Video Transcription
Instructor: What’s up everybody? Happy Tuesday. Happy Tuesday evening, Tuesday night. Hopefully you guys get a lot of value out of this and it helps you do some wholesale deals, and maybe learn a little something in the real estate that you didn’t know before. What do you have in your mind right now that you guys would like to learn before you leave this room that would help you? Help you possibly do a deal, help you get better, help you something?
Class: Scaling the right amount of leads.
Instructor: Scaling leads.
Class: Being able to conquer the fear of not having that much knowledge.
Instructor: Okay.
Class: Maybe, if that makes any sense.
Instructor: So, basically not knowing what to do next? Am I getting that right?
Class: Getting to the stressed homeowner that needs help.
Instructor: How you find and get to them? Is that what you…
Class: Yeah, you just get to that stressed homeowner [inaudible 00:00:58].
For me, it would be like, I have never buy a property from a wholesaler, so how is the process of the wholesaler selling me the contract?
Instructor: Got it.
Class: [crosstalk 00:01:07] I can get the property [inaudible 00:01:09].
Instructor: Got you, because you’re used to just buying it yourself?
Class: We usually buy ourselves and not knowing the process, I don’t want to get into some funny business with someone out that I don’t know how to…
Instructor: Yeah man.
Class: I mean, I don’t know how the deal is.
Instructor: Right. That’s an awesome…
Class: Finding more buyers too.
Instructor: Finding more buyers.
Class: Finding more buyers or wholesale deals.
Instructor: Or wholesale deals.
Class: And wholesale deals, yeah.
Instructor: Okay.
Sometimes, it can be four people per transaction.
Hey, how’s it going man?
The reason I’m saying that is, there’s a lot of opportunity for people to work together.
Class: His strategy was, you bought and you fix one up, sell it owner financed and create his own accounts. He did that with five houses. He had 65, 70 houses in that radius. After five years, he turned around and sold everything to [LifeStore 00:01:57] for top dollar.
Instructor: Oh wow.
Class: So, he made a killing. I remember selling that and I’m thinking [crosstalk 00:02:02] he’s buying everything. He bought a house with no floors and no roof. I’m thinking, “What a sucker.”
Yeah, man.
Instructor: Yeah, that’s the…
They know like, “Yo, this is the value. Yeah, you could sell it on the market. Go sell it.” They’re not doing if for a reason. They’re calling you… If an investor’s smart and he gets your post card and calls you, it’s for a reason. He’s not dumb. He could just sell it himself. He could just put it on the market himself. But, there’s a reason. Right? That’s a misconception people have.
Well anyways, we’ll go there. This is a property in West Park and this is on the second hardest zip code in Broward County, un-investor, and we wholesaled the deal.
Class: What’s the zip code?
Instructor: 33023? 33023, something like that. West Park.
Class: [inaudible 00:03:08].
Instructor: All right. This guy called us… This was a cold call, actually. So, this was one of our guys in our office that we have cold calling with a list. Called, he said, “Hey man, you know, my name is John and from We Buy Houses. We’re buying houses in your area. Are you interested in selling?” “Yeah, sure.” “Check me out.” “Cool. Hey, when we can go see the property? Tomorrow, 3:00 pm? Awesome.” We went to the appointment and after a couple days of follow up…
Things like that. Same shit. Not everyone’s into real estate. Think about it, there’s only, I don’t know, 25 of use in here and two million people in Miami. Not everybody’s into real estate, investing, a realtor, whatever. So, they need people like us to help them. Does that make sense?
What is wholesale? It’s just like a pawn shop. People are trading. They want to get a cheaper price on their house or they wouldn’t take a cheaper price on their house, just for peace of mind. “Cool, just take it off. Just close quick. Just take cash. Just do this. Is it cool if I move later?” Things like that. That’s wholesale real estate. It’s just solving a problem that gives people peace of mind. The way we solve it is, we become professionals at talking with them, solving their problem and buying their house. Make sense? Everybody with me there?
This is the formula of how to… This is a very, obviously, basic formula. Someone said it, “What’s the difference?” This is the original formula, the OG. I like to use the other model now, but if you guys want to know ARV, which is what a house is selling for retail, 70% minus repairs, minus profit, it goes on from there. House is worth 100, offer times 70%, 70k. Let’s say it needs 10k, 60. I want to make 10k, 50k offer. You all with me? Cool.
Class: How does that compare to your cash offer price you mentioned [inaudible 00:05:23]?
Instructor: Like I said, it’s pretty similar. If we were to do this analysis with 10 properties and do the cash buy analysis with 10 properties, we’re probably going to be roughly be at the same number. It’s just a shortcut and more of a guarantee.
Because here’s what happens, this is actually a really, really good question and as you asked me, I kind of thought of it again. Here’s the problem, the biggest challenges we see, when we go to sell a property is this, the ARV. People argue the ARV, which is people argue the retail price, and people argue the repairs. Does everyone understand what I mean by that?
Quick example. “Hey, I think the house is worth 200.” You tell me, “No man, it’s 180.” Now, we’re in an argument over this. We’re not even in an argument over the deal. We’re just in an argument over some opinions, right? You get three appraisers to do an appraisal on the house, all three of them are going to have different results. There’s no black or white. That make sense? Then, repairs is another thing that buyers love to say, “No, it needs 50. I think it needs 30. I think it needs 28.” I don’t want to argue with them. I just want to get on to the good cash price that they’re willing to buy that.
So, to answer your question, roughly the same. Probably some slight variations, depending. But, it’s really just a more, “Let’s get to the bottom of it type of strategy.”
Class: And the percentage of ARV would vary by area.
Instructor: By area, yeah. These are very basic things.
Class: Yeah.
Instructor: You know, I always say that Miami, it should be closer to 80, 82.