The Science of Flipping - Hacking Deals On the MLS feat. Ryan Zolin

Episode Date: May 26, 2022

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Yo, yo, what is up? Welcome back to the Science Flipping Podcast. I'm your host, Justin Colby. And on this episode, we have our guy Ryan Zolin joining us. What's up? What's up? What's up, dude? We are proving the myth that you can't find deals on the MLS. Okay. Mr. Zolin is absolutely crushing it. And by the way, if you're not watching this on YouTube, you should because we are live and in action right now, right here in Scottsdale, Arizona. So everyone jump over to youtube.com forward slash Justin Colby and watch this episode. If you're on iTunes,

drop five stars, but otherwise, Ryan, what's up, dude? Not much, man. Out here enjoying the conference, watching some of the speakers, getting to meet some cool people. Yeah, cool. So I have been doing this 15 years. I've done almost 2,000 transactions. And I will tell you, I've probably done, if I'm guessing, I've probably maybe done 150 of those 2,000 from the MLS. Wow. I've been educating for nine years. And for the vast majority of that, I've said, go off market. That's where you'll get your discounted properties. You, my friend, are changing the game.

Trying to. You are proving this old man wrong. I say that humbly because how old are you? I am 24. I am almost double your age. So there's making me feel bad. But talk to me about how you are finding properties, how this MLS hack that you've done and made so successful, how's that working? Sure. So it started back when I was 18.

I started off as a traditional real estate agent. So fresh out of high school, no college background, anything like that. I wanted to get in real estate just because college wasn't in the cards, but then also I figured I wanted to be an entrepreneur and my own boss, and this was the easiest route to go, full transparency. And if I didn't succeed, I was 18. What did I have to lose? I had nothing but time on my hands.

So I started off as an agent for about three years and I sold about like 25, 30 million. And I was like just an all right agent, nothing crazy. But the one thing I realized as an agent was that there's a few things. Number one, the hardest part of being a realtor is to find a willing, able and qualified client. The second part is that most people get into real estate for freedom and flexibility, which I think you'd probably agree with. And the one thing as a realtor is that you show houses when, weekends and nights. So there was no freedom. I transitioned over to the investment side and I was like, oh man, the hardest part of being an investor is finding a deal. So then I was obviously able to surround myself with a lot of guys being local in Arizona

that are doing it at a very high level. The one thing that I failed with from the beginning was comparison. So I was like, okay, well, I need VAs. I need to have acquisitions, dispositions, TCs, junior acquisitions, whole nine yards. And I failed very quickly because I realized, okay, I'm spending too much money. I don't have the skill set and I'm relying on right place, right time. So then I was like, okay, well, what if I could take the gap of people understanding that the hardest part of being the investor is finding a deal. The hardest part of being a realtor is finding a client.

What if I can just be my own client? So I accidentally did what I call now is the double dip in my very first transaction on the investment side where I ended up going and getting a deal on the MLS. I had myself as the buyer's agent, because it's just what I was familiar with. I got a deal under contract and then I wholesaled it out, just expecting to get the assignment fee. On the HUD, I noticed I had the commission come to me too. And I'm like, whoa, this is crazy. I'm double dipping. I'm getting commission and an assignment fee. This is insane. So at this point, I was like, how do I scale this? How do I just really double down on the double dip? And I failed forward. I kept continuously building relationships with agents, realized the flow of them not understanding how the process works. And then from there, we were able to really hone in on our process.

And I mean, dude, now we're hitting 15, 20 deals a month off the MLS and agent relationships, $0 in marketing, and we're clearing six figures every single month. Are you doing this here in Phoenix or are you doing it? Yep. So Phoenix is my primary market. I have some secondaries. It's Florida, Vegas, and Atlanta. But we usually pull like one, maybe two out of those markets every month. Other than that, it's all Phoenix. So let's walk through the process really quick. You're a licensed agent here. Correct. You go to the MLS. You find a deal that is listed that you've essentially underwritten, analyzed, comped, and said, there's margin here.

Yes. You then contract it as the buyer that is representing yourself, meaning you'll get the commission, but you're also the buyer. Correct. Okay. So you'll get your 2. a half to 3%. Yep. You also then basically just go find the right buyer knowing the buyer and say, Hey buddy, I know this is on the MLS, but it fits your buy box. Yep. Are you willing to buy it? Let's just say 10 grand above for sure. And they say, yes, that's it. Okay. Now do you get any pushback from your buyers about it being on the MLS and you're not giving them a discount?

I think that there's this misconception that people are like, oh my God, it's on the market. Yes, I do have buyers that are like, why wouldn't I just go to the listing agent? Well, it's a good question that you have. It's exclusively available through me. There was a bidding war. There was multiple offers on the table. I got it available. Like I said, it's exclusive through me. If you don't want to buy it, no worries. I do have the buying capability myself and I'll take it down if I don't sell it. So it's really not that complex. What people need to understand is what I said a minute ago, the hardest part of being an investor is finding a deal. So what I would challenge people, and this is what I tell all my students that bring me the same roadblock. I'm like, number one,

did you actually have that happen? Or are you asking me a hypothetical? Two, get better buyers. Understand, like I just said, again, investors' hardest part is finding the deal. If it's a deal, the numbers don't lie. It doesn't matter how they found the deal. So how do you know it's a deal for that right buyer? So this is a- Go buyers first. That's it. I was just going to say it's from Glenn Stearns. So the number one thing he always teaches is find your buyers first. So you go in, you qualify them. Going and trying to find a buyer in a market like this is not that hard. The hardest part is actually trying to identify, are you actually a buyer or are you just a

wholesaler that's going to put your fee on top and mark it up and send it out on the list? And that's why I use Privy or PropStream or any of the list sources that can show you these people are who closed on it. Correct. open corporates look up the corporation call them that's it i love it and it's funny because quite literally after educating as long as i have and probably doing 150 out of 2000 deals yep on the mls i've i've actually flipped it and because of benson and privy is kind of why i've really decided to do it is because their algorithm allows you to see the percentage of ARV. Yep.

And that's huge because, yeah, you're finding the real buyer, but now you know exactly percentage ARV they're willing to buy at. Yep. And you don't have to run some formula and call an agent and say, hey, I need, you know, 15% off a list price. You can literally contract it at list price. Literally. Yep.

And so do you do that in a general sense of like, ask your buyer where their buy threshold is, At list price. Literally. Yep. And so do you do that in a general sense of like, ask your buyer where their buy threshold is? Or do you always go in and ask for discounts based around list price? No, it's really what their threshold is. I have a handful of buyers that really don't care. Like it's not often, but we'll get deals that are at list price more often than not. It's like day one on market or like coming soon where, okay, yes, it was listed at 430.

My price is 445. ARV is like 600. Okay. Sounds good coming soon where, okay, yes, it was listed at 430. My price is 445. ARV is like 600. Okay. Sounds good. That's a deal. Go for it. It was either just a seller that's in a motivation where they have motivation to sell quick, or it's an agent that just didn't do their due diligence and they underpriced it. So aside from that, most of the time our offers are below list price, but optically then going back to your question of, well, do you get kicked back from buyers? If it's below list price, why would they have a problem? It's lower than what they could get it at. They shouldn't. Ideally in our world, they shouldn't. You're saying, Hey dude, this is the, the potential of this home is 600. Yep. I'm getting it to you at 445. Exactly. Why do you

care? Exactly. Now that's the perfect world. Some buyers do. And you say, great. To your point, you're indifferent. If you don't want it, not a big deal. I can just buy it myself. I figured I just kind of offload this one, but not a big deal. Right. And you move on to the next buyer. And that happens all the time. Like where I actually do just close on the property and we'll sell it more often in that situation. It's still like a hedge fund or to somebody that would have an issue seeing an assignment fee. And I didn't want to double close. Sure. So no, I love it. And, and again, this is in any market access. That's why Privy really changed it for me is, is quite literally, I just was telling my manager, I was like, Hey, we need to pull one full-time person off of acquisition, put them on Privy, only go Privy MLS. Yep. And that's why when I was, when I was able to interview for this pot,

I'm like, absolutely. Cause this has been like the old dog, new tricks kind of thing. I'm like, it's not really a new trick, but I was in my own way. Like, oh, it doesn't really work that way. Well, it does, right? I will tell you, I'm the biggest advocate of the MLS. People go around calling me the MLS king, and I'm like, I love that. I appreciate it. But you're foolish if you're not at least looking because it's free.

It's free opportunities. What's your day look like? Are you just drowned in MLS all day? You're just always analyzing properties or is it more like you get the notification that something new came on? You're really only measuring the news. Like when I say news, the new listings. Yeah. So my day to day is a little bit different now. Um, as of about two months ago, I'm actually out of the day to day operations in the wholesale company. So the acquisition team dispositions, they've got it all under control. But what their day looks like is they've got specific KPIs. It's 50 real estate agent conversations per day.

50 agent conversations a day. Yep. And then five offers minimum. Five offers a day. And I would argue very, very comfortably that you could get more than five offers out if you'd really like to. What should be the conversion rate of those five offers? If five offers go out, what are you expecting? So 25 a week, 100 a month.

When you're first getting started, you should probably get about 15 to 20 under contract. Good month. 15, 20 under contract, closing on about 10 to 12 of those. Now, keep in mind, those are where numbers are over the sense of, okay, I understand what I'm looking for. I've got my, maybe not like a shotgun approach. When someone's just starting, it might not be as good as those numbers.

And if I were to go off of someone just starting off the a hundred offers that they would submit, you're more likely submitting offers on properties that you're not going to get under contract, which is fine. Expect on your first 100 offers to get probably a handful under contract closing on one to two. But if I'm still telling you- So five to 10% is reasonable. Correct. And one to two, I would say full conversion from obviously being able to close. To sell to, okay. So a hundred offers, five to 10 contracted, one to two closed. And I can tell you our numbers.

So last week we wrote 50 offers. We had eight under contract. Okay. So we closed or we sold, I think six of them. We're trying to sell two. We had to get extensions. So like 18%. Yep.

And then you actually closed on like 80%. Yeah. That's great. Yeah. Our numbers. And remember, I mean, this has been a, like a refined process over the years. I've been doing this for now three years of really honed in on MLS and agents. As of last year, I put all my effort and energy into doing this full time, like, like full time on this side, just MLS and agents. And we did over seven figures last year. So love it. 90, it was like 89, 90% profit margins. Guys, I'm telling you, sometimes you just got to open up your mind. There are other ways to do it. Again, Ryan Zolan, where are we finding you? Let's follow Ryan. Instagram, TikTok, YouTube. I do a show with Brent Daniels every Thursday, Millionaire Before 30. Oh,

I love it. That's rad. So listen, make sure to follow him. Thank you guys for paying attention. I'll tell you right now, this is an opportunity game. Whether you're cold calling like Brent, myself, whether you're making offers like Ryan and now myself, or your direct mail, whatever it is, create those opportunities so you can convert the deals. That's really what it's about. I appreciate you coming on board, bro. Thank you for having me.

I appreciate it. Right on. Awesome. Peace. you