Epic Real Estate Investing - Virtual Wholesaling! Reality, or Myth? with Lisa Nilson | Episode 95

Episode Date: March 31, 2014

You'll find no shortage of "how to" programs on virtual wholesaling, but is it really possible to operate your wholesaling business from one location and transact real estate in another? Matt Theriault takes a break from the Living the Dream Series, of which will continue next episode, to share with you his experiment to establish whether "virtual wholesaling" is real, or a myth. Matt is taking a total newbie, Lisa Nilson, through the virtual wholesaling process step-by-step. Listen in and hear about her initial results, and they aren't what you think. Enjoy! ------------------------- Say goodbye to your favorite podcasters. It's the end of podcasting as you know it.http://fundanything.com/patenttroll  ------------------------- Join Matt and his team on the next Cash Flow Savvy Property Tour on May 1st & 2nd. Get the details and register here: EpicRealEstateTour.com Download the free real estate investing course "How to Do Deals | No Money Required" at FreeRealEstateInvestingCourse.com or text FreeCourse to 55678 "Click" what interests you most:    Education Properties Income Coaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Yeah. Hello. Hello. And welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, welcome. Super happy that you're here. And if this is not your first time, welcome back.

And you may know this, you may not. This is the place where I teach people how to escape the rat race by investing in. in real estate. And if I were to do this all over again, if I had to start from scratch, I'd do it exactly the same way. And I would do it exactly the same way, whether I had money and credit to work with or not. Now, I'd certainly, if I had the credit score, I would certainly take advantage of these bank loans today. I mean, the all-time lows, those are great rates. But other than that, if I didn't have access to it, I would do it exactly the same way. And the reason why is when I was getting started, I kind of stumbled upon, I guess.

You could say I discovered, I created, I kind of just came up with 12 different strategies of investing in real estate with little to no money. And in hindsight, you know, being forced to invest that way with, you know, with minimal resources, I believe that made me a much better investor. And today I've got money to work with. I've got access to credit to work with. And I still don't use it very often. And I'm just a better investor for it now.

And I think the intellectual currency that I've acquired along the way has, you know, negated the need for a lot of the actual currency. So I'm just, I've become a better investor because of how I began, and I want to make you a better investor as well. So I put the first two strategies, the two of which I believe are the easiest and fastest strategies to a paycheck. I've put them into a free course just for you. And you can access that free course at free real estate investing course.com.

Or if you can't wait to get back to your computer, if you happen to be in the gym or in the car, and you're listening, you know, via your smartphone, I've got something for you. you can download the free course right there on your phone by texting free course to 55678. And you'll get the two easiest and fastest strategies to a paycheck right there on your phone. Now, we're just a hair over a month away from the Epic Real Estate Tour in St. Louis. That will be May 1st and May 2nd. We'll meet the evening of the first for a cash flow workshop and then a happy hour reception, one of my favorite parts, all on me.

And then the following day, May 2nd, we will take a tour of St. Louis in a private vehicle, of which we'll preview some before properties and some mid-rehab properties and some finished properties. So you can get an idea of the type of work we do over at Cashflow Savvy. Then we'll go ahead and we'll break for lunch of which you'll get to meet the entire St. Louis team, my team. You get to ask them all the questions you want. You get to ask me all the questions you want. And then we'll break for a few hours. We'll go back to our hotel rooms and where we'll close. our thoughts. We'll get cleaned up and then we'll reconvene later on that night

atop one of St. Louis's tallest buildings where there's an awesome restaurant, whole view of the city, 360 degrees, where you can just see everything and it looks right at the St. Louis Arch. It's awesome. And then there we'll get to eat and talk some more and just hang out and have fun at that point. So to attend, it's $597 per person. You do have to pay for your travel and your hotel accommodations. But everything else is on me. It's all covered under that $5.97. So to register and reserve your seat, go to epic real estate tour.com. And I noticed a couple episodes ago, I gave out the wrong domain name.

It's not Epic Property Tour. No, no, no, no, my bad. It is Epic Real Estate Tour. So hope you can make it. Would love to meet you. Okay, so, you know, one thing I love about getting your emails, and they are coming in like crazy, and I appreciate that, and I love reading them. Sometimes it's a little time-consuming.

It takes me a little while to get back to you, but I do get back to all of them. But one of the things I love about them is they tell me so much about who listens to the show and the challenges that you face in your real estate investing business. And one of the more common questions or one of the more common issues, I don't know, subjects that comes up is how can I wholesale virtually? And I've been getting this question for years now. And although I personally do a lot of wholesaling virtually, I have multiple teams in place in the markets where I do wholesale that enables me to wholesale virtually fairly easily. but when someone asks me how can they get started wholesaling in another market, something that's not convenient to them to travel to, you know,

I'm a little bit hesitant to tell them to just go for it without first having, you know, a team established there. Now, I've heard and I've seen other gurus out there give words of encouragement about wholesaling virtually and how easily it can be done. However, I just, I can't give an honest recommendation and or, you know, an opinion about it to any and everybody. just that it can be done so easily. Because I don't think it can be done so easily,

especially if you're just getting started for the brand new investor, I don't think it's that easy. So, you know, given the amount of times that I received this question, though, I figured it's time to, you know, do something about it. It's a big concern for a lot of people out there. So let me address it.

And I decided, you know, basically just to put together my own little experiment, to do my own little MythBusters style experiment right here in my office on virtual wholesaling. And I think I've mentioned this recently that I've been working with someone here in the office on this.

I've kind of touched on it casually. It hasn't been really major subject of conversation, but I've touched on it. And I thought it would be a cool idea. Actually, a podcast listener that I recently had dinner with, Nick, he said,

I should discuss this experiment before it succeeds rather than after it succeeds like I had intended. And Nick thought it would be cool and have more of an impact to the audience if we did it that way.

If I let the audience just kind of follow along from the beginning until we reach success. And, you know, I immediately slapped myself in the head and thought, well, why didn't I think of that? Well, one of the reasons I didn't think of it is because I wasn't, you know, I don't know if it's going to work or not. But I guess that's the whole point. We want to be transparent here. We want to see what's applicable. And, you know, and let's see if it's possible. Let's see if we can bust this myth of that, you know, virtual wholesaling is possible and available to all of you.

So I took on the challenge. Thank you, Nick. I appreciate the suggestion and I've taken your suggestion and I'm running with it. So on the phone, I'm joined by my lab rat. Just kidding. She's actually not a rat at all. She's a very good friend of mine who has had a burning desire to get involved in real estate for quite a while, but for one reason or another, you know, she's had a couple hits here

and there but hasn't really been able to put anything together on her own with any substantial success. So, you know, needless to say, when I approached her about my idea, She was all in. There was no consideration. There was hardly a question. She just said yes. So that's the type of person that I wanted to work with, someone that really wanted it.

And I think she is just the perfect person for me to experiment on. So on the phone, I have Lisa Nilsson. Lisa, welcome to Epic Real Estate Investing. Thank you, Matt, so much. And I'm so grateful to be here. Yes. I am grateful that you're here too. I'm grateful that you've donated yourself to science.

But real quick, Lisa, can you take a quick 60 to 90 seconds and just kind of share your background? Yeah, absolutely. I'm outside sales. I work for a medical referral company. And what that means is we have a network of doctors that we market for. And so I market to attorneys. And so I've been doing that for four years. And I've definitely always wanted to do real estate investing.

I tried short sales for a short while. I didn't work out too good. And so, yeah, so I'm just outside sales now for the company right now. Okay, okay. And you just got married? Mm-hmm, a year and a half ago. And you just moved into a new house? We did, we did.

So we're excited. Well, congratulations to you. We've known each other for a while, and I know that you've been interested in real estate for a long time and, you know, no big results. Yeah, what do you think the reason for that is? What do you think was missing in your process that's kind of prevented you from really connecting the dots there? I think it's all mindset.

I really believe that in the last couple years I've been doing a lot of personal development and reading books and just mindset. So I really believe that I really, you know, let that get in the way of my success and just giving up and, you know, not pursuing it. Inconsistent with it. So I really believe it was mindset. Okay, okay. Well, if all goes well, hopefully we'll change that and we'll get you up and running.

so you're self-sufficient and you can do as many deals as you want to do. Sound good? Absolutely, absolutely. Perfect. Okay, so I'm taking Lisa through the process of wholesaling and I'm incorporating my concept of learning at the speed of instruction, the whole concept of travel as far as you can see, and when you get there, you'll see further. So I didn't give Lisa a big course up front.

She's not an epic pro-academy member. I didn't take any sort of any significant time to prepare her. We sat down for maybe 15, 20 minutes. And once she made the decision that she wanted to do this, we just got started. So the first thing we did is we decided which markets that she wanted to work in. And we determined that based off of what her end buyers are looking for. That's what everyone should do. You know, you kind of want to get an idea of what you'll be able to sell,

the people that you have contact with and what they're going to buy. So that's a good idea of what you should go out and be looking for. And since she's just getting started, though, she doesn't have any end buyers. She doesn't have any buyers in place. She doesn't know what anyone's looking for. So we didn't want to wait for that. And I don't think you should either if you're in the same situation. So together what we did is we decided just to use the buying criteria at epic wholesalers.

And that's a website that I've put up for people in the business that, you know, they don't have to wait to build their buyers list. And until they have their own buyers list, they can borrow mine. And sometimes it works. Sometimes it doesn't. I don't know. We're probably rolling 50-50 these days. But anyway, this is where she can tap into. my private list in case, you know, we're unable to find a buyer together. She can't find a

buyer on her own with the strategies that we're going to implement. So we took that criteria and we plugged it in over at listsource.com. We generated a non-owner occupied property list and a free and clear property list. So what that means, non-owner occupied, those are properties that don't have the owners occupying them. So basically they're rentals. The owners live somewhere else other than that property. And then we pulled the free and clear list. These are the properties. where there are no mortgages on them. They're owned free and clear. Okay.

And through those lists, it gave us the address of the owners. So she has all of her criteria and then her minimum deal stand is built in. We got all that by default using the criteria and deal standards described over at epic wholesalers.com. So that's where we are there. Now, step two, we've got to actually generate the leads. This is the primary, this is the business. You know, the more leads you generate, the more deals you're going to do. and your success is going to be in direct correlation to the number of leads that you generate.

So what we did is we decided to just get started using direct mail with the yellow letters. Okay, nothing fancy. The exact same yellow letter that I show you how to use in the free course. So, Lisa, how long have you been sending out the yellow letters now? For about two weeks. About two weeks. Okay, and then how many letters a day on average are you sending out? It ranges anywhere between, I started at 50 and then.

It went to 60, so about 50 or 60 a day. 50, 60 a day. Okay. And you're tracking all of this, correct? I am, yes. Perfect. Because when we're all done, we're going to have some actual numbers, some real numbers that are going to, you know, some stats.

So everyone can kind of see what it took for someone starting from scratch. So are you writing all of the letters out yourself then, 50, 60 letters a day? No, absolutely not. I started to myself and then I found two people that are doing it. for me and so I have one person doing 200 letters a week and so yeah she just started increasing her number and she wants to do more than 200 so I haven't even started to have the other person start. Okay.

And what are you paying her to write your letters for you? 25 cents a letter. 25 cents letter. Okay, perfect. So the phone number that you're putting on your letters, how they're going to contact you? What type of system are you using to receive those calls from your leads? I have a separate phone and then I have a local number in the market that I'm marketing to,

a separate number that is transferred to my phone. So I get all the numbers transferred to my phone. Okay, so the number on the letter matches the area code of the place that you're mailing to. Correct. And then when they call that number, it forwards to your Los Angeles phone here. Yes, correct. All right, perfect. So you sent out, I don't know, a couple weeks, 50 letters a day.

That's, what, 500 or 600 letters probably? Mm-hmm. Okay. I'm there. So after, you know, 600 letters, how many calls have you received? I have received. I know that I printed out 75 appointment sheets, so I know it's been definitely more than 75. That's huge.

That's huge. Yeah. Okay. So I know we have those actual numbers. We'll be able to report. those at the end. But even just the 75 and the 50, so we're right, I guess, what's that around 12%? I guess? Around 12 or 13%? But you're more than that. So I think we're right at 15% probably, right? That would make sense. Yeah. Oh, no, 75 would be 15% I think. Okay, whatever. It's more than 10,

so we're doing good. So I armed Lisa with a very simple script and I armed her with the seller information questionnaire. And that's it. That's all I've given her. And the script, it's the exact same script that I went over on last episode. I went over it a few times with Lisa and then she's been off and running and she's an absolute pro right now. So Lisa, what is the script that you're using when your leads call in? I just say thanks for calling and I just say, you know, tell me about your situation. Mm-hmm. Okay. And then I just, I don't say anything and I just let them talk. And then next, I ask them, what do you want to have happened? What do you want to have happen? What do you want to have Perfect.

And then the next I just say, okay, great, if I can make that happen, how soon would you be ready to move or how soon would you be ready to sell? Perfect. Okay, so that's it. And how are those conversations going just on those three questions? Are people pretty giving with information? Is it mixed? How is it?

What's your experience? Yeah. You know what? Some people, they love to talk and tell you their whole life story. And then there's some people that don't like to talk. And I have to, you know, continue to ask them questions, you know, why they want to sell or what the situation is. And I have to keep asking them questions just to pull it out of them. But some people just, you know, voluntarily like to talk and tell me their whole story.

And so, yeah. Okay. Cool. So it's mixed. It varies. And, you know, you just kind of go with the flow, right? Mm-hmm. All right.

So after you get those three questions answered and that part of the conversation, you know, is done, what's next? Okay. So then I ask them if they have about 10 minutes, and if they do, I fill out a seller information sheet and ask them some basic information questions about their property. And if they don't have 10 minutes, then I schedule an appointment so that I could contact them and fill it out then. Okay.

And perfect. So how is that part of the call been going? What's your experience this far? Was that the little... What are they giving them with information there? because there's a lot of information about the actual property and kind of their personal situation, their finances. How is that going?

It's going good. It seems like they don't really have a problem giving me information, but when I ask them, you know, reason for selling, they're kind of redundant a little bit. I ask them, again, why they're selling. And then a lot of them don't want to tell me that they have immediate cash needs. I think they're maybe a little shy. They don't really want to tell me.

And I just let them know, like, hey, it's okay. You know, if you have some cash needs, just let me know, because if you want to, you know, close that through in a few days, you know, we didn't need to know that up front. So I kind of let them know that that's the reason why I just need to know. And so then they kind of open up a little more. Super. So you let them know that there's an actual reason that we need this information. And, you know, I can't help you unless you help me, right?

Exactly, yes. Perfect. So was this a little scary initially or was it just no big deal? At first, it was a little scary. And then, you know, I just kind of created myself a little context that, you know, every time before I, answer the phone, I just told myself that everyone loves and trusts me and everyone wants to do business with me and everything I say is perfect. I love it.

So I kind of just, you know, got past that really fast and everyone was really nice. I mean, because I know you set me up to kind of expect some people being mean, maybe sometimes, and I really had a great experience so far, just everyone is overall pretty nice. Got it, got it. So now that you've rolled through at least 75 of these phone calls, how is it now? You know what? Now I know what to ask and it's just much easier now. I get through it much faster and I know what to ask and there was things I would forget

sometimes and so now I know for sure I have to ask certain questions and make sure not to leave anything empty on the sheet. Okay, super. Great job. So once you've got the seller information questionnaire done, what's the next step or what's been the next step for you? The next step is I go over and research on Zillow with you and kind of search the area and the market to what the current market is doing and plug in the numbers and, you know,

create a three-option letter of intent. Perfect. Yeah, so we just tap into Zillow really quickly. We're just trying to get a ballpark figure. We get an idea of what properties are selling for and then we get an idea of what they're renting for. And then we use the three-ups. option calculator, the little spreadsheet, and we've come up with three offers for each completed

questionnaire, and that gives us the info that we need to plug into the actual three option letter. That's how it's been going. You know, and by the way, if this is your first time hearing about the three option letter of intent, download episode 70 and 80, several episodes ago. But there I do a complete training on this particular letter, on the calculator, and I also give you a copy of the letter and the calculator. and I'm doing absolutely nothing different with Lisa than I did inside of that training. So, Lisa, of the three offer options that we're typically, you know, that we're typically making with the letter, we offered, the first one is a steep discounted cash offer, right?

Mm-hmm. Then we offer just sort of a rather traditional seller-financed offer. Mm-hmm. And then we offered a principal-only payments seller financed offer, right? Mm-hmm. Yeah. So we've done the exact same three offers on every single letter. We adjust the numbers, but the structure of those deals are the exact same.

So which offer are you finding that the sellers are more interested in? Offer number one, all cash. The cash. They want all cash. Yeah. And I think that's really interesting because we're asking for a really steep discount. And what I like about the three-option letter is that it makes that steep discount land a little softer because they see their alternatives that I could have more money if I just waited longer

to get it or I could have all of this right now. You know, I haven't seen so many cash offers accepted, but maybe that's an indication of what the climate is out there right now. I don't know. But do we have any of those accepted yet? Yes, I had, well, I have a few pending. I had to accept it. And so then we sent out the property management team out there to verify

and make sure that the repairs did not exceed a certain amount that we calculated. and to make sure, verify the market rents. And those two that were accepted, the estimated amount of repairs superseded what the seller, you know, had told us up front. So they didn't go through. But I do have a handful pending right now. Perfect.

Perfect. Okay. So that's it. Once the offer or once the seller has accepted one of the offers or they've chosen one of the options in that three option letter, do you have them? sign it and send it to you, correct? Oh, yes. I tell them, you know, if you could please sign this, this is just intending that you

want to sell your property to me. And I've had some resistance with a couple people. I just, you know, explained it to them that, look, you know, I know your time is valuable as well as mine, and by you signing this letter of intent is showing me that you're interested in intending to sell your property to me. So therefore, then I'll have my property management team go out there and look. But until I receive this, I can't, you know, send my property management team out there to verify everything until you sign it.

this. So then then they're okay and then they send it. Perfect. Perfect. Cool. So just giving them a reason why and then all of a sudden they go, oh, okay, well, if I want to sell a property, I guess I better do this. Yeah, exactly. Exactly. And some of the stuff. You're not signing your life away. I told him this is not no binding contract. It's just the, you know, intent. Right, right. It's just kind of, it's a little bit more formal than your word. That's all. Mm-hmm. Exactly.

So, you know, and you've heard Lisa talk about her property management team. You know, in our experiment, I just don't see a way of getting around, you know, needing boots on the ground. So you need someone there to confirm some vital information about the property. I mean, it is real estate. There's a lot of variables, a lot of moving parts. We always talk about that. And you need somebody that. I just don't see how anyone could do it without that. So Lisa has been able to leverage some of our relationships to confirm the information that she's needed. But don't let that discourage you. If you don't have a team in the market you want to wholesale in, it's not that big of a deal to create one. You know, we've gone over a team building on this show several times in the past. So I don't want to get deep into that right now.

But all you really need up to this point in the process, all you really need on your team is a property manager partner. That's it. And, you know, hit Google, hit the yellow pages. I don't know. Did they even make yellow pages anymore? I don't know. But hit Google and just, you know, and keep asking until one is willing to work with you.

Okay. So, Lisa, we've sent the property manager out a few times already to look at some of the potential deals, and you kind of already said this, but the results have been, the rehab, it's a little bit more expensive than what the seller thinks it's going to be, right? Right. Okay. So where do we stand now? You said we have some that we had a decline and walk away from, and we have some pending,

correct? Right, correct. And then we have a short sale. Okay. Oh, and we have the short sale, right? So what do we do with that? I forget, actually. You know what?

She just emailed me information and told me how much the repairs were and how much the market run is on that one. So we'll have to take a look at that one. Okay. Oh, that's right. Because that one was actually represented by a realtor, right? Right. Exactly.

All right. So the realtor had contacted Lisa and said, you know what? Why don't you go ahead and submit the offer that you offered the seller directly? So I think we're going to go ahead and do that. Yeah. Perfect. So Lisa, you're doing an absolute awesome job. You're being an amazing student.

Thank you. Let's check in another week or two once you've got that under your belt. And we'll have this conversation kind of all over again. and then you can bring us up to date with your progress. Sound good? Oh, sounds great. Thank you, Matt, so much. You bet.

Awesome. Thanks for pausing your day to share, and you can get back to your doctors now. And we'll talk soon, okay? Okay, thanks so much. All right, take care. All righty, so that's how you do it. Okay? It's very simple.

You didn't hear anything overly complicated there. Step one, you find the deal. Step two, you secure the deal. And that's as far as we've gotten. Okay, we've only gotten to step two is to secure. cure the deal. And you'll notice that Lisa hasn't needed a dime up to this point. She's been investing right now with no money and no credit up to this point. You know, other than her, I guess, her mailing materials and her friend to put her materials together in the postage. So this is where

you can take on some expense, but you need absolutely no money for the real estate itself up to this point. You know, this is what I mean by traveling at the speed of instruction. As soon as you receive instruction, you take action on that instruction. And that's what Lisa has been doing. I say, just trust me, just go do this and then go do this. And when they call, you say this. And when they, if they answer all three of those questions, then you do this. Okay, so travel as far as you can see. And when you get there, you will see further. So she, I don't even think she knows what step three is yet. I haven't, I haven't explained it to her because we're going to go into deeper due diligence there. But she's getting rather good at step one and two, right? You could tell.

And in just a couple weeks, she's already noticeably more comfortable. She's more competent. I didn't know about her little secret conversation that she has with herself when the phone rings. But whatever works, okay? And now she's to the point where she answered a couple of the calls here in the office the other day, and I just kind of overheard her. And she was just blazing right through. She was just blazing right through.

It was no big deal. And that's what happens through repetition. She's doing it right. Certainly I'm holding her hand during the process, but hopefully by you listening, to this episode and the episodes do come featuring Lisa, hopefully that can serve as a virtual handholding for you. You're going through one step at a time right with Lisa. So I had intended to continue our Living the Dream series,

but our conversation with Lisa took a little bit longer than planned. So we'll resume that next week. Okay, we'll read this, go back into our discussion of Living the Dream. And so that would be it for today. Okay, so I'm Matt Terrio and on behalf of Lisa Nilsson, we are living the dream. You've been listening to. Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education.

If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-Suite Radio Network. For more top business podcasts, visit c-sweetradio.com. Thank you.