How One Expired Listing Turned Into an $80K Subject-To Deal with Richard Whitman

Welcome to the Smart Real Estate Coach Podcast, your source for actionable, real-life, practical investing advice. Each week we help you make a quantum leap somewhere in your business, your finances, and/or your life. Subscribe, leave a rating and review, and learn more at smartrealestatecoachpodcast.com. Okay, smart listeners, it's Chris Prefontaine with another episode. It's actually a family cast this week. So we are bringing you a cool masterclass that has actually turned into a family cast, and that is going to be with our own Mr. Richard Whitman. And because it's a family cast and because he's a High 6 associate, I'm going to have him introduce himself. I want to give you some backdrop though. Rich and I met at one of our In the Trenches boot camps. And what's really cool is every single boot camp, there are usually 1 to a handful of people that have been in the business for a lot of years like me. And they have properties in their inventory, yet a lot of the things we do live in the bootcamp, the light bulbs go off nonstop and they have so many aha moments. And then we turn some of the existing properties that they didn't know certain profit centers were available to them to access. We turn those into gold. We turn those into 3 paydays. We turn deals that would've maybe walked away from into 3 paydays. And so Rich is no exception to this. I really, really, really— I'm looking forward to not only this interview, but also his journey with us here at Smart Real Estate Coach. All right. So with that as a little bit of an intro, I wanted to save the intro for Rich himself. Rich, welcome to the show, buddy. Thank you.

Good to be here.

Yeah, I know we might be hanging out at the boot camp this week. We may not, but if not this week, it'll be next month. Rich, do this for me. I didn't on purpose give your intro. Whenever I do like a family cast like this, internal community. I like people just tell them about themselves. So how many years you've been in real estate? Go back as a summary of what you did leading up to now, just so these guys have an idea of who we're chatting with.

Well, I always liked working on houses. So I worked on cars at first, but I actually switched over to working on houses. In '05, I bought my first flip, cost me 10 grand, put about 12 in it, sold it for 50. So that gave me a good urge to start doing more. So gave you the real estate itch. It gave me a good itch. It did. And so in '08, when everybody was having problems, I was actually buying. So it was actually pretty good for me. Sorry to hear about the other people, but it was actually pretty good for me. I actually bought like 3 properties in '08 and '09, '10. And I started from there and did a little— they were fix and holds pretty much. No, they were foreclosures, a lot of them. I buy a lot of foreclosures and I actually just started fixing them up and then renting them out. And I started there and I went into a little bit of a downfall in my life from 12, lost my brother, my mother, and my son.

Oh yeah, that's right. You shared that with me. I was Brutal.

Yeah. And it sort of hit me and it hit me pretty hard. And then in '18, I really said, look, I got to get off my butt and get moving here. I mean, I'm just, my life's going to nothing. So I started doing fix and flips and I started in '18 and from '18 to today, I did approximately 13 Fix and flips. Nice. Five fix and holds. I still have them. I currently have thirteen properties, twenty units right now. And I just I have an Airbnb I run. So that's that's pretty nice.

Yeah, you got a nice mix actually, right? Nice variety.

Yeah. Yes, I do. I do. And that's and that was one of my goals is to get a variety. So I'm. I'm actually laying off the fix and flips a little bit now. So I'm actually into the 3-day, 3-paydays now. So I'd rather focus on that a lot more is my thing. I have foreclosures. I love helping people. I really do. One of my main things is I just helped a veteran out with our, my first deal with you.

Awesome.

It was actually an expired listing where The veteran was going to give it back to the bank. And I said, this isn't good. I said, don't do that. I said, let me help you out here. And sure enough, I was able to help this veteran out and help him get out of his mortgage. I mean, like I say, take it over. I took it over actually.

Yeah. And that was your first deal with exiting with us right after we met?

Yes, yes, actually. Yes. Yes, I actually, well, I just, I haven't been with you a year yet.

Yeah, no, it's new.

Yeah, it's new. So this is my first deal in a year, which was pretty good.

Well, let's come, actually, let's come back to that. And I didn't have that on my list, but let's come back to that number-wise, right? And you can be rough on the numbers, you can be approximate. I wanted to, you saw me scribble notes, couple questions that I didn't know, even though we met in person at the bootcamp. So prior to '08, what was the journey like? Was it any real estate? You were fixing cars a little bit for a hobby maybe, but what did you do for work prior to that?

I was actually a mechanic for 20 years.

That's why you own the cars. Okay.

Yeah, I was a mechanic for 20 years. I was in the service, uh, and then, uh, in 2000, I actually, uh, went for accounting. I got my accounting, uh, degree, and I was an accountant for 20 years. Uh, I just retired in, uh, last September.

So, so mechanic and then accountant. I definitely didn't know that. This is good. And then transition to real estate. So the math, okay, so the math part of this, we're going to get into 3 pages in a minute. That's got to get you intrigued then because you know the math.

Yes.

Yes. Oh, I'm psyched for you because this is going to resonate. Why did I not know that? All right. This is going to give me some ideas. Sorry. That's awesome. No, I'm psyched. Here's what I'm psyched about. When you were at the bootcamp, you admittedly said something along the lines, not exact words, but something like, okay, I got to get used to not like trying to fix up everything. You know, and get, because of 3 paydays for the listeners, we don't have to fix up everything. We can, if Rich wants to, we can, but you don't have to. So I guess I'd go with next, before you go to your deal, what else was like an aha for you, whether it was at the bootcamp or part of the deal? Like what, what are, what are some of the other ahas? Like, oh, oh man, I didn't have to fix that up. Like anything else that kind of struck you if you think back again, it hasn't been long.

Just, no, just the way the deal structures. I like the way you have it with the 3 paydays with the down money. And then your payday 2 is where you get a little bit out of the rent. And then the 3rd is completing it. I mean, just getting your last— and sometimes you have to wait. You have to wait for that last payday, which could be, who knows? I just like the deal structure, how it's set up. And I mean, I was getting a lot of ahas out of Boot camp, I really was. And that's why I joined right away. I knew this was for me. And of course, my daughter's right there aside of me now.

Yeah, it's awesome.

She's—I'm trying to get her a little more involved. So she's a she's one of my little workers. She was always one of my little workers. And I just just get her. I want to get her on the other side of the working like I am now. Yeah.

Well, and you guys know, and you might come up soon this week, but you guys know you can. You can both come because of where you are, what level you're at in the company. You can come whenever you want. So we'd love to have you as long as there's a seat there for your butt and we'll get you in. We'll make it work. Yeah, no, I'm psyched for you guys and I'm very, very psyched for you guys as a family doing it. 'Cause as you know, that's what we've been doing for, you know, a long time now. So that's really cool. Let's, maybe we'll pivot to the deal, Rich. So this deal, the source, it was an expired listing. It was a veteran. Not that I'm going to do a whole deal structure here, but I just want to give these guys a sense. And what attracted you was when you talked, you didn't know till you talked to him, right? You just saw expired listing. Am I right?

Yep.

Yeah. And then when you called him, was he behind? I forget.

Yeah, he was behind a little bit. He had about $10,000 behind. So I wound up catching that up.

So you did have money in the deal going in?

Yeah, I did have money in the deal. Yes.

I mean, I got to think this guy was ecstatic. What kind of conversations went on? Did it take a while, like from the time you got the lead till the deal? Talk about that a little bit.

He didn't really understand it, what was happening and how it was going to foretake. And really, I didn't either. So it was 2 of us in this at one time. I've never did a sub-2, so that was new to me. So basically getting the sub-to in line and getting him to understand what the process was. And he actually was like right on board with it. He was like, yeah, if it's going to help me and my credit.

Yeah, exactly.

He said, I'm on board with that. So he pretty much said, let's do it.

Because he was going to give it back, which would haunt him on his credit for, I don't know, up to 7 years.

At least.

Yeah. Yeah. Okay. So the challenge you had was process, but he was on board and you learning it as you went. So that was a— okay. So what did you do for that? Because I wasn't too, too involved in that deal. Who was helping you on that deal and what, you know, was that important? Like what was interaction?

On the buyer side, not too much. I pretty much took that on a little bit of my own and Rusty a little bit. But the main thing was Nick on selling.

Yeah.

I mean, Nick was right there with me, guiding me, leading me, and it pretty much led right in. I mean, it was step by step, real simple and easy. Helped me draw up the contracts with the buyers and stuff, and just going through Getting them ready to— getting the correct— getting a good buyer in there was—

Is key.

Yeah, was the key. And Nick walked me right through that really good and easy.

Well, for context for everybody, so Nick is my son who's been doing the buyer side since 2014 in the fall. So 12 years coming up. So needless to say, he's done a lot of buyers. And so as you, Rich, as you probably experienced, and maybe you can comment on this, but It's all scripted for him in his head. He's done it so many times, it just comes out natural to him. And I'm sure you went through that with him.

Yes, yes. And like I said, he was a big help. And just being in that buyer's meeting helped me understand things too on Wednesdays. That was actually a good aha. So just getting to— Being part of it. Yeah, getting a lot of things out of that. And I mean, I'm in your meetings as much as I can too. I mean, I've still got my own things going on, um, where, I mean, uh, I, I still do a lot of things around the community and stuff and, and, um, and for myself as for my business. But, uh, I, I like the, um, I like this kind of, uh, things that are happening with your business, uh, with your 3-day, 3 paydays.

You know, it doesn't matter if you're brand new to real estate or if you've been doing this for several years or a whole bunch of years. I learned the hard way back during the crash that doing creative deals is much better. It's a much better path in real estate in general than, let's call it, the old way— getting paid once, using banks, signing personally. 3 paydays— getting paid 3 times on a deal. It's better 3 ways, not one. Money now, money over time, and money long term. And I don't care if you're in an up, down, sideways market. It doesn't matter. You can and should operate with the utmost confidence. There's literally nothing I love more than helping people create systems and simple systems and processes to become massively successful with our 3 Payday System, and doing so in literally any market and doing it geographically literally anywhere. So if you've been learning and learning and listening and studying and not taking action, I'm telling you after going through it myself, it's costing you tens of thousands if not hundreds of thousands of dollars by not taking action on the 3 paydays the way you should be getting paid. Many of the people that were brand new, just like you, that joined our community have fast-tracked their startup. Now, I mean, wouldn't that be ideal? If you said, okay, should I go fast or slow? Should I take action now or later? It's costing you too much money to wait. Each one of you are at a point in your life, I'm sure, where you want things to be easier, you want things to be better for you and your family. You probably realize that you not only want more, but you deserve more. In this life. So, to be able to give your family everything they want, build a legacy for you personally too, and to have time freedom to start enjoying life, frankly, whatever else you're seeking. And for some of you, now's the time, for example, to just focus on security. Maybe it's building a big solid bank account for retirement. We take these things super, super seriously, and it's my life's biggest reward to help you achieve them. I want to give you a free discovery session with our team. It's free. It's 15 or 20 minutes. You have zero to lose and everything to gain. And to understand how you might fit into the 3 Payday System that we've done now in over 80 markets as of this filming, go to smartrealestatecoachpodcast.com/discovery for a free call with our team. smartrealestatecoachpodcast.com/discovery. Because it's not whether or not you can do it or whether or not you fit. You can do it. It's whether or not you'll take action and do what it takes. And we can guide you through that process. That's smartrealestatecoachpodcast.com/discovery. We'll see you soon. Yeah. And we love having you just because you're experiencing your transition, as I said to you. And it's not because you're on the show. I've said it too many times. Yeah. And for context, these guys to know, when Russ— when Richard said Wednesday buyer meeting, every Wednesday, it's not too old. We just started this recently. Nick holds a just a roundtable Q&A, but buyer-centric. Because we have so many other nights that it's a lot of seller stuff, a lot of associate masterminding, but no buyer-centric. And so that has been a big hit to Rich's point on Wednesday nights. Yeah.

Yeah, it's actually very good and very knowledgeable.

What was the 3 paydays on that deal? Because I've asked you, I think I did one with you where we did some deal structure, but what did it end up coming out to? All, you know, proposed the whole thing.

We got like $30,000 down. Uh, and I think one, I'm gonna look about 4, or the payday 2 is like 14. And then the final payday's, um, I think like about, I think the bottom line is like 80.

Yeah. 80 something. That's what I remember. 80 or 90 grand. And that's if it doesn't change, it could go shorter and it could be a little less or it could go longer. Yeah, of course. So, but that's a nice, that's nice. Actually, it was a nice, um, even spread out of the paydays, right? 30-ish down and then kind of probably the same, if not a lot more on the back end. Your payday too is that high? 14-ish? That's awesome, actually.

Yeah, I think it's like 14. I mean, because, uh, I'm pretty sure I'm gonna— I had to look it up again.

No, no, that's great.

I think it's 7. I'm sorry.

Well, it doesn't matter. The bottom line is you're just— again, you're knocking on 6 figures on, on, you know, 80-something grand. That's nice.

I'll tell you what, I'm not— I'm, I'm grateful I am. I'm I'm I'm a kind of guy. I'm just thankful for anything. I'm thankful I could help somebody out. Yeah, right. Win win. I'm thankful that I got somebody in a house that weren't able to get qualified through banks and or any kind of mortgage company or anything. So like I said, that that really that inspires you too. Big time, Rich.

I remember like it was yesterday when I was in my apartment, Kim and I after we get. just annihilated in the crash. And she said to me, why don't you help other people? We didn't have a business then. She said, why don't you help other people learn how to get their credit back and learn how to get a house? Like, because that was us. My credit was in the toilet and I couldn't buy it. My life depended on it. So it's just cool to hear people like you in the community go, yeah, that's what we just did. That's just like, that's what lights us up. So that's why I exist. That's why we do it. Were there any, with the buyer or the seller, Any, like, I don't know, pivots or major curveballs or anything? Because you said it went pretty smoothly. Anything that comes to mind where you went during the process going, oh man, like any curveballs at all?

Yeah, there was a curveball with the buying end where I should have probably did a better job on the sub-to. Basically, I put it in my company name and I should have Put in a trust, so and I am working on that right now, getting that out of there. So getting that corrected.

Okay, but that's the worst thing. I mean, you know, at the beginning for us, I think a whole handful went into LLC. You know, so you live and learn. Yeah, and it's something that's correctable.

So yeah, it's not going to kill you.

No, no, not at all. Everybody's going to be good. I don't think I got because we get off on something else when you got the lead. Till when you put it under contract, the seller basically said, yeah, and signed the purchase and sales. How long was that?

Not very long.

Oh, we couldn't wait.

That was pretty quick. That was about a month.

That's awesome, especially for sub-2, right? Especially for someone that never did one, you, and never even knew what it was, him.

Right.

Okay. How about the buyer side? So you put an agreement and then from when you and Nick launched it, how long did that take? To wrap the buy-up, not to necessarily fund it, but wrap it up?

60 days or less.

Okay, so both of them are pretty textbook.

Yeah, they were.

Where they're supposed to go.

They went a lot faster than I thought they would.

Love it, love it. Okay, so here's the magic question. When are we going to do more? And what's your goal for this year for these type? You got a lot of other deals, just for context for these guys to know. How many of these do you want to do?

Yeah, I just bought one too, but I'm putting my daughter-in-law in it.

So again, helping someone, that's just you.

That's me. That's me. Especially family. I mean, yeah, like, uh, they do a lot. And I got, uh, actually found one for my, uh, my nephew. And I didn't— I don't take nothing for that. I mean, that's, you know what I mean? That's family. Uh, uh, that's a freebie.

That's awesome. No, that's awesome. But how many— so outside of— because you'll do those, it's just who you are. And you'll do flips now and again because you'll probably stumble on one even though you don't want to make that the focus. How many 3-payday deals like this do you want to do without help?

I'll tell you what, my goal is to get at least 2 a month. I mean, that is a goal. Whether I make it or not, I would like to. I think I might have one in the thing right now. Hopefully we'll see. Like I said, I do foreclosures. I really like helping people. I did. Yeah, I think I have a little bit in the bank where I can help people. Yeah. And I can wait for it in the long run. So it's actually security for me.

It is. Yeah, right on. 100%. And you can do 2, to answer your question. There's no question you can, especially A, you're back ground of knowledge, right? You have that, you have enough foundation built. And then B, you got all of us on your back. You mentioned Rusty earlier, so the listeners wouldn't know, Rusty's just one of the 4 or 5 coaches, just so—

Yeah, the list, yeah, no. Yeah. So, I got a lot of knowledge out of Derek when we were at— when we were in our— in Boston. I sat with him and he just—

Wealth of knowledge.

Yeah, wealth of knowledge it is. And you also, I mean, Um, the whole team there, um, Zach, everybody. I mean, these guys, I envy you guys. I do. I mean, I appreciate it.

I really appreciate it. And you're, and you're just, it's like an awesome, um, I'll say marriage because that's what it is. It's an awesome relationship. And you know, Derek's going to be at this boot camp this week, right?

I know. I know. That's the only thing that can help. I want to— all right.

Just a little teaser. Maybe that'll get you going.

I already told him I'd buy him a drink.

Alright, so you're in. Alright, you got to text me later, let me know, but that's awesome. Well, again, I'm super ecstatic for you, Rich, and anyone that comes up like this, especially just your whole makeup with everything you went through, different than I went through, but a lot of challenges, and that you're able to come out the other side and just make that work inside of our ecosphere is awesome.

Yeah, sometimes you got to push aside the things that, I mean, that, I mean, are their family and they hold you back. But in the long run, I mean, you got to move forward.

Well, that's super cool advice actually. So, I'll ask you, are there any other— like, let's say you're talking to tens of thousands, if not hundreds of thousands of listeners over time on this show, but let's say you were in front of a room and they're all with you and they were filled with— because this is what happens, they're filled with this fear of Oh, I have my job and I don't want to take the move. I'm afraid. Any words of wisdom for them? Any nuggets for them? Just because I'm, you know how I am, I'm just like, go, get out of the job. That's your risk. So what do you say to that?

Like I said, that's why I had a job. So I mean, basically I would say put your foot forward and take the chance, even if you just start out at the bottom level. Get in there, put your foot in there, and start taking the baby steps. And sooner or later, you'll be jogging.

Love it. Love it. Love the analogy of jogging too. Rich, I super appreciate you carving some time out of your day, and I couldn't be more psyched for your progress. And I want to help you get to that 1 to 2 a month like clockwork because you can do that. And do it this week if that works for you. I'm always only bossing you, but I love you to be here. And if you're not, we'll do it next month. So we'll get you in and get you rolling.

It might surprise you.

Good. Good. I appreciate you being on, buddy. Thanks so much for carving out some time.

Hey, thank you.

You bet. All right, guys, that wraps up our time together today with Richard. Come join us at one of the bootcamps. Come hang out with others that are going in the same direction that you are or already accomplished what you want to accomplish. It's very interesting when you hang out with people that are doing that because it's not unbeknownst to most people. trying to mimic their skill sets or mimic how they— what— how they do things. It's really mimicking how they think. And that's hard to do unless you're with them in the room. We get to do that at the boot camps. I want to give you 2 freebies today, guys. As usual, if you haven't gone through my master's class, go to smartrealestatecoach.com/masterspodcast. That's Masters Podcast. That's going to give you my free workshop. No one's there with you. It's you. It's going through a replay and you get to enjoy that. You can go through it a few times if you want. Secondly, if you don't have my books, you didn't go to Amazon and buy them yet. I don't know why you wouldn't have yet, but if you didn't, I want to give them to you for free. Go to 3, the number 3, 3paydaysbooks.com/podcast. They're yours for free. We'll send them out of this office. You might get some goodies or some things in that box with that. And it's all on us. It's not one of those free offers that says free book and you got to put in $8 or $10 for shipping. Guys, hope you enjoyed the show. I want your story to be the next one we tell. I really do. I'd love to show you how to create 3 paydays. Get yourself into that free material. If it's something you want to pursue further, let's chat, you and I, live. You could go to smartrealestatecoach.com/action to schedule a call with me if you want, or one of the team members. And I look forward to seeing you on the next masterclass here at Smart Real Estate Coach Podcast. Be sure to rate and review us, share this episode with your friends and family, and I look forward to seeing you next week. You know, guys, for years I've been at the business now, 34, but for years we had some rent collection things in place, we had bookkeepers in place, we had marketing to go to all these different websites. Now we simply go to prosperity.io. It was built with us and you in mind. You can market your first property if you're brand new, you can scale if you're already in the business, but you can market your properties across 50+ platforms in one click from way less than hiring a pro. You can easily collect rent online, so it's like an escrow service for you. You can track payments, you can get monthly reports so you know how your investments are doing, or if it's your first investment. And no tech headaches, no guesswork, just smart tools to help you grow with confidence. Get started now at prosperity.io because every portfolio starts with a powerful first step. All right, thanks for tuning in to the Smart Real Estate If you got value from today's episode, guys, be sure to subscribe so you never miss a future episode. It literally takes one nugget to access some of the things we're doing. And when you're talking the amount of the size rather of the paydays, it's an opportunity cost that you can't let go. So don't miss an episode. And for goodness' sake, share it with someone who needs to hear it. If you're ready to find your best path for getting started on your real estate investing journey in general, head over to smartrealestatecoach.com. We're going to help you take the guesswork out of your next steps. See you in the next episode.