fbpx

Episode 63: Simple Not Easy – Case Study with Alex Ficco

Join Our Community – It’s Free!

Show Notes

In this episode, David Dodge interviews Alex Ficco, one of his Students that has been crushing it in Reno, NV Market.  Alex Ficco is a part-time wholesaler that has only been wholesaling for a few short months and has already completed 6 deals and has made over 25K in wholesale fees.   Alex joined the Discount Property Investor coaching program only 3-4 months ago and was determined to succeed. With a little guidance from Dave and Mike, Alex has learned just how simple this business is, however, that it is not always an easy business! We also talk about how he got started investing in real estate and what he is going to do next to continue to grow his business.

To learn more about Wholesaling visit: https://www.FreeWholesaleCourse.com

Check out our Tool Kit to see David & Mike’s Secret Weapons:
https://discountpropertyinvestor.com/toolkit/

David: Alright guys welcome back to the Discount Property Investor Podcast. I am your host David Dodge; my co-host Mike is out today doing some deals. I am joined with Alex Ficco. He is one of my students, one of mine and Mike’s many students. Alex is located in Reno Nevada, hello Alex, how are you, buddy?

Alex: Hey Dave, how’s it going?

David: It’s going well. So I wanted to bring Alex on the show today. Alex has– he is new to wholesaling and he is doing a fabulous job with it. He’s picked it up, he’s ran with it. He has been one of our students for– how long has it been Alex? Probably going on three or four months give or take?

Alex: Yeah probably four or five months now.

David: Four or five months, okay. So Alex has been a student for four or five months. How many deals have your closed successfully to date?

Alex: I just closed on my 6th deal last week.

David: Six! I didn’t even realize it was that high.

Alex: Yep.

David: That’s awesome. So Alex tell us a little bit about your background– real quick before we jump in, because I want people to take a little lesson away from this episode that– you don’t have to have tons of cash, and or tons of experience to be able to do this business. It’s a simple business. I always tell people it’s not easy but it’s simple. It can be simple without being easy. But it is a very simple business. So Alex, tell us a little bit about your background and what you were doing before we met, and before you started doing wholesale deals.

Alex: Yeah so I have pretty much no background in real estate, I don’t know anyone that does it. But I have been interested in it for five years or so. So I figured wholesaling was a good place to start, after doing a lot of research– not really an easy way, but a good way to stack up some cash so I can start buying rentals in the future. I do music full time, I still do music full time. So wholesaling has kind of been– I split my time probably 50:50 between music and wholesaling.

David: Okay, that’s also a good thing too. You are not even really doing it 40-hour weeks. You are kind of just doing it part time. So you have done six deals in six months, that’s awesome, that’s amazing.

Alex: Yeah the six deals, I didn’t do my first two until January of this year. So it’s really only been three and a half months.

David: Yeah, we are mid-April now. Well Alex tell us a little bit about some of the deals you have done, some of the challenges you have faced. I know that– from talking to you weekly on our coaching calls; it seems there is always something, but that’s the business. That’s just kind of how it works. As wholesalers we are problem solvers. Our main job is just connecting people, connecting buyers, connecting sellers. Often times in order to create that win:win scenario, we have to come in and solve problems.

Let’s talk about the first deal or two you did and how it went.

Alex: Yeah so I would definitely say that my first deal was the hardest one so far. Pretty much everything that could have gone wrong did.

David: Let me interrupt real quick. How did you get the deal? What was the lead source?

Alex: I believe the guy called me off a Craigslist ad. Not off a bandit sign or anything, just off a free Craigslist ad. He called me up, he had a mobile home up in [00:04:19.29 – inaudible] that he wanted to sell, and we went from there.

David: Okay, I know this deal very well. So tell us about this deal, summarize that happened, because this is the first deal, he called you up and– take it from there, what happened next?

Alex: So seller called me up, and he had just– or his wife and kids had just left him, he was behind in the space rent for the mobile home. He owned the mobile home outright, but he owed the park a bunch of money. He was also behind on the property taxes on it. So I think he was behind about six grand for both of those. Yeah– I didn’t know how to evaluate it because it was mobile. But luckily it is a pretty big park up there, so there was some comps that I could look up on Zillow and some stuff that was for sale right now. So I had a decent idea. I just told the guy, I don’t really know what to do with this, I don’t want it, but I think I could find a buyer that does, but I could give you like $7500 for it.

David: You have never done any real estate deals and now you’re flipping mobile homes for your first deal; I love it. That’s awesome.

Alex: He ended up– he said that was fine, I said that will pay off all your debts and you will walk away with a little bit of money at 7500. He said, yep that’s all I want. Okay cool. I went out and he was living down here in the Reno area.

David: How far away is– was that mobile home from where you’re at?

Alex: It was pretty far, probably– definitely over an hour, between an hour and an hour and a half. Also in California, not Nevada. So I screwed up so much on the deal. I got it under contract for $7500, but while he was signing I was thinking, this contract is for real estate and a mobile home is personal property, so this is probably going to have to be re-done.

David: Right, it’s a little different. For those people who don’t know; if you own a mobile home and you have it in a park, and you don’t own the pad though, so basically you are just leasing the space. If you get too far behind on your payment, the park basically takes the home; they own it at that point.

Alex: Right.

David: Moving a home is about five grand. I have done it before, and that’s if you’re doing it within a 50-100-mile range. If you are going further it’s more. So okay go ahead, I didn’t mean to interrupt, I just wanted people to know that.

Alex: As far as numbers for it, it was in pretty rough shape, it needed a roof, needed a full rehab inside. It was kind of an older one I think it was from the 70’s. I figured it was worth definitely over 10,000, maybe up to 20,000 depending on repairs as is. There were some that were similar that were selling in the park for between 50-60,000. I figured for 7500 I should be able to unload it for more.

David: Yeah, that’s real good comps.

Alex: Yeah so– I had it under contract and I went and–

David: How did you find– sorry go ahead I didn’t mean to interrupt.

Alex: Yeah so, I went and tried to open up escrow and– the escrow agent I was going to use was like, I can’t help you it’s mobile I don’t do mobile but call this lady she does. I was like, okay. So I drove to the other title company because I wanted to meet with her face to face. I should have just called her because it was a 30-minute drive. I got there, she’s like, yeah this is fine, but I don’t want to do it because it’s in California not Nevada, I don’t want to deal with it. Then I called both of the title companies that came up on Google in [00:07:56.18 – inaudible] and no one does mobile up there. The other office was further away so I finally found someone that could do mobile. I sent her the contract and I’m like, I don’t think this is right but tell me what I need to change, and I will get another contract signed. She’s like, I will just send you the contract we use. I’m like, okay fine.

David: Awesome. That’s a good lesson; anyone that’s new in this business, the title companies are your friend. Leverage those people, you’re paying them to do work so– absolutely. That is something I told Alex too, go make friends with them and they are going to help you get the deal done.

Alex: Title companies are definitely your best friend. But yeah so, I got the new contract, got it re-signed for the same price. I thought everything was good, so now I needed to find a buyer. I opened up the escrow, I sent it out to my buyers list. I probably only had 40 or 50 names at that point on it.

David: How are you getting those real quick, Alex? What was your technique?

Alex: My buyers list I pretty much built off Craigslist adds, putting up adds that said, hey if you are looking to invest into the Reno market contact me, I have discount property blah, blah, blah.

David: Sure.

Alex: And also going to the investor meetups here in town.

David: Go to the REIA’s, guys. Pick up all the business cards, all of the people there are either investing or looking to. That’s awesome you did great. So you had a good list. Here’s the thing, man. You don’t need 5000 people on your list. 40-50 is great and you probably have five times that now. That’s a good start. So from that list you sent it out, then what?

Alex: I sent it out, I got a couple of bites that guys were interested. I listed it for I think just under twenty grand. I figured I might as well shoot high and a lot of room to come down if need be. I hadn’t seen the property yet, he just sent me photos of it. So yeah I sent it out, had a couple of bites. In the next couple of days there was a meet up. So I went to the meet up and brought some print outs of it.

David: I love it.

Alex: The MailChimp e-mail.

David: Was there a deal table at the meetup? Or were you just passing out flyers?

Alex: They make you go around and say who you are and what you do at the beginning of the meetings.

David: I’ve got a deal.

Alex: Yeah so that’s exactly what I did.

David: Awesome.

Alex: I explained it to the whole meeting, and this one guy actually ended up buying it. He is South [00:10:31.26 – inaudible] and he comes down here for the meetings. He didn’t want it at first and I said, hey just look at it. I was actually going to show it– now I remember, the next day to another buyer who was off my list up there in [00:10:44.19 – inaudible]. I had go up there and I was like, hey just come by–

David: I’m already driving up, I’m meeting someone else. Yep awesome.

Alex: He was also a general contractor. I had no idea for the repair estimates or anything. So I’m like, I’d love to just have you come by and at least give me a repair estimate. He is like, yeah no problem. He came the next day. I think I had four or five buyers scheduled to go up there on that day. None of them showed up except for him.

David: Except for him. It happens like that, man. And you’re driving an hour and a half to do that too.

Alex: Right, he was the only one that showed up. Everyone else bailed on me. Yeah so he ended up wanting it and he got a good repair estimate. He thought it was going to be 30-35 grand to completely fix up the place. Yeah so he ended up– he offered I think $12,000 for it. At this point he was the only bite and I just wanted it done. I said, let’s do it. Yeah so that was $4500 for me I thought.

David: $4500?

Alex: Right.

David: This is where the deal spins again, we have a couple of twists here in the story, guys. This is good, so go ahead.

Alex: Everything was good, had the assignment contract signed. Yeah, then it started to unravel, the escrow agent we were using kind of was not really working fast I guess. We wanted to close fast and the seller was– I don’t want to say he was crazy, but he was crazy.

David: Don’t worry he’s not going to see this. I think from what you had told me that he was mentally unstable, and possibly on drugs or something. But he was definitely a difficult individual.

Alex: I was getting text messages every night at two in the morning. F-this, the deal’s gone and all this stuff. He was the one that was kind of dragging it out. He wants to close quick–

David: But didn’t he owe the title company documents and stuff. Only the title company can only do so much, folks. They are your best friend, but if you can’t provide them with what they need, they can’t do their job. I think this was the case with this, Alex, right? They needed something from him, he’s blowing you up in the night every night. Let’s get this deal done, but he can’t even get what’s needed to the title company. That was a challenge that you overcame. Then there was at least one or two on that, right?

Alex: Yeah. We ended up switching escrow agents, because the one we were using was too busy. So she kind of passed it off to a different agent in her office. That agent was awesome, she was really up on it. I could call her, she would answer the phone right away, or I could e-mail her, and she would e-mail me back. The other one was like a day communication time.

David: That’s terrible.

Alex: Then the seller has this family friend that was helping him throughout this deal. She didn’t really understand what was going on. So I had to talk to her, so now I was a middle man, but she was the middle, middle man going in-between the seller and myself, I was between the seller and the title company and the buyer. There was also some issues with the park. They were ordering the park demands and the park wasn’t sending them. So title was waiting on that paperwork, title was waiting on some paperwork from the seller.

David: I just came up with a name for this episode. Simple not easy.

Alex: Right yup. Simple but not easy to do sometimes.

David: It’s simple though, right. Okay go on. So long story short you had all these people that were wanting different things. Did you ever have any issues with the buyer at any part of this process? Was he ever getting frustrated or having any remorse or anything like that?

Alex: The buyer was frustrated but he was never going to back out or anything. He was just wanting to go. We had a break in the winter, early this winter. So this was going down– over the holidays that was another issue. This is happening right before Christmas, through the holidays. So the title company is all backed up. There is a bunch of non-working days in here where we could have been doing stuff. The seller didn’t really understand that. I’m like, dude it’s Saturday we can’t do anything. Or it’s Christmas.

David: Or it’s 2am. We can’t do nothing right now.

Alex: Yeah the buyer just wanted to go because he wanted to put a roof on the place before it snowed again.

David: Sure.

Alex: Because it had the roof ripped off, it was just metal up there and that was it. So he was frustrated like that, but he knew it wasn’t my fault. I was staying on top of it and doing everything I could. But yeah, with this family friend– I’m talking to her and she– the seller definitely trusted her more than anyone in this transaction. So she was kind of a good thing. She would explain to him what’s going on. Then I got a call, I thought I was going to close. She’s like, so he’s getting $7500 plus what he owes, right?

David: Oh jeez.

Alex: I was like, no whatever he owes comes out of his proceeds at closing, just like if you buy a normal house, it’s the same thing.

David: Right.

Alex: She’s like, oh that’s not what he thinks. I’m like, oh here we go, this is going to fall apart now. Now we are six grand off on the price, there is no way.

David: You’re right it’s six grand off, but in terms of percentages it’s like double.

Alex: Exactly.

David: If this was a $100,000 property and you had six grand, then we can figure something out. But you are paying $7500 and he wants another six that’s a 90% more.

Alex: Yeah. This is taking so long like another month– January had started. So now he has more taxes and more space rent to pay. His proceeds are dwindling. I think he would have been negative had it closed at that point. I was so fed up with this and never wanting to talk to him again. I told the family friend, I will offer $2000 out of my cut to just get this deal done, that’s my last-ditch effort. She’s like, okay let me talk to him. They ended up accepting that. So now I was down to $2500 for my assignment fee which is like, okay fine. We were just about to close, then the seller was saying something about how we lost a day because he was like, I am not paying the space rent for January.

David: It was like January 25th at this point too, right?

Alex: Yeah.

David: Way late.

Alex: No, you are only paying up until the date we close.

David: We aren’t paying you rent though buddy.

Alex: He’s like okay– the next day, we lost a day there when we were supposed to close. The next day, he didn’t want to pay December’s rent because I wasn’t up there at all. I’m like, dude you’re responsible, your name was still on the title. So the title company is calling, how much is it? It was like $480 or something. I’m like, just take it out my cut and let’s get this thing closed. I took even less, I actually have the cheque here because I printed it out because it’s sentimental.

David: Oh let’s see it. What’s the net proceeds?

Alex: $2087. I don’t know if you can see that or not.

David: Hey first deal. How long did that take? A lot of people would quit. You didn’t just have one or two scenarios with this deal. We have been talking about it for almost 18 minutes. This deal could have fallen apart eight or nine times. But you were persistent, you just solved problems and made it work. That’s what’s so important. Like you just said, that is the least amount you have made in six deals over the course of three and a half four months of you doing this intently. But the beautiful thing is that you learned probably so many lessons from that deal. On negotiations, title companies, contracts, everything. Crazy sellers, motivated sellers, dealing with buyers. So it’s beautiful. From there, every deal is only going to get easier, I love that. You have done six deals, that was one. Tell us about another deal or two that you had a couple of issues with. I just want to talk about some of the problems that you had, and how you overcame them. Again, the business is super simple, but it can sometimes not be easy.

Alex: Yeah, I can talk about one that closed last week. This was the second craziest seller. The first deal was definitely–

David: Oh by far.

Alex: This guy not nearly as bad, but still had some issue.

David: Okay, let’s hear it.

Alex: This is a great lesson for follow up.

David: I preach that heavily, don’t I?

Alex: Yep. The first deal was just an initial on the call, and I told him I don’t really know what to do with it, I will call you back. I called him back after a couple days and offered him $7500. This guy called me off a bandit sign. It was December 23rd, it was two days before Christmas. He had a home [00:20:30.13 – inaudible] which is right next to Reno. Wanted to sell. Almost the same situation. His wife and kids left him, and he wanted out of the house because of the memories. He was telling me it was all remodeled and hardly needed any work and all this stuff. I’m like okay, I was looking it up online as I was talking to him. I saw it was worth 230-240. Quickly doing the calculations I am like sight on scene it would be right around 170-175 if it doesn’t need any work. He’s like, okay yeah I want to sell. I will come look at it tomorrow, it was night time. He’s like, no I’m going to California to visit my family for Christmas. I’m like, okay give me a call back on Monday when you’re here. Never heard from him again until three weeks ago.

David: How long was it from first contact till the second contact?

Alex: It was three months for sure.

David: Hey, man, that’s a lesson right there, folks. If you’re listening to this or watching this online, that happens so much. So building a funnel is so important, and having a follow up system is even more important. So that was three months, you think that’s long; I have people sometimes I won’t talk to for up the three years. I will have them on my system, I will call and call and leave a voicemail, and e-mail, text message you name it. They call you way later. So three months goes back, go ahead.

Alex: That wasn’t just like three months of I didn’t hear from him. That was three months I probably called him–

David: Every other week probably.

Alex: I texted him another ten times I bet. I left messages, I didn’t leave messages. I even had my mom call him. A Google number and my personal number. We could not get a hold out of him. Out of nowhere, again I was just sitting right here, I get a call and I answer, hey It’s Jerome. I’m like, hey.

David: Been trying to reach you for months.

Alex: And he’s like, I’m ready to sell. I’m like, alright. Can I come look at it tomorrow? And he’s like, yeah 11 o’clock.

David: Be there.

Alex: So I actually had a meeting that next morning with the biggest buyer in the city, in fact in the whole State.

David: Back up. How did you meet the biggest buyer in the State?

Alex: Actually from another deal. I got his contact information, because when I started I pulled up the county records, I filtered the sales records, and I filtered it for cash purchases, who has bought more than two homes in the last year in cash. I figured those would be the cash buyers. There was about 80 names on the list. So I mailed all of them; written letters, hand addressed all of them. It took forever. He was the only one to e-mail me back. All he said was, we’re still buying put me on your list.

David: There you go.

Alex: I didn’t talk to him, and that was before I even met you. That was November-October–

David: I love it, it’s such a simple thing. You filtered the list, found out who is buying and sent them letters. You sent you 80 letters, cost you 40 or 50 bucks. Right there you probably got one of the best buyers on your list at this point.

Alex: The best for sure.

David: That’s awesome.

Alex: I actually– it was a different deal, one or two before the one I’m talking about right now. I ran it by a couple of other buyers before I got it under contract; they passed on it by a large margin. I was kind of bummed thinking it wasn’t a deal. I thought, I am just going to send it Steve and see what he says.

David: There you go.

Alex: Ten minutes later he calls me and said he would take it.

David: Awesome! That’s the beautiful thing about having awesome buyers, man. If you have a couple of really good buyers, and you’re new to this business. People refer to it as reverse wholesaling. But just go buy that they’re looking for.

Alex: That’s exactly what I’m doing for them pretty much.

David: For them now, we will get to that in a minute. Let’s continue with this one here.

Alex: I had brought him two deals already. Him and his partner wanted to meet with me, because the market is so hot here in Reno, the deals are really tight and few and far between. They brought me in and said, hey what can we do to help you bring us more deals? That’s what the meeting was about. While I was there I was like, hey I got an appointment in thirty minutes on this one. I gave them the address, they looked it up. They were like, yeah we will take this down for 175. That was–

David: They went with you to the appointment you’re saying?

Alex: No they didn’t go with me. They just told me at our meeting that they wanted it for 175.

David: Okay.

Alex: I told him it needed 10,000 worth of work. That was over estimating what the seller had told me.

David: Right.

Alex: I got the meeting, I take a bunch of photos, the place is way more torn up than he said. He had been remodeling it, but it was like home work.

David: You were in for 175 then to what?

Alex: Steve actually told me, call me when you’re there. I’m like okay. I call him and I’m like, hey it needs more work, probably 20,000. He’s like, that’s what I estimated at anyway. So you are still at 175? I’m like yeah. Now I know all I had to do is get it under contract for less than 175.

David: Boom! Isn’t that beautiful to have a house sold before you bought it?

Alex: Right.

David: I do that a lot nowadays because I have people that I just know.

Alex: Takes half the work out of wholesaling.

David: It does absolutely. Also I like it because it’s a game. If I know I got to be below a number, and if I can get a little below, then I might a little. But if I a lot below and make a lot. You write your own pay cheque.

Alex: That’s exactly what I try and do.

David: Go to town, negotiate hard, you know?

Alex: So I am there with the seller, I probably spent 45 minutes or an hour with him, just building rapport, asking him what’s going on. He was telling me about his family situation, wanted to get a new house, this and that. A little trick that I have learned, when you ask people what they want, they have a number. But I will ask them what will make them happy walking away from the closing table in your pocket? That number is always less than what they say.

David: That is a good strategy, I like it.

Alex: He owed just over 80 grand on this one. So all he wanted was a down payment for a house. So he was thinking like 40. I’m like, oh cool. I could get this, but then he was like, I have other bills, probably 20,000 in bills. I want to pay off my truck, I want to do this, I want to do that. I offered him 150 at first. I am trying to hit a home run and make 25 on that. He is like, no I can’t do that. We kind of just went back and forth a little bit. I went up to 160. He was still like no. I was like, well what number? Oh, for 160 he said he would think about it. This guy with his past of not contacting me, I wanted to get this contract right here.

David: Three months of no contact. So you’re probably like, we got to get this done now! Because I might not hear from him for another three more months.

Alex: Yeah, but that being said he was ready to move out. They were moving all the stuff out. I know he was going to sell no matter what. I said, what number would make you sign right now without even thinking about it. He said, 180. I’m like, okay well that’s a little bit more than my buyers can pay. He knew I was on the phone with them and stuff. I was like, I would think about the 160 and what you can do. He said, okay can you come back at 5.30 tonight. I’m like yeah. So I call him on the way over and he actually answered, I was quite surprised. So I met up with him, he made me wait 30 minutes at the store where I was meeting him. He said 5.30 but wasn’t until 6. So he showed up and negotiated a little more. I was like, let me explain to you exactly how I make money. In my opinions it’s better to be 100% transparent with the seller.

David: I agree. It disarms them, it lets them know that you are not there to get them. You are just trying to help them sell it. Of course you are not doing it for free, you’re a business man.

Alex: He was still at 180. Let me tell you exactly how I make money. My buyer already told me he wants this place for 175. He’s like, okay. I was like, so for me to make any money I have to get it for less than 175, and I sell it to him for 175. So I don’t need to make all that much. If you would do 170, let’s get it done. He’s like, okay.

David: You see, that’s great. The fact you were open and transparent. It didn’t give him an objection. He either could do it or he couldn’t.

Alex: He could–

David: That’s a really good win:win:win. Buyer wins, you win, seller wins. Really the seller really won. You probably could have got him down a lot less, but it would have been a lot more work. The deal may not have happened, let’s put it that way. You could have killed it. But just the fact you were transparent, you were open. It was easy, quick and it was done.

Alex: And the fact it was already sold. That five grand is really worth ten if you take half the work out of wholesaling.

David: Absolutely, and did you assign that deal or double close it?

Alex: Assigned.

David: So you made all five, you didn’t have any closing costs?

Alex: Actually I made more.

David: Tell us how.

Alex: My buyers are brokers, both of them. Those particular buyers. They own a brokerage in town, so the seller was saying he wanted to buy a new house, and he wanted me to help him with that.

David: But you’re not an agent.

Alex: Yeah I’m not an agent. But you are in luck because the buyers are actually agents. So they can have one of their agents reach out to you. In my head I am thinking, okay I added a little bit of value to the buyers with that. They can get– not another listing, but a sale out of it. So when I scanned in the contracts and stuff and went to the buyer, when I sent it to him I said, can you do 178 instead of 175? He said, sure.

David: Yeah they will make a couple of extra grand on that side, that’s awesome. So $8000?

Alex: $8000 and then this one had a couple of hiccups too. The seller wanted to close in a week, and not many buyers can put that off consistently. These ones can, they are ready to go. They work with a title agent here in town that is really on it, she’s the best one I have come across so far, super-fast. So all they have to do is wait for the payoff information and Boom! They are ready to close.

David: Yeah, run the title. So we have done it as soon as four days. The fastest closing I have done is four days. I may have done one in three, just one. But yeah one week is tough, that’s difficult but you guys pulled it off.

Alex: Well almost. We signed the contract on the Friday, he wanted it closed by the next Friday to get his money. Weekend goes by, the buyers since they are agents, they have to have a few other things signed by the seller for liability reasons, to cover them with the board. So they sent this over and said get this signed. So I am calling the guy all weekend, no answer, no answer. Text, no answer. I’m like, here we go. Monday rolls around. I told them, I have not been able to contact him. Title was calling him on Monday, they were calling him on Monday to try and get him the new house. No one can talk to him, then Tuesday morning 7.30 am I get a text, hey are we going to close on Friday? I’m like, yeah if you call the title company back.

David: Where you been?

Alex: Then another day goes by. He killed Monday and Tuesday, he didn’t call the title company back. The buyer calls me on Tuesday afternoon and is like, hey we just got the same deal from another wholesaler, so something is going on with this guy. I’m like, okay. He’s like, I don’t know if he’s having remorse, but he is trying to shop it around a little bit, which I don’t think is legal for him to do that because it’s under contract already. Anyway–

David: Is this the guy who singled multiple contracts? Is this the same one?

Alex: Yeah.

David: Sorry, go ahead. I didn’t mean to interrupt, I just wanted to make sure I’m on the same page as you.

Alex: Yeah so, the buyer tells me, call him, have a heart to heart, try and figure out what’s going on with him, and try and get this deal done. I call him up, he actually answered. I’m like, hey the investor circle is kind of small here in Reno, I know you’re shopping the deal around. You said you wanted it closed and that was your deal. Obviously, that’s not the case because the buyers have already wired the money in at this point, they are ready to close. He is the one that’s holding up the deal. I know that’s not the issue, but what’s going on. He’s like, bro I just lost everything. He keeps telling me that. I’m like, yeah I know the situation. He’s like, I don’t have anywhere to go after we close.

David: Isn’t that what the buyers were helping him do?

Alex: They were trying to get him a new house, but it wasn’t going to be ready right then. He doesn’t have a place to go. There buyers are really flexible, they have done rent back situations in the past. Let me run it by them and see if they will do that for you. What do you need, a month? He said, if you could do two months that would be great. I want my son to finish school then we can move.

David: Perfect, this is a great case study. Keep going.

Alex: So I call up the buyer and was like, hey he wants two months’ rent back, so he has some time to get out and find a new place to live. That’s all he wants? Just offering him like, $500 a month and let’s get it done.

David: Probably half the market rate.

Alex: Yeah, less.

David: Less than half

Alex: A third yeah. $500 a month for two months, let’s get it done. We are just going to have to sign a rental agreement. Tell him he can just take that $1000 out of his proceeds, so he won’t have to pay anything out of pocket. I was like, okay. So I call him back I’m like, hey good news. Oh sorry backtrack. In the meantime the buyers have already offered him $2000 more than the 170, because the thought it was a money issue at first. They are like, offer him two grand more to get this done. So I call him back and I’m like, hey I already got you $2000 more, good news; the buyers are willing to do a two-month rent back and you can live there for $500 a month, and you don’t have to pay it out of pocket, they will just take it out of your proceeds. I don’t hear anything for a second. Then I hear, thank you bro.

David: He’s crying!

Alex: He was so happy.

David: It happens, man. I have had people cry not out sadness, it’s a joyful cry. Helping them out so much. Not only did you help him sell his house, you found someone to help him find a new one or move into a new one. You helped him get money to pay off all his bills and walk away with. You were able to work out a situation where he could stick around so his son could finish high school. That’s awesome. There is so much value that you created in that deal. So what were your proceeds? What did you make?

Alex: We had it for $8000 for the assignment. But that extra two grand, and being on top of the rent back situation from the buyers. I said, I will split that two grand with you, because the deal was pretty skinny anyways. They helped him out, they couldn’t flip it for two months now so holding costs. I said, I will split that with you. They were like, okay cool.

David: That’s a buyer you want to keep on your good side

Alex: For sure.

David: And sell them more deals. So what is 1000 or whatever, right?

Alex: That one was 7000

David: You made seven grand on that, that’s awesome!

Alex: Three months of phone calls. But the whole deal was done from the time I looked at it, to the time I got a cheque in a week and a half.

David: Okay so, a couple of things; seven grand, three months, you got the deal from follow up. Where did the lead source come from originally, do you remember?

Alex: A bandit sign.

David: A bandit sign, okay. That brings me to another point I want to talk about in a minute here is marketing. Seven grand, this is going to be hard to calculate, but I think you can estimate pretty quickly for me here. How much time did you have in the deal total? I am not talking about placing the bandit signs. I am talking about his initial call to you, your call back, your negotiations, anything and everything you did. How many hours do you think you spent on that? Three, three hours?

Alex: Yeah, and one of that– well if you count the driving time going up there twice, probably– four or five.

David: Four or five hours and you make seven grand, love it. Isn’t that awesome?

Alex: Yeah.

David: Don’t you love wholesaling, man?

Alex: Yeah.

David: It’s awesome, I love it. I did a deal yesterday, I sent three emails and made 2800 bucks. The more you do it, the easier it becomes. So that brings me to a good point; so we talked about two deals that you had obstacles that you overcame, I love it, it’s beautiful. This business is simple, guys. It’s not necessarily easy, but it is very, very simple. Just got to stick to the plan and be a problem solver. Try and make everything out to be a win:win. So, I want to ask you a quick question Alex. I know the answer obviously, but I want the audience, listeners and viewers to– so when you first got involved in wholesaling, or when you first started, you said you talked to a lot of investors and everyone said wholesaling is dead in Reno. There was maybe one or two other people if that in Reno that were wholesaling?

Alex: Well that’s why I ended up being a student of yours, because I couldn’t find anyone locally that has actually done a deal.

David: Couldn’t even find a local mentor because there wasn’t anyone. It just goes to show, any and all markets are fair game. Just because people can’t do it doesn’t mean you can’t. Basically what you have done is simple, and anybody could basically do it, but it’s not easy. That is going to be our title here. You went the extra mile to just solve a couple of extra problems, and you have done six deals in four months give or take here. How much total have you made if you don’t mind me asking? You are going to triple that over the next four months.

Alex: I think-

David: Made over twenty grand already?

Alex: Twenty-five.

David: 25,000 in four months? That’s awesome. I preach this to Alex every time we are on the phone. You got to build your funnel. You got to have stuff in the pipeline. You got through stints where– when it rains it pours. You are going to have a ton of deals come in. You are going to have a time frame where you don’t do one for a month or two, or three or whatnot. So you got to fill that funnel up. But once you have that funnel built up, have a good follow up system in place, you are guaranteed to do deals. With that being said, funnels, follow up, all that good stuff. What kind of marketing are you doing right now in your market? Because we have gone over tons of different stuff, but I just want the listeners to know what you’re doing. It’s nothing over the top or crazy, it’s simple.

Alex: No not at all. I have been doing most of my deals. I think all of them except that first one off of bandit signs. I know it’s a lot different in St Louis where you’re from here. No one does bandit signs consistently here. I will see a new sign for a week or two, I always call them, they never answer the phone, never call me back.

David: Why are they even wasting the money and the time?

Alex: I am out there every week putting them up. You are getting calls every week because I am the only signs out there really.

David: It’s beautiful.

Alex: Now I have gotten calls from the City of Sparks about the signs, because there are grey areas of legality with them.

David: Sure, an obstacle.

Alex: So now I am still going to do the signs where I can legally, and also be starting up a heavier direct mail campaign.

David: Awesome. I know you’re doing the bandit signs, that’s great. You have done some mailing. You’re not an agent, but you have got MLS access, I’m the same way. I am not an agent, I have access. If you’re new in this business, you don’t need it but it’s going to help you out a ton. If you want to go get your license I don’t see anything wrong with that, go do it. There are going to be some costs involved with that. But you can get MLS access from another agent by becoming an assistant. I don’t know what you paid, Alex. But mine was 100 bucks a year.

Alex: Mine is 15 bucks a month.

David: 15 bucks a month, there you go. I pay annually, and I am just an assistant to a buddy who is an agent, and he doesn’t even list properties as an agency, he is an investor and just wanted MLS access. Absolutely, man. That’s awesome. So you’re doing bandit signs, Craigslist posting, you have done a couple of mail campaigns at this point. What else are you doing to get people to call you? How do you get your phone to ring?

Alex: That is pretty much it, definitely bandit signs are the heaviest. You can see– I am not doing that many either. I will put out 15 per week on Monday, then I will get a few calls throughout the week.

David: It’s consistency though, that’s the good thing. It doesn’t matter if you are putting out 15 or 50, you got to do it consistently. You can’t just get out one day and put out 100 and not do it for two months.

Alex: Exactly.

David: You can’t do that.

Alex: I can definitely tell if I skimp a week that the phone doesn’t ring–

David: The volume slows down.

Alex: Yeah.

David: Right.

Alex: Yeah that’s pretty much all I’m doing to get people to call me.

David: Your market is a lot different to ours. For a while I had you making offers on listed properties, we determined that was not the best solution on your market. It’s actually difficult on our market. So we have kind of pivoted, we have a VA– and I am going to get that in a minute with you. But we have a VA who was sending out between 25-40 offers a day on MLS properties here in St Louis. We had her do it for about six months. We got maybe six of seven deals from it, but five of the deals, let’s say we did six deals from it, so a deal a month. But five of those deals were from agents that we e-mailed an offer to on the property that would e-mail back and say, this isn’t going to work on this property, but I got this other one. So there was a benefit of doing that. We decided, hey we can’t really wholesale off the MLS in St Louis, which you have that same problem. But we can get properties at enough of a discount for rentals. There is not enough room to middle it, but we can still find some deals here and there. So you were doing that for a little while as well.

Alex: Right.

David: Did you get a deal from those efforts or not? I didn’t think so.

Alex: Never got a deal off the MLS, but I think that’s a good take away for people listening is, every market is different.

David: It is.

Alex: When you learn to wholesale through podcasts, online or whatever; they teach you about the MAO formula, they will teach you to do .6 for your discount, .7 for your discount. I am sure that works in a lot of markets.

David: It works in St Louis, but it doesn’t work in Reno.

Alex: Doesn’t work here, not even close. I am doing times .8 no matter what the neighborhood is.

David: Minimum, maybe .5?

Alex: Yeah, really those buyers, the guy buyers I have; they are buying at .85, .86, barely taking a discount. But their model is more off of volume than profit per deal.

David: That’s a great point, Alex. I appreciate that. So of all the marketing that you’re doing, the best is probably just doing bandit signs, right? That’s where you are getting a majority of your deals from?

Alex: Yeah definitely, the signs have been the best for me. I don’t like them because it is time consuming compared to setting up a mailer and letting it go.

David: But you have made 25,000 in four months, you can afford to pay someone a dollar or two dollars a sign at this point. When you started you couldn’t, but now you could?

Alex: Yeah, I have got a kid here who wants to learn how to wholesale. I told him I would give him $1.50 a sign, then doing some driving for dollars for me too. A dollar a lead through the Deal Machine app.

David: That’s another way or marking. So your app set up, so while he’s out putting up signs for you and getting paid to do that, he is using an app, what’s it called? Deal Machine?

Alex: Deal Machine, yeah.

David: I think it is similar to the Driving for Dollars app. We did a podcast about that one too. Basically how does the app work? Tell us about the app.

Alex: Yes, it’s pretty cool. You just pull up and you see a house that is burned up or vacant or whatever.

David: Tall grass, trash in the yard, cars parked in the grass, windows broken. You name it, just distressed.

Alex: Then you just take a photo of it right off your smart phone. It works of GPS and it pulls up the map and you can move the map, so your pinpoint is right on the property to get the right address. It automatically pulls up other information from the county records. Then right from the app you can either mail the person a postcard, and customize what you want the postcard to say. But it has a photo of the house on it that you just took.

David: That you just took? That’s sweet.

Alex: That’s why it is supposed to convert so high. I have not been able to text that yet.

David: I would think so. If someone sent me a postcard with a picture of my house and my car was in the driveway.

Alex: It’s not a Google image.

David: It’s the real image, that’s awesome.

Alex: You can either mail them for a dollar. The app is 50 bucks a month, then you can have some team members under you. This kid is a team member for me.

David: Are you using Simple Crew for your bandit sign guy yet or not? No?

Alex: No by a should.

David: It’s 50 a month it’s kind of steep. But if you get a couple of people doing it, it’s worth it. Last week I got 450 bandit signs out.

Alex: Wow.

David: Last week.

Alex: I have never put out–

David: But, if you are doing that kind of volume it’s worth it. But if you’re not– the only problem with not tracking it, is it’s hard to give someone 100 signs and then they go throw it in a dumpster and say I did it. You got to be able to trust them.

Alex: I trust this kid because he wants to learn the business from me. He is not going to make that much money putting out 20 signs for $1.50.

David: Maybe he can come on an appointment with you when you get the deal.

Alex: Exactly. That’s what I told him. We will get appointments, come with me. You can learn the business, any questions you have, you can do your own marketing, I’m here for you if you need any help. I will also bonus you out $200 if a deal closes from a sign or driving for dollars or whatever. It’s like okay, but that’s why I trust him because he actually wants to learn the business. Not some kid off Craigslist that is like, yeah I did it and just threw the box of signs away.

David: Yep that was what I was about to get to. Last week on our call, I think it was last week, maybe two weeks ago, you were asking about VA’s. You made some money at this point. Your funnel is getting big, you’re increasing your marketing to get more into direct mail. But you are still going to continue doing what you’re doing. What’s your goal and or stance on bringing on someone to help you out? You are going to be getting pretty busy soon if not already, you know?

Alex: Definitely, I am going to use a VA mostly for inbound stuff is a good place to start. I just set up a CallRail account, so I can have more than just my Google number. Then you can assign different phone numbers to different mail campaigns and track it all through there. It’s automated through Podio to keep track of the leads. I have that all set up just to go to voice mail. The VA after he gets trained properly can call back the leads. Whether it’s a hot lead or hang up, then set appointments for me that way. I can kind of automate that part of the business, the inbound. I can just go on appointments, get the contracts, then deal with the buyers.

David: That’s how my business is set up now. You will get there, man. It’s awesome, we have three VA’s. But start with one, they’re great. Alex, you have done an awesome job. I love coaching you because you’re a go getter. I don’t have to necessarily get on the call every week and be the bad guy, hold you accountable. Instead of me saying, how many of this did you do? And you say, none. You come out and say, I did this, I did this. I’m like, you’re a go getter I love it. So with that being said, what advice you give somebody that was just starting out? They haven’t done a deal yet, or maybe done one deal. They are wanting to get to six deals like yourself in a couple of months, short time. What advice would you give them?

Alex: I think definitely a mentor is helpful for sure. I am the type of person I am pretty analytical, and I learned a ton about the business before I even called you guys. I knew the business but, going through that first deal taught me a lot about the business. You have to do a deal, but the mentor will help you do the deal. Whether that’s someone like you or someone in your local market, like whatever. You just have to add value to them whether you’re coaching, or say hey, I will give you 50% of my first deal if you just help me through it. I think that mentor is super important. But that being said, I am a go getter. For people that aren’t, even just having that weekly call helped me a lot. Even though you guys didn’t have to really push me to do the work, I still felt accountable. Wednesday it’s like, oh I got my call.

David: I got to do something real quick, right? Absolutely I think it’s very important. I have coaches and I have had coaches. That’s the main thing. You feel guilty if you can’t get on that call with your mentor and talk about some progress that you’ve made, especially if you’re paying that person. I love that, I have coaches as well too. Do you have any challenges right now that you are facing on any of your deals? Or in the business that I could help you with before we wrap up?

Alex: I don’t know if there is anything you can help me with right now. My challenges are really getting the VA, which I talked to your VA and he is helping me find someone. So it’s a waiting game at this point. I am dealing with the signed lease. I found a couple of ways to work around it. I am just waiting for my next batch of signs. I thought I ordered them on time, I did. I ordered them two weeks before I needed it.

David: I just ordered them a couple of days ago and there is a five or six-week back order. Are you facing that too?

Alex: Yep and I called. I’m like, hey what’s going on? I ordered like three weeks ago and it still says it’s in production. Yeah, it’s our busiest time of year. I have ordered two boxes, so I will have them for a while to avoid this down the road. My first box should be here tomorrow. I can get back on that, but the last two weeks I haven’t been able to put out any signs, and my phone has been dry from that.

David: Hey, before I forget. I do– we are approaching an hour but that’s okay no problem. Some of our best episodes go over an hour, and this is a really good one and I am really happy we are doing this. But I do just briefly want to touch on the relationship you built. So you had no real estate experience five or six months ago, right?

Alex: None.

David: Only really started doing deals four months ago.

Alex: Yep.

David: Now you have a buyers list with several hundred people on it. You have done six deals and made 25 grand. You’re crushing it, you are doing amazing. You made a connection with– I don’t know if it was with the same buyer you were referring to or another one, that wants to partner with you because they see you’re a hustle and a go getter. I don’t know if that deal is done or net yet. You don’t have to give us too much details. But someone came to you and said, we want to work with you, we want to pay for your marketing.

Alex: Yeah.

David: Just a quick little summary of how that happened. Just goes to show you that networking is so powerful. You basically now are going to be doing reverse wholesaling for these people, selling them deals. Again, you can explain it. But the deals they don’t want they are paying for you to go to sell to someone else.

Alex: Yeah exactly. That was the same buyer and that’s what that same meeting was about before the appointment that I was talking about. They said, hey how can we help you get more deals to bring to us? I’m like, well let me think about it. I thought about it and– I’m like okay, direct mail, a decent campaign is pretty expensive to four different lists you are mailing weekly or whatever. So I am like okay, I can just have them pay for that. I will set up a CallRail number to put on all that stuff so I can track–

David: You control that, right.

Alex: But they are just going to bonus me out on deals to pay for it. So I’m really paying for them, I am just using their money. I am buying the list, I have the CallRail numbers. So I’m controlling all of it. In return I am just bringing them deals.

David: So you’re going to get paid on the deals? They are paying for the marketing. Like I said, anything that comes in from your efforts and their money that they don’t want, you still have. You can try and sell it to one of your other people.

Alex: Exactly. They have got a lot of money. Their only problem is there is not enough deals to spend it on.

David: That’s a great problem to have, isn’t it?

Alex: It’s actually easier than reverse wholesaling because they will literally buy anything that is at a discount. They are not looking for a specific zip code, or only duplexes or only condos or whatever. Anything you can get they will look at and say, yeah we will take that done for this amount. So I can really– I could just work the lead and get it under contract then bring it to them to try and hit more of a home run, or I could just do what we did on that deal I was describing and say, hey here is a lead, what will you take it down for? They will say, then I can go out there with that number in mind, and then reverse it that way.

David: Oh man that’s awesome. So you know what’s crazy? I also wanted to ask, have you explored any Facebook marketing? Or ad words on Google? I just type in Reno Nevada sell house fast. There is not a single person advertising, not one.

Alex: No I haven’t yet. That is down the road for sure.

David: So with that being said in our market, it’s anywhere from 15-25 a click. But we have 15 people bidding. You don’t have anybody, so you may want to look into that because you could probably get leads, don’t quote me on this, but you could probably get clicks for 50 cents to the dollar.

Alex: Yeah.

David: Just test it. Throw 500 bucks at it and see if that’s any good. I know Facebook, we are doing that as well and that is really cheap. I think it’s like 10/15/20 cents a click, just to get leads that come in. Just having multiple channels of marketing is huge. Build that funnel, keep that follow up system rocking man.

Alex: That’s kind of where I am going with the marketing. I am just going to have them, the buyers paid for mail campaign. I work the leads for them, I am also paying for my own stuff like bandit signs, took out some ads in throw away newspapers.

David: That’s different numbers, right?

Alex: Yeah.

David: Okay perfect!

Alex: Yeah.

David: That’s awesome, man. Alex, thanks for coming on the show. How did you hear about me and Mike and the Discount Property Investors? Did you take the free wholesale course?

Alex: I did take it. You guys were on a podcast, I can’t remember which one it was. Was it Simple Wholesaling you guys were on?

David: We were on that one, yeah

Alex: So I think I heard you on there. You plugged the free course, that’s when I was trying to learn. I was super impressed by the course. All the information is out there online

David: It is

Alex: Compile it into one spot. I took the course. I already knew a lot of it

David: You probably knew everything

Alex: Yeah

David: But it wasn’t lined up simply

Alex: I was still impressed. I was like, damn this is awesome. Then I reached out to you guys to see if you could help me further, because I was having a tough time finding a local mentor who was a wholesaler

David: Right, right. Well I hope you’re happy with the program. I know I love coaching you because you’re a go getter, and you’re crushing it. I am going to plug my course if you don’t mind real quick

Alex: Yeah

David: Anybody that’s listening. If you’re listening or watching, we have put together a free course online to help people just like we have helped Alex here. I was in the same boat as you, man. Whenever I first got started I spend two months, three months reading, researching, debating on hiring a coach or a mentor. By the time I did hire a coach, everything he told me I already knew. But he put it in a very simple– like don’t think about step seven before you do one and two and three. That’s what we have done with the free wholesale course, guys. I am not going to harp on it here for long. If you haven’t taken the free wholesale course go take it. It’s freewholesalecourse.com. Doesn’t get any easier than that. It will surely help you keep the business simple. Again, it might not be easy, but that’s the beautiful thing; if you are a problem solver and a go getter, you can take that information and make a ton of cash. Alex you’re crushing it, keep up the good work. Do you have any deals in the pipeline right now?

Alex: Yeah I am working one, I should have a contract signed today if the seller comes through. I have already sent it over, gave them the over. Again that was kind of a reverse wholesale for these buyers. We will take it now for 285. Then you kind of have to trust your buyer to do that too. I am sending them stuff that is not under contract, but they are not going to go behind my back, it’s not worth their time. They would rather just get the lead from me.

David: Is that a verbal with them, or are you actually getting it in writing?

Alex: Just a verbal.

David: We do that as well. We just add in subject to successful acquisition on that B – C. I will sell properties before I even own them, but I will just put that little phrase in there that says subject to successful acquisition. Meaning that I then have to go buy this. If I don’t ever have control of it, then the contract is null and void. It is really null and void until I get that property. So you can do that as well. But if you have a relationship with them and you’re doing verbals that’s great. You don’t have that contract signed yet, but you should have today. What’s the spread on that one?

Alex: That one is 5000.

David: Boom! Five grand. How much time do you have in that?

Alex: I haven’t even been to the property. I spoke to the seller on the phone, e-mailed him a contract. Probably 30-40 minutes.

David: Love it, you will hopefully be at 30 grand by the end of next week.

Alex: Yeah for sure.

David: Awesome. Alex thanks for joining us today it’s a pleasure. I love coaching you, you have been an amazing student. Guys check out the free wholesale course. Super simple, get you started in this business. You will learn right away, it’s not necessarily an easy business, but it is super simple. If you have what it takes to solve some problems, you will be successful in this business just like myself and Alex here. Thanks guys, we will see you next time.

Thanks for Listening

As always If you liked what you heard please help us grow by adding a review.  Your reviews help us rank higher and reach more people. Thank you! Talk to you soon.

To learn more about Wholesaling visit: https://www.FreeWholesaleCourse.com

Check out our Tool Kit to see David & Mike’s Secret Weapons:
https://discountpropertyinvestor.com/toolkit/

Join Our Community – It’s Free!

Related Articles

Responses