You're not a rookie real estate investor anymore. In fact, you're probably doing a small handful of deals each month, but you're killing yourself to make it happen and to top it off, if you take time off from your business, you don't make any money. That's because you don't have a real business, yet. We're about to fix all that. If you're a can do action taker, the whole scaling podcast will teach you the tips, tricks, and systems you need to generate massive revenue, build your team and give you the financial freedom you've dreamed of in any market in the US. This is WholeScaling.
(00:43): All right guys. Welcome back to the show. Welcome back to wholescale. My name's Joe evangelists. I am your wholesale mentor and coach in your road to being successful as a real estate investor. Episode one. I hope you guys did the homework. I hope you went out there and took activity, took action, and did the activity. I hope you had those 10 meaningful conversations with real estate investors. And here's the thing. If you did it, if you did the action, if you did the activity, if you put in the work, you're sitting here saying, man, that was a game changer. Those who did the work, they went out, they had conversations. They talked to investors in their area. They learned about what was working, what was not working. They learned about what some of the top dogs in the area are doing right now in their market and that is valuable, valuable information.
(01:33): I want you to get accustomed to having that conversation as much as possible to go seek those phone calls so that you can be speaking with the real movers and shakers in your area. I have a good friend of mine that for years all he did was call buyers real estate investors, buyers, cash buyers every single day. For years. He did this five days a week, seven days a week. He made calls to buyers. It's great to keep your pulse in the market. It's great to understand what people are looking for. It's great to figure out what opportunities they need. All of this stuff is going to help lead you into being an amazing entrepreneur and team leader because you will know the market better than anybody. Don't avoid the phone guys. Make sure you're making those calls. If you haven't done it, go back to episode one where you listen.
(02:23): It's a quick recording. It's going to help you guys get out there to take action. So for episode number two, we're going to start talking data. Today we're going to start talking. Where do we find the data that we can convert to a seller lead to a motivated seller? Well, before we get into data, what's important is, and again, if you're listening and you're watching and you're paying attention, always have a pen and a notepad out. If you don't have a pen and a notepad right now, hit pause, go grab one and come on back, right? Because we're going to talk about some high level stuff and you're going to want to take notes on this piece. Number one, with data, it's important to know who are your motivated sellers, right? The whole concept behind wholesale is being able to help a seller sell a property at a discounted rate and then connect them with a buyer who's also looking for that property, and what we're going to do is we're going to create for ourselves, what we call the gap or the assignment fee or the wholesale fee.
(03:19): We're going to create a gap between what the seller is selling for and what the buyer is buying for, right? That's our gap. That's what we get paid for. That's what we get paid for. Bringing value by bringing those two people together. Well, in order to start that out, it's important to know what kind of sellers you're going to be having conversations with, what kind of seller is going to be talking to in order to help them create value, and those types of sellers are, there's a lot of them out there, right? That's what I want you to understand. A lot of people think when they first get into this, again, there's some myths around, well, there's not enough people that are motivated and you're just stealing properties from people and why wouldn't you just hire a realtor? There's a lot of reasons around those things and we're going to debunk some of those myths today, but let's start with data.
(03:59): It comes out with data first, right? Who are typically your motivated sellers? Well, you're going to have the DS, right? You're going to have death and divorce. So we buy a lot of properties from people who inherited them because of death. You know, uncle Sally and Sally died and we inherited the property, didn't even know I was going to inherit it. Or a lot of times, obviously it's mom and dad and one of them pass away and we had heard a property. So death causes a lot of transactions in the real estate business. The interesting thing about death is if it's an older person that passed away and it was their property, you're going to deal with a lot of equity, right? Most older people, especially those who bought their houses in the fifties and sixties that are passing away now, bought a nice house. They upkept it to their taste, but at this level they're getting ready to sell it.
(04:48): And even though the house might have good structure, good bones, well maintained from a structural and a utility standpoint, there might be some challenges with them selling because the house is dated, you know it's got that green shag carpet. It's got old kitchen with old Formica countertops. It's got the purple and black bathroom or the pink and black bathroom. So a lot of times those properties, people will sell them at a quote discount because they don't want to put the effort into making the property look top of the market. Retail value. They want to unload the property. A lot of times there's sometimes good memories, sometimes there's bad memories, but a lot of times the kids that inherit the property, they just don't want to deal with it. They don't want to worry about it. They certainly don't want to go through tearing mom's house apart and putting it back together.
(05:34): What they want is they want a quick sale, they want their cash and they want to move on with their life. So death is a big one. Divorce is another big one and a lot of times you're going to find people get divorced, they have high equity or a lot of their net worth is in their property. And again, they need a quick sale. They don't want to be dragging people through with a realtor and having a sign out front, announce it to the whole block that they're going through and they're selling their house, right? They want to quiet off market, easy, close. And so we've got death and divorce. The other thing is damage, right? Damage, fire damage, water damage. You would not believe how many people go through a major event. This happened to us years ago with hurricane Sandy across the East coast where a lot of houses were just destroyed by water damage.
(06:18): And what happened was at that time people were getting these enormous insurance checks to cover the damage. I remember buying a house distinctly back in man, maybe 2014 2015 that had been affected by Sandy. Damage of water had come in, flooded the property. But the good news was that the land itself was worth as much as the house. In other words, we could knock it down and build a newer house there for the cost of the value of the, of the retail value of the house. So at that time, let's say the house was worth 300 grand, I think we paid two 75 the owners had just received a two or $300,000 check from the insurance company to clean up and remedy the property. Well, they're allowed to keep that money. It's their money, it's the insurance company's gonna give it to them and say, here you go.
(07:04): This is for the cost of fixing up the damage that happened. And then they turn around, they sell the land anyway. So they sold it to us for two 75 so they made another 200 and insurance money. They know it's like a property worth 300 grand and they got four 75 out of it by being opportunistic. So damage, water and fire. A lot of times you have properties that were damaged from porters or from just deferred maintenance, right? Not fixing the property over the course of years. So we buy a lot of properties that are just damaged, just outright damaged. And of course there's a discount for that because you're going to put the work in, you're going to put the effort into making it retail ready, or you're gonna knock it down and build a new house. But there's so much more opportunity there.
(07:41): The sellers don't generally want to deal with the problem or they can't afford to deal with the problem and they usually have good equity. The ones that you, that you're talking to for these deals. So there's death, there's divorce, there's damage, right? And a, there's also a plethora of other reasons why people might be interested, tired landlords, for example. You'll be surprised how many people go out and become landlords and almost instantly they lose the love for it. They realize that man, being a landlord is not as easy as everyone thinks. And my tenants behind on rent, I got to evict. You know, I've got to maintain the property and they just get tired of being landlords. They're sold on the return on investment or cashflow on that deal. And then they find out year or two later that man, this thing doesn't really add up to what I thought it was going to be.
(08:25): And it's taken a lot of my time and a lot of my effort and it's not making me a lot of money. So maybe I just need to unload this thing. Right? So those are some of the reasons and some of the ways that people want to get rid of their property or sellers that are potentially motivated. Right? And we'll get into the conversation how all that goes in a few episodes. But for now, what I want to focus on the data of finding these people. So for a lot of you, I've never been in this business before. A marketing is a big piece of the business. The next episode we'll talk about actual types of marketing and ways to market, but for now your homework for this week is to collect data. Okay. There are a lot of ways to do that. We use a source called listsource.com which is basically a data aggregate.
(09:07): There are a myriad of different versions of this type of public records data that you can buy. If you can find a better way, go for it. We've been using the same way for years and years because I like a platform, but of course we don't make anything off of you guys using that platform. You can use whatever platform you want, but when you go to list source, what we're going to do for data's, we're going to search for people who are positioned to have the most motivation to have conversations with us, right? So we usually search for what's called non owner occupant. Now if you think about what we just said, we have death, we have divorce, we had damage, we have tired landlords. Most of these are going to fall into the non owner occupant category. What that means is this is a property that is owned by someone who does not live here as their primary residence, so a landlord for example that's going to be a non owner occupant.
(09:56): The owner is not occupying the property and inherited property a lot of times not owner occupied, damaged property. Sometimes that's going to be people have moved on or it's their second home, right? So non owner occupant and so we're going to look for non owner occupant and then we're going to sort that data by equity. See list source along with a lot of other providers will allow you to actually parse out the data of the people who are slated to have equity. So you can start out with your best low hanging fruit is 100% equity and you can work your way up to 80% equity, 50% equity, whatever the case may be. You can draw the line wherever you see you want more data. If you're just starting out, the low hanging fruit is going to be obviously 100% equity. Right. The second piece that's really interesting that a lot of people won't do is you can actually check unknown equity.
(10:46): Now, this is a little bit of roll in the dice, but I want to tell you why this is the secret sauce. This is the golden ticket of data. The reason is that most people, investors, you've got to think about this, the more difficult it is to do. This is like a a rule for anything in life, right? But the more difficult something is to do, the less likely people are going to do it. Okay? And in this case, the more difficult it is to pull the data or the more you have to spend for the data, the less likely people are going to press extra buttons. The reason why unknown equity is such a honeypot of leads is because most people aren't going to pay for that. They're not going to buy data that says unknown equity. Well, what happens if they have no equity?
(11:27): Well, what happens, I'm going to ask you is if they have 100% equity and the public records system just isn't on par, they didn't get the recording of the mortgages down properly. This thing was paid off early because somebody had the cash to do. So. There's a million reasons why for every reason that unknown equity could be bad. There's also reasons why it's amazing. And one of those reasons is a lot of people aren't buying it. You know your typical investors, not going to double down on the unknown equity, but I'm telling you, as my loyal listeners, it's a honeypot. Make sure you check unknown equity and even keep that separate in a separate list. Download both lists, but parse out the unknown equity data. And I want you to look at the stats a year from now because I'm gonna teach you how to do your metrics and your KPIs and I'm going to teach you how to track this data.
(12:15): I want you to look in a year from now and tell me if the unknown equity isn't one of the best performing lists that you have. Okay? So that's data we're going to go on. We're going to buy non owner occupants, we're going to buy unknown equity and we're going to buy say 50% and higher equity in the property depending on how dense of an area that your market is, you're going to come up with quite a few results at least enough to get you moving at the beginning. We're going to download that data. We're going to buy that data. For some of you, you're going to say, Oh my God, well it cost a couple hundred dollars guys, here's the thing. You have to be ready to invest in yourself. You have to be ready to invest in your business and if a couple of hundred dollars scares you, you're going to have a really hard time ever making 10 20 $30,000 on an assignment fee.
(12:59): You guys are worth what you believe your value is or you're worth what you believe the value you bring is. So a lot of this stuff is going to be mindset. If you can't scrape together a couple of hundred bucks to pull out some data, well then I suggest go get a job, a part time job, and save up some extra bucks. Investing in your business takes investment and to start making 50 grand a month or 20 grand a month. Even in this business, you gotta be prepared to spend a couple thousand dollars on data, on marketing, on lead generation. It's all part of business marketing. Like the next episode we're going to get into cost money, but the best results are going to come from marketing. So for this episode, I want you guys to go pull the data.
(13:44): I want you to write down the opportunities that could be in front of you as far as motivated sellers. Who's out there, and let's go pull those lists. Okay? Try to pull a couple thousand people from a list source based on your lists. If you're not getting a couple thousand from the criteria or putting in, then expand your reach a little bit. Maybe add the adjoining County, maybe add another city that's nearby you, but you want to pull at least a couple hundred to a couple thousand actual names and addresses out of that data poll. So that's homework for week number two and I look forward to catching up with you guys next week to teach you exactly how we're going to drive leads from that data.
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