, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. See, it wasn't that easy, was it, Brandon? Thank you all for listening to the Bigger Pockets Real Estate podcast.

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