KGCI: Real Estate on Air - Wholesaling, Buying, & Selling Strategies

Episode Date: June 20, 2024

Welcome back to another episode of the Agent Goldmine where today, Shelby and I are interviewing James Michner. And what we're talking about in today's episode, this episode is for you if you're interested in learning how to go to listing appointments and turn into an investor. So presenting three different types of options to the seller. One is regular listing. The second one is you buying it. The third one is wholesaling it. We're going to be talking a lot about wholesaling. So if that is up your alley, continue listening.

If not, move on to any of our other amazing episodes. Who do we have today? We have James Michner today out of Arizona. He's been an agent for over 10 years in coaching for the last seven. And of his coaching clients, he's had four rookies of the year. And so many of his clients make over six figures annually. He is a wealth of knowledge, especially like Ali said when it comes to the investment space. This guy, he has 30 rentals, 50% of which are paid off.

And he's really passionate about the investment site. So, again, Ali said it. If you're not into investing, this one's not for you. If you are, buckle up buttercups and let's fucking go. In case you do not end up listening to this episode, but you're curious on how to pay off your mortgage super, super fast. We mentioned toward the very, very end, the shred method, which is how I, I mean, I came across the shred method through Shelby Five Pillars.

And so if you have any questions about paying off your property, either for yourself or for your clients, hit either one of us up. We'll get you started. I want to talk about more. Okay. And guys, that's it. That's all I have. Allie Moore, more. Yes. No, just kidding. No. Let's get the show started. James, I know that you are passionate about turning real estate commissions into passive income. That's something that Allie and I are actually also super passionate about. We've been on the bigger pockets train for years, investors. And so you are our type of people. And I would love to know more about, because you're a coach too. So I'd love to know more about what are, what's your

process and method for helping agents turn those commission checks into passive income. Well, it's funny that you brought up bigger pockets because that's kind of where I really got going on this, right? I would listen to their podcast all every morning when I was working out or going on hikes. And I was finding that real estate agents that were on this show were there because they had invested all their commissions into passive income. such as private money notes, fix and flips, the wholesale, the retail turning into them buying it as a rental property. But the majority of these guys bought rental properties or invested in the private money notes. And I knew early in on my career, probably two years in that I just didn't want to practice real estate that hard for that long.

So I needed to make as much income as I could to use that income to put into past, to put into rentals, private money notes, fix and flips, wholesale deals. and really build out my team to make everything as passive as possible. Tim Road and I don't know if you know him or Thatch Newton or Rock Thomas were guys that I actually reached out to personally and did a little bit of one-on-one coaching with them because they were in real estate. One of them, Tim was in real estate, I think 10 years before he was able to retire off of his passive income. And that was primarily through real estate investing in a rental properties.

So reaching out to those guys, that's what helped me out a lot in listening. those podcasts. So what I would do, especially in the beginning, is the first year I made 47,000, then 180, then 300 and 600 and so on and so forth. In the past four years, I've made over a million dollars and a year. And what I wanted to do is take that commission income and reinvested in the thing I know best, which is real estate products, right? Just like I had talked about the four previous to that. And when I started doing that, I started doing house hacking as well. If you guys are familiar with that. So my wife and I, we were living in a, in a rental and she wanted to move out of it. And our rent was like 400 bucks. I'm like, we're saving so much money doing this, right? So I reached

out to a couple of my colleagues and they're like, hey, I got a really good duplex that you could buy. And it's not on the market yet. Do you want to take a look at it? I looked at it that night, bought it. And I ended up renting out the other side for 900 bucks. In my monthly mortgage was 350 that I was having to pay, right? That property I bought for a hundred and 95, thousand is now worth 550,000. So what I did is I kept doing that over and over and over again for the first six times. So then my life, we can't do this anymore. Right. But that switched my mindset to if I go on these listing appointments, let me see if I can buy this myself or I can sell it to an investor through my wholesale or I can fix and flip it. Right. So that was a huge thing

for me. And fast forward a decade later, I now have 30 rental properties, a cash flow about $300,000 a year on that, which is amazing. And not only that, those properties that I bought were worth $4 million, and now there were $12, $12 million. So there's about now my net worth is right around $10 million just in real estate. And then there's cash assets as well and other stocks that I have, which are given in stocks because I like the passive income from all that, right? So conservative growth on that.

So for me, what, what, I found is that I need to follow a blueprint, right? And my guardian father, when we were sitting at breakfast one morning, he's, I said, what got you in the real estate sales? And he said, I wanted to be in a industry where if I sold, I would make the most amount of money I possibly could, right? So I got in real estate. I like sales. And I wanted to be in an industry where I got the first dibs on the deals. So I followed his blueprint. And he owned 24 rental properties. He was cash flowing about, 400,000 at that time and all of those were paid off. So he retired at 55 years old, whereas my friends that were doctors, lawyers, CEOs, and whatnot, their dads were still working.

But he was able to leverage all that commission and put it in a real estate, which allowed him to retire. So my biggest thing is investing in rental properties. Then my guardian father also told me about private money notes. I'm sure you guys are familiar with private money, right? So you lend to somebody that is looking to buy a rental property or do a fix and flip. And the first one I ever did, I was flying to Washington and I was talking to a buddy and say, can you loan me like 250 grand on this house in a neighborhood? I knew really well, right? It was probably worth 350,000. I said, absolutely. He was going to pay for the repairs. He ended up fix and flipping that in eight months or eight weeks. I made $12,000 on that. I'm like,

that was easier than buying a rental. property. So then what I did is I built out a company called Titan Capital Investment, and now we loan private money. So last year, I loaned out $4 million in cash, and I made $250,000 on that just on the interest alone, not including the points or anything like that, right? And then what happens is once you start doing a lot of those investment deals, your name gets passed around the community into other real estate agents. So I started leveraging my relationship with other real estate agents. And last year, I got four fix and flip deals that I made $200,000 on because I got the

first opportunity to buy those because they knew I closed on properties. They knew who I was. They knew I had the cash to do it. And that's just giving you a snapshot of one year, right? It was $200,000 on that, $250,000 on the interest and then $300,000 on the rental income. So my biggest thing that I want to tell real estate. agents is don't give those deals away to other investors and whatnot. See if you can take that down or you can wholesale a contract rather as well. Because when you wholesale a contract instead of

making five or 10 percent or sorry, two to three percent on the commission, you're making $5, $10,000, $80,000 on a $300,000 deal, right? And they're still winning. They're just not taking all the proceeds from that deal and sucking it dry and then not giving it back to you because they keep it as rental or their cousin gets in a real estate. So they end up listing it with him. So passive income has absolutely been my number one thing for the past eight years to make sure that I get to a point where I get to choose what I want to work, which is right now. So then what do I get to do passive income set up? I get to do passion projects, right, which is still buying more rental properties, building out my wholesale business and my private money business.

But my newest one is now coaching because I want to teach real estate agents how to take that commission and find those deals and take those deals rather than passing it on to somebody else. Because if you if you look at it from a 30,000 foot view, we as real estate agents have the best access to the number one things that makes millionaires in the United States through real estate. So there's no reason that real estate agents should have to be working from commission to commission. check. Exactly. Yeah, we we say this like all the time. So we're like right there with you. Also, I used to be the the co-host of Invest 2-5. I don't know if you've heard of it. Craig Karloap. He's a bigger pocket published author. I want to I want to make the introduction. So that way you could be on his podcast too. So I love that. Yeah. With with in the beginning when you mentioned you were house hacking pretty much your way when you first got started. You're an agent.

you have a spouse and you were you asked your sphere and hey you know like we're moving out of this four hundred dollar a month rental does anyone know of anything coming up i think you had you had put yourself in a position where you were surrounded by investors already so you were in that sphere you had a good network what would you suggest a couple questions here what would you suggest for those that maybe don't have that those connections maybe they haven't joined a crew like yours a crew like ours where we're like investors first, you know, so they're not there yet, but they know that their spouse wants out of where, you know, wherever they're, wherever they're doing. But they still want to house hack is, it's one thing, I think, a big mental shift. And sometimes it's what hurts agents to go

from just being an agent to an investor as well. The really, really good in between that everyone can do is house hacking. So how, what would you suggest to agents to get into house hacking? And personally, with your with your story how many times did you house hack until until you stopped house hacking and how did that grow your net worth and then we'll go more into agent stuff since our audience are more like their agents yeah so one of the biggest things is you said mindset right because it's super scary to start investing in a real estate especially if you're newer and you don't have a like a couple hundred or million or two million dollars saved up so you need to get into the mindset right Which the best way for me to do that was to network with other individuals who have done what I wanted to do.

Because you'd ever want to ask directions from somebody that's never been there, right? So that's one of my truest quotes that I love. So I always reached out to people that knew what they were doing in my community. And I only have 150,000 people, right? And our here, and our average income is $40,000 for a family, like $40,000, so there's not a huge amount of people that are doing. this, right? But how did I expand that network and my mindset was watching bigger pockets and going on a different forums and then watching videos on YouTube on this stuff, which helped simplify it and not make it as big of a deal as what it was. So the first thing that's always

really hard is to do your first deal, right? So after you do your first deal, you're like, oh, that wasn't too bad and it's worked out really well. Your second deal, man, that was great. And then you just get in this flow. You're like, damn, I am making some great. money on this. I love this. Let's just keep this going. And so you can hire a mentor. You can listen to bigger pockets or some podcast or you can watch YouTube videos and reach out to your network. So those are the biggest thing as your mindset. One of the other questions you had is how many did I do this before my wife put the kibosh on it, right? And that was six of them because we moved 11 times in the last 10 years and six of those were to properties that we had

bought, we lived in for a little bit, and then we moved out and put them as rental properties. And why did we do that? Because when you buy a property as an owner, you have to put less down, you get a better rate, and you can have a little bit more time to find that deal. And you're constantly building on the next one, right? Whereas we went from a duplex to a single family house, to a bigger single family house with amazing view, to an even bigger. And so it just stepped up. But there's a point where my life, hey, we have two kids. I can't do this anymore. We're removing from house to house and kind of disrupting our family and whatnot. So what that happened is I need to figure out, okay, if I can't buy these with owner financing

and live in them for a year or two to kind of build up, what's the next way that I can do this to really get this going? So I had to talk to lenders, mortgage brokers, and see what the next best step was for me, right? And understand how much it was going to take with the down payment, where to find the best deals and who I needed to network again. So a lot of that was getting in touch with a good mortgage broker, finding one that wasn't going to charge me too much and that offered competitive interest rates and that had my profile set in their systems. Because if you go from lender to lender to lender as a real estate agent or any 1099, there's so much paperwork that you have to send in, right,

especially when you have properties. They want everything plus your blood type and like the, you know, first secured note of your first child and whatnot. So they want everything on that. So really building out that network of individuals from your sphere of influence to stuff online to mortgage brokers was huge for me in that realm. So that was a big part of it. Six times were, was that like once a year, every year for six years? It was once a year for the first three years and then again, every once a year or nine months then it was one year then it was another year and then we went 18 months and then we just slowly we stayed in each place a little bit longer than the next because as we got up in the in the properties they become more comfortable right and it wasn't until i

found this lifestyle yeah lifestyle and you know a couple of these like i door knocked the people because they came in on my website or the referral websites that i was using as a real estate agent and I would go door knock it. There'd be so many times that we'd be going dinner and getting done from dinner and we're heading home and I'm like, oh, hey, but I just got this text message from one of my lead sources and there's this deal right around the corner and they only want X amount of money, right? I would jump on that as fast as I could and go door knock them rather than calling them or I'd call them see if I could set up a point. If I didn't get a hold of them, I'd go door knock them. That way I had face to face because I found if I was face to face and I really

like the property. They were more apt to trusting me and doing a deal with me rather than talking to another real estate agent. And I would know what the pros and cons were of why they're wanting sell, what their motivation was, what their billing rapport with them. So again, they trusted me and I understood what their goal was and they understood what my goal was, which was huge. That's like the best way to use all of the resources that you as an agent have available to you that you're doing for clients, you know, people door knock for clients, door knock for yourselves. And because we've mentioned like this this episode is so like bigger pockets and I love it. And in case you haven't heard of Shelby's episode, Shelby was on one of the newest, the newest,

one of the oldest ones. Shelby's like, if you have a listen, her episode is 406. So if Shelby's a G, she's 75 fucking rental properties, who knows how many she has now, a shit ton. I was on bigger pockets. Rookie, do you want to write that down too? I'm just kidding. I'm just kidding. That's awesome.

I'm going to look to your podcast, Shelby. That's awesome. I loved it because it still had Brennan Turner on it. So it was like she's it was so old it was but it's October of 2020 and I still got Brandon and David which was pretty cool. But anyway James watched your podcast before. Well you know when you were like I was watching your pockets and all these agents were using their active income to fuel their passive I was like I literally said that

my episode. I was like that's my whole goal of being an agent I wanted to be an investor. I wanted to be an investor. I wanted to close all the deals so that way I could have these rental properties and my passive income and my financial freedom and all the shit. And that's exactly how I found Shelby. I was like like I never thought I'd be a real estate agent, but one day I was in the shower and I was like, you know what? I think I will be an agent. Who else? I know that's been an agent. And I resonated with her story because she was like prior military and I was like, I reached out to her.

I was like, dude, let's do something. Okay. I love that. Every time Allie tells that story, she always includes the issue. shower like 100% she was naked and I thought it's great I love it yeah anyway bringing back in James I have a question so you said earlier you mentioned wholesaling and wholesaling is like a very scandalous word in this yeah agent world so I'm curious to know about how you like I know in Arizona I don't know

what the rules are I can't fucking say but what how do you navigate the wholesaling you can't do that as an agent. Yeah, so that was a big thing for me, right? It was so foreign and it seemed so complicated, right? And then it's just like anything, like your first investment deal, the more you do it, the easier it is. And I did two of these, right? And then I got to my third.

And after that, I'm like, wow, this is really simple, right? And I always thought of wholesalers as like kind of slimy or whatnot. But they're really helping people out because there would be so many times where I'd go to listening. Real quick. James, can you explain what is wholesaling? Because our target audience, being agents, they might be like, I actually don't even know what that is. So can you start there?

Yeah, absolutely. So when I go to a listing appointment, I offered a list of property or buy it myself, right? And if they, because a lot of people don't want to list a property on the MLS because they don't want to deal with the showings. They don't want to deal with the traditional way of selling a home. They just want to get it sold for a cash offer. So I give them a CMA and I have them sign that of what they could get on the market. and the offer that I'm going to give them, which on a site built house is generally 20 to 30% market value, right, minus market value. And what I do is I write my name in there or my company's name

or a signee on that. That way, the or a signee allows me to transfer that contract to a different buyer. And then what I take is say there's a house that I get under contract for 200,000, right? But it's worth the ARV is 325. I'm going to mark that up to 2.30. or 235 and I'm going to take the amount of in between 200 and 235. So I'm getting paid a $35,000 commission or fee on that. And the seller's totally stoked because they didn't have to go through all the showings, right? But a lot of times what will happen is I'll list the property for the market value and I'll

put it on to my investors as a wholesale deal. So we've converted so many of these by going to the listing appointment and offering that. So the so basically you're going in and you're just putting your name on the contract or a signee, and then you're assigning that to another investor in your network or sometimes even out of state for that, that amount. And it's really, it is beneficial to the seller because for one, you get to, if you're going to go to the appointment, have three things in mind, right? Can I list this property? Can I buy this property for myself? Or can I wholesale it and give them those three opportunities so that you're not wasting any time when you go to

every, going to appointments. I can't tell you how many times I lost deals, especially in the beginning of my career, because I didn't understand what wholesaling was and understand their true needs, wants, and concerns. So those three things really helped me out in converting more of my listings to either me buying it, me wholesaling it or listing it for them.

But I always have them sign a CMA that says, this is what you could get market value. If you were to list property and this is what I will buy it for you. And then there's other disclosures in Arizona. There's a disclosure form that you need to let them know you're a wholesaler. Your intention is not to be, you're not going to be the only one possibly buying the property that you may buy it or somebody else may buy the contract from you. So that's that's kind of wholesale in a nutshell. And there's a lot of good resources online as well.

Yeah. That is super smart. Actually, quick, before I forget, what are some of those resources where people can look? I like Brent Daniels. He's awesome on YouTube. He's great. And YouTube is the main one that I would use for figuring this out or looking at wholesale coaches that have good networks built in place.

And then just listening to podcasts specifically, like there's wholesaling ink, which is a good podcast that focuses on wholesaling or Steve Trang's podcast, if you guys are familiar with him, which is real estate disruptors, which is all about wholesaling as well. And those give you great ideas, right? for that. But the main thing that I like about wholesaling is I get way more leads that come in. And I would say 10% of them want to do wholesale. The other 90% want to list the property. So I'm getting more seller leads, which I love seller leads, right? I personally, I don't like working with with buyers all the time. I would rather do 95% listings. And so that gives me, that gets me

in front of more seller leads than anything, which I feel is super powerful. And there's not a lot of agents that understand it. There's not a lot of agents that are willing to do it. And there's not a lot of agents that know those different, those different strategies to get those seller leads into you. Can we do some role playing? Yeah, absolutely. I would love to show, okay, us had a listing appointment. Us. I'm the seller. You're providing those three options. Last time we did an us, Albee and I, it was such a, remember, it was such a cluster. I'm like lost. So it's not an us.

It's Ali. She's solo. So yeah, I'd love to see like how you present these three different options to me when I, yeah, you know what? Okay. You just came over to my house or if there's anything beforehand you did. So let's take it from there. Hey, James.

Welcome to my house. Hey, Ali. Hey, I know we spoke on the phone and you were looking at getting the property on the market so you could move to Texas. And you kind of had some ideas and a little bit of reservations on whether you wanted to list it and have the house be completely ready because you have your dogs and you really just want to net a certain number to move on. I wanted to show you the three things that we can do for you and that's listing the property, the amount that you can get for listing it. I'm really interested

in buying it as a rental property and this is the price I could give you. Or I have a network of investors as well. There's about 1,300 and I do this on a daily basis where I'm sending out properties to these investors. And this is the price I could get you on the wholesale side. Now the listing is going to take anywhere for where the market's at. We're at 72 days on market. It's going to take you about 72 days to get that to get that under contract, 30 to 45 days to get it closed, which you're essentially looking at right around four months. Or if I buy it as a rental property, I could close on it in 30 days. And let me ask you, Ali, would you be open to carrying the note? Are you in a position to do that? That way you're getting residual income on this as if it was

kind of an annuity or are you wanting to just cash out? I would be open. I would be open. to both. I do know I want to close a little bit earlier than four months, but I also don't want to take just like a lowball offer. I want to sell it for the most that I can sell it for. So you want to sell it for the most that you can sell it for. Well, let me show you this. This is wholesale and this is a price that we give you. Obviously, I have to offer this price because we're going to be giving to investors. And there's going to be money that they need to put into it and a certain amount of income that they're trying to make a spread on it. And this is the offer that we can give you for the wholesale.

Again, the first one is four months, and this is a price that you'd get. This is what I'd offer you as a rental, and I could buy it within 30 days, or we can wholesale it. And generally, that takes about two to three weeks to get that under contract. I'm going to know in the first 10 days or so, if an investor's ready to make a move on that. And then we can close in another 10 days after that. So you're looking at about 20, 21 days for that process.

Which price works best for you, do you think? How much would I be able to get with the investor? So the investor? So the market value is $350,000. And let me show you how we do this. So what I'm going to do is I'm going to pull up my calculator in front of them. And I'm going to say generally we want to offer you about 70% of that. So 70% would be about $2.45.

But because your property is in really good condition, I think we could bump that up to somewhere around 20% on that. Because some of these investors also want to just have rental properties as well. So probably the maximum that we could probably get you. This would be net in your pocket. There's no closing costs. There's no commissions, anything like that would be $280,000. And that would be about three weeks that it would take for us to get this sold.

So $350 for the listing price. I could probably offer you about $300 as a rental prop as buying it as a rental for myself. But again, that's about 30, 45 days for me to close on that because I got to go through the lending. And then the wholesale would be $280,000. Again, that would be net to you. So you wouldn't be paying the commissions or the closing cost. What kind of timeframe are you looking at? I had two months.

But I also, you know, I don't want to do too much work to the house. So it's nice that we could sell it off without having to bring everyone and their mother into the house. But yeah, I don't really know. Well, what I would suggest because we do this all the time with a lot of our clients is why don't we try it on the market at that price of the $350,000? We can do the wholesale as well and see what kind of action we get on that. And that way, not only are you marketing to investors, but you're also marketing to the retail market. And then you have the choice at that point in time of which offer you want to take.

And honestly, you want to make the most amount of money that you can on the house. And I'm just giving you worst case, the average scenario, which is 72 days on the market. But we might be able to get this on a contract in the first two weeks or the first month and then have another 30 days for closing. So that would hit you, that would get you right at that two month period that you're looking for. But I would suggest doing it. That's what a lot of my clients do is they try both avenues.

That way they're hitting every single buyer that they can around the country and within our marketplace as well. Which would you feel comfortable of trying both avenues for that? Yeah, both would be awesome. Okay. Let's get that going. And then so we'll just have two different documents. I can get this rock and rolling.

And again, you have the opportunity to wait a little bit longer on the listing side or take that whole wholesale contract if you want. Awesome. Dude. Okay. Yeah. Oh. And that's the way I play it. I really like how I was, okay, so I see that for a lot of clients, sellers, they don't, they've never done this before.

They don't know the terminology. They don't know wholesaling. They don't know retail. They don't know. All I know is I want to sell a top dollar, but also do minimal amount of work. So I like how when I asked my questions, I was like, yeah, I don't know. You explained it. You didn't just say, oh, okay, well, then we'll just list it.

You'll explain it further without making me feel stupid. You know, so I, that is, okay, so is that typically what you do is you, you do the, the two options at once listing and like the wholesaling behind the scenes. Okay. So is that typically what you do is you, you do the two options at once listing and like the wholesaling behind the scenes? Yep. And I always try to be as upfront with them as possible and always try to push them

to list the property. That way, there's nothing that will fall back on me. And that's why I had them sign every single price that I gave them in case they ever come back on me, which I've never had happened. But I always try to, this is a human to human business, right? That's why online stuff is probably not going to take because real estate's very complicated. It's very emotional and there's a lot of moving parts to it. So I tried to build the reporter that I can be completely upfront with them and really do

what's best for them, which I feel is the listing part of it for to, get that going and be completely honest on all three sides of the deal for what they could make. Okay, James, I'm thinking about this from an agent who's uncomfortable with gray area. And I know this kind of loops back to like my wholesaling is like a gross word. Okay, so from a brokerage perspective, there is, you know, one opportunity where the brokerage gets a commission. And then there's another opportunity where I'm assuming you, because you're signing a listing agreement, you're signing some sort of representation document to list the property on the

MLS. And you said there's a secondary set of forms. So I'm just trying to think, has your brokerage at any point in time been like you pulled that, but I also see, you know, I'm in the know enough. I see you online. I know that you're also closing transactions outside of the firm. Are they, is there, has there been any pushback? Like how are you open and communicating with your brokerage on what you're doing and are they okay with it? Or is it kind of like under the table? type of thing. No, 100%. I try to be as open with everybody as it can. I've never been sued or anything like that, never been in any sort of arbitration or arbitration or mediation. So before I even join the brokerage, I asked them if I could do wholesaling and she said, show me your contract. So I showed it to

her and she said, as long as you write it under a different LLC name, then you're fine. And you're not running it through your actual retail business name or you're doing it through your personal name. And so they were totally okay with that. I don't pay them anything on this, right? And they are not obligated to in any way, shape, or form to take any of the hit if we end up getting sued because I put it under my personal name or a different LLC's name. So I was completely upfront with them because I want to know if I could do wholesale because I like wholesale, right? So, but they don't take any fees or anything of that. Okay. And my question a little different now is what is your, what would you say is your average commission versus your average wholesale assignment fee?

All right. So let's do this two ways, right? So my average wholesale fee is about $15,000. That average wholesale takes me about an hour to do. My average listing price is about $10,000 to $12,000, which takes me about 10 to 15 hours per closing on that. So if you're breaking it down by hour by minute, my dollar per hour is way more on the wholesaling side, but it's relatively the same when it comes to listing or whatnot, right? And sometimes you hit a home run and you make $65,000 on a wholesale fee. Sometimes you're just getting $2,000, but I don't have to pay anybody except for my disposition guy on that to help me. A disposition means sell it to investors, right? They do the marketing. So there's really not a huge out of pocket with that. Do you have an acquisitions guy

and a dispositions guy? What does your team look like for the wholesaling side? There's two of us. And then the other thing that's really important is having the right escrow officer to help you. Because a lot of these escrow officers, they don't want to do wholesale or they don't understand it. So I spoke to a couple of escrow officers and I found one that I really like and she understands a contract in and out. She actually gave me a copy of the contract that she would prefer us to use to cover all the ins and outs and make sure that we stay in compliance. Okay, gotcha. So are you doing acquisitions then? Yes. It's about 50-50 where I'm doing it. the beginning, I was doing the acquisitions, a lot of them. And then I started moving him

into a role of acquisitions and dispositions at that point. So I pay for the cold callers. I pay for the CRM, the leads that are coming in. And then if there's a couple of deals that I want to take down, or I know it's going to be a good wholesale fee, then I will go to the appointment and meet with her, meet with the individual seller. The reason why I'm asking is because, so I've done wholesaling, you know, for for a whole year, I did that in addition to agent stuff. And I just want to really manage tax architectations for the listeners out there because they heard you say that it took an hour to do a wholesale deal. And if you are doing, which that's always asking what's your setup and stuff like that, because it is a full ass business, guys, like when you are like,

oh, I'll just wholesale because it's easier. It is a whole ass marketing sales, dispo business. Like you, it's not just, I'll just do this. I mean, you can wholesale here and there. But if that's the direction you're going, do not take this, this venture lightly. You know, it is, it is a big fucking ordeal. Yeah. Let me go to Shelby's point. So when I first started in wholesaling, I didn't realize how important the disposition was going to be.

It was good to get the contract sign, right? But then you have the disposition, which is marketing the property, selling the property and finding the investors that you need to get in place, right? And you can only cold call so many people and ask them if they're willing to take a significant discount on their property. That's not market value. So if you're just solely focused. saying on talk to people, which is just your cold calling, that's extremely hard. So what we did

is I started implementing systems on my CRM, implementing the acquisitions on that, and then implementing different lead sources that we're coming in. And I can tell you right now that I personally, and it might just because I have more experience in retail sales, but I personally think that wholesale is probably one of the hardest things that you can do because it's a very hard to get up and going process, right? But once you get it going and you get your systems in place, it can be, it can be fairly manageable. But it all comes down to people, right? Who do you have helping you do this? What are the systems that you have in place? How are the conversations going? And just making sure that you have the right mentors and you're learning the ins and out of it. So you're not

going to my first year I did 36 wholesale deals. My second year was a very hard market. We did 18. And then this year we've done 12 already this year. But that, 18 deals that we did was very hard to get to get going. And we thought we were going to maybe close the doors at one point in time. But there's just like your real estate team, there's a team that you have to build on the wholesaling side as well. And that's, I think, where a lot of the, yeah, the upfront work in order to get to, for all like the machines to be spinning, you know, without you.

So that way you can get a lead and all you to do at that point after all like the work is done, then all I have to do is just call them, go to their house. 30 minutes sign something, you know, assigned it to somebody else. And and that's so that's like all the upfront. But then you also have to have a list of investors that are ready and able and willing to actually go through with it because there are a lot of people. I'm in Tucson by the way. So like we're both in Arizona and a lot of the wholesalers that I know it's just like unreasonable numbers. And then they say that they have a list of investors and the investors are like brand new investors. They've never pulled the trigger. They never will. And I feel really like negative saying that is just

the truth. So a lot of false promises, as you mentioned, like in the beginning with wholesaling. Yeah, for those that think that wholesaling is like the first step in to investing. Yeah. I want to, I want to switch gears a little bit to the your switch from being an agent to being a mentor and like why and just what I guess what does that look like now? So my big switch was I was doing a hundred hundred transactions a year myself while running the team and my investments, right? And once you, one day I took six listings myself, which was insane. And I got a call that evening from two of my team members, just thanking me for all the help I had given them and changing their career around.

And the fulfillment from that was massive, right? And I would go to different coaching. I'd be in masterminds. And a lot of people were asking me these questions on top of asking the coach. And a lot of people are like, you should get into coaching. You should get into coaching. Like you, you help out so much, you know, you've already been in the trenches doing all this. So for me, it was more of a fulfillment thing in a passion project, right? I love helping people. Like I don't make, I don't do business with my friends.

I make friends out of my business for the most part, which is huge for me as a real estate agent. I can't tell you how many friends I made out of that with my team members, my clients, friends that have, we've kind of known each other. Then I've helped them with real estate and they become even better. better friends. So for me, I love that relationship that I vote with people when I was helping them out. And I think there's just so much for a real estate agent to know than just by helping a buyer sell or buy or buy or buy in a seller sell. I want them to also experience what financial independence is, right? And leverage the leverage real estate because you're already on the front lines of that. So I really want to take people from doing 15 to 20 deals to doing 50 deals because

if you're doing 15 to 20 deals, it's just as much work to do 50 deals as it is that that 15 to 20 deals in my opinion, right? You just have to make a few adjustments in your business, which is getting a CRM in place, getting a transaction coordinator, hiring a part-time or a full-time assistant, and then you can move so much more. I talked to a guy the other day. I had lunch with them two weeks ago, and he does 50 fix and flips a month, right? I'm like, how do you do that, man? What about this, this, this? And every time I asked him how he did certain things, he said, oh, I have somebody that helps me.

Well, this person does both of those jobs. So it's he's making great money and he's not having to spin all the plates, right? He has other people helping him spin those plates. So for me, I just want to help people get agents get to a point where they're making good money and their take their budgeting so that they can take that commission income and reinvested into real estate because that's that's been the biggest eye opener for me is just how powerful it is to be a real estate agent with the commissions that we make because I know when people complain, oh, I won't take a 2% listing. Well, I will because it's a million dollar house. Like I'm making

$20,000 on that. Like how hard is it to make $20,000 in the real world? It's very hard. And if you keep your expenses low, you can save that money and then reinvest in real estate and you're making a good chunk of money on each transaction that you're doing. And you can make a very good living doing three to five deals a month if you wanted. So. Yeah, definitely, especially with, with, well, I don't want to talk too much about, you know, commissions, but in Arizona. Yeah, I'm not going to say that. Okay. Yeah. Okay. Yeah. I get it. What did you provide for today's golden nugget. So we have the neighborhood domination plan, right, Shelby? It's the one you look at it. I got it pulled up. It is legit. It is very pretty. Did you make

this in camera? Did you have an admin make this in camera? So it's so funny because I have all these outlines right. My brother-in-law is like, how did you do all this? Like where did you find the time? I'm like, well, I typed it up, had my assistant put it and make it all pretty and nice. And then we just worked on organizing it. So it is beautiful. Perfect. Okay, hit us with what it is. Yep. So neighborhood farming is always a big thing within real estate agents, right? And so I have a good friend of mine that's here in town and he does a lot of like events at his neighborhood, that he, that he, his farm area and he does a lot of mailers. I didn't want to spend a thousand bucks a month.

It was going to take to do those mailers and organize all that stuff, plus do the events. So I thought, hey, I've done really well with cold calling when it came to cancel expired for sale by owners and then some neighborhood stuff, but I've never actually focused on a neighborhood. So for 18 months, I focused on one that was five minutes for me across the street for me. And I cold called through that entire neighborhood and did my follow up. Within 18 months, I closed 36 deals and made over half a million dollars just by doing the calls, sending a thank you card with forget me not seeds and then setting them up on home bought. And my my sweat equity paid off massively.

I might have only spent, I mean, if you count the data in the dialer in the thank you cards and whatnot, maybe $10,000, $15,000 on that. And it was all sweat equity because a lot of people, they get these postcards and they just throw them away, right? Like they're not using them. Whereas if I built rapport with other people in that neighborhood, they trusted me, they liked me. I knew their neighborhood inside and out.

And then I would develop a friendship with them. So even people that didn't sell always referred me people that were in that neighborhood either to their neighbors or their friends that were wanting to look look to buy in that neighborhood as well. And it was just like an aha for me because there's other ways to do neighborhood farming than just sending out postcards or doing events in that neighborhood. Now, if you mix that all in, it's going to be incredible. But I wanted to focus on cold calling and try that out.

And I was like, the first three, four months was very hard, right? Because you're just getting in. There's other people that are doing the postcards and they're already farming it. But the more conversations I had, the more closings I ended up getting. And it was probably that four-month period where I started getting closings. And then after about nine months to a year, it was just like boom. It was just coming in. People were looking online for top selling agent in Quailwood and my name would pop up.

They would look at the reviews and they would be calling me themselves without me even actually touching base with them because of the system I built out there in the transactions I had done in that neighborhood. I want to ask, have you ever heard of the shred method? No. Okay. Adam Carroll has developed a shred method and it's not the only type that you're, where you're able to do this. A lot of, there are different companies that do this,

but pretty much like it's a way to pay off your properties super, super fast, like in months instead of in decades. So, and I first learned about it with five pillars. And then I like became sort of friends with friends with, friends with Adam and like in one of our trainings I was like what the heck like you can pay off an entire mortgage in months I was like this has got to be a scam and I put in the back of my head for a year and then I was like you know what I heard them again like sponsoring some other conferences and I'm actually going to go see him like in two days the shred method I signed up and it was a way

it's so essentially what you're doing is you're getting a line of credit you're trading like the compounding interest of a mortgage and instead you're paying the simple interest based off of a daily average balance with the line of credit. And you're just moving money. So instead of like you paying the bank, you are getting your own line of credit. And it's a lot more you can find more information. Actually, with us, if you hit up Shelby or if you hit me up, we, we have affiliate links for a shred method because we are such big proponents on this.

And we tell all of our clients this. We tell our agents to tell their clients. So that way you're not just, you know, investors or even just regular home buyers, retail homebuyers, they can buy more and more because they're paying off these properties in one year instead of 30. So yeah, but yeah, I want to send you some information on the shred method because it's like stuff that will help your your agents also help their clients, help their investors, help themselves. It's it's crazy. It's it sounds so good to be true, but it's true. You know, like it's wild. Okay. And we're going to have Ali,

we're going to have you do a whole, you know, she did a training for our Five Pillars Nation, but and it was a hit. So we're going to Allie. We're going to have you do a show. I'm going to interview you. We're going to go through your whole process and experiences on this so the listeners can get that too. That's just that. Hey,

coming to do. Yeah. Yeah. Thank you for that. I'll look it up right away. So. I want to. No.

I want to. Oh. Yeah. No, All you do. It's all you do. I want to head to our wrap up since we're kind of coming up on time. Our wrap up questions. Or actually, you know what?

First, before wrap up, is there anything? that you want to mention like where you're headed or you know what you're what you're doing next anything that we didn't talk about of course we didn't talk about a lot you know but anything that you want to mention before we head to our wrap up questions just that everybody that's a real estate agent right now just keep your head up and know that there's highs and lows in this business and right now it's been pretty tough but the more work you put in now the more you're going to know when the market gets back up picking up and going and so one of the things i was super grateful for. In the beginning of my careers, I learned how it was during the slower part,

and then it ramped up and I hit that peak, right, during the peak time. And it was because I did all the work in the beginning to learn my scripts, learn my cold calling, develop my systems. And so when everything hit that peak in 2021, I had everything built up and I was free flowing with the conversations. And it just made such a huge difference for me to be able to close 183 deals myself, 300 over 300 with my team because I already knew how things were working. So think about it the same way. We're in a low, like we're in a low when it comes to the market, right? But if you keep practicing your skills and developing your systems, it's going to hit

another peak. And you want to be ready to capitalize on that peak as the time goes. So just keep moving on, improving yourself every single day by 1%. And I swear you will capitalize on the next upcoming market. Love it. Okay. James, what is your favorite app or tool? My app or tool. Life or business. Whatever are you feeling? My favorite tool is Vulcan 7 tied into Mojo, right? I love that because that's where I'm getting the best lead sources from. And then I like the dialer on on Mojo as well. And then if you're,

if you own rental properties, door loop has been pretty good to you. I don't know if you or if you have a suggestion for property management stuff or if you just have a property manager. But I really like those. Yeah, I'd never heard of DoorLoop. But then as soon as you said it was a property manager, you know, I'm running away. I'm like so over managing properties. My goodness. Okay.

Oh, you don't do it. I still do that. I mean, I do it now, which is why I hate it. So what events are you going to in the rest of 2024? So I am hoping to go to. Do you guys know who John Schwab is by chance? No. John Schwab, he wrote the making it big on little deals.

And so it's in Jacksonville, Florida. This guy's just a really good speaker. He's down to earth. He's just a really great guy. And he tries to break down real estate investing in a small way. And then I'm going to go to Limitless as well, which I really like Limitless. It's just a great, great event to go to. But all these people

Tony Robbins, right? What's that? Is limitless Tony Robbins? You know who he is because if you guys have been on bigger pockets, it's a, oh man, I can't remember his name. No, it's, he does jujitsu with Brandon and stuff and he's, oh, what's his name?

Thatch goes to it, Robert Kiyosaki. Is it Ryan? Murdoch? Not Ryan Murdoch, no. Let me see you some real quick. Google knows. But it's a great. I literally got to go to do.

or with Brandon, who you did the podcast with. I got to talk with Robert Kiyosaki. Let me see. I see a lot of people on the website, like Ken McElroy. Yeah, I got to. I had a couple drinks with Ken at the party that was there. So I'm literally talking to a billionaire about real estate. Like it was unreal.

It was so cool. That's dope. Okay. Yeah. And no worries. James, how can we and listeners help you in your business? I mean, just to help me, it'd be great if you wanted to reach out about coaching or just take those next steps as well in your own business, right? If you're a real estate agent right now, try to leverage that commission that you're making and put it into your own financial independence bank so that you're showing the way for other real estate agents to be able to invest in themselves in their business and in their family to get to financial independence.

So if you could do one thing for me as a whole is just help like spread this or spread other podcasts that you guys are sharing because it these are such good tools for real estate agents so that they're not just thinking they're on a hamster wheel having to go sale after sale and they can be more free with their thinking, more free with their their opportunity seeking and whatnot. And they don't feel like they're stuck in their pigeonhold in any type of box, right? So just take advantage of everybody that's. been in your position and then made it out and you'll enjoy real estate more in my opinion.

So yeah. And we need good agents that enjoy it and aren't taking, aren't just taking a listing and take a listing so that they can get a paycheck, right? They're being honest with their clients or being honest with their buyers because I think that's one of the toughest things as a real estate agent in my position is the agents taking listings at higher price than what they should and not being completely forthright because they want to hopefully get that. And it just gives a bad rap to everybody. And it gives more insight for those other companies take over real estate. And we have a great industry. And it's a beautiful

game. It's a beautiful journey. So take advantage of what we have here as real estate agents. For sure. And it feels so good in the beginning to trade your active income into passive income because the more that your passive grows, the fewer deals you have to do. And then one day you're just like, wait, I only have to do four deals this whole year and still put the life that I've been living, you know, like that. And then eventually, you know, you get to the point where you're like, I don't even think I want to work anymore. Life is good. That is that. That's a great point is now I, I mean, I don't necessarily have to do any deals, but now I'm excited to do deals and I don't have to overburden myself. And so it's put the fun back into real estate for me and

helping people. Absolutely. Allie, the agent on. Instagram, The Shelby Show on Instagram, hit us up with some feedback. Get today's Golden Nugget, which is a good one on the agent goldmine.com. It is for free. James, thank you so much for being on the show. We'll see you next time. Thank you both. Appreciate it.

Be a bro and share the show.