Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.
(00:37): Hey, what's up? Hey everybody. Thank you for tuning in to another episode with me, I appreciate all of you out there that are downloading my podcast and listening to it. Hopefully I'm adding value to you. I'm incredibly grateful today. I'm going to bring you an interesting topic. It's for you agents out there that are getting these houses that are low dollar houses, and you don't want to list them and you're leaving money on the table. So, you know, this came out of a conversation I had with my friend. Who's a KW agent, and I'm going to go into that in a minute. But what I'm talking about here is you guys, are you agents, you're getting internet leads, you're getting phone calls. I remember being a real estate agent. This is going to date me a little bit, but back in the day before the MLS, we used to sit in our broker's office and you do floor time and you'd be assigned from whatever, eight to noon, noon to four, four to eight, and the broker would do advertising and the calls would come in and I know it's different now.
(01:44): I know there's floor time doesn't exist anymore, but we would get these calls and a wholesome call and constant, Hey, I want to sell. And then we'd run out and list their house, you know, real excited to get a floor call to come off of the company's advertising. It was cool. That's how new agents got rolling. That's how we got our business and that's evolved, right? And now a lot of it is internet leads, you know, and you're paying Zillow to get a premium subscription and get your name up there and be first when they look it up and hopefully you'll get a call that way, or, you know, I haven't obviously taken those type of calls in years, but I don't know how the sign calls come in. I don't know those used to come into the brokerage or our broker at least would put the office number on there so he could generate inbound calls and give them to us agents.
(02:37): But nowadays I think all of you agents have your own phone numbers on there. So you're taking all your assigned calls and stuff like that, which I get. It's just the business change has changed a lot, but what's happening is after this conversation with my KW friend, you know, he got an inbound call for a guy who wanted to list his single family home in the old Brooklyn neighborhood. And he said, Hey man, my house is prior, but probably worth 40 or $50,000 major friends that he, I mean, he won't even go out and take the listing. Yeah. You know, I don't really don't have time to deal with it right now. And he's turned that down. Cause he, in his mind, he's thinking, you know, this thing goes for 50 grand, 40 or 50. So let's say 50 grand on the high side, a 3% straight commish 1500 bucks.
(03:29): All right. And then he's got a split with his broker, whatever his commission tier is. So he's like, man, I'm not going to go out there and fool around with all the things I have to do to earn this commission. It's really his fault. He'd rather spend his time, time on higher value assets. I kind of was like, wow, man, I can't believe it. You know, I remember back in the day I was so hungry as an agent that I would list just about anything just to get a listing. Also I was trying to make my break, my broker happy. Right? And then if the guy I'm working boss, I'm working, I'm bringing in listings, man. You know? And then he would always teach us, just get the dang listing. And then we can always get them to reduce, reduce if it's not selling. Right. The only reason why houses don't sell is price.
(04:11): So I remember those days, but he wouldn't go out and take this. And then I started jogging my mind about a story. I remember a friend of mine, he worked at a big corporation and he was relocating out of state and his company. I had three real estate companies that they worked with and this was 2009. So it's right in the thick of where it was very hard to make money, right? Real estate wasn't moving. And it was very, very hard to make money during those years as a real estate agent. And I remember him telling me he had a home in Garfield worth about $40,000 or less software at that time. That was the value of the home. And he called three agents that their company has relationships with. And it was a, if I remember it was a Howard Hanna, it was a KW and it was a small, independent brokerage shop.
(05:09): I don't know the name of it. It's just a small one. Yeah. And two of the three wouldn't even call him cause they didn't want to take the listing. And the third one, he had to convince them on why he should take the listing. That agent should take the listing. I remember him telling me saying things like Joe man. I told them the house it's clean. It's nice. It'll sell quickly. I have lots of updates done to it, which he did it. Wasn't a, a junk hole. It's a hundred thousand dollar house. Yeah. In today's market. But back then, because the market was so low. I mean, for the, you guys have been in the business 10 plus years, you know, 2009 was a blood bath. Right. You could just, America was on sale at that time. And he could not get these agents to even call him back.
(05:55): And the third one, he had to call three or four times to say, man, can you just find the time to come out here and do this? And the agent wasn't even busy. That's the funny part because the economy was so bad that he had time. He just didn't want to go out there to move a $40,000 property to make a $1,200 commission 3%. And he ultimately did get someone out there. I don't really remember who, but he got the home listed in the soul relatively quickly and he was on his way. But then this is the conversation I'm having with my KW friend. He's sitting there the other day calling me saying how it's tough out there. Right. But my KW friend is sitting there telling me it's busy. It's busy. It's just competitive. It's hard. I'm like, this is interesting. This is, the market has changed so much.
(06:41): It's interesting. Right? So he's telling me he's 10 to one. He writes 10 offers to get one accepted. So he's running buyers and they finally get the buyer to raise their hand, say, yes, I want this home, which we all know as an agent, right. That can take a little bit of time. Right? It could take three houses, 10 houses, hopefully not more than that, but we get the buyer to say yes, then he's going and writing an offer. And he told me, he's writing good offers right now he's writing lists above list. He wrote one at 30,000 above list and didn't get it. And it's sold for more. I'm like, wow dude. But then he gets this call for old Brooklyn property. The guy says it's 40,000 our house. And he doesn't want to go out there and waste his time for the small commission.
(07:29): I'm like, dude, what? You don't understand? What you're missing is there is gold in that gold. There are guys out there like me who buy stuff like that. And I'm happy to pay you a large commission so to speak. So on that house, he was discussing, that's a $40,000 home. I told him, I, we talked about the street and I said, listen, I'll Pepe to pay your company a $5,000 check, deliver that asset to me. So now he can make a $5,000 commission. Now that's a whole new game changer. That's like selling a $200,000 house or maybe more I'll pay 45 for this house. In this particular situation. Maybe he tells a seller, listen, I have a buyer. But you know, when you get down to 35 and he could make $10,000, it's almost like wholesaling, but he's doing it with a commission, right. I will pay the brokerage commission large.
(08:22): Do you imagine a 10,000? Let's say this other agree to take 35 and I'm still willing to pay 45. And he put himself in the middle there for $10,000. I mean, what's that equivalent to selling? I don't know, $700,000 house or something at least right? Six, $700,000 property. And he's throwing this lead in the garbage cause it's a $40,000 house. All the money is right there. It's right in front of him. And there's a lot of these sellers running around Cleveland, wanting to get rid of these properties because they inherit them because in their, they need a ton of work and I've noticed it. Yeah. People talk themselves out of why or house. Isn't a value. I meet with sellers and they say, it needs a roof. It's 10 grand. It needs to be cited. It's 10 grand. It needs windows. It's 10 grand in their mind.
(09:11): It's already $30,000. But to a professional real estate investor who has a staff of trades, men, handyman and subcontractors, that 30,000 in their mind might be 12 for me. And there's gold. There's money to be made, but they've talked themselves out of why the house is not worth what they think it is in their head. They arrive at that stuff all by themselves. Of course you get it's others that are, Oh, my house is worth a hundred, not even close, but just as an example. So I'm trying to tell him and say, when you get these inbound leads in your pain, Zillow premium subscription, and you're getting what you consider bad leads and you're yelling at your rep at Zillow. Cause you're getting low dollar value houses. Stop for a minute and think who might want these. And maybe it's not just me. Maybe you're getting East side leads at different areas that you don't even know anybody in and give you a free tip here, go to list source.com and you can buy a list.
(10:15): You can get so specific FIC on that website. You can buy them list of let's say all the well C's that purchased a home in this zip code on the East side, under 50,000, all cash I can get. That's a specific right by the list of names. And in the last couple of years, they bought a house, all cash under 50,000 though in this zip code and mail them, call them text message them. Hey, I'm a real estate agent, but I get houses in the zip code. I see you're a real estate investor because you're buying in an LLC. You have multiple homes in it. And I occasionally get deals. Would you mind if I added you to my cash buyers list and that's it. And next time you get a call into your office from someone who wants to sell their home in Slavic village and you don't know anything about it, just call the guy who owns four houses over there and say, Hey, would you pay me?
(11:12): You know, big commission, we'll call it. I mean, there's different ways to frame this. You could use a buyer broker agreement where you just charge the buyer to find houses for them. You can charge a seller a little bit to sell the home and you can put together a really nice fee for yourself, all above board, all great and making everybody happy. You bring in buyer and seller together doing we're supposed to be doing. We've got our fiduciary responsibilities. We're helping sellers sell their homes for the best price possible. You have the builtin buyer. You have the seller. I mean, that's what we do as brokers, right? That's what brokers do. That's what agents do. We bring buyers and sellers together. And you can have both sides of the deal. And you're working neighborhoods that you never would have worked because maybe you don't want to drive to the East side.
(11:56): We don't have to. Now if you get the call and you already know who the buyer's going to be, send them over there, put yourself in the middle. There's gold here, guys. I just want you to think about that. You agents, next time you get that call into your office and you're letting say an I run out there for that. I ain't going to the East side. I ain't going to Slavic village. I stay in the West side or wherever you're at your best, stay in Beachwood. You know? So just think about that process. It, I think there's a lot of money there. Thanks for tuning in today, guys. Appreciate ya. We'll see you on the next episode.
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