Episode 224: Student Makes $11,000 Wholesale Case Study

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Show Notes

Welcome back to Discount Property Investor Podcast, In this episode of Discount Property Investor David and Mike is with their student Derek who secured a rental property. A 2 story 40,000 square feet building, Dave and Mike helps Derek in selling this deal. Checkout how Derek found this deal and his experience in wholesaling Real Estate in the rest of the video.

Things that will cover in this episode:

  • DPI Students Experience in Wholesaling Real Estate
    • How to Find Deals
    • How to Get in Touch with Owners

SERVICES MENTIONED IN THIS EPISODE:

Welcome back to the Discount Property Investor podcast. Our mission is to share what we have learned from our experience and the experience of others to help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate, the discount property investor way. To jumpstart your real estate investing career, visit freewholesalecourse.com, the most complete free course on wholesaling real estate ever. Thanks for tuning in. 

David: All right, guys, welcome back. Today, we’re going to be discussing an $11,000 wholesale on a building that one of our students flipped. This is actually his fourth deal and the coolest part is Derek made $11,000 on this deal, but Mike and I also made an additional seven, so basically there was an $18,000 spread on this deal. Derek did the hard part of this transaction, that’s why he made 11 by marketing to a motivated seller, finding them, making a friend, offering to solve a problem and then brought it to Mike and I, and we helped him find a buyer for it and we created a win-win-win-win. Awesome, love it. Derek, welcome to the show. How are you this morning?

Derek: I’m good, how are you?

David: I’m doing awesome, I’m doing awesome. Mike, good to have you as well my friend.

Mike: Alright guys, yeah Derek congrats man, congrats.

Derek: Thanks.

Mike: That’s a good one.

Derek: Yes sir.

David: Tell us about this deal. I want to hear how you found it, what was the list or was it a driving for dollars? Next, how did you get the information? Did you call them? Text them? How did those conversations go? Let’s jump in man, tell us about this deal.

Derek:  Okay, the list was from a vacant list pulled off Propstream. So I was searching in the area around two flips that I’m doing, so this actually like one of the first lists that I started to pull when I signed up for Propstream so the vacant list, skip traced that list in Batch and I originally spoke with the owner, I believe it was in April.

David: Okay.

Derek: So this is that type of deal that you always speak about that the money is in the follow-up.

David: Isn’t it true? Man, I love it. So you spoke to seller in April and- so you found him and you said it was off of what kind of list?

Derek: It was a vacant lists and what’s funny, I was just looking for single-family like single family and duplexes so I must’ve didn’t check the commercial property tab but it was included.

David: Either that or you called somebody that had a single and they- and they also have a mult.

Derek: Yeah, that could’ve been the case as well. Yeah, but I think I just didn’t check off the commercial which I’m glad I didn’t at this point. It was just a vacant list in that area.

Mike: Yeah, big mistake, big mistake.

Derek: Vacant list and then I skip traced it and spoke to the owner. He’s an out of town owner so it was a lot of going back and forth and seeing when he would come into town and we had a key issue but I mean, it was well worth it.

David: I love it. So a single-family list, we think of vacant list off Propstream. You talked to them in April, how did that initial conversation go? You called them up and you were probably looking for single so what’d you say? Just you know, I’m looking to buy some property, do you have anything you want to sell?

Derek: Yeah, it more than likely started with a text on Batch, so I just texted him about the property and they said they would be open to it and then at some point I got them on the phone, I think that was a little bit of a challenge at first, but when I did get them on the phone, he did tell me his intentions for the property.

David: Okay.

Derek: He said he was open to selling it and I mean it’s kind of sweet deal cuz he told me he was open to selling it for one buck.

David: For one dollar?

Derek: $1. He said he just won-

David: So why [inaudible] motivation to sell something for a dollar? What was the motivation behind this?

Derek: The motivation was it was due to be sold at tax sale on October the 6th, that was his motivation, so he just wanted to get rid of it.

David: Okay, so you talked to him in April and that was when the conversation opened, when were you able to get this thing under contract? Man, April, that was months ago.

Derek: Yeah, I don’t believe I got it under contract until July.

David: Okay, so it was basically a tax sale as the motivator. He didn’t want it to go to tax sale so he was literally saying hey you can have this building for a dollar, right? That’s what I want for it, however in order to buy it, you got to pay these taxes or else somebody else is going to go to the auction and they’re gonna get it. So what was the approximate amount of taxes or what were they? do you know?

Derek: Yeah, it was about-

David: You should know.

Derek: It was about 12,500.

David: 12,500 owed in taxes, so you basically had to find- so you had a contract, you had none of your own money invested, you had a contract to control this building for what was owed, 12500 plus 1 dollar to the seller.

Derek: Yes.

David: Correct? Okay, then from there what’d you do?

Derek: From there, I started marketing-

David: You marketed this on your own for a little while, right?

Derek: Yeah, I started marketing on my own because it’s such a unique property, I was getting people interested-

David: [inaudible] talk about the property real quick cuz that’s gonna be- that makes a lot of difference. This is not your standard, you know, 900 square foot, 2 bedroom 1 bath rental property, right?

Derek: Right.

David: This is a- this thing is massive. I went there yesterday with Mike and I was like holy shit, this is the biggest building we’ve ever wholesaled in terms of size.

Derek: Right. Did you guys go upstairs?

Mike: No, we didn’t make it up there.

David: No, we didn’t even get inside.

Derek: I don’t blame you. Oh, okay. Yeah, so it was about 40- I believe 45 thousand square feet, two levels, multiple dog doors, so it was a huge place, huge warehouse and it needed work.

David: It needed a lot of work.

Derek: It was definitely distressed. Yes.

David: Yeah, I mean it was a good solid- it had good bones though like it had a good shell. I mean, this place looked like a factory. You said 40 thousand square feet?

Derek: Yes, yup.

David: That’s 40 thousand- that’s 40 individual thousand square foot home in terms of size all next to each other guys. That is so big, it’s basically like two big buildings connected with an area in the middle. We’ll have to get a picture and share that with everybody but wow. So this guy again, his motivation was the tax sale so you sent him a contract sometime in July, you started marketing this, it was a unique property so it’s- you gotta be you know, you got to be a little bit more creative when your marketing this type of deals, so what were your marketing approaches?

Derek: Pretty much did the same thing in reverse which I always do. I guess if it’s not broke, don’t fix it at this point. Found some buyers on Propstream, saved that list, exported it to Batch and started my marketing campaign.

David: One of the things I love about Derek, Mike is that he likes to keep things simple and we don’t. We like to often confuse things and add five layers of complexity.

Mike: Always.

David: Well you don’t have to do that, you don’t have to. You can literally you know, use two software’s to do deals at this point. I mean, you could use zero if you had the right resources, but it creates inefficiency by not having the ability to get lists, skip trace them and then obviously market to them. So, Derek has Propstream and Batch, go ahead Mike.

Mike: Oh, I just was going to say I just pulled up the pictures of the property. Can you see my screen here? I don’t know if anybody is watching us.

David: Not yet but try to pull it up.

Mike: I just did. I’m trying to share it on the software here, guess it’s not letting me share it with you.

David: But anyway, Derek’s got Propstream, he’s got Batch Leads and he’s getting his leads from Propstream, not only the motivated seller side of the leads but also the cash buyer sides of the leads. Then he moves them over into Batch and he’s skip tracing those and list stacking those at the same time then he’s doing cold marketing via text SMS to these sellers, but one of the things that I like, not only do you keep it simple but you reverse engineer it for the b- for the selling of a deal meaning that you know, you’re getting your cash buyers there- I’m sorry, your getting your motivated sellers there to begin with but then when you go get a deal, it’s like well hey let’s just go do the exact same thing we just did, but this time let’s not try to find the motivated people that are- that are out, you know, some sort of reason, they have a problem, instead let’s find people that are looking to buy deals and have cash. So it’s awesome, you’re using two software’s, this is your fourth deal, you paid 11 thousand. Mike and I got an extra seven grand on our own for helping you find that buyer. Win win win win, I love it man. So, whenever you started marketing this particular deal and you know, people were wanting to go look at it, how was that handled? You had a lockbox on this big building. I mean, we didn’t go-

Derek: Right, we had a few challenges at first. Like I said, he was an out of state owner so I had to wait for him to come in. Met him, got it under contract and I left a lockbox there, it’s not the best part of town by any stretch of imagination. Some kind of way my lock box came up missing but the actual lock didn’t I don’t know how that works, how you steal a lockbox but don’t take the lock, so we went through that challenge for like a week or so then we were really getting a lot of interest. Laura, she did an amazing job of handling everything, so I had to just meet up with the seller’s daughter, get another key, get another lockbox on there.

David: How many people went and looked at this, do you think?

Derek: I believe probably about 5-7 people.

Derek: That’s a good amount for this type of a building guys. This is 40,000 square-foot and this place needs multiple, multiple six figures, maybe even seven figures of work, I mean to get this thing to be tip-top again.

Mike: So it’s uh-

David: 5 people, man I’m impressed with you and Laura and the marketing efforts towards these cash buyers, five people. I’m impressed with that alone, wow. Go ahead Mike.

Mike: Well, I was just going to say so just to clarify who Laura is, Laura is on our team as well and she does a lot of the dispositions for us. So, Derek is one of our students and a rock star in his own right already and we offer this to everybody, it’s called Let’s Go Wholesale. So we’ve got a little website put together and if you send us a deal that you want help getting sold, we push it through all of our distribution channels, we send it out to all of our buyers that we’ve done deals with and we basically help you get it sold. So that’s why we partnered with Derek on this one. We’re able to again, get him paid more importantly and then also we make a little bit of profit as well. That way, you know, we create that win-win situation, helps everybody out. So again, that’s who Laura is, just wanted to give a bit of reference there.

David: Yeah, Laura did a great job.

Mike: Yeah, she’s a rockstar too.

David: Yeah, [inaudible] from the website, blasted it out text, email to the buyers list, put it out on Facebook Marketplace, local groups, Craigslist in some cases and anywhere and everywhere that we also have another local deal hub that we’re putting properties on. Basically if there is a place to market it, we’re doing it and Laura does a fantastic job of getting eyeballs on a deal, and really there’s only two reasons why a deal won’t sell and I learned this from Joe, one of my old coaches five, six years ago, and it rings true today. Number one, it’s not priced right, right? If it’s too high, people aren’t going to buy it or number two, not enough people have seen it.

Derek: Marketing.

David: It’s always one of those two reasons why deals don’t sell, period. One of those two reasons, so if it’s not priced right or enough people haven’t seen it, that’s why it hasn’t sold and sometimes it’s both, but most of the time it’s just that not enough people haven’t seen it, right? So, love it.

Derek: Right.

David: Derek, what are some of the takeaways? What are some of the things that you’ve learned from this particular deal?

Derek: This particular deal is- I definitely think I’m going to be searching for more commercial properties because the spread is just there and I think it’s less competition as well cuz I don’t think there’s many people are looking for those type of lists.

David: Yeah.

Derek: That’s the biggest thing I got from this.

Mike: I love it man, and think about that, if there’s less competition and you become an expert in selling these type of deals, just think about how you can clean up in this market right now.

Derek: Right.

Mike: That’s awesome.

David: I love it. Well guys, thanks for coming on Derek, it’s always a pleasure connecting with you. You’re four deals down, I’m confident you’re going to be doing probably four more by the end of this year if not more. You’re crushing it, keep rocking, keep doing what you’re doing. Guys, there’s three pillars to wholesaling real estate: marketing to motivated sellers, making offers and following up on those offers, and anybody along the process of you marketing that raises their hand that says I’m interested, you follow up and if you continuously do those three things- and by the way, those are the money-making activities in this business. If you consistently do those three things, you will have success in this business. Derek is a perfect example of a student that is crushing it cuz he is consistently doing those three things. Derek, congrats, 4th deal down 11k. You’d probably made close to 30 grand at this point.

Derek: Yup, right at 30.

David: In real estate, and you know, you’ve been a student for just a couple of months here bro so you are crushing it. Keep up the good work.

Mike: Keep the day job man. I know you’re wanting to quit that day job. Keep that day job so you’d get into rentals baby.

Derek: Yeah, I’mma try, I’mma try man.

David: One step closer right? I love it, I love it. Awesome guy, hey Derek, thanks for coming on and sharing a little bit of information about this particular deal and congrats on making 11 grand this week my friend.

Derek: Definitely, definitely.

David: Alright guys, signing off. You can uh- we’ll talk to you soon, thanks.

Thanks for listening to the discount property investor podcast. If you enjoyed this episode, please like, share, and subscribe to help us reach a wider audience to jump-start your real estate investing career, visit freewholesalecourse.com- the most complete free course on wholesaling real estate ever. We would also appreciate it if you left us a review on iTunes or Stitcher. Thank you in advance for your support and remember you make your money when you buy, you get paid when you sell. Now let’s go build some wealth.

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