67: Overcoming Inaction, Direct Mail, and Becoming an Successful Wholesaler with Tim Gordon

This is the bigger pockets podcast show 67.

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What's going on, everybody? This is Josh dworkin, host of to the BiggerPockets podcast, here with my co host, Mr. Brandon Turner. What's going on, Brandon?

Josh Dworkin.

How are you? I'm doing good, man. I'm doing real good.

Good. We just got done recording this episode and it was an awesome, awesome episode. So, yeah, I'm excited.

Yeah, I am too. And what, what's. What's actually just as awesome is when people are listening to the show. You and I will be in San Francisco. And why are we going to be in San Francisco, Brandon? Because we are going to be presenting at.

I don't remember what. It was a company. It was a small company.

You know, it's one of the smaller ones out there.

Yeah, Google.

Google.

Yeah, that's right.

That's right.

That'll be fun.

Yes, yes. Yeah, no, we're really looking forward to it. Brandon and I are going to be speaking at Google, helping the Googleites. I don't know what they're called, but perhaps that's what they're called. The Googleites.

Googlers.

Googlers.

That's people who use Google.

Anyway, yeah, yeah, we're doing a little presentation on kicking off your real estate investing, and I know, I'm really excited and it should be a fun trip and should be great.

Yeah, yeah, that should be fun. I'm looking forward to it. So we'll let everyone know how that went in the following week, hopefully, but yeah. All right, well, let's get on with the show. Before we do, why don't we do.

Our quick, quick tip? Quick tip.

All right.

Today's Quick tip is a CRM. If you have not heard of a CRM.

You need to know what this thing is. A CRM is a customer relationship management software, platform, whatever you want to call it. But a CRM can help you stay organized, track leads, remember to follow up and keep you completely stress free. That's not true, but it'll keep you way less stressed, hopefully if you've got one set up. And we're actually going to talk a little bit CRMs towards the end of this show. Our guest today is using such a system and he's really, really fond of it. So we definitely recommend paying attention. And of course, if you have any questions, please feel free to ask them in the show notes, which you can find@biggerpockets.com show6 7. But we definitely recommend getting organized and a CRM is a great way to do that. So check it out again. I just want to reiterate to all of our listeners, please, if you like the show and get value out of it, jump on itunes and leave us ratings and reviews. We really, really love those. They help us to spread the word. So let people know what you think about the BiggerPockets podcast by leaving us a rating and review. And with that, we're going to get the show started. Today's show is with Tim Gordon. Tim's a wholesaler in San Diego and he's really rocking it. He's another guy who learned his way around real estate through bigger pockets and hopefully you'll listen up and learn how he's doing. What do you say, Brandon? Several wholesale deals per month now.

Two to three a month.

Two to three a month consistently. There's a lot of really, really good tips in the show, so definitely stay tuned and listen up.

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And with that, why don't we bring him on? Mr. Tim. Tim Gordon. Welcome to the show, man. Good to have you.

It is an honor to be on the Bigger Pockets podcast.

An honor. I like that.

I like that. I like that. Very cool. Well, hey, Tim, it's nice to see you officially. I know we've chatted online just a few times back and forth, so it's always nice to put a face to the. To the personality.

The only thing about the face that troubles me is that Detroit hat that he's wearing.

Let's get into that. That'll be fun.

But you don't live. You don't live in Detroit, though, correct?

No, I'm actually. I'm in San Diego, California. So I've paid my dues and I don't think I'm ever going back.

Nice, nice. There you go. There you go. But by the way, I don't know if we talked about this, Brandon. Sorry to cut you off here, Tim, but there was a piece on CNN the other day that I. That I have to rant about a little bit. There was this piece about, like, this data that was saying how great place Detroit is to invest in. And I really. Yeah, I was taken aback by it because the, you know. Yeah.

The title was called, like, if you want to make money as a landlord, try Detroit.

Yeah. I mean, literally, it was like, buy here, buy now. And it looked at some data that was legitimate data saying that, you know, some of the numbers in Detroit are good as. As they are.

Like the article I wrote a couple of weeks ago.

Yeah, but, but the difference between your article and that article is you actually stepped out and said, there's more to look at here, you know, and you can't just go and buy a deal because CNN says that Detroit is cheap or that some data says that it's cheap. You got to look at all that says, well, it's cheap. And it's cheap for a reason, but since we brought it up and it was something that just came up, I thought I'd put it out there. What's your take on that, Tim?

I think they might want to rename that article. If you're wondering where your copper pipes went, you might own a rental in Detroit.

Well played, my friend. Well played. That's awesome. All right, so that rant over, how did you get started in real estate investing? You started working on the side while you were working a time job, right?

Yeah. It's no lie. I actually did begin it at Biggerpockets.

Oh, nice.

I was. It was the summer of 2011, and I was dating a girl who was basically a private money lender. So she had the cash and she would loan it to a partner who would rehab houses, and they'd split everything down the middle. And so she introduced me to the Biggerpockets website. I would start reviewing deals with her, but I was just, you know, someone on the sidelines. I wasn't actually doing anything, but I worked in the corporate world ever since graduating college. And so here I was working, you know, for somebody else probably 60 hours a week, coming home to see somebody who's been at Pilates classes all day or at the beach, and they're doing a lot better than I am.

I want that job.

Yeah. So.

I mean, the private lenders on the higher level of the real estate investor world, but it's starting to make me aware of more of a different lifestyle that was available to you than just working at a day job for somebody else. And I do like working, and I like to be busy, but the idea of not having to work on somebody else's schedule, not having to report to other people, and that there was this thing that you could do on your own. And so that got me into the bigger pockets. I started attending local real estate investment clubs in Southern California, and after that, it just took off. It got me interested in researching wholesaling and furthering my education, and that was where it all began.

Right on. Right on.

Wholesaling is kind of your main thing now, right? I mean, that's your bread and butter.

It is. I typically wholesale about two to three deals a month. Last year, I kind of fell off the track a little bit. I bought a 4 Plex and I bought a house, and I rehabbed both of them. And it was a lot of fun, and it was something that was a goal of mine to do, but it drew me away from what I really like doing in real estate. Which is wholesaling. If I can do all day long wholesaling, I'm happy.

All right, so I'm going to jump in and say.

First, how long did it take you to get that first deal? You decided, hey, I'm going to be a wholesaler. How long did it actually take? And then I'd like to hear your follow up on the age old question because there's a lot of debate on this. Should new investors start by wholesaling? Do you had a chance to do something else?

That is a fantastic question. So the funny thing is it took me well over a year to get my first wholesale deal. And I'm not embarrassed to share that. I actually you shouldn't be. I want to share that because a lot of people actually you should be.

You should be really embarrassed. That's, that's horrifying.

I was doing a lot of things wrong and it took a reevaluation to learn how to correct those things to become successful at wholesaling. But it took well over a year because I really wasn't 100% committed to the practice of treating it like a business. I was treating it more like once I'm successful at it, then I will invest in it. And that's not the right method for creating any business that is going to succeed. You need to be willing to invest, willing to spend the money on the marketing, put in the efforts to generate the leads to grab a deal. And once I made a larger commitment, treated it like a business, put structure and systems in place, it took me three months to get a deal and I was cranking from there on. And then in regards to your question, should new people wholesale?

I'm not sure. Honestly, I don't think everyone should. I like to say that there's a place for everybody on real estate island and everyone has different personalities. And if you're trying to force yourself to do something that doesn't make you happy and doesn't excite you, I really don't think that you should be doing that. So for me, I'm a very outgoing person. I come from a sales background. I like to chase things. And so wholesaling to me was a perfect fit for my personality style and for my background. Training had been in business. If it hadn't been, I don't think it would have been a wise move. I think that. I think partnering with experienced individuals in whatever field of interest you have is the best way to begin. So if you're interested in flipping, you should shadow an active rehabber and learn the process from them. If you're, you know, if you want to be a landlord, then you should shadow a landlord if you want to be a lender, et cetera. So I. I don't think you should just start in wholesaling. I think that's really poor advice. I think you should start by partnering up or becoming almost like a mentee to somebody who is the next level above you and where you want to become.

Gotcha. Gotcha. That's good advice. Yeah. Yeah, for sure. So why inevitably, did you actually end up picking wholesaling to start with?

To me, there was a low. A low risk for one, but also.

Almost matched what I was doing for my day job of outside sales. It was, you know, it was business. It was everything. And so that's why it was the perfect, you know, perfect way for me to start.

Well, and I think that's interesting right there, is that the people that I know that are the best wholesalers, I mean, I'm not, you know, the world's best wholesaler or anything, but the people that are really good at it are people who come from sales backgrounds. A lot of the best wholesalers I know have been salesmen of some kind, because I think that that is a major skill you need to succeed at wholesaling because you have to talk to people, or you at least have to have the right people in place to be able to do that for you. But, yeah, generally I think that sales background is really, really important.

Yeah. I mean, a lot of it, too, is what's going to make you happy. I mean, if you don't enjoy what you're doing every day, there's really not more points in doing it. I mean, we all like money and things, but if you're not truly satisfied in what you're doing every day, why do it? So I see a lot of people who. They can get a wholesale deal done, and they're very talented people, but it doesn't satisfy them. So what's the point?

There's.

There's other things you can do that will excite you in real estate.

Yeah. Yeah, for sure.

Well, cool. Well, hey, let's go actually kind of dive into your strategy for finding the wholesale deals, because if you're looking at them, you said you didn't really get a whole lot until you started taking it seriously and investing in your marketing. So what is, I guess, what does your marketing look like? What weren't you doing that you started doing more?

I mean, are you asked. You're asking him pretty much what he did wrong when he started.

Yeah.

Hey, yeah. What did you do wrong? And then what did that transition into?

Yeah, well, I'm happy to cover a bit of both because what I really love to do is motivate other people to become successful in these things. So I think sometimes sharing some of the pain or the mistakes is a very helpful way to help other people avoid it. And so at the beginning, I would maybe go to a real estate meeting, get amped up, you know, for a few weeks, and I would put out some mailers, say maybe 500 yellow letters or something. And the calls would come in, they wouldn't seem very motivated or I was very timid, or I was nervous to screw it up. And then the calls would slowly fade away. And then I would sit around wondering why I don't have a deal. And then I'd go to another meeting a month later. And so it was inconsistent marketing, inconsistent follow up, inconsistent tracking of the leads. Basically I would just save the number in my phone if I thought that they might be a motivated seller. And if they weren't, it was forgotten about. So I kept no database. It was like a hobby instead of a business. And so all of those things were.

Allowing me to really generate anything decent. What shifted was I basically created a marketing schedule where this day, this week we're doing these mailers. We set up a voicemail system where all the calls go to all of the leads are entered into a database now, and so they're consistently tracked and there's a follow up schedule with all those leads. And so really all I did was I just turned it into a business. So everything has structure and methods that will allow it to be easily traced, easily tracked and followed up upon. And as soon as I started doing that and doing it consistently, the deal started happening. The other thing I did do is I went on higher volume mailers. I spent a considerable larger sum on marketing.

So I've got a couple questions for you.

When you say consistent, what do you think? Well, larger sum on the mailing, if you don't mind sharing. I mean, approximately how much money is that a month?

Do you think that amount is necessary in terms of being consistent for somebody to have a steady deal flow?

I think for a steady deal flow, yes. I think if you're just looking to grab deals here and there, you don't have to do it that way. But sometimes it's just pure chance. Maybe Brandon's got a property and he's just evicted a tenant. And luckily enough, my postcard hit him the day that he got out of court and the house is vacant. And he just says, perfect, I'm done. So it was timing, just good fortune. Got my card to land in his hands. But for a consistent flow of deals, yes, I mail about 4 to 5,000 postcards per month. That runs me about $1,800 to $2,000, depending on, you know, how it's printed, the color, things like that. And all I did was I'm a big fan of reverse engineering, so I know that I need about 25 to 30 leads usually to get a deal. And if my response rate is a certain percentage, then I just reverse engineer it to that. And that's the number I mail is that.

And that sounds like that's the sales background kind of working in, right?

Definitely. And it was guidance from other people, too. I mean, going on bigger pockets or researching where people start. You notice these trends, and they'll say, this is your average response rate. This is how many deals it usually takes to get from a mailer. And you start seeing it and tracking your own things, too.

What kind of response rate on your. You said postcards, right?

I'm predominantly postcards these days.

All right, so what kind of. I also want to ask why postcards? But we'll get to that. Second, what kind of response rate do you typically see, I mean, or do you track that, like 1%, 2%, something like that?

I track everything religiously. And the response rate can vary from anywhere from a half of a percent to 1% if you're very lucky. Okay.

And then out of those, let's say 1%, you send out a thousand mailers, you get 1% of them to actually call you, which would be 10 people.

Yes.

And then how many people? You said 20 to 30 phone calls in order to get one deal that we were saying usually.

And it's funny, I've been doing this for a while now, so I'm getting much better on the phone. I'm training an assistant right now, and I'm nervous because my close rate is getting better and better with each mail campaign. So I did a 4,500 mail piece campaign, and I've got two deals already from it and probably another two that I'm going to get from it. So that's an astonishing close rate, because usually that's 45 phone calls. I'm saying it's 1 out of 25, and I'm getting 4 out of 45. But I think that was just some Good luck to 1 out of 25 is what is the goal that's great.

Yeah, that's great. So what are you using in terms of organization? Do you just use Excel spreadsheet or are you using some kind of software to manage and organize yourself? What are you doing there?

Excel spreadsheets scare me. The idea of running a business through an Excel spreadsheet, if there was a hell, that's one of the things, I.

Guess I'm in hell.

It'S just not for me. There's a software called Zoho and they make a customer relationship management software. And this again was some good fortune from my sales background. I used ACT there. So you've got Act Salesforce, Zoho. There's tons of them. So you can just pick one that is more suited to you. I like Zoho because it's cloud based and I've actually completely customized it to my business. And so Josh, Brandon, either of you could log in, you could see what deals are in escrow, what stage of the closing process. You can see what the new leads are. You can see, you could open up a lead and you would know the owner, how we found them, the transaction details, the numbers, the property details and their exact situation. And you could just walk into it and know everything. And the reason I did that a year and a half ago was because I knew that eventually I would be hiring in somebody and I didn't want them to be trying to figure out how to work my way. I wanted them to be able to sit down and know everything from the minute they looked at it.

That's great. That's awesome. Yeah, I've not used Zoho but I've heard about it and I really need actually because I am also in that, that hell of Excel spreadsheets everywhere. Well, I shouldn't say Excel. I use like Google Docs, which is probably worse because it's, it's cloud based at least, but there's not as fancy. So anyway, yeah, I've been, I've been needing to do that for quite a while now. Let, let me go back to the phone call thing. You said when you were starting you weren't very good at it. This is an area I absolutely suck at. I just don't like talking on the phone and so which is ironic for co hosting a podcast that is rather.

Interesting for a guy who doesn't shut up.

I do, I do not like talking on the phone. Like, I just hate my voicemail right now. If you call me, don't call me, but if you call me, it just.

Number.

My voicemail is hi I don't answer my phone. So this is important. Leave me a message and I'll call you back. Maybe, like, that's my voicemail.

That's awesome. Anyway, way to have a good voicemail to attract clients.

That's not my, that's not my business voicemail. Like my, you know, lead voicemail. But anyway, I want to go back to the phone call.

How do you.

Can you kind of walk me? I mean, walk me through this. How should I, as somebody who's terrible and does not like using the phone, how do I get better? What do you do? What do you say when people call you or when you call them back?

Should we role play?

I want free. Yeah, I want free advice here.

Well, it's funny, I mean, but before I enter that, I will tell you there are a lot of sellers who share that trait with you. And so there's a lot of people who share these traits. And so they might actually prefer to talk by a text message with you. And so with some sellers, you can actually read that they're not that into speaking on the phone too. And the call will slowly transition to text message. I bought houses via text message from sellers before because you could tell they didn't want to speak on the phone. But you just have to have a friendly enthusiasm to it and the more you do it, the more comfortable you get. And I actually, I feel very Californian saying this, but if I know I have a day full of phone calls to make to sellers, I will actually meditate for about half an hour prior. And I don't know what about it it does, but it just gets me in the zone and I just, I start calling them and I'm in a. I think it puts me in a happier mood and I just start getting friendly. And really, it's. What I like to do is I like to kind of be a chameleon. So I match my tone with their tone. And I will record all of my phone calls so I can listen to them later. And also for training purposes for my new assistant. And so being aware that I'm recording the phone call for some reason makes me more aware to be better while I'm on the phone with them. And so if they're speaking slowly, I'm speaking slowly. If they're speaking fast and they're just saying, give me the number. What are you going to pay for my house? What do you want? Then I go right back at them at the exact same speed.

Hey. And just a quick thing on the phone call to anyone listening, you Be careful recording phone calls, because there's things called wiretapping in some states. If you don't have permission of the other person, you can get yourself in a lot of trouble. So make sure you know your local laws and make sure it's okay. And if it's not okay, and you have to put disclaimers in the call, make sure that you do that. Something really important to know.

I did not know.

The more you know.

Good advice. All right, so you. You get a person on the phone, you talk to them, and they say, you know, I don't know. Let's say they say that I. How much you want to pay for my house? I mean, this.

What do you want to buy my house for?

Yeah. Yeah. Well, I might hit him right back and say, why do you want to sell it?

I don't like my wife, okay?

And while I'm on the phone with them, so the lead comes in, and they leave their address and their phone number. So a better situation is I already have their address. I've looked it up online. I got a quick idea. If I just have to throw a number out because they're putting pressure on me, then I'm going to throw a really low number out. And if they have a bad reaction, then I can say, you gave me 10 seconds to think. So that's my price. If you want to give me some more time, I'll get a better number if you let me research what I think it's worth.

Oh, gotcha.

And if they're coming at you aggressive, you have to be just the same to them. Otherwise, I don't think they'll respect you. Otherwise, you really have to. And it's probably a bum lead anyways if they're being that aggressive with you. But you want to take them all seriously. So I would throw a number right back at them just as quick as they've asked me for a number.

All right, so you get. You get let's say 25. I mean, let's say you send out what we talked about earlier. You send out a thousand. Let's say you send out 3,000 mailers, and at 1%, you get 30 phone calls. Out of that, they leave 30 voicemails. Do you hit all of them like, once a day? I mean, once a week, once a month? Like, how do you return those phone calls?

We're gonna go right. Right away. We're gonna try and get them, because that's a hot lead. So the minute that call comes in, all time is dedicated to returning those as fast as possible. If, if it, if we succeed at speaking with them, then we go to the next step. Whether it's setting up a meeting or getting them an offer, etc, if it goes to voicemail, we're gonna leave them a voicemail every day, every other day, pretty much until they call us back. And then we're going to get them. If they're not very motivated or they're mediocre, we're going to set them up into a follow up cycle. So once a month, twice a month, we're going to do a follow up call to them. Because sometimes the best deals come from the follow ups. And honestly that's where a lot of the new wholesalers fall short, is they do a mailer, the calls come in, they don't have a way to track them properly and then they forget to start following up with them.

Now the daily phone calls sound kind of like the collection agent. You know, I wonder, is there, I mean, I don't know because I'm, you know, I'm not tracking your numbers, but I would wonder, you know, does it come to a point where that almost annoys people and turns them off? Oh, this guy is being a pain, he's too aggressive or I don't know, it's just one of those things I would, I would question. What are your thoughts?

Yeah, I agree with you. I think for the first week we're going to go pretty aggressively and after that first week it'll start to taper off usually because there's other tasks that we're trying to focus on. But that's actually an area that I'm trying to structure better because I'm bringing on help. And so before they would taper off because of my schedule. Now I do agree to be not too aggressive, they should taper off. But we're going to start to design whatever we deem fit. Be the best follow up practice I got you.

And I mean if it, if it's working, not that I'm saying we want to go annoy people, but if you're annoying 9 out of 10 people, but 1 out of 10 people sells you a property you can make a $5,000 profit off of. I mean, 9 out of 10 people can be annoyed for me to make $5,000, you know what I mean? Like, I'm not saying like let's be.

Jerky, I'm annoyed right now. Jerky.

Yeah, you know, it's a very good point. Brandon. Here's another one. So thank you. You don't like talking to sellers, right? And it was like, what if I gave you ten grand for making a phone call? Yep. You'd do it, right? I would. So that's what you're missing out on. That could be one of those $10,000 phone calls that you're not making right now.

He just called you out. He just said, you know, get over yourself.

And, well, I mean, I know I need to do more of it. I just, it's, it's not my kind of. You said earlier, right. It's like some people excel at certain things. I figure I really like, you know, small multi families. I can buy them from banks all day long. I mean, things like that are, are easy for me because I don't have to like, talk to anybody ever. And I get like chocolate. At the, you know, the escrow company, they give out free candy. I mean, that's, I got, I got a butter knife.

Who gives?

A butter knife?

You get a butter knife at closing.

Yeah, with an engraved butter knife.

That's funny. That's funny.

I felt like Wayne and Wayne's World where he's like a gun rack. You know.

I don't have butter, let alone the need for a butter knife.

All right, so I want to step back a second here too. Earlier on you had talked about marketing schedules and follow up schedules and that kind of stuff. I wonder if you'd be willing to dig in on that a little bit. You know, what, what, what are you doing? What is your marketing schedule and what is the follow up other than beat them on the head until they call the cops on you?

Currently, it's very simple and I'm looking forward to stepping this up on more professional ways. But right now it's basically we map out San Diego county and there's high net worth areas within San Diego County. There's no reason to mail to those. So we're shooting for properties that are between 600,000 and below. And we map out those zip codes and we're going to pull in the data and then we mail those. And the goal is to mail them three to four times a year by a postcard. And so we'll, you know, we'll do one region and then we'll set that up to be hit again in three months. And then the next month we'll do the next region. And so that gives us the steady flow of calls coming in and we're kind of blanketing the area. You know, it's, it's a rotating marketing campaign, basically.

Gotcha. Gotcha. And are you, are you marketing to absentee Landlords. What kind of motivated sellers are you reaching right now?

Absentee is my favorite. I've done owner occupant, but I think it takes a far greater volume to hit owner occupant. So absentee is hands down my favorite. It's pretty much anything. Anything from a four unit down to a townhouse, I will hit. So I mail condos, townhouses, single family, duplex, triplex, fourplex, absentee, owner.

Purchased. I think I'm going from like 2003 and back now. I don't do anything with equity. Don't care if they're upside down. Then I'll refer it to someone to do a short sale. So I hit a pretty broad list.

Gotcha, gotcha, gotcha. So what do your deals typically look like? I mean, I think most wholesalers that we probably have spoken with, and I think I'm going to generalize, most people, I think, who are probably wholesaling are probably doing so on cheaper properties than 600,000. Maybe I'm wrong, but I haven't spoken to a lot of people that really target as high as that. So what are you making on a typical deal?

It'll vary. It's kind of funny. It's usually pretty darn close to what a realtor would make. So in most cases, I'm actually still saving homeowner money versus listing it. Because if you look at 6% of a $600,000 house, that's a large sum. So a wholesale fee could vary anywhere from $50,000 to $2,000. I've seen other. I've got other friends who close much larger ones in this area. The high value of the properties allows for a larger spread. So that is an advantage that we have. But it is a more competitive market. But on average, I'd say 10,000 to $40,000.

Gotcha. Gotcha. Go ahead, Brownie.

Well, I was gonna say you mentioned it being a competitive market. So these people are probably getting multiple mailings. They're probably getting talking to multiple wholesalers. Why do they pick you? Why do you even succeed above the other ones?

That's a very good point. That certain, certain lists, and everyone has agreed on this, that sometimes these lists just sometimes you get lucky. Sometimes it's timing. Sometimes you are competing against other wholesalers. And if you're competing against other wholesalers, and we've got some really savvy individuals here in San Diego, you've got to know your numbers very well, and you've got to know the buyers that will pay the absolute most for a deal. And that's how you're going to, that's one of the ways that you're going to succeed. But you've also got to be genuinely liked by the seller and they've got to know that you're there to do what you say you're going to do. So you've got to come across as very confident, know what you're doing and you've got to be able to deliver on any promises that you make. And if you can express that effectively to the homeowner, to the seller, you've got a pretty good chance of succeeding.

Hey, I've got a question and I think I probably ask this every time we have a wholesaler but again there's so many people getting into it that I think it's important to re ask the question. So for, for a new wholesaler, you know, I think one of the biggest fears for those guys is that they're not going to be able to sell the property. And it's also talking to the seller and trying to, you know, trying to lock the deal in, you know, without, without kind of saying, hey, I'm going to buy this from you, but I'm not really buying it, I'm actually kind of buying it. And then I'm going to find another buyer and they're going to come and you're going to close with them, not with me.

How do you get past that? How can new investors overcome that? Is there any just easy one liner that helps them get through that or what?

Well, I will say this. I was absolutely terrified the first time I had to try and lock up my own deal. And with sellers it was scary. So you're not alone if you're in that place right now. But what's important is that you keep pushing forward and trying to improve yourself and go through this because the next time it's going to be easier. And so it's really no different than a rehabber who's got a hard money lender or a partner. They're going to lock up a deal and then their partner is going to review it, double check the numbers and then they're going to agree or disagree on whether or not they want to close on that deal. That's exactly what I'm doing. I'm looking at a deal, we're going to secure it at a certain price and then we're going to bring it to other partners who are either going to decide yes we want to buy it or no we don't. So it's the same practice. It is Slightly different in terms of who's actually rehabbing the property. But I have partners and we're going to introduce it to one of them who's going to invest with me on this property and they're going to have the final say on if they think it's a good buy or not.

Gotcha. And then in terms of the actual dialogue. So you are telling these folks, hey, listen, I'm a buyer of this property and do you explain the and or assigns or do you not explain that to them in the agreement? How do you handle that?

It'll vary on each deal. If there's someone whose personality style is that they want to know every nut and bolt to the process, then they're going to be made aware that this property will be closed on in another company's name because they're the person with the money and they're the person that rehabs it and I'm the person that finds the properties. So my purpose to this partner is I'm the deal finder, they're the deal fixer. And so I take on an acquisitions role. Basically, that's what I'm here to do. I'm not the fixer. And if it's someone who that's not an interest of theirs, then it's not really discussed because there's really no need to bring up something that they're not interested in.

Gotcha. Gotcha. No, that makes sense. That makes sense. Cool. All right, so you're wholesaling. Sounds like you've got a pretty steady deal flow going. Are you still working? You still got a full time job or how does that work?

I do. I have a full time job in outside sales. It does have a flexible schedule and it's a job I've had for five years. I'm fortunate to have it because it's allowed me access to some really sweet loans, which is why I bought those properties.

Nice.

But yeah, it's been an interesting job and I do enjoy it, but I do think my goal is to transition into 100% full time real estate investing.

Gotcha. Gotcha. And you brought up something that I know that we always harp on when we hear it or when we have an opportunity. Working and having a job and having that paycheck coming in definitely gives access to more money. It certainly helps when you're trying to get a loan.

I think a lot of people will go and say, well, I'm just about making enough money. I'm going to quit today because I want to quit today. I think a lot of other folks might say, you might want to hold on a second, keep that job for a little bit until you really don't have to worry as much about the financing side.

Yeah, and I think evaluating your own personal situation is very important because I admire the guts it takes just to leave a job and you are going to go harder at your new venture. But I own a rental property and if something catastrophic happens there, I'm responsible for it. So I need to be very well funded. There's certain risks that are not wise for me to take being a landlord, even if I want to pursue my wholesaling on a greater level. And so for those reasons alone, it's wise for me to be a little bit more cautious in my practices.

And what does that mean to you as a landlord? Presumably you're talking about having reserves.

What does that mean from your perspectives? What kind of reserves do you think a landlord needs to have? Because again, that's another place where I think new investors sometimes will find themselves in trouble. They don't have enough and they end up in trouble. So what do you try to have on hand to protect yourself?

That's a really good question and I haven't really considered it in great detail, but I think I would like enough to keep the property going float for at least six months if something say like a $15,000 for any kind of a major repair and or if say I'm paying half of the mortgage or all the mortgage, I want to be able to cover that. I'm in the process of getting a wholesale deal right now from someone who has no reserves. Both tenants decide to stop paying the rent and he's going to either lose the property or sell it to me because he doesn't have any cash reserves. So seeing that makes you wise up to what you need to have to be prepared.

Yeah, I like the idea of having a float. You want to assume the worst. Right. I mean, it sucks to think that you might have completely empty units for x amount of time, but I think if you're conservative, six months is probably not unreasonable to say, hey, I want to make sure I could cover all my payments for six months and have some room for some big capex in case that comes up.

Yeah, because what are your alternatives? If you don't have that money and something goes wrong, you're either going to go borrow it from somebody or it's going to create unnecessary stress.

Well, you become a slumlord or whatever else. Exactly, exactly.

Yeah.

Right on.

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Before we Dig in a little on. On the landlord stuff. I'm actually curious. I, you know, we. We were talking about the mailings and things like that. I wanted to ask you what your postcards say and what do you. What's your messaging?

Okay. Well, it's. It's. Obviously, everyone can't see it, but I can show it to you guys through the camera, but it basically has vertically down the side of it, it says notice in big letters. So when you get in this in.

The mail, you think you're in trouble.

You think you're behind on a bill. Yep. Or something's happened. It instantly makes you think, here, put.

That back up on the screen.

So you're thinking, crap.

Oh, yeah, yeah, that's not good.

And it's a very simple. I mean, these cost me under 40 cents apiece. I've made a point to personalize them. So I actually had someone create a formula in Excel. So when the full name shows up on the title, you know, it could be Smith Family Trust, you know, with the date or so. And so the formula will actually turn that into Dear Smith Family or Dear John Smith or Dear John and Mary. And it'll include every owner's name in there. Just so it's a little bit more personalized. It just says, my name is Tim Gordon. I'm interested in buying your house at 1234 Main street in San Diego. I buy several houses each month, and I'm looking to buy more in the area. I actually just changed the copy on it a little bit on the last one, and I'm trying to do more calls to Action. It says, find out why the timing is right in 2014 to sell and call now. So it kind of teases them that, you know, there's something going on. And I have been getting more calls from people who are at about a break even, and they are accidental landlords, and they're seeing that it's about that chance where they can get out. And I really enjoy those leads, actually, because it's people who don't want the house, they don't want to own it, and they're sick of the problem. So someone like me to come in and I'll take it with or without the tenants. With or without repairs right now. They're thrilled. I mean, to them, it's. It's the best thing they've ever heard of.

Yeah, yeah, it's a great. I mean, listen, I. I had some property that was. Was problematic to me, and I sold it direct to an investor. It was. It was the Same thing. I wanted this thing gone. You know, all the properties around mine were going belly up and vacant and I was like trapped in this bubble of hell and, and literally the only option I had was to just dump it.

Right.

And sometimes you got to do that. Sometimes circumstances, you know, come in and bite you. And you know, I think when an investor could come in and save you from your hardship, you know, that's, that's going to, that's going to be a net benefit. And so I think that's part of the pitch obviously on the side of the investor is, hey, you know, I'm not here, I'm not, I'm not the bad guy. Right. I'm here. I'm trying to help you out of this difficult opportunity because you know what, the realtor is going to come in and they're going to try and sell it for the most money. And they're not necessarily, not always, but they may not always have the same interest at hand. Your interest when you're in that trouble is to dump. You want to get rid of this thing and get rid of it fast. And it typically doesn't mean trying to sell it for the most money possible. It's trying to sell it for as fast as you can.

Yeah, I mean, I'm a problem solver. That is my purpose to the sellers I'm there to either deal with. The 4 Plex I purchased had heroin dealers in it. Old lady that lived in a nursing home, her family saw the liability with that property and they wanted it gone. And I took it with everything the way it was. So I was a problem solver. That's all I am as a wholesaler, is a problem solver.

Nice. Yeah, I think, I think that's well put.

Well, hey, who, before we leave the wholesale topic, I want to find out a couple questions about cash buyers. Like when you're selling these things, are you primarily selling to flippers or landlords or both or which one do you prefer?

It's a mix of both. And this is where my love of sales comes to my advantage. The best deals to wholesale are going to be rehabs to cash buyers. And what I like to do is every couple months we'll have a title. The title company will give us a report of all cash transactions in our target markets. We can then see what companies are buying the most properties. And that gives us a good indicator of one, who the big dogs are. Two, everything in California is public record. So you can go look at that deal, see what it was bought for, what it was sold for. We can then find the buyers who buy at the thinnest margins. Those are the people that you want to sell your deals to. And in most cases I'm buying a deal for the same price the average rehabber would buy it for. It's just that I'm selling it to the rehabber who will buy at the highest price.

Nice.

So we'll so anything that's a flip, we'll go to them in San Diego. Not too many are going to make sense as a rental, but the few that do, I have wholesale to buy and hold buyers. And it's a more detailed process because a flip is a, say a six month decision. You're gonna be gone to that thing in six months. Whereas a rental, you've got long term things. And so now that I've owned a fourplex, I can present a rental in a more professional manner. I'm gonna give them a profit and loss sheet. I'm gonna be able to tell them what the market rents are. I'm gonna tell them, you know, what the tenants are paying for, what the lease is state. And so we're really presenting it to them as an investment opportunity and less of a flip. And it takes a much more detailed and professional approach if you're going to succeed at selling a buy and hold deal.

And those, you know, those prepared reports that you've got, the professional package that you put together is one of the advantages that you have over the next guy as well, isn't it?

Yeah, I mean, you've got to answer every single one of their questions before they ask it. We wholesale the triplex to an individual who actually got a conventional loan to buy it and closed in three weeks. And we sold it for more because it was in his. We knew it was in his target market. He owned other rentals in that area. We found that from a title search. So we called him and said, hey, you own two on the street, you want another one? We know that he is the person that wants that deal more than anyone, but we had to present him with all the details so that he could move forward. And in California they need to know about the tenants, if they've got problem tenants, what the lease estate, who's paying for what. All of those items are critical. If I was going to buy a deal, I want that. So I know I need to present that to whoever's going to buy one of mine.

Yeah, makes sense. I mean, different properties for different types of people. So you need to just do your research and find out who Wants what? So speaking of that then, how many cash buyers do you have on your list and how many do you need? How much does a wholesaler need?

I think I've got about 200 on my list and I've probably only sold to six of those people.

And that's actually a really good point. Right, like you don't, like you don't need 200 necessarily.

You really don't. I mean, I'm kind of torn. I think it depends on your availability of time for me because I'm doing so many things. I would rather find the deal and then find the right buyer for that deal. So if it's, we just wholesaled a tear down where literally it's in a tremendous zoning where you can put three townhomes on it. So we tied up the deal. I shot it out to some of my regular buyers, but they're all rehabbers. They don't want a development deal. So we had to reverse engineer and find a local individual who is developing in the area and he bought it right away. So there would have been no need for me to go out and find those types of buyers until I have that type of deal. So I think you should have rehabber buyers, but then find the rest when you have the deal.

So, so you think buyers list comes after the deal then? Obviously, definitely. Okay, so newbies, you know those folks are telling newbies, go build a buyer's list, go for 997. I'll teach you how to build the biggest buyers list in the world. That's a bad idea. A waste of your time probably.

Yeah, I mean you could honestly do both. And we've just got a new website up, so we'll have a link where buyers can go to the website and opt in to the buyers list. And so what I would like to do is send a mailer to all the cash buyers for the last 90 days and say we're wholesalers, go to this link, add yourself to our buyers list. Then we've, we've easily added more buyers that way. And so I think people should do both. But if you're going to ask me what's more important, hands down the deal. Nice.

Nice. Yeah, I'm with Josh. I always see like ads online all the time that just say things about cash buyers. And I think the reason why is because that's, that's something that's very easily and like, what's the word? Attainable. Right. So if you pay $1,000 to learn how to build a cash buyers list, you think you got $1,000 worth of work. Because all of a sudden you have a cash buyers list.

That's all you got. You got nothing.

Doesn't matter that it doesn't give you anything. Like it will never produce without the other half. Which is the more difficult half is finding the deals or not even half?

Well, even before that. Hold on. Before that, you got to know what a deal is, right? And we haven't talked about that. We have not covered that at all right now. And we probably should chat about that. I mean, you know, you can't just go and say, I'm going to lock in a contract on a deal without it being an actual deal. Otherwise you can't get it out to the next guy. So, you know, you got to buy at some kind of discount to what that thing's going to retail at, particularly if you're, if you're buying it to send to a flipper because they got to make their money. So what are you buying these deals at? What kind of discount are you buying to a future arv?

Obviously, I'm trying to get it as low as I can. I know that typically a rehab has to. The highest they'll usually sell around here is at about 82% of ARV. That might sound high, but the spreads are larger in California, so people are still making decent margins on their money. I was listening to a really good podcast you guys did with Mike Nelson, and he said, look, I don't care about the arv. I look and see what people are currently buying flips at in my market. And that is exactly what you should be doing, because my market is different than a lot of other individuals. And so you look for trends, you look for what the market is telling you. And so if you see deals are closing at one number and then being listed at another number, the market is telling you where they're being bought and where they're being sold. So you just have to operate within that range. And it really just comes down to being very aware of what is actually going on in your market.

Gotcha. And where have you found like the seven guys who've, who've actually been your real buyers, your actual buyers list versus your fantasy buyers list?

Where did those guys come from? Were they all through the website or were they people you met at clubs or biggerpockets or what was that?

One of them actually messaged me through biggerpockets about a year before we did a deal.

And he's actually one of my favorite people to work with.

Most of them come from the meet real estate meetings or title searches, because you'll see who the big players are, and you want to work with the big players for your standard bread and butter flip. In my market, the person that's going to pay the most for it move the quickest is my big buyer.

Nice. Nice. Well, cool. Well, hey, let's move on to talk a little bit about a question that I love to ask people. What is the best deal you've ever done?

Oh, man.

Off the top of your head.

My favorite one is a. It was a $48,000 wholesale fee over a round of beers.

Wow. Let's hear that story.

We have to hear that story.

Hear that.

So. And it's generated one of the greatest friendships I've ever had in real estate, too, which is probably worth more than the money we made. But I spoke at the Gosh, it's Investors workshops, Orange County. They have a little bonus session in April, and they had me speak at the beginning, and it was kind of a story of a, you know, a new person who had failed and struggled and the steps that they took to implement to become successful. So I was kind of going through the whole experience, and I met a gentleman by the name of Sean Katona afterwards, and we're drinking beers. He goes, you know, I got this deal. And he usually rehabs because I just not sure if I want to rehab it. I don't really have the money. I'm going to wholesale it. I was like, well, cool. What are the numbers? Tell me the numbers. He goes, okay, well, it's worth. I think he said it was worth 600 and he was going to wholesale it for. I think it was 410 or something like that, or 420, he was going to make 10 grand on it. And I knew instantly that there was a lot more to be made on this deal. And so I just basically said, sean, can I have one day to try and sell this deal? I said, how much would you be happy getting a check for? And he thought about it for a second. He goes, if I can get 30 grand, I'm happy. Okay, give me one day. So I made a couple phone calls, and I had a buyer lined up. And the next day I called him and I said, well, I got your 30 grand. Really? Yep, we got it. So we lined up the buyer. We opened escrow. He goes, just out of curiosity, how much are you making? I said, 18. And so I made 18 grand for a phone call. But I also made him a lot more than he expected to make. So over a Round of drinks. We generated a $48,000 wholesale fee and a fantastic friendship. We've done, I think two or three more deals since then. He's taught me a ton about his side of the business and then I've taught him a lot about properly wholesaling and how to get the most dollar for your deal. And hands down, probably one of my favorite deals.

And that phone call was only possible because you did you have relationships with the guys that you were calling at that point or they weren't just cold like buyers list people. They were folks. You.

That was actually my. That was my bigger pockets referral buyer. And I told a small line. I actually text message. He likes to talk by a text message. So I sold the deal by text. I don't think we even spoke.

Nice, nice. And that's the day you went pro on Biggerpockets, right?

I think today is that day.

Nice.

Nicely done, Josh.

Really, really quick for everybody listening, this is show 67 of the BiggerPockets podcast and you could check out the show notes@biggerpockets.com Show67 all right, so that was the best deal. That sounds like a lot of fun.

It was great. And everything is so relationship based. And that was what was so great about it. It was a win for everybody. And I'm learning now from this person.

Yeah, for sure. What about the worst deal? Your least favorite deal? Because they might be different, won't they?

My worst deal, it was probably my first deal, honestly, and so I'm very sentimental about it. But basically I was helping a friend. He called me out on being a half assed wholesaler and he said, maybe this isn't for you. And that stung. It really stung. And so it was two houses in Desert Hot Springs, California, which is just scummy desert properties. It's probably the Detroit of the desert for Josh.

And yeah, baby.

We'd actually. The contract had expired on it with the seller and I managed to find a buyer and so we went back to the seller and said, hey, we can close now. We're ready to go. And the seller changed their tune and basically said, we want $10,000 more. And that was our wholesale fee. So we kind of thought we were done. And I'm just. I mean, this has been a year, guys. I'm trying to get my first check. I am foaming at the mouth just to get a piece of paper in my hand that is telling me I have not wasted a year of my life.

So we went back to the buyer and just said, look, we're so sorry, but the seller is renegotiating, and he wants 10,000 more. That's our wholesale fee. Is there any chance you can just give us a little more just so that we can cover our costs? I said, can you just give us $2,500? He said, okay, it was a fair deal already. So he was okay with it. Well, there's two other individuals involved in this deal, and one of these individuals was having very hard times, so his power had just gotten shut off. I'm doing very well at my day job. My other friend is doing very well wholesaling. So we made the decision basically to close the deal and give all of the money to the other individual. So I just asked for a check for a dollar. I just want to check for a dollar so that I can say I closed my first deal. And it was actually a hard experience because you're taking something that you've wanted more than anything in your life for the last year, and you're basically letting it go and saying, somebody else needs this more than I do. And so I agreed to do it. And I remember I had this little bottle of champagne a friend had given me to drink when I closed my first deal. And I remember just kind of like, sitting there at my desk, and the deal's closed. I'm thinking about the dollar, and I just drank the entire volume.

But listen, I think that says. I think that says a lot about you, man. And I think. I think anybody in SoCal who's listening to the show is. Is getting ready to add you to their I got to get in touch with this guy list, because, I don't know, man. I mean, that's. That's. That's pretty. That's pretty cool of you to do that. And, you know, putting. Putting them ahead of yourself. I think that's really admirable. So, kudos.

Thank you. I've been very lucky to have a few good friends who've expressed the importance of charity on me. And the nice twist to that story is we went to escrow to get our check, and we open up the envelope, and there's two checks for $2,500 there. The seller, or sorry, the buyer, misunderstood me when we asked for an extra 2,500, and he thought it was per house, not for the whole deal. So we had 5,000 in there. So my friend Luis and I, we split the 2500, and we gave the other 2,500, as we'd intended, to the other person who, you know, who was really in need. And so we ended up being rewarded for our charitable efforts.

Oh, nice. That's cool. That's. That really is cool. Hey, so you had talked about rentals, and we're starting to run out of time here a little bit. But do you have more than just the one rental at this point, or do you have multiples? And are you. Are you looking to build that side of your business out or what's up?

My ultimate dream is to own a trailer park. I do own a fourplex that I purchased via the ever elusive FHA 203k rehab loan. And I love that fourplex. I just bought a house this summer in Oceanside that's right by the beach, and I rehabbed that. So I'm kind of. I'm happy with what I have right now, honestly. I. If I can pick up something small and simple, I will. But my goal right now, honestly, is to simplify my life. I went like a bull in a china shop last year, and I paid for it with my sanity.

So does that mean by simplifying your life that you want to do less wholesale deals? Do you want to do less business just kind of enough to get by or, you know, because I think there's always this, well, you got to keep building your business. You got to keep building your business. But, you know, I think it was Paula Pant, the show we did with Paula where we had talked about building this lifestyle business, and I think there's definitely a difference. Right. Do you want to build a business so you can chill out and hang out on the beach, or do you want to build a business that you're going to be working at for the next X amount of time?

That's exactly. I mean, I was at Best Buy today buying a microphone for this podcast, and the girl said, oh, you're not working today. I was like, yeah, I'm working. I'm wearing sandals and shorts, and I'm very happy that I'm working this way. So I'm after more of a lifestyle, to be honest with you. Last year, I turned wholesaling into a job, which was what I was trying. I was wholesaling to get out of a job, and I fallen right into the exact same thing.

Yeah, and I think I'm glad you said that as well, because, you know, I think most folks who don't know see flipping houses and wholesaling is a way to get out of the quote unquote, rat race. However, you know, both of those are their jobs, right? I mean, they are absolutely jobs.

Yeah, it's I'm in the process of training someone now and until, until I can go away for two weeks and the business still earns money. It's a job. Yeah, it's, it's a job until then.

That's a good tweetable topic right there. I'll put that up on the show. Notes@biggerpockets.com show67 but final question I want to ask before we head on is how do you plan on using those people? You're training somebody underneath you. How do you want to implement other people to help that lifestyle business develop?

That's kind of two part for me. So they're probably in the background. They're probably gonna hear me say this and call me out if I, if I lie about it too. It's my personality suits the more out, you know, going out, meeting sellers, going to the event, selling the deals. I, so I'm training someone who can handle the back end operations. I want them to be screening the calls to the motivated sellers. I want them to be logging all the data. I want them to be doing the follow up work, monitoring all the systems. So I'm based, I want someone who's going to run the back end of the business for me and then I can be free to, you know, kind of I get like an APB that we got a hot lead in this place and then it's on to me. My job is not to deal with the filtering anymore, it's just to deal with the hot leads.

You're the closer.

Yeah.

Nice, nice. And it makes sense. I mean that goes with the whole 80, 20 principle that, you know, Tim Ferriss is kind of popularized though. I know it, you know, bigger than Tim Ferriss. But the whole idea of whatever you're good at, like that 20, focus on that, outsource the rest, let other people take care of that and you can work, you know, four hours a week or whatever it is. The, you know, the goal is so very cool.

Pareto, Pareto's principle.

Yeah, yeah, yeah.

Not, not Tim Ferriss principle.

I'm just saying he popularized it.

Yeah, okay. I mean just, just clarifying here.

All right, well why don't we move.

On to the, it's time for the fire round.

All right, the fire round. These are questions that are straight from the forums. So we're gonna throw them at you and you have no idea what's coming.

So first let's do this.

First of all, do you sell only to cash buyers? And because you already kind of answered that question, I want to reframe it to what should a new investor do? Should they avoid only, like financing buyers or only work with cash buyers? Or how should a new investor do that?

They should stick to cash buyers. That deal that we did with the finance buyer was one of the most complex real estate transactions I've ever been a part of. And to start out doing that, it would have been an absolute mess. So it's stick to the cash buyers. There's other ways to turn a lead like that into income generating. And it would probably mean referring it out to another wholesaler or to a listing agent or it's a poor use of your time.

For those people listening, how can somebody make money referring a lead to another wholesaler? How would they monetize that? Just if you could extend it out for us, sure.

That's one of my favorite ways to work. About a quarter to a third of my business is working with other wholesalers. Basically, they might have a deal and they can't find a buyer or vice versa. And you've got to leverage your strong suit. So for me, my strong suit is selling. So if someone else has a deal and they can't find a buyer, I can take the time to reverse engineer who the best buyer is and turn what is probably a not so great deal into almost, you know, to generate some income. Almost like we're playing like a buyer's agent or a listing agent or where we're specifically targeting that exact perfect buyer and we wholesale it to them. Great, great.

Gotcha, gotcha. So you collect a wholesale fee, and they collect a wholesale fee and everybody collects a fee, and that's it.

Can I get one?

Yes. And it builds great camaraderie amongst your local investor community too. So you always want to be there to help your other wholesalers. They are not competitors, they're your allies.

Tweetable topic right there. Boom, boom, boom, boom. All right, here's the next one. If somebody only has about 500 bucks a month for marketing, is it worth it?

That's a tough one. I think I would tell them to go door knocking and gets handed some serious rejection and get used to being really on their feet. And I think if they've got the guts to go door knocking and try it and no matter what happens they're still enthusiastic about real estate, then, yeah, I think they should send out some mailers to get the phones ringing. But I think the first thing they should do is get up off their feet and go knock on some doors and see what happens.

I agree. And I tell you what? That was the first thing I did when I was an agent. I found a farm that I wanted, and I created these really cool door hangers that I printed with my face, all sorts of stuff. And I literally knocked on door in the neighborhood. And that was terrifying. Absolutely terrifying. But. But taught me a lot and taught me, you know, that people aren't going to bite you. And the ones that do, you just kind of move on and. And that's it. And you get to learn and really know those neighborhoods that you're farming.

It's. It's like a commitment by action. If I knew somebody had gone door knocking and then they asked me for help, I'm 10 times more likely to help them because I know they've just gone and done one of the scariest things you can do in business.

And that might be my favorite tip from this entire show is right there that if. If you're out there, if our listeners, they want to get into wholesaling and they want to find a mentor of some kind, like what you just said there is perfect. Like, go out and do something scary first. Go out and prove that you're serious about this business, and then go and talk to somebody about, hey, do you want to work with me and help me out?

Yeah, that's exactly it.

All the difference in the world. I love that.

Very cool.

Well done.

Yeah.

All right, Cool. All right, next firearm question. Somebody called on my direct mail, and they were extremely angry. They left a voicemail. Should I call them back?

You know, I do. This is part of my metrics. I know the cost per phone call, and it averages $40 to $60. So I just paid $60 for that person to tell me to f off. I'm gonna call them back, you know, so that's a good way to look.

That's a great way of looking at it, is figuring out how much you make per phone call. And I love that. That's great. I never heard anybody say that before.

It is hard not to follow up when you're looking at that lead and you know that you just sent $60 is sitting there and you're not doing anything with it. So, I mean, you never know. I mean, the odds are that it's probably not a motivated seller, but I think there's good practice in doing habits consistently. So, yes, I would call them.

So what was the worst thing somebody's ever said to you?

Well, that person hasn't called me back, in fact, but. And I've called them a few times. I think someone called Me, a vulture? Someone's called me things like I could care less. I'm not affected in the least by those things. I just wish them a great day and move on to the next lead.

Nice. Nice. All right, so in wholesaling, when a house is put under contract to be assigned to a buyer who's responsible for the property being inspected, is it you? Is it you, the wholesaler? Is it the end flipper who takes care of that?

That is 100% on the buyer. And this is another way to weed out your tire kickers or other wholesalers is I require a $5,000 non refundable deposit to tie up my deal. You do not get an inspection period. I will give you full access to the property so that you can do your due diligence and I want you to be comfortable. But you cannot secure this deal until you're ready to write a check for the entire property. So you're going to give me a $5,000 non refundable deposit. The buyer is responsible for all due diligence.

Interesting. Got it. Got it. And did you do that all along or did that come out of getting burned?

That was actually guidance from another respected wholesaler and it eliminates the tire kickers and it really pushes you towards the serious buyers. I mean, as long as it's not hanging off the side of a cliff, they'll be able to tell you within half an hour if they can buy it and what their number is. And those are the people you sell your deals to?

Yep.

And I just want to be clear because I may have missed it. Will you let somebody see the property?

Oh, yes.

Okay. Definitely can't just.

I want to give them full access. They can view it, they can get a contractor in it. I want them to be 100% comfortable with the purchase. I'm just saying you cannot secure it to purchase it until you've done all those things and you're willing to fund a non refundable.

Sure, of course.

Hey, I want to go back now that you said that. I know this is firearm, but whatever I want to.

Rules?

Yeah. You know me, I'm a rebel. All right, so if you get a property under contract, how do you. How does that whole process work then? You talk to a motivated seller, they want to sell it. Do you get a key for the property? Do you call the cash buyer and arrange them to meet the seller at the property? Do all three of you go there? Does it depend on the deal?

It's. It's been a mix. You really one of the things about being a good wholesaler and or real estate investor is that you're going to have to adapt as the situations allow. 9. I mean, if it's a vacant house, my favorite word in the all of real estate is vacant. We put on a lockbox, we get a key, and then buyers can go look at it. If it's occupied by tenant, we want to be really respectful of the tenants. I'm very. I preach on that a lot. You want to treat anyone who lives in a home with respect. That's their sanctuary. So as long as they're paying, I mean, if they're a scumbag, then whatever. But, you know, you're going to schedule it within the tenant schedule. You're going to say, hey, what works for you? You know, when can we get in here? And we might schedule one or two buyers to come view it. So it's. You kind of have to adapt as the situation permits, but you've got to get them in quickly and you've got to give them full access and you have to figure out how you're going to do that.

Nice. Nice. That's awesome. Cool, man. Well, fantastic. Fantastic stuff. Why don't we move on to the final segment of the show? This is the one we fondly call the Famous Four. First question of the Famous Four is what is your thing? Favorite real estate book? Oh, my God.

I listened to this on the podcast. I still don't know. I don't read a lot of real estate books.

And we actually do prepare our guests to let them know that these are the four questions we're going to ask them. Clearly, Tim, you were unprepared.

I really enjoy the book. Good to Great. It's more of a business book, but that one lately has been a big impact on me, and I do, like, think and grow rich as well. I'm actually probably one of the few people who has never read Rich Dad, Poor Dad. I don't think I ever will.

There you go.

Just for principle, I don't like their sales pitches. And so.

Yeah, yeah, yeah, I feel it, man. I feel it. All right. What about your favorite business book? Another favorite business book?

I guess so. I just read a book recently called Lifeinaire, and it's like millionaire, but replace the word mill with life. And it really flipped my life upside down in regards to what's important. And, you know, I don't need a lot of money. I want more experiences. I want more time with my friends and my family. And that book.

Was a little unusual, but it has had the most impact on me out of any book I've probably read the last three years.

Gotcha.

Right on.

Go ahead and heard of that one. All right, what about your hobbies? What do you do for fun?

I am an adventure person, so I like scuba diving, surfing. I like doing stupid things with anything that has a motor.

You know, I'm traveling. I'm a. I love to travel. I went to Belize last year, Australia the year before. My entire goal is just to free myself to travel more, actually.

Nice. Very cool. Very cool. All right, final question from me. What do you believe sets apart successful real estate investors from those who fail or never get started in the first place?

I thought about this really hard when I heard this, and to me, it's awareness. There's a level of awareness within certain individuals which I think allows them to succeed or not. And that can be awareness that you're doing things improperly, awareness that you're afraid, awareness of bad habits. And so I think a general awareness of who you are, what you want, what's important to you, and truly how you're acting. I mean, a lot of us might say that we're going through the steps to do deals, but we're taking little baby steps because we're scared, and we're not admitting to ourselves that we're scared or we're not admitting to ourselves that we're doing the wrong thing. And so for me, it's a level of awareness is necessary to take things to that level where you're going to succeed and be happy.

Right on. Right on. And that was Psychology 102 with Tim Gordon.

All right, Tim. Listen, man, it was a great show. Really, really appreciate the time. And there are definitely a lot of fantastic nuggets in there for both the wholesaler and everybody else listening. So I think that's great. Where can people find out more information about you?

You can go to my website. It is gordon buys homes.com and there's information there. I've got a little blog running, and if anyone ever has any questions regarding wholesaling or real estate investing or psychology102, you're welcome to send me a message. I'd love to help and encourage new investors or seasoned investors. I've. I'm very thankful to biggerpockets for having me here. It's today felt like the day before Christmas. I was so excited. And so the honor of that, I just want to pay it back by helping anyone that can. So thank you so much.

And you do in the forums all the time. I just noticed that today you had a lot of recent stuff in there. And, you know, thank you for that.

I love it. I just want. I want other people to succeed at this. And, you know, you guys should be commended for building a community that encourages that.

Yeah, I just clean up around here. Josh built that.

Thank you. Thank you. And that's. That's the ideal. That's what we do. That's what we strive for. And you're the guy that we want. You're the people, so to speak, that we want. We want people who are there to not only go out there and change their own lives, but try and be helpful to others. And it's great that we fostered that. So it's great. And speaking of the day before Christmas, I'm sorry you had to put up with the Grinch on the other side of the mic over there, but he's all right sometimes. All right, Tim, listen, man, it's been a pleasure. Really appreciate having you on the show. For all the listeners, be like, tim, jump in, get involved, read up, listen to the shows. And Biggerpockets can help you improve your investing and really can help you change your life. So come on board and be a part of the community. Otherwise, as always, we'll see you on Facebook or LinkedIn or any of the other major networks. Feel free to keep in touch with us there. And last but not least, you know, get out there and make it happen, guys. We. We want to see you be successful. We want to hear about it. So share your stories with us, and we'll see you back on Biggerpockets. I'm Josh Dworkin signing off.

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