Pre-Foreclosure Mastery (SS#3)

Let's go! We're back, baby!

Little spotlight series with Quinton, man. It's my first time going live on Instagram. Instagram, it actually looks like it's delayed. I don't know if it's delayed on my end or what the deal is, but I'm gonna forget about that. Yep, we're on. Let's go, dude! Live on Facebook, Instagram, and YouTube. It's good stuff.

Yo, does Stream Power do all three of them?

Yeah, StreamYard does all three, which is great.

Uh, okay, nice.

It's honestly the best one. The quality isn't the best, uh, especially like when you download it, but it's not bad and it's easy to bring— send someone the link and you can stream to all three platforms, which is super nice. Right. Um, but cool. Welcome everyone. Uh, Spotlight Series, something I'm just— I'm starting to do now, bringing different people on that I enjoy speaking with who I think can provide value to other people. I met Quinton back in October. Within a month of getting down to St. Pete, we met at a meetup. This guy is probably 9 feet tall. So if you ever see him, you'll know it's him because you'll be looking at the sky when you look at him. But super knowledgeable guy. He's dealt with straight pre-foreclosures for a long time. And over the— he would hop in these Optimize REI meetings and he'd start talking about the pre-foreclosure. I'm like, dang, man, you actually, you know, you know a lot about this. You've been going deep into this. So it's been his main strategy for a long time. I think it's good to shed light on because, especially when you're getting started, pre-foreclosures can be a good one to go after because you don't have a team. You're not at a position where you can play the numbers game of cold calling and texting. So if you're door knocking or just going after this very niche motivated list of pre-foreclosures, it could be a really good way to get your first deal. We never did it, but I hear a lot of people say, pre-foreclosures is some of the best ways to get your first deal. But before we get into any of that, what's going on, man? Thank you for, uh, coming on.

Absolutely, man. Thanks for having me.

Tell us a little bit just about you real quick, how you got to where you are, how many deals you've done, how long you've been doing it, all that stuff.

Yeah, yeah. So I've been, uh, from Charlotte. Um, like I said, I moved down to St. Pete in October. I'm actually now back in Charlotte this weekend, just kicking it with the family and everything. So I've been doing this for about a year and a half. I'm coming up on a year and a half now. November 2022, it's that year and a half, year and some change. It's actually kind of funny 'cause I tried it in high school and the, I was working out with a guy, he's actually like one of my best friends, mentors, kind of like an older brother to me. He was doing wholesaling by himself and I was trying to do it in high school. So I was looking up tax deeds on Mecklenburg County, going to the houses, wouldn't even open up the door. I'd just look at the house and just be like, "Yeah, this probably isn't for me." And he was coaching me in basketball as well. And then we kind of just parted ways just because he was doing his thing. And then I went to school for basketball and then I left school. I reached out to him, I was like, "Hey, I'm gonna let you do the real estate. I'm an open book. If you need me to do something, I mean, I'd be open to it." And he asked me, he was like, "You willing to make extra $2,000 a month?" I was like, "Sure, I got nothing else going for me, so let's do it." And here we are. So I've done about, geez, I wanna say I've done about at least 15 deals. I wanna say 15, 20 deals. So yeah, it's been a trip, a lot of ups and downs. Those highs are high, but those lows can be even lower, but wouldn't change it for the world.

Yeah, that's incredible. I think you're in such a good stage too, because especially for people looking to get started, you have a lot more experience than them, right? You've been doing it for a year and a half. You've done 15 to 20 deals, which in pre-foreclosures is a lot more because as we'll get into, these are a longer cycle, right? You got to follow up and they're typically deeper spreads. You might get anywhere from 30 to 50 60, 70K deals, but there's not as many of those deals. Um, so something to, to keep in mind there. Um, good stuff. So now you're in Florida, you're in St. Pete. And then one thing I kind of like to ask everyone, because I'm what I call a mindset nerd, I love talking about mindset.

Yeah.

What are some mindset hurdles that you had to overcome getting started and, and just some that you continue to run into as, you know, as you're on your journey?

Uh, I think when I first started was cold calling. Um, I was scared to pick up that phone, and I was just like, man, I don't know how I got over it. I think you just keep doing it, just smile and dial. Um, I've gotten threatened to get sued a couple times. That kind of shied me away from it. Um, but like, they're not— they haven't done it yet. And so I've dropped my address to them, like, here, here's the address, send the letters. Um, I haven't received anything yet, so it's It's like a smile and dial kind of thing. Um, and at the end of the day, like, we help people keep their homes. So you might get cussed out a couple times. I've been cussed out and then helped them through the process, um, maybe get a loan modification passed, or, you know, we bought their home for them and gave them some extra money for the new season of life. So just knowing, like, why you're calling, like, hey, like, I'm here to help. You're getting tons of calls, but I'm actually here to help you. So I kind of get why they're pissed, but It's just like, it was just a mindset hurdle to get over.

That's interesting. You say, so I guess dive into your process a little bit there with the free foreclosures. You said you're there to help. So you're just there to help them keep their house. How does that, how do you guys, how are you in business?

Yeah, yeah, yeah. So, um, you have many options of helping them keep their home. You could number one, reinstate the loan, try to get them a personal loan, um, A couple times, the— maybe the wife or the husband isn't on the mortgage, so their credit isn't affected, so they can reach out for a personal loan. Or if we have a— I know it's kind of like an embarrassing subject to speak about with your kids, but if your kids are older, like 25, have them apply to your credit union, um, to get a loan. Second one's a loan modification. That's where they take what you owe now, so the $10,000 or $12,000, and they'll split it up on the existing payments going forward. So say you're paying $1,200 a month, it might be like $1,700 a month going forward. Or say your term ends in 2045, um, they might extend it to 2050, 2055, just so you can pay the bank back from what you owed. But you need to have a proof of hardship. Um, so like, you just— because like you weren't paying your bills, they're gonna be like, no, like you can't do this. Like if you were sick, you had COVID, Absolutely. Like, they will be more than willing to work with you. I've had people pull out of their 401 before. If you're a veteran, you can talk with the VA. The VA helps so many veterans in foreclosure. That's a really good resource. And depending on the state you're in, so for North Carolina, the states that we're in, we have an NC Home Assistance Fund. Um, this, which hands out $40,000 grants to homeowners that were affected of their housing during COVID So it's just like walking them through all those options. Um, and if none of those work, yes, you can file Chapter 13. But I've seen many times over and over and over, and it's kind of funny because I'll see the people that filed Chapter 13 a year, year and a half ago, like when I just first started And now I'm reaching back out to them again because they weren't able to make the bankruptcy payments. And now, so, hey, like, how are you doing? I didn't, you know, it's been a little while. How was everything? So if none of that works, then, you know, reluctantly we'll buy the home or do a subject to.

Now this can't be right. So you're telling me that you're actually out there for people's best interest, man? That can't be true, dude. Wholesalers just steal houses from people. That's all they do.

And some are like that. We do get a really bad name. Some really do. And that's why we get cussed out so much. And I'm like, hey, like, I mean, it seems like you've been getting called a lot, people trying to buy your home. Like, yeah, yeah, they are. Um, I kind of say like, hey, I'm just gonna keep it real with you. I'm here to help you keep it. Um, would you, you know, do you have a couple minutes to walk through some of those options?

Yeah, it's super important for us to do business in the right way because there is so many bad apples. And it's like with any industry, right? Realtors, wholesalers, police, cops, right? There's all these, these bad apples that give that group of people a bad name, you know. So it's almost our responsibility to come in and do business the right way and, um, and help people out. So, um, and they— and these sellers, they have a right to be mad, right? They have a right to cuss us out. Yeah, maybe not, but you know, because they're just throwing us in there with every other bonehead who's called them. Um, so it's kind of our duty to go in there and do business the right way and it's like, I hope that you work with me because I know that I'll treat you the right way and point you in the right direction. So kind of the mindset you have to have. So you went through the different options that you can provide the homeowner, help them keep their house. But basically your approach right off the bat is, hey, do you, do you want to keep the house or do you want to sell it? That's like one of the first questions, right? If they want to keep it, you're walking them through those options. Hey, what can you do? What makes sense? And if nothing makes sense you'll buy the house. Now, how do you stay in business doing this? Well, it's just a numbers game, right? You reach out to enough people, a certain number of people's best option will just be to sell you the house, and that's how you get your deals. Right.

My first deal. Yeah. My first deal was just like that. I was like, "Hey man, I'm trying to help you keep it." He was like, "I want to get rid of it." I was like, "All right, let's go then." Well, it's great because from a sales approach, you're pushing away right off the bat.

Or you're not pushing away, you're pulling away right off the bat, right? Hey, I don't even know if I'm a good fit for you. I'm here to help you keep your house, you know, um, that type of deal. So it kind of disarms them and you're able to get in and really get the information about, about what needs to happen. So, um, I think that's a key point. So with pre-foreclosures, and I know some people don't do this, some people do, um, my preferred approach if I were to do it is to come in from this consulting approach, right? I'm not just coming in trying to give them an offer. Trying to consult, hey, what's your situation? What's the best option for you? And let's figure it out. Um, which I absolutely love. So you have those 4 things. Now, why did you start with pre-foreclosures? Why did you start with them specifically?

Um, so I'm with Pure Flair Homes. I'm sure— I don't know if you guys know Devin Robinson, um, but he's like— he's the one that went to a Collective Genius Mastermind Um, it's called— short for CG. Um, and he saw Michael Franke speak, and him and his partner Carl Liu, um, saw him speak because they were trying to do regular wholesale. But in 20— I want to say it was 2022 when all the hedge funds stopped buying, or 2020, I'm not really sure. I was still in college then. Um, they, uh, kind of went out of business for a little bit, and they went to CG. They saw Michael Franke speak about pre-foreclosures and Carl, like, tapped Devin. It was like, hey, like, this is it. This is what we need to focus on. Um, and so when I started, it was just me, uh, Devin and his partner Darius, um, the guy that kind of put me on with everything, one of my basically like older brothers. Um, and just ever since then, I haven't like touched regular wholesale data until like 6 to 8 months ago. Um, and they were like, pre-foreclosures, that's where the spreads are. And North Carolina is like a really good state for pre-foreclosures just because of the redemption period. It kind of gets to— it's bad for the homeowner, but it's good for the investor, as bad as it sounds.

Yeah. What do you mean regular wholesale data? What's the difference between regular wholesale and pre-foreclosure data?

So like your high absentee owner data, maybe probate a little bit here and there, but like just like your regular, like, absentee owner data.

What's absentee owner?

That kind of different. It's when the— it's when the owner doesn't live in the house, so they might rent it out to a tenant. I might be vacant. They might have inherited the property. Um, they might have just had, you know, mom or dad just passed away, now they don't know what to do with it. Um, so kind of like that. Yeah, I am the owner.

Yeah, so there's basically— Isaiah and I call it the quantity approach versus the quality approach. We're doing the quantity approach, which is absentee owner. So we'll pull a massive list of of properties, anyone who owns 2 properties. So say I live in 123 Main Street, but I own 123 Banana Street, you know, and I don't live at 123 Banana Street. So that's an absentee-owned house. I'm absent from it. Um, so we just pull all of those in the area. So there's no specific pain points. We don't know who's going to be, you know, looking to take speed and convenience over price. We don't know that. So it's, it's a lot of reaching out, a lot of cold calling and filtering to find that needle. We're looking for the needle. When you're calling pre-foreclosures, pretty much all of them are the needle. The needle being the motivated seller who needs our help, who we can actually get it at a price that makes sense for us. So with pre-foreclosures, more of a quality approach because you'll pull, you'll go to the county and pull, you know, anywhere from 20 to like a couple hundred leads and that's it versus we're pulling lists of like 10,000. Um, and they both work ideally, arguably the, the pre-foreclosures, you know, a quicker way to get a deal, although the cycle's longer.

I don't know. Yeah, well, yeah, you got like second mortgages that you find at, you know, closing. You know, you thought you were gonna make $50,000 and now you're gonna make like $500,000. So I've got those a couple times. So like, definitely pre-foreclosures are not for like the faint-hearted, um, because it's been like a couple times I'm like, I was supposed to make like $60,000. Well, this— I had a recent one I was supposed to make, we were supposed to make like, I think, $90,000 on it. And it dwindled down to like 5— like $50 grand, which is like still like— it's still, it's still like a really good deal though. Just like, it's like 50% of our cut just went out the window. But that's the name of the game.

It's working those deals, man. It's like once it goes under contract or whatever, I mean, that's just the start. And then it's like you got to get everything to the finish line. Um, okay, so you talked about your approach, right? It's more of a consulting approach. You walk them through the different options. How do you— so how do you even get started? Like, how do you find the records to call?

Yeah, yeah, great question. So say I was completely broke, um, and I was in the middle of nowhere, say like I was in Kansas or something. So what you would do is you go on auction.com, Zillow, and you go to pre-foreclosures or auction, um, and I think auction.com will have it. You'll scroll down to where it says foreclosure attorney contact info, click on that For example, one of ours is Hutchins. So I would type in Hutchins pending foreclosure sales, and then boom, there's your whole list of the properties, the auction date. Sometimes we'll have the opening bid. So you just get a couple zip codes in your area, just door knock them, but hey, I'm here to help. And like, you can get a deal in 2 weeks, maybe tomorrow. It's like, it's really that possible. So Kind of pulling data from all those sources.

So auction, realtor, and then what you said, the county?

The county, yep.

How do you find the county? What do you search again?

So you're going to go to— so for Charlotte, it's Mecklenburg County Courthouse. Um, St. Pete, Pinellas County. Well, Pinellas County has an online auction site, which is really cool, but Mecklenburg, you have to actually go to the courthouse. That'll be where you place your upset bids. You find your SP numbers, your addresses, and a little hint, if you're on the DISPO side, that's where you also find your buyers because you can find the person who just bid on the property. And same thing for Pinellas County. If you're in Tampa or St. Pete, your bidders will be on the website and scroll through them. So if you're trying to build up a buyer's list, that's a great way to do it. So it's just like, it's just like a lot of sources. And there's, I want to say there's about 5 foreclosure attorneys that we know. That we're in a pretty good relationship with. So it's just finding out who your foreclosure attorneys are in your area.

So Zillow will post it if it's in preforeclosureauction.com, and then you can go to the county— I forget what it's called— clerk of the county or clerk of court. Clerk of court, yeah, for the county. Go to the county website, it'll show you the preforeclosure records. A couple of nuances here. You want to get in touch with the personal representative, right? Or no, that's probate. I'm thinking probate.

Personal representative. Yeah, it doesn't really matter about the personal representative. You can have a pre-foreclosure probate and that gets really tricky and weird. That gets— that gets—

go there, get the information. And then, so you think door knocking is the most effective way to get to these people? Why is that?

You're face to face with them. If you can be— so like with pre-foreclosures, speed to lead is key. And Michael Franken would touch on this many times in his YouTube videos. If you can be the first one they talk to, because you're gonna have after like a day, they've probably, you know, got 40, 50, 60, 70 phone calls from people. But if you, as soon as you have your, if you're scrubbing the website or your VAs are, as soon as they hit the list, bam, get in your car, start driving over there. This is that if you have no marketing dollars at all, this is just something you can do for free. Completely for free. You can figure out everything out later. Like finding a buyer is easy. Just give it to New Western, worst case scenario.

Yeah. You could have them disposition. If I have no money, I'm going to go onto the county clerk website and just be— get familiar with it, right? So I can hop on there quickly and filter and see what the new records are, right?

Yeah.

So say it's a Saturday or it's a Friday. I look at those new records and I'm going to want to get out there that day or on Saturday to door knock. So just export them into what, an Excel file or how do you get that? And then you just—

you can do Excel sheet. Yeah, like a Google Sheets. Um, and then if you're not sure who the owner is, go to the county GIS website. Um, it'll show the, uh, owner information, who all's on it. Um, they might be dead, so if they're, you know, deceased, then reach out to the heirs. Same, same exact thing. Hey, notice that 123 Main Street was having some issues with the bank. I was wondering if you knew the owner. Sometimes they'll say no, sometimes, but yeah, it's my dad. Be like, Okay, I was trying to help keep his home, but do you know anything about it? And kind of just open up the floor with that conversation.

Yeah. Okay, so it's really that simple. So I mean, you're pulling that data, those are the 3 things, and then you're going to be out door knocking, man. Door knocking, that takes some grit.

So listen, it does.

Business is not easy.

Okay?

Not easy. Otherwise everyone would be very successful in it.

I thought I was about to get shot one time. I saw some dude reaching for his pocket. I was like, hey, I'm just here to help, man.

I'll admit, I've knocked like— I'm a big, big wuss when it comes to door knocking. I probably knocked like 5 doors. I'd rather just cold call. I'm like, door knocking—

Carter's a beast. Carter's a beast. Like, he'll talk to the neighbor, like the neighbor's daughter. I'm like, yo, you got it. Like, I'm trying to go to the next house.

That's who you want on your door knocking team.

I'm trying to get him. I'm trying to get him when we come— I know. When he gets back.

Okay, so So just to recap, right, we're reaching out to the sellers, more of a consultative approach, trying to see if they want to sell it or keep it. If they want to keep it, walk them through that options. They want to sell it, right? It's a phone call, they want to sell it. Then what are you doing? You're setting an appointment, you're going over there. What does that process look like?

So since I'm not— well, obviously I'm not in Charlotte. I'm trying to get every in-person appointment this weekend in Charlotte, but since I'm usually not in Charlotte, um, If I know like they're going to sign the contract, I'll have one of my— hey, talk to one of my colleagues, hey, they're ready to sign, can you just go send the paper? I had a deal in Kannapolis, North Carolina where lady was 85 years old. I was like, there's no way she's going to figure out DocuSign. I was like, and we need this like today. So I sent her over with a contract, she locked it up, closed on it a couple weeks ago. So that was really cool. Um, but I'll— if I need to set up the in-person, I will. But if I don't have to, and I'm like, they're familiar with DocuSign, then I'll just lock it up on the spot.

Okay. So two basic approaches. You could call, um, or you can door knock. But once you get in touch with the seller, it's the same process of being a consultant, walking them through and trying to figure out what to do. So calling or knocking, if you can have the courage to go knock, it's going to be the most effective. It's also going to probably build your skills the most. Um, and speed to lead is key. So you pull these lists from the county. You got to be there that day, be the first one to talk to them because they're going to be motivated. Once they get a billion other calls, it's going to be hard. Is there any tips for once you get it under contract? Because I imagine they're going to get a bunch of other calls after that. How do you make sure that they don't go sign another contract or something?

Yeah, that's a great question. It really depends on your exit strategy. If you're a new wholesaler, You better have like a really, really tight relationship with them. I'm not too familiar with double closes. Um, I know that, you know, Devin's got the installment method, which is kind of like a double close, which we're actually doing, uh, in South Carolina because wholesaling's quote-unquote like illegal. Um, so with an installment, you'll have your first closing and you'll put down an equitable down payment on the home, which puts you in partnership with the seller on the title. So they can't sign with anybody else. Um, and you can catch up the reinstatement fee, so it's not going to foreclosure. You have to worry about postponement or anything. Um, and you can actually give the seller $4,000 or $5,000 up front. So it really just depends on your exit strategy and what you're trying to achieve. Um, you could do a memorandum of contract, but I've, you know, I heard those get kind of messy a little bit. Just depends on your, your experience and how much capital you have to spend.

Yeah, I agree. And just to be clear, wholesaling, so they're— it's like the assignment that they want to ban, right?

Yeah.

The assignment of the contract. So you can still close on it and resell it.

Yes.

And still get the transaction done. Yeah, that's really good. I think additionally is setting the expectations maybe with the seller, saying like, "Hey, you're probably going to get a ton of other calls. If anyone calls you, just redirect them to me. Let them know that I'm handling it, and we're good to go here," right? So Like, hey, this is like binding. You're going with us no matter what. If I don't, I'll offer you more money or whatever the deal is. So yeah, definitely something to, uh, to keep in mind there. Yeah, that's great. So, um, and how do you manage, I guess, from a systems perspective, kind of getting a little bit more nitty-gritty? What do you use for like a CRM? How do you manage everything? How do you dial? Do you have like a phone? Use your personal phone? Do you use systems? What does that look like?

So we just changed from Resimpli to Salesforce, uh, 2 or 3 or 3 or 4 weeks ago. And Salesforce is a complete beast. Um, I still look at it and just kind of just like, it's like solving a Rubik's Cube almost. Um, but I'm now starting to make dials out of Salesforce just so the calls are recorded. Um, and you like, you have to treat sales like a basketball game because I, you know, kind of biased because I used to hoop, or like a football game, a soccer game. Like, you watch film You get your calls recorded, see what you could do better, just like your pauses, your question asking, question asking. And it's just, you know, and you practice in the role play. So shout out Optimize REI, every Wednesday, Thursday, 5:30. Just role play, film, and then talk to seller. Bam, it's game time. So it's like all my athletes out there, um, same thing. You're just using your mouth instead of your, uh, your body.

It is, it's a game. Just, you know, business is a sport. Um, yeah, a lot of the similar qualities to, to sports or athletics, I think you can be translated into entrepreneurship. Absolutely.

Oh yeah.

And again, it's just taking the action, not overcomplicating it, right? I think, I think maybe the biggest takeaway from this episode is It's not complicated. Go onto the county website, get the records, and go knock the door immediately and just have a conversation with the seller. See what you can do to help. For free.

It's completely for free.

Yeah. And in the Optimized group, and you might have posted something about it too, but there's a sheet in there in the Optimized Facebook group that's like, hey, 12 ways to stop pre-foreclosure or whatever it is, 5 ways. And you can download that PDF and you can just like bring it with you or get familiar with it so you can know those 5 options. Or you can rewind this and listen to what Quinton was saying about those options. But that's it. Pre-foreclosure, you know, it's a quality approach. Those are distressed sellers right there. So I think getting in front of them, operating business in the right way is going to be crucial. My boy Cody Thompson in Miami, just moved to Miami, actually used to be in Tampa, but he's down in Miami. He said on Instagram, He said, had many deals I couldn't close after their taxes and collections come back from title and add up to be more than the deal is even worth.

Yeah, I have it. Yep, yep. And that's kind of where you kind of bite the bullet. So I think in, uh, in Miami-Dade— my— that's Dade County, right? Miami? I want to say it's Dade County. So I think Dade County, Pinellas County. So if you go to your auction website on Miami-Dade, uh, Pinellas, Hillsborough, it'll have the final judgment amount, um, there. So just pull your high equity foreclosures from the auction calendar, um, so you don't have any sneak— like sneak, uh, sneak title issues, which I've ran into a couple times, um, like judgments that sneak up. Just get your high equity foreclosure or your sub-2s. I think a couple times, if you dig a little deeper, you can find the reinstatement quote and your interest rate for your subject-to. So just kind of like play around with the website.

Yeah, for sure. Real quick, uh, some, some buzzwords I wanted to clarify. What is a reinstatement period?

Yeah, so a reinstatement fee is essentially what it takes to catch it back up. So they might say it's $9,000 to catch it up, but you need a reinstatement quote which tags on your legal fees, uh, just like BS other fees, um, which might tag on another $2,000 or $3,000. So that $9,000 that you thought it was going to take to catch up might be like $12,000 or $13,000.

Got it. And then what's a reinstatement period?

Period, um, that's kind of like when you can pay the reinstatement. So say your auction day is May 3rd, um, and today, like, today's your only day to put in the reinstatement. After May 3rd, you're cooked, um, depending where you are. You can't do like any more reinstatement money. You have to pay off the whole mortgage. So like your reinstatement period is the time before the house actually goes to auction.

Got it. That's good. Yeah, I think there's some terms there. Awesome, man. I appreciate you coming on. Any last words? I guess before that, where can people find you? I know you're getting Instagram up and running. I'm sure people have more questions if they want to reach out about pre-foreclosures?

Yeah, just Quinton.Sherman on Instagram. I know the last name is kind of a tricky one. I think Jake has it on his story, so check out Jake's story. Yeah, feel free to reach out to me if you have any questions.

Yeah, for sure. Absolutely, man. So any last comments or ideas you want to leave people with as they get started on their pre-foreclosure journey or they're in it and they're just pushing.

Keep going. It took me 4 months to get my first deal, but we had a new acquisition, acquisition guy get his first deal in like 1 week just because like we built out the process in the system. So just like stick with it. There's been so many times I was like, dude, screw this, like, but just stay with it. I promise you it'll pay off.

Stay with it. That's it. All right, peace guys. Hope you all have a good week. Um, next person I got on I believe is Miss Kalisha Carter. Talking about private money. Don't quote me on that, May 7th, but, uh, either way, excited for that. And, uh, I'll catch you around, Quinn.

Peace.