4 Ways to Find (and Buy) Undervalued Rental Properties

welcome to the BiggerPockets podcast show 781 if you're a new investor and you've got a small budget there's three strategies here for you one of mine or James's because those cost money and then doing both of what Sam and Rob said because neither one of those costs money they take time and effort and so now you've got three lines in the water that could potentially all generate lead flow for you setting you apart from every other new investor just trying one thing I'm your host Rob abasolo and I'm joined here by my good friend and co-host Henry Washington how you doing today bud hey man what's up glad to be back on another show just you and I chopping it up let's do it today is a big victory for me because I did the intro and you aren't laughing the entire time and so for me I honestly I just feel like that's a milestone in our relationship let's get into today's episode man so today we're talking all about off-market deals and the Art of buying deeper this whole thing stemmed from a podcast you and I did not too long ago where you brought up the concept of buying deeper and I think we had a lot of questions from the audience that was like all right well that sounds cool I want to buy at a Deeper Discount but how do I do it and so this episode really Nails I think four different ways that people can do this what were some of your favorite parts of today's episode man I'm just such a a deal junkie I love hearing and learning how other investors are deploying some of these strategies and the results that it yields and so it's cool to hear from some of these super high level operators at what they're doing and knowing that there's always a version that you can do so don't get overwhelmed when you hear of what somebody who's doing hundreds of deals a year is doing from a marketing strategy you could do that same strategy on a smaller scale and start to build up your cash reserves yeah that's right and uh we're gonna get into today's episode but before we do we're gonna do a quick tip and I'm gonna do what David Green always does and toss it to you with no time to think about what said quick tip is and go well I am Nimble and ready to do this always so today's quick tip is steadily into this app episode and pick one of these strategies and start implementing it today I'm not going to give away too much but there are at least two of these strategies which you can literally get started on right now and it's not going to take a ton of your money or really even a ton of your time it's just a matter of are you willing to put in the work to buy at a deeper discount so that you can do deals in this crazy market so the quick tip listen to the end pick one strategy take the action right now all right let's get into today's episode welcome to today's panel uh this panel was actually inspired by an episode that I did not too long ago with my good friend Henry Washington currently on the Pod about buying deeper and uh I think we got a lot of questions about what that means uh what are the logistics of doing that so we actually wanted to put together an entire podcast panel that kind of walks you through the concept of going off Market sourcing your deals and buying deeper so I'm gonna go around really fast toss it to you guys and I'd love for you guys to introduce yourselves and sort of talk about what your experience is with buying off market and just a quick introduction Sam we'll start with you yeah I'm Sam Prim appreciate the intro Rob so I've bought a thousand off Market houses since 2014. I started investing in the side then in 2018 I quit my job and went full time and Flash Forward to today I own 45 million dollars worth of rental properties that I bought without using any of my own money and I also own a house flipping company here in St Louis Missouri where we buy and sell about 300 houses a year so we are in the game to find off-market house and distressed properties that's how the magic works that's how we're able to bind without using any of our own money so super excited to dig in and share that and combat your guys's horses nice nice not bad not 45 million dollars so you're you're relatively Green in the real estate space you're just getting your start right just getting my feet wet awesome uh Henry I'll pass it over to you man why'd you make me go after Sam I know I know I had to create a little bit of of a gap there you know I uh Henry Washington I'm a real estate investor been doing this since 2017. I do what Sam does but I do it in Arkansas and I do it on a whole lot smaller scale so essentially what you would call a mom and pop shop we are doing purely off Market deals uh I've got about a hundred rental properties that I buy and hold we flip maybe 10 to 20 houses a year and we're talking you know four-man operation myself my wife my project manager and my uh well five man content manager my assistant and so it's all it's all a pretty small shop uh but it's all still in the business of generating income through buying discounted properties and then monetizing those leads awesome man well you know you seem to be accelerating at quite the pace on your on your end over there and your team building is really great um so I'm excited to dive into your strategies but before we do James tell us a little bit about yourself man I'm James Dennard I'm an active real estate investor at a Pacific Northwest Seattle Washington I got involved in real estate and sourcing deep deals when I was a senior college in 2005. I'm kind of an old school wholesaler guy banging doors finding foreclosures getting deals done since doing that we've uh we've been through all different sorts of Market Cycles all different types of things but we've been able to accomplish over 3 500 off-market real estate deals since 2005 uh and like Sam we've taken this money and built out rental portfolios in Seattle Washington to where we're over a thousand doors in our local market so buying deep can really change the game for long term wealth and really when you reinvest that money it turns into real real wealth uh so uh definitely a deal junkie I will buy anything and I'm not afraid to go after anything either you're so serious yeah yeah I know okay so do you want to give us your phone number uh just really quick and we'll have people text you um all right so Henry since uh this kind of kicked off with a an episode we did and something you said which right you you said the word buying deeper the phrase tell us a little bit about what that means and what it actually means to go off Market buying deep is essentially buying properties at a discount and when you buy properties at a discount it it you it you walk into Equity so you're buying Equity essentially and then our job as investors is to monetize that equity in some way shape form or fashion and so investing in a nutshell in any industry is about buying something adding value to that something and then monetizing the new value so when we talk about buying deep in real estate it's buying properties at a discount which means you're buying them at less than the value that they're valued at and then adding to that value by adding value to that property so that could mean that you renovate that property it could mean that you add tenants to that property it could mean that you change the usage of that property whatever that value add means you do that and then you increase the value of that property but that doesn't net you the money what Nets you the money is you monetizing that increased value so that could mean that you rent that property out now that it's been renovated it can mean that you sell that property at the highest value meaning you flip that property it could mean that use if you change the usage then you sell that property with the new usage so some people add value by getting by buying land and then changing what you're allowed to do and so if you can now do that new thing then you monetize it at the highest value so in a nutshell sale buying deep means finding ways to buy properties at a discount and typically that's going to mean you need to find people who have Equity because you can't buy a deal without equity and you can't buy a deal with that motivation that person needs a reason to sell to you at a discount awesome yeah it's a great explanation and there are so many ways to to buy deep to go off Market just a few and we're going to get into these a little bit in today's episode but just to kind of name some of the main strategies that people are taking when they're going off markets Direct Mail driving for dollars wholesalers pocket listings with agents property managers for other owners looking to sell social media SEO which means search engine optimization bandit signs and softwares like envelope prop stream and deal machine and so again there are probably another 50 ways that you can go off Market I think that's the the most amazing thing about this is that there you can get as creative as you want I've heard some pretty creative ways that people have landed deals and some of those will actually what we're going to get into now but now that I've given you sort of the list what I want to do is go to each panelist what you're going to do is you're going to pick a strategy that you personally use to find good off-market deals then you're going to break down the steps and then the rest of us are going to have a chance to sort of poke a hole in your strategy and uh you know with that said does everyone here sort of have a strategy in mind because I'm going to make you pitch us I'm going to make I mean we're going to do a two minute pitch it's like Shark Tank it is yeah and we'll either be in or out and we'll we'll invest in that I'm going to close your Rob I'm gonna close you all right so since uh James you know came in with uh quite the confidence here I guess we're gonna we're gonna start with you you're up first tell us your strategy and I'm gonna put two minutes on the shot clock here and I'm gonna give you two minutes to pitch the strategy and then we're gonna break it down and we're going to build it back up does that sound good that sounds good that sounds good and go all right buzzer beater uh first thing I want to say is anything for off Market all these Avenues work and off Market you have to constantly be changing your marketing platform to get deal flow in so that's the first thing but the one that we've been using most regularly for the last 12 months is actually call centers we use a company called Easy Button leads and what this is is we contract call centers either professionally trained dialers that have real estate scripts that we provided them with and what they've done is that it allows us to Mass contact sellers so we can get really big buckets to generate leads for a very fraction of the cost so let me tell you why this works so last month here's our stats we had four callers that we paid fifteen hundred dollars a month which produces about 25 or 25 to 30 leads per caller a month that's an average cost of sixty dollars per leads and we're getting 80 to 100 leads every month from that set of 6 000 that we're spending in addition to they are calling over 80 to 100 000 people in that month to get massive reach so we can hit buckets that you didn't really even know there was deals in right because that's always the thing with our segmented lists that were really targeting on with our inbound sales guys then we want coverage for the rest so it gives us coverage based on this six thousand dollars we we spent we produced three hot off Market leads that were actively almost Contracting right now we got one deal done that we racked forty five thousand dollars as our assignment Theon and not only that because the amount of coverage we're getting we get secondary business out of it to where we've generated now four listings that we're about ready to take to Market this week and it's producing over a hundred and fifteen thousand dollars in revenue for our business by spending six thousand dollars and so what we found is the call rooms in a market where we don't know what where people are locked in with their interest rates they don't know what they want to do we want to make sure that we're getting the mass amount of coverage more contacts equal contracts and the more contacts you get for affordable the more deals you're going to get done boom with with two seconds to spare uh wow very nice I think we have I have questions I'm sure every Sam and Henry have questions too so now what I want to do is kind of just open it up to the to the panel here it's been about five minutes breaking this down because what you just described was honestly a mind melting amount of information in two minutes and I think the audience deserves to kind of break this down and understand the strategy because really it sounds amazing so I guess I'll I'll just start um based on everything you said I'm curious how complex is it to actually set up the strategy uh it's actually fairly simple to set up so a lot of time now if you want to set up your own call center which I've done that is a lot more work but there's so many call centers that you can contract out there you got to find the right ones that specialize in real estate but our setup process was sourcing the right call center that took us probably four or five months of testing then we found Easy Button leads then we had to create scripts and work we create scripts that takes me about 30 minutes to an hour every month just to update their scripts and test it to see what's working from there we also had to set up a CRM and a delivery from there so the Easy Button leads they call it they set it up it goes into their CRM we had to set up a connector that goes right indoor sales team because what we wanted to do is make sure that we're getting a certain speed to lead that's a that's something that's very very important in our business once that lead comes in we got to be contacting that within 30 minutes to an hour to keep that lead on the phone and so it was about connecting the the communication so there was no drag in there but a simple simple process we had to Source vet the operator make sure that they can actually do it correctly we interviewed their sales team I actually had some phone calls with them to make sure that their English was good that they could that they could carry a conversation uh that it was fluid and then it was a matter of setting up the right scripts and monitoring we set up our CRM for live transfer uh go from there and then once a month we do kpi reporting and we're tracking all different types of things as far as contacts conversion rates speed delete so it's a very very simple process as I'm out just connecting and making sure they get the information to your sales team immediately so help me understand the I guess the ideal scenario because we have a call center right A lot of people making phone calls is the idea that the people at the call centers are calling potential sellers they're calling people on a list and those people are asking those people if they want to sell their property and they're effectively trying to lock down a property under market value and then you then go and flip it or what's the the next step in that chain uh so what we do is we have them generate interest I want my internal sales team my closers really working the numbers and so what we for us we just want the interest does the are the people interested in selling over the next 12 months and then we want to get general information from them what's the condition because we want to make sure we're giving the lead out to the right person what's the condition was their motivation to sell and then we kind of leave it at that we don't have them close over the phone I do know a lot of people do do that and our Market Washington State's a little bit more expensive the sellers are a little bit more educated they want a little bit more dialogue and conversation so for us we're just having them generate that lead and then it goes over to our sales team which is our internal guys in inside of our office we have four guys there that work these leads set the appointments go out meet with the sellers and that's where most of my time and training are on what with my my closers but this is really just a lead gen and then the lead gen you got to get it over to your sales closing team to convert it into dollars do you have like a list that is good that is like highly qualified leads you don't do stack lists for certain types of you know pain points for for sellers or do you just kind of mass call uh that's a great question um so we go specific uh but we we keep it a little bit more broadly with the mass calling because they can get through so many phone numbers it's all about the coverage so we have our internal guys in our office we have them call in on the specialty stuff the probates the foreclosures the really symptoms for selling uh because it's just a more targeted sale we use the call Rooms To Target bigger platforms but we use big buckets like out of state owners that's a really big list of properties those are all people that are interested in selling so we still segment it down but we just do broader segments or you know we we buy different types of data like we have something called refi rejects where people went to refinance the property but their credit core wouldn't allow them to so that goes into there so we use more broader buckets but we don't just call everybody James what would you say your your true or total all-in cost is because I know it costs a certain amount a month to have each caller but you also have the cost for I'm sure you have a CRM you said you have a CRM that you have to have what other tools or things that are you having to pay for on a monthly basis that account for part of the marketing dollars here it's actually not very expensive to get it all set up we use something called follow-up boss for CRM it's a very simple CRM to use it's easy for sales people I think the cost on that is less than 100 bucks a month with our because we have a bulk account with them and then we had to set up our zapier to zap the leads over which was an initial setup it probably cost us fifteen hundred dollars to get their CRM and RCM plug together and then it's about a hundred dollars per rep to have the leads monitored at that point now there is other things that go in that are part of that cost we house in office we are buying lead data which isn't that expensive at that point but you know we're spending usually got three to four hundred dollars a month on data just buying and mass manufacturing leads and then we do have to pay for the skip tracing of sourcing so in ebl Easy Button leads because you're working with them they will do your skip tracing for uh eight cents so it does you get a benefit where the typical cost is 10 to 12. and so so it kind of it's an extra cost but they're giving you a savings at that point too okay cool yeah that all sounds good so can you tell us is there a particular downfall or a pitfall with using this strategy yeah there definitely is you know and the reason being is your sales people are not professional they're they're trained we actually do training calls with them once a month on a zoom call too so because I like to be a little bit more Hands-On than other people that I think operate but when you you know like if I have a highly trained real estate professional calling a seller they're going to know how to Pivot and change a lot better and so if you get that random question that jams it up that could be a really good seller that you just called but they asked a question that they didn't like the answer to and you lose that lead and so it's about quality of contacts that can sometimes go down but the the benefit has way outweighed that and that's why we set up our secondary team to really have our professional guys calling through that small segmented list cool cool that makes sense and then if you were gonna assign one crucial kpi to this or one kpi to sort of track the success of this model what would it be speed the lead that is the key you know we're testing this so right now we actually set a secondary Army of callers up for our brokerage too to get listings and then we did a comparison speed to lead and what we did was with the off Market it was taking us an hour to hour and a half to get to those Sellers and then with the Brokers we set it up to where we're getting into it within 30 minutes and are are going from a lead to an appointment increased by 400 percent so you can't you gotta if a seller's interested you got to keep them on the phone and get it moving fast so that speed the lead has been the biggest kpi we've been tracking right now awesome okay well James consider me closed I'm in on the strategy Henry Sam any any final questions for James I think the key to this strategy is when you talk about the normal everyday investor the key to this strategy is keeping up with your lead flow because a strategy like this can produce a lot of leads because you can call massive amounts of people in a short period of time but if you don't have the bandwidth yourself to keep up with these leads call these sellers make offers look at houses quickly and make those offers then you're wasting your leads and they're wasting your money you put into it right these guys have operations and they've got people doing all of those things and so do you want to make sure that your strategy doesn't over produce or you don't pay for leads that you can't get to yeah it seems like the follow-up game is also super important just because all those leads can materialize six to 12 months or even 18 months from now if someone actually decides to ever sell so all right Henry I'm going to move on to you I want to hear your two minute pitch and we will all collectively let you know for in or out but uh before we do just a quick reminder we got two minutes on the shot clock here we want to know what is the strategy how would you or how have you approached setting it up and why is it successful for leads all right timer starts now so I'm going with the old tried and true Direct Mail marketing this is the very unsexy way of generating off-market deal flow so in a nutshell uh Direct Mail marketing involves you generating a list of sellers who have equity and motivation that motivation to sell at a discount and you reach out to those sellers via Direct Mail you essentially send them a piece of mail that says hey I'm Henry I'd like to buy your house at 123 Main Street you don't have to pay any realtor fees or commissions I will pay all of your closing costs you don't have to make any repairs give me a call text or check my website out if you would like a offer on your house and what this does is is it allows you to reach out to Sellers and then gives them the opportunity to reach back out to you this was a great strategy for years and then technology like text messages and voicemail came in and then rules came in that said text messaging and voicemails aren't legal and so now mail has regained some popularity but I have done the most volume of deals through my direct mail campaigns I am not expecting to win anybody's Hearts here with Direct Mail as a strategy it is a very tortoise in the hair tortoise style strategy it takes Relentless consistency but when you do it it can generate leads for you essentially on autopilot and it is a great supplementary method if you couple it with something like the call center strategy James said boom wow that's a record that's a minute and a half right there that just goes to show man you are you're good at this whole podcast thing so so awesome well let's open it up to the whole panel here and I'll kick us off with with my question here which is how complex is it to actually start a kind of a direct mail campaign it is so easy it's the same thing you're going to need to pull a list right so essentially buying that data from somewhere you can buy it from literally anywhere credit bureaus there's tons of websites you can use deal machine prop stream there's tons of places where you can buy lists from you gather that list and then you can go to I think the best way to do this is to go to a print house that specializes in direct mail and you can give them your list select the kind of mail you want to send there are tons of print shops you know what's funny is several of them are located right there in St Louis where sanprim is but there are several of direct mail shops that you can just send your list to and you can then break that up so one of the lessons I learned after my very first Direct Mail campaign is that you want to break it up so that you're delivering your list over uh your your list gets sent out over the course of a month like a week at a time my verse for a mail campaign I sent out three thousand pieces of mail everything went out all at once my phone started ringing off the hook and I could not get to the calls fast enough I probably lost some deal flow there and so we spaced it out so that somebody's getting some mail every month that way I can stay on top of my leads again we're talking about it Mom and Pop Shop when I send mail my phone rings I answer the phone I talk to sellers I set appointments I look at houses I make offers and so I have to be able to keep up with that lead flow But to answer along with the way of answering your question is pull a list send that to a print shop who sends Direct Mail tell them the frequency you want your mail delivered and they will deliver it some of these print shops will even pull more lists for you if you give them your criteria and so they can you can literally set this on autopilot tell them the kinds of lists you want to mail how frequently you want to go out how want it to go out give them a method of payment and your mail can be on autopilot all right so Henry you ready for it let's do it so let's say James had six thousand dollars he was spending so let's say I have six thousand dollars I'm a brand new real estate investor what is the the list or the area that I should be looking to maximum my six thousand dollars you know my very first list I'm sending out should I stack it like you know a lot of pain points should I send all absentee what would you tell me if I was bringing new yeah if you were brand new and you had a limited budget I'm going to tell you to use a more Niche list to nail down your first deal and you want to use a niche list that isn't the most popular Niche list so how I found my very first Direct Mail list to mail was I researched on podcasts and listened to people who were talking about what lists they like to mail I literally wrote them all out on a piece of paper every time I heard a strategy and then I crossed out all the ones I heard multiple times and I used a strategy that I very least heard because I don't want to be the 13th piece of mail from that somebody gets from an investor I either want to be the first or the last so I'm not trying if you have a limited budget you want to mail a niche list that has some level of volume for you to mail if your Niche list only has 10 people you can't mail it but you want to Niche list that has enough volume for you to mail so you don't have a ton of competition so that your response rate is higher and so my Niche list that I used was owner occupieds for people over the age of 50 who had owned their house for 10 years or more no llc's only personal names and deeds who had 40 Equity wow so for everyone at home rewind that last two minutes we're gonna do a drinking game take a shot every time Henry says Niche list okay so that's cool and just for anyone wondering nicholas.com is available for sale for four thousand three hundred and fifty dollars I did check um so let me ask you this when it comes to the actual composition of the letter do you like how hard is it to actually copyright that letter or does your company that handles all that write it for you that's a great question do not overthink this this just needs to say hi I'm so and so I want to buy your house at 123 Main Street I will pay all of your closing costs don't say closing cost paid say I will pay your closing costs it's much more personal I will pay your closing costs you don't have to pay any fees or commissions you don't have to make any repairs if you want a cash offer and then give multiple ways to contact you call me or text me and give them a phone number or visit my website at and give them your website that is it don't have to overthink what your message says which is nicholas.com that'll be your website I love that Henry simple is good for wholesaling like you try to overthink it as a wholesaler I remember it was brand new it's like I need to have this magical pitch that's going to let me in the house and they're going to sell my house it's like no just be yourself and be direct um hey I question Henry I love Direct Mail Direct Mail was our main marketing source for dealflow from 2010 to 2014 for sure we it was a hundred percent of our marketing banded it worked really really well and then it stopped working for a while it was like when the texting everything came out and then what happened is our cost per deal exploded in a 120 day period because we were mailing so much right and obviously we were doing a lot more volume what's your average cost per deal because that I love mail I think it's great it gets you in the door but the cost would you know because it's so consistent you got to be on that drip like you're talking about the follow-up mail it can turn into an expensive thing what what's your average cost per deal when you're closing yeah so we measure more on cost per lead or cost per appointment right so for every appointment I go on I'm probably spending about 500 to go on that appointment so that means uh if you divide all of the channels we're sending marketing out to uh across what we're spending every time I go look at an appointment it's probably cost me anywhere between three to seven hundred dollars to go on that appointment with my marketing but I'm not just doing mail and that's why I wanted to caveat that by saying it's a great supplementary marketing strategy I don't think it's the best strategy to get started if you have a limited budget because there are other strategies like the call center strategy or hiring somebody else that's going to do calls for you because you can get more volume that way right you could touch more people that way but when you complement a high touch strategy like calls with a slow touch strategy like Direct Mail you capture some of those deals I have bought deals that I had been calling and not getting through to anybody or them hanging up on me when they got my piece of mail they answered it they contacted me I look at the house and offered it right so it's a great complementary status and it's it's just it's just slow and steady you have to think of marketing in general but Direct Mail especially is you're trying to get your piece of marketing in the hands of the seller at the moment they're thinking about selling and so it's not fun or pretty because you might send that first piece of mail and they go uh they just throw in the trash they never look at it second piece of mail they look at it and go some yahoo wants to buy my house and they throw it in the trash but then they start thinking man I wonder what I could sell this house for and then start thinking what they could buy with that money and then that third piece of mail comes and they go I'm going to call this Yahoo because I sure wouldn't mind a new truck and get rid of this problem property and then they call you and that's when you got to be ready to jump on that house talk to that seller look at that appointment and make an offer so it's not a great only strategy it's a great supplementary strategy and the good thing about mail is it leaves Little Golden nuggets for you everywhere you get these random phone calls three years later like we don't even send mail anymore right now and we still get calls because we were just pounded Washington state with mail for years and we still get those random calls it's like a freebie all of a sudden comes in you're like yeah this is this is awesome I closed on a flip last or two months ago that I sent mail to three years ago yep and hadn't sent mail two cents 100 okay well awesome well thanks for breaking it down I hope for everyone listening at home I mean we just pitched the entire process in less than seven minutes and to be honest like these are strategies that I've always wanted to do but I'm like oh the logistics the logistics but hearing it from you guys it really is so simple um all you really have to do is like just try it right like actually take a little bit of action and work through those details one by one so um we're gonna move over to you Sam do you have a strategy in mind that you'd like to to pitch us I do and I really like Henry and just meeting James but I my strategy is going to blow their strategies out of the water for for a new investors I'm just laying it out there I'm calling my shot like who is that roof did that calling my shot yeah okay awesome all right two minutes on the clock and all right that sound is awesome all right so I'm going to take a step back I'm going to try to talk to people that are brand new investors that don't have a ton of money don't have a ton of time or energy and are just doing this on the side dipping their toes in the water maybe they're not even fully committed to spend money so my strategy is a strategy that has a zero dollar per cost zero dollar per buy strategy and that's contacting other wholesalers not everybody is willing to send out direct mail or do ads or connect with people get inside houses and negotiate and do all the things that go into buying these distressed properties they get them super cheap but not everybody wants to do that or has the skill or ability to do that so what my strategy is is kind of taking a step back and just contacting wholesalers that do that every single day we've bought over 150 houses in the past three years in Saint in the St Louis Market all from contacting wholesalers and having them contact us because most wholesalers do not want to close on a property most wholesalers do not want to buy a property fix it up or keep it as a rental they just want to get a check and move on so what we do is we contact all the wholesalers in St Louis and we let them know that you know we can be your end buyer and we can purchase the property from you there's no software to set up you can probably use like a Google doc or maybe your phone to kind of keep track of leads or lead management software but in general you're contacting the experts that are out there already doing it and of course you're going to pay for that by them marking it up but as long as that meets your criteria and as long as you're buying it at your price which good wholesaler will leave plenty of meat on the bone that's a good thing that they get paid they make 30 grand on you so they're going to come back to you so I love Henry and James strategies we use them as well but for a brand new investor I think the best place to start is wholesaling because it's unlimited cost it just takes time and energy and effort to get your name out there awesome all right with 15 seconds to spare We'll add it to this five minute panel discussion I'll kick us off here how complex is it to get into this specific strategy it's super easy you go to your local meetups and you can meet wholesalers we have one here in St Louis 250 300 people come every single month and there's like 50 or 60 wholesalers every month that Come Those little banish signs you see on the side of the road if you're not driving take a picture of those signs those are wholesalers you can Google local wholesalers near me or Real Estate Investors near me and these companies that are decent sized like James company companies like that they're wholesalers so you can contact them and get on their list so it's pretty easy to do but you do have to kind of be an extrovert and be willing to go out and talk to people and meet people to make this strategy work Sam I I agree with you I think talking to wholesalers is a good strategy how do you so put on your new investor hat take off your Sam print hat right so how do you as a new investor get a wholesaler especially if it's an experienced wholesaler how do you get that wholesaler to take you seriously and give you a shot at those deals where you're not competing with all the big guys right because it yeah you're Sam Prim you've got a you've got a reputation you walk in there you say hey wholesaler send me a deal I can pay cash for it they go yeah I know you can I know who you are but how does the guy who's just getting started get that wholesaler to take them seriously and that's a very good point that is kind of I think the the main downfall of this strategy it takes time to develop those relationships you know not everybody is willing to close on the deal you know you see you guys see it in all of your markets people don't close on deal and they kind of get a bad name so there's these experienced wholesalers are always trying to find new investors they probably pay more than experienced investors so somebody like me our company we are going to buy it with enough room to re-wholesale it right daisy chain and Mark it up so a brand new investor that is going to keep it if you're going to keep it as a rental and flip it you can probably pay more than me so you know I have to buy it deeper because I'm going to potentially resell it so if you're going to have your exit strategy be the very next you know you know Domino to fall on the investment then you can probably pay more than I can and it is going to take time to develop a relationships it's one of those things that you know six months take the next six months and talk to as many wholesalers as you can really get in with five of them and then you got a gravey train is what we call it where you're getting you know two or three leads a month coming from these you know these 10 people these five people that you make connections with so it does it does take time you're right Henry it's not like you send out direct mail and get calls right away it does take time but there's enough wholesalers out there and you know there's enough you know not every wholesaler has unlimited money so they'll be willing to come to you I love this strategy I think the the power of networking with wholesalers you know we do probably 10 deals a month with wholesalers that we have a partnership program with and then we have our own wholesaling team and so it's a great way to get deal flow in you know the negatives is you are paying a markup and that direct to seller you know direct sellers a lot more work but the return can be huge at that point but one of the other big negatives for a newer investor is trying to vet the right wholesaler too because a lot of new investors depend on the deal sourcer to provide them with the and the analysis on the property and a lot of times wholesalers they're they're sales people they're trying to get a deal done right and and that happens a lot where I'll talk to an investor like well I bought this deal and it wasn't a good deal off a wholesaler I'm like well that's not the wholesaler's fault that's your fault you didn't vet your information like well his rehab numbers wrong I'm like no your rehab number's wrong you're the one who looked at it but it's about betting your own information so what suggestions do you have for newer investors like because it's this hard thing you want to qualify yourself so they take you seriously but you also want to make sure that you're buying the right thing because buying the wrong thing can be detrimental so what steps should newer investors take to really vet this information or you know should you know for us I know we've set up our own underwriting so it's like yeah it bring us the deal we're underrated our own way we don't even care if there's numbers in there but most new people are not like that what steps should they be taking to verify this info yeah I think in general like you said you have to do your own underwriting so if you're newer to this I mean you'll be underwriting any strategy you have but you have to stick to your numbers it's good to reference the wholesaler's numbers but they're going to say it's going to sell for more than they'll sell for and they're going to say it takes you know less than it's actually going to take to fix it up so knowing that going in I think is key and then sticking to your numbers and not letting emotion get involved and offering on every single do you get it from a wholesaler because the worst thing can happen is you can build a relationship well I guess not the worst thing but you can build a relationship with somebody they bring you a deal it makes no sense and you just ignore them well they're not going to bring you the next deal that might be a deal so we always tell them offer and explain your offer if it's 30 grand less 40 grand less than what they're asking who cares still offered explain why you never know we've had that happen before where wholesalers have gone and renegotiated with the seller and got it down and then they're like I'd rather sell it to you and make 10 grand I was trying to hit a home run but I'd rather make a little money than no money on this deal so I think those are great points just being you know conservative and sticking to your numbers and always offering and explaining your offer will help you not you know maybe piss off a wholesaler with a low offer I think the networking with wholesalers is is great and I think one thing new investors can do is partner or make good friends with a new newer wholesaler because look what wholesalers need is they need to know somebody can close right what they also need is they need to be able to underwrite a deal and so maybe you haven't done a deal but you know enough about a property to tell how much rehab it needs one of the things that I did when I first got started was I was great at marketing and generating the leads but I couldn't do great at renovated or understanding a renovation cost I'm not a handy person it took me a while to develop that skill well I started taking a partner who wasn't a partner at the time but another investor with me he was great at understanding what the rehab cost was we would walk a property he would tell me what he thinks it was going to cost to rehab it and he'd tell me what he would pay for that property and then all I had to do was go contract that property for less than that number and that's how much money I made and I assigned maybe four or five deals to this person right so maybe you can walk properties with a newer wholesaler to help them feel more confident in their underwriting maybe you can say hey send me your deals I'm going to take first shot at them I I will get them close find the title company ahead of time that you know is going to handle assignment fees that's sometimes a problem that wholesalers have too is finding a title company who will work the deal out where they get their assignment fee what value can you bring to a new wholesaler pitch that to them build the relationship because what they're concerned about is getting that deal closed and getting paid if you can make that job easier for them they'll bring you your deals yeah yeah Sam I love the strategy really you know I think the I think I don't think you oversold it I think this is a great strategy because people will listen to these different things they'll say oh my gosh they may get hung up on some of the logistics with some of the things that we're pitching here but with your strategy you're sort of taking out the logistics and you're finding a wholesaler that's doing all the work and all the scouting and all the off marketing themselves they're paying for the direct mail they're paying for the call centers possibly and you're just working with them and paying the fee right so it is more expensive to go this way but it simplifies that process for you if you're willing to pay that markup so I think this is a really great one uh thank you so much I'm in on this I think you blew Henry and James away with your pitch but unfortunately we still have one more pitch and that is my pitch uh and I I you know I don't know if I have to time myself I guess I'll time myself I'm going to aim to be the shortest pitch that way I can at least win in one thing today my pitch is the real estate to meet up okay and what I really like about this specific strategy is that I think that this is something that people can do tomorrow right there there are no Logistics necessarily with the real estate Meetup depending on how you approach it um I'm proposing it twofold right there is actually hosting a real estate Meetup where you bring together a group of investors that are all like-minded people and they're all they come from all walks of the real estate Journey you can bring together flippers short-term rental hosts multi-family people everybody in the real estate world can all come together and you can meet them and what I like about actually hosting a Meetup is that it sort of makes you a local expert and if you are just getting your your start in the real estate world at the very least it makes you somewhat of an authority in the eyes of people that are coming to this real estate Meetup because they say oh Sam is hosting this Meetup there are 10 20 30 40 50 100 people here he must know some stuff if he could get that many people here right so it kind of puts you in the Limelight of your local area and if that happens and I think you're more likely to build a rapport with the people in your community and actually get deals tossed your way that would be one option for the real estate Meetup I think a lot of people might get hung up on actually getting those started I have some ideas for how you can actually get your real estate meetups up and running but you can also just go to meetups there are a lot of meetups in every single City every single week that you can just go to and meet other people and network with other people tell them what you're looking for and I think this is a really great way like you talked about to find wholesalers and to find people that are executing the strategies that you might want to execute but don't have time for you let them do it you let them send you the deals and you pay a premium for it and seen with 10 seconds to spare actually I think I think you actually beat me on this one Sam time-wise but it's okay yeah I love that strategy um Rob I think that that's a great one it goes along with the network that I'm talking about I think there's two main ways to get deals that we've all been discussing they're spending some money putting some systems in place buying them a little bit deeper and you know having to deal with that end of it and then there's just the going out and talking to people making connections and getting in front of as many people as you can and both of them have their their pros and cons and I think I'm going to a local Meetup or hosting your own local Meetup a little more effort but that that's a great way to meet a lot of people instantly your Rolodex is up as soon as you go to a Meetup the business cards the connections you make you just make connections that might make you hundreds and maybe tens of thousands of dollars down the line so I love your I love your plan yeah the meetup's great because you get to meet people in person and shake their hand and there's nothing like you know in the days of you know we're in a technology boom right everyone's online they're talking we're talking to each other on video right now right the in-person connection is how you build relationships for the Long Haul and so I love the strategy meetups are great um I the only thing I always like to disclaim out of meetups is go in there with a purpose and don't get distracted because some people just get lost in the meetups and all they're doing is going to meet ups don't be that person go get that go get what you're trying to do done and stay focused I love it Rob I I want to give two kind of pro tips to uh that strategy so if you're going to go to a Meetup that you are not hosting don't go with the mindset that you're looking to take something away from that meeting to get something from somebody else go with the mindset that you're looking to add value to the successful people in the room right and just have that in your head I want to find a way to help somebody who's doing deals because then you put human nature in your favor if you walk into a room with the Sam primer or James Dennard and you hear them talking about their business and you hear something that they're struggling with and you can make a connection to somebody or some other business that you know that can help with that problem or you have a skill set that might help with that problem and you offer that servicer that help for free whether they use it or not they're going to remember that person who tried to help them who knew nothing about them over all the other people who are probably standing around them trying to get them to give away some secret sauce or some information so adding value is going to make you stand out if you go to a Meetup if you're going to host your own Meetup it doesn't matter if you've done a deal or not just like Rob said one thing you can do is now you have something that that other local businesses who are partner to your business are going to want right and so now you can go to your local title company and say hey do you have somebody maybe you'd like to come and just be at this meeting and meet some other investors who might end up wanting to close deals there maybe you can go to contractors and say hey do you have somebody who'd like to come and just be in this room where some other people might have some business for you now you can go to all these other businesses who are potentially people who you would need on your team who didn't have a reason to talk to you before because you were just some would-be investor but now you're hosting a meet-up and that comes with some Authority and now you're going to be putting potential clients in a room with them and you get to leverage that relationship because they're going to coordinate getting there through you and seeing the value you're adding to their business just by connecting them with other local people and so now you've built your team without even having to have done a deal you've given them something of value just by using Rob strategy here yeah yeah I love that one one quick addition on that is you don't even you don't have to to be the expert as you mentioned you can have somebody else be a keynote speaker we do that every month at ours we have somebody come in that is an expert that will speak on a specific topic so that can draw more people in and whoever you have speaking usually has some type of following your people that they'll bring so you don't have to you know get up there and talk for an hour at these meetups you can do a quick intro and then you can have the experts speak and you know draw more of a crowd through them hey James or Rob like I don't know have you got have you guys been asked to be an expert at Sam's meeting I haven't I haven't got that it's kind of whisper right because it's like I don't know I just got a new number maybe the texts aren't going through yeah that call center thing that maybe that yeah that's why you know mail and call centers don't work I called you guys I sent you mail I got I must got that return mail I'll skip Trace you guys and then I'll reach out to you then I appreciate that yeah okay so you guys hit a lot of what I love about meetups and so this actually goes back to Henry your question to Sam like how do you get a wholesaler to take you seriously listen I have been contacted quite literally by I don't know probably a hundred wholesalers in my life and I have reached out back to them I would say of the hundred like in my real in the last five years probably like 30 where I'm like hey I want this deal or hey here's what here's my buy box this is what I'm looking for it's in the same neighborhood I've never gotten a response from any of them okay and so it is one of those things it's a painful effort to build a rapport with someone digitally with someone over email because there is no name to the face and so what's really powerful about a real estate Meetup is when you meet someone there's actually a vested interest to help that person win just like you said Henry if you're providing value to someone you find out that they're a wholesaler say hey how can I help you now that wholesaler wants to help you win if you can help a wholesaler narrow down their specific strategy right because I have wholesalers that I've met at meetups that they're like oh I do the LA area and I'm like well hey I'm looking for zip code 90043 I'm looking between these streets and these streets and I just gave them exactly where they need to hit and then they send me deals that way right so it's a really great way to actually get to know people uh what I wanted to talk about were a few ways that you could actually get a real estate Meetup going and how you could actually Market it a little bit right because this doesn't have to be super hard I think one of the downfalls with real estate meetups is that it does take a little while right it's not like you're going to get 200 people at your first Meetup it might start with five but then it'll grow to 10 and 15 and 20 and 30 and 40. it is a grind that you have to keep reinvesting to but you just need one deal from every Meetup that you host for this to be a ten thousand dollar business for you per month right so I would post your social media channels tell people your friends family if they know any investors to go to your Meetup and Market it that way um there are different websites like meetup.com that you could create a Meetup event on there if you wanted to you could create a Craigslist ad I think that's like 10 bucks you could go to different Facebook groups that are targeted within your city like local real estate media meetup groups in your city you can go to the Bigger Pockets forums and say hey I'm hosting a Meetup in Houston Texas at this day you can contact local brokerages and say hey uh I know that you guys have a bunch of Realtors on your team I'm hosting this Meetup would love to invite you guys and maybe if you want to promote it to your email list here's the link go to conferences in your area conferences are probably the best version of a Meetup if you don't want to throw one if you want to just go and network with people because those are people that paid for tickets to go and learn something and it's just a little bit more of a serious investor at that point and then ask this is a great idea that you guys just said ask a local influencer is there a local influencer in your city that you can say hey come to my Meetup I'd love for you to speak I'll buy you a beer and you can promote your business to everybody whatever that is but if you can get a local influencer there they could get 20 30 40 50 people there uh Tony Robinson me and Brian Davila we just threw a meet up in Los Angeles and we promoted it for about a week I think 500 people registered and I want to say like 300 people showed up a lot of places actually said we couldn't go to the go go to their breweries or whatever we actually got turned down from businesses because it was so many people so asking a local influencer to show up I think can can create a pretty large Meetup turnout for you and then the last thing I want to say to James's point which is super important make sure that you do have a purpose and make sure that you have a way to reach out to the people that come to your Meetup I've hosted several meetups where I didn't collect emails phone numbers anything and that afterwards I was like that was amazing I'll never I don't know if I'll ever speak to them again because I didn't get any information create an Eventbrite and when people register on that Eventbrite put in automation through zapier.com that sends their email to a spreadsheet create that spreadsheet full of emails and remarket to them and build your email list at the local levels that you can always promote your Meetup from time every single time that you do it uh and scene yeah sorry I know that was a lot but there's there is just such Rich territory for me I think and I think a lot of people really don't utilize I think the simplest way to get your name out there in the real estate Community yeah thanks for inviting me to your Meetup in La Rob I'm just like 30 minutes away I thought you live in in Arizona do you not Am I Wrong Newport Beach in Seattle oh my gosh that's cool you totally do you got a boat he lives everywhere we're having a memorable conversation about Airbnb in my boat out you can't do that in a desert well it's actually your yacht you're under playing it you're very very cool yeah okay next one is going to be our collab Meetup in Los Angeles we'll plan it out bud there we go I'm in okay well that is four Mega Ultra solid ways to find off-market deals I'd like to go around just get final remarks final thoughts from everybody do you want to switch teams do you wanna you wanna try something out Henry I'm gonna throw it to you first you look like you have something you want to say yeah my closing thought is if I were a new investor I just heard let's say this if you're a new investor and you've got a small budget to start marketing what I just heard is there's three strategies here for you one of mine or James's because those cost money and then doing both of what Sam and Rob said because neither one of those costs money they take time and effort and so now you've got three lines in the water one that's taking some of your budget and two that are costing your time and effort that's going to generate could potentially all generate lead flow for you setting you apart from every other new investor just trying one thing yeah I think all of these strategies work and none of these strategies work it's all about you actually going out there and doing it and following up you send one batch of direct mail you may get leads you have to continually do that you just call a couple numbers you have to continually do that you can't just go to one Meetup or talk to One wholesaler you have to commit to this and you have to go do it and you will eventually be successful but you will not be successful if you don't commit to and actually go do it yeah I love that Sam a consistency is key try a method don't give up on it too easily it takes time consistency works but I will plug call Rooms one more time it is working if you are a new investor and you want to buy a deal where like the money he's dripping off the HUD the day you're you're buying it right it's just dripping you're making money direct to seller avoid the other fees I actually think uh yeah that tree behind Sam is or a bunch of Hud statements with dollar bills hanging off right there they'll just call center leads on Sam's tree awesome well uh if people want to find you guys online Sam where can people learn more about you connect with you learn all the cool stuff that you're doing out in the world yeah just Instagram is probably the best place to find me that messenger is the best so at sing a faster freedom on Instagram just shoot me a message and and I'll answer cool what about you Henry best place to reach me on Instagram I'm at the Henry Washington on Instagram cool and Mr James uh same thing Instagram's an easy way to get a hold of me uh it's j Dane flips or you can check out James dainard.com awesome well you guys can find me on MySpace at rawbilt r-o-b-u-i-l-t or check out my Zenga if you'd like but uh with that thanks everybody for joining we will catch everyone on the next episode of Bigger Pockets [Music] sure [Music]

Channel: BiggerPockets

Views: 73,427

Keywords: rental properties, off market real estate, off-market real estate, off market deals, off market real estate deals, how to find off market real estate, how to find off market properties, how to find off market real estate deals, income property, investment property, invest in real estate, how to invest in real estate, home prices, mortgage rates, mortgage interest rates, flipping houses, wholesale real estate, sam primm, biggerpockets, biggerpockets podcast, podcast

Id: HaocGdKSTqU

Length: 52min 52sec (3172 seconds)

Published: Tue Jun 20 2023